Town of Georgetown v. David A. Bramble Inc. et al

Filing 80

MEMORANDUM ORDER. Signed by Judge Sue L. Robinson on 3/15/2016. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

TOWN OF GEORGETOWN,
Plaintiff,
v.
DAVID A. BRAMBLE, INC. and LIBERTY
MUTUAL INSURANCE COMPANY,

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Civ. No. 15-554-SLR

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Defendants.

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v.

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LEE RAIN, INC., and TRAVIS, PATTERN &
FOUNDRY, INC.,
Third Party Defendants.

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MEMORANDUM ORDER

At Wilmington this

16-tt- day of March,

2016, having reviewed plaintiff Town of

Georgetown's motion to quash (D.I. 47), and the papers submitted in connection
therewith, the court issues its decision based on the following reasoning:
1. Background. The issue before the court is whether Davis, Bowen & Friedel,
Inc. ("DBF") is considered an agent of plaintiff Town of Georgetown ("Georgetown") in
the above captioned matter. On November 23, 2015, Georgetown filed a motion to
quash a subpoena directed to DBF at the request of defendant Liberty Mutual Ins. Co.
("Liberty Mutual"). (D.l. 47) On February 4, 2016, after having heard oral argument on
Georgetown's motion to quash, the court ordered Georgetown to submit "for the court's
consideration the relevant parts of those documents upon which [Georgetown] relies to

establish an agency relationship between [Georgetown] and [DBF]." (D.I. 64) The court
permitted both defendants to respond in kind. (Id.) The court now considers the
documents presented by all parties to determine the presence of an agency relationship
between Georgetown and DBF. 1 (D.I. 67, 69, 70)
2. Georgetown has presented evidence to support its contention that DBF was
its agent with respect to the construction project ("project") giving rise to this litigation.
Georgetown makes two primary arguments in supporting its position: that the relevant
contractual documents pertaining to the project indicate that DBF was its agent for
purposes of the project, and that DBF acted as Georgetown's "Town Engineer" for the
past twenty years. (D.I. 67 at 1-2)2
3. With respect to its first argument, Georgetown refers to its agreement with
Bramble that sets forth the terms of the project, which stated, "[t]he [p]roject has been
designed by Davis Bowen & Friedel, Inc. [], which is to act as Owner's representative,
assume all duties and responsibilities, and have the rights and authority assigned to
Engineer in the Contract Documents in connection with the completion of the Work in
accordance with the Contract Documents." (D. I. 67-1 at 10) Georgetown also refers to
the performance bond accompanying the contract for the project, which describes DBF
as "Owner's Representative" on the bond. (D.I. 67-1 at 19) In supporting its second
argument, Georgetown includes documents demonstrating that DBF has acted as
Georgetown's "Town Engineer" for approximately twenty years. (D.I. 67 at 2) These

This court has jurisdiction pursuant to 28 U.S.C. § 1332.
For purposes of consistency, the court refers to the docketed items according to the
page numbers provided via ECF, rather than the handwritten page numbers that were
included in a portion of the documents submitted to the court.
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documents include Town Council meeting minutes that refer to an employee of DBF as
the "Town Engineer" 3 (D.I. 67-1 at 37-39), as well as correspondence between DBF and
Georgetown in which DBF notified Georgetown of "changes to [DBF's] on-call municipal
rates" over the course of several years. (D.I. 67-1 at 36, 50-51, D.I. 67-2 at 23)
4. In contrast, Liberty Mutual states that DBF was never an agent of Georgetown
because Georgetown did not exercise the level of control over DBF necessary to
establish an agency relationship. (D.I. 69 at 1) Liberty Mutual states that DBF is a
general contractor, and that Georgetown admitted such when it responded to Liberty
Mutual's brief in opposition to the motion to quash. (Id.) According to Liberty Mutual,
independent contractors are generally not seen as agents of the parties with whom they
have contracted. (Id.) Liberty Mutual further states that, although there is a limited
exception to this general rule when the owner/contractee's control dominates the work
being performed under the contract, DBF would not fall within the scope of this
exception. (Id.)
5. In support of this assertion, Liberty Mutual states that Georgetown did not
have sufficient knowledge of engineering to be able to control decisions made by DBF
and that Georgetown relied on DBF to obtain relevant information about the project.
(Id.) Liberty Mutual also refers to Georgetown's contract with DBF for the project and

states that, under the applicable case law, DBF was not Georgetown's agent because
the contract indicates that Georgetown did not "control" DBF in such a way that would

The relevant Town Council meeting minutes refer to "Hans Medlarz" as "Town
Engineer." (D.I. 67-1, at 37-39) Georgetown indicates Medlarz was affiliated with DBF.
(D.I. 67 at 2) (The status of DBF as Town Engineer dates back at least 20 years, as
evidenced by minutes designating Hans Medlarz [of DBF] as "Town Engineer").
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establish an agency relationship. 4 (Id.) These contract terms include a clause stating
that "DBF's design documents belong to DBF" and that DBF alone "shall retain an
ownership and property interest therein." (D.I. 69-1 at 6) Liberty Mutual also refers to a
portion of the contract that states, "Owner shall not be responsible for discovering
deficiencies in the technical accuracy of Engineer's services." (Id. at 9) Furthermore,
arguments made by Bramble appear to support Liberty Mutual's assertions generally. 5
(D.I. 70)
6. Legal Standard. Independent contractors are not generally viewed as agents
of parties with whom they contract. However, "the terms agent and independent
contractor are not always mutually exclusive." Fisher v. Townsends, Inc., 695 A.2d 53,
60 (Del. 1997) (citing Bradbury

v. Phillips Petroleum Co., 815 F.2d 1356, 1360 (10th Cir.

1987)). "Although a person cannot be a servant and an independent contractor, a
person can be an independent contractor and an agent." Id. at 61 (internal citations
omitted).

Liberty Mutual states that, pursuant to the court's ruling in Brown v. lnterbay Funding,
LLC, 2004 WL 2579596, at*3 (D. Del. 2004), "[t]he exception does not apply here
because Georgetown, by its own admission, did not exercise the near-total level of
control necessary to strip DBF of its independent-contractor status." (D. I. 69 at 1)
Liberty Mutual argues that the factual scenario in the instant case is comparable to that
which appeared in Brown, and that DBF was therefore not an agent of Georgetown.
(Id.) The court's reasoning in Brown is discussed in the "Legal Standards" section of
this memorandum.
5 Bramble's letter to the court states that while "Bramble does not dispute that DBF was
the Owner's Representative for purposes of the Project," "[t]his does not necessarily
make DBF the Town's 'agent' for purposes of the Project." (D. I. 70, at 1, n.1) Bramble
also states that if the court were to find an agency relationship between Georgetown
and DBF, the result would be questionable. (Id. at 2) (listing services provided by
independent contractors for municipalities and stating that these services do not
establish agency relationship).
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7. Further, "one well-recognized exception to the general rule of non-agent
status for an independent contractor turns on the "amount of control retained or
exercised by the owner." Id. (citing E.I. DuPont De Nemours & Co. v. Griffith, 130 A.2d
783, 784 (Del. Super. 1957)). Under DuPont, whether such control exists turns on
whether "the owner's or contractee's control or direction dominates the manner or
means of the work performed, the non-agent status of the independent contractor can
be destroyed and the independent contractor becomes an agent capable of rendering
the principal vicariously liable for the acts of the independent contractor." DuPont, 130
A.2d at 785.
In explaining its analysis, the DuPont court stated:
Generally speaking, there is no absolute rule to be applied in determining
whether or not a purported contractor is in fact independent, or is in fact
an agent or employee of the owner. Each case stands or falls on its own
facts. The test of independency consists of the amount of control retained
or exercised by the owner, particularly with respect to the absolute right to
direct the manner and method of proceeding with the work rather than with
respect to the end result only. A requirement that the work be performed
according to standards and specifications imposed by the owner is not
sufficient to establish the degree of control necessary to make a
presumably independent contractor the agent of the owner. But retention
of the right not only to insure conformity with specifications but the
retention or exercise of the right to direct the manner in or means by which
the work shall be performed will destroy the independent status of the
contractor.
Id. at 784-85 (internal citations omitted).
8. In addition, this court has ruled on the issue of agency and found that the
"element of continuous subjection to the will of the principal" is a defining factor of the
agency relationship, as compared to other relationships. Brown v. lnterbay Funding,
LLC, 2004 WL 2579596, at *3 (D. Del. 2004). In Brown, the court found that no agency
relationship existed between the parties who had contracted to provide an "independent

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appraisal report." 6 Id. In concluding that an agency relationship did not exist, the court
reasoned that one of the parties was not permitted "to use the appraisal for any use
other than that specified as outlined in [the letter between the parties.]" Id. Because of
this arrangement, the court found that one of the parties was not an agent "because its
conduct was not controlled by [the other party." Id.
9. Further, the Restatement (Second) of Agency states that an agency
relationship requires "an understanding between the parties which, as interpreted by the
court, creates a fiduciary relation in which the fiduciary is subject to the directions of the
one on whose account he acts." Restatement (Second) of Agency§ 1 (1958).
Additionally, Comment B to Subsection (1) states that "[i]t is the element of continuous
subjection to the will of the principal which distinguishes the agent from other fiduciaries
and the agency agreement from other agreements." Id., cmt. b.
10. Given this standard, while independent contractors are not typically
considered agents, they may be deemed agents if the principal or owner exercises
sufficient control over them. The existence of an agency relationship, therefore, is
determined by the level of control the principal exercises over the independent
contractor.

In Brown, the plaintiffs brought suit against a bank and appraisal company and
alleged, among other things, that an appraisal conducted on their property was
discriminatory and in violation of the Equal Credit Opportunity Act and the Fair Housing
Act. See Brown, 2004 WL 2579596, at*1. The plaintiffs alleged the bank was "liable for
the discriminatory appraisal because [the appraisal service] was acting as its agent." Id.
at 3. The court examined the agreement between the bank and the appraisal service
and ultimately found a lack of an agency relationship. Id. ("Although the agreement
placed certain requirements on the appraisal, [the bank] was not in control of the
process. [The appraisal service] used its own tools and employees to appraise the
property. In addition, [the bank] was not responsible for paying [the appraisal service]
for the appraisal, as plaintiffs paid for it.").
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11. Analysis. While Georgetown makes numerous references to language in
the agreement between Georgetown and Bramble, as well as DBF's longstanding
status as "Town Engineer," this evidence is not determinative in deciding whether an
agency relationship exists between Georgetown and DBF. In assessing Georgetown
and DBF's relationship using the standard articulated above, the court examines the
level of control Georgetown possessed over DBF.
12. Under the standard set forth in the Restatement (Second) of Agency, DBF is
not an agent of Georgetown because DBF was not "continuously [subject] to the will" of
Georgetown in acting as "Town Engineer" or with respect to the contract between
Georgetown and Bramble. Restatement (Second) of Agency§ 1 cmt. b (1958). As
Liberty Mutual indicates, Georgetown could obtain only certain information regarding the
project from DBF and Georgetown lacked sufficient knowledge of engineering to control
DBF. (D.I. 69 at 1) Further, language contained in the contract between Georgetown
and DBF expressly demonstrates a lack of control that would establish an agency
relationship. By disclaiming responsibility for the technical accuracy of DBF's services,
Georgetown indicated that it intended not to exercise complete control over DBF in
regard to this contract. (Id. at 2)
13. In addition, under Brown, DBF is not an agent of Georgetown because the
arrangement between the two parties indicates a lack of the requisite control. In Brown,
the court examined the contract in determining whether one party exercised sufficient
control over the other in order to establish a principal-agent relationship. See Brown,
2004 WL 2579596, at *3 ("Although the agreement placed certain requirements on the
appraisal, [the bank] was not in control of the process."). Similar to the agreement at

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issue in Brown, the contract between Georgetown and DBF demonstrates that DBF
retained its design documents, and DBF explicitly stated that if Georgetown used its
design documents, it would bear all associated risks. In light of Brown, these conditions
demonstrate that Georgetown did not control DBF in such a way that would indicate
DBF was Georgetown's agent.
14. Conclusion. For the above reasons, the court concludes that DBF was not
Georgetown's agent for purposes relevant to this litigation. Accordingly, Georgetown's
motion to quash (D.I. 47) is denied. An appropriate order shall issue.

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