JOHNSTON, J.
Plaintiff Richard E. Devincentis ("Devencentis") filed this action against Defendant European Performance Inc. ("European Performance"), alleging breach of contract and breach of bailment contract. Devincentis claims that as a result of European Performance's breach, his 2003 Ferrari 360 Spider Roadster (the "Vehicle") sustained substantial damage. Devincentis seeks damages for diminution in value of the Vehicle, loss of use of the Vehicle, and other unspecified contractual damages.
European Performance filed this Motion for Summary Judgment, arguing that: (1) Devincentis lacks standing to bring the instant action; and (2) Devincentis' suit is barred by the statute of limitations. Alternatively, European Performance moves for partial summary judgment, arguing that Devincentis is not entitled to the full amount of damages requested.
The Court finds that Devincentis has standing to bring the instant action and has filed the Complaint within the applicable statute of limitations. The Court, however, finds that a genuine issue of material fact exists as to the appropriate measure of damages to which Devincentis would be entitled should European Performance be found liable. Therefore, European Performance's Motion for Summary Judgment, and alternative Motion for Partial Summary Judgment, must be denied.
On March 16, 2007, Devincentis purchased the Vehicle from World Motor Sports through Ebay. Divincentis paid approximately $165,000 for the Vehicle. Devincentis claims that, at the time of purchase, the Vehicle had a fair market value of $165,000.
The Vehicle subsequently was delivered to Devincentis and titled in Delaware. The title to the Vehicle, dated August 29, 2007, reveals no liens on the Vehicle.
On October 12, 2007, Wilmington Trust Company ("Wilmington Trust") made an interest only loan to Devincentis in the amount of $100,000. Devincentis pledged the Vehicle as collateral for the loan.
In November 2007, Devincentis retained European Performance to perform routine maintenance on the Vehicle. On November 12, 2007, Devincentis dropped the Vehicle off at European Performance for service. Devincentis claims that while the Vehicle was awaiting service, European Performance left the keys inside the Vehicle. That same day, the Vehicle was stolen.
The Vehicle was recovered by the Elsmere Police Department on November 12, 2007. Devincentis claims that the Vehicle sustained approximately $115,000 to $135,000 in damage as a result of European Performance's alleged breach.
European Performance arranged for the Vehicle to be repaired at a body shop in Pennsylvania. Due to financial difficulties at the body shop, it took over two years for the Vehicle to be repaired. The Vehicle eventually was returned to Devincentis on December 16, 2009. Devincentis, however, took the Vehicle to the body shop on three more occasions because additional repairs were necessary.
At some point in time, Devincentis defaulted on the loan from Wilmington Trust. This Court entered an Order of Replevin on April 15, 2010, allowing Wilmington Trust to repossess the Vehicle. At the time of repossession, the Vehicle was located at the body shop in Pennsylvania.
After taking possession of the Vehicle, Wilmington Trust sold it for $49,500. Wilmington Trust subsequently cancelled the $51,500 balance on Devincentis' loan.
European Performance argues that Devincentis lacks standing to bring the instant action because any legal interest Devincentis had in the Vehicle was extinguished by the Order of Replevin. Moreover, European Performance claims that, pursuant to the terms of the loan agreement between Devincentis and Wilmington Trust, Wilmington Trust is entitled to any and all compensation for damage to the Vehicle. Therefore, Devincentis does not have a tangible interest in the outcome of the matter.
Devincentis concedes that he no longer has a possessory interest in the Vehicle, but claims that he still has standing to proceed with the instant action because he suffered an injury-in-fact.
The term "standing" refers to a party's right to invoke the jurisdiction of the Court to enforce a claim or redress a grievance.
It is undisputed that Devincentis' possessory interest in the Vehicle was terminated by the Order of Replevin.
European Performance further argues that any interest Devincentis may have had in the outcome of the litigation was extinguished by the terms of Devincentis' loan agreement with Wilmington Trust. According to European Performance, the terms of the loan agreement provide that Wilmington Trust is entitled to all sums due if European Performance is found liable for the damage caused to the Vehicle.
The loan agreement, executed by Devincentis and Wilmington Trust, identified the Vehicle as collateral. Collateral also included "[a]ll proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in the Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process."
As provided by the loan agreement, Wilmington Trust repossessed the Vehicle upon Devincentis' default. Wilmington Trust then resold the Vehicle for $49,500 and cancelled the remaining $50,500 balance on the loan. In so doing, Wilmington Trust foreclosed any future debt collection, and relinquished its right to receive any proceeds recovered for damage to the Vehicle. Even assuming, arguendo, that Wilmington Trust had not canceled the $50,500 loan balance, any recovery to Wilmington Trust would have been capped at $50,500, plus contractual costs and fees. Devincentis would be entitled to any surplus recovery.
An argument can be made that any recovery to Devincentis must be offset by the amount of debt reduction. However, that is an issue affecting the proper measure of damages, not bearing upon standing.
Under the facts of this case, the Court finds that Devincentis has standing to pursue to instant action.
European Performance argues that because Devincentis seeks strictly tort relief, his action is subject to the already-expired two year statute of limitations for tort actions. According to European Performance, the type of damages suffered, rather than the cause of action pled, determines the applicable statute of limitations.
In response, Devincentis claims that the damages sought — diminished value and loss of use — are appropriate remedies for breach of contract claims. Therefore, the appropriate statute of limitations is three years.
It is well-settled Delaware law that the nature of the damages, and not the cause or type of action instituted, determines what statute of limitation controls a particular action.
Contrary to European Performance's assertion, the relief sought by Devincentis is not strictly tort relief. This Court previously has held that "[i]n establishing a damage theory, `regardless of whether the cause of action sounds in contract or tort, the focus is to identify the [injured parties'] interests and to compensate for the damage done to them.'"
In the context of a breach of contract claim, a plaintiff is entitled to compensation sufficient to place the non-breaching party in the same position as if the contract had been performed.
Here, Devincentis raised two claims — breach of contract and breach of bailment.
Devincentis seeks damages for diminution in value of the Vehicle, loss of use of the Vehicle, and other unspecified contractual damages. The Court finds that such relief falls squarely within recovery contemplated by contract law. So long as Devincentis can demonstrate actual loss, he is entitled to compensation for the damage allegedly caused by European Performance.
The Court finds unpersuasive European Performance's argument that Devincentis' claims are governed by the two-year statute of limitations applicable to tort actions. Devincentis' Complaint neither alleges negligence nor seeks relief unique to a tort action. Rather, Devincentis' Complaint establishes claims for breach of contract
Devincentis filed this action on August 6, 2010 — well within the three-year statute of limitations.
Devincentis claims that the Vehicle had a fair market value of $165,000 when it was purchased in March 2007. Had European Performance properly performed its duties as bailee, the Vehicle would have been returned to Devincentis with a fair market value of $165,000.
European Performance argues that prior to the alleged breach, the Vehicle had a fair market value of only $100,000 to $110,000. According to European Performance, the Vehicle had been involved in an accident prior to Devincentis' purchase. Alternatively, European Performance argues that if the fair market value of the Vehicle before the alleged breach was $165,000, Devincentis' damages should be capped at $65,000 because he already has recovered $100,000 from Wilmington Trust.
In determining the appropriate measure of damages for a breach of contract claim, the Court first must quantify the loss suffered by the non-breaching party.
The parties dispute the fair market value of the Vehicle before and after the breach. Devincentis claims that prior to European Performance's defective performance, the Vehicle had a fair market value of $165,000. Devincentis offered the expert report of Michael Cassidy ("Cassidy") to corroborate his calculation of the value of the Vehicle prior to the alleged breach. Additionally, Devincentis offered the deposition testimony of Francis deRuschi, a former sales manager of a local Ferrari dealership. deRuschi testified that at the time of the Vehicle's purchase in March 2007, $165,000 was a reasonable purchase price.
As a result of European Performance's alleged breach, Devincentis claims that the fair market value of the Vehicle decreased by $115,000 to $135,000. According to Cassidy's report, the Vehicle sustained structural damage that diminished its value. As further evidence of the diminution in value of the Vehicle, Devincentis points to the fact that the Vehicle was resold for only $49,500.
In response, European Performance argues that the Vehicle only had a fair market value of $100,000 to $110,000 prior to the alleged breach. European Performance's expert, L.E. Batton, stated that the Vehicle had been involved in an accident prior to Devincentis' purchase. According to Batton, the Vehicle showed evidence of frontal impact and obvious poor frame repairs.
European Performance also disputes the fair market value of the Vehicle after the alleged breach. Relying on a "Diminished Value Consideration" Report provided by Travelers Insurance, European contends that the Vehicle had diminished in value by $25,000 to $30,000.
Viewing the facts in the light most favorable to Devincentis, the nonmoving party, the Court finds that a genuine issue of material fact exists as to the valuation of the Vehicle both before and after the alleged breach. Therefore, summary judgment must be denied on the issue of damages for diminution in value of the Vehicle.
A plaintiff may seek damages for the lost use of a vehicle caused by the defendant's breach.
The failure to procure a replacement vehicle, however, does not preclude recovery for loss of use.
However, when a vehicle has been substantially destroyed or is not substantially repairable, a number of jurisdictions deny recovery for loss of use damages.
In the instant action, although the Vehicle was repaired post-breach, a factual dispute exists as to whether repairing the Vehicle would place it in substantially the condition it was in before European Performance's alleged breach. According to Devincentis, the Vehicle should have been declared a total loss because roughly $117,000 was expended for repairs. Notwithstanding the substantial repairs performed on the Vehicle, it was resold for only $49,500. As additional support, Devincentis presents Cassidy's report, which concluded that the Vehicle was disqualified from being a potentially marketable car to a retail Ferrari or highline car specialist because the "Vehicle History Report" disclosed the fact that the Vehicle had been stolen and sustained structural damage.
European Performance, on the other hand, clearly believed that the Vehicle was "repairable." Rather than declare the Vehicle a total loss, European Performance retained an auto body shop to rebuild and repair the Vehicle. Batton, European Performance's expert, estimated that after repairs, the Vehicle had a fair market value of $110,000 to $120,000.
The Court finds there to be a genuine issue of material fact as to whether repairing the Vehicle placed it in substantially as good a condition as before European Performance's alleged breach. If the Vehicle was not substantially repairable, Devincentis is not entitled to damages for loss of use.
Additionally, a genuine issue of material fact exists as to the proper measure of damages for loss of use. The parties dispute: the amount of time each month Devincentis used the Vehicle; the reasonable rental cost of a substitute car; and whether loss of use damages are even reasonable for a `purely pleasure automobile.
The Court finds that although Devincentis' right to possess the Vehicle was extinguished by the Order of Replevin, Devincentis has standing to bring the instant action. Additionally, the Court finds that because Devincentis commenced the instant matter within three years of the alleged breach, his Complaint is timely.
The Court further holds that genuine issues of material fact exist as to the valuation of the Vehicle before and after the alleged breach for purposes of calculating diminution in value damages; whether the Vehicle was "repairable" such that Devincentis would be entitled to loss of use damages; and the proper measure of any loss of use damages.
