Moore v. Erickson & Ralph, Inc.

• Decision Date: 03 May 2011
• Docket Number: Docket No. CV-10-33
• Parties: DWIGHT A. MOORE and ANNE MARIE MOORE, Plaintiffs v. ERICKSON AND RALPH, INC., d/b/a/ RALPH'S HOME SALES, and M.M.H. PRESTIGE HOMES, INC., Defendants
• Court: Maine Supreme Court

DWIGHT A. MOORE and ANNE MARIE MOORE, Plaintiffs v. ERICKSON AND RALPH, INC., d/b/a/ RALPH'S HOME SALES, and M.M.H. PRESTIGE HOMES, INC., Defendants

Docket No. CV-10-33

SUPERIOR COURT STATE OF MAINE Sagadahoc, ss.

Dated May 3, 2011

ORDER AND JUDGMENT

This matter is before the court on die motion of Defendant M.M.H. Prestige Homes, Inc. for summary judgment; the motion of Erickson and Ralph Inc. for summary judgment; and die motion of Plaintiffs Dwight and Anne Marie Moore, motion to amend the complaint.

BACKGROUND

The undisputed facts of this case may be briefly summarized as follows:¹ On or about September 16, 2003, Plaintiffs Dwight and Anne Marie Moore entered into an agreement with Defendant Erickson and Ralph, Inc., d/b/a/ Ralph's Home Sales ("Ralph'sHomes") lor a "Ralph's Homes Modular Package" for their properly located at 19 Granite Ledge Road, Phippsburg, Maine. The package included, hut was not limited to, a foundation, backfill, drainage, excavation, water line, sewer line, finish work, loom and seed, as well as a modular home built to plans and specifications provided by Defendant M.M.H. Prestige Homes, Inc. ("Prestige"). Ralph's Homes entered into a contract with Prestige under which Prestige would sell to Ralph's Homes a modular home to be delivered to the Phippsburg address.² Prestige was compensated for the home by Ralph's Homes, and was not paid directly by Plaintiffs. Prestige contends that the only parties to the home sale contract were Prestige and Ralph's Homes, while the Plaintiffs contend that, as the customers, they were also parties to the contract.

Prestige admits that the home sold to Ralph's Homes was customized for Plaintiffs, and that Prestige prepared floor plans, elevation plans, stair plans, and foundation plans specifically for the Plaintiffs' home. Some of these plans were stamped: "Issued for Construction Cannot Proceed without: Customer Approval . . . ," and were signed by Plaintiff Dwight Moore.

The contract between Ralph's Homes and Prestige stated that all site, foundation, and site finish work for the Phippsburg home would be completed by parties other than Prestige. Prestige did not construct the foundation for the Phippsburg home, nor did Prestige at any time complete maintenance work on the foundation. The construction of the foundation was completed prior to the delivery of the home.

The modular home arrived in Phippsburg on dates during December 2003 and January 2004. It came in four parts via truck from Prestige's facility in Sussex, New Brunswick. Prestige completed delivery of the home and was paid in full by Ralph's Home on January 13, 2004. The Plaintiffs and Ralph's Homes closed on the modular home package on March 4, 2004.

Plaintiffs were provided with Prestige's Home Owner's Manual that included a Warranty & Service Program Section that stated: "Your Prestige warranty guarantees all workmanship and materials used in the construction of your home." Additionally, according to the Performance Standards Section of the Manual, "Prestige Homes' warranty covers all workmanship and materials supplied by Prestige Homes for a period of 12 months from the date of possession." (P.A.S.M.F. ¶ 5; Prestige R.S.M.F. ¶ 5 (admitting the statement despite objections)³).

The Ralph's Homes Service Policy for Modular Homes also limited Ralph's Homes' warranty on the home to one year*, from March 4, 2004 through March 5, 2005. (Ralph's S.M.F. ¶¶ 4-6.) The Service Policy was made a part of the contract through the Purchase and Sale Addendum that was initialed by the Plaintiffs. (Id.)

On March 25, 2004, Dwight Moore and Prestige construction supervisor, Norman Harding, completed a Warranty Inspection/Customer Orientation Form. This form, signed by both Mr. Moore and Mr. Harding, notes Plaintiffs numerous complaints of defects in the home, including a complaint regarding the defective roof. On or about January 18, 2005, the Plaintiffs communicated to Ralph's Homes that the foundation wall had cracked. The Plaintiffs admit to communicating with both Defendants about these defects over the course of the next five years. Plaintiffs were continually in contact withboth Defendants over the next five years about the remediation of the defects Plaintiffs asserted needed to be addressed.

On April 21, 2010, Plaintiffs filed the current complaint against the Defendants alleging that their failure to construct the home in a reasonable and workmanlike manner resulted in defects in the roof and foundation and caused injuries to the Plaintiffs. Specifically, the complaint states the following claims: Count I: Negligence; Count II: Breach of Warranty; Count III: Breach of Agreement; Count IV: Breach of Covenant of Good Faith and Fair Dealing; Count V: Unfair Trade Practice; Count VI: Breach of Warranties Under the Home Construction Act; and Count VII: Breach of Implied Warranty of Fitness.

On December 20, 2010, Prestige filed the pending motion for summary judgment. On January 6, 2011, the Plaintiffs filed the pending motion to amend the complaint to add a claim of fraud (Count VIII). On January 25, 2011, Defendant Ralph's Homes also filed a motion for summary judgment. The court addresses these motions below.

DISCUSSION

I. Motion to Amend the Complaint:

In the interests of finality and judicial economy, courts should rule on a motion to amend before considering a dispositive motion, such as a motion to dismiss or a motion for summary judgment. See Sherbcii v. Remmel, 2006 ME 116, ¶8, 908 A.2d 622, 624; Kelly v. Michaud's Ins. Agency, 651 A.2d 345, 346 (Me. 1994).

After a responsive pleading is served, a plaintiff may amend its complaint "only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." M.R. Civ. P. 15(a); see also Efstadiiou v. Aspinquid, Inc., 2008ME 145, ¶ 21, 956 A.2d 110, 118. "Whether to allow a pleading amendment rests with the court's sound discretion." Holden v. Weinschenk, 1998 ME 185, ¶ 6, 715 A.2d 915, 917 (quoting Diversilicd Foods, Inc. v. First Natl Bank of Boston, 605 A.2d 609, 616 (Me. 1992)).

Courts should freely allow an amendment to a complaint except for bad faith, dilatory tactics, or undue delay resulting in prejudice to the opponent. Longley v. Knapp, 1998 ME 142, 19, 713 A.2d 939, 945; see also 1 Field, McKusick & Wroth, Maine Civil Practice § 15.4 (2d ed. 1970). However, where "a proposed amended complaint would be subject to a motion to dismiss, the court is well within its discretion in denying leave to amend." See Glynn v. City of S. Portland, 640 A.2d 1065, 1067 (Me. 1994).

The Plaintiffs' motion to amend seeks to add a claim of fraud to their complaint.

Fraud occurs when a defendant:

(1) makes a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless disregard of whether it is true or false (4) for the purpose of inducing another to act or to refrain from acting in reliance upon it, and (5) the plaintiff justifiably relies upon the representation as true and acts upon it to his damage.

Efstadiiou, 2008 ME 145, ¶ 15, 956 A.2d at 116 (citing St Francis de Sales Fed. Credit Union v. Sun Ins. Co. of N.Y., 2002 ME 127, ¶ 26, 818 A.2d 995, 1003). Therefore, "[p]rocedurally, a party seeking to amend its complaint to include a fraud count must provide 1) a description of the fraud with particularity in its motion to amend and 2) a draft order granting it permission to include the count of fraud." Anderson v. Cigna Healthcare of Maine, 2005 Me. Super. LEXIS 139 (Oct. 27, 2005) (citing M.R. Civ. P. 7(b)(3); M.R. Civ. P. 9(b)).

Here, the Plaintiffs' submitted amended fraud claim states:

Ralph's and/or Prestige made representations of material fact to the Plaintiffs onnumerous occasions mat they were aware of the defects in the structure, that they (sic) were legitimate damage claims, that they had an obligation to make the necessary repairs, and that they would do so. (Am. Compl. ¶ 46.)

These representations of material facts by Ralph's and/or Prestige constituted false and material misrepresentations to Plaintiffs, and were made with the knowledge that they would not, and had no intent of, making the necessary repairs to Plaintiffs' structure. (Am. Compl. ¶ 47.)

Ralph's and/or Prestige false and material misrepresentations to Plaintiffs were made with knowledge of their falsity or in reckless disregard of whether they were true or false. (Am. Compl. ¶ 48.)

These false and material representations made by Ralph's and/or Prestige were made for the purpose of inducing Plaintiffs to act or defer action in reliance upon them, in that Plaintiffs reasonably believed Ralph's and/or Prestige would honor their obligations and make the repairs. (Am. Compl. ¶ 49.)

Plaintiffs justifiably relied upon the representations made by Ralph's and/or Prestige as being true and acted upon them or deferred action on them to their detriment. (Am. Compl. ¶ 50.)

The Plaintiffs have failed to plead fraud with particularity as required by M.R. Civ. P. 9(b). The Plaintiffs never specified who made the alleged misrepresentations, or the specific content of the misrepresentations. Although "[m]alice, intent, knowledge, and other condition of mind of a person may be averred generally" when pleading fraud, the actual circumstances surrounding the allegation must be plead with particularity. M.R. Civ. P. 9(b); see also Barnes v. McGough, 623 A.2d 144, 146 (Me. 1993).

A distinct reason why the proposed fraud count would likely not survive a motion to dismiss is that the gravamen of the Plaintiffs' fraud allegations, appears to be that the Defendants made promises to remedy defects that they never intended to keep. Under Maine law, a damages claim for fraud requires misrepresentation as to an existing fact, and a breach of a promise to do something in the future cannot qualify, at least in the absence of some special relationship between the parties, which is not alleged. See Boivin v. Jones& Vining, Inc.,...