Court Opinion

ID: 9390691
Source: CourtListenerOpinion
Date Created: 2023-04-28 14:02:59.139816+00
Date Added: 2024-06-11T17:18:36.262151
License: Public Domain

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

                                    Final Report: April 28, 2023
                                  Date Submitted: January 3, 2023

   William R. Firth, III, Esquire                    Richard E. Berl, Jr., Esquire
   Emily A. Letcher, Esquire                         Hudson, Jones, Jaywork,
   Cohen, Seglias, Greenhall, Pallas,                & Fischer, LLC
   & Furman, P.C.                                    34382 Carpenter’s Way, Suite 3
   500 Delaware Avenue, Suite 730                    Lewes, DE 19958
   Wilmington, DE 19801

           Re:        Apennine Acquisition Co., LLC v. Richard M. Quill, et al.,
                      C.A. No. 2022-0503-SEM

   Dear Counsel:

           Pending before me are motions to dismiss an amended complaint and cancel

   a related lis pendens. The underlying dispute is contractual—the plaintiff alleges

   that the parties had an oral agreement to form a joint venture to construct

   condominiums on certain real property. That oral agreement, per plaintiff, was final,

   partially performed, yet never memorialized.            When the plaintiff learned the

   defendants were entertaining other offers for the property, the plaintiff filed this

   action and a lis pendens against the property. The defendants seek dismissal of the

   plaintiff’s amended complaint arguing the plaintiff failed to plead a reasonably

   conceivable equitable claim or request for relief and without such, this Court lacks
Apennine Acquisition Co., LLC v. Richard M. Quill, et al.,
C.A. No. 2022-0503-SEM
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subject matter jurisdiction. The defendants also seek an order cancelling the lis

pendens and assessing the statutory fees.

          I find the plaintiff failed to plead a reasonably conceivable equitable claim or

request for relief. Thus, this Court lacks subject matter jurisdiction and the amended

complaint should be dismissed, with the statutory leave to transfer. Because I

recommend dismissal on jurisdictional grounds, I recommend the lis pendens be

denied without prejudice. This is my final report.

I.        BACKGROUND1

          The parties’ dispute relates to property located at 203 Savannah Road in

Lewes, Delaware (the “Property”).2 The Property is owned by White Bucks, LLC

(“White Bucks”), which is owned 50-50 by Richard M. Quill and Joseph Johnson

and Karla Johnson (the “Johnsons”, together with Mr. Quill and White Bucks, the

“Defendants”).3

1
  All facts are drawn from the amended complaint, Docket Item (“D.I.”) 13, and the exhibits
attached to it. See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del.
2004). I decline to consider the additional documents attached to D.I. 10. See Paul Capital
Advisors, LLC v. Stahl, 2022 WL 3418769, at *9 (Del. Ch. Aug. 17, 2022), as corrected
(Aug. 25, 2022) (“In reviewing a motion to dismiss under Rule 12(b)(1), the Court may
consider documents outside the complaint, although when a challenge to subject matter
jurisdiction is directed to the face of a complaint, the court accepts the plaintiff’s allegations
of fact.”) (cleaned up).
2
    D.I. 13, ¶ 12.
3
    Id. at ¶ 13.
Apennine Acquisition Co., LLC v. Richard M. Quill, et al.,
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          In November 2021, Joseph Latina, a real estate broker, introduced Apennine

Acquisition Co., LLC (“Apennine”), a real estate development company, to the

owners of White Bucks to discuss the Property.4 Apennine was interested in

purchasing the Property to develop residential condominium units thereon.5 Initially,

the discussions went well. On November 10, 2021, Apennine and Mr. Quill met

and orally agreed to form a joint venture between Apennine, the Defendants, and

Mr. Latina (the “Joint Venture”).6 Through the Joint Venture, the parties would

develop residential condominium units on the Property.7 Before beginning that

project, though, “the parties’ intention was to ‘cash-out’ the Johnsons’ membership

interest in White Bucks . . . with Quill retaining an ownership interest in White Bucks

together with [Apennine] and Latina.”8

          The next month, in December 2021, an agreement of sale was prepared

whereby Apennine and Mr. Quill would purchase the Property from White Bucks

for $1,800,000.00 with closing to occur no later than May 15, 2022 (the “Agreement

4
    Id. at ¶¶ 11-12.
5
    Id. at ¶ 12.
6
    Id. at ¶ 14.
7
    Id. at ¶ 12.
8
    Id. at ¶ 14.
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C.A. No. 2022-0503-SEM
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of Sale”).9 On February 2, 2022, Mr. Johnson initialed, signed, and transferred the

Agreement of Sale to Apennine via facsimile, on behalf of White Bucks.10 But

neither of the buyers executed the Agreement of Sale.11

           Nevertheless, in the following weeks Apennine moved forward with the Joint

Venture. Apennine approved a site engineer for the project, reviewed development

plans, “prepared financing pro formas, conducted a marketing analysis, allocated

cash, solicited and negotiated with banks and performed financing appraisals” for

the project’s development costs.12

           On February 16, 2022, Apennine and Mr. Quill met again to finalize the terms

of the Joint Venture.13 Apennine avers that the parties, at that time, “shook hands,

orally agreed upon [the] final terms [of the Joint Venture] and to memorialize the

terms in writing.”14 That memorialization, per Apennine, was in a February 23, 2022

email from Michael Scali, who is a partner at, and general counsel for, Apennine.15

9
    Id. at ¶ 15. It is unclear who prepared the Agreement of Sale.
10
     Id. at ¶ 16.
11
     Id. at Ex. A.
12
     Id. at ¶ 17.
13
     Id. at ¶ 18.
14
     Id.
15
     Id. at Ex. B.
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           In his email, Mr. Scali wrote to Mr. Quill, Mr. Latina, and two others outlining

how Mr. Scali saw “the deal/paper working out.”16                Mr. Scali proposed the

following: (1) White Bucks would redeem the Johnsons’ 50% interest in White

Bucks for $400,000.00, (2) Mr. Quill would assign 10% of White Bucks to Mr.

Latina and 45% to Apennine for $200,000.00, resulting in Mr. Quill retaining 45%,

and (3) White Bucks’ operating agreement would be amended to reflect the new

ownership with Apennine having decision making control “except for certain items

that need unanimous consent.”17

           Contemporaneously with these transactions the parties would also (1)

refinance White Bucks’ existing $1 million in debt with a construction loan, (2) Mr.

Quill would assign “Two Dips agreement to White Bucks,” and (3) Mr. Quill and

the Johnsons would terminate an existing agreement for assignment of the Johnsons’

partnership interests.18 Mr. Scali invited questions or concerns in response to his

email and offered to start drafting.19 But, despite assurances to the contrary,

Apennine’s counterparts failed to take any action toward the Joint Venture.20

16
     Id.
17
     Id.
18
     Id.
19
     Id.
20
     Id. at ¶ 20.
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          Months later, on or about May 25, 2022, Apennine discovered the Defendants

were engaged in negotiations to sell the Property to other prospective purchasers.21

Soon after, on June 9, 2022, Apennine commenced this lawsuit.22 Then, on June 13,

2022, Apennine filed a notice of lis pendens against the Property with the Sussex

County Recorder of Deeds.23

          In Apennine’s initial complaint, Apennine pled seven (7) counts for (1) breach

of oral contract, (2) breach of the implied covenant of good faith and fair dealing,

(3) promissory estoppel, (4) equitable estoppel, (5) interference with prospective

economic advantage, (6) unjust enrichment, and (7) constructive trust.24 On July

15, 2022, the Defendants filed a motion to dismiss the original complaint under

Court of Chancery Rule 12(b)(1) and 12(b)(6).25 The next day, on July 16, 2022, the

Defendants filed a motion to cancel Apennine’s lis pendens.26 On August 3, 2022,

the Defendants filed a combined opening brief in support of their motions.27

21
     Id. at ¶ 21.
22
     D.I. 1.
23
     D.I. 3.
24
     D.I. 1.
25
     D.I. 8.
26
     D.I. 9.
27
     D.I. 10.
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           Thereafter, the parties met and conferred and filed a stipulation and proposed

order through which Apennine would respond to the motion to dismiss by amending

its complaint.28 I granted that stipulation on September 21, 2022 and Apennine filed

its amended complaint on September 23, 2022, adding an eighth count for specific

performance (the “Amended Complaint”).29 The Defendants filed another motion

to dismiss on October 12, 2022, arguing Apennine failed to state a claim for specific

performance under Court of Chancery Rule 12(b)(6).30 The Defendants incorporated

by reference their earlier arguments for dismissal of the remaining claims for lack of

jurisdiction and cancelation of the lis pendens.31

           Briefing was complete on November 22, 2022,32 and I heard oral argument on

January 5, 2023, at which time I took the motions under advisement.33

28
     D.I. 11.
29
  D.I. 12-13. Apennine revised various averments and other counts in the Amended
Complaint, although those edits were largely stylistic. See, e.g., D.I. 13, Ex. 1, ¶ 2.
30
     D.I. 15.
31
     Id.
32
     D.I. 20.
33
     D.I. 23.
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II.      ANALYSIS

         The Defendants seek dismissal for failure to state a claim under Court of

Chancery Rule 12(b)(6) and lack of subject matter jurisdiction under Rule 12(b)(1).

The standard of review under these sections is settled.

         Under Rule 12(b)(6):

         (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.”34

Under Rule 12(b)(1), a claim will be dismissed “if it appears from the record that the

Court does not have jurisdiction over the claim.”35

         The Defendants argue that even taking Apennine’s well-pled allegations as

true, Apennine has failed to state a claim for specific performance, which Defendants

argue is the only equitable claim in the Amended Complaint. Thus, the Defendants

argue that if the specific-performance claim is dismissed, this Court lacks

jurisdiction over, and should dismiss, the remaining claims. Apennine disagrees and

contends it has multiple equitable claims within this Court’s jurisdiction. Regarding

34
     Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002) (citations omitted).
35
     AFSCME Locals 1102 & 320 v. City of Wilm., 858 A.2d 962, 965 (Del. Ch. 2004).
Apennine Acquisition Co., LLC v. Richard M. Quill, et al.,
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the latter, the Defendants disagree that those claims are equitable or adequately pled.

The Defendants also seek an order cancelling the lis pendens and assessing the

statutory fees. I address these arguments in turn.

           A.    It is not reasonably conceivable that Apennine can establish a right
                 to specific performance by the required clear and convincing
                 evidence.

           Apennine seeks specific performance of the Joint Venture and the Agreement

of Sale. To ultimately prevail on its specific-performance claim Apennine would

need to prove, by clear and convincing evidence, “that (1) an enforceable contractual

obligation exists; (2) [Apennine] has performed (or is ready, willing, and able to

perform) its own obligations; and (3) that the balance of the equities tips in its

favor.”36 Here, at the pleading stage, the question is “whether it is reasonably

conceivable that [Apennine] can establish a right to specific performance of the

[Joint Venture] by clear and convincing evidence.”37          Evidence is clear and

convincing when it “produces an abiding conviction that the truth of the contention

is ‘highly probable.’”38

36
  Hastings Funeral Home, Inc. v. Hastings, 2021 WL 8741648, at *3 (Del. Ch. Nov. 29,
2021), adopted, (Del. Ch. 2021).
37
     Id.
38
     In re Martin, 105 A.3d 967, 975 (Del. 2014).
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      I find it is not reasonably conceivable that Apennine can establish a right to

specific performance of the Agreement of Sale or Joint Venture by the required clear

and convincing evidence. Apennine’s specific-performance claim for both alleged

agreements fails the first prong—an enforceable contractual obligation. I address

each agreement in turn.

             1.     It is not reasonably conceivable that Apennine can prove, by
                    clear and convincing evidence, that the Agreement of Sale is
                    an enforceable contract.

      An agreement for the sale of real property is subject to the Statute of Frauds

under 6 Del. C. § 2714(a), which provides:

      No action shall be brought to charge any person upon any agreement
      made . . . upon any contract or sale of lands, tenements, or
      hereditaments, or any interest in or concerning them, . . . unless the
      contract is reduced to writing, or some memorandum, or notes thereof,
      are signed by the party to be charged therewith, or some other person
      thereunto by the party lawfully authorized in writing[.]

Apennine recognizes this hurdle and attempts to plead part performance. “It is a

venerable and well-settled rule of law that the statute of frauds does not bar

enforcement of an oral agreement that is supported by evidence of partial

performance of that agreement. More specifically, partial performance will defeat
Apennine Acquisition Co., LLC v. Richard M. Quill, et al.,
C.A. No. 2022-0503-SEM
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the statute of frauds and render enforceable an oral contract for the conveyance of

real property.”39

         In Walton v. Beale, Vice Chancellor Parsons explained the bounds of partial

performance:

         In general, the act relied on as part performance should be an act that
         would not have occurred absent a contract or agreement relating to the
         land. Further, the actual part performance must be a joint act, or an act
         which clearly indicates mutual assent of the parties to the oral contract.
         Courts generally have found that taking possession of the land, making
         partial or full payment for the land, rendering services that were agreed
         to be exchanged for the land, or making valuable improvements on the
         land in reliance on an oral contract demonstrates part performance.
         Likewise, courts have found preparatory acts, such as giving directions
         for conveyances, taking a view of the property or putting a deed in the
         hands of a solicitor to prepare a conveyance, insufficient to satisfy the
         partial performance exception.40

         Apennine’s alleged performance falls squarely into the latter category.

Apennine pleads that it approved a site engineer, reviewed development plans,

prepared financing forms, conducted a marketing analysis, allocated finances,

negotiated with banks, and performed financing appraisals for the project’s

development costs. These are not joint actions or actions clearly indicating mutual

assent to a sale of the Property. Rather, they are actions indicative of due diligence

39
     In re Lot No. 36, 2004 WL 3068348, at *4 (Del. Ch. Dec. 29, 2004).
40
  Walton v. Beale, 2006 WL 265489, at *4 (Del. Ch. Jan. 30, 2006), aff’d, 913 A.2d 569
(Del. 2006) (citations and quotation marks omitted).
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and continued negotiations. I find Apennine has failed to plead facts making it

reasonably conceivable that it could establish part performance by clear and

convincing evidence. Thus, I recommend the claim seeking specific performance of

the Agreement of Sale be dismissed.

               2.     It is not reasonably conceivable that Apennine can prove, by
                      clear and convincing evidence, that the Joint Venture is an
                      enforceable contract.
         To state an enforceable contractual obligation related to the Joint Venture,

Apennine needed to plead sufficient factual predicate making it reasonably

conceivable it could establish the following by clear and convincing evidence: “(1)

the parties intended that the contract would bind them, (2) the terms of the contract

are sufficiently definite, and (3) the parties exchange[d] legal consideration.”41 I

find it is not reasonably conceivable that Apennine can prove the parties intended to

be bound to, or that there are sufficiently definite terms for, the Joint Venture by

clear and convincing evidence.

         Intent to be bound is an objective inquiry that requires this Court to look at

the “overt manifestation of assent—not subjective intent.”42           In Eagle Force

Holdings, LLC v. Campbell, the Delaware Supreme Court clarified that “all essential

41
     Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010).
42
     Eagle Force Hldgs., LLC v. Campbell, 187 A.3d 1209, 1229 (Del. 2018).
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or material terms must be agreed upon before a court can find that the parties

intended to be bound by it and, thus, enforce an agreement as a binding contract.”43

This is similar to, but distinct from the second prong, which requires sufficiently

definite terms. “A contract is sufficiently definite and certain to be enforceable if

the court can—based upon the agreement’s terms and applying proper rules of

construction and principles of equity—ascertain what the parties have agreed to

do.”44

          I find Vice Chancellor Zurn’s analysis in Hyetts Corner, LLC v. New Castle

County most instructive.45 Therein, “[a] dispute over landscaping and maintaining

open space in a new housing development . . . spurred a rift between the developer

and New Castle County.”46 The parties’ efforts to resolve their disputes culminated

in an email from the County which explained what an agreement may look like, if

drafted.47 The developer argued that the email was an enforceable contractual

obligation because it contained all essential terms and demonstrated a reasonably

conceivable claim “that the parties struck a definitive and enforceable agreement to

43
     Id. at 1230.
44
     Id. at 1232.
45
     2021 WL 4166703 (Del. Ch. Sept. 14, 2021).
46
     Id. at *1.
47
     Id. at *3-4.
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agree.”48 Emphasizing that agreeing to negotiate was not an offer and any offer

needs to be accepted to form a contract, Vice Chancellor Zurn dismissed the breach-

of-contract claim.49 She explained, “[a] reasonable negotiator in [the developer’s]

position could not have believed the . . . [e]mail ‘concluded the negotiations’

between the parties. Because there was no ‘complete meeting of the minds’ between

[the parties] . . ., no contract was formed between them.”50

          The same is true here. Apennine pleads that the parties agreed to form a joint

venture in their November 2021 meeting, then agreed to the final terms of the Joint

Venture orally at the February 2022 meeting. Those oral terms, per Apennine, were

“specifically set forth in the February 23, 2022 e-mail.”51          But that email is

equivocal, and a reasonable negotiator could not have believed the email concluded

the negotiations between the parties. That email begins with a preface from Mr. Scali

from Apennine: “Here is how I see the deal/paper working out.”52 Then, before and

after specifying the terms as he envisioned them, Mr. Scali invited “any questions or

48
     Id. at *4.
49
     Id. at *5.
50
     Id. at *7.
51
     D.I. 13, ¶ 24.
52
     Id. at Ex. B.
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concerns” or “any issues,” respectively.53 When he did not receive a response after

more than one month, he replied all with a question: “Are we good to proceed to

document here?”54 Reading this email in a light most favorable to Apennine, at best

it indicates that the parties were close to finalizing a deal and were hashing out the

final terms. It does not alone, nor coupled with the allegations in the Amended

Complaint, support a finding that it is reasonably conceivable that Apennine can

prove the parties intended to be bound to the terms in Mr. Scali’s email by clear and

convincing evidence.

           Likewise, the email undermines Apennine’s contention that the parties agreed

upon sufficiently definite terms during their meetings. Even if the parties, as

Apennine avers, left their meetings having agreed to work together, the email reflects

much uncertainty as to the specific terms of their relationship and the Joint Venture.

Rather than memorialize the definite terms agreed to, the initial email reflects Mr.

Scali’s view on how the relationship might work; his follow up email was likewise

inconclusive. With the uncertainty evident in Mr. Scali’s emails, a reasonable

negotiator could not have believed negotiations between the parties had concluded.

Thus, it is not reasonably conceivable that Apennine can prove by clear and

53
     Id.
54
     Id.
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convincing evidence that the alleged oral agreement to form a joint venture has

sufficiently definite terms.

         Taken together, Apennine has failed to plead facts making it reasonably

conceivable it could prove an enforceable contractual obligation related to the Joint

Venture by clear and convincing evidence. As such, I recommend the claim for

specific performance thereof be dismissed.

         B.     Apennine has failed to adequately plead any other equitable claims
                or requests for relief, leaving this Court without subject matter
                jurisdiction.

         This Court is a court of “limited jurisdiction.”55 “[T]he Court of Chancery

can acquire subject matter jurisdiction over a cause in only three ways, namely, if:

(1) one or more of the plaintiff’s claims for relief is equitable in character, (2) the

plaintiff requests relief that is equitable in nature, or (3) subject matter jurisdiction

is conferred by statute.”56 Under Court of Chancery Rule 12(h)(3) “[w]henever it

appears by suggestion of the parties or otherwise that the Court lacks jurisdiction of

the subject matter, the Court shall dismiss the action.”

55
     Clark v. Teeven Hldg Co., Inc., 625 A.2d 869, 880 (Del. Ch. 1992).
56
  Candlewood Timber Gp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 997 (Del. 2004)
(citations omitted).
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         If the specific-performance claim is dismissed, as I recommend herein, the

following counts remain: (1) breach of contract, (2) breach of the implied covenant,

(3) promissory estoppel, (4) equitable estoppel, (5) interference with prospective

economic advantage, (6) unjust enrichment, and (7) constructive trust. Apennine

argues its claims for equitable estoppel, unjust enrichment, and constructive trust

invoke this Court’s equitable jurisdiction.57 The Defendants disagree, arguing that

the claims are either not equitable or are not pled adequately to invoke jurisdiction.

I address these claims in turn.

               1.     Apennine failed to plead a reasonably conceivable equitable-
                      estoppel claim.

         The parties do not appear to dispute that equitable estoppel is an equitable

claim within this Court’s jurisdiction. As described by then-Vice Chancellor Strine,

a claim for equitable estoppel is a “traditional equitable claim[.]”58              Thus, if

adequately pled, this claim could be sufficient to invoke this Court’s jurisdiction.

57
  In its answering brief, Apennine appeared to argue that Count Five, interference with
prospective economic advantage, was also an equitable claim. D.I. 16, p.10. But
Apennine’s counsel clarified at oral argument that it was not the claim, but rather the relief
Apennine was seeking, that sounded in equity. D.I. 24, 30:2-24. Such relief is addressed
herein and found insufficient to sustain this Court’s subject matter jurisdiction.
58
     Mirzakhalili v. Chagnon, 2000 WL 1724326, at *7 (Del. Ch. Nov. 9, 2000).
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But Apennine failed to plead a reasonably conceivable claim for equitable estoppel

in Count Four in the Amended Complaint.

           To state a claim for equitable estoppel, Apennine must plead facts supporting

the following elements:

           (1) conduct by the party to be estopped that amounts to a false
           representation, concealment of material facts, or that is calculated to
           convey an impression different from, and inconsistent with that which
           the party subsequently attempts to assert, (2) knowledge, actual or
           constructive, of the real facts and the other party’s lack of knowledge
           and the means of discovering the truth, (3) the intention or expectation
           that the conduct shall be acted upon by, or influence, the other party
           and good faith reliance by the other, and (4) action or forbearance by
           the other party amounting to a change of status to his detriment.59

“A party’s reliance must be both reasonable and justified under the circumstances.

Thus, the standards for establishing the elements of equitable estoppel are stringent;

the doctrine is applied cautiously and only to prevent manifest injustice.”60

           Apennine’s equitable-estoppel claim is largely duplicative of its breach-of-

contact claim. Apennine pleads that it (1) was unaware the parties’ agreement

“would not be honored” by the Defendants who were negotiating with others, (2)

reasonably relied on the Defendants honoring the agreement, and (3) “suffered a

prejudicial change of condition as a result of its reliance,” because it was deprived

59
     Hyetts Corner, LLC v. New Castle Cnty., 2021 WL 4166703, at *10 (citations omitted).
60
     Id.
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of the benefit of the agreement and lost other opportunities.61 Such is the essence of

the underlying contract claims.

           Apennine has not, as it was required to, pled facts that would transform such

contractual (or quasi-contractual) claim into one for equitable estoppel. Such

requires “conduct by the party to be estopped that amounts to a false representation,

concealment of material facts, or that is calculated to convey an impression different

from, and inconsistent with that which the party subsequently attempts to assert.”62

Thus, I find Count Four insufficient to invoke this Court’s jurisdiction.

                 2.       Apennine’s unjust-enrichment claim is not sufficient to prize
                          the doors of this Court.

           “Unjust enrichment is a traditionally legal claim.”63 To invoke this Court’s

equitable jurisdiction, a plaintiff must plead facts supporting a reasonably

conceivable claim that the plaintiff has “no adequate remedy at law.”64 Apennine

has failed to so plead—rather, Apennine’s unjust-enrichment claim is an off-the-

61
     D.I. 13, ¶¶ 61-69.
62
   Hyetts Corner, LLC, 2021 WL 4166703, at *10. Cf. Cornell Glasgow, LLC v. La Grange
Props., LLC, 2012 WL 2106945, at *8 (Del. Super. June 6, 2012) (Slights, J.) (holding that
a plaintiff cannot state a fraud claim “merely by intoning the prima facie elements of
[fraud] while telling the story of the defendant’s failure to perform under the contract”).
63
  Parseghian as Tr. of Gregory J. Parseghian Revocable Tr. v. Frequency Therapeutics,
Inc., 2022 WL 2208899, at *9 (Del. Ch. June 21, 2022).
64
     Id.
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contract theory of recovery, pled alternatively to its breach-of-contract claim,

through which Apennine seeks monetary damages. Because such relief is available

at the Superior Court, I find Count Six insufficient to invoke this Court’s

jurisdiction.65

              3.     Apennine failed to plead a reasonably conceivable claim for
                     a constructive trust.

       Count Seven purports to state a claim for constructive trust over the Property.

A constructive trust is an equitable remedy, rather than a standalone claim. 66 It is a

trust “imposed by a court of equity as a remedy to correct the unlawful vesting, or

65
   See Crosse v. BCBSD, Inc., 836 A.2d 492, 496–97 (Del. 2003) (explaining when an
unjust-enrichment claim is brought as “an off-the-contract theory of recovery that
accompanies the breach of contract allegations[,]” the claim is a “legal, not equitable
claim”, over which “[t]he Superior Court typically has jurisdiction”).
       In its answering brief, Apennine points me to LVI Grp. Invs., LLC v. NCM Grp.
Hldgs, LLC, 2018 WL 1559936, at *17 (Del. Ch. Mar. 28, 2018) and In re Tr. FBO duPont
Under Tr. Agreement Dated August 4, 1936, 2018 WL 4610766, at *13 (Del. Ch. Sept. 25,
2018) to argue that its unjust-enrichment claim should survive the motion to dismiss. D.I.
16, p.12. Both cases, however, addressed whether unjust enrichment could survive at the
pleading stage as an alternative theory. Neither addressed whether an add-on unjust-
enrichment claim was sufficient to invoke this Court’s subject matter jurisdiction. I find,
as plead here, Apennine’s claim is not.
66
  iBio, Inc. v. Fraunhofer USA, Inc., 2020 WL 5745541, at *12 (Del. Ch. Sept. 25, 2020);
VTB Bank v. Navitron Projects Corp., 2014 WL 1691250, at *6 (Del. Ch. Apr. 28, 2014)
(“This Court has recognized that a party may, on rare occasions, mistakenly plead a remedy
as an enumerated cause of action. In these situations, this Court has tended to permit the
remedial claims to remain in the complaint, but it has generally excluded them from its
analysis at the motion to dismiss stage. In effect, this Court treats remedial claims not as
independent causes of action but instead ‘as having been included in [the] prayer for
relief.’”).
Apennine Acquisition Co., LLC v. Richard M. Quill, et al.,
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Page 21 of 24

assertion of, legal title.”67 Unlike specific performance, a constructive trust “is not

designed to effectuate the presumed intent of the parties, but to redress a wrong.

When one party, by virtue of fraudulent, unfair or unconscionable conduct, is

enriched at the expense of another to whom he or she owes some duty, a constructive

trust will be imposed. Some fraudulent or unfair and unconscionable conduct is

essential.”68 When a party seeks to invoke this Court’s jurisdiction through an

equitable remedy, “this Court must take a practical view of the complaint to

determine what a plaintiff really wants.”69

         Throughout Apennine’s constructive-trust count, Apennine emphasizes its

interest in money damages, and merely adds that “[t]he Property is unique, and the

monetary loss . . . cannot presently be calculated. Further, [Apennine] cannot be

fairly and entirely recompensed by money damages given the deprivation of its

unique interests in the Joint Venture . . . and the Property.”70 But the uniqueness of

real property would be a matter resolved through specific performance, a claim I

find Apennine failed to adequately plead. Further, that monetary loss “cannot

67
 E. Lake Methodist Episcopal Church, Inc. v. Trs. of Peninsula-Del. Ann. Conf. of United
Methodist Church, Inc., 731 A.2d 798, 809 (Del. 1999).
68
     Hogg v. Walker, 622 A.2d 648, 652 (Del. 1993) (citations omitted).
69
     Intel Corp. v. Fortress Inv. Gp., LLC, 2021 WL 4470091, at *5 (Del. Ch. Sept. 30, 2021).
70
     D.I. 13, ¶ 93.
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presently be calculated” is not sufficient to state the absence of a remedy at law.71

Likewise, Apennine’s averment that money damages would be inadequate is

unsupported and conclusory. And, turning back to the purpose for a constructive

trust—to redress a wrong—Apennine has failed to plead any facts making it

reasonably conceivable that the Defendants actions were fraudulent, unfair, or

unconscionable. Finally, taking a practical view of the complaint, I find what

Apennine really wants is money damages to make it whole from the failed project;

it has an adequate remedy at law through which it can seek such recovery.

                                        *    *    *

       Because Apennine failed to plead a reasonably conceivable equitable claim or

remedy, I find the Amended Complaint should be dismissed for lack of subject

matter jurisdiction. Under 10 Del. C. § 1902, Apennine should be granted sixty (60)

days from a final dismissal decision to request transfer to a court with jurisdiction.

       C.      The motion to cancel the lis pendens should be denied without
               prejudice to renew before a court with jurisdiction.

       The Defendants also ask that this Court issue an order cancelling the lis

pendens and awarding the statutory fees. Under 25 Del. C. § 1606, a court “upon

71
  Cf. Anglo Am. Sec. Fund, LP v. S.R. Glob. Int’l Fund, LP, 829 A.2d 143, 156 (Del. Ch.
2003) (“Proof of . . . damages and of their certainty need not be offered in the complaint in
order to state a claim.”).
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motion of any party aggrieved, shall direct any recorder of deeds to cancel a notice

of pendency and mark the indices accordingly if: . . . [t]he claim relating to the real

estate is one which, if sustained, would entitle the party solely to recover money or

money damages.” The lis pendens statute also sets forth discretionary cancellation

“if the court determines that there is not a probability that final judgment will be

entered in favor of the party recording the notice of pendency.”72

          Here, the Defendants argue both—that the lis pendens must be cancelled

because, if anything, Apennine could claim money damages but also, under the

discretionary test, such claim is not likely to succeed. Apennine counters that it “has

a reasonable probability of success on the merits and at this stage in the litigation

and [the] Defendants have not established a record suggesting otherwise.”73

          I find this matter is best presented to a court with jurisdiction over the

remaining claims and should be denied without prejudice.             “Subject matter

jurisdiction is in essence a question of the power of a court to hear and decide the

case before it.”74 Herein, I find this Court lacks jurisdiction over the remaining

claims pled in the Amended Complaint. Although there may be some overlap

72
     25 Del. C. § 1608.
73
     D.I. 16, p. 17.
74
  Abbott v. Vavala, 2022 WL 453609, at *5 (Del. Ch. Feb. 15, 2022), aff’d, 284 A.3d 77
(Del. 2022).
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between my analysis and the mandatory cancellation framework, I find this Court is

not the appropriate tribunal to address or direct cancellation of the lis pendens. If

this action is transferred, the receiving court may entertain such request.

III.   CONCLUSION

       For the above reasons, I find Apennine failed to plead a reasonably

conceivable equitable claim. Thus, I recommend the Amended Complaint be

dismissed for lack of subject matter jurisdiction. Under 10 Del. C. § 1902, Apennine

should be given sixty (60) days from a final dismissal decision to request transfer to

a court with jurisdiction. I also recommend that the cancellation of Apennine’s lis

pendens be denied without prejudice to renew before a court with jurisdiction over

Apennine’s claims. This is my final report and exceptions may be filed under Court

of Chancery Rule 144.

                                                Respectfully submitted,

                                                /s/ Selena E. Molina

                                                Master in Chancery