Court Opinion

ID: 4176134
Source: CourtListenerOpinion
Date Created: 2017-06-09 15:08:05.120547+00
Date Added: 2024-06-11T14:38:36.131153
License: Public Domain

COURT OF CHANCERY
                                              OF THE
                                        STATE OF DELAWARE
MORGAN T. ZURN
 MASTER IN CHANCERY                                                        LEONARD L. WILLIAMS JUSTICE CENTER
                                                                            500 NORTH KING STREET, SUITE 11400
                                                                              WILMINGTON, DE 19801-3734

                                   Final Report: June 8, 2017
                                 Date Submitted: March 17, 2017

      David A. Boswell, Esquire
      Hudson Jones Jaywork & Fisher, LLC
      18354 Coastal Highway                            Mr. Robert L. Moore, Jr.,
      Rehoboth Beach, DE 19971                         P.O.A. for Martha M. Landon
                                                       14052 Union Street Ext.
      Ms. Martha Landon                                Milton, DE 19968
      1125 Milford-Harrington Highway                  robertlmoore@netzero.com
      Milford, DE 19963

                      Re:   IMO John T. Landon, Jr. Estate
                            C.A. No. 5230-MZ

      Dear Counsel and Litigants:

                When John T. Landon Jr., passed away, his testamentary documents left his

      second wife a life estate in several real properties and named his children by his

      first marriage as remaindermen. Two of those children are the current executors of

      the estate. The second wife and children have been involved in litigation since

      2006. Pending before me is the executors’ motion to enforce a settlement

      agreement. For the reasons that follow, I find there is an enforceable settlement

      agreement because the parties agreed on all the essential terms. I therefore

      recommend the Court grant the executors’ motion.
C.A. No. 5230-MZ
June 8, 2017
Page 2

       I.      Background

       John T. Landon Jr. (the “Decedent”) died on March 30, 2006. The

documents reflecting the Decedent’s testamentary plan include a last will and

testament dated September 28, 1994 (the “Will”), the first codicil dated June 10,

1996 (the “First Codicil”), the second codicil dated January 16, 2002 (the “Second

Codicil”), and the third codicil dated October 26, 2005 (the “Third Codicil”)

(collectively, the “Testamentary Documents”). The Decedent was survived by his

wife, Martha Landon (“Martha”),1 who he married in November 1992. The

Decedent also was survived by five children from a previous marriage: Keith

Landon (“Keith”), Ann Richter (“Ann”), Byron Landon (“Byron”),2 William

Landon (“William”), and John T. Landon III (“Tommy”). The Will appointed

Keith and Ann as co-executors of the Decedent’s estate (the “Estate”).

       The bulk of the Estate is comprised of five parcels of land and some

personal property, along with certain debts that were owed to the Decedent. The

parcels of land (and improvements thereon) consist of: (1) a residential property in

Sussex County the parties call “Tommy’s Home,” (2) a lot consisting of 4.9 acres

the parties call “Keith’s Nassau Lot,” (3) a residential property in Kent County the

1
  Because some of the parties share the same last name, their first names have been used for
purposes of this report. No disrespect is intended.
2
  Byron died shortly after the Decedent and is survived by his wife and two children.
C.A. No. 5230-MZ
June 8, 2017
Page 3

parties call the “Milford Residence,” (4) a lot in Sussex County the parties call the

“Billboard Lot,” and (5) another lot in Sussex County the parties call the “Adjacent

Lot.”

        The Decedent made a number of specific bequests in the Testamentary

Documents, including bequests of all of his real property. Among other things, the

Decedent devised to Martha life estates in the Milford Residence, the Billboard

Lot, and the Adjacent Lot, and devised the remainder interests in those three

properties among his various children.

        The Will contained a clause apparently intended to dissuade beneficiaries

from contesting the Testamentary Documents. That clause was deleted and revised

by the Third Codicil. The clause (the “No-Contest Clause”) contained in the Third

Codicil provides:

        Should any person entitled to share in my estate either as an heir at
        law or a legatee or devisee under this Will contest or oppose or seek to
        set aside this Will or establish any legal right to share in my estate
        other than as herein approved and provided, or if any such person
        shall violate my wife’s right to quiet enjoyment, as legally defined, of
        any real property and any income therefrom bequeathed to her by me,
        or shall claim a right to any income from investments which I have
        bequeathed to her, I hereby give and bequeath to each such person the
        sum of ONE DOLLAR ($1.00) only, and expressly direct that he or
        she shall receive no other or further share in my estate to the extent
        any such interest in my estate is continuing, and the share to which
        any such person might otherwise have been entitled had he or she not
        participated in such contest or opposition, or participated in any
        violation of my wife’s quiet enjoyment, I give, devise and bequeath
C.A. No. 5230-MZ
June 8, 2017
Page 4

        such person’s share to the AVENUE UNITED METHODIST
        CHURCH, of Milford, Delaware.3

        On November 30, 2006, Martha filed a lawsuit (the “Billboard Lawsuit”) in

this Court against Keith and Byron, in which she sought a constructive or resulting

trust over the Billboard Lot.4 Martha asserted the Billboard Lot was marital

property because it was purchased during the marriage using a combination of

funds from the spouses’ joint account and funds obtained through a mortgage that

was paid with funds from the joint account. Martha alleged that, upon the

Decedent’s death and by operation of law, she now owned the property outright as

the surviving spouse. Martha voluntarily dismissed the Billboard Action in June

2007.

        The Executors began this action in 2010, seeking instructions regarding the

proper distribution of the Estate. The Executors’ Petition for Instructions asserts

that the Billboard Lawsuit ran afoul of the No-Contest Clause, and seeks

instructions regarding the proper distribution of the bequests to Martha of life

estates in certain real and personal property, along with lifetime interests in the

principal and interest due on certain loans payable to the Decedent. The Petition

3
  Pet. ¶ 10 & Ex. A. Exhibit A to the Petition for Instructions appears to contain an incomplete
copy of the Third Codicil. The foregoing recitation of the final sentence of the No-Contest
Clause therefore is drawn from the Petition for Instructions.
4
  C.A. No. 2582-MA.
C.A. No. 5230-MZ
June 8, 2017
Page 5

for Instructions also seeks additional instructions regarding whether a mortgage

Decedent obtained on the Milford Residence is a debt of the Estate, whether

Martha’s claim against the Estate for funeral expenses is valid, whether Martha

properly has a claim for a spousal allowance, and whether Ann continues to be

obligated to the Estate for a mortgage the Decedent held on Ann’s home, as well as

instructions regarding the order of abatement or sale of the Decedent’s property to

the extent necessary to pay debts against the Estate.

       The parties engaged in discovery and motion practice. In the summer of

2015, the parties twice agreed to extend pretrial deadlines in order to allow for

continued settlement discussions.

       The Executors filed the pending motion to enforce a settlement agreement

(“Motion”) on August 12, 2015. The Motion required Martha and the Executors to

obtain substitute counsel to litigate the Motion, as their counsel to date would

necessarily serve as witnesses in connection with the Motion. Martha sought and

received several continuances to obtain substitute counsel, but ultimately

proceeded without the benefit of counsel.5 Martha responded to the Motion on

5
  Docket Item 105, dated Nov. 3, 2015; Docket Item 108, dated Nov. 24, 2015; Docket Item 111,
dated May 17, 2016 (providing Martha had identified replacement counsel but had not yet
retained them); Docket Item 112, dated July 1, 2016 (moving to withdraw as Martha’s counsel as
Martha had not heeded former counsel’s recommendations and advice in retaining replacement
counsel).
C.A. No. 5230-MZ
June 8, 2017
Page 6

October 17, 2016.6 The Executors did not file a reply. I held an evidentiary

hearing on March 17, 2017. This is my final report.

       II.    Analysis

       The Executors contend they and Martha reached a settlement agreement in

July 2015, and seek enforcement of that agreement. Martha disagrees. Delaware

courts encourage negotiated resolutions to contested cases, and for that reason,

among many others, settlement agreements are enforceable as a contract.7 As the

parties seeking to enforce an alleged agreement, the Executors bear the burden of

proving the existence of a contract by a preponderance of the evidence.8 In

determining whether the Executors have met their burden, I must inquire:

       whether a reasonable negotiator in the position of one asserting the
       existence of a contract would have concluded, in that setting, that the
       agreement reached constituted agreement on all of the terms that the
       parties themselves regarded as essential and thus that that agreement
       concluded the negotiations.9

6
  Martha’s pro se response included a pleading signed by one of her sons, Robert L. Moore Jr.
(“Robert”) as Martha’s power of attorney, an affidavit signed by Martha, and an affidavit signed
by another son, John T. Moore (“John”). Docket Item 115. At the hearing, Robert indicated he
wished to litigate on Martha’s behalf as her power of attorney. See Docket Item 114. The
Executors objected. I concluded that Robert’s intended representation of Martha would
constitute the unauthorized practice of law and was impermissible. See Snyder v. Martin, 820
A.2d 390, 392-93 (Del. Fam. Ct. 2001) (“[T]he Courts of this State … must prohibit the lay
person from taking on the function of an attorney at law under the guise of a document which
makes that lay person an attorney-in-fact.”). Robert and John assisted Martha in proceeding pro
se.
7
  Schwartz v. Chase, 2010 WL 2601608, at *4 (Del. Ch. Jun. 29, 2010); Asten, Inc. v. Wangner
Sys. Corp., 1999 WL 803965, at *1 (Del. Ch. Sept. 23, 1999).
8
  Schwartz, 2010 WL 2601608 at *4.
9
  Id.
C.A. No. 5230-MZ
June 8, 2017
Page 7

Overt manifestations of assent control over subjective intent.10

       The relevant settlement discussions began in July 2014. Martha’s counsel,

Bruce A. Rogers, Esquire (“Rogers”), suggested potential terms for resolving the

case to both Martha and the Executors’ litigation counsel, David A. Boswell,

Esquire (“Boswell”).11 Among other terms, Rogers suggested payment of the

Decedent’s funeral bill (although Rogers’ letter did not specify the payor(s)), that

the heirs return all personal property to Martha, that Martha have quiet enjoyment

of the Milford Residence, that the heirs repair the roof of and insure the Milford

Residence, that Martha receive rental income from other properties “as

heretofore,” and that Martha pay a “reasonable amount” of interest on a home

equity line of credit secured by the Milford Residence that was used to purchase a

different property. This suggestion did not gain traction.

       The next settlement proposal came from the attorney handling the

administration of the Estate, Stephen P. Ellis, Esquire. In response, on March 24,

2015, Rogers conveyed a “counter-offer of settlement” for the Executors’

consideration.12 Rogers’ counteroffer proposed Martha would receive the Milford

10
   United Health All., LLC v. United Med., LLC, 2013 WL 6383026, at *6 (Del. Ch. Nov. 27,
2013).
11
   Pet’rs Hr’g Ex. P1; Hr’g Tr. 49.
12
   Pet’rs Hr’g Ex. P2.
C.A. No. 5230-MZ
June 8, 2017
Page 8

Residence as her free and clear property; the heirs would be responsible for the

home equity line of credit; Martha would receive rental income from the Billboard

Property; and upon Martha’s death, the Milford Residence would be conveyed to

Martha’s sons and Ann.

       Boswell rejected Rogers’ counteroffer and made “another settlement

proposal” via letter dated June 23, 2015.13 Boswell proposed Martha would

purchase the Milford Residence at a price adjusted for assuming the home equity

line of credit, the actuarial value of her life estate in the Milford Residence, and her

life estate in the Billboard Lot and Adjacent Lot, which she would convey to the

heirs. Boswell also proposed that Ann would exchange her claim to the personal

property at the Milford Residence for $25,000 so long as she received family

photographs. Boswell’s proposal did not address the Decedent’s funeral bill.

       Rogers responded with a “counter proposal” dated July 16, 2015.14 Rogers

proposed that Martha assume the home equity line of credit and take the Milford

Residence free and clear, and release rental income from the other properties.

Rogers testified that Martha authorized this proposal.15 Rogers suggested that Ann

list items of personal property she wanted from the Milford Residence, and that

13
   Pet’rs Hr’g Ex. P3.
14
   Pet’rs Hr’g Ex. P4.
15
   Hr’g Tr. 114, 116.
C.A. No. 5230-MZ
June 8, 2017
Page 9

upon agreement, those items would be transferred without any equalizing payment.

Finally, Rogers proposed Martha would release the Estate “upon payment of the

funeral bill of Mr. Landon by the estate.”

       When Boswell received this proposal, he concluded “the big issues had been

resolved,” meaning the life estate and remainder interests on the properties, and the

only remaining issues were the funeral bill, personal property, and the scope of

releases.16 Boswell and Rogers agreed Martha’s release would be as to not only

the Estate, but also its personal representatives and remaindermen.17 The next day,

Rogers and Boswell submitted a joint stipulated scheduling order postponing

looming pretrial deadlines to allow for continued settlement negotiation. 18 Rogers

and Boswell informed the Court that “[t]he parties have come a long way towards

settlement, and are now trying to work out only minor details such as personal

property in the Milford residence, and the funeral bill. The parties hope to reach a

settlement within the next few business days.”

       Boswell formally responded to Rogers’ July 16 proposal via a July 17 letter,

in which he stated his clients were “generally amenable” and proposed “minor

16
   Hr’g Tr. 72-74; see Pet’rs Hr’g Ex. P5 (including Boswell’s response, “It looks like the parties
are fairly close at last.”).
17
   Hr’g Tr. 74-75.
18
   Pet’rs Hr’g Ex. P5; Docket Item 79.
C.A. No. 5230-MZ
June 8, 2017
Page 10

clarifications” and details as to the mechanics of the agreed-upon terms.19 Boswell

accepted Rogers’ proposal with regard to the Milford Residence, home equity line

of credit, and rental income. He provided Ann’s list of requested personal

property, such that all that remained was Martha’s approval of that list. Finally,

Boswell documented his conversation with Rogers in which Rogers had advised he

believed Martha might be willing to split the funeral bill and that Rogers would

seek her authority on that point.

       On July 21, 2015, Rogers advised Boswell that the property list was no

longer an issue.20 Rogers also advised Boswell that Martha was in fact willing to

pay half of the Decedent’s funeral expenses. Martha told the funeral director that

she and the estate were working towards a compromise in which they would split

the bill evenly.21 Boswell updated his July 17 proposal on July 22 to document

that agreement.22 The July 22 letter had a space for Martha to sign to indicate

acceptance. Boswell requested a response within two days.

       After Rogers had proposed that Martha assume the home equity line of

credit and release the income streams, and after Boswell had accepted that

19
   Pet’rs Hr’g Ex. P7.
20
   Pet’rs Hr’g Ex. P9; Pet’rs Hr’g Ex. P10, p. 14 ll. 20-21 (“Mr. Rogers: They provided a list of
personal property, and she was okay with that.”); Hr’g Tr. 96-97.
21
   Hr’g Tr. 42, 44, 47.
22
   Pet’rs Hr’g Ex. P8.
C.A. No. 5230-MZ
June 8, 2017
Page 11

proposal, Martha and her sons thought that Martha should receive the rental

income after all so that she could carry the line of credit more easily. On July 20,

Martha and John visited a bank to discuss Martha’s ability to carry the home equity

line of credit.23 They concluded Martha would be impoverished by carrying the

line of credit without the rental income.24

       Martha and one of her sons discussed this with Rogers.25 Rogers “was

advised there was a desire to modify the counter offer so that Ms. Landon would

receive income from the rental of the billboard for her life.”26 On July 25, Rogers

informed Boswell of this development, which he attributed to the “involvement of

third parties,” but indicated he was recommending Martha accept Boswell’s July

22 proposal and believed she would do so the following week.27 Boswell

understood Rogers to be saying that Martha was in agreement but her sons “were

pulling in different directions.”28 Martha neither formalized any demand for rental

income nor signed Boswell’s July 22 letter.

23
   Resp. Hr’g Ex. A; Hr’g Tr. 132.
24
   Resp. Hr’g Ex. A; Hr’g Tr. 132.
25
   John affirmed to the Court that he spoke with Rogers on July 21, 2015, and informed him
Martha rejected the Executors’ offer. Resp. Hr’g Ex. A. Rogers’ contemporaneous emails
indicate he spoke with Martha and one of her sons for almost two hours on July 24, 2015. Pet’rs
Hr’g Ex. P9.
26
   Pet’rs Hr’g Ex. P9.
27
   Pet’rs Hr’g Ex. P9.
28
   Hr’g Tr. 96.
C.A. No. 5230-MZ
June 8, 2017
Page 12

      On August 4, 2015, the parties agreed to extensions of pretrial deadlines and

stipulated as follows:

      The parties have come a very long way towards settlement, and only
      one issue remains to be resolved. The parties hope to reach a
      settlement within the next two days.
      …
      The parties agree to hold additional settlement discussions without
      further delay, and to make every possible effort to resolve this matter
      no later than 5 pm on Friday, August 7, 2015.29

The Motion followed on August 12, 2015.

      At the evidentiary hearing, Martha, who was eighty-two years old at the

time, repeatedly testified she had no memory of speaking with her attorney about

this case.30 She could not offer any testimony that informed the issues raised in the

Motion. Her affidavit submitted in response to the Motion was similarly devoid of

any argument specific to settlement. Her affidavit and testimony asserted only

general positions with regard to the Decedent’s testamentary intent and plan.

      I conclude that a reasonable negotiator in the Executors’ position would

have concluded that they reached agreement with Martha on all terms the parties

regarded as essential, and thus that the agreement concluded the negotiations.31 By

July 16, 2015, the parties had agreed to the most significant terms – the ownership

29
   Docket Item 88.
30
   Hr’g Tr. 21, 23, 24, 26.
31
   See Schwartz, 2010 WL 2601608 at *4.
C.A. No. 5230-MZ
June 8, 2017
Page 13

of the Milford Residence, the assumption of the Milford Residence’s home equity

line of credit, and the recipient of rental income from other properties – and were

still negotiating only the funeral bill and the distribution of personal property

between Ann and Martha. On July 17, Ann provided a list of personal property she

wanted, and on July 21, Rogers advised Boswell that Martha agreed to that list.

Between July 17 and July 21, Rogers also advised Boswell that Martha agreed to

pay half the Decedent’s funeral expenses, and the Executors agreed to pay the

other half. Martha further manifested her assent to paying half the funeral bill in a

conversation with the funeral director. By July 21, 2015, the parties had agreed to

all essential terms.

          The only sources of equivocation are the fact that Martha never signed

Boswell’s July 22 letter, and the concern about the rental income raised by Martha

and her sons on or after July 21. Boswell’s July 22 letter included a place for

Martha to sign, and Rogers testified that Boswell had requested Martha’s signature

to indicate acceptance of the agreement.32 Martha did not sign.

          Where a settlement agreement has been reached, the fact, alone, that it
          was the understanding that the contract should be formally drawn up
          and executed, does not leave the transaction incomplete and without
          binding force, in the absence of a positive agreement that it should not
          be binding until so reduced to writing and formally executed.

32
     Pet’rs Hr’g Ex. P8; Hr’g Tr. 141-43.
C.A. No. 5230-MZ
June 8, 2017
Page 14

       Therefore, the question is whether the parties positively agreed that
       there will be no binding contract until the document is executed.33

Boswell’s request falls short of proof that that the parties considered Martha’s

signature to be a necessary precedent to making the settlement agreement final and

binding. I conclude the absence of Martha’s signature does not preclude an

enforceable settlement agreement.

       Martha’s doubt about releasing the rental income came too late to preclude

an enforceable settlement agreement. Rogers, with Martha’s authority, offered to

assume the home equity line of credit and release the rental income on July 16,

2015.34 Boswell formally accepted that offer on July 17.35 At that point, as Rogers

and Boswell told the Court, the only remaining issues were “minor details such as

personal property in the Milford residence, and the funeral bill.”36 The personal

property was resolved on July 21, 2015, and the funeral bill was resolved on July

21 or 22. That agreement was documented in Boswell’s July 22 letter.37 The

discussion among Martha, her son, and Rogers regarding the rental income

occurred after Rogers and Boswell agreed to all essential terms on behalf of their

33
   Whittington v. Dragon Croup LLC, 2013 WL 1821615, at *3 (Del. Ch. May 1, 2013) (internal
citations and quotations omitted).
34
   Pet’rs Hr’g Ex. P4.
35
   Pet’rs Hr’g Ex. P7.
36
   Pet’rs Hr’g Ex. P5; Docket Item 79; Hr’g Tr. 76-77.
37
   Pet’rs Hr’g Ex. P8.
C.A. No. 5230-MZ
June 8, 2017
Page 15

clients. Martha’s overt manifestations of assent – her counsel’s explicit and

authorized agreement to all essential terms and her statement to the funeral director

that she would pay half the burial costs – control over subjective doubt later held

by Martha or her sons. Martha’s doubts were never conveyed to Boswell as a

formal demand; to the contrary, Rogers told Boswell that Rogers continued to

recommend the settlement terms and believed Martha would “get to that point” in a

matter of days.38

          Martha was already at that point. The record shows Martha authorized

Rogers to offer assumption of the line of credit with release of the income stream,

and that Martha assented to Ann’s requested personal property and to pay half the

funeral cost. There is no evidence that Martha’s authorization or assent was in any

way compromised or ineffective; Martha’s present inability to recall the settlement

negotiations does not invalidate them. The record indicates that third parties might

have cast doubt on Martha’s conclusions after the fact. This is insufficient to

disturb the agreement between Martha and the Executors. The Executors have

proven that they and Martha reached agreement on all of the terms that the parties

regarded as essential.

38
     Pet’rs Hr’g Ex. P9.
C.A. No. 5230-MZ
June 8, 2017
Page 16

      III. Conclusion

      For the foregoing reasons, I recommend this Court grant the Executors’

motion to enforce a settlement agreement. This is a final report pursuant to Court

of Chancery Rule 144.

                                   Respectfully,

                                /s/ Morgan T. Zurn

                                Master in Chancery