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COURT OF CHANCERY

OF THE

STATE OF DELAWARE

KIM E. AYVAZIAN

MASTER IN CHANCERY

CHANCERY COURTHOUSE

34 The Circle

GEORGETOWN, DELAWARE 19947

AND

NEW CASTLE COUNTY COURTHOUSE

500 NORTH KING STREET, SUITE 11400

WILMINGTON, DELAWARE 19980-3734

November 20, 2014

Via Lexis-Nexis

John A. Sergovic, Jr., Esquire John F. Brady, Esquire

Sergovic Carmean & Weidman, P.A. Law Office of Gerry Gray

142 East Market Street 21133 Sterling Ave. Unit 12

PO Box 751 PO Box 549

Georgetown, DE 19947 Georgetown, DE 19947

RE: Leonard Mathias, Sr. and Susan J. Mathias v. Angola Neck Park

Property Owners Association, Inc.

C.A. No. 9124-MA

Dear Counsel:

Pending before me are exceptions to my draft report filed by Plaintiffs 

Leonard Mathias, Sr. and Susan J. Mathias. In my draft report, I recommended 

that the Court grant registered agent Judy Mangini’s motion to quash service of 

process and, if Plaintiffs wished to proceed with their pending complaint seeking 

title by adverse possession over a portion of a paper cul-de-sace adjacent to their 

lot in Angola Neck Park, they would have to file a petition to appoint a receiver or 

trustee (hereinafter simply “receiver”) for the Defendant Angola Neck Park 

Property Owners Association, Inc. (the “Corporation”), which became a void 
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corporation by order of the Delaware Secretary of State on October 1, 2010. For 

the reasons that follow, I recommend dismissal of the Plaintiffs’ exceptions.

On November 27, 2013, Plaintiffs filed a complaint against the Corporation 

for declaratory relief in the form of an order establishing Plaintiffs’ title by adverse 

possession over a portion of a paper cul-de-sac adjacent to Lot 92 in Angola Neck 

Park. The summons and complaint were served on Mangini, the Corporation’s 

registered agent, on December 4, 2013. On January 15, 2014, counsel for Mangini 

entered an appearance for the limited purpose of filing a motion to quash, which 

alleged that the Corporation had become a void corporation by order of the 

Delaware Secretary of State on October 1, 2010, after the residential community 

failed to continue the operation of its homeowners association. Mangini suggested 

that the complaint should be served instead upon the individual homeowners in 

Angola Neck Park.

Desirous of avoiding the “inefficiency” and difficulty of naming and serving 

each individual homeowner as a defendant and of reviving the Corporation, 

Plaintiffs responded to the motion by proposing that this Court order the 

Corporation to continue in existence for the purpose of defending the instant 

action. However, citing In re Krafft-Murphy Co., Inc., 82 A.3d 696, 710 (Del. 

2013), I found that the three year winding-up period of 8 Del. C. § 278 had expired 

by the time Plaintiffs filed their complaint on November 27, 2013. Upon the 
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expiration of the winding up period, the homeowners association had ceased to 

exist as a “body corporate” and had lost its authority to manage its unfinished 

business. Therefore, I recommended that Mangini’s motion to quash be granted,

and that Plaintiffs should file a petition for the appointment of a receiver because

the only way the Corporation could be re-empowered to defend its interests was 

through the appointment of a receiver under 8 Del. C. § 279. 

Plaintiffs do not take exception to my recommendation that the Court grant 

Mangini’s motion to quash. Instead, they take exception to what they term my 

“rationale” that Plaintiffs can petition for the appointment of a receiver when 

service has not been perfected on a defunct corporation. Instead, citing In re 

Krafft-Murphy Co., Inc., 2011 WL 5420808, at *3 (Del. Ch. Nov. 9, 2011), 

Plaintiffs argue that there appears no method of perfecting service on the 

Corporation other than under Court of Chancery Rule 4(d)(7).1 Therefore, 

Plaintiffs request that I fashion a mode of service under Rule 4(d)(7), so that 

service may be perfected on the Corporation through a receiver for it under 8 Del. 

C. § 279, in lieu of requiring Plaintiffs to file a separate petition to appoint a 

receiver. 

 

1 Court of Chancery Rule 4(d)(7) provides: “An order directing another or an 

additional mode of service of a summons in a special case may be made by the 

Court.”
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I decline to accept Plaintiffs’ suggestion that I appoint sua sponte a receiver 

for the Corporation. Instead, I recommend that, upon Plaintiffs’ filing a petition 

for the appointment of a receiver, service of process may be perfected on the 

Corporation by publishing notice of the original complaint and the petition once a 

week for three consecutive weeks in the Delaware State News and by mailing (first 

class mail) the same notice to each property owner in Angola Neck Park and to 

legal counsel for the Sussex County Council. Therefore, I adopt my draft report, as 

modified herein, as my Final Report. A proposed form of Notice shall be 

submitted to me for approval no later than 14 days after this Final Report becomes 

a final order of the Court. 

The parties are referred to Court of Chancery Rule 144 for the process of 

taking exception to a Master’s Final Report.

Sincerely,

/s/ Kim E. Ayvazian

Kim E. Ayvazian

Master in Chancery

KEA/kekz