Court Opinion

ID: 9890640
Source: CourtListenerOpinion
Date Created: 2023-10-13 19:04:02.860711+00
Date Added: 2024-06-11T13:22:46.100873
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

DELAWARE HUMAN AND CIVIL                   )
RIGHTS COMMISSION,                         )
                                           )
                                           )
               Plaintiff, ex rel.          )
                                           )
MOHAMMED SEDGHI and PAULA                  )
BURKHARDT-SEDGHI,                          )
                                           )
       v.                                  )   C.A. No: S23C-04-004 MHC
                                           )
SCHELL BROTHERS, LLC, and                  )
JONATHAN HORNER,                           )
                                           )
                  Defendants.              )

                                      ORDER

                              Submitted: July 14th, 2023
                              Decided: October 13, 2023

                   Upon Defendants’ Motion to Dismiss,
            MOTION GRANTED IN PART AND DENIED IN PART.

Elizabeth S. Fenton, Esquire, Ballard Spahr, LLP, 919 N. Market Street, 11th Floor,
Wilmington, Delaware, 19081, Attorney for Plaintiff. Lila R. Miller, Esquire,
Zoila E. Hinson, Esquire, David S. DePriest, Esquire, Relman Colfax, PLLC, 1225
19th Street NW, Washington, DC, 20036, Pro Hac Vice, Attorneys for Plaintiff.

David C. Hutt, Esquire, R. Eric Hacker, Esquire, Morris James, LLP, 107 W.
Market Street, Georgetown, Delaware 19947-1438. Kelly E. Farnan, Esquire, Puja
Upadhyay, Esquire, Richards, Layton, & Finger, P.A., 920 North King Street,
Wilmington, Delaware 19801, Attorneys for Defendants.

CONNER, J.
                               INTRODUCTION

      Before the Court is the Motion of Schell Brothers, LLC (“Schell Brothers”)

and Jonathan Horner, General Counsel for Schell Brothers, (collectively

“Defendants”), to Dismiss. The Delaware Human and Civil Rights Commission (the

“Commission”) originated this action on behalf of Mohammed Sedghi and Paula

Burkhardt-Sedghi, a married couple. The Complaint was brought for unlawful

discrimination under the Delaware Fair Housing Act. Defendants move to have the

Complaint dismissed for lack of standing and failure to commence the action

promptly.

                 FACTUAL AND PROCEDURAL HISTORY

      On November 20, 2020, Mr. and Mrs. Sedghi entered into an agreement to

purchase a new home from Schell Brothers in one of it’s communities in Selbyville,

Delaware. The Sedghi’s made a 10% downpayment of $82,926 to secure the

purchase. On April 19, 2021, Mr. Sedghi spoke on the phone with Mr. Horner to

seek clarification about an addendum in the home purchase agreement (“Purchase

Agreement”). Mr. Horner did not answer Mr. Sedghi’s questions and instead

allegedly threatened to terminate the Purchase Agreement pursuant to a provision

included therein which gave Schell Brothers the power to unilaterally terminate the

Purchase Agreement at any time with anyone who does not fit within the

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“community, culture, or operations.” After hearing this threat, Mr. Sedghi advised

he would exercise his fair housing rights. This caused Mr. Horner to terminate the

Purchase Agreement, allegedly stating “I know your kind of people. I know how you

people are.”

      Mr. Horner followed up with an email confirming the termination of the

Purchase Agreement, noting that it was in part occurring because Mr. Sedghi stated

he would sue Schell Brothers. Mr. Sedghi still wanted to purchase the home so he

decided to agree to the addendum he originally questioned and made numerous

requests to Schell Brothers to reconsider the Purchase Agreement. Schell Brothers

refused the requests to reconsider and Mr. Horner also refused to return the Sedghi’s

downpayment unless the Sedghi’s agreed not to pursue litigation.

      On May 28, 2021, Mr. and Mrs. Sedghi filed a complaint with the Delaware

Division of Human and Civil Rights (the “Division”) and United States Department

of Housing and Urban Development. The Sedghi’s allege Defendants violated their

rights under the Delaware Fair Housing Act (“DFHA”) and federal Fair Housing Act

(“FHA”) by refusing to sell them the property they had contracted to purchase and

by retaliating against them for asserting their fair housing rights. The Sedghi’s

further allege Defendants discriminated against them based on Mr. Sedghi’s religion

and national origin. The Division investigated the claims and issued a charge

(“Charge”) pursuant to 6 Del. C. §4610(f)(2).
                                         3
       On August 11, 2022, pursuant to 6 Del. C. § 4612(a), Defendants elected to

have the claims asserted in the Charge decided in a civil action.               Thus, the

Commission brought this claim against Defendants for violating 6 Del. C.

§§4603(b)(1), (2), and (3), 4604(a) and 4618.

                             STANDARD OF REVIEW

       Superior Court Rule 12(b)(6) permits the Court to dismiss an action for failure

to state a claim upon which relief can be granted.1 The Court must accept all well-

pleaded allegations contained in the complaint as true and draw all inferences in a

light most favorable to the plaintiff.2 A complaint will only be dismissed if it appears

“with reasonable certainty that, under any set of facts that could be proven to support

the claims asserted, the plaintiff would not be entitled to relief.”3

       Title 6, Section 4601 of the Delaware Code establishes the lens through which

the DFHA actions should be viewed. Particularly, §4601(b) instructs that the DFHA

shall be “liberally construed to the end that its purposes may be accomplished and

all persons may fully enjoy equal rights and access to housing for themselves and

their families.” 4

1
  Gray’s Landing Dev., LLC v. Blackston Cove Dev., LLC, 2023 WL 2609633, at *2 (Del. Super.
Mar. 21, 2023).
2
  Thomas v. Capano Homes Inc., 2015 WL 1593618, at *2 (Del. Super. Apr. 2, 2015).
3
  Id.
4
  6 Del. C. § 4601(b).
                                             4
                                     ANALYSIS

    I.      Failure to Promptly Commence

         Defendants argue the Complaint should be dismissed because it was not

timely filed, stressing the “promptly commenced” language of 6 Del. C.

§4612(n)(3). Defendants challenge that Plaintiffs did not promptly commence the

action because there was an approximate nine-month delay between the issuance of

the Charge and the filing of the Complaint and Praecipe.

         Plaintiffs assert they promptly commenced the action once the appropriate

procedural steps were taken. When the Commission authorizes a civil action, the

action must be immediately referred to the Attorney General.5 The Attorney General

then has 30 days to pursue the civil action on behalf of the Commission in the names

of the aggrieved person or persons.6 However, if the Attorney General has a conflict

of duty, the Commission shall employ special counsel to pursue the action.7 Once

the special counsel is retained, the action shall be promptly commenced.8

         In the matter before the Court, the Attorney General had a conflict of duty,

therefore the DFHA required the retention of special counsel to proceed with the

action. The Commission retained special counsel on February 10, 2023, and local

5
  6 Del. C. § 4612(n)(1).
6
  6 Del. C. § 4612(n)(2).
7
  6 Del. C. § 4612(n)(3).
8
  Id.
                                           5
Delaware counsel on March 21, 2023. The Commission then filed the Complaint on

April 6, 2023. Due to a clerical error admitted by Plaintiffs, the accompanying

Praecipe was not filed until May 19, 2023. Superior Court Rule 3(a) and Delaware

case law make it clear that an action is not officially commenced until the plaintiff

files both the Complaint and Praecipe, which puts “the judicial machinery in

motion.”9

          Although the Plaintiffs did not file the Praecipe until May 19, 2023, the time

between the retention of the special counsel and the official commencement of the

action was less than two months. There is nothing contained in the DFHA that states

an action cannot proceed if initiated after a certain time period. The language simply

reads, “such action shall be commenced promptly after the Commission employs

such counsel.”10 Defendants failed to demonstrate a set of circumstances in which

Plaintiffs could not be entitled to relief. Rather, defendants simply argued a nine-

month delay between the Commission referring the action to the Attorney General

and the filing of the Complaint is violative of time limits. However, Defendants fail

to acknowledge the Attorney General’s conflict of duty and the time it took to retain

the required special counsel.           The Court is satisfied the action was promptly

9
    Sup. Ct. Civ. R. 3(a); see also Russell v. Olmedo, 275 A.2d 249, 250 (Del. 1971).
10
     6 Del. C. 4612(n)(3).
                                                  6
commenced after special counsel was retained. As such, Defendants’ Motion to

Dismiss for failure to promptly commence the action is DENIED.

      II.      Lack of Standing

            Defendants argue that because the Division never issued a charge on behalf

of Mrs. Burkhardt-Sedghi the Commission lacks standing to bring the Complaint on

her behalf. Defendants further argue the Complaint regarding Mrs. Burkhardt-

Sedghi must be dismissed as there was a lack of notice.

            Plaintiffs argue the Commission has standing to bring an action on behalf of

an “aggrieved person or persons”11 and that Mrs. Burkhardt-Sedghi is an aggrieved

person because she is associated with her husband and was injured as a result of the

discriminatory housing practice. Plaintiffs further argue Defendants were on notice

because the same facts apply to both Mrs. Burkhardt-Sedghi’s claims and Mr.

Sedghi’s claims.

            When a charge is issued pursuant to §4610, a complainant, respondent or an

“aggrieved person on whose behalf the complaint was filed, may elect to have the

claims of that charge” decided in a civil action under §4612(n).12 When such an

election is made, §4612(n)(1) commands the Commission to authorize a civil action

11
     6 Del. C. § 4612(n)(1).
12
     6 Del. C. § 4612(a).
                                              7
on behalf “the aggrieved person or persons.”13 A civil action pursuant to §4612(n)

cannot occur without an election pursuant to §4612(a). Section §4612(a) requires

the complaint to be filed on behalf of “an aggrieved person.” Mr. Sedghi is the only

person on whose behalf the charge was filed. Therefore, the Commission only has

standing to authorize a civil action on his behalf, not for Mrs. Burkhardt-Sedghi

since no complaint was filed on her behalf.

          Plaintiffs argue this interpretation of the DFHA is “nonsensical” and “creates

a bizarre asymmetry” because it theoretically allows Mrs. Burkhardt-Sedghi to

subsequently intervene in this civil action pursuant to §4612(n)(4) but does not allow

the Commission to authorize a civil action on her behalf. The Court agrees, but it is

nonetheless the law established in the DFHA. As stated above, the language of

§4612(n)(1) limits the claims parties may elect to have decided in a civil action to

those listed in the charge. It does not, however, limit the charges that may be decided

in the civil action. Therefore, nothing in this order precludes Mrs. Burkhardt-Sedghi

from subsequently intervening in this suit pursuant to §4612(n)(4).

          Because the Commission lacks standing to assert claims in their Complaint on

behalf of Mrs. Burkhardt-Sedghi the Court need not address the issue of notice.

13
     6 Del. C. § 4612(n)(1).
                                             8
Accordingly, Defendants Motion to Dismiss regarding a lack of standing on behalf

of Paula Burkhardt-Sedghi is GRANTED.

                               CONCLUSION

      As discussed above, Defendants’ Motion to Dismiss is DENIED as to the

promptly commenced argument and GRANTED as to Paula Burkhardt-Sedghi’s

Standing claims.

      IT IS SO ORDERED.

                                            /s/ Mark H. Conner
                                            Mark H. Conner, Judge

cc: Prothonotary

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