Title: Lockwood v. Capano
Citation: N/A
Docket Number: 89, 2014
State: Delaware
Issuer: Delaware Supreme Court
Date: November 10, 2014

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
DONALD A. LOCKWOOD and   
§ 
 
DARIN A. LOCKWOOD,  
§ 
No. 89, 2014 
 
 
§ 
Defendants Below- 
§ 
 
Appellants, 
§ 
Court Below:  Superior Court  
 
  
§ 
of the State of Delaware in and  
v.  
§ 
for New Castle County   
 
 
§  
 
LOUIS J. CAPANO, III,  
§ 
 
§ 
C.A. No. 10C-11-228  
 
 
Plaintiff Below- 
§ 
 
 
Appellee. 
§ 
 
 
 
 
Submitted:  October 29, 2014 
       Decided:  November 10, 2014 
 
 
Before HOLLAND and RIDGELY, Justices, and BOUCHARD, 
Chancellor.*    
 
O R D E R 
On this 10th day of November 2014, it appears to the Court that:  
(1) Defendants-Below/Appellants Donald A. Lockwood (“Donald”) and 
Darin A. Lockwood (“Darin”) (collectively, the “Lockwoods”) appeal from a 
Superior Court order denying, in part, their renewed cross-motion for summary 
judgment and granting, in part, the renewed cross-motion for summary judgment 
of Plaintiff-Below/Appellee Louis J. Capano, III (“LIII”).  The Lockwoods raise 
one claim on appeal.  The Lockwoods contend that the trial court erred by granting 
summary judgment in favor of LIII and that it should have entered judgment in 
                                          
 
* Sitting by designation pursuant to art. IV, § 12 of the Delaware Constitution and Supreme 
Court Rules 2(a) to fill up the quorum as required.  
2 
their favor.  We find a material dispute of fact on the issue of contract formation 
that precludes summary judgment for any party.  Accordingly, we reverse and 
remand for further proceedings consistent with this Order.  
(2) This action arises from a failed business venture that originated in 2004.2  
LIII and his father, Louis J. Capano, Jr. (“LJC”) (collectively, the “Capanos”), 
formed Milton Investments, LLC (“Milton”), in which they were the sole 
members.  Donald and Darin Lockwood formed, and were the sole members of, 
Lockwood Brothers II, LLC (“LBII”).  In December 2004, Darin and LIII, as 
authorized members of their respective companies, signed an agreement to form a 
new company, North Milton Development Group, LLC (“NMDG”).  Under 
NMDG, the parties executed a series of agreements in connection with the 
purchase of land located outside of Milton, Delaware (the “Rust Property”).  The 
parties planned to use the Rust Property for both commercial and residential real 
estate development. 
 (3) In order to purchase the Rust Property, NMDG entered into a loan 
agreement with Wilmington Trust Company (“WTC”) for two loans.  The first was 
a 2004 acquisition loan for $7,130,000 (the “Acquisition Loan”), and the second 
was a 2007 loan for $1,000,000 (the “Working Capital Loan”) (collectively, “the 
Loans”).  The Loans were originally represented to the trial court as having been 
                                          
 
2 Unless otherwise noted, the facts are taken directly from the Superior Court’s January 09, 2014 
Memorandum Opinion.  Capano v. Lockwood, 2014 WL 606608 (Del. Super. Jan. 9, 2014).   
3 
guaranteed by all of the principals of Milton and LBII.  But LJC never signed the 
loan documents, and during depositions testified that he did not personally 
guarantee the loans.  LIII admits that he personally guaranteed the Loans, but there 
is no copy of his execution of some critical documents. 
 (4) One day prior to NMDG’s formation, a contribution agreement (the 
“Contribution Agreement”) was created.  The third recital of the Contribution 
Agreement states that Donald and Darin “are each guarantors of the Acquisition 
Loan” along with LJC and LIII.  Section 2 of the Contribution Agreement provides 
that in the event a “demand” was made by WTC upon “one or more but not all of 
the guarantors,” the Lockwoods, on the one hand, and the Capanos, on the other 
hand, would have reciprocal rights of contribution against the other two 
individuals, jointly and severally, for payments made in excess of their liability 
share.  The Lockwoods each signed the Contribution Agreement and forwarded it 
to LIII.  LIII, however, failed to produce a signed copy of the Contribution 
Agreement.  LJC also never signed the Contribution Agreement and failed to 
execute any documents to commit to the personal guarantee. 
(5) The downturn in the housing market precluded NMDG’s planned 
development for the Rust Property.  By August 2010, NMDG was behind on its 
loan payments.  On September 24, 2010, WTC’s then-Vice President Jeremy 
Abelson (“Abelson”) sent an email to LIII stating: 
4 
Louis, we sent an email to Darin notifying him of the need to 
pay the October 1 payments for the two North Milton loans. 
These invoices have still not been paid for September 1. This is 
a quarter end, so it’s extra “special.” Thanks for your 
anticipated help on this matter.3 
(6) The parties failed to produce LIII’s response to this email.  Five days 
later, Abelson sent another email to LIII, which stated: “Louis, sorry the nag, but 
the two loans are still due for 9/1.  Will these two loans be paid for September?” 
LIII responded minutes later with “Will go to the bank today[]” and Abelson 
thanked him.  Thereafter, LIII alone paid 100% of the monthly payments on the 
Loans through April 2011, totaling $192,509.20 on the Acquisition Loan and 
$26,999.78 on the Working Capital Loan.  
(7) The original complaint in this case was filed in November 2010, and the 
case has been extensively litigated since that time.  In November 2013, LIII and 
the Lockwoods filed renewed cross-motions for summary judgment.  The trial 
court heard argument on the cross-motions and on January 9, 2014, issued a 
Memorandum Opinion granting in part and denying in part both motions.  In so 
doing, the trial court required the Lockwoods’ contribution on the Acquisition 
Loan, but found that that the Contribution Agreement did not apply to the Working 
Capital Loan.  The trial court entered a Final Order of Judgment on January 27, 
2014.  This appeal followed. 
                                          
 
3 Capano, 2014 WL 606608, at *2.   
5 
(8) “The entry of summary judgment is appropriate only when the record 
shows that there is no genuine issue of material fact and the moving party is 
entitled to judgment as a matter of law.  In an appeal from a trial court’s decision to 
grant summary judgment, this Court’s scope of review is de novo . . . .”4  “A 
conditional contract is an executory contract, the performance of which depends on 
a condition.”5  “A condition precedent is either an act of a party that must be 
performed or a certain event that must happen before a contractual right accrues or 
a contractual duty arises.”6  “One may also speak of a condition precedent to the 
formation or existence of a contract.”7 “Thus, when the parties to a proposed 
contract have agreed that the contract is not to be effective or binding until certain 
conditions are performed or occur, no binding contract will arise until the 
conditions specified have occurred or been performed.”8  “[T]he parol evidence 
rule does not prevent the introduction of evidence to show that a written instrument 
is delivered on condition, oral or written . . . .”9 
                                          
 
4 LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 191 (Del. 2009) (internal citations 
omitted).  
5 13 Williston on Contracts § 38:1 (4th ed.) (internal citations omitted).   
6 Id. at § 38:7 (4th ed.) (internal citations omitted); see also USH Ventures v. Global Telesystems 
Group, Inc., 796 A.2d 7, 10–11 (Del. Super. 2000) (addressing conditions precedent to formation 
of a contract). 
7 13 Williston on Contracts § 38:7 (4th ed.) (internal citations omitted). 
8 Id.    
9 Id. at § 38:17 (4th ed.) (internal citations omitted).    
6 
(9) The Lockwoods argue that the Contribution Agreement never became a 
binding contract because all four parties were required to sign it.10  They argue that 
LIII’s failure to produce a signed copy of the Contribution Agreement and LJC’s 
failure to sign the Contribution Agreement prevented the creation of a contract 
between the parties.  Accordingly, the Lockwoods contend that the signature of all 
four parties was a condition precedent to the Contribution Agreement’s formation.   
(10) We find that there exists a genuine issue of material fact as to whether 
having all four parties sign the Contribution Agreement constituted a condition 
precedent to the contract’s formation.  Accordingly, we reverse and remand this 
matter so that this factual determination can be made at a trial.   We note that even 
if it is determined that the signature of each of the four parties was a condition 
precedent and the Contribution Agreement is not a valid contract, LIII may still 
have a basis to pursue equitable relief on an amended complaint.11  If necessary, 
the President Judge may seek the designation of the trial judge to sit as Vice 
Chancellor pursuant to Del. Const., art. IV, § 13(2) to complete the disposition of 
the case.12   
                                          
 
10 See Appellant Darin Lockwood’s Op. Br. at 12; Appellant Donald Lockwood’s Op. Br. at 12.    
11 See Levy v. HLI Operating Co., Inc., 924 A.2d 210, 220 (Del. Ch. 2007) (“An equitable right 
of contribution arises when one of several obligors liable on a common debt discharges all, or 
greater than its share, of the joint obligation for the benefit of all the obligors.  To succeed on a 
contribution claim, a party must show concurrent obligations existed to the same entities, and 
that the obligors essentially insured the same interests and the same risks.”) (internal citations 
omitted).  
12 Del. Const., art. IV, § 13(2). 
7 
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior 
Court is REVERSED and this matter is REMANDED for further proceedings 
consistent with this Order.     
 
BY THE COURT: 
 
 
 
 
 
 
/s/ Henry duPont Ridgely 
 
 
 
 
 
 
Justice