Wallworks, Inc. v. Dougherty & Conrad Insurance Services

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

DESHONG & SONS CONTRACTORS, )
INC., by itself and through PENN )
NATIONAL INSURANCE, as subrogee, )
)
Plaintiffs, )
)
v. ) C.A. No. N20C-12-064 CEB
)
WALLWORKS, INC., DONEGAL )
MUTUAL INSURANCE COMPANY, )
and ATLANTIC STATES INSURANCE )
COMPANY, a subsidiary of Donegal )
Insurance Company, )
)
Defendants. )
)
WALLWORKS, INC., )
)
Third-Party Plaintiff, )
)
v.
)
DOUGHERTY & CONRAD )
INSURANCE SERVICES n/k/a )
DOUGHERTY & COMPANY, )
)
Third-Party Defendant. )

Submitted: August 26, 2024
Decided: October 23, 2024

MEMORANDUM OPINION
Upon Third-Party Defendant Dougherty & Company’s Motion to Dismiss
DENIED.

Krista M. Reale, Esquire, MARGOLIS EDELSTEIN, Wilmington, Delaware,
Attorney for Third-Party Plaintiff.
Aaron E. Moore, Esquire, MARSHALL DENNEHEY, P.C., Wilmington,
Delaware. Attorney for Third-Party Defendant.

BUTLER, R.J.
INTRODUCTION

This is the Court’s decision on the motion of Third-Party Defendant

Dougherty & Company, n/k/a Dougherty & Conrad Insurance Service

(“Dougherty”), to dismiss the third-party complaint filed by Defendant Wallworks,

Inc. (“Wallworks”). For the following reasons, the motion is denied.

BACKGROUND

1. Deshong and Wallworks dispute whether Deshong was covered by
Wallworks’ commercial general liability policy.

Plaintiff Deshong & Sons, Inc. (“Deshong”) had a construction contract to

build a Wawa store in Hockessin, Delaware. Deshong hired Wallworks for a portion

of the work. As a part of the Deshong/Wallworks agreement, Wallworks was

required to carry certain insurance and to indemnify Deshong for all losses caused

by Wallworks’ work at the site and to name Deshong as an additional insured.

Several key issues are in dispute, including: 1) whether Deshong is an additional

insured under the insurance policy; 2) whether the insurance that was placed through

Dougherty was the insurance required by the Deshong/Wallworks agreement.

Dougherty produced a “Certificate of Insurance” (“COI”) identifying

Defendant Atlantic States Insurance Company (“Atlantic Insurance”) as the
2
insurance carrier.1 The COI, apparently prepared by Dougherty, indicated that the

insurance was “primary” and “non-contributory,” terms that may be significant later

on.2

An employee of Wallworks suffered a serious injury on the jobsite and sued

Deshong in the Court of Common Pleas in Philadelphia.3 Deshong notified

Wallworks and Atlantic Insurance of the lawsuit, but Atlantic Insurance refused to

defend. Armed with an opinion from coverage counsel, Atlantic Insurance took the

position that the insurance policy did not require Atlantic Insurance to defend or

indemnify Deshong. Ultimately, Deshong and its own insurer, Penn National, settled

the Philadelphia lawsuit with Wallworks’ employee for a substantial sum. Deshong

then filed this lawsuit seeking contribution and/or indemnification from Wallworks

and/or Atlantic Insurance for the settlement amount.

Atlantic Insurance has taken the position that the insurance carried by

Wallworks was not “first party” insurance benefitting Deshong. Rather, Atlantic

1
D.I. 144 (Wallworks Inc.’s Third-Party Compl.), Trans ID 71634691 (Dec. 15, 2023) ¶ 7
[hereinafter Third-Party Compl.].
2
Id. ¶¶ 7-8.
3
It is unclear at this point whether the exact cause of the employee’s injuries is relevant. But
certainly the employee would be limited in his rights against his employer, Wallworks, by virtue
of the exclusive remedy provisions of the Delaware Worker’s Compensation Statute. See 19 Del.
C. § 2304.

3
Insurance maintains that the policy was secondary, “excess” insurance, triggered

only when the primary carrier’s liability coverage was exceeded. Whether Atlantic

Insurance’s position is correct remains at issue, as Deshong has a pending motion

seeking a ruling that Wallworks’ policy is, in fact, primary insurance.

Notwithstanding, Deshong has taken the alternative position that if the insurance

purchased by Wallworks is not primary insurance benefitting Deshong, then

Wallworks breached the subcontract by failing to ensure Deshong was fully covered.

2. Wallworks files a third-party complaint against Dougherty.

Wallworks has now named Dougherty as a third-party defendant. Wallworks

claims that it is entitled to contribution and/or indemnification from Dougherty for

placing the wrong insurance with Atlantic Insurance. Dougherty is also faulted for

failing to name Deshong as an additional insured and for issuing a COI that mis-

identified the policy as “primary non-contributory.”4

Dougherty, a company based in the Philadelphia suburbs, initially moved to

dismiss, arguing that Delaware could not assert personal jurisdiction over the

brokerage. The Court heard argument on that motion and asked the parties for

additional briefing on the somewhat intriguing question of personal jurisdiction over

insurance brokers that insure activities in other states. But rather than further

4
Third-Party Compl.¶ 7.
4
articulate its basis for believing that Delaware lacked personal jurisdiction,

Dougherty’s second round of briefing conceded the question of personal

jurisdiction 5 and instead moved to dismiss on the grounds to be dealt with here.

ISSUES RAISED

Wallworks’ third-party complaint, fairly read, is that Dougherty, as agent for

Wallworks, was told (or perhaps shown) what terms Deshong wanted in the contract

of insurance that was required in the Deshong/Wallworks agreement, and Dougherty

failed to place insurance as per the contract terms. This meant Deshong was not held

harmless as required by the subcontract and was liable for substantial sums in

personal injury damages that Wallworks’ insurer, Atlantic Insurance, should have

responded to. Further, Dougherty failed to have Deshong named as an additional

insured as per the contract.6 Finally, Dougherty issued a “COI” incorrectly

identifying the policy as “primary” and “non-contributory,” but in fact it was not.7

Assuming, as we must at this stage of the case, that all of this is true,

Dougherty presents four arguments in its motion to dismiss: 1) that Dougherty

5
D.I. 166 (Opening Br. in Support of Mot. to Dismiss), Trans ID 73665647 (July 15, 2024) at 1
[hereinafter Opening Br. in Support of Mot. to Dismiss].
6
D.I. 130 (Third Amended Compl.), Trans ID 71472479 (Nov. 22, 2023) ¶¶ 12-14 [hereinafter
Third Amended Compl.].
7
Third-Party Compl.¶¶ 7-8.

5
cannot be liable to Wallworks for contribution and/or indemnification because

Dougherty is not a “joint tortfeasor” with Wallworks; 8 2) that a negligent

procurement claim cannot be asserted as a third-party claim because third-party

claims cannot be raised independent of a contribution claim; 9 3) if this is a negligent

procurement claim, then it is time barred; 10 4) to the extent Wallworks’ claim is one

for negligent misrepresentation, the Court of Chancery has exclusive jurisdiction

over negligent misrepresentation claims and this Court lacks jurisdiction. 11

STANDARD OF REVIEW

In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6),

the standard for review is well known:

[T]he Court (1) accepts as true all well-pleaded factual allegations in the
complaint; (2) credits vague allegations if they give the opposing party notice
of the claim; (3) draws all reasonable factual inferences in favor of the non-
movant; and (4) denies dismissal if recovery on the claim is reasonably
conceivable. 12

8
Opening Br. in Support of Mot. to Dismiss at 6-11.
9
Id. at 11-12.
10
Id. at 12-15.
11
D.I. 169 (Reply. Br.), Trans. ID 74147644 (Aug. 26, 2024) at 6-7 [hereinafter Reply. Br.].
12
Grottenthaler v. SVN Med, LLC, 2022 WL 17249642, at *2 (Del. Super. Nov. 28, 2022) (citing
Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Holdings LLC, 27 A.3d 531, 535 (Del. 2011)).
6
Granting a motion to dismiss is inappropriate, except where “under no

reasonable interpretation of the facts alleged could the complaint state a claim for

which relief might be granted.”13 The inquiry in a motion to dismiss is “whether

there is a possibility of recovery.” 14 But the Court need not “accept conclusory

allegations unsupported by specific facts or . . . draw unreasonable inferences in

favor of the non-moving party.”15

ANALYSIS

1. Rule 14 is not limited to joint tortfeasor liability cases.

Dougherty argues that “Rule 14 does not permit a joinder of a third-party for

a direct claim involving negligent conduct to the third-party plaintiff, and not the

plaintiff as a joint tortfeasor.”16 This assertion requires critical review.

Deshong alleges that Wallworks breached the subcontract by failing to secure

the proper insurance and further, that Wallworks was negligent in that it improperly

13
Ryle v. Outen, 2024 WL 66022, at *2 (Del. Super. Jan. 5, 2024), aff'd, No. 28, 2024, 2024 WL
4285431 (Del. Sept. 24, 2024) (quoting Unbound Partners Ltd. Partnership v. Invoy Holdings
Inc., 251 A.3d 1016, 1023 (Del. Super. 2021)).
14
Middlecap Assocs., LLC v. Town of Middletown, 2023 WL 6848999, at *2 (Del. Super. Oct.
16, 2023) (quoting Garfield v. BlackRock Mortg. Ventures, LLC, 2019 WL 7168004, at *7 (Del.
Ch. Dec. 20, 2019)).
15
Bovell v. Harrison, 2023 WL 4105410, at *2 (Del. Super. June 20, 2023) (quoting
Price v. E.I. DuPont de Nemours & Co., 26 A.3d 162, 166 (Del. 2011), overruled on other
grounds by Ramsey v. Ga. S. Univ. Advanced Dev. Ctr., 189 A.3d 1255, 1277 (Del. 2018)).
16
Opening Br. in Support of Mot. to Dismiss at 7.

7
represented to Deshong that Deshong was covered as a primary insured.17 That

representation was Dougherty’s representation initially, propounded by Dougherty

and then repeated by Wallworks. 18 Deshong alleges that this misrepresentation,

made by both Wallworks and Dougherty, caused Deshong damages for which it

seeks compensation. 19 Dougherty and Wallworks were, in this sense, “joint

tortfeasors” – two tortfeasors causing one injury – that caused Deshong’s exposure

to liability without the bargained for insurance coverage. Deshong has a “direct”

claim against Wallworks, and Wallworks has a “direct” claim against Dougherty.

It is correct that Deshong also has a breach of contract claim against

Wallworks in that failing to secure the coverage called for in the subcontract was a

breach of the subcontract. Deshong was not a contracting party with Dougherty. But

privity of contract is not necessary to support a third-party complaint under Rule

14.20

17
Third Amended Compl. ¶¶ 15-20.
18
Opening Br. in Support of Mot. to Dismiss at 3-4.
19
Third Amended Compl. ¶¶ 18-19.
20
Guardian Const. Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378, 1387 (Del. Super. 1990)
(negligent misrepresentation claims may be raised despite lack of privity).

8
Rule 14 permits any party to join “a person not a party to the action who is or

may be liable to the third-party plaintiff for all or part of the plaintiff's claim against

the third-party plaintiff.” 21 Deshong is suing Wallworks for, inter alia, failing to

secure first-party insurance on its behalf. That is part of the plaintiff’s claim against

the third-party plaintiff.

Dougherty’s motion to dismiss makes much of the Delaware Contribution

Among Tortfeasors Act (“DCATA”). The DCATA defines a “joint tortfeasor” as

“2 or more persons jointly or severally liable in tort for the same injury to person or

property, whether or not judgment has been recovered against all or some of

them.” 22 DCATA does not require that the two or more persons have acted in

concert or even with the same motives.23 Rather, DCATA requires only that the two

21
Super. Ct. Civ. R. 14(a). “The purpose of Rule 14 is to provide an efficient means for
resolving multiple claims arising from a single set of facts.” CHARLES A. WRIGHT, ET AL.,
FEDERAL PRACTICE AND PROCEDURE §1442, at 291 (2d ed. 1990); see also Novak v. Tigani, 110
A.2d 298, 299 (Del. Super. 1954) (citing Goldsberry v. Frank Clendaniel, Inc., 109 A.2d 405,
407-08 (Del. Super. 1954)) (noting the primary purpose of rule is to avoid circuity of action and
multiplicity of suits); State ex. rel. Building Comm'n v. Wood, 173 A.2d 327, 332 (Del. Super.
1961) (citing 3 JAMES W. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 14.04 (2d ed.
1955)) (observing third-party practice has general purpose of preventing inconsistent verdicts
based on similar evidence on identical issues).
22
10 Del. C. § 6301.
23
“[W]hen the negligent acts of two or more persons concur in producing a single indivisible
injury, such persons are jointly and severally liable, though there was no common duty, common
design, or concerted action.” Leishman v. Brady, 3 A.2d 118, 120 (Del. Super. 1938) (citing 1
COOLEY ON TORTS § 86).

9
actors have caused one injury.24 DCATA sorts out how the actors are to apportion

the loss between them when some tortfeasors settle and others do not. DCATA is

not a procedural rule of third-party practice; Rule 14 is.

Dougherty argues that it cannot be added as a third-party defendant because

Wallworks’ complaint is different from the one asserted by Deshong against

Wallworks: “the legal relationship between Deshong and all defendants is not the

same.”25 Dougherty says, “There must be joint and several liability, rather than joint

or concurring negligence in order for there to be contribution.” 26 But in this motion

to dismiss, the issue is whether Dougherty can be named as a third-party defendant

under Rule 14, not whether the liability is joint, several, or concurring. Dougherty’s

argument confuses the difficulties surrounding contribution under the DCATA with

the right to bring a third-party complaint under Rule 14. Rule 14 permits the third-

party plaintiff to assert any claim upon which the third-party defendant may be found

24
“[W]hen the negligent acts of two or more persons concur in producing a single indivisible
injury, such persons are jointly and severally liable, though there was no common duty, common
design, or concerted effort.” O'Rangers v. Cadia Rehab. Silverside, 2019 WL 1531520, at *5
n.32 (Del. Super. Apr. 8, 2019) (quoting Campbell v. Robinson, 2007 WL 1765558, at *2 (Del.
Super. June 19, 2007)).
25
Opening Br. in Support of Mot. to Dismiss at 9 (citing Johnson v. Preferred Pro. Ins. Co.,
2014 WL 4792962, at *3 (Del. Super. Sept. 25, 2014)).
26
Id. (citing Rodgers v. Erickson Air-Crane Co. L.L.C., 2000 WL 1211157, at *11 (Del. Super.
Aug. 17, 2000)).

10
liable for all or part of plaintiff’s loss.27 The contribution rules under DCATA are

not before the Court on a motion to dismiss.

Dougherty finally argues that it owed no duty of care to Deshong. But again,

that is not the issue. If Deshong were suing Dougherty directly under a third-party

beneficiary theory or some such, there might be more to discuss, but those arguments

are not before the Court.

2. To the extent this is a negligent procurement claim, it may be
asserted in a third-party complaint.

Dougherty says that even if this claim can be brought under Rule 14, a

negligent procurement claim cannot because “only” contribution claims can be

asserted in a third-party complaint. 28 Exactly where this novel theory comes from

is a mystery. No authority is cited.

Dougherty argues that to the extent this is actually a claim for negligent

procurement of insurance, the only parties to such a dispute would be Wallworks

and Dougherty, not Deshong. Fair enough. But in this third-party complaint,

Deshong is not a party: Wallworks is the plaintiff, and Dougherty is the defendant.

27
“The third-party defendant may also assert any claim against the plaintiff arising out of the
transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party
plaintiff.” Goldsberry, 109 A.2d at 406.
28
Opening Br. in Support of Mot. to Dismiss at 11-12.
11
Dougherty goes on to argue that since Deshong cannot assert a negligent

procurement claim against Dougherty, then neither can Wallworks, at least in this

lawsuit. Apparently, Dougherty believes this point is self-evident. It is not.

Whether Deshong can assert a negligent procurement claim is not the issue

before the Court. The third-party claim is that if Wallworks misrepresented the

insurance to Deshong, it is because Dougherty misrepresented it to Wallworks.

Naturally, all of this remains to be seen through discovery and/or trial.

3. A ruling on the statute of limitations for negligent procurement
requires a more complete factual record and cannot be decided on
this motion to dismiss.

Dougherty argues that to the extent Wallworks is making a claim for negligent

procurement of insurance, it was not filed within two years of placement, the

Pennsylvania statute of limitations for torts. Alternatively, Dougherty argues that it

was not filed within three years, Delaware’s limitations period for torts. Wallworks

responds that this is really an action for contribution, and the “claim” does not mature

until judgment is entered against Wallworks, and Wallworks pays out on the claim.

Only at that point does the cause of action accrue.

As to Wallworks’ argument that this is a contribution claim, it is noted that

Deshong settled the personal injury claim at the bottom of this dispute on September

15, 2021, and Wallworks filed the third-party suit on December 15, 2023, less than

12
three years after Deshong’s liability was certain. Whether these dates are conclusive

or whether Wallworks’ claim is actually a contribution claim we need not determine

here. For present purposes, it is enough to say there are factual issues afoot that

require discovery and preclude dismissal.

Dougherty points the Court to the Supreme Court’s decision in Kaufman v.

C.L. McCabe & Sons, 29 a negligent procurement case in which the Court ruled that

the statute of limitations began to run from the time the policy was delivered to the

insured. But the Kaufman Court recognized a limited exception to this rule. The

“time of discovery” may control the running of the statute where the defect in the

policy was “inherently unknowable” and “sustained by a ‘blamelessly ignorant

plaintiff.’”30 It is significant that Kaufman was a review of a decision on summary

judgment, after a full discovery record had been developed.31

In this case, Dougherty argues that the policy became “active” and was

delivered to Wallworks on July 1, 2016, which is the date on the “declarations page”

of one of the policy periods. 32 This fact, outside the record on a motion to dismiss,

29
Id. at 13-14 (quoting 603 A.2d 831, 835 (Del. 1992)).
30
Kaufman, 603 A.2d at 835 (quoting Isaacson, Stolper & Co. v. Artisans' Sav. Bank, 330 A.2d
130, 133 (Del. 1974)).
31
Id. at 832.
32
Opening Br. in Support of Mot. to Dismiss at 15.
13
may or may not be relevant to when Wallworks was on notice that the policy written

was insufficient to suit the contract between Deshong and Wallworks.

The Court has been shown no material on construction industry practices at

all, or the practices between Dougherty and Wallworks in particular. It is quite

unclear whether and when Wallworks knew that the insurance policy in question

was deficient vis-à-vis the subcontract. This is understandable on a motion to

dismiss, but again illustrates why the issue presented is unsuited to resolution at this

early stage of the pleadings.

The “time of discovery” exception, recognized in Kaufman, may toll the

statute of limitations. The “COI” that identified the policy as “primary” and “non-

contributing” was issued by Dougherty. There are no facts in the record before the

Court as to when the COI was generated, or why, or who saw it, or what duties

attached when it was delivered, or even if it ever was delivered. The Kaufman case

did not need to consider a misrepresentation by the broker concerning the coverage

under the policy.

In addition to the substantive problems with Dougherty’s arguments,

Dougherty must also overcome a significant procedural hurdle. Rule 12(b)(6)

provides that when a party seeking dismissal argues matters outside the pleadings,

“the motion shall be treated as one for summary judgment and disposed of as

14
provided in Rule 56, and all parties shall be given reasonable opportunity to present

all material made pertinent to such a motion by Rule 56.” 33 The “pertinent materials”

for a motion for summary judgment include the discovery that has been taken or

needs to be taken. The record – at least the record before the Court – on the creation,

execution, and delivery of the policy in question is non-existent.

Dougherty may have a winning argument that the statute of limitations has

limited or eliminated any claims against it. So far as the Court can determine, there

has been no discovery taken on this subject. Therefore, the Court will deny the

motion to dismiss on statute of limitations grounds without prejudice to Dougherty

raising the limitations period on a motion for summary judgment once discovery is

completed.

4. Resolution of a contested jurisdictional issue is not well served by
considering an argument only raised for the first time in a reply
brief.

As noted above, the briefing on this motion to dismiss is not the same briefing

on personal jurisdiction the Court expected. Dougherty switched tack and chose the

issues above in its opening brief. In its answering brief, Wallworks raised the

question whether Dougherty might be liable to Deshong on a third-party beneficiary

theory. Because the Court has determined that the complaint survives a motion to

33
Super. Ct. Civ. R. 12(c).
15
dismiss, we need not concern ourselves further, but it does highlight how “fluid” the

parties’ positions are in this dispute.

In its reply brief, Dougherty argues for the first time that one of Wallworks’

claims is for negligent misrepresentation that may only be heard in the Court of

Chancery.34 Dougherty’s late arrival to this issue has consequences: “Courts may

disregard or deem waived any arguments made in a reply brief which was not raised

in the opening brief.”35 Courts have the discretion to deem new arguments in a reply

brief waived because the “‘purpose of the reply brief is to respond to matters raised

in the answering brief.’” 36 This waiver rule is designed to prevent defendants from

34
Reply Br. at 7.
35
Ethica Corp. Fin. S.r.L v. Dana Inc., 2018 WL 3954205, at *3 (Del. Super. Aug. 16, 2018)
(citing Murphy v. State, 632 A.2d 1150, 1152 (Del. 1993)); see also Lewis v. Delaware Dep't of
Transportation, Div. of Motor Vehicles, 2022 WL 3025665, at *3 (Del. Super. Aug. 1, 2022)
(citing Ethica Corp., Finance S.R.L., 2018 WL 3954205 at * 3-4) (“Failure to provide any
factual and legal support an argument in an opening brief is grounds for treating it as waived, or
for disregarding it or deeming it waived if only made in a reply brief.”); Parkell v. Frederick,
2019 WL 1435884, at *1 (D. Del. Mar. 31, 2019) (quoting Perrigo Co. v. Intl. Vitamin Co., 2019
WL 359991, at *2 n.1 (D. Del. Jan. 29, 2019)) (“Because this argument was raised for the first
time in a reply brief, this Court may consider it waived.”); Houser v. Feldman, 569 F. Supp. 3d
216, 223 n.2 (E.D. Pa. 2021) (citing Filer v. Foster Wheeler LLC, 994 F. Supp. 2d 679, 692
(E.D. Pa. 2014)) (“If a party chooses to wait until reply briefing to raise its arguments, then the
‘Court need not address them.’”).
36
Camtech Sch. of Nursing & Tech. Scis. v. Delaware Bd. of Nursing, 2014 WL 604980, at *6
n.78 (Del. Super. Jan. 31, 2014), aff'd, 100 A.3d 1020 (Del. 2014) (quoting Chase Bank USA,
N.A. v. Hess, 2012 WL 5463127, at * 1 (D. Del. Nov. 8, 2012)).

16
sandbagging37 plaintiffs and forcing the Court and plaintiff “to wait for the reply

brief to understand the alleged bases for dispositive relief.”38

To be sure, the Superior Court’s subject matter jurisdiction is always a matter

of concern to the Court. 39 And the Court is quite aware that there are differing views

on jurisdiction over claims of negligent misrepresentation. 40 Resolution of these

differing points of view is not well served by considering an argument raised for the

first time in a reply brief.

It is clear enough from the pleadings that Wallworks’ dispute with Dougherty

stems from Dougherty’s alleged failure to put in place the insurance necessary to

satisfy the contract requirements of the subcontract. That Dougherty also

misrepresented that it was in place seems almost beside the point, except to the extent

the representation kept Wallworks and Deshong from knowing that the wrong

37
“Delaware Courts do not favor ‘sandbagging’ in reply briefs.” Ethica Corp. Fin. S.r., 2018
WL 3954205 at *3 (citing In re Asbestos Litig., 2014 WL 7150472, at *1 n.5 (Del. Super. Dec. 4,
2014)).
38
In re Asbestos Litig., 2007 WL 2410879, at *4 (Del. Super. Aug. 27, 2007).
39
Otto Candies, LLC v. KPMG LLP, 2018 WL 1960344, at *3, *5 (Del. Super. Apr. 25, 2018)
(finding the Superior Court lacked subject matter jurisdiction over a negligent misrepresentation
claim but denying the motion to dismiss, and ordered the case to Court of Chancery).
40
Compare Van Lake v. Sorin CRM USA, Inc., 2013 WL 1087583, at *12 (Del. Super. Feb. 15,
2013) (interpreting a negligent misrepresentation as a claim for simple negligence, keeping
jurisdiction in Superior Court) with WyPie Invs., LLC v. Homschek, 2018 WL 1581981, at *16-
17 (Del. Super. Mar. 28, 2018) (opining that the Court of Chancery should have exclusive
jurisdiction over all claims for the negligent provision of false information).

17
insurance had been procured. Perhaps this figures into the statute of limitations

question discussed previously, but it is not going to suddenly make insurance appear

where it does not exist.

The Court is well aware that the question of Dougherty’s duties – to both

Wallworks and Deshong – is of significance to this dispute. But the parties have not

sharpened their arguments on whether these duties lie in tort, in contract, or whether

they exist at all. The lack of a record through discovery only complicates what the

parties seem to agree is a matter undecided under Delaware law.

For these reasons, the Court declines to dismiss the complaint at this bare

pleading stage and will revisit the negligent misrepresentation issue once it has been

fleshed out through discovery and appropriately briefed by the parties.

CONCLUSION

For the reasons stated above, Dougherty’s motion to dismiss is DENIED.

IT IS SO ORDERED.

/s/ Charles E. Butler
Charles E. Butler, Resident Judge

18