Delhar, LLC v. Pabian Ventures, LLC, Case No. CPU4-19-003429

CourtCourt of Common Pleas of Delaware
Writing for the CourtSMALLS, C.J.
PartiesDelhar, LLC, Plaintiff, v. Pabian Ventures, LLC, d/b/a Pabian Properties, Defendant.
Decision Date26 February 2021
Docket NumberCase No. CPU4-19-003429

Delhar, LLC, Plaintiff,
v.
Pabian Ventures, LLC, d/b/a Pabian Properties, Defendant.

Case No. CPU4-19-003429

COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY

Submitted: October 19, 2020
February 26, 2021


Gregory D. Stewart, Esq.
409 South Ridge Avenue
Middletown, DE 19709
Attorney for Plaintiffs

Santino Ceccotti, Esq.
2055 Limestone Road Ste. 200-H
Wilmington, De 19808
Attorney for Defendant

ORDER ON DELHAR, LLC'S MOTION FOR SUMMARY JUDGMENT, PABIAN VENTURE'S CROSS MOTION FOR SUMMARY JUDGMENT, and PABIAN VENTURE'S MOTION TO COMPEL

SMALLS, C.J.

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This matter is before the Court on Delhar, LLC's ("Delhar") Motion for Summary Judgment; Pabian Venture's ("Pabian") Cross-motion for Summary Judgment, and; Pabian's Motion to Compel. Delhar alleges Pabian is indebted to Delhar in the amount of $5,743.27 for non-payments of rents and refusal to return security deposits for properties managed by Pabian. Pabian brings a counterclaim in the amount of $59,998.91 for non-payment of construction and repair services.

FACTUAL AND PROCEDURAL HISTORY

The issues in this case involve a series of business transactions between Pabian Ventures and several other entities. Pabian Ventures is a property management corporation which provides construction, property management, and maintenance services. As a property manager, Pabian manages lease properties owned by their clients, and forwards the clients the rents collected, after Pabian deducts their fees.

In November of 2016, Delhar, Miles Development, LLC, ("Miles") and 19709, LLC, ("19709"), entered into an agreement with Pabian, whereby Pabian would provide property management and maintenance services. Pabian's duties included improving the client's properties and collecting rent. Pursuant to an alleged separate verbal agreement, the collected rents were credited to the amounts due for the improvements with any excess amount paid to the clients. However, during the course of the contract, the parties' relationship deteriorated, resulting in Delhar, Miles, and 19709 terminating Pabian as their property manager in June of 2019.

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On September 13, 2019, Delhar, Miles, and 19709, all filed separate lawsuits alleging Pabian was in default for non-payment of rents and refusal to return security deposits for their properties.1

On October 28, 2019, Pabian filed a separate answer to each complaint denying the allegations. With regard to the action by Delhar, Pabian asserted a counterclaim in the amount of $59,998.91 for services Pabian allegedly performed on Delhar's rental units. On November 14, 2019, Delhar filed an Answer to the Counterclaim, denying the allegations.

Discovery commenced, and in February 13, 2020, Delhar filed a Motion to Compel, arguing that Pabian's responses to interrogatories were incomplete and evasive, and that it failed to produce certain documents Delhar had demanded in its discovery requests.

On March 16, 2020, while it's Motion to Compel was still pending, Delhar filed a Motion for Summary Judgment on the grounds that Pabian admitted to the debts owed in its discovery responses.2 Delhar relied on a document titled "Owner Statement report Period 01/01/2015 to 12/31/2019" which, Delhar argued, confirmed a balance due to Delhar in the amount of $5,743.27, after the deduction of expenses and

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management fees.3 Further, Delhar argued that because Pabian "failed to produce any documentation of the amount owed in the counterclaim" Pabian's counterclaim should be dismissed.

On June 19, 2020, Pabian filed a response in opposition to Delhar's Motion for Summary Judgment, arguing that Delhar is indebted to Pabian as evidenced by invoices Pabian sent to Delhar and tax deductions that Delhar took relating to work Pabian performed and charged to Delhar. Further, Pabian argued that the existence of the debt entitled Pabian to an offset and a retention of the rents and deposits owed that were applied to Delhar's outstanding debt.

On July 30, 2020, Pabian filed a Motion to Compel. In the motion, Pabian asserted that it propounded discovery requests upon Delhar, seeking all tax returns filed by Delhar since January 1, 2015, and any supporting documentation. Pabian argued that Delhar failed to produce these documents and, as such, Pabian's own failure to provide discovery to Delhar is excused.

On July 31, 2020, Delhar filed a response to Pabian's Motion to Compel. Delhar asserted that counsel for Delhar timely responded to the first request for production of documents and produced supplemental responses after discussions with Pabian's counsel. Additionally, Delhar argued that it had attempted to resolve the discovery dispute, to no avail, by requesting that Pabian's attorney limit the discovery request to

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a relevant period of time, specifically during the contract period. Moreover, Delhar contended that their supporting tax documentation came from the owner statements that Pabian provided them over the course of their contract; therefore, the documentation Pabian requested is in Pabian control. In conclusion, Delhar contends that Pabian's request for production should be found overly broad, unduly burdensome, and not likely to lead to the discovery of relevant evidence and, as such, the Court should Pabian's the Motion to Compel.

On August 17, 2020, a hearing was held in which this Court denied Delhar's Motion for Summary Judgment and granted it's Motion to Compel, giving Pabian thirty days to respond to discovery requests. Pabian's Motion to Compel was not heard at this hearing.

On September 10, 2020, Delhar filed a Second Motion for Summary Judgment in which Delhar set forth the arguments made in its prior Motion for Summary Judgment. The motion alleged a claim for breach of contract and added a claim for $114,520.47, on the basis it represents the amount Pabian charged to Delhar for the work repairing Delhar's properties. Delhar argues it is entitled to a return of money paid to Pabian, because Pabian is not able to substantiate the charges Pabian billed Delhar during the period when Pabian was Delhar's property manager.4

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On September 21, 2020 Pabian responded to Delhar's Second Motion for Summary Judgment and filed a Cross-Motion for Summary Judgment. Pabian's response to Delhar's Motion, raised for a second time the argument that it was entitled to offset the rent owed to Delhar with the open invoice with their contractional to their agreement. Further, Pabian relied on Delhar's tax returns showing Delhar took deductions for capital improvements and expenses in an amount similar to that which Delhar seeks, indicating Delhar was aware of the charges and cannot now claim ignorance. In support of its argument, Pabian relies upon documents signed by Sean Foley, a managing member of Delhar, authorizing the construction work Pabian performed, and a "Management Detail Report" which purports to show Delhar with a negative balance of $59,998.91 on their account with Pabian.

On September 25, 2020, Delhar filed its response to Pabian's Cross-Motion for Summary Judgment. Delhar again denied the alleged debt, stating that the document submitted in discovery by Pabian shows that Delhar does not owe Pabian any funds because the document was produced by Pabian's Property Management Software. Further, such document reconciles the accounts and shows a comprehensive view of Delhar's account with Pabian in which there were no unpaid bills. Further, Delhar called into question the sufficiency of Pabian's evidence to support its claim.

On October 2, 2020, Pabian filed a reply brief restating the basis for its claim for unpaid expenses relating to the work Pabian performed on Delhar's rental units, it allege that Delhar never denied that the alleged work was performed and that Delhar's 2017

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tax return indicate Delhar took deductions for repairs in amounts similar to the amount which Pabian charged Delhar for the work.

On October 19, 2020, the Court held a hearing on the outstanding motions and reserved decision.

DISCUSSION

I. Delhar's Motion for Summary Judgment

Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."5 When parties submit cross-motions for summary judgment, neither party's motion will be granted "unless no genuine issue of material fact exists and one of the parties is entitled to judgment as a matter of law."6

A genuine issue of material fact arises when "the parties are in disagreement concerning the factual predicate for the legal principles they advance."7 Summary judgment is proper only where the ultimate fact finder has nothing to decide, as the "function of the judge in passing on a motion for summary judgment is not to weigh the evidence."8 Further, summary judgment is inappropriate if, upon an examination

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of the record, it seems necessary to further develop the record in order to "clarify the application of the application of the law to the circumstances."9

In analyzing a motion for summary judgment, the Court construes all reasonable inferences from the...

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