Court Opinion

ID: 9697073
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:05:13.357533+00
Date Added: 2024-06-11T12:27:43.386720
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

LEON O. MESSINA and                    )
ANN M. MESSINA,                        )
                                       )
                  Plaintiffs,          )
                                       )
           v.                          ) C.A. No. 2022-0421-SEM
                                       )
CARLA ANN VANDERWENDE                  )
KILLMON and GARY H. KILLMON,           )
                                       )
                  Defendants.          )

                                FINAL REPORT

                       Final Report: August 25, 2023
                       Date Submitted: May 1, 2023

Gary W. Alderson, SCHWARTZ & SCHWARTZ, ATTORNEYS AT LAW, P.A.,
Dover, Delaware; Counsel for Plaintiffs.

Kashif I. Chowdhry and F. Michael Parkowski, PARKOWSKI, GUERKE &
SWAYZE, P.A., Dover, Delaware; Counsel for Defendants.

MOLINA, M.
          In this contract action, the plaintiffs seek specific performance of neighborly

agreements regarding shared use of a driveway. The plaintiffs allege the parties

entered into various oral and written agreements and seek enforcement thereof, or

relief through alternative theories. The defendants argue this action is a nonstarter

and, as such, moved to dismiss it in full. After the motion to dismiss was argued, the

plaintiffs moved for leave to amend their complaint. I find that request comes too

late and recommend that the plaintiffs’ claims for breach of the alleged oral

agreements, breach of the implied covenant, and promissory estoppel be dismissed

with prejudice. That leaves the plaintiffs’ claims for breach of the written agreement,

fraudulent inducement, equitable fraud, and negligent misrepresentation, which I

find should survive the pleadings and proceed to discovery.

I.        BACKGROUND 1

          The properties at issue were purchased at a 2007 auction from Donald L.

Bullock. Thereat, Leon Messina and Ann Messina (together, the “Plaintiffs”)

purchased two parcels of Mr. Bullock’s land located at 5517 Whiteleysburg Road in

Harrington, Delaware. 2 The first parcel consists of 44.63 wooded acres, where the

1
  Unless otherwise noted, the facts recited herein are taken from the complaint. Docket
Item (“D.I.”) 1. Citations in the form “Ex. __” refer to exhibits to the complaint. D.I. 4–17.
I do not consider the proposed amendments to the complaint because, as explained below,
I recommend the motion to amend be denied.
2
    D.I. 1 ¶ 8.
                                        Page 2 of 25
Plaintiffs’ home is located (“Parcel 1”).3 The second parcel is a thirteen-by-six-

hundred-foot-wide driveway connecting Parcel 1 to Whiteleysburg Road (“Parcel

2,” with Parcel 1, the “Messina Property”). 4

          At the same 2007 auction, Mr. Bullock sold a neighboring 111.61-acre farm

(the “Vanderwende Farm”) to the Revocable Trust of William W. Vanderwende and

the Revocable Trust of Ellen Ann Vanderwende.5 The Vanderwende Farm consists

of 90 acres of cleared land, tilled by the owners of the Vanderwende Farm during all

relevant periods.6 The remaining acreage is wooded and has been historically used

by the owners for hunting.7 On June 19, 2021, after a few interim transfers, the

Vanderwende Farm was conveyed to the defendants here: Carla Ann Vanderwende

Killmon and Garry Killmon (collectively, the “Defendants,” with the Plaintiffs, the

“Parties”).8

          The Vanderwende Farm and the Messina Property share a common driveway.

Starting from Whiteleysburg Road, the first portion is the 13-foot-wide driveway on

3
    Id. ¶¶ 7–9.
4
 Id. Although termed as connecting, the Plaintiffs plead that, through a mistake, “the two
parcels do not actually connect; rather, the corner of one actually abuts the corner of the
other.” Id. ¶ 10.
5
    Ex. 4.
6
    D.I. 1 ¶ 14.
7
    Id. ¶ 15.
8
    Id. ¶ 4.
                                       Page 3 of 25
Parcel 2, owned by the Plaintiffs. 9 The Plaintiffs “have always allowed and continue

to allow” the owners of the Vanderwende Farm to use the driveway on Parcel 2. 10

Then, where Parcel 2 abuts, but fails to fully adjoin Parcel 1, the driveway “continues

across a small portion of the Vanderwende [Farm] to connect the two Messina

parcels where they abut one another.” 11 Thereafter, the driveway “widens

considerably and continues past the [Plaintiffs’] home.”12 As it widens, the driveway

straddles the Plaintiffs’ property on Parcel 1 and the Vanderwende Farm, “and each

party uses their side of this wider driveway portion to access their respective

properties.” 13

          A.        The Oral Agreement

          Although this neighborly agreement worked well, it has not been without

incident. Per the Plaintiffs, the turn from Whiteleysburg Road onto the 13-foot-wide

driveway in Parcel 2 is too tight for the heavy farming equipment and trucks used to

serve the Vanderwende Farm.14 As is the driveway’s narrow width as it continues

9
    See Ex. 2–3; D.I. 1 ¶ 26.
10
     D.I. 1 ¶ 24.
11
     Id. ¶ 20.
12
     Id. ¶ 21.
13
     Id. ¶ 22.
14
     Id. ¶ 27.
                                         Page 4 of 25
toward Parcel 1. 15 Without sufficient space to maneuver, equipment has run off the

driveway, sometimes getting stuck. 16 The Plaintiffs must then repair and maintain

the property to account for any damage or strain from the agricultural use.17

           Prompted by these concerns, Mr. Messina walked over to the Vanderwende

Farm in the Spring of 2018 to talk with Mr. Vanderwende about a solution.18 At that

time, the Vanderwende Farm was owned by the Revocable Trust of William W.

Vanderwende and Ellen Ann Vanderwende (the “Vanderwende Trust”), and Mr.

Vanderwende served as a co-trustee. 19           Mr. Messina and Mr. Vanderwende

discussed the driveway and how to improve access for the Plaintiffs and the

Vanderwende Farm, but failed to reach any resolution. 20

           They restarted their discussion on September 15, 2018 (the “September

Meeting”). 21 At the September Meeting, Mr. Vanderwende proposed to “give a strip

of land to the [Plaintiffs] to widen the driveway and connect their land-locked parcel,

so long as they would agree to construct and maintain the widened driveway as they

15
     Id.
16
     Id.
17
     Id.
18
     Id. ¶ 28.
19
     Ex. 4.
20
     D.I. 1 ¶ 29.
21
     Id. ¶ 30. One of Mr. Vanderwende’s sons (“believed to be Jimmy”) was present. Id.
                                        Page 5 of 25
always had with the existing driveway.” 22 Mr. Messina countered that the land

should be sold rather than gifted.23 Mr. Vanderwende agreed (the “Oral

Agreement”).24

          B.        The Written Agreement

          Following the September Meeting, the Plaintiffs began working toward

memorializing and effectuating the Oral Agreement. They arranged for surveys to

support an application for a minor lot line adjustment, had a phone pedestal moved,

and hired separate counsel to draft a sales agreement and conduct closing. 25

          But the process moved slowly. Eventually, in the Spring of 2019, Mr. Messina

contacted Ms. Killmon to arrange a visit so that Mr. Vanderwende could sign forms

related to the sale. 26 Mr. Messina met with Mr. Vanderwende on April 1, 2019, who

signed “the forms” and Mr. Messina delivered the signed documents to his attorney’s

office on April 2, 2019. 27

          Although it is unclear what “the forms” included, it is apparent they did not

include an agreement of sale. Rather, it was not until January 23, 2020, when Mr.

22
     Id. ¶ 33.
23
     Id. ¶ 34.
24
     Id. ¶ 35.
25
     Id. ¶ 39(a)–(c); Ex. 7.
26
     D.I. 1 ¶ 42.
27
     Id. ¶¶ 43–44.
                                       Page 6 of 25
Messina presented Mr. Vanderwende with, and Mr. Vanderwende signed, an

agreement of sale (the “Written Agreement”).28

         The Written Agreement contemplated that Mr. Vanderwende, as trustee of the

Vanderwende Trust, would sell the Plaintiffs “.28 acres of the land being a part of

the property known as Whiteleysburg Road, Harrington, DE 19952, being tax parcel

number: MN-00-169.00-1-11.00-000” (the “Strip”). 29 Under “Purchase Price” the

Written Agreement’s typed print contemplated a price of “eight hundred dollars

($800.00),” but those words were crossed out and “$2,000.00” was handwritten

above.30 Despite what looks like a last-minute change, the Plaintiffs aver the

$2,000.00 price was previously discussed and agreed to by all involved. 31 The

Written Agreement also contemplated a deposit, with the typed print reflecting

$100.00, but that amount was crossed out with “$1,200.00” handwritten above it.32

The Plaintiffs paid the $1,200.00 deposit on the day they signed the Written

Agreement. 33

28
     Id. ¶ 49; Ex. 11. Ms. Killmon was present at the signing. D.I. 1 ¶ 50.
29
     D.I. 1 ¶ 49.
30
     Ex. 8 ¶ 2.
31
     D.I. 1 ¶ 52.
32
     Ex. 8 ¶ 2.
 D.I. 1 ¶ 54. “The Vanderwendes cashed and deposited the $1,200.00 Messina check on
33

March 23, 2020.” Id. ¶ 57.

                                          Page 7 of 25
           Settlement was originally set on February 7, 2020.34 The Written Agreement

did, however, allow for extensions “for a reasonable time” if necessary “to secure a

survey, or to prepare the necessary legal and financial settlement documents[.]”35

The Written Agreement also contained a “No Representation; Entire Agreement”

provision, explaining that:

           Purchaser and Seller agree that they have read and fully understand this
           Agreement, that it and all necessary attachments contains the entire
           agreement between them, and that they do not rely on any oral
           representation or statement not expressly written in this Agreement.
           Furthermore, this Agreement shall not be amended except in writing
           signed by Purchaser and Seller.36

Finally, under “Miscellaneous,” the Written Agreement provided:

           The parties hereto agree to execute and deliver any other instrument(s)
           or document(s) that may be necessary or convenient to carry into effect
           the provisions of this Agreement, and the parties agree to otherwise
           cooperate in good faith as may be necessary to complete the settlement
           contemplated therein.37

           Following the execution of the Written Agreement, the Plaintiffs began to

prepare for closing. For unknown reasons, settlement was moved to August 6,

2020. 38 At some point before closing, Mr. Messina called Ms. Killmon to arrange to

34
     Ex. 8 ¶ 4.
35
     Id.
36
     Id. ¶ 18.
37
     Id. ¶ 22.
38
     D.I. 1 ¶ 58.
                                         Page 8 of 25
have Mr. Vanderwende sign and have notarized a “final set of settlement

documents.” 39 Included in the final documents was a license agreement through

which the Plaintiffs proposed to grant the Defendants a license to use the driveway

and required the Plaintiffs to maintain it (the “License Proposal”). 40 Upon receiving

the License Proposal, Ms. Killmon told Mr. Messina that she did not like the

language and would have the License Proposal reviewed by a friend.41

          C.     The Deal Falls Through

          On August 5, 2020, Ms. Killmon notified the closing attorney that Mr.

Vanderwende had lacked capacity “for some time” and therefore could not sign the

closing paperwork.42 Then, on August 21, 2020, a successor trustee to the

Vanderwende Trust communicated to counsel to the Plaintiffs that Mr.

Vanderwende lacked capacity to execute the Written Agreement or any other

associated documents, and that the Vanderwende Trust was unwilling to move

forward with the transaction as proposed. 43 Counsel for the Defendants returned the

39
  Id. ¶ 59. Ms. Killmon said she would “take care of the arrangements for [Mr.
Vanderwende] to sign.” Id. ¶ 60.
40
     Ex. 10.
41
     D.I. 1 ¶¶ 62–63.
42
     Id. ¶ 64.
43
     Id. ¶ 65.
                                     Page 9 of 25
deposit to the Plaintiffs, who have not cashed it “fearing that would signify their

acquiescence to cancellation of the sale.”44

          Shortly thereafter, on September 27, 2020, Mr. Vanderwende died.45 With

his passing, Ms. Killmon became a co-trustee of the Vanderwende Trust.46

          D.        The Post-Death Agreement

          After Mr. Vanderwende’s passing, and despite the earlier complications, the

Parties continued to negotiate a sale of the Strip.47 On April 2, 2021, counsel for the

Plaintiffs affirmed that they wanted to move forward, and “simply wanted the

[Defendants] to sell the 0.28-acre parcel to them for the agreed upon price of

$2,000.”48 The Plaintiffs also confirmed that they were interested in moving forward

with the Oral Agreement.49

          On April 13, 2021, the Defendants’ counsel confirmed that the Defendants

“agreed to sell the subject parcel to the [Plaintiffs] for $2,000 … [o]n the terms

44
     Id. ¶ 66.
45
     Id. ¶ 68.
46
  Id. ¶ 68; D.I. 14; Ex. 11 at Art. VI.         The other co-trustee is Douglas Edward
Vanderwende. Ex. 11 at Art. VI.
47
     D.I. 1 ¶ 69.
48
  Id. ¶ 70. The Complaint reflects this date as 2020, but the Plaintiffs confirmed in briefing
that “[t]he dates given in ¶¶ 70–72 of the Complaint should all be 2021 not 2020.” D.I. 27,
p.15 (emphasis in original).
49
     D.I. 1 ¶ 70(d)–(e).
                                        Page 10 of 25
described” (the “Post-Death Agreement”).50 Thus, on April 26, 2021, counsel for the

Defendants sent a draft deed, easement agreement, and a minor lot line adjustment

plan to the Plaintiffs’ counsel. 51 But, concerned that the drafts did not cover all the

agreed upon terms, the Plaintiffs rejected them.52

         As the Parties continued to negotiate acceptable terms, the Vanderwende

Farm changed owners. On June 19, 2021, the Vanderwende Trust and Ms. Killmon,

as designated beneficiary of the Vanderwende Farm under the Vanderwende Trust,

transferred the Vanderwende Farm to the Defendants. 53

         Ultimately, and unfortunately, the Parties were unable to reach a final

agreement and this action was filed. 54

         E.      Procedural Posture

         The Plaintiffs filed their complaint on May 12, 2022 (the “Complaint”). 55 In

the Complaint, the Plaintiffs plead four claims for (1) breach of contract, (2) breach

of the implied covenant of good faith and fair dealing, (3) promissory estoppel, and

50
     Id. ¶ 71(a)–(b).
51
     Id. ¶ 72; Ex. 12.
52
     D.I. 1 ¶¶ 73–75.
53
     Ex. 4.
54
     D.I. 1 ¶¶ 73–79.
55
  D.I. 1. The Plaintiffs attached to their opposition to the Motion to Dismiss (as defined
herein) an earlier complaint filed in March 2021 against the Vanderwende Trust. See D.I.
27, Ex. A. Per the Plaintiffs, the complaint was rejected for filing and not refiled because
the Parties continued to negotiate. D.I. 28.

                                       Page 11 of 25
(4) fraudulent inducement, equitable fraud, and negligent misrepresentation. The

Plaintiffs’ primary relief requested is specific performance.

          On September 9, 2022, the Defendants filed a motion to dismiss the Complaint

under Court of Chancery Rule 12(b)(6) and 12(b)(7) (the “Motion to Dismiss”).56 I

heard oral argument on the Motion to Dismiss on January 19, 2023. 57 During oral

argument, the Plaintiffs indicated an interest in seeking to amend the Complaint.58

The Plaintiffs followed through on March 3, 2023, when they filed a motion to

amend the Complaint (the “Motion to Amend”). 59 The Defendants filed their

opposition to the Motion to Amend on April 17, 2023, and on May 1, 2023, the

Plaintiffs advised they would not be filing a reply brief in further support of the

Motion to Amend. 60 At that time, I took both the Motion to Dismiss and the Motion

to Amend under advisement. This is my final report on both.

II.       ANALYSIS

          The Defendants seek dismissal of the Complaint under both Court of

Chancery Rule 12(b)(6) and 12(b)(7) and leave to amend the Complaint. I first

address the Motion to Dismiss and then turn to the Motion to Amend.

56
     D.I. 23.
57
     D.I. 35.
58
     D.I. 36; D.I. 46 at 50:11–22.
59
     D.I. 38.
60
     D.I. 44 at 4, 11; D.I. 45.
                                      Page 12 of 25
      A.     Counts II and III should be dismissed; Count I and IV should
             survive in part.

      Under Rule 12(b)(6), the Defendants argue the Complaint fails to state a

viable claim for which relief may be granted. I agree, in part. I find the Plaintiffs

pled a viable claim for breach of the Written Agreement, but not the Oral Agreement

or the Post-Death Agreement. I further find the Plaintiffs failed to plead reasonably

conceivable claims for breach of the implied covenant, specific performance, or

promissory estoppel. But I find the other alternative theories viable. Thus, I

recommend the Complaint be dismissed in part, with only Count I and IV surviving.

      The standard of review under Rule 12(b)(6) is settled:

      (i) all well-pleaded factual allegations are accepted as true; (ii) even
      vague allegations are “well-pleaded” if they give the opposing party
      notice of the claim; (iii) the Court must draw all reasonable inferences
      in favor of the non-moving party; and ([iv]) dismissal is inappropriate
      unless the plaintiff would not be entitled to recover under any
      reasonably conceivable set of circumstances susceptible of proof. 61

I apply this standard to the following: (1) Counts I and II for breach of contract,

specific performance, and breach of the implied covenant, and (2) Count III and IV

for promissory estoppel, fraudulent inducement, equitable fraud, and negligent

misrepresentation.

61
  Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002) (citations and quotations
omitted).

                                    Page 13 of 25
               1.     The breach-of-contract claims should survive, in part, with
                      specific performance off the table.

         The Plaintiffs allege breach of contract and the implied covenant and seek an

award of specific performance. For their requested remedy, the Plaintiffs must

establish “(1) a valid contract exists, (2) [they] [are] ready, willing, and able to

perform, and (3) that the balance of equities tips in favor of the” Plaintiffs.62 At the

pleading stage, the question is “whether it is reasonably conceivable that [the

Plaintiffs] can establish a right to specific performance . . . by clear and convincing

evidence.”63

         Here, the Defendants contest whether the Plaintiffs have pled that any valid

contract exists and argue that the balance of the equities would not support specific

performance. I address these arguments in turn.

                      a.     The Plaintiffs well-pled the existence and breach of one
                             contract: the Written Agreement.

         I find the Plaintiffs have pled sufficient support for a pleading stage finding

that the Written Agreement is an enforceable contract and was breached. “This Court

has found that the price, date of settlement, and the property to be sold are essential

62
     Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010).
63
  Hastings Funeral Home, Inc. v. Hastings, 2021 WL 8741648, at *3 (Del. Ch. Nov. 29,
2021), adopted, (Del. Ch. 2021).

                                       Page 14 of 25
terms of an enforceable contract for the sale of real property.” 64 These terms are all

present in the Written Agreement, a claim for breach of which should survive the

pleadings. 65

         But the Plaintiffs did not, within Count I, plead any breach-of-contract claims

arising from the Oral Agreement or the Post-Death Agreement. First, the Plaintiffs

aver that the Oral Agreement was memorialized through the Written Agreement

which was fully integrated. Second, the Plaintiffs failed to include either the Oral

Agreement or the Post-Death Agreement in their breach count, nor seek any relief

related thereto in their prayer for relief. The Plaintiffs pled: “the issue here is specific

performance of the sale, so once that is resolved, the [P]arties can memorialize the

64
     Id. (internal quotation omitted).
65
   The Defendants argue that the Written Agreement fails to reflect mutual assent and lacks
all material terms. At this stage I disagree. At the pleading stage, the signatures on the
Written Agreement support a reasonably conceivable finding of mutual assent. Cf. Eagle
Force Holdings, LLC v. Campbell, 187 A.3d 1209, 1231 (Del. 2018) (holding that the
signatures of both parties provided strong evidence that they intended to be bound by the
agreement). Regarding material terms, the Defendants have articulated that the Written
Agreement lacks licensing terms and includes an ambiguous property location. I find the
first irrelevant, because the Written Agreement is fully integrated. The second I find does
not support dismissal of the claim at this stage. See Heckman v. Nero, 1999 WL 182570,
at *4 (Del. Ch. Mar. 26, 1999) (“Even if aspects of the agreement are obscure, the
agreement will be enforceable if the Court is able to ascertain the terms and conditions on
which the parties intend to bind themselves.”).

                                         Page 15 of 25
status quo ante of the use and maintenance of the driveway on the conveyed land to

the terms that were already agreed upon.”66

       It was only through their briefing and the Motion to Amend that the Plaintiffs

attempted to add the Oral Agreement and Post-Death Agreement to their breach

claim. But parties cannot supplement the claims pled in their complaint through

briefing.67 And, for the reasons I explain below, I recommend the Motion to Amend

be denied. Thus, I look to the Complaint, and I find the Plaintiffs failed to plead a

claim for breach of the Oral Agreement or Post-Death Agreement. To the extent the

Plaintiffs intended to include the Oral Agreement or the Post-Death Agreement

within their breach claims (Counts I and II), they should be dismissed.

       Further, the Plaintiffs failed to plead a reasonably conceivable claim for

breach of the implied convent of good faith and fair dealing. The Plaintiffs appear

to argue that, because the implied covenant is inherent in every agreement, they need

not plead a separate factual predicate for breach thereof. I disagree.

       “The implied covenant is inherent in all contracts and is used to infer contract

terms ‘to handle developments or contractual gaps that the asserting party pleads

 D.I. 1 ¶ 103. The Plaintiffs affirm as much in their prayer for relief, where they aver the
66

Defendants are in breach of the Written Agreement; there is no mention of the Oral
Agreement or the Post-Death Agreement. Id. ¶¶ 80–103.
67
  See Tygon Peak Cap. Mgmt., LLC v. Mobile Investco, LLC, 2023 WL 4857281, at *5
(Del. Ch. July 31, 2023) (“Arguments do not serve to amend the pleadings.”) (citations
omitted).

                                       Page 16 of 25
neither party anticipated.’” 68 At the pleading stage, thus, the pleading party must

plead an unanticipated development or gap in the written agreement and a breach

thereof. The Plaintiffs did neither and Count II should be dismissed in full.

                      b.     The Plaintiffs failed to plead a viable claim for specific
                             performance of the Written Agreement.

         Although I find it reasonably conceivable that the Written Agreement is an

enforceable contract, it is not reasonably conceivable that the Plaintiffs can establish

a right to specific performance of the Written Agreement by the required clear and

convincing evidence.

         Initially, I disagree with the Plaintiffs that there is no heightened standard for

pleading specific performance. There is and that standard is clear: the question

before me is “whether it is reasonably conceivable that [the Plaintiffs] can establish

a right to specific performance . . . by clear and convincing evidence.”69 I find the

answer is “no” because the location of the Strip is ambiguous.

         Although ambiguity in contractual terms can be resolved through extrinsic

evidence, this Court will not decree specific performance for contracts where the

Court has “to supply meaning to the essential elements of the contract.” 70 Here, the

68
     Dieckman v. Regency GP LP, 155 A.3d 358, 367 (Del. 2017) (citations omitted).
69
     Hastings Funeral Home, Inc., 2021 WL 8741648, at *3.
70
     Mehiel v. Solo Cup Co., 2005 WL 1252348, at *7 (Del. Ch. May 13, 2005).
                                        Page 17 of 25
Written Agreement calls for the transfer of “.28 acres of land being a part of the

property known as Whiteleysburg Road, Harrington, DE” with reference to the

parcel identification number for the Vanderwende Farm.71 The Written Agreement

does not, however, specify the exact location of the .28 acres, which would need to

be determined through extrinsic evidence. The need to look to extrinsic evidence to

clarify an essential term renders the Written Agreement unsuitable for the

extraordinary remedy of specific performance.72 Thus, even reading the well-pled

allegations in the Complaint in a light most favorable to the Plaintiffs, it is not

reasonably conceivable that the Plaintiffs can prove that the equities support specific

performance by clear and convincing evidence.

         For these reasons, I find Count I should survive, limited solely to the Written

Agreement, but Count II and the requested remedy of specific performance should

be dismissed.

                2.     Count III should be dismissed but Count IV should survive.

         The Plaintiffs plead Counts III and IV as alternatives to their contract claims,

seeking a finding of promissory estoppel and alleging fraudulent inducement,

equitable fraud, and negligent misrepresentation. The Defendants argue that these

71
     Ex. 8 ¶ 1 (emphasis added).
72
  Having so found, I decline to address the alternative argument that laches bars the relief
requested.

                                       Page 18 of 25
claims are dead on arrival because the Defendants were not parties to the underlying

transaction and cannot be estopped thereby or held liable for fraud allegedly incurred

therewith. I agree for Count III but disagree for Count IV.

         “Claims for fraud, fraudulent inducement, negligent misrepresentation,

promissory estoppel and estoppel all require a plaintiff to plead that he justifiably or

reasonably relied on the defendant’s promise.”73 Here, the only promisor for the Oral

Agreement was Mr. Vanderwende, on behalf of the Vanderwende Trust. Those

promises are not transferrable to the Defendants. Nor are the alleged promises

underlying the Written Agreement actionable; those are encompassed in the

remaining portion of Count I. Thus, the promissory estoppel claim (Count III),

which was expressly premised on the Written Agreement, should be dismissed.

         Moving to Count IV, the Plaintiffs seek relief for “representations made

regarding [Mr. Vanderwende’s] capacity[.]” 74 The Defendants are alleged to have

made knowingly false representations when they (1) remained silent about capacity

during the discussions before and after the Oral Agreement and the Written

Agreement or, alternatively, (2) when Ms. Killmon asserted capacity issues in

August of 2020. These false representations underlie the claims in Count IV for

73
  Chapter 7 Tr. Constantino Flores v. Strauss Water Ltd., 2016 WL 5243950, at *7 (Del.
Ch. Sept. 22, 2016) (citations omitted).
74
     D.I. 1 ¶ 112.
                                     Page 19 of 25
fraudulent inducement, equitable fraud, and negligent misrepresentation. I address

these claims together because their elements largely overlap.

      For a fraudulent inducement claim, the Plaintiffs were required to “plead facts

supporting an inference that: (1) the [Defendants] falsely represented or omitted

facts that the [Defendants] had a duty to disclose; (2) the [Defendants] knew or

believed that the representation was false or made the representation with a reckless

indifference to the truth; (3) the [Defendants] intended to induce the [Plaintiffs] to

act or refrain from acting; (4) the [Plaintiffs] acted in justifiable reliance on the

representation; and (5) the [Plaintiffs were] injured by [their] reliance.” 75 To plead

negligent misrepresentation or equitable fraud, the Plaintiffs needed to plead factual

predicate supporting the same factors, minus knowledge or reckless indifference.76

      Under Court of Chancery Rule 9(b), “[i]n all averments of fraud or mistake,

the circumstances constituting fraud or mistake shall be stated with particularity.

Malice, intent, knowledge and other condition of mind of a person may be averred

generally.” To satisfy Rule 9(b), thus, the Plaintiffs were required to allege in their

Complaint: “(1) the time, place, and contents of the false representation; (2) the

75
   Abry Partners V, L.P. v. F & W Acquisition LLC, 891 A.2d 1032, 1050 (Del. Ch. 2006)
(citations omitted).
76
  See Williams v. White Oak Builders, Inc., 2006 WL 1668348, at *7 (Del. Ch. June 6,
2006), aff’d sub nom. Williams v. White Oak Builders, 913 A.2d 571 (Del. 2006).

                                     Page 20 of 25
identity of the person making the representation; and (3) what the person intended

to gain by making the representations.” 77

         Through alternative pleading, the Plaintiffs aver that either (1) Ms. Killmon

knew Mr. Vanderwende lacked capacity while actively participating in the

negotiations and execution of the Written Agreement and related documents and

stayed silent, or (2) her representation in August 2020 that he lacked capacity and

had lacked capacity “for some time” was false. At the pleading stage, and even with

the particularity requirement, I find Count IV adequately pleads alternative claims

for fraudulent inducement, equitable fraud, and negligent misrepresentation.

Whether those claims will prevail remains to be seen.

         B.     The Defendants’ joinder argument is moot.

        Under Rule 12(b)(7), the Defendants argue that the Complaint should be

dismissed because the Plaintiffs failed to join the mortgagees for the Parties’

respective properties. The only claims to which the mortgagees might be interested

were the claims for specific performance of the Written Agreement, Oral

Agreement, or Post-Death Agreement. I recommend herein that all such claims be

dismissed. Thus, I find the joinder issue moot and decline to address it any further.

77
     Abry Partners V, L.P., 891 A.2d at 1050 (citations omitted).
                                         Page 21 of 25
         C.     The Motion to Amend should be denied.

         Having found that the Motion to Dismiss should be granted in part and denied

in part, I now turn to the Motion to Amend. The proposed amendments would add

additional factual predicate regarding the Post-Death Agreement. For the following

reasons, I find the Motion to Amend should be denied.

         Amendments are governed by Court of Chancery Rule 15. In this case, the

Plaintiffs moved to amend their complaint after the Motion to Dismiss was fully

briefed and argued. And the proposed amendments are designed to address the

arguments raised in the Motion to Dismiss and accompanying briefing. Thus, I find

the Motion to Amend falls under Court of Chancery Rule 15(aaa), which provides:

         [A] party that wishes to respond to a motion to dismiss under Rules
         12(b)(6) or 23.1 by amending its pleading must file an amended
         complaint, or a motion to amend in conformity with this Rule, no later
         than the time such party’s answering brief in response to either of the
         foregoing motions is due to be filed.78

78
     Ct. Ch. R. 15(aaa).
       The Plaintiffs attempt to compare their request to that made in TVI Corp. v.
Gallagher, 2013 WL 5809271 (Del. Ch. Oct. 28, 2013). I find TVI distinguishable. There,
Vice Chancellor Parsons deferred consideration of a motion to amend filed after argument
on a motion to dismiss “because, among other reasons, it would not yet be clear whether
any claims would be dismissed and, consequently, which standards should govern any
requested amendments.” Id. at *21. But “[t]o avoid requiring a re-filing of the [m]otion to
[a]mend and incurring needless delay and additional expense,” he considered the motion
to amend in the same decision as the motion to dismiss, and treated it as submitted after
his disposition of the motion to dismiss. Id. I do the same here. But the primary purpose of
the motion to amend before Vice Chancellor Parsons was to add a completely new claim,
not addressed in the motion-to-dismiss briefing. Id. at *21. He properly found that request
fell under the more lenient Rule 15(a). Id. For the requested addition of allegations in
support of a claim addressed in the motion to dismiss briefing, Vice Chancellor Parsons
                                       Page 22 of 25
Under Rule 15(aaa), a plaintiff responding to a motion to dismiss has two options:

to “stand on the complaint and answer the motion; or seek leave to amend the

complaint before the response to the motion was due.”79

      Under Court of Chancery Rule 15(aaa) where “a party fails to timely file an

amended complaint or motion to amend”—like the Plaintiffs here—“and the Court

thereafter concludes that the complaint should be dismissed under Rule 12(b)(6)”—

like I recommend herein—“dismissal shall be with prejudice . . . unless the Court,

for good cause shown, shall find that dismissal with prejudice would not be just

under all the circumstances.” Thus, the question before me is whether dismissal with

prejudice would be just under all the circumstances. Upon review of the totality of

the circumstances, I find dismissal should be with prejudice and the Motion to

Amend should be denied.

      Rule 15(aaa) has been interpreted stringently. But it does not pose an

insurmountable bar.     For example, in TVI Corporation v. Gallagher, Vice

Chancellor Parsons found good cause to permit an amendment to a claim that would

looked to Rule 15(aaa). Id. Here, the amendments before me are most appropriately
addressed under the more stringent Rule 15(aaa).
79
  Hillblom v. Wilm. Tr. Co., 2022 WL 17428978, at *5 (Del. Ch. Dec. 6, 2022) (quoting
Braddock v. Zimmerman, 906 A.2d 776, 783 (Del. 2006)).

                                    Page 23 of 25
have otherwise been dismissed with prejudice.80 In TVI, the plaintiffs’ counsel

mistakenly filed an incorrect first amended complaint and did not realize their

mistake until shortly before argument on the motion to dismiss. Thus, “[r]oughly

contemporaneously with the oral argument” the plaintiffs moved to amend.81 After

ruling on the motion to dismiss, in the same decision, Vice Chancellor Parsons

addressed the proposed amendments. Most related to a wholly new claim and were

considered under Rule 15(a). But one was “the addition of the particularized factual

allegation regarding the misappropriation claim, [which] would affect [the Court’s]

decision to dismiss that claim and, therefore, [was] assessed under Rule 15(aaa).”82

The mistaken filing and lack of undue delay or prejudice to the defendants convinced

Vice Chancellor Parsons to permit the amendment.

          This case has no such extenuating circumstances. Rather, the Plaintiffs made

the tactical decision to rest on the Complaint and oppose the Motion to Dismiss

through briefing. Only after oral argument on the Motion to Dismiss, did the

Plaintiffs move to amend the Complaint to address the challenges in the Motion to

Dismiss. Such has consequences: dismissal with prejudice. The Plaintiffs have

failed to articulate good cause to relieve them of those consequences and I

80
     TVI Corp. v. Gallagher, 2013 WL 5809271, at *23.
81
     Id. at *20.
82
     Id. at *21.
                                      Page 24 of 25
recommend the Motion to Amend be denied and the dismissal recommended herein

be with prejudice.

III.   CONCLUSION

       For the above reasons, I find the Motion to Dismiss should be granted in part

and denied in part. Count I, limited to the Written Agreement, and Count IV, in full,

should survive and proceed to discovery. Any remaining portions of Count I and

Counts II-III should be dismissed, as should the requested remedy of specific

performance. Further, the Motion to Amend should be denied and the dismissal

recommended herein should be with prejudice.

       This is a final report and exceptions may be filed under Court of Chancery

Rule 144.

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