Opinion
Civil Action No. 09A-10-011-JOH.
Submitted: June 10, 2010.
Decided: September 14, 2010.
Upon Appeal from a Decision of the Court of Common Pleas — REMANDED, In Part, and GRANTED, In Part.
Maggie Clausell, Esquire, of the Law Office of Maggie Clausell, Dover, Delaware, Attorney for Appellant.
Thomas C. Marconi, Esquire, of Losco Marconi, Wilmington, Delaware, Attorney for Appellee.
MEMORANDUM OPINION
Defendant-Below, Brandon Frazer, appeals a decision of the Court of Common Pleas awarding $22,750.41 to his former mother-in-law, Catherine Gregory. Their dispute arises from his use of Gregory's credit card. He brought a third-party action against his former wife, Nicole Frazer, but she is not a party to this appeal. Brandon Frazer asserts five arguments on appeal: (1) Delaware lacks personal jurisdiction over him; (2) Delaware lacks subject matter jurisdiction over the claim; (3) the statute of frauds precludes the enforcement of the contract; (4) the factual determinations by the trial court were erroneous; and (5) the lower court erred when it judicially estopped Mr. Frazer from making arguments based on the contract. The only claim with any merit is related to the lower courts finding of judicial estoppel.
Procedural History
Gregory filed her complaint on September 25, 2007. Mr. Frazer answered on January 4, 2008. The answer contained denials and affirmative defenses, none of which included lack of personal jurisdiction. Thereafter, he participated in discovery.
On the eve of trial, Mr. Frazer moved to dismiss the action under Rule 12(b) for lack of personal jurisdiction on July 6, 2009, and a motion for summary judgment on July 8, 2009. The only relevant pre-trial motion to this appeal is his affirmative defense of lack of personal jurisdiction pursuant to Court of Common Pleas Civil Rule 12(h). The trial court held, "an affirmative defense of lack of personal jurisdiction is waived if not presented in the responsive pleading or a timely amendment thereto, or prior to filing a responsive pleading." The trial court ruled that personal jurisdiction was waived when Mr. Frazer filed his answer to the complaint and physically participated in the litigation in Delaware, subjecting him to the jurisdiction of the court without challenge.
Gregory v. Frazer, C.A. No: 2007-09-492 at 4-5 (Del. Comm. Pl. 2009).
Factual Background
The Court of Common Pleas stated the facts surrounding this action:
Defendant and Third-Party Defendant were married in December 1999. In 2002, the couple moved from Wisconsin to Delaware. While in Delaware, Defendant was employed by a construction company but had ambitions to become self-employed. In March 2002 Defendant discussed his ambitions with Plaintiff, then his mother-in-law, at the Touchdown Lounge in Dover, Delaware. Defendant did not have the start-up capital or professional network to start his own business. Plaintiff had worked for the State of Delaware Housing Authority for 23 years. She was willing to support Defendant's start-up venture by introducing him to person in the construction industry and helping finance the venture. Defendant quit his construction job after a year to start his own company.
Plaintiff and Defendant entered into an agreement whereby plaintiff would loan funds to Defendant for his business expenses by granting him use of her Credit Card. The agreement was that the Defendant would be added to the Credit Card account as an authorized user and would be responsible to repay all charges he made on the Credit Card, as well as any applicable interest. Defendant does not dispute this was the agreement.
When Defendant and Third-Party Defendant filed for divorce in December 2006, Plaintiff terminated Defendant's use of the Credit Card. Plaintiff has since paid the entire account balance in full and seeks reimbursement from Defendant consistent with their agreement. Plaintiff testified at trial that she and her husband refinanced their family home in order to repay the debt accumulated on the account. Plaintiff further testified she paid the Credit Card debt in full on September 17, 2007.
Trial was held on July 13, 2009 in The Court of Common Pleas for New Castle County. The trial court sua sponte ruled that Mr. Frazer was judicially estopped from arguing the non-existence of the contract and that he did not owe Gregory money from the contract. When ruling judicial estoppel applied, the trial court relied on a financial disclosure from Mr. Frazer signed in the Wisconsin divorce proceedings and testimony from both Nicole and Brandon Frazer. The financial disclosure statement listed a debt to Gregory in the amount of $17,000. The testimony of Nicole Frazer pertaining to the Gregory debt was:
Q. Okay. Do you recall seeing this document in the context of your divorce proceedings in Wisconsin?
A. Yes.
Q. In this document, did Mr. Frazer acknowledge that he owed your mother money?
A. Yes.
Q. Can you tell the Judge where in this document?
A. [A] USAA credit card, Cathy Gregory loan, $17,000 is the balance, monthly payment $300, and then under that is Glen and Laurie Frazer, loan $2,000, monthly payment $100.
There is no record that either party advanced a judicial estoppel claim during trial.
Frazer's attempt to supplement the record with the transcript of the Wisconsin court trial is not necessary as sufficient testimony is on the record to make our ruling today.
Plaintiff's Trial Ex. 4.
Trial Tr. at 113-14.
The testimony of Mr. Frazer revealed the debt to Gregory was not divided up between Brandon and Nicole in the Wisconsin preceding. The trial court clarified Mr. Frazer's testimony:
Trial Tr. at 147-48.
Court: You mean, when they say take [the Gregory debt] out of the divorce, take it out of consideration, remove it from consideration by that Court, is that what you mean"
Mr. Frazer: Right, yeah, like they weren't going to go through trying to figure out what was what so we could move on with the divorce.
Trial Tr. at 148.
Id.
On cross-examination, Mr. Frazer affirmed that, "you listed that you owed Cathy Gregory $17,000 and that you were paying her $300 a month." He explained this with; "[y]es, I put that down because that's what I was told."
Id. at 171.
Id. at 172.
In a Trial After Decision opinion dated October 2, 2009, the trial court ruled in favor of the plaintiff, awarding damages of $22,750.41 and post-judgment interest at the legal rate. The trial court held Ms. Frazer was not liable to Frazer or Gregory for Frazer's debt to Gregory.
Gregory, No: 2007-09-492 at 3.
Id.
Standard of Review
This is a review of the New Castle County Court of Common Pleas judgment against the defendant, Brandon Frazer, for breach of contract. Jurisdiction is proper pursuant to 10 Del. C. § 1326. The Superior Court review is on the record.The Superior Court has the duty to review the sufficiency of the evidence and to test the propriety of the findings below. If such findings are sufficiently supported by the record and are the product of an orderly and logical deductive process, the Superior Court must accept them . . . if there is sufficient evidence to support the findings of the Trial Judge, the Superior Court sitting in its appellate capacity must affirm, unless the findings are clearly wrong.
This Court must accept any decision of The Court of Common Pleas which is supported by sufficient evidence. Questions of law are reviewed de novo.
Levitt v. Bouvier, 287 A.2d 671, 673 (Del. 1972).
Motorola Inc. v. Amkor Tech. Inc., 958 A.2d 852, 859-60 (Del. 2008).
Discussion Defendant Waived Affirmative Defense of Personal Jurisdiction
Mr. Frazer first argues the trial court erred in refusing to grant his motion to dismiss the action jurisdiction grounds. The trial court held Mr. Frazer's personal jurisdiction argument was waived for two reasons; he failed to raise the issue in the answer to the complaint, and he consented to personal jurisdiction by participating in the lawsuit for over a year.The crux of his argument on appeal is that this action originally involved two contracts, but was represented as one in the pleadings. Mr. Frazer claims the first agreement was formed with Gregory while he was residing in Delaware and the second agreement was formed in Wisconsin while he was residing in Wisconsin. He believes that the first contract formed in Delaware was terminated when full payment was made. After one year passed, he argues a separate contract was formed with the same terms and conditions. Mr. Frazer originally believed this lawsuit only involved the first agreement originating in Delaware and is the reason for not pleading a lack of personal jurisdiction in the answer.
A judge, acting as sole fact-finder in a non-jury trial determines the credibility of the witnesses and resolves conflicting testimony. The judge does not abuse discretion by choosing to give more weight to the testimony of one party over the opposing party.
Jamison v. State, 1995 WL 716806, at *2 (Del. Super.).
Romain v. State Farm Mutual Auto Ins. Co., 1999 WL 1427801, at *2-3 (Del. Super.).
There is testimony in the record to support the contract as either a single agreement or two separate agreements. Gregory testified that Mr. Frazer's name was added to the credit card in 2002 and remained on it until she paid the card off in 2006. Mr. Frazer testified that his name was added in 2005 after he moved to Wisconsin. There is sufficient evidence to support the trial court's finding that only one contract existed.
Trial Tr. at 28-29.
Id. at 121.
Personal jurisdiction can be waived in two instances; (1) if not raised in the answer to the complaint and (2) by participating in the litigation. Mr. Frazer waived the affirmative defense of personal jurisdiction in both scenarios. He did not raise the issue in his answer to the complaint and participated in the litigation for over a year before attempting to raise the issue of personal jurisdiction. Because Mr. Frazer waived the defense of personal jurisdiction the Court will not allow a waiver issue to be relitigated on appeal. Further, the trial court did not err in its ruling Mr. Frazer had waived personal jurisdiction.
Del. Comm. Pl. Rule 12(h).
Hornberger Mgmt. v. Haws Tingle Gen. Contractors, 768 A.2d 983, 989 (Del. Super. 2000) (citations omitted).
The Court of Common Pleas has Subject Matter Jurisdiction
Mr. Frazer argues the trial court lacked subject matter jurisdiction to hear the case. His argument rests on Delaware's long arm statute to establish jurisdiction for the Court of Common Pleas. This argument is misplaced. The Long Arm Statute is used to confer personal jurisdiction over an out-of-state defendant. It has no application to Subject Matter Jurisdiction. Subject matter jurisdiction for the Court of Common Pleas provides: "The Court shall have jurisdiction over all civil actions at law where the matter or thing in controversy, exclusive of interest, does not exceed $50,000."
10 Del. C. § 1322(a).
This argument is without merit. The civil suit was filed for $22,280.01 and damages were awarded of $20,504.95. Both amounts fall under the subject matter jurisdiction requirements.
Statute of Frauds Argument Is Without Merit
Mr. Frazer argues the contract is unenforceable because it is not in writing as required by the statute of frauds. The Statute of Frauds provides that any agreement not to be preformed in one year must be in writing. Only if the parties cannot possibly perform the agreement within one year does the Statute of Frauds apply and require a writing, signed by the charged party. The alleged agreement between Mr. Frazer and Ms. Gregory could have been preformed within one year therefore the Statute of Frauds does not apply.
6 Del. C. § 2714.
Olson v. Halvorsen, 986 A.2d 1150, 1159 (Del. 2009).
Factual Findings of the Court of Common Pleas Are Supported By Substantial Evidence
Mr. Frazer next argues that some of the credit card charges the court found below to be business related were actually Nicole Frazer's charges. Testimony was offered from Mr. Frazer that some transactions were either personal in nature between him and Ms. Frazer or individually Ms. Frazer's charges. She also testified to which charges belonged to Mr. Frazer. The trial court accepted her account minus the disputed charges from Mr. Frazer. The trial judge attached plaintiff's (Gregory's) trial exhibit two in the Decision After Trial, which summarized all credit card transactions for the dates in question. Ms. Frazer testified at trial and highlighted which charges were Mr. Frazer's business expenses. The court accepted the total of $21,404.95 as shown in the exhibit to compute the debt owed to Gregory.
Mr. Frazer spent substantial time in his appellate brief arguing the facts of the case; therefore, it is assumed that Mr. Frazer is arguing the factual findings of the trial court were clearly erroneous.
Gregory v. Frazer, No 2007-09-492 (Del. Com. Pl. 2009) appendix I and II.
Plaintiff's Trial Ex. 1 does not contain the disputed charges from Mr. Frazer; therefore, the trial court rendered an amount by subtracting Mr. Frazer's disputed charges from Nicole Frazer's claimed charges to arrive at the total debt owed to Ms. Gregory.
Sitting as fact finder, the trial court relied on plaintiff's (Gregory's) exhibit one, the testimony of Mr. Frazer, Ms. Frazer, and Gregory in determining whether each credit card charge belonged to Mr. Frazer or Ms. Frazer. Even though this Court could possibly reach a different conclusion, factual findings by a trial judge that are sufficiently supported by the record and are the product of an orderly and logical deductive process must be accepted unless clearly wrong and the doing of justice so requires. Gregory's trial exhibit one combined with the witness' testimony form sufficient evidence and is the product of an orderly and logical deductive process.
Levitt v. Bouvier, 287 A.2d 671, 673 (Del. 1972).
The Court of Common Pleas Erred When It Sua Sponte Held The Defendant Was Judicially Estopped From Making Defense
The Court of Common Pleas held Mr. Frazer judicially estopped from denying the existence of the contract between him and Gregory; and judicially estopped from claiming the debt was less then $16,100. The trial court based this on Plaintiff's Exhibit 4, a financial disclosure statement, and the testimony of both Ms. and Mr. Frazer.
Frazer was estopped from claiming less then $17,000 was originally owed to Gregory, minus three $300 payments made to come to a debt of $16,100.
Mr. Frazer argues that judicial estoppel was not applicable in this case because, while he testified to the debt owed to Gregory in a divorce proceeding under oath, the Wisconsin court refused to make a ruling on the debt. His argument is supported by his testimony offered during trial. The trial judge clarified his testimony that the Wisconsin court did not consider the alleged debt to Gregory. Ms. Frazer never testified that the Wisconsin court considered the debt, only that it appeared on the financial disclosure form.
Trial Tr. at 147-48.
Trial Tr. at 148.
Trial Tr. at 113-14 (Nicole Frazer makes no other mention of the financial disclosure during her direct or cross examination).
Judicial estoppel precludes a party from asserting an inconsistent position in the same or earlier legal proceeding. It is appropriate to preclude an inconsistent argument if a previous court made a final ruling on the litigant's previous position or relied on the litigant's position in making their ruling. The goal of judicial estoppel is to protect the integrity of the judicial system. The application of judicial estoppel is a question of law, thus review is de novo.
Motorola Inc. v. Amkor Tech. Inc., 958 A.2d 852, 859 (Del. 2008).
Id.
Id.
Id.
The Wisconsin court did not rely on Mr. Frazer's debt to Gregory when dividing assets and liabilities; therefore, Mr. Frazer is not estopped from making an argument to the contrary. The only testimony regarding whether or not the Wisconsin court considered the debt in dividing liabilities suggested it did not. Further, the agreement by both Mr. and Ms. Frazer for the Wisconsin court to exclude the Gregory debt in the proceeding negates an attack to judicial integrity.
Id. at 859-60.
The trial court's judgment is remanded to determine whether the second and third elements for the breach of contract claim are satisfied, namely: The existence of a contract and the damages flowing from the contract's breach if it existed. The case need not be re-tried. The trial court made no mention of judicial estoppel until the opinion after trial. As such, the defendant was precluded from making any arguments at trial. There is sufficient evidence on the record for the trial court to determine whether the two elements have been met by a preponderance of the evidence.
Plaintiff's Trial exhibit 4 is insufficient to support being judicially estopped from denying the existence of the contract or the amount owed to Gregory. However, this may be sufficient evidence of such. This is a factual determination this court cannot make.
Conclusion
For the reasons stated herein, defendant Brandon Frazer's appeal of judicial estoppel is REMANDED. This is remanded to the Court of Common Pleas for a determination on the record of the existence of the contract between the defendant and Ms. Gregory and a determination of damages, if any for the breach of the contract.
As to all other issues raised on appeal, The Court of Common Pleas is AFFIRMED.