SUPERIOR COURT OF THE STATE OF DELAWARE P AUL R. W ALLACE J UDGE N EW C ASTLE C OUNTY C OURTHOUSE 500 N. K ING S TREET , S UITE 1 0 400 W ILMINGTON , D ELAWARE 19801 (302) 255

- 0660

Date Submitted: May 15 , 2020 Date Decided: Ju ly 2, 2020

Stephen B. Brauerman, Esquire Elizabeth A. Powers, Esquire 600 North King Street, Suite 400 Wilmington, Delaware 19801 Robert Mahoney Saleem Mawji N orris Mclaughlin, P.A. 400 Crossing Boulev ard, 8th Floor Bridgewater, New Jersey 08807 Kelly A. Green, Esquire Smith, Katzenstein & Jenkins LLP 1000 West Street, Suite 1501 Wilmington, Delaware 19801 Jeffrey Gans, Esquire Pillsbury Winthrop Shaw Pittman LLP 1200 Seventeenth Street NW Washington, DC 20036

- 3006

RE: Facchina Construction Litigations Civil Action No. N1 7 C

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- 163 PRW CCLD (Consolidated)
Dear Counsel:

This L etter O rder addresses the Defendants ’ ICATech and Empresas ’ (together “ICATech”) pending Motion to Strike and for Further Relief (D.I. 17 0 ). For the reasons set forth briefly below, that Motion is GRANTED IN PART, and

DENIED IN PART.Facchina Construction Litigations

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FACTUAL AND PROCEDURAL BACKGROUND This matter is in the post

- trial, pre

- verdict phase and is the consolidation of

two separate litigations. The current motion to strike is truly centered around an

exhibit relevant only to the first of those two case s. So the Court will not recount the entirety of the pending claims, counterclaims, defenses, affirmative defenses,

etc. , in this consolidated matter.

- T HE F IRST A CTION - B ROUGHT BY P AUL V. F ACCHINA , S R

. The first case, Paul V. Facchina, Sr. v. ICATech Corporation and Empresas
ICA, S.A.B. DE C.V. , was filed in September 2017. It involves Paul V. Facchina, Sr.’s (“ Mr. Facch ina ”) sale of his (various construction companies (“Facchina Companies”) to ICATech with Empresas as ICATech’s guarantor. ICATech is a

Florida

- based subsidiary of Empresas, a Mexican company.

Mr. Facchina has alleged that the subject June 2013 Purchase A greement projected that he would earn $35

- 40 million over the ensuing three to five years. 1
This figure represents about 40% of the consideration Mr. Facchina would receive

from the sale. 2 Additionally, ICATech would fund an Escrow Account with Wells

1 Seller Representative Facchina’s Complaint (D.I. 1) ¶ 1.

2 Id.Facchina Construction Litigations

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Far go with $3.5 million for “payment of any outstanding indemnifications claims.” 3

Both Mr. Facchina and ICATech have requested the escrow funds; however, Wells Fargo will not release the funds without a court judgment or the parties’ consent. 4 Furthermore, $2.25 million was withheld “as part of the final working capital adjustments from the case that [ Mr. Facchina ] received at closing.” 5
Finally, Mr. Facchina alleges that ICATech has only paid $4,352,491, $3.5

million of which went to the Esc row Account and $852,491 went to Mr. Facchina , as opposed to the $35

- 40 anticipated in the Purchase Agreement. 6 Mr. Facchina

claims he contacted ICATech multiple times between 2015

- 2017 about the status of the Facchina Companies and the Earn

- Out Payments , but received no response. 7
After not receiving a response, Mr. Facchina demanded an Acceleration Payment of $30,647,509 by September 5, 2017. 8 ICA Tech did not respond to the request. 9

3 Id. at ¶ 2 and 28.

4 Id. at ¶ 35.

5 Id. at ¶ 30.

6 Id. at ¶ 40

- 41.

7 Id. at ¶ 44

- 45.

8 Id. at ¶ 50.

9 Id. at ¶ 51.Facchina Construction Litigations

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Mr. Facchina’s claims include: (1) a Breach of Contract claim again st
ICATech ; 10 (2) a Legal Fraud claim against both ICATech and Empresas ; 11 (3) an Equitable Fraud claim against both ICATech and Empresas ; 12 (4) a claim that ICATech and Empresas v iolat ed the Delaware Fraudulent Conveyance Act ; 13 (5) a Breach of Implied Covena nt of Good Faith and Fair Dealing claim against ICATech and Empresas ; 14 and (6) an Enforcement of Guaranty claim against Empresas, as the parental guarantor. 15 In addition to rights to the $3.5 million Escrow Account and $30,647,509
payment, Mr. Facchina re quests compensatory and punitive damages against ICATech and Empresas, pre

- judgment interest, attorney fees and costs, and any other relief as the court deems just and proper. 16

10 Id. at ¶ 55

- 56.

11 Id. at ¶ 57 (citing Id. at ¶ 40

- 51).

12 Id. at ¶ 59

- 60.

13 Id. at ¶ 61 , 68

.

14 Id. at ¶ 70

- 73.

15 Id. at ¶ 74

- 76

.

16 Id. at ¶ E

- I.Facchina Construction Litigations

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In Answer, Defendants raised several affirmative defenses and brought a counterclaim accusing Mr. Facchina of fraud. They say he made fraudulent statements as to the projected value of upcoming projects of the Facchina Companies to induce Defendants to agree to the Purchase Agreements. Specifically, the counterclaim points to The Grove at Grand Bay project (a large Florida construction project) as one that Mr. Facchina a llegedly ha d knowledge would face challenges, but did not disclose those challenges to Defendants. Among other judgments, Defendants are seeking an amount of $26 million from Mr. Facchina

. 17

At issue here is the Mr. Facchina ’s citation to an April 4, 2019 affidavit of Witness Jesus Vazquez in his post

- trial reply brief. 18 That affidavit’s contents and alleged relevance go to activity related to The Grove project.

Mr. V azquez’s affidavit was, during summary judgment proceedings,

attached to Defendants ICAT ech and Empresas ’ Brief in Opposition to Mr.

Facchiana’s Motion for Partial Summary Judgment. 19 And p retrial , ICATech suggested it be designat ed as Joint Exhibit 507.

17 Def. Answer and Counterclaim (D.I. 7) at 8

- 11.

18 D.I. 166, at 9.

19 D.I. 81Facchina Construction Litigations

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As ordered, each party lodged its pretrial objections to the ex hibits proffered by the others. Mr. Facchina objected to ICATech’s trial use of Joint Exhibit 507 asserting th at it was inadmissible hearsay. ICATech conceded that Joint Exhibit 507 was inadmissible hearsay. And so ICATech did not introduce Joint Exhibit 507 at

trial , understood it could not use it in post

- trial briefing , and did not use it in any way

thereafter

. Yet, notwithstanding his earlier objection to its admission, Mr. Facchina cited

to the Vazquez affidavit in Section II (A)(1) of his own post

- trial reply brief. That

reference reads as follows:

There is no credible evidence that Facchina of Florida (“FOF”) had an operational policy that it would not

– without exception

– subcontract concrete work to more than one entity or that Vazquez violated a directive regarding subcontracting concrete in packages. (See SR PostTr ial Ans. Br. ¶¶ 13, 14.) In fact, ICATech/Empresas’ ever evolving fraud theory directly contradicts Vazquez’s affidavit previously submitted to the Court by ICATech/Empresas, which states that he never deliberately disobeyed any instruction given to him b y Mr. Facchina or Charles McPherson. (See 4/4/19 Affidavit of Jesus R. Vazquez [Trans. ID 63136243].) 20 ICATech has filed the present motion to strike asking the Court “to enter an order striking section II (A)(1) of Mr. Facchina’s reply brief and granting ICATech five

20 D.I. 166, at 9.Facchina Construction Litigations

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business days to file a short (not more than 750 words) surreply responding to the argument based on evidence not admitted at trial.” 21
Mr. Facchina counters that “[t]he Affidavit was not referenced for the truth of

the matter asserted there in, nor as a trial exhibit, n or as part of the trial record. It was referenced only to demonstrate how the allegations underlying ICATech’s fraud theory have changed.” 22 He says he “reference[d] the Affidavit simply to highlight

the difference between ICA Tech’s summary judgment and post

- trial arguments.” 23

And he complains that “in no fewer than twenty instances throughout its three sets of post

- trial briefs, ICATech cites directly from [Mr. Facchina]’s summary judgment briefs (using the docket transaction numbers), as if they were evidence and part of

the trial record. ” 24 Thus, he has object ed to what he believes are the numerous errant

citations in ICATech’s post

- trial briefing that reference the summary judgment pleadings. 25

21 D.I. 166, at 9.

22 D.I. 174, at ¶3.

23 Id. at ¶ 5.

24 Id. at ¶6.

25 Id. at ¶7 (“As argued in [Mr. Facchina]’s Post

- Trial Answering Brief, statements made in summary judgment briefs are not evidentiary admissions. (See Seller Representative’s Answering Post

- Trial Brief at 38

- 40).”).Facchina Construction Litigations

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LEGAL ANALYSIS
No doubt, the parties well understood when the trial recessed that the primary purpose of the post

- trial briefing here was to act as the parties’ closing arguments.

And , no doubt, the rules of engagement for closing arguments and post

- trial briefing

in Delaware trial courts are expected to be honored by counsel and enforced by the judge without fail. 26
Under those rules, e vidence that is not part of the trial record should not be argued in closing or cited to in post

- trial briefing. 27 Mr. Facchina posits that he referred to Mr. Vasquez’s affidavit that had been submitted only earlier in the case during summary judgment proceedings “not for the truth of the matter asserted

therein ” but merely to demonstrate the evolution of ICATech’s a rguments

26 See, e.g., Baker v. State , 906 A.2d 139, 151 (Del. 2006) (During closing argument in a criminal trial “judges have a continuing duty to intervene sua sponte , even in the absence of defense counsel’s objection, when a trial prosecutor steps out of bounds.”).

27 See g enerally Joseph v. Monroe , 419 A.2d 927, 930 (Del. 1980) (“[W] e agree, of course, that it is improper for counsel to comment on the credibility of witnesses from personal knowledge or from evidence not on the record .) (emphasis added) ; Spence v. State , 129 A.3d 212, 223 (Del. 2015) (“While prosecutors are given latitude in making closing arguments, his or her comments must be limited to properly admitted evidence and any reasonable inferences or conclusions that can be drawn therefrom.”); TruePosition Inc. v. Andrew Corp. , 2008 WL 205305, at *2 (D. Del. Jan. 23, 2008) (striking evidence cited in a post

- trial brief “becau s e it was not part of ‘the factual record created at trial,’” and thus “was not permissibly included in defendant’s post

- trial briefing”).Facchina Construction Litigations

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throughout the lawsuits . But in doing so, he expressly asks the Court to examine the

substance of affirmative statements in a n ow unadmitted affidavit , i .e. , he , in closing
argument, expressly references the statements of a witness that are not in the trial record and urges the Court to consider their substance. The Court finds this any easy

call under Delaware’s well

- established rules. Th at reference in Mr. Facchina’s argument is improper and properly cured by excision. Undaunted though, Mr. Facchina

— by complaining that he does no worse than

ICATech in its brief

— seems to urge Court to apply t he “invited response” or “invited reply” rule . That rule suggests that improper closing argument by one party may “open the door” to an otherwise impermissable rebuttal by the other

. 28 But t he invited response doctrine has been strongly criticized , if not outright rejected , b y the Delaware Supreme Court

. 29 And t he Court could rest its rejection of Mr. Facchina’s invitation

to excuse him by invo king the United States Supreme Court’s simple statement on invited response : “Clearly, two improper arguments

- two apparent wrongs

- do not make for a right result.” 30 Howeve r, even w h e re our state high court has indulged some resort

28 Miller v. State , 2000 WL 313484, at * 3

- 4 (Del. Feb. 16, 2000).

29 Id.

30 United State v. Young , 470 U.s. 1, 11 (1985).Facchina Construction Litigations

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to the invited reply rule , it has made clear that the rebutting arguments may not be otherwise “improper” comments

. 31 To be sure, Mr. Facchina ’s citation to a witness’s

statement that Mr. Facchina affirmatively objected to and that was never admitted in

the trial i s improper argument.

It is well

- accepted in Delaware that instead a party must object to an improper closing argument ; it m

ust not take such argument as license to respond improperly. 32 Of course, such objections are only as effective as the trial judge’s willingness to take appropriate corrective action. And most often that corrective action is striking of the offending argument

— which normally takes the form of an instruct ion to the factfinder to disregard such

. 33
Here, Mr. Facchina did violate the well

- established rule t hat only evidence admitted at trial should be used in closing arguments. S o the Court will disregard just

so much of Mr. Facchina’s argument as will cure that wrong. So too, the Court will

31 See, e.g., Hooks v. State , 416 A.2d 189, 205 (Del. 1980); Dorman v. State , 608 A.2d 726 (Del. 1992)

.

32 Michael v. State , 529 A.2d 752, 763 (Del. 1987).

33 See Sammons v. Doctors for Emergency Services, P.A. , 913 A.2d 519, 538

- 39 (Del. 2006); Tilson v. Luthern Senior Services, Inc. , 2010 WL 6596959, at *4

- 5 (Del. Super. Ct. Dec. 12, 2010) ; see also Chavin v. Cope , 243 A.2d 694, 696 (Del. 1968) (“Ordinarily, an appropriate instruction to disregard the statement is sufficient to avoid prejudice to the defendant .

. . .”)

.Facchina Construction Litigations

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consider the like objection Mr. Facchina has properly lodged to I CA Tech’s citation to the summary judgment briefing.

CONCLUSION Accordingly, the Court GRANTS, in part, ICATech ’s Motion . The Court

shall strike only the offending portion of Section II (A)(1) of Mr. Facchina’s post

trial reply brief , 34 read ing such section now as follows: There is no credible evidence that Facchina of Florida (“FOF”) had an operational policy that it would not

– without exception

– subcontract concrete work to more than one entity or that Vazquez violated a directive regarding subcontracting concrete in pac kages. (See SR PostTrial Ans. Br. ¶¶ 13, 14.) In fact, ICATech/Empresas’ ever evolving fraud theory directly contradicts Vazquez’s affidavit previously submitted to the Court by ICATech/Empresas, which states that he never deliberately disobeyed any instr uction given to him by Mr. Facchina or Charles McPherson. (See 4/4/19 Affidavit of Jesus R. Vazquez [Trans. ID 63136243].) And the Court will not consider the contents of the Mr. Vazquez’s affidavit for any purpose in rendering its verdict. During its deliberation, t he Court will also remain mindful of Mr. Facc hina’s objection to ICATech’s alleged mis use of excerpts from or statements made in the

34 D.I. 166, at 9.Facchina Construction Litigations

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summary judgment briefing as if they were admissible trial evidence or evidentiary

admissions made at trial.
The Court finds, therefore, that there is no reason for a further written post

trial submission “responding to [Mr. Facchina’s] argument based on evidence not admitted at trial.” So ICATech’s request for leave file a surreply is DENIED. The matter is now considered fully submitted for deliberation and verdict on the evidence and arguments properly presented by the parties.

IT IS SO ORDERED.

/s/ Paul R. Wallace Paul R. Wallace, Judge Original to Prothonotary

cc: All Counsel via File and Serve