Nash v. Hoopes

• Decision Date: 09 January 1975
• Citation: 332 A.2d 411
• Parties: Anne A. NASH, Plaintiff, v. Linneaus L. HOOPES, Jr., and Hoopes and Sudduth Associates, Inc., a Delaware Corporation, Defendants.
• Court: Delaware Superior Court

Page 411

332 A.2d 411

Anne A. NASH, Plaintiff, v. Linneaus L. HOOPES, Jr., and Hoopes and Sudduth Associates Inc., a Delaware Corporation, Defendants.

Superior Court of Delaware, New Castle County.

Jan. 9, 1975.

Elwyn Evans, Jr., Wilmington, for plaintiff.

James A. Walsh, Wilmington, for defendants.

TAYLOR, Judge.

On August 16, 1972, plaintiff and defendant Hoopes and Sudduth Associates, Inc. (H&S) entered into a contract whereby by H&S agreed to convey to plaintiff the property at 229 West 30th Street, Wilmington, Delaware for $11,500.00. The purchase price was to consist of $1,200.00 payable in installments and the assumption by H&S agreed to convey to plaintiff the amount of $10,300.00. On June 6, 1972, prior to execution of the contract, the holder of the outstanding mortgage on the property had filed foreclosure proceedings. The foreclosure was based upon default in payments which occurred during the time that H&S had owned the property. In October, 1972, the property was posted for Sheriff's sale, and on November 14, 1972, the sale took place. Prior to the sale, H&S attempted to secure financing to permit plaintiff to acquire the property, but was unsuccessful. At the sale, the property was brought in by United States Department of Housing and Urban Development. Plaintiff was able to lease the property on a temporary basis until she was able to purchase the property for $12,000.00 on March 7, 1974.

H&S concedes that plaintiff is entitled to recover damages against it in the amount of $3,167.00 for the loss of bargain resulting from the breach of the contract.

I

The first issue which must be dealt with is the liability of defendant Linneaus L. Hoopes, Jr. (Hoopes). Hoopes did not enter into the contract, having signed only as President of H&S. If he is to be found liable, it must be on the basis of misrepresentation or concealment. Plaintiff relies on §§ 2512 and 2513, Title 6, Delaware Code. These sections were enacted in 1965 by Chapter 46, Volume 55, Laws of Delaware, which was entitled 'An Act to Amend Title 6, Delaware Code to Protect the Consumer Against Fraudulent and Deceptive Merchandising Practices'. The definition of 'merchandise' appearing in 6 Del.C. § 2511(b) includes real estate within the protective provisions of the Act.

Hoopes argues that, since he was unaware that the foreclosure proceeding had been commenced at the time the contract with plaintiff was negotiated, he lacked fraudulent intent at the time of the representation and therefore should not be held liable. The purpose of the Act was to forbid deception, fraud, false pretenses, false promises, misrepresentations, concealments, suppression or omission of any material fact. The only reference to 'intent' in this section is that the outlawed action be done 'with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise . . .'. 6 Del.C. § 2513(a). Fraudulent intent in connection with the making of such unlawful practice is not requisite to the availability of the remedies of the statute. In Re Brandywine Volkswagen, Ltd., Del.Super., 306 A.2d 24 (1973), aff'd Del.Supr., 312 A.2d 632 (1973). The records of H&S showed that the last monthly pament whih H&S had paid on the mortgage was on December 7, 1971 and that a check dated March 15, 1972 in the amount of $252.00 had been refunded by the mortgagee, and that H&S had made no monthly payments thereafter to the contract date. From these facts, H&S was on notice that the mortgage was in default and subject to foreclosure. Hoopes was not a mere employee of H&S he was its president and an active participant in its operation. Whether the information was actually known to him at the time or not, it was readily available to him. Under these facts, his negotiations with plaintiff, predicated upon the continued existence of the mortgage after settlement with plaintiff, constituted a concealment or omission of a material fact in violation of 6 Del.C. § 2513(a). I find that the elements of § 2513(a) have been met constituting this concealment or omission to be an unlawful practice entitling plaintiff to recover against Hoopes. See 6 Del.C. § 2525.

II

Plaintiff also claims damages for lost profits which she anticipated earning if the property had been available to her for such use. She testified that she had previously taken care of elderly people and that based upon the contract to buy this property, sh...