Stewart v. Polk, C. A. JP17-21-001033

CourtCourt of Justice of Peace Court of Delaware
Writing for the CourtALAN DAVIS, CHIEF MAGISTRATE JUDGE
PartiesDENNIS R STEWART, JOYCE A STEWART, APPELLEE Plaintiff Below, v. DONALD E POLK JR. APPELLANT Defendant Below,
Docket NumberC. A. JP17-21-001033
Decision Date14 September 2021

DENNIS R STEWART, JOYCE A STEWART, APPELLEE Plaintiff Below,
v.

DONALD E POLK JR. APPELLANT Defendant Below,

C. A. No. JP17-21-001033

State of Delaware, Justice of Peace, Sussex

September 14, 2021


Submitted: July 19, 2021

TRIAL DE NOVO

David C Zerbato, Attorney for Dennis R Stewart and Joyce A Stewart Tasha M Stevens, Attorney for Donald E Polk JR.

Alan Davis, Chief Magistrate Jennifer Sammons, Justice of the Peace John Martin, Senior Justice of the Peace

ALAN DAVIS, CHIEF MAGISTRATE JUDGE

ORDER ON TRIAL DE NOVO

The Court has entered a judgment or order in the following form:

Procedural Posture

This matter is before the Court as a three-judge panel appeal. Plaintiffs filed the action on March 9, 2021. A single judge heard the case on May 13, 2021, and decided the matter on May 21, 2021, finding in favor of the Plaintiffs. Defendant filed timely for appeal, and a panel consisting of Chief Magistrate Davis, Judge Sammons and Senior Judge Martin heard the appeal on June 22, 2021. At trial, the Defendant moved for judgment as a matter of law. The Court ordered supplementary briefing on the issue and this is the Court's order after consideration of the oral and written arguments on the issue presented. For the reasons stated below, the Court grants the motion and finds in favor of the Defendant.

Facts

The facts necessary for the disposition of this case are relatively undisputed and narrow in scope. Plaintiffs own the subject property. They entered into a conditional sales agreement for that property with Defendant that called for certain monetary transactions to take place within certain time periods. Defendant failed to complete those transactions to close the conditional sales agreement. Plaintiffs gave Defendant extra time to complete those obligations. Defendant did not do so, but proposed an alternative, which was rejected. Plaintiffs then proceeded to reclaim their property under the applicable law.

Positions of the Parties

Defendant moved for judgment as a matter of law after the completion of the Plaintiffs' case-in-chief. Defendant contends that the conditional sales agreement became, by operation of 25 Del. C. §314(d)(3), a landlord-tenant relationship and that all of the rights and duties of the parties were then governed by the requirements of the Residential Landlord-Tenant Code. Defendant further argues that, under the Code, Plaintiffs failed to provide proper notice, and therefore, this action should be dismissed in accord with long-standing statutory construction and precedent in this Court.

Plaintiffs claim that they gave all necessary notice when they provided notice of the initial breach of the conditional sales agreement. Further, the parties entered into an addendum that specifically considered the issue of the Defendant vacating the premises. The Defendant had actual notice at best, and constructive notice at worst, of the need to vacate the property, and therefore the formal notices provided for in the Landlord-Tenant Code are unnecessary and superfluous.

Discussion

In 2008 the General Assembly enacted modifications to 25 Del.C. §314 to include specific provisions that all conditional sales agreements must contain if the seller provides financing, and the final closing of the contract does not take place within one year. Those provisions are contained in subsection (d) of the statute. In particular, the new provisions require a stated periodic rental value, give the buyer 120 days to redeem after default, and convert the relationship to a landlord-tenant agreement retroactive to the date of the default if the buyer does not redeem the property. The law additionally made the Justice of the Peace Court a court of competent jurisdiction-concurrent with the Court of Chancery- to hear all matters associated with these situations, including one for an accounting after the termination of the agreement.

Defendant urges the Court to look at 25 Del. C. §314(d)(3) as a stand-alone determinant in this case. By the logic of the Defendant, once the buyer is in breach, the seller must give notice of the breach, an opportunity to cure for 120 days and, once...

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