Opinion
C.A. No. CPU4-16-003764
10-17-2017
EZRA RICHARDS, Appellant/Plaintiff, v. ALMONDO BURGOS, and CHRISTINE BURGOS Appellee/Defendants.
Ezra Richards P.O. Box 741 Bear, DE 19701 Pro se Appellant Christina Burgos 1344 US 9 Route Ocean View, NJ 08230 Pro se Appellee
ORDER Ezra Richards
P.O. Box 741
Bear, DE 19701
Pro se Appellant Christina Burgos
1344 US 9 Route
Ocean View, NJ 08230
Pro se Appellee WELCH, J.
This is an appeal from the Justice of the Peace Court involving an alleged breach of contract. Trial was conducted on September 6, 2017, and the Court reserved its decision. Appellee Almondo Burgos was not present for trial as default judgment was entered against him on April 21, 2017. This is the Court's Final Order after consideration of the pleadings, oral and documentary evidence submitted at trial, arguments made at trial, and the applicable law. The Court finds the relevant facts to be as follows.
On April 19, 2015, Appellant Ezra Richards ("Appellant") and Appellees Almondo Burgos and Christina Burgos entered into a written agreement which stated:
Appellee "Christine" stated at trial that her name was correctly spelled Christina.
I, Ezra Richards [sic] is entrusting Mr. Almondo Burgos and his Wife Christine Burgos to pay the remaining loan payments on my 2008 Nissan Maxima effective April 19th[,] 2015.The written agreement was signed by all three parties and notarized. In January 2016, Appellees separated. Problems between the parties did not surface until June 2016 when Appellee Almondo Burgos refused to continue making payments towards Appellant's 2008 Nissan Maxima ("the vehicle"). Appellant approached Appellee Christina Burgos ("Appellee") and asked her to assume paying the loan because he was having problems contacting her former husband. All three individuals agreed to meet in New Jersey and create a new contract omitting Appellee Almondo Burgos as a signatory; however, the agreement was never finalized. Instead, Appellees began fighting—both asserting it was the other's turn to pay Appellant—and, amidst the arguments, Appellant left without payment or possession of his vehicle.
The principal balance (total amount due) is $13, 230.86. The monthly payment is $348.00 due on the 19th of every month. They are required to maintain full insurance coverage on the vehicle.
The car will remain in my [Ezra Richards] name throughout the life of the loan until the car is paid in full. As such, the title will be transferred into their names.
All the parties involved are in agreement with the terms of this contract.
Joint Exhibit 1. Appellant testified that his former wife had bought the vehicle and left it in his possession. He further testified that he did not possess the income to afford multiple vehicle payments, so he approached Appellees about assuming the payments on the vehicle.
Id.
From July 17, 2016 until August 13, 2016, Appellant and Appellee's relationship irrevocably deteriorated. Despite asking Appellee to assume the loan, Appellant expressed frustration to Appellee about her late payments. On July 19, 2016, Appellant stated, "No[t] trying anything. Legally i [sic] can and am getting my car..... its [sic] my car." He further stated, "Its [sic] registered in my name [sic] everything is in my name. I am going to get my car back. Believe me. You and Monday [sic] play around with the car payment it's been late twice almost late this time I'm tired of talking and playing with you. [sic] around with." At this point in the conversation, Appellee mentions that the written agreement does not provide penalties or fees for late payments. In the remaining text messages, the parties continue arguing about who has the right to possess the vehicle.
Defendant's Exhibit 1 (text messages between Appellant and Appellee). Appellant objected to these messages being submitted into evidence on the grounds that he did not know he could submit such evidence at trial. Yet, he specifically threatens in the text messages that he will bring the messages to trial. In addition, he admitted that the messages were authentic and exchanged between himself and Appellee.
Id.
Id.
Id.
Id.
Id.
On August 11, 2016, Appellee writes Appellant, stating: "[n]eed to set up a time for you to come pick up your property." Appellant replies, "[y]ou can bring it back to Delaware, where you pick [sic] it up." Appellee retorts that she will not drive the vehicle when there is no insurance on it. Appellant seemingly changes his tune and starts demanding Appellee continue making payments towards the vehicle. On August 13, 2016, Appellant threatens to sue Appellee for the remaining payments under the written agreement. Appellee retorts that she was current on payments through July 19, 2016 and was leaving the vehicle at ACME for Appellant to retrieve. Appellant retrieved the vehicle on August 13, 2016, and did not contact Appellee again until the initiation of this action.
Id.
Id.
Id.
Id.
Id.
Appellant seeks $8,803.77 in principal and $145.00 in court costs. Following Appellee's July 2016 payment, she had contributed $5,500.68 towards the $13,230.86 total value of the vehicle. Thus, the principal amount Appellant seeks is the amount of money that Appellee owed as of August 19, 2016 when she left the vehicle in the ACME parking lot. Conversely, Appellee requests the Court take into consideration that Appellant continued to possess and pay for the vehicle since August 2016 and does not currently owe $8,803.77 towards the vehicle.
Appellee testified that she did not counterclaim for the $5,500.68 because she had possessed the vehicle during the time she made payments.
Despite the parties considering the contract to include all "essential" terms, there is no default provision or guidance to the signatories regarding the proper protocol to relinquish possession of the vehicle. While the Court does not find the written agreement to be so "indefinite" that it prevents the Court from "determining whether a breach has occurred," the Court is cognizant of the applicability of the implied covenant of good faith and fair dealing to "every contract." The doctrine is a "'judicial tool used to imply terms in a contract that protect the reasonable expectations of the parties,'" yet, under the facts of the present case, the application of the doctrine presents difficulty when the parties have mutually agreed to terminate the contract and its remaining obligations. Accordingly, based on the unique factual posture here and the doctrine of mutual rescission discussed below, the need to engage in such a "rare and fact-intensive" analysis strikes the Court as ambiguous and—ultimately moot—when the parties' later intent dissolved the agreement.
Distinguishing the case sub judice from one where the contract was deemed unenforceable because terms the parties considered essential were not "expressly or . . . implicitly resolved." Ramone v. Lang, 2006 WL 905347, at *11 (Del. Ch. Apr. 3, 2006) (finding email correspondence did not resolve the uncertainty); see also Heritage Homes of De La Warr, Inc. v. Alexander, 2005 WL 2173992, at *3 (Del. Ch. Sept. 1, 2005) (finding that the parties agreed at the time of contracting to agree on essential terms at a later date).
See Loureiro v. Copeland, 2006 WL 2685582, at *1 (Del. Super. Aug. 21, 2006); see also Biasotto v. Spreen, 1997 WL 527956, at *5 (Del. Super. July 30, 1997) ("[I]t is telling that Plaintiffs cannot really point to those provisions of the agreement upon which the parties essentially agreed. . . . In any event, the Court is unable to discern the obligations and responsibilities which would inure to the parties under the supposed agreement . . . .").
See The Chemours Co. TT, LLC v. ATI Titanium LLC, 2016 WL 4054936, at *9 (Del. Super. July 27, 2016).
Id. (quoting Amirsaleh v. Bd. Of Trade of City of New York, Inc., 2009 WL 3756700, at *4 (Del. Ch. Nov. 9, 2009)).
Khushaim v. Tullow Inc., 2016 WL 3594752, at *4 (Del. Super. June 27, 2016) (quoting Cincinnati SMSA Ltd. P'ship v. Cincinnati Bell Cellular Sys. Co., 708 A.2d 989, 992 (Del. 1998)) (internal quotation marks omitted).
A contract cannot be modified or mutually rescinded without a "meeting of the minds." The Delaware Supreme Court has stated, "just as in the making of a contract, so in the negotiation for its abrogation or termination, there must be a meeting of the minds of the parties in respect to the proposition that it shall be cancelled." While rescission usually requires the restoration of the parties to their condition before they entered into the contract, mutual rescission—rescission by mutual assent—does not require such restoration. Mutual rescission, also known as an "agreement of rescission," occurs "where each party agrees to discharge all of the other party's remaining duties of performance under an existing contract." Further, the Statute of Frauds does not prevent an oral agreement from rescinding a contract and "all unperformed duties."
See Foss-Hughes Co. v. Norman, 119 A. 854, 855 (Del. 1923); Josloff v. Falbourn, 125 A. 349, 350 (Del. 1924).
Josloff, 125 A. at 350.
See Bryant v. Way, 2012 WL 1415529, at *11 (Del. Super. Apr. 17, 2012). The rescission of a contract does not equate to "equitable rescission," which only the Chancery Court has jurisdiction over, as equitable rescission requires "further equitable relief beyond invalidation of the contract. See E.I. Du Pont De Nemours & Co. v. HEM Research, Inc., 1989 WL 122053, at *3 (Del. Ch. Oct. 13, 1989).
See 26 WILLISTON ON CONTRACTS § 68:3 (4th ed. 2017) ("The meaning of 'rescind' and 'rescission'"); Lockwood v. Capano, 105 A.3d 989, 2014 WL 7009737, at *2 ns. 4 & 6 (Del. Nov. 10, 2014) (TABLE) (citing to Williston on Contracts); see also Falcon Tankers, Inc. v. Litton Systems, Inc., 300 A.2d 231, 235 (Del. Super. 1972) (noting a contract can be "extinguished" by mutual rescission).
See 29 WILLISTON ON CONTRACTS § 73:15 (4th ed. 2017) ("Elements of rescission; Oral rescission").
RESTATEMENT (SECOND) OF CONTRACTS § 148 (1981) ("Rescission by Oral Agreement").
Concerning an agreement of rescission and the required consideration, the Restatement (Second) of Contracts opines:
Consideration is provided by each party's discharge of the duties of the other. This is so even though one or both parties have partly performed their duties or one or both have a claim for damages for partial breach. . . . The agreement need not be expressed in words. Other conduct may show an intent by both parties to abandon their contract. If one party, even wrongfully, expresses a wish or an intention to cease performance and the other party fails to object, circumstances may justify the inference that there has been an agreement of rescission. Sometimes mere inaction on both sides, such as the failure to take any steps looking toward performance or enforcement, may indicate an intent to abandon the contract. Mere failure to object to a repudiation, however, is not a manifestation of assent to an agreement of rescission.When determining whether both parties have agreed to mutually rescind the contract, the Court examines "not only [] the language of the parties, but to all of the surrounding circumstances."
RESTATEMENT (SECOND) OF CONTRACTS § 283 cmt. a (1981) (internal citations omitted); see also Morgan v. Scott, 2014 WL 4698487, at *2-3 (Del. Sept. 22, 2014) (TABLE) (affirming a Superior Court decision that relied on the Restatement of Contracts).
See 29 WILLISTON ON CONTRACTS § 73:15 (4th ed. 2017) ("Elements of rescission; Oral rescission").
The doctrine of mutual rescission is patently applicable to this case. Based on the parties' statements and actions, the Court finds that the written agreement was rescinded by both parties. Appellant expressed a clear intent to retrieve the vehicle in his messages to Appellee. Appellee expressed a clear intent to forgo possession of the vehicle and stop making payments. Beyond the parties' words, Appellee's action of leaving the vehicle in an ACME parking lot and Appellant's retrieval of the vehicle the same day evidence an intent to cancel the contract.
The Court notes that neither party can claim frustration of purpose as a defense. See CRS Proppants LLC v. Preferred Resin Holding Co., 2016 WL 6094167, at *7 (Del. Super. Sept. 27, 2016) ("A frustration of purpose defense is available when: (1) there is substantial frustration of the principal purpose of the contract; (2) the parties assumed that the frustrating event would not occur; and (3) the Defendant is not at fault. Performance may remain possible, but is excused because it 'would make little sense' to continue where the object frustrated was the basis of the contract." (internal footnotes omitted)). This is because neither party is blameless in preventing the contract's fruition. Appellee left the vehicle in an ACME parking lot and Appellant repossessed the vehicle, and neither had further conversations regarding the vehicle or the contract. Moreover, the doctrine of "temporary frustration of purpose" is inapplicable because Appellee never received possession of the vehicle a second time. See Schaefer Lincoln Mercury, Inc. v. Jump, 1987 WL 642758, at *2 (Del. Com. Pl. June 8, 1987) (finding the temporary interruption of vehicle ownership because of repair excused the defendant from making rental payments on the vehicle while it was being repaired).
Under different circumstances, Appellee's abandonment of the vehicle in the ACME parking lot would give the Court pause. However, Appellant not only retrieved the vehicle, but there is no testimony or documentary evidence that he later attempted to return the vehicle to Appellee or complained to Appellee of possessing the vehicle. In fact, he did not contact Appellee again about the vehicle prior to initiating a suit. In addition, despite originally creating the contract because he could not afford the vehicle, Appellant retained possession of the vehicle and continued making payments towards the vehicle.
Appellant apparently still possesses the vehicle.
When the parties' words and actions evidence an intent to rescind the contract and relieve each other of any further obligations under said contract, the Court finds it unnecessary to analyze whether a breach occurred. Therefore, based on a preponderance of the evidence, the Court finds that Appellant has failed to prove that a breach of contract occurred, as the contract was rescinded by mutual agreement. The Court therefore enters judgment in defendant's favor as plaintiff has failed to prove his case-in-chief by a preponderance of the evidence,. Each party shall bear their own costs.
To prevail on a claim for breach of contract, the plaintiff must establish by a preponderance of the evidence that: (1) a contract existed between the parties; (2) the defendant breached his obligation imposed by the contract, and (3) plaintiff suffered damages as a result of the defendant's breach. See VLIW Technology, LLC v. Hewlett-Packard, Co., 840 A.2d 606, 612 (Del. 2003).
In civil actions, the burden of proof is by a preponderance of the evidence. See Gregory v. Frazer, 2010 WL 4262030, at *1 (Del. Com. Pl. Oct. 8, 2010). "The side on which the greater weight of the evidence is found is the side on which the preponderance of the evidence exists." See Reynolds v. Reynolds, 237 A.2d 708, 711 (Del. 1967). --------
IT IS SO ORDERED this 17th day of October, 2017.
/s/_________
John K. Welch, Judge cc: Ms. Tamu White, Chief Civil Clerk