Twin Willows, LLC v. Pritzkur
| Decision Date | 18 October 2022 |
| Docket Number | 2020-0199-PWG |
| Parties | Twin Willows, LLC v. Lewis Pritzkur, Trustee for Patricia E. Gibbs, Dawn R. Ellery, Gwen D. Rinaldi, Patricia E. Gibbs, and Robin Silverman |
| Court | Court of Chancery of Delaware |
Jeffrey M. Weiner, Esquire Law Offices of Jeffrey M. Weiner P.A.
Mark M. Billion, Esquire Billion Law
Peter K. Schaeffer, Jr., Esquire Avenue Law
Patricia W. Griffin Master
Dear Counsel and Mrs. Gibbs:
This highly litigated dispute involved an agreement between a buyer developer and a partition trustee to purchase approximately 81.9 acres located in Smyrna, Delaware. Following my final master's report resolving this dispute, the partition trustee seeks clarification of the attorneys' fees finding in the report, an award of damages and attorneys' fees under the lis pendens statute, and costs under Court of Chancery Rule 54(d). I recommend that the Court grant the motion for clarification but deny the motion for damages attorneys' fees, and costs under the lis pendens statute. I recommend that the Court grant certain costs under Rule 54(d). This is a final report.
I. BACKGROUND
On August 2, 2022, I filed a final master's report ("Report") recommending that the Court enter judgment for Respondents Lewis Pritzkur ("Trustee"), trustee for Patricia E. Gibbs, and Dawn R. Ellery, Gwen D. Rinaldi, and Robin Silverman (collectively "Lawrence Respondents," and together with the Trustee, "Respondents") and against Petitioner Twin Willows, LLC ("Twin Willows") denying specific performance of a sales agreement ("Agreement") for property located at 3431 South Dupont Boulevard, Smyrna, Delaware ("Property").[1] In the Report, I also declined to award attorneys' fees to either party, finding that "there is no basis in this case to justify the extraordinary action of fee shifting and that each party should [bear] their own fees in this litigation."[2] I noted that, although I ultimately found against Twin Willows, I determined its position was not frivolous and "the record is clear that fee shifting would not be appropriate in this matter."[3]No exceptions were filed to the Report, which was approved by the Court on August 18, 2022.[4]
On August 9, 2022, the Trustee filed a motion for clarification ("Motion") whether the Report precludes Respondents from seeking a statutory award of attorneys' fees and costs under 25 Del. C. §1611 ("Section 1611") related to the lis pendens ("Lis Pendens") filed by Twin Willows on July 10, 2020.[5] Later on August 9, 2022, Twin Willows filed a notice that it was voluntarily cancelling the Lis Pendens.[6] In reply to my letter asking the parties' position whether the Motion was moot following the voluntary cancellation,[7] Twin Willows responded that the Motion was moot because the Lis Pendens had been vacated,[8] and Respondents argued that it was not moot under Section 1611.[9] On August 22, 2022, the Trustee also moved for damages, attorneys' fees and costs ("Fees Motion") based on Section 1611, which was supported by Lawrence Respondents.[10] On August 31, 2022, the Trustee applied for $10,817.76 in court costs under Court of Chancery Rule 54(d).[11]
On September 7, 2022, Twin Willows filed in opposition to the Fees Motion, arguing that the Court has no jurisdiction to award attorneys' fees or damages under the lis pendens statute, since no motion to cancel the Lis Pendens was filed and the Court has already determined there is no bad faith in this action.[12] It further asserts that good cause, the interest of justice, or damages have not been shown; this is not an exceptional case that would warrant imposing attorneys' fees related to a lis pendens matter; and any fee award would be limited to fees incurred seeking a cancellation of the lis pendens.[13] Twin Willows also asks the Court to deny certain costs claimed by the Trustee under Rule 54(d).[14]
II.
III. ANALYSIS
First, I consider the Motion seeking clarification whether the Report's denial of fee shifting precludes Respondents from requesting attorneys' fees and costs under Section 1611. "A motion for clarification may be granted where the meaning of what the Court has written is unclear, and such a motion is treated, procedurally, as a motion for reargument under Court of Chancery Rule 59(f)."[15] "A motion for reargument under Rule 59(f) will be denied 'unless the Court has overlooked a decision or principle of law that would have controlling effect or the Court has misapprehended the law or facts so the outcome of the decision would be affected.'"[16] Because I believe that additional guidance is warranted, I grant the Motion and clarify the portion of the ruling pertaining to attorneys' fees.
In the Report, I noted that the parties did not address attorneys' fees in their briefing but determined that the extraordinary circumstances did not exist, such as bad faith, that would warrant the award of attorneys' fees in this case.[17] I held that each party should bear their own fees in this litigation.[18] In the Motion, the Trustee requests clarification whether, because no application for mandatory cancellation of the Lis Pendens had been filed, he can request a statutory fee award against Twin Willows under Section 1611.[19] Twins Willows voluntarily cancelled the Lis Pendens shortly after the Motion was filed. In response to my question whether the Motion was moot following the Lis Pendens' cancellation, Twin Willows argued it was moot;[20] the Trustee denied that it was moot and filed the Fees Motion, asserting that Section 1611 allows the Court discretion to award damages and attorneys' fees to the prevailing party in the interest of justice;[21] and Lawrence Respondents concurred with the Trustee's position arguing that Twin Willows caused unnecessary delay in the potential sale of the Property.[22]
"Mootness arises when controversy between the parties no longer exists such that a court can no longer grant relief in the matter."[23] "A proceeding may become moot in one of two ways: if the legal issue in dispute is no longer amenable to a judicial resolution; or, if a party has been divested of standing."[24] Recognizing that I did not consider whether Section 1611 applies to permit a fee award in this situation as part of the Report,[25] I find that there remains a controversy between the parties concerning that issue and grant the Motion so that I can determine whether Section 1611 allows the award of attorneys' fees and damages in this instance. Section 1611 provides:
In an order either upholding a notice of pendency or cancelling a notice of pendency, the court may, for good cause shown, and in the interest of justice, direct a party to pay the prevailing party's damages, if any, together with court costs of the action. In addition, the court, in exceptional cases, may award reasonable attorneys' fees to the prevailing party. Attorneys' fees may be assessed against a party only if the court finds that such party has wilfully asserted a claim or defense thereof without foundation in law or fact and/or not supported by a good faith request for an extension of the law, or for an improper purpose such as to harass or cause unnecessary delay in a legal proceeding or transaction.[26]
Respondents argue that, despite Twin Willows' cancellation of the Lis Pendens, the Court can award damages and attorneys' fees under this statute "in the interest of justice" because, otherwise, a plaintiff can escape damages and fees by a much later recording of a cancellation of lis pendens.[27] [28] "[I]f a statute is clear and unambiguous, the plain meaning of the statutory language controls."[29] If a statute is ambiguous, "it is susceptible of two reasonable interpretations," and "[Delaware courts] consider the statute as a whole, rather than in parts, and [they] read each section in light of all the others to produce a harmonious whole."[30]
Here the plain language of Section 1611 provides that "[i]n an order either upholding a notice of pendency or cancelling a notice of pendency, the court may, for good cause shown, and in the interest of justice, direct a party to pay the prevailing party's damages, if any, together with court costs of the action."[31] It also states that the Court, "in exceptional cases, may award reasonable attorneys' fees to the prevailing party."[32] Respondents argue that the use of "and" in the first sentence is intended as a several use of "the interest of justice" so that the Court may award damages and attorneys' fees even if a motion to cancel the Lis Pendens is not pending.[33] I am unpersuaded by that argument and find the language is not ambiguous. The reasonable interpretation of the meaning of "and" in that sentence is that the several meaning applies and permits the Court to award damages either "for good cause shown," or "in the interest of justice" if a lis pendens matter is pending. Contrary to the Respondents' argument, it does not eliminate the effect of any language before "in the interest of justice" in that sentence. I consider that "[t]he cancellation proceeding is itself a separate proceeding from the underlying lawsuit."[34] In this case, Twin Willows voluntarily cancelled the Lis Pendens by recording the cancellation of the notice of pendency in the recorder of deeds so there remains no notice of pendency for the Court to consider or to serve as the basis for ordering damages, costs and/or attorneys' fees under Section 1611. The Lis Pendens was in place for much of this litigation, and no motion for discretionary or ...
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