DELAWARE HUMAN AND CIVIL RIGHTS COMMISSION, Plaintiff, ex rel. MOHAMMED SEDGHI and PAULA BURKHARDT-SEDGHI, v. SCHELL BROTHERS, LLC, and JONATHAN HORNER, Defendants.
C.A. No: S23C-04-004 MHC
IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
Decided: April 28, 2025
Submitted: March 12, 2025
CONNER, J.
Upon Defendants’ Motion to Dismiss,
MOTION GRANTED IN PART AND DENIED IN PART.
Kristen S. Swift, Esquire, Kaufman Dolowich, LLP, 222 Delaware Ave., Suite 720, Wilmington, DE 19801, Attorney for Plaintiff.
Elizabeth S. Fenton, Esquire, Ballard Spahr, LLP, 919 N. Market Street, 11th Floor, Wilmington, Delaware, 19801, Attorney for Plaintiff. Lila R. Miller, Esquire, Zoila E. Hinson, Esquire, David S. DePriest, Esquire, Relman Colfax, PLLC, 1225 19th Street NW, Washington, DC, 20036, Pro Hac Vice, Attorneys for Plaintiff.
David C. Hutt, Esquire, R. Eric Hacker, Esquire, Morris James, LLP, 107 W. Market Street, Georgetown, Delaware 19947-1438. Kelly E. Farnan, Esquire, Richards, Layton, & Finger, P.A., 920 North King Street, Wilmington, Delaware 19801, Attorneys for Defendants.
CONNER, J.
Defendants Schell Brothers, LLC (hereinafter “Schell Brothers“) and Jonathan Horner, Esq. have filed what is now their third Motion to Dismiss, seeking to dismiss six of Plaintiff-Intervenors’ eight counts in its amended complaint, relating to a house purchase agreement which went south allegedly for discriminatory reasons. Defendants move to dismiss the six contractual claims on grounds of: (1) being time-barred by contractual terms; (2) Defendant Horner not being independently liable; and (3) five counts that fail to state a claim.
FACTS
On November 20, 2020, Plaintiff Mohammad Sedghi and Plaintiff-Intervenor Paula Burkhardt-Sedghi (“Plaintiffs” or “the Sedghis“) entered into an agreement (hereinafter “Purchase Agreement“) to purchase a new home from Schell Brothers in one of its communities in Selbyville, Delaware. The Sedghis made a 10% down payment of $82,925 to secure the Purchase Agreement. On April 19, 2021, Mr. Sedghi spoke on the phone with Mr. Horner, General Counsel for Schell Brothers, to seek clarification about an addendum in the Purchase Agreement. Mr. Horner did not answer Mr. Sedghi‘s questions and instead allegedly threatened to terminate the Purchase Agreement pursuant to a provision giving Schell Brothers the power to unilaterally terminate the Purchase Agreement at any time with anyone who does not fit within the “community, culture, or operations.” After hearing this threat, Mr.
Mr. Horner followed up with an email confirming the termination of the Purchase Agreement, noting that it was in part occurring because Mr. Sedghi stated he would sue Schell Brothers. Mr. Sedghi still wanted to purchase the home so he agreed to the addendum which he originally questioned and made numerous requests to Schell Brothers to reconsider the Purchase Agreement. Schell Brothers refused the requests to reconsider and Mr. Horner also refused to return the Sedghi‘s down payment unless the Sedghis agreed not to pursue litigation.
On May 28, 2021, Mr. and Mrs. Sedghi filed a complaint with the Delaware Division of Human and Civil Rights (the “Division“) and United States Department of Housing and Urban Development. The Sedghis allege Defendants violated their rights under the Delaware Fair Housing Act (“DFHA“) and Federal Fair Housing Act (“FFHA“) by refusing to sell them the property they had contracted to purchase and by retaliating against them for asserting their fair housing rights. The Sedghis further allege Defendants discriminated against them based on Mr. Sedghi‘s religion and national origin. The Division investigated the claims and issued a charge (the “Charge“) pursuant to
Round 1
On August 11, 2022, pursuant to
Defendants responded to Complaint No. 1 with their first motion to dismiss (hereinafter “Motion to Dismiss No. 1“), arguing that the action was not “promptly commenced” within the meaning of
The Sedghis moved to intervene on February 7, 2024 which was resolved by a stipulation on April 23, 2024 and granted on April 25, 2024. The Sedghis filed their complaint as intervenors, titled “Plaintiffs’ Complaint,” on May 2, 2024 (“Complaint No. 2“). Defendants officially responded to Complaint No. 2 with an opening brief to “Defendants’ Motion to Dismiss Counts I-VI of the Plaintiffs-Intervenors’ Complaint” filed May 31, 2024 (Motion to Dismiss No. 2).
Round 3
Before anything else proceeded with Motion to Dismiss No. 2, on June 26, 2024, the Sedghis filed “Plaintiffs’ Amended Complaint” (“Complaint No. 3“). In Complaint No. 3, Count VI alleges discrimination under both the FFHA and DFHA and Count VII alleges retaliation for exercising fair housing rights (hereinafter collectively “the Discrimination Claims“). The claims based on alleged breaches of contract (hereinafter collectively “the Contractual Claims“) consist of: Count I breach of contract; Count IV “bad faith breach of contract;” Count II seeks return of the downpayment through “replevin, conversion, & detinue“; Counts III and V fraud; and Count VIII unjust enrichment.
Mr. Sedghi passed away shortly after Complaint No. 3 was filed. After some procedural shuffling to substitute Mr. Sedghi‘s estate as a new party, Defendants responded to Complaint No. 3 with a motion to dismiss, titled “Defendants’ Motion
Plaintiffs’ Answering Brief was timely filed on October 18, 2024. Defendant‘s Reply Brief was timely filed on the extension deadline of November 8, 2024. Oral argument was held March 12, 2025.
STANDARD OF REVIEW
In evaluating a Motion to Dismiss under
Defendants move to dismiss on three grounds. First, Defendants argue that all six contractual claims are contractually barred by the terms of the Purchase Agreement requiring claims to be brought within one year. Second, Defendants argue that the Contractual Claims fail to state a claim against Defendant Horner in his individual capacity. Third, Defendants argue that the Contractual Claims, besides Count I for breach of contract, fail to state a claim generally against either Defendant.
I. Plaintiffs’ claims are not time-barred.
Parties’ arguments
Defendants argue that all six Contractual Claims are contractually barred by the terms of Purchase Agreement requiring claims to be brought within one year. Defendants argue the relevant time period starts April 19, 2021, the time of the alleged discrimination, to February 2024, when the Sedghis moved to intervene.
Plaintiffs’ responses to the contractual statute of limitations argument are that the enforceability of the contract is still at issue and therefore needs further discovery, that the one-year time-limit is unreasonable, and that the time-limit is tolled either by the continuing harm doctrine or by
For this statute of limitations analysis, the Court must determine: (a) when the claim occurred; (b) when the action was commenced; (c) what is the applicable time limit for claims; and (d) if the time between the claim occurring and action commencing exceeded the applicable time limit was the time period tolled.
(a) When did the claim occur?
“Both the Federal and State Fair Housing Acts impose a two-year limitation period by statute: in the Federal Act running from the later of the ‘occurrence or termination’ of the wrong; in the State Act after the later of the occurrence, termination or actual or reasonable discovery thereof.”5 “[E]ither an act of discrimination is a discrete act, initiated and completed (an ‘occurrence‘), or it is a pattern of discriminatory behavior (a ‘continuing violation‘), the ‘termination’ of which would start the clock on the statutory period.”6 “[C]urrent effects alone cannot breathe life into [stale] discrimination [claims]. . . .”7
Here, the wrong allegedly occurred during the April 19, 2021, phone call and follow-up emails. Plaintiffs do not allege with any specificity events occurring after April 19, 2021, that give rise to further claims.
Thus, the claim arose April 19, 2021. The Court will not apply the continuing harm doctrine for purposes of this analysis.
According to
Although the Sedghis were named plaintiffs in Complaint No. 1, Mrs. Burkhardt-Sedghi lacked standing to be an original party, as determined in the order from October 13, 2023. Instead, she had a statutory right to subsequently intervene. Defendants mistakenly assert that the Court should consider the commencement of their action from the time of the motion to intervene on February 7, 2024.
The statute of limitations for filing a FFHA complaint does not apply to the addition of new parties in a reasonably amended administrative complaint.15 Thus,
Here, the Sedghis’ claims in Complaint No. 2 relate back to the Commission‘s claims from the first Complaint. These claims “arose out of the conduct, transaction, or occurrence set forth . . . in the original pleading,” as required by
Complaint No. 3 was amended by leave of Defendants17 in compliance with
c. What time limit applies in this case?
Defendants argue that the Purchase Agreement contractually sets a time-bar for claims to occur within one year of the alleged harm. Plaintiffs argue that this contractual limit is unreasonable, and instead request the statutory two-year period
Delaware “follow[s] the general principle that contractual limitation of actions periods are valid if they are reasonable.”18 Delaware has previously explained the underlying rationale that the statute of limitations serve, “. . . the interest of the public to discourage the litigation of old or stale demands . . .” to prevent the difficulties of properly litigating those demands, and those interests are helped, not harmed by those provisions.19 Furthermore, “[i]t is generally held that, in the absence of express statutory provision to the contrary, a statute of limitations does not proscribe the imposition of a shorter limitations period by contract.”20 Therefore, Defendants are correct that generally Delaware will enforce a one-year contractual limitations instead of the applicable statute of limitations.21 Additionally, the mirrored language of the DFHA and FFHA both do not explicitly state that parties cannot contract to shorten the two-year prescribed period of
The alleged harm arose on April 19, 2021, and the action was commenced on May 19, 2023, which is two years and one month later. The applicable time limit is the contractual limit of one year. Thus, the final question in this analysis is whether the contractual limit was tolled as a matter of law.
“According to the doctrine of inherently unknowable injuries, sometimes referred to as the ‘discovery rule,’ a statute of limitations will not run ‘where it would be practically impossible for a plaintiff to discover the existence of a cause of action.‘”23 However, no theory would toll the statute beyond the point where the party was objectively aware, or should have been aware, of the facts giving rise to the wrong.24 Although Plaintiffs allege fraud, Plaintiffs were aware of the issues with this case as of the April 19, 2021 phone call, and brought claims to the Division within a month, thus the discovery rule of tolling does not apply.
Both
An aggrieved person may not commence a civil action under this subsection with respect to an alleged discriminatory housing practice which forms the basis of a charge issued by the Division if an Administrative Hearing Officer or Panel has commenced a hearing on the record under this chapter with respect to such charge.26
This language mirrors that of
Defendants argue that “discriminatory housing practice” should be limited to Plaintiffs’ claims of discrimination and retaliation and should not encompass the related Contractual Claims. In other words, Defendants argue tolling under
Plaintiffs argue that “discriminatory housing practice” should include related contractual claims when the contractual breach is for discriminatory reasons. Plaintiffs contend that Defendants’ proposed course of action would be a waste of judicial resources.
This Court finds that “discriminatory housing practice” under
Furthermore, this Court notes the public policy concerns that California, Kansas, and New Jersey have with contractual limits to discrimination statutes, with each finding contractual limits to raise claims void as a matter of public policy.31 These public policy concerns dictate that restricting the time to bring discrimination claims necessarily impedes the enforcement of the statutory rights meant to prevent discrimination.32 However, this Court notes that each of these example cases involved a limit of six months rather than one-year.33 It also recognizes the District of Delaware case, Johnson v. DaimlerChrysler Corporation, which upheld a contractual limitations of six-months for an employment discrimination claim as reasonable.34 However, the DaimlerChrysler court explicitly based its decision more on the pro se plaintiff‘s behavior, rather than the reasonableness of the contract,
With the understanding that tolling under
The Court could measure the proceedings formally ending with the Division issuing the Charge on July 25, 2022. The action was commenced May 19, 2023, which is 298 days after issuing the Charge, creating a total of 337 days elapsed that were not tolled. Alternatively, the Court could measure the proceedings ending with Defendants’ election to proceed with a civil action pursuant to
II. Plaintiffs fail to state valid claims against Defendant Horner as to the Purchase Agreement.
Parties’ Arguments
In Complaint No. 3, Plaintiffs state: “Mr. Horner‘s actions described herein are as an agent of Schell Brothers and as an individual, he is part of this suit in both capacities.”36 Plaintiffs further state: “[i]n acting or failing to act as alleged herein, each employee or officer of each corporate defendant was acting in the course and scope of his or her actual or apparent authority. or the alleged acts. were subsequently ratified and adopted. . . .”37
Defendants argue that Defendant Horner is a corporate officer who is not individually liable for the Contractual Claims related to the Purchase Agreement.
Plaintiffs in their response do not disclaim the possibility that Defendant Horner could be liable as a corporate officer, but instead try to leave as many doors open as possible, which Plaintiffs’ counsel referred to during oral argument as due
Analysis
The parties agree that Defendant Horner has an attorney-client relationship with Defendant Schell Brothers. There are three different routes for theories of liability for Defendant Horner as a party of the contract: as outside counsel; as an individual; and as a corporate officer. However, none of these theories are viable, and thus Defendant Horner is entitled to summary judgement as to the Contractual Claims.
A. Individual Theory
Outside Plaintiffs broadly stating, “Mr. Horner‘s actions described herein are as an agent of Schell Brothers and as an individual, he is part of this suit in both capacities,”38 which is a conclusion of law inserted into Plaintiffs’ Complaint No. 3 most likely in response to Defendants’ earlier motions to dismiss, there are no factual allegations to present a colorable claim. There are no allegations of Mr. Horner having personal motives or interests that are independent of Defendant Schell Brothers
In the general fact section, Mr. Horner is specifically named for facts about his communication with the Sedghis, in which multiple times he is identified as Schell Brothers counsel and never described in any manner as acting in his personal capacity.39 Mr. Horner is lumped in with Schell Brothers as “Defendants” in Counts I-IV and VIII. In Count V, Mr. Horner is identified as the person making the allegedly fraudulent representations but is still otherwise lumped in with Schell Brothers
In Yu v. GSM Nation, LLC, 2018 WL 2272708 (Del. Super. Apr. 24, 2018), a party tried to work around Delaware Superior Court‘s lack of subject matter jurisdiction over piercing the corporate veil by “alleg[ing] (without any factual support) that ‘[defendant] benefitted from [fraudulent] transfers’ and ‘made transfers by himself in his individual capacity.’ ”40 The Yu court granted a dismissal as to that defendant.41
Plaintiffs assert this Court cannot discount the possibility that Defendant Schell Brothers could disclaim Defendants Horner‘s actions,42 but Schell Brothers have claimed Horner‘s actions43 and Plaintiffs have not provided any factual allegations supporting their loose hypothetical to the contrary. Thus, Plaintiffs have not pled a case supporting an individual liability theory against Defendant Horner.
If Defendant Horner simply was Defendant Schell Brothers lawyer, he is not responsible for his client‘s contract. “An attorney is deemed to possess general authority to act on behalf of his client in the prosecution of an action for which he has been retained. In our system of representative litigation, ‘each party must be bound by the acts of his lawyer-agent.’ ”44 Defendant Schell Brothers is responsible for its contract, not its lawyer. Thus, Plaintiffs have not pled a case supporting an outside counsel liability theory against Defendant Horner.
C. Corporate Officer Theory
If instead this Court treats Defendant Horner as a corporate officer, then a corporation is only liable for torts committed within the scope of employment.45 “A corporate officer does not step out of his corporate role unless he ‘seeks to gain a benefit independent of their financial interest resulting from their employment by or investment in [their employer].’ ”46
Here, Plaintiffs have specifically alleged that each officer of the corporate Defendant Schell Brothers was acting within the scope of employment,47 and do not identify any benefit Mr. Horner had independent of Defendant Schell Brothers.
When an employee or officer of a company does not bind himself or herself to a corporate contract individually, “[c]onsequently, a plaintiff who seeks to sue an officer of a corporation must pierce the corporate veil to do so.”49 As the Delaware Court of Chancery has sole subject matter jurisdiction over actions to pierce the corporate veil, the Delaware Superior Court lacks jurisdiction over such claims.50 To that point, the Delaware Superior Court has previously dismissed for lack of jurisdiction claims alleging that an officer engaged in fraudulent conduct within their individual capacity such that the claim “reads like an improper attempt to pierce the corporate veil.”51
Plaintiffs have generically alleged that Defendant Horner engaged in fraudulent conduct within his individual capacity without any further explanation such that the claim reads like an improper attempt to pierce the corporate veil. This Court lacks subject matter jurisdiction to entertain this theory. Thus, Plaintiffs have
D. Unjust Enrichment
“Unjust enrichment cannot be used to circumvent basic contract principles recognizing that a person not a party to a contract cannot be held liable to it.”52 As the analysis above establishes, there are no theories tying Defendant Horner as an independent party to the contract. Plaintiffs cannot go after Defendant Horner directly for unjust enrichment as a way to sidestep the fact he was not a party to the contract.
Although Plaintiffs raise concern that Defendant Schell Brothers will later disaffirm Horner’ actions, Schell Brothers would still be vicariously liable for the Discrimination Claims53 and still be responsible for the Contractual Claims as a party to the Purchase Agreement. Even if there is a possibility that Defendants could later launch crossclaims, meritorious or not, that possibility does not grant Plaintiffs the right to include Defendant Horner as jointly and severally liable to the Contractual Claims.
III. Plaintiffs do not state contractual or tort claims against Defendant Schell Brothers outside of Count I, breach of contract, pled alternatively as Count VIII, unjust enrichment. Thus, Defendant Shell Bros. is entitled to dismissal of Counts II-V.
Parties’ Arguments
Defendants raise four separate arguments to eliminate the Contractual Claims besides Count I (breach of contract) as improperly pled. First, Defendants argue that Count II (replevin, conversion, and detinue) is duplicative and contrary to Delaware law. Second, Defendants claim Counts III (Deceit and Bad Faith During Contract Negotiation) & V (Fraud) are impermissible rehashes of the breach of contract claim as tort and are insufficiently pled. Third, Defendants argue that Count IV (bad faith breach of contract) is not a separate cause of action from Count I. Finally, Defendants argue that Count VIII (unjust enrichment) must fail due to it being based on a breach of contract.
Plaintiffs respond that all claims are properly pled. Plaintiffs argue the retaliatory retention of the down payment as ransom to force Plaintiffs to waive their rights is a tort separate from the breach. They also contend the down payment represents an economic interest in the property providing the right to purchase the
a. Count II: Replevin/Conversion/Detinue
While the parties discuss the differences between replevin, conversion, and detinue,54 the main point is Count II seeks recovery of the down payment in tort. When a plaintiff‘s claim arises solely from a breach of contract, the plaintiff “generally must sue in contract, and not in tort.”55 “Thus, in order to assert a tort claim along with a contract claim, the plaintiff must generally allege that the defendant violated an independent legal duty, apart from the duty imposed by contract.”56
The parties’ arguments focus on Kuroda v. SPJS Holdings, L.L.C., a 2009 Court of Chancery decision which dismissed a conversion claim as improperly pleaded when the plaintiff was only paid 90% of what he was owed by contract.57 The Kuroda court rejected the plaintiff‘s theory that the tort duty violated was a breach of the duty to not convert others’ property as a circular argument, and that it also did not fall under the narrow exception to the general rule prohibiting claims for conversion of money, the exception being the return of identical money.58 The
Here, Plaintiffs fail to state a tort claim under Count II separate from the breach of contract claim in Count I. The identical money exception does not apply, as this is not a specifically identifiable chattel but simply a lump sum related directly to the contract at issue. Plaintiffs may have requested “identical” money in its complaint60 but have not specifically identified the down payment deposit as a unique chattel or otherwise explained how the Court can determine which money is “identical” to that which is pled. Furthermore, Plaintiffs do not identify any specific value to the “identical money” or why Plaintiffs’ recovery would not be otherwise satisfied by any other cash except the cash provided to the down payment. Thus, the identical money exception does not apply.
Plaintiffs try to argue that the down payment creates an interest in the property which must be returned as the property has since been sold and thus specific performance is not feasible. But even if this Court were to hypothetically accept that theory, the Plaintiffs are not seeking possession of that “interest” beyond the form of the cash of the down payment. This argument slaps a new coat of paint on the
Plaintiffs try to argue that there is an independent legal duty by attempting to retaliate against Plaintiffs for exercising their legal protections to sue for discrimination.61 But the alleged retaliation is regarding claims based on Defendants’ allegedly discriminatory reasons to breach the contract, and the return of that money is outlined by the contract, as Plaintiffs themselves explicitly pled later in the complaint.62 The pleadings as presented are that Defendant Schell Brothers breached the contract, then demanded a settlement to waive that initial breach under the threat of breaching even harder if Plaintiffs did not accept that settlement. Even if the Court were to accept at face value Plaintiffs’ assertions that the “... Sedghis claim a right to be free from retaliatory conduct associated with their purchase of real estate. . . ,”63 this retaliation is not independent of the breach of contract. Rather, it directly flows from the breach. Thus, the motion to dismiss Count II as to Defendant Schell Brothers is GRANTED.
Section 11(C) of the Purchase Agreement outlines the rights of Defendant Schell Brothers, including to terminate due to “culture,” and outlines its obligations if it were to breach, including returning the Sedghis’ down payment. The Plaintiffs allege that instead, after breaching for discriminatory reasons, the Defendants tried to force the Sedghis to waive their legal protections from housing discrimination by dangling the down payment as leverage despite having no legal right to do so.
Plaintiffs argue that this claim is for the allegation that not only have Defendants breached, they breached for discriminatory reasons, followed by discriminatory retaliation, creating a separate cause of action. Plaintiffs also argue that if Section 11(C) is unenforceable due to Seller‘s rights to discriminate based on “culture,” the Court may use Count IV to reimpose Section 11(C)‘s obligations for Defendants to return the down payment as an “implied covenant.”
Defendants argue that either this all counts as one large breach and thus Count IV duplicates Count I, or alternatively that Count IV fails to state a claim for a breach of implied covenant.
“[T]he implied covenant of good faith and fair dealing is recognized only where a contract is silent as to the issue in dispute.”64 “Absent a contractual
Here, Plaintiffs’ theory that Defendants breached for discriminatory reasons is not separate from the underlying breach of contract. The alternative to an unenforceable contract theory fails because implied covenants are for when a contract is silent, not about reimposing explicit contractual obligations after finding a contract unenforceable. The reimposition of contractual duties can be done through unjust enrichment, as explained further below, but not through implied covenant.
Plaintiffs have failed to state a valid claim for Count IV separate from the original breach of contract claim in Count I. Thus, the motion to dismiss Count IV as to Defendant Schell Brothers is GRANTED.
c. Count III: Deceit & Count V: Fraud
In Delaware, fraud and deceit are interchangeable.66 Delaware also does not distinguish between fraud and fraudulent inducement.67 Plaintiffs raise two fraud claims.
Count V (labeled “Fraud“) claims that after the initial breach, Defendants mislead the Sedghis in an email on April 19, 2021 which concluded with “[w]e are now left with the following options: 1. All parties can sign a mutual termination agreement and the deposit will be immediately returned to you; or 2. Should you desire to litigate the termination, we will retain the deposit in escrow pending a resolution of the dispute.”70 Plaintiffs claim this induced the Sedghis to sign an addendum that the Sedghis waive any claims regarding a sewer drain, not included but described as setting forth “... that a homeowner has a proper expectation of the storm drain location and to prevent future liability for [Defendant Schell Brothers]
Defendants move to dismiss on grounds that either Count III duplicates Count V, or alternatively that Counts III and V fail to sufficiently plead the elements of fraud. Specifically, Defendant contends that Count III fails as Plaintiffs disclaim reliance in Section 18 of the Purchase Agreement, and Count V fails to plead reliance.
(1) the defendant falsely represented or omitted facts that the defendant had a duty to disclose; (2) the defendant knew or believed that the representation was false or made the representation with a reckless indifference to the truth; (3) the defendant intended to induce the plaintiff to act or refrain from acting; (4) the plaintiff acted in justifiable reliance on the representation; and (5) the plaintiff was injured by its reliance.74
Superior Court Civil Rule 9(b) requires that “... the circumstances constituting fraud . . . shall be stated with particularity. Malice, intent, knowledge and other condition of mind of a person may be averred generally.”75 Public policy requires a specific articulation of which statements would have been false or materially misleading.76 Furthermore,
. . . the anti-bootstrapping rule bars a fraud claim where the plaintiff merely “adds the term ‘fraudulently induced’ to a complaint or alleges that the defendant never intended to comply with the agreement at issue at the time the parties entered into it,” but it does not prevent a fraud claim against defendants who “knew ‘contractual representations’ were false, and yet made them anyway.”77
For Count III, there is no false representation given. Plaintiffs point to the potentially discriminatory language in the Purchase Agreement which provided
For Count V, the inducement alleged has no real connection to the reliance or damages outside the breach of contract. Count V describes an inducement baiting Plaintiffs to sign the sewer addendum, then describes damages about the underlying Purchase Agreement falling through, not damages related to signing the sewer addendum.80 The only damage Plaintiffs directly suffered from signing the sewer addendum is jumping through an extra hoop that ultimately proved pointless in their
For Count V‘s alternative theory, there also is no actual reliance, because Defendants trying to induce Plaintiffs to ‘waive your rights to sue for discrimination’ does not match Plaintiffs’ actual reliance of ‘waiving rights to sue for the sewer drain.’ This alternative theory also fails to allege damages relating to Plaintiffs waiving their rights to sue about a sewer drain to a house they never closed on. As stated above, the damages Plaintiffs include are related to the failure to close on the house and are not damages stemming from the alleged fraud. Under either theory, Count V fails to state a claim. Thus, the motion to dismiss Counts III and V as to Defendant Schell Brothers is GRANTED.
d. Count VIII: Unjust Enrichment
“Unjust enrichment is defined as ‘the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.’ ”81 “A claim for unjust enrichment is not available if there is a contract that governs the relationship between parties that gives rise to the unjust enrichment claim.”82
Accepting all facts in the complaint as true for this motion to dismiss, Plaintiffs allege that the Purchase Agreement arose through wrongdoing, as the language of the Purchase Agreement showed Defendants entered this deal with the intention of discriminatorily breaching and keeping the downpayment.87 Additionally, Plaintiffs adequately allege that the Purchase Agreement had language that allowed Defendant Schell Brothers to unilaterally walk away from the contract after making a discriminatory determination that Plaintiffs were of an unacceptable
CONCLUSION
Ultimately, Plaintiffs’ Contractual Claims (Counts I-V and VIII) are not time-barred as a matter of law. However, Plaintiffs still fail to state contractual claims against Defendant Horner in his individual capacity, and thus the motion to dismiss Defendant Horner with respect to the Contractual Claims (Counts I-V and VIII) is GRANTED. Plaintiffs further fail to state claims for replevin, conversion, detinue, deceit, fraud, or bad faith breach of contract. Thus, the motion to dismiss Defendant Schell Brothers with respect to Counts II-V is GRANTED. Plaintiffs state a valid claim of unjust enrichment as an alternative to breach of contract in the event the contract is deemed void, and thus the motion to dismiss Defendant Schell Brothers with respect to Count VIII is DENIED.
The case shall proceed with Counts I and VIII against Defendant Schell Brothers and Counts VI-VII against both Defendant Schell Brothers and Defendant Horner.
/s/ Mark H. Conner
Mark H. Conner, Judge
cc: Prothonotary