COURT OF CHANCERY OF THE STATE OF DELAWARE M ORGAN T

. Z URN V ICE C HANCELLOR L EONARD L. W ILLIAMS J USTICE C ENTER 500 N. K ING S TREET , S UITE 11400 W ILMINGTON , D ELAWARE 19801

- 3734 February 11, 2022

Theodore A. Kittila , Esquire Halloran Farkas & Kittila LLP 580 1 Kennett Pike, S uite C Wilmington, Delaware 19807 Richard E. Berl, Jr. , Esquire Hudson, Jones, Jaywork & Fisher, LLC 34382 Carpenter’s Way, Suite 3 Lewes, DE 19958

R E : Mark G. Schaeffer, Sr. v

. Donald Lockwood , Civil Action No. 2018

- 0926

- MTZ

Dear Counsel,
I write to address the parties’ dispute over prejudgment interest. I write for
the parties and assume familiarity with my November 30, 2021, post

- trial opinion,

and the defined terms used therein. 1

The parties first dispute when prejudgment interest begins to run. Plaintiff
Mark G. Schaeffer, Sr., points to language in Citadel Holding Corporation v. Roven
providing that prejudgment interest “is to be computed from the date payment is

due.” 2 Like Weil v. Vereit Operating Partnership , cited by defendant Donald

Lockwood, Citadel awarded interest on indemnification based on the demand date;
the demand initiated the obligation to pay. 3 Here, Schaeffer’s unjust enrich ment

1 Schaeffer v. Lockwood , 2021 WL 5579050 (Del. Ch. Nov. 30, 2021).

2 603 A.2d 818, 826 (Del. 1992).

3 Id. ; Weil , 2018 WL 834428, at *15.Mark G. Schaeffer, Sr. v

. Donald Lockwood
, Civil Action No. 2018

- 0926

- MTZ February 11, 2022 Page 2 of 3
claim does not require a demand to ripen; Citadel ’s plain language anchors interest
to the date payment is due.
Schaeffer’s payment was due when he enriched Lockwood yet remained
impoverished. Schaeffer brought Lockwood the Subdivision that closed Se pt. 29,
2016; assisted in preventing sunsetting from June through closing; and secured a
takedown agreement that closed on Feb. 29, 2017, but went unpaid. 4 I conclude
payment was due by March 31, 2017.
I turn next to the interest rate appropriate in this case. “The legal rate for
prejudgment interest is 5% over the discount rate; however, this may be adjusted, as
equity requires, in this Court ’ s discretion.” 5 Here, equity commands a downward
adjustment. Interest rates available to Schaeffer, as someone without a history of
large investments, were extremely low from 2017 to present. 6 Like Wright , this case
moved slowly for reasons not solely attributable to Lockwood and which include a
global pandemic; Schaeffer should not receive a windfall fro m the passage of all that

4 Schaeffer , 2021 WL 5578050, at *6

– 9, *20; Tr. 312

– 18.

5 Wright v. Phillips , 2020 WL 3410544, at *1 (Del. Ch. June 22, 2020); see 6 Del. C

. § 2301(a).

6 See Wright , 2020 WL 3410544 at *1; Seibold v. Camulos P’ship LP , 2012 WL 4076182, at *24 (Del. Ch. Sept. 17, 2012); Schaeffer , 2021 WL 5578050, at *4, *6, *12.Mark G. Schaeffer, Sr. v

. Donald Lockwood
, Civil Action No. 2018

- 0926

- MTZ February 11, 2022 Page 3 of 3
time. “I find this is the rare case where imposition of interest at the legal rate would
offend equity. I find a rate of interest of 3% to be appropriate.” 7

I ask counsel to confer with their calculators, and submit a stipulated proposed
final order and judgment.
Sincerely
,
/s/ Morgan T. Zurn

Vice Chancellor

MTZ/ms

cc: All Counsel of Record, via File & ServeXpress

7 Wright , 2020 WL 3410544, at *1.