Gateway Estates, Inc. v. New Castle Cnty., D&M Enters., LLC

Full title: GATEWAY ESTATES, INC. Plaintiff v. NEW CASTLE COUNTY, D&M ENTERPRISES…

Court: SUPERIOR COURT OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY

Date published: Sep 29, 2015

C.A. No. N13C-07-307 MJB (Del. Super. Ct. Sep. 29, 2015)

Opinion

C.A. No. N13C-07-307 MJB

09-29-2015

GATEWAY ESTATES, INC. Plaintiff v. NEW CASTLE COUNTY, D&M ENTERPRISES, LLC, MICHAEL PAOLI, 3D BUILDERS INC., and ROBERT R. & ROSA GONZALES Defendants

Kathleen DeLacy, Esq., Reger Rizzo & Darnall LLP, 1523 Concord Pike, Suite 200, Wilmington, Delaware 19803, Attorney for Plaintiff. Aysha L. Gregory, Esq., and Tanisha L. Merced, Esq., New Castle County Government Center, 87 Reads Way, New Castle, Delaware 19720, Attorneys for Defendant New Castle County. Robert J. Leoni, Esq., Shelsby & Leoni, 221 Stanton Street, Wilmington, Delaware 19804, Attorney for Defendant Michael Paoli. Charles T. Armbruster, III, Esq., Law Offices of Raymond E. Tomasetti, Jr., 14 W. Market Street, Newport, Delaware 19804, Attorney for Defendant 3D Builders. Charles A. McCauley, III, Esq. Zarwin Baum DeVito Kaplan Schaer Toddy, P.C., 1500 N. French Street, 2nd Floor, Wilmington, Delaware 19801, Attorney for Defendants Robert R. and Rosa Gonzales.

BRADY, J.

Upon the Gonzales' Motion for Summary Judgment, GRANTED. OPINION Kathleen DeLacy, Esq., Reger Rizzo & Darnall LLP, 1523 Concord Pike, Suite 200, Wilmington, Delaware 19803, Attorney for Plaintiff. Aysha L. Gregory, Esq., and Tanisha L. Merced, Esq., New Castle County Government Center, 87 Reads Way, New Castle, Delaware 19720, Attorneys for Defendant New Castle County. Robert J. Leoni, Esq., Shelsby & Leoni, 221 Stanton Street, Wilmington, Delaware 19804, Attorney for Defendant Michael Paoli. Charles T. Armbruster, III, Esq., Law Offices of Raymond E. Tomasetti, Jr., 14 W. Market Street, Newport, Delaware 19804, Attorney for Defendant 3D Builders. Charles A. McCauley, III, Esq. Zarwin Baum DeVito Kaplan Schaer Toddy, P.C., 1500 N. French Street, 2nd Floor, Wilmington, Delaware 19801, Attorney for Defendants Robert R. and Rosa Gonzales. BRADY, J.

I. INTRODUCTION

This action concerns the sheriff's sale of real property located at 544 Erickson Avenue, Hockessin, Delaware 19707 (the "Property," "544 Erickson"). On August 9, 2005, 544 Erickson was sold at sheriff's sale for non-payment of property taxes. At the time of the sale, the Property was owned by Gateway Estates, Inc. ("Plaintiff," "Gateway"), a Delaware corporation that had been defunct since 1973 when the corporate character was voided for failure to pay its corporate franchise taxes. Gateway was revived in 2012 by Brendan Simison ("Simison"), a Massachusetts resident who claims his deceased grandfather was the sole shareholder of Gateway as of 2005. Acting as President of the revived Gateway, Simison instituted the present action on behalf of the corporation. Simison argues that Gateway did not receive proper notice of the sheriff's sale. Gateway, acting through Simison, seeks to have the sale set aside and/or damages and legal fees.

Plaintiff has filed suit against (1) New Castle County ("NCC"), the party who executed the sheriff's sale; (2) D&M Enterprises, LLC ("D&M"), the purchaser of Property at the sheriff's sale, and the three subsequent purchasers of Property; (3) 3D Builders ("3D"); (4) Michael Paoli ("Paoli"); and (5) Robert R. and Rosa Gonzales ("Mr. and Mrs. Gonzales"). Mr. and Mrs. Gonzales are the current owners of Property.

On September 18, 2014, the Court heard three Motions for Summary Judgment: Plaintiff's Motion for Summary Judgment, Defendant NCC's Motion for Summary Judgment, and Mr. and Mrs. Gonzales' Motion for Summary Judgment. The Court denied Plaintiff's Motion for Summary Judgment and NCC's Motion for Summary Judgment,¹ but reserved decision on Mr. and Mrs. Gonzales' Motion for Summary Judgment, giving Plaintiff 60 days to establish standing.² On November 17, 2014, Plaintiff submitted a letter to the Court regarding the issue of standing, enclosing documents he claimed supported his standing.³ Mr. and Mrs. Gonzales submitted a letter in response on November 21, 2014.⁴ After reviewing these submissions, the Court determined that supplemental briefing was required to determine whether Simison has standing to act on behalf of Gateway.

1 Order, Item 130; Order, Item 131.

2 Judicial Action Form, Item 129.

3 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133.

4 Letter to The Hon. M. Jane. Brady from Bradley P. Lehman dated November 21, 2014, Item 134.

In a letter dated February 25, 2015, the Court gave Plaintiff an additional 30 days to submit briefing and supporting evidence, and the Court gave the defendants an additional 30 days after Plaintiff's submission to respond.⁵ Due to a clerical error, Plaintiff did not receive the Court's February 25, 2015 letter when it was filed.⁶ On April 14, 2015, the Court granted Plaintiff's counsel an additional 30 days to submit the requested briefing and the defendants an additional 30 days thereafter to respond.⁷ Plaintiff submitted supplemental briefing on May 7, 2015.⁸ Mr. and Mrs. Gonzales submitted supplemental briefing in reply on May 27, 2015.⁹ NCC submitted supplemental briefing in reply on June 8, 2015, and the Court took the matter under consideration.¹⁰ For the reasons given below, the Court finds that Gateway had actual notice of the sheriff's sale in 2007, through its corporate officer. Francis Biondi, Esq. ("Biondi") and failed to either revive the corporation or to file suit to have the sale set aside. As a result, this Court finds that Gateway has waived its right to challenge the sheriff's sale. This Court also finds that Plaintiff has not established standing to pursue the instant litigation. Specifically, the Court finds that the natural person, Brendan Simison, directing the litigation on behalf Gateway has not demonstrated standing to act on behalf of the corporation. This Court finds that Gateway's allegation that its constitutional rights were violated is barred by the statute of limitations and that Mr. and Mrs. Gonzales are bona fide purchasers for value who therefore have superior rights to the property over any rights Gateway may have. Accordingly, Mr. and Mrs. Gonzales' Motion for Summary Judgment is GRANTED.

5 Letter from Judge Brady to Counsel Regarding Supplemental Briefing, Item 137.

6 Letter, Item 140.

7 Judge Brady's Letter to Plaintiff's Counsel Granting an Additional 30 Days to Respond to Her 2-25-2015 Request, Item 142.

8 See Plaintiff's Response to the Court's Request for Additional Briefing, Item 143.

9 See Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated May 27, 2015, Item 144.

10 See New Castle County's Supplemental Briefing, Item 145.

II. BACKGROUND

A. Gateway Estates , Inc. and 544 Erickson

The original shareholders of Gateway, each of whom held 20% of the outstanding shares, were Biondi, Harvey Porter, Esq. ("Porter"), James Errigo, Esq. ("Errigo"), Alvin M. Chanin, Esq. ("Chanin"), and Forrest B. Fleisher.¹¹ At some point, Mr. Fleisher sold his interest to Howard DuBroff ("DuBroff"). Errigo passed away and his interest passed to whoever received his estate (herein referred to as "receivership of Errigo").¹² Gateway originally owned approximately 142 acres in Hockessin, Delaware, which it planned to develop into 300-400 residences.¹³ While most of the surrounding land was developed, the parcel at 544 Erickson remained a vacant lot until around 2009.¹⁴ In April 1973, Gateway's corporate charter was voided and the company became defunct for failure to pay its corporate franchise taxes.¹⁵ Gateway remained defunct until 2012.¹⁶

11 See Siebold Affidavit, Exhibit A to Opening Brief in Support of Defendants' Motion For Summary Judgment, Item 123, at 000107 ("The stockholders of the corporation, each of whom owns 25 shares, are O. Francis Biondi and Harvey Porter (the former law partners of Errigo), Alvin M. Chanin (a Philadelphia lawyer), Errigo, and . . . the fifth original stockholder, Forrest B. Fleisher, . . .").

12 See Siebold Affidavit, Exhibit A to Opening Brief in Support of Defendants' Motion For Summary Judgment, Item 123, at 000107 ("Howard Dubroff, who is a full-time employee of the corporation engaged in supervising the development of the tract. Dubroff is the only one of those persons who was not an original stockholder, but he succeeded to the interest of the fifth original stockholder, Forrest B. Fleisher, . . .").

13 See Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000055.

14 Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at *6.

15 Certificate of Revival, Exhibit E to Plaintiff's Motion for Summary Judgment, Item 106, at *1 ("The corporation was duly organized and carried on the business authorized by its charter until the 15^th day of April A.D. 1973, at which time its charter became inoperative and void for non-payment of taxes and/or failure to file a complete annual report . . .")

16 See Plaintiff's Motion for Summary Judgment, Item 106, at *2 ("Thereafter, approximately 1973, the Corporation was void for failure to pay taxes until March 16, 2012, when Brendan N. Simison, grandson of Henry Thompson, current President of Gateway Estates, Inc., filed to revive the Corporation.").

In the intervening years, the property taxes on 544 Erickson went unpaid.¹⁷ Beginning in 2003, several interested buyers contacted NCC to inquire about the Property.¹⁸ At some point, NCC initiated foreclosure proceedings. As part of the preforeclosure process, NCC ordered a title search on the Property on February 1, 2005.¹⁹ The search query was "Gateway Farms, Inc., H. DuBross."²⁰ The search result listed "Gateway Estates, Inc." as owner.²¹ By all accounts, the "Gateway Farms" name was incorrect, and the "Gateway Estates" name was correct. The "DuBross" name was likely a scrivener's error, misspelling the name of Howard DuBroff and the "Gateway Farms" name was likely used because this was the name of the neighborhood Gateway Estates was developing and where the Property is located.²² As a result, NCC mistakenly addressed subsequent correspondence related to the foreclosure to "Gateway Farms, Inc. c/o H. DuBross."²³ Plaintiff has asserted that DuBroff died in 1991 and therefore was deceased at the time the notice was sent.²⁴ Plaintiff contends that as of 2005 the sole shareholder of Gateway was Simison's grandfather, Henry Thompson.²⁵

17 See Exhibit G to Plaintiff's Motion for Summary Judgment, Item 106 ("Back taxes are due on this parcel of approximately $8,400.").

18 See Plaintiff's Motion for Summary Judgment, Item 106, at *6 ("On or about December 1, 2003 and November 1, 2004, County was contacted by two different individuals interested in purchasing the Property . . .").

19 Plaintiff's Motion for Summary Judgment, Item 106, at *3 ("A title search was ordered on February 1, 2005 after receiving the letter with the pre-payment for the sale of the Property. The Search was ordered on Gateway Farms, Inc., H. DuBross. The search result listed Gateway Estates, Inc. as the owner.").

20 See Plaintiff's Motion for Summary Judgment, Item 106, at *3.

21 See Plaintiff's Motion for Summary Judgment, Item 106, at *3.

22 See Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000055.

23 See Plaintiff's Motion for Summary Judgment, Item 106, at *4-5.

24 Plaintiff's Motion for Summary Judgment, Item 106, at *6 ("Upon information and belief, Howard DuBroff, . . . passed away on March 8, 1991, more than fourteen years before the date of the alleged mailing and therefore could not have received such mail.").

25 Simison believed all the other shareholders were deceased at the time he took action on behalf of the corporation. Simison has subsequently changed his position, and sought, and secured, affidavits from heirs to DuBroff's estate and Chanin signing over their interest in Gateway to him. Affidavits of DuBroff Heirs, Exhibit to Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133; Chanin Affidavit, Exhibit D to Plaintiff's Response to the Court's Request for Additional Briefing, Item 143.

On April 27, 2005, NCC sent a letter to "Gateway Farms, Inc. c/o H. DuBross 544 Erickson Ave, Hockessin, Delaware 19707" stating that a monition action had been filed against Gateway.²⁶ It is unclear whether this letter was ever received by anyone. On April 28, 2005, NCC filed for a monition judgment.²⁷ The filing also incorrectly stated the name of the Property's owner as "Gateway Farms, Inc."²⁸ The monition was issued by the Prothonotary on April 29, 2005.²⁹ The New Castle County Sheriff's Office then posted a copy of the monition on a placard on the Property on May 11, 20 05.³⁰ NCC requested that the Prothonotary issue the Venditioni Exponas on June 16, 2005, and the writ was issued on June 17, 2005.³¹ Meanwhile, on June 16, 2005, another letter was sent, via Certified Mail/Return Receipt, to "Gateway Farms, Inc. c/o H. DuBross, 544 Erickson Avenue Hockessin, Delaware 19707."³² This letter stated that all writs had been properly filed to have the Property exposed to Sheriff's sale.³³ The letter was returned to NCC with "no such number" noted.³⁴

26 Plaintiff's Motion for Summary Judgment, Item 106, at *3.

27 Plaintiff's Motion for Summary Judgment, Item 106, at *4.

28 Plaintiff's Motion for Summary Judgment, Item 106, at*4.

29 See Exhibit 4 to Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, at *1.

30 Deputy Service Sheet, Exhibit E to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

31 See Exhibit 4 to Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, at *1.

32 Exhibit M to Plaintiff's Motion for Summary Judgment, Item 106.

33 Plaintiff's Motion for Summary Judgment, Item 106, at *4.

34 Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000029-000032.

On July 22, 2005, NCC mailed the Notice to Lienholders, Tenants, Record Owners, and Persons having an Interest of Sheriff's Sales of Real Estate ("Lienholders' Notice") with return receipt requested to "Gateway Farms, Inc. c/o H. DuBross, 544 Erickson Avenue Hockessin, Delaware 19707" and "Tenant and/or Lessees 544 Erickson Avenue Hockessin, Delaware 19707."³⁵ A copy of the Lienholders' Notice was then affixed to the Property.³⁶ The Property was scheduled to be sold on August 9, 2005.³⁷ The Sheriff's Office published the Notice of Sale in The News Journal on or about July 28, 2005,³⁸ and in The Newark Post on or about July 29, 2005.³⁹ These notices both incorrectly stated the owner as "Gateway Farms, Inc.," but they correctly identified the property by its address.⁴⁰

35 Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000008-000009, 000014-000015.

36 Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000010.

37 Plaintiff's Motion for Summary Judgment, Item 106, at *6 ("The Sheriff's Sale Notice attached tot eh Notice to Lienholders indicated the Sheriff's Sale was to be held Tuesday, August 9, 2005.").

38 See Plaintiff's Response in Opposition to Defendant New Castle County's Motion for Summary Judgment, Item 128, at *5 ("There are notices published in two newspapers of the Sheriff's Sale which were requested by the Sheriff. Those notices list the incorrect owner and incorrect parcel number.").

39 Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000101-000102.

40 Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 000101-000102.

On August 9, 2005, the Property was sold at sheriff's sale to D&M.⁴¹ On December 22, 2005 the sale was confirmed.⁴² Subsequently, on or about February 2, 2006, the Property was sold to Paoli.⁴³ On or about April 4, 2008, the Property was sold to 3D.⁴⁴ A house was constructed on the Property sometime in 2008 or 2009, and the Property was then sold to its current owners, Mr. and Mrs. Gonzales, on or about February 20, 2009.⁴⁵

41 See Plaintiff's Motion for Summary Judgment, Item 106, at *7 ("Despite the lack of notice to Plaintiff, on or about August 9, 2005, a sheriff's sale was held and the Property was sold to Defendant, D & M Enterprises LLC ("D & M") for $27,000.").

42 See Docket, Exhibit E to Plaintiff's Response in Opposition to Defendant New Castle County's Motion for Summary Judgment, Item 128.

43 See Plaintiff's Motion for Summary Judgment, Item 106, at *7 ("Then on or about February 2, 2006, D & M sold the Property to Defendant, Michael Paoli ("Mr. Paoli") for $65,000.").

44 See Plaintiff's Motion for Summary Judgment, Item 106, at *7 ("Then on or about April 4, 2008, Mr. Paoli sold the property to Defendant, 3D Builders Inc. ("3D Builders") for $83,000.").

45 See Plaintiff's Motion for Summary Judgment, Item 106, at *7 ("Then on or about February 20, 2009, 3D Builders sold the property to Defendant, Robert R. & Rosa R. Gonzales (the "Gonzales Defendants") for $364,000.00.").

B. Gateway's Shareholders

Of the five Gateway shareholders at the time the company went into defunct status, only Biondi, Porter, and Chanin are still known to be living. Biondi and Porter are Delaware attorneys and are listed in the Delaware Legal Directory. Chanin is a Pennsylvania attorney.

NCC sent an email to Biondi, on or about June 18, 2007, enclosing documents relating to the sale of the Property.⁴⁶ Apparently, Biondi had contacted NCC, identified himself as a representative of Gateway, and asked about the 2005 sheriff's sale of the Property.⁴⁷ NCC contends that Biondi indicated that he had no objection to the sale, but he intended to revive Gateway and pursue the excess proceeds.⁴⁸ Plaintiff presently disputes NCC's characterization of Biondi as having been in agreement with the sale, but has offered no affidavit or other documentation to support this claim.⁴⁹

46 See Email, Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, at 000091.

47 Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 5-6; see also Exhibit A to Opening Brief in Support of Defendants' Motion for Summary Judgment, at 000091.

48 Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at 6.

49 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at 2.

At some point, Biondi informed Chanin of the sale, according to Chanin's affidavit.⁵⁰ In that affidavit, Chanin states he does not know anyone named Henry Thompson and no such person was ever an officer, director, or shareholder of Gateway.⁵¹ Porter is also aware of this matter, but according to Simison wishes to have no part in it.⁵² In an email to NCC, Porter states that he is currently a shareholder of Gateway, that Biondi told him in 2007 about the sheriff's sale and excess proceeds, and he was not notified by DuBroff of any sale of Gateway shares "as required by the stockholders agreement," an apparent reference to an endorsement on the back of the stock certificate.⁵³

50 Chanin Affidavit, Exhibit I to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

51 Chanin Affidavit, Exhibit I to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

52 Letter to Judge Brady From Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at 2.

53 Email, Exhibit M to New Castle County's Supplemental Briefing, Item 145 ("I was not notified of the sale by DuBroff as required by the stockholders agreement noted on the reverse side of the certificate."); see also Stock Certificate, Exhibit 2 to Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated May 27, 2015 ("The shares of stock represented by this certificate are subject to all terms and conditions of an Agreement made the 7^th day of February, 1964, between Errigo, Biondi, Porter, The Corporation, Fleisher and Chanin, a copy of which is on file at the office of the Corporation."). A copy of this agreement has not been provided by any party in this matter.

According to Plaintiff around 2010-2011, Franklin AAA Holdings, LLC ("Franklin"), a company that specializes in the recovery of excess proceeds from sheriff's sales, was investigating the sale of the Property.⁵⁴ Franklin allegedly discovered through independent research that Howard DuBroff was the last president of Gateway.⁵⁵ Franklin also allegedly discovered that DuBroff was now deceased, and DuBroff had sold his interest to Henry Thompson.⁵⁶ Mark Cohn ("Conn"), a Franklin employee, contacted Thompson. Thompson remembered Gateway and DuBroff and confirmed his acquisition of what he called "worthless" shares in the company "many years ago."⁵⁷ However, Thompson did not seem to be familiar with the Property. According to Cohn, Thompson abruptly ended the conversation at some point.⁵⁸ Thompson did not return Conn's follow-up calls. In 2011, another Franklin employee discovered Thompson's obituary on the internet and began trying to contact possible heirs, including Thompson's grandson, Brendan Simison.

54 Cohn Affidavit, Exhibit J to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

55 Cohn Affidavit, Exhibit J to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

56 No documents relied upon by Franklin to make that connection have been presented to the Court.

57 Cohn Affidavit, Exhibit J to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

58 Cohn Affidavit, Exhibit J to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

C. Brendan Simison's Revival of Gateway Estates , Inc.,

and the Instant Action

In 2012, Brendan Simison received an unsolicited phone call from Franklin informing him that he may be entitled to excess proceeds from a sheriff's sale.⁵⁹ After the phone call, Simison asked his mother, Thompson's daughter, about the company. It was through these conversations that Simison allegedly determined that his mother was the heir to Thompson's interest in Gateway.⁶⁰ Simison alleges that his mother's interest passed to him, but he does not specify how this happened.⁶¹ Simison's mother is still living.

59 Simison Depo. at 46-47, Exhibit L to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

60 Simison Depo. at 9-10, Exhibit L to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

61 Simison Depo. at 9-10, Exhibit L to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123. Plaintiff asserts in a letter addressed to the Court that it had previously provided the Court with paperwork transferring Thompson's interest to his wife, who transferred it to their daughter, who transferred it to Mr. Simison. Letter to Judge Brady From Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1. However, after a complete review of the docket the Court is unable to locate any such paperwork. Ultimately, based upon the Court's decision the presence or absence of the documents is not dispositive.

On March 16, 2012, Simison filed to revive Gateway.⁶² Simison has provided "Meeting Minutes," also dating from March 16, 2012, in which Simison acted as the alleged sole remaining shareholder to elect himself the sole director and then, as sole director, to elect himself President, Secretary, and Treasurer of Gateway.⁶³ Simison says that he did not contact any of the former shareholders of Gateway because, according to his testimony, he thought that they were all deceased.⁶⁴ Simison says his original intention was to seek only the excess proceeds until he learned through research of the potential issues with the notice of the sale (e.g., the scrivener's error naming "Gateway Farms" as owner). On July 23, 2013, Simison filed the instant action on behalf of Gateway.⁶⁵

62 Certificate of Revival, Exhibit E to Plaintiff's Motion for Summary Judgment, Item 106.

63 Meeting Minutes, Exhibit 14 to The Gonzales Defendants' Motion for Summary Judgment, Item 120.

64 Simison Depo. at 35, Exhibit L to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

65 Complaint, Item 1.

Plaintiff alleges that NCC failed to provide proper notice at several steps in the sheriff's sale process in violation of Superior Court Civil Rule 4(f),⁶⁶ Rule 69(g),⁶⁷ and 9 Del. C. §8771 et seq.⁶⁸ Plaintiff also alleges two constitutional violations: violation of the Due Process clause of the Fourteenth Amendment⁶⁹ and violation of the Takings clause of the Fifth Amendment.⁷⁰

66 Complaint, Item 1, at 8.

67 Complaint, Item 1, at 4.

68 Complaint, Item 1, at 6.

69 Complaint, Item 1, at 11.

70 Complaint, Item 1, at 14.

Plaintiff argues that notices was inadequate because, inter alia, (1) NCC had the wrong name for Plaintiff; (2) NCC did not file proof of mailings with the Prothonotary as required by Rule 69(g); and (3) NCC repeatedly mailed and posted notices on the Property, which at the time was a vacant lot, rather than taking reasonable steps to serve Gateway.⁷¹ More specifically, Plaintiff argues that reasonable diligence would have revealed the proper name of the corporation and the corporation's defunct status at the time NCC was seeking to effect service.⁷² Plaintiff says that NCC knew or should have known that the proper procedure for serving a defunct corporation is to serve the Secretary of State, Division of Corporations.⁷³ Plaintiff maintains that NCC was negligent and unreasonable in continuing to send and/or post notices on the vacant lot.⁷⁴

71 Complaint, Item 1, at 5-6.

72 Complaint, Item 1, at 5-6.

73 Complaint, Item 1, at 6.

74 Complaint, Item 1, at 5.

III. MR. AND MRS. GONZALES' MOTION FOR SUMMARY JUDGMENT

A. Defendants' Motion

On September 5, 2014, Mr. and Mrs. Gonzales filed the instant Motion for Summary Judgment.⁷⁵ Mr. and Mrs. Gonzales argue that (1) Plaintiff lacks standing to pursue the instant claim because Simison had no authority to revive Gateway; (2) Mr. and Mrs. Gonzales are bona fide purchasers for value, and hence the monition sale should not be set aside; and (3) notice of the monition sale was sufficient as a matter of law.⁷⁶ Mr. and Mrs. Gonzales further argue that in the event that Gateway is awarded title to the Property, they are entitled to an equitable lien on the Property for the full value of all improvement thereon and are entitled to indemnification/contribution from the other defendants.⁷⁷ i. The Issue of Standing

75 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120.

76 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 6.

77 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 6.

Mr. and Mrs. Gonzales advance two main arguments regarding the issue of standing. First, they argue that Gateway has no standing to challenge the sale because the Property was disposed of prior to the revival of the corporation.⁷⁸ Mr. and Mrs. Gonzales cite 8 Del. C. § 312(e), which provides that when a corporation is revived, "[a]ll real and personal property, rights and credits, which belonged to the corporation at the time its certificate of incorporation became forfeited . . . and which were not disposed of prior to the time of its revival or renewal shall be vested in the corporation, after its revival and renewal . . ."⁷⁹ Mr. and Mrs. Gonzales interpret the statute to mean the revived corporation cannot claim title to any property that was removed from the corporation's ownership, by any means, prior to revival.⁸⁰ As the sale of the Property took place in 2005, which was prior to Gateway's revival in 2012, Mr. and Mrs. Gonzales argue that there is no basis for Gateway to contest the sale.⁸¹

78 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 7.

79 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 7 (quoting 8 Del. C. § 312(e)).

80 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 7.

81 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 7.

Mr. and Mrs. Gonzales' second argument is that Simison is not legally entitled to act on behalf of Gateway to bring the present action.⁸² Mr. and Mrs. Gonzales argue that Plaintiff has failed to establish that Simison's grandfather ever held an interest in Gateway or that this alleged interest passed to Simison.⁸³ Mr. and Mrs. Gonzales argue that no stock certificates or other evidence of Thompson's association with Gateway has been produced. Mr. and Mrs. Gonzales allege that, without conducting a reasonable inquiry into the whereabouts of Gateway's former stockholders or directors, Simison simply assumed that he was the sole remaining stockholder and held a meeting at his own residence in Massachusetts—during which he acted as the sole remaining stockholder to elect himself as the sole Director; acted as Director to elect himself President, Secretary, and Treasurer; and then acted as Director to "reissue" 250 shares of Gateway stock to himself.⁸⁴ ii. Bona Fide Purchasers

82 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 8.

83 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120 at 8.

84 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 8 (citing Meeting Minutes, Exhibit 14 to Motion, Item 120).

Mr. and Mrs. Gonzales argue that even if notice was defective, they are bona fide purchasers for value who came to own the Property after it had already been through multiple owners following the monition sale.⁸⁵ Thus, Mr. and Mrs. Gonzales argue that the Property should not be taken from them. Mr. and Mrs. Gonzales argue that "[t]o grant title to the Property back to Plaintiff would set a dangerous precedent and bring about an absurd result where no Delaware homeowner could ever be certain that he or she is safe from a dispute of this nature."⁸⁶ Public policy "requires that a good faith purchaser at a tax sale reach a point, one day, where he becomes assured of absolute title and the peace attendant thereto."⁸⁷ Furthermore, the fact that there are significant improvements on the land—the land was a vacant lot when owned by Plaintiff and now has a home on it—makes it inequitable to return the Property to Plaintiff.⁸⁸

85 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 10.

86 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120 at 11.

87 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120 at 11 (citing Ward v. Gray, 374 A.2d 15, 16 (Del. Super. Ct. 1977)).

88 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120 at 11.

Mr. and Mrs. Gonzales cite N & W Development Co. v. Carey, in which the court explained that, in Delaware, "[t]he holder of legal title will prevail over one with equitable claims to the Property if he is determined to have purchased it for value and without notice of the equitable interest."⁸⁹ Mr. and Mrs. Gonzales argue that they had absolutely no notice of Gateway's alleged claim to the Property prior to the instant suit and that there was nothing in the public records to put them on notice of a potential problem with the monition sale at the time they purchased the Property.⁹⁰ Further, Mr. and Mrs. Gonzales point out that, by the time they purchased the Property, over three years had passed since the sale, and the Property had been sold three times.⁹¹ iii. Sufficiency of Notice

89 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 10 (citing N & W Development Co. v. Carey, 1983 WL 17997 (Del. Ch. Jan. 27, 1983))

90 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 10.

91 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 10.

Mr. and Mrs. Gonzales incorporate by reference NCC's arguments concerning the sufficiency of notice and argue that the Court should find notice of the sale sufficient as a matter of law.⁹² Specifically, Mr. and Mrs. Gonzales maintain that (1) notice of the monition sale was sufficient under Delaware Law and under the United States Constitution; (2) Gateway waived the right to contest the monition sale; and (3) Gateway unreasonably delayed in seeking to set aside the monition sale.⁹³ iv. Equitable Lien and Contribution/Indemnification

92 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 12.

93 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 12.

Mr. and Mrs. Gonzales argue that in the event that Gateway is awarded title to the Property, they are entitled to an equitable lien for at least the value of the improvements to the Property.⁹⁴ It is undisputed that the Property was a vacant lot at the time of the monition sale and the Property was subsequently improved with the construction of a single-family residence.⁹⁵ Mr. and Mrs. Gonzales bought the Property after the construction of the house, and the added value of the house was reflected in the purchase price paid by Mr. and Mrs. Gonzales.⁹⁶ The monition sale price of the unimproved lot was $27,000, and Mr. and Mrs. Gonzales bought the improved the Property for $364,000.⁹⁷ At the time of the sale, Gateway owed $8,580.74 in back property taxes.⁹⁸ Mr. and Mrs. Gonzales argue that it would be inequitable for Gateway to benefit from the subsequent improvements to the Property.⁹⁹ Mr. and Mrs. Gonzales cite Delaware law holding that an equitable lien "may be impressed out of recognition of general equitable principles of right and justice"¹⁰⁰ and that "[a] principal reason for impressing an equitable lien is to prevent unjust enrichment."¹⁰¹

94 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 12.

95 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 12.

96 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 12.

97 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 12.

98 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 13.

99 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 14.

100 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 13 (citing Branca v. Branca, 443 A.2d 929, 931 (Del. 1982)).

101 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 13 (citing Hayden v. Hayden, 1993 WL 330058, *2 (Del. Ch. Aug. 18, 1993)).

Specifically, Mr. and Mrs. Gonzales contend that they should be awarded an equitable lien in the amount of their purchase price minus the sale price of the Property at the monition sale less the back property taxes owed by Gateway, which amounts to $345,580.74.¹⁰² However, Mr. and Mrs. Gonzales concede that there may be alternate ways of calculating the amount to which they should be entitled; and ask, in the alternative, that the Court find as a matter of law that Mr. and Mrs. Gonzales have an equitable lien in an amount to be determined at a subsequent hearing.¹⁰³

102 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 13.

103 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 14.

Mr. and Mrs. Gonzales also argue that in the event that Gateway prevails in the instant action, they should be entitled to indemnification and/or contribution from the other defendants, NCC in particular.¹⁰⁴ Mr. and Mrs. Gonzales reiterate that they had no knowledge of any defect with the monition sale or of Gateway's alleged interest in the Property at the time Mr. and Mrs. Gonzales purchased it. Mr. and Mrs. Gonzales argue that any defect in the sale, such as would result in Gateway retaining an interest in the Property, is due to the negligence of NCC. Mr. and Mrs. Gonzales argue that if Gateway can recover the Property from them, they are entitled to recover the value of the Property from NCC.¹⁰⁵

104 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 14. See also Defendants Robert R. and Rosa Gonzales' Second Amended Answer and Affirmative Defenses to Plaintiff's Complaint, Counterclaim and Cross-Claim, Item 108, at *6-7.

105 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at 14-15 (citing Lee v. Brenton Engineering, 2001 WL 1482358, * 2 (Del. Super. Ct. Oct 30. 2001) (explaining that under Delaware law, "a person who is liable to an injured party but whose negligence is secondary, or passive, to the negligence of another [party] more actively or primarily responsible for the injury, may seek indemnification from the more negligent party.").

B. Plaintiff's Response

On September 12, 2014, Plaintiff filed a Response in Opposition.¹⁰⁶ First, incorporating by reference the arguments in its prior briefings, Plaintiff argues that notice was in fact defective.¹⁰⁷ Second, also incorporating by reference the arguments in its prior briefings, Plaintiff argues that Mr. and Mrs. Gonzales cannot allege lack of standing.¹⁰⁸ Plaintiff argues that a corporation revived pursuant to 8 Del. C. §312 is vested with all the same rights as if the corporation had never fallen into dormancy.¹⁰⁹ Thus, he contends, the revived Gateway has standing to challenge the procedural adequacy of the sheriff's sale. Plaintiff further argues that under 8 Del. C. § 329, the defendants are precluded from alleging any deficiencies in the corporate revival itself.¹¹⁰ Finally, Plaintiff argues that even if the defendants could dispute Mr. Simison's authority to revive the corporation, this would be a matter to be filed by the other shareholders in the Court of Chancery, not a matter for the Superior Court.¹¹¹

106 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126.

107 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 3 (citing Response, Item 24; Motion, Item 106; Response, Item 128).

108 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 4 (citing Response, Item 24; Motion, Item 106; Response, Item 128).

109 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 24, at 2.

110 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 3.

111 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 4 (citing the authority of the Court of Chancery under 8 Del. C. § 111 to "interpret, apply, enforce or determine the validity of corporate instruments and provisions of this title.").

Plaintiff argues that in the event the sheriff's sale is found deficient, the proper remedy is to return the Property to Plaintiff.¹¹² Plaintiff argues that the Court has broad discretionary power to set aside a sheriff's sale "for the correction of abuses or the prevention of injury" and that improper notice is one of the "most usual grounds" on which sheriff's sales are typically set aside.¹¹³ Plaintiff argues that an equitable lien is an inappropriate remedy because it is akin to a constructive trust, which "is a remedy only available at equity," which is outside the jurisdiction of the Superior Court.¹¹⁴ Plaintiff does not dispute that Mr. and Mrs. Gonzales may be entitled to indemnification and/or contribution from the other defendants.¹¹⁵

112 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 4.

113 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 5 (citing Household Bank F.S.B. v. Daniels, 2005 WL 1953035, *2 (Del. Super. Ct. July 14, 2005) (internal citations omitted)).

114 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 5 (citing Cippa Construction v. Innovative Property Resources, 2007 WL 914640, *1 (Del. Super. Ct. Mar. 2, 2007)).

115 Plaintiff's Response in Opposition to Defendants Robert R and Rosa Gonzales' Motion for Summary Judgment, Item 126, at 5-6.

C. September 18 , 2014 Oral Argument and Letters in Response

On September 18, 2014, the Court held oral argument on the instant Motion for Summary Judgment. The Court reserved judgment on the instant motion and requested additional submissions on the issue of standing.¹¹⁶

116 Judicial Action Form, Item 129.

Plaintiff and Mr. and Mrs. Gonzales submitted their initial submissions addressing the issue of standing on November 17, 2014 and November 21, 2014, respectively.¹¹⁷ Plaintiff takes the position that the defendants cannot allege deficiencies either with the corporate revival or with the current "corporate state," by which Plaintiff seems to mean Mr. Simison's authority to act on behalf of the corporation.¹¹⁸ Plaintiff attaches affidavits from allegedly all of Howard DuBroff's intestate heirs transferring any interest that they may have in Gateway to Mr. Simison. Plaintiffs further allege that DuBroff sold his entire interest to Henry Thompson, and that Mr. Thompson's interest subsequently passed to his grandson, Mr. Simison.¹¹⁹ Plaintiff states that it previously provided the Court with paperwork transferring Thompson's interest to his wife, who transferred it to their daughter, who transferred it to Mr. Simison.¹²⁰ Further, Plaintiff says that the deed to the Property was found among Thompson's belongings at his death.¹²¹

117 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133; Letter to the Gon. M. Jane Brady from Bradley P. Lehman Dated November 21, 2014, Item 134.

118 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1.

119 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1.

120 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1. Plaintiff asserts in a letter addressed to the Court that it had previously provided the Court with paperwork transferring Thompson's interest to his wife, who transferred it to their daughter, who transferred it to Mr. Simison. Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1. However, upon review of the docket the Court is unable to locate said paperwork.

121 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1. However, Plaintiff did not submit a copy of the deed to his response. See Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1.

While Plaintiff alleges that the sale from DuBroff to Thompson did take place, Plaintiff concedes that no bill of sale transferring the interest from DuBroff to Thompson can presently be located.¹²² Plaintiff says that it is for this reason that it presently provides affidavits from DuBroff's heirs, transferring any interest that they might have to Simison. Plaintiff maintains that Simison paid the heirs a fair price for their interest, that they were fully informed by counsel regarding the nature of these proceedings and the possible outcome, and that they were provided a copy of the affidavit for review by their attorney prior to signing.¹²³ Plaintiff also states that counsel has had lengthy conversations with Mr. Biondi. Plaintiff says that Biondi indicated that he was not in agreement with the sale, but he would not sign an affidavit as he does not believe he holds a current interest in Gateway and both he and Mr. Porter wish to have nothing to do with the instant action.¹²⁴

122 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1.

123 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1.

124 Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *2.

Mr. and Mrs. Gonzales first argue, echoing an argument made by NCC in its Motion for Summary Judgment, that Gateway lacks standing to contest the sheriff's sale because, pursuant to 8 Del. C. §312 revived corporations are vested with the property that they held at the time they became defunct with the exception of property that was disposed of during the period of corporate dormancy.¹²⁵

125 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *1; see also 8 Del. C. § 312(e) ("All real and personal property, rights and credits, which belonged to the corporation at the time its certificate of incorporation became forfeited or void pursuant to this title, or expired by limitations and which were not disposed of prior to the time of its revival or renewal shall be vested in the corporation, after its revival and renewal, as fully and amply as they were held by the corporation at and before the time its certificate of incorporation became forfeited or void pursuant to this title . . .") (emphasis added).

Second, Mr. and Mrs. Gonzales reiterate that Simison has failed to demonstrate that he has any interest in Gateway or, even if he does, that this interest is sufficient to authorize Simison to act on behalf of Gateway.¹²⁶ Mr. and Mrs. Gonzales argue that the corporate records before the Court suggest that DuBroff had at most a 25% interest in Gateway.¹²⁷ Thus, even assuming that DuBroff or his heirs transferred the entirety of that interest to Simison, Simison would still only have a 25% interest in Gateway.¹²⁸ Mr. and Mrs. Gonzales allege that Simison still has not made any showing that the remaining Gateway shareholders, officers, or directors— at least two of whom are known to be living and listed in the Delaware Legal Directory—voted to appoint Simison to any position of authority.¹²⁹ Mr. and Mrs. Gonzales argue that "[c]onspiciously absent from Gateway's submissions to the Court is any discussion about what happened to the other Gateway ownership interests."¹³⁰

126 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *1.

127 Mr. and Mrs. Gonzales appear to arrive at this percentage by assuming that there were only four original equal shareholders, thus the 25 shares Simison allegedly received from Chanin represents a 25% interest. Mr. and Mrs. Gonzales forget the fact that the evidence is that there were five original equal shareholders and 125 shares issued. Had Mr. and Mrs. Gonzales taken this fact into account, they probably would have argued that DuBroff had at most a 20% interest in Gateway.

128 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *1.

129 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *2.

130 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *2.

Finally, Mr. and Mrs. Gonzales renew their arguments that their interest in the Property should be protected as they are bona fide purchasers for value, who purchased the land after it had been titled to multiple owners after the sheriff's sale.¹³¹ Further, they argue that the return of the Property to Gateway would be inequitable as the Property was a vacant lot at the time of the sale and has since been improved with a single family home, which was reflected in the purchase price they paid.¹³²

131 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *2.

132 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated November 21, 2014, Item 134, at *2.

After reviewing the November 17 and November 21 letters submitted by the parties, the Court wrote to the parties explaining that the Court could not yet decide Mr. and Mrs. Gonzales' Motion for Summary Judgment because the issue of Simison's standing had not yet been resolved.¹³³ The Court explained that while Simison had submitted additional evidence in support of his contention that he holds stock in Gateway, this evidence does not address whether Simison is authorized to act on behalf of Gateway.¹³⁴ The Court invited Plaintiff to submit additional briefing and supporting evidence to establish that Simison has standing to act on behalf of Gateway.¹³⁵ The Court explained that the evidence that Simison would have to produce would likely include: (1) the names of the officers and directors at the time Gateway became defunct and where they are now; (2) evidence that these persons were all unavailable when Simison elected himself the sole representative of Gateway; and (3) evidence that Simison acted in accordance with the charter and bylaws of the corporation in electing a new board, which elected new officers, who authorized Simison to bring the instant litigation on behalf of Gateway.¹³⁶ The Court invited the defendants to submit additional briefing in response.¹³⁷

133 Judge Brady's letter to Plaintiff's Counsel granting an additional 30 days to respond to her 2-25-2015 request, Item 142, at *2.

134 Judge Brady's letter to Plaintiff's Counsel granting an additional 30 days to respond to her 2-25-2015 request, Item 142, at *2.

135 Judge Brady's letter to Plaintiff's Counsel granting an additional 30 days to respond to her 2-25-2015 request, Item 142, at *3.

136 Judge Brady's letter to Plaintiff's Counsel granting an additional 30 days to respond to her 2-25-2015 request, Item 142, at *3.

137 Judge Brady's letter to Plaintiff's Counsel granting an additional 30 days to respond to her 2-25-2015 request, Item 142, at *3.

IV. SUPPLEMENTAL BRIEFING AND SUPPORTING EVIDENCE

A. Plaintiff's Submissions

Plaintiff alleges that the last acting President of Gateway was Howard DuBroff, who is now deceased.¹³⁸ Plaintiff maintains that Simison inherited DuBroff's entire interest through his grandfather, Henry Thompson, who purchased DuBroff's interest from him.¹³⁹ Plaintiff also maintains that in the event DuBroff retained any interest in Gateway as of his date of death, Simison has subsequently acquired these rights from DuBroff's heirs.¹⁴⁰ Plaintiff states that, upon information and belief, Chanin is alive and living in New York.¹⁴¹ Plaintiff contends that Chanin "was the only other named officer of Gateway Estates, Inc." at the time Simison was seeking to revive the corporation.¹⁴² Regarding other shareholders as of the time of revival, Plaintiff alleges that Plaintiff's counsel contacted Biondi, who indicated that he wanted nothing to do with the company. Plaintiff also states that Plaintiff's counsel "was informed" that Chanin did not want to be involved.¹⁴³ Plaintiff says that when it originally tried to contact Chanin, he would not return any calls.¹⁴⁴ However, Plaintiff states that Chanin has since agreed to speak with Plaintiff and that Chanin has executed an Affidavit of Lost Certificate—averring that he was the owner of 25 shares but lost the certificates and that, in any event, he transferred his shares and interest in Gateway to Simison.¹⁴⁵ Plaintiff says that Porter, who was a shareholder but not an officer or director, also indicated that he wished to have nothing to do with Gateway.¹⁴⁶

138 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *1.

139 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *1.

140 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *1. Plaintiff has however, failed to demonstrate that all of DuBroff's heirs transferred their interest to Simison. Plaintiff simply provides affidavits from what it alleges to be all of DuBroff's heirs.

141 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *1.

142 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *2.

143 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *2.

144 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *2.

145 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *3 (citing Affidavit of Loss, Exhibit C to Plaintiff's Response to the Court's Request for Additional Briefing; Chanin Affidavit, Exhibit D to Plaintiff's Response to the Court's Request for Additional Briefing).

146 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *2 (citing Wright Affidavit, Exhibit A to Plaintiff's Response to the Court's Request for Additional Briefing).

Plaintiff says that under the original Gateway Certificate of Incorporation, the President is empowered "to act very broadly on behalf of the corporation," including "to purchase, hold, sell and transfer the shares of its capital stock, to have one or more offices and to conduce any or all of its operations and business and to promote its objects within or without the State of Delaware, without restriction as to place or amount, to carry on any other business in connection therewith, etc."¹⁴⁷ Plaintiff maintains that the President was likewise authorized to make, alter, or amend the bylaws.¹⁴⁸ Plaintiff further says that the Certificate of Incorporation does not specify the number of directors required to act on behalf of the corporation.¹⁴⁹ Plaintiff maintains that because the Certificate of Incorporation does not fix the number of directors, the President is given broad powers to act on behalf of the corporation on his own.¹⁵⁰

147 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *2 (citing Certificate of Incorporation, Exhibit B to Plaintiff's Response to the Court's Request for Additional Briefing, at *3). The Court notes that Plaintiff's interpretation of the certificate of incorporation language is facially erroneous. The certificate of incorporation states that the corporation is authorized to take these actions but does not state, as Plaintiff suggests, that the President has the power to act unilaterally to take these actions.

148 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *2.

149 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *3.

150 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *3.

Plaintiff says that it agrees that the default position is that the last acting officers and directors who were in place when the corporation became defunct retain these roles.¹⁵¹ However, Plaintiff argues that, pursuant to 8 Del. C. § 312(h), "if a sufficient number of the last acting officers of any corporation desiring to renew or revive its certificate of incorporation are not available by reason of death, unknown address, or refusal or neglect to act, the directors of the corporation or those remaining on the board, even if only 1, may elect successors to such officers."¹⁵² Plaintiff argues that, as successor in interest to DuBroff, Simison was entitled to act for the corporation because everyone else who had been associated with the company as a board member, officer, or shareholder was either unwilling or unavailable.¹⁵³ Plaintiff suggests he is currently entitled to act as successor in interest to both DuBroff and Chanin.

151 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *3.

152 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *3.

153 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *4.

B. Defendants' Submissions

In their supplemental briefing, Mr. and Mrs. Gonzales argue that Simison has still not met the burden of demonstrating his interest in Gateway.¹⁵⁴ Mr. and Mrs. Gonzales claim that Simison has not produced any credible evidence of his interest prior to Simison's alleged recent acquisition of Chanin's shares.¹⁵⁵ Mr. and Mrs. Gonzales reiterate their claims that there is no evidence that DuBroff really owned shares in Gateway, that DuBroff sold his shares to Thompson, or that Thompson's interest passed to Simison.¹⁵⁶ Mr. and Mrs. Gonzales argue that even if Simison did recently acquire Chanin's shares, this still did not retroactively authorize Simison to act on behalf of the company at the time this action was commenced or to hold the 2012 meeting at which Simison appointed himself to all corporate offices.¹⁵⁷

154 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated May 27, 2015, regarding additional briefing on the issue of standing, Item 144, at *1.

155 Chanin Affidavit, Exhibit D to Plaintiff's Response to the Court's Request for Additional Briefing, Item 143. Mr. and Mrs. Gonzales state that they do not concede that the transfer of Chanin's shares to Simison was proper as "no consideration for the transfer was recited." Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated May 27, 2015, regarding additional briefing on the issue of standing, Item 144, at *2.

156 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated May 27, 2015, regarding additional briefing on the issue of standing, Item 144, at *2.

157 Letter to the Hon. M. Jane Brady from Bradley P. Lehman dated May 27, 2015, regarding additional briefing on the issue of standing, Item 144, at *2.

NCC also submitted supplemental briefing.¹⁵⁸ Like Mr. and Mrs. Gonzales, NCC argues that Simison has not established his interest in Gateway or his authority to act on behalf of the company. First, NCC argues that Simison has not presented any evidence that Thompson purchased DuBroff's interest or that Thompson's interest now rests with Simison, calling Simison's account "family lore."¹⁵⁹

158 New Castle County's Supplemental Brief, Item 145.

159 New Castle County's Supplemental Brief, Item 145, at *2.

NCC argues that despite Plaintiff continual attempts to state otherwise, Simison knew or should have known the names and whereabouts of the last acting officers and directors and the current stockholders. NCC points out that Plaintiff concedes that DuBroff was the last acting President and Chanin was the last acting Secretary.¹⁶⁰ NCC submitted the last Annual Report of the corporation on record, which indicates that Biondi was the Treasurer of Gateway.¹⁶¹ NCC argues that Plaintiff has not demonstrated that Simison made a good faith effort to locate the last known stockholders—Biondi, the receivership of Errigo, Porter, DuBroff, and Chanin.¹⁶² The names of Biondi, Errigo, Porter, DuBroff, and Chanin all appear in incorporation documents and annual reports, which are publically available from the Secretary of State and at least some of which Simison claims he had in his possession.¹⁶³ Simison testified that based on documents he received from the Secretary of State he conducted internet searches for officers, directors, and stockholders. However, Simison summarily states that he was unable to locate any of these persons alive.¹⁶⁴ NCC argues that "it strains credulity" that Simison actually made such an effort as the information regarding Chanin, Porter, and Biondi is readily ascertainable through simple internet searches.¹⁶⁵

160 New Castle County's Supplemental Brief, Item 145, at *2-3 (citing Plaintiff's Supplemental Brief, Item 143, at *1).

161 Annual Report, Exhibit G to New Castle County's Supplemental Brief, Item 145.

162 New Castle County's Supplemental Brief, Item 145, at *3.

163 New Castle County's Supplemental Brief, Item 145, at *3 (citing State of Delaware Corporation Annual Report and Simison Depo. at 34-35, Exhibit G to New Castle County's Supplemental Brief, Item 145).

164 Simison Depo. at 34-35, Exhibit G to New Castle County's Supplemental Brief, Item 145.

165 New Castle County's Supplemental Brief, Item 145, at *3.

V. LEGAL STANDARD

The Court may grant summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."¹⁶⁶ A motion for summary judgment, however, should not be granted when material issues of fact are in dispute or if the record lacks the information necessary to determine the application of the law to the facts.¹⁶⁷ A dispute about a material fact is genuine when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."¹⁶⁸ Thus, the issue is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law."¹⁶⁹ When parties file cross-motions for summary judgment, as is the case here, and have not argued the existence of disputed issues of material fact, "the Court shall deem the motions to be the equivalent of a stipulation for decision on the merits based on the record submitted with the motions."¹⁷⁰

166 Super. Ct. Civ. R. 56(c).

167 Bernal v. Feliciano, 2013 WL 1871756, at *2 (Del. Super. Ct. May 1, 2013) (citing Ebersole v. Lowengrub, 180 A.2d 467, 468 (Del. 1962)).

168 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986).

169 Id.

170 Super. Ct. Civ. R. 56(h).

Although the party moving for summary judgment initially bears the burden of demonstrating that the undisputed facts support his legal claims,¹⁷¹ once the movant makes this showing, the burden "shifts to the non-moving party to demonstrate that there are material issues of fact for resolution by the ultimate fact-finder."¹⁷² When considering a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-moving party.¹⁷³

171 Hughes ex rel. Hughes v. Christina Sch. Dist., 2008 WL 73710, at *2 (Del. Super. Ct. Jan. 7, 2008) (citing Storm v. NSL Rockland Place, LLC, 898 A.2d 874, 879-80 (Del. Super. Ct. 2005)).

172 Id.

173 Joseph v. Jamesway Corp., 1997 WL 524126, at *1 (Del. Super. Ct. July 9, 1997) (citing Billops v. Magness Const. Co., 391 A.2d 196, 197 (Del. Super. Ct. 1978)).

VI. DISCUSSION ¹⁷⁴

174 In the instant matter, the parties have filed cross Motions for Summary Judgment. See Plaintiff's Motion for Summary Judgment, Item 106; see also Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120; Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123. Per Super. Ct. Civ. R. 56(h), when parties file cross Motions for Summary Judgment and have not presented an argument to the Court that there is an issue of material fact, "the Court shall deem the motions to be the equivalent of a stipulation for decision on the merits based on the record submitted with the motions." Super. Ct. Civ. R. 56(h). Here neither party has raised an argument that there is an issue of material fact. As a result, this Court views all submissions accompanying the parties' Motion for Summary Judgment as undisputed facts.

A. Gateway Waived Any Objections To The Way The Property Was Sold

Gateway contends that any delay in bringing this action should be excused based on a lack of notice under Rule 69(g). Gateway is essentially arguing that any deficiency in the notice requirement in Rule 69(g) amounts to a right to set aside the sale which survives in perpetuity. Mr. and Mrs. Gonzales, however, argue that Gateway has waived its right to bring this suit based on an unexcused delay in filing this action.¹⁷⁵

175 See Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at *15-16.

The Delaware Supreme Court has stated that "[o]bjections to the process by which property is sold on execution are waived if the objector fails to file a timely application to set the sale aside, unless the court finds lack of notice or other basis to relieve the party of the consequences of unexcused delay."¹⁷⁶ The Court, quoting Shipley v. New Castle County, noted that "[b]ecause of the strong public interest in the finality of sheriff's sales, a presumption of unreasonable delay and lack of diligence arises after the sale is confirmed by the court."¹⁷⁷ The Supreme Court further noted that, "the Superior Court has broad power to control such sales to correct abuses or protect parties from injustice."¹⁷⁸

176 Deutsche Bank Nat. Trust Co. v. Goldfeder, 2012 WL 644442, at *3 (Del. Feb. 14, 2014) (quoting Deibler. Atl. Props. Grp., Inc., 652 A.2d 553, 556 (Del. 1995)).

177 Id. (quoting Shipley v. New Castle Cnty., 975 A.2d 764, 770 (Del. 2009)).

178 Id.

Assuming, arguendo, that there were deficiencies in the notice requirement prescribed by Rule 69(g), as Gateway argues, these deficiencies are not sufficient to relieve Gateway's delay in filing this action. It is uncontradicted that the sale occurred on or about August 9, 2005¹⁷⁹ and this action was filed on July 23, 2013.¹⁸⁰ Clearly, on or before June 18, 2007 Biondi learned that New Castle County had "erroneously captioned its sale as New Castle County versus Gateway Farms."¹⁸¹ In addition, on June 18, 2007, NCC sent an email to Biondi enclosing copies of the Venditioni Exponas filed by the County, the accompanying long and short property descriptions, the December 7, 2005 sheriff's deed, and the deed conveying title from D&M to Paoli.¹⁸² After Biondi received this information he contacted Chanin informing him of the sale and excess proceeds.¹⁸³ This is evidenced by Chanin's affidavit, which states, "O. Francis Biondi, Esq., informed me that there were unclaimed excess proceeds of a Sheriff's Sale in the name of Gateway Estates, Inc."¹⁸⁴

179 Complaint, Item 1, at 4 ("On or about August 9, 2005, a sheriff's sale was held and the property located at 544 Erickson Avenue, Hockessin, DE 19707, was sold to Defendant, D & M Enterprises LLC for $27,000.").

180 Complaint, Item 1, at 1.

181 Hay Affidavit, Exhibit H to Opining Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at *1 ("Mr. Biondi advised me that the County erroneously captioned its sale as New Castle County versus Gateway Farms, but that he had no objection to the County's sale."); see also Exhibit A to Opening Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at 000091. Simison disputes NCC's characterization that Biondi did not object to the sale, although this fact is in dispute it is not relevant to the Court's consideration as Biondi had the opportunity to object to the sale but did not do so.

182 Exhibit A to Opening Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at 000091.

183 Chanin Affidavit, Exhibit I to Opining Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at *1.

184 Chanin Affidavit, Exhibit I to Opining Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at *1.

The Court of Chancery has noted that the general rule pertaining to officers and directors having notice is that "knowledge of an officer or director of a corporation will be imputed to the corporation."¹⁸⁵ As a result, Biondi's knowledge of the sale in 2007 is imputed to Gateway as he was the last known Treasurer.¹⁸⁶ In addition, Chanin's actual notice is imputed to Gateway as he was the last known Secretary of Gateway.

185 Teachers' Retirement System of Louisiana v. Aidinoff, 900 A.2d 654, n. 23 (Del. Ch. 2006)(citing Carlson v. Hallinan, 2006 WL 771722, at *21 (Del.Ch. Mar.21, 2006); In re HealthSouth Corp. S'holders Litig., 845 A.2d 1096, 1108 n. 22 (Del.Ch.2003); 18A Am.Jur.2d Corporations § 1444 (2005)).

186 See 1996 Annual Report, Exhibit G to New Castle County's Supplemental Briefing, Item 145.

The Supreme Court noted in Doutsche Bank National Trust Company, that this Court has "broad power" to "protect parties from injustice."¹⁸⁷ Had Gateway been revived and brought an action to set aside the sale in 2007, this Court may have done so to prevent injustice to Gateway. However, when Gateway had actual notice of the sale, in 2007, the property was a vacant lot. This action was not filed until 2013, seven years after the transaction was finalized and by a corporation revived after being defunct for more than 30 years. The injustice, if the Court were to negate the sale, would be to Mr. and Mrs. Gonzales. This Court finds that Gateway's objection to the process by which the Property was sold has been waived because Gateway has failed to overcome the "presumption of unreasonable delay and lack of diligence,"¹⁸⁸ which arises after the sale is confirmed by the court.

187 Deutsche Bank Nat. Trust Co., 2012 WL 644442, at *3 (citing Shipley v. New Castle Cnty., 975 A.2d 764, 770 (Del. 2009)).

188 Deutsche BankNat. Trust Co., 2012 WL 644442, at *3 (quoting Shipley, 975 A.2d at 770).

B. Simison Has Failed to Establish He Has Standing to Bring this Action ¹⁸⁹

189 The Court could properly choose to summarily dismiss the action based on the record supporting Simison's standing at the time he initiated the action, but chooses to address the merits on the record the Court has generously permitted Mr. Simison time to create. To do otherwise might simply prompt Mr. Simison to renew the action on the present record.

Mr. and Mrs. Gonzales argue that Simison does not have standing to bring this action. It is well-established that if the Court finds that a plaintiff does not have standing, the action cannot proceed.¹⁹⁰ "Standing is the requisite interest that must exist in the outcome of the litigation at the time the action is commenced."¹⁹¹

190 See, e.g., Association of Citizens of North of Dover v. Regional Planning Commission of Kent County, 1990 WL 263562, *1 (Del. Super. Ct. Dec. 26, 1990) (explaining that a claim must be dismissed when the party asserting the claim lacks standing).

191 General Motors v. New Castle County, 701 A.2d 819, 823 (Del. 1997).

Plaintiff is correct that, under Delaware law, once a corporate charter has been renewed and revived, only the State can institute proceedings to void the charter on the grounds that the person who filed for the renewal was not authorized to do so.¹⁹² However, the validity of Simison's revival of Gateway is a separate question from whether Simison has authority to act on behalf of Gateway. In other words, while the defendants cannot challenge, and the Court cannot adjudicate, whether Simison has standing to revive Gateway, the Court still must determine whether Simison has standing to instigate and pursue the instant litigation on behalf of Gateway.¹⁹³

192 Engstrum v. Paul Engstrum Assoc., 124 A.2d 722 (Del. Ch. 1956); McKee v. Standard Minerals Corp., 156 A. 193 (Del. Ch. 1931).

193 See Maitland v. International Registries, 2008 WL 2440521, at *1 (Del. Ch. June 6, 2008). In Maitland v. International Registries, the Court of Chancery granted the plaintiff's motion to strike the answer of the corporate defendant and disqualify the corporate defendant's counsel on the grounds that the natural person directing the litigation on behalf of the corporation was without authorization to do so. Id.

Delaware law provides that when a corporation becomes defunct for failure to pay franchise taxes, the corporation persists as a legal entity¹⁹⁴ with the same corporate structure unless and until action is taken to change the structure.¹⁹⁵ Upon revival of the corporation, the law acts as if there was never a gap in the corporation's existence.¹⁹⁶ The result is that the persons authorized to act on behalf of the corporation upon revival are the last acting officers and directors when the corporation became defunct, unless and until they are properly replaced under the procedure set forth in the bylaws.

194 Wax v. Riverview Cemetery, 24 A.2d 431, 436 (Del. Super. Ct. 1942).

195 See, e.g., Frederic G. Krapf & Son, Inc. v. Gorson, 243 A.2d 713, 715 (Del. 1968) (holding that a corporate officer may enter into a contract binding on the corporation even after forfeiture of the corporate charter for nonpayment of franchise taxes).

196 Wax, 24 A.2d at 436.

Under the corporate revival statute, 8 Del. C. § 312, the certificate reviving a corporation must be filed with the "authority of those who were directors or members of the governing body of the corporation at the time its certificate of incorporation expired."¹⁹⁷ The revival statute further provides that if the last acting officers are "not available by reason of death, unknown address or refusal or neglect to act," then the directors can elect replacements; and if all the directors are not available by reason of death, unknown address or refusal or neglect to act, then the stockholders can elect a full board as provided by the corporation's bylaws.¹⁹⁸ It is important to note that Simison has not provided a copy of the bylaws in any of his submissions to the Court, leaving open the question of whether Simison complied with the proper procedure for electing a full board of directors.

197 8 Del. C. § 312(d)(6).

198 8 Del. C. § 312(h).

Furthermore, Simison has not adequately demonstrated that he has an interest in Gateway that would authorize him to commence this action on behalf of Gateway. Specifically, Plaintiff has not provided evidence that DuBroff was possessed of an interest in Gateway at the time of his death or that he validly transferred his interest to Thompson¹⁹⁹ or that Thompson's alleged interest was transferred through a chain of relatives to Simison.²⁰⁰ In an attempt to cure this defect, Simison submitted affidavits from heirs of DuBrof transferring their interests to Simison, although the affidavits from DuBroff's heirs do not specify that they are all of DuBroff's heirs. Further, the stock certificate indicates that the shares are subject to the terms and conditions of an agreement, which has not been produced, nor have the terms been presented.²⁰¹ The Court, without knowing the terms, cannot find that Mr. Simison has authority, through DuBroff or any other shareholder, to act in this matter.

199 Aside from Simison's testimony, the only evidence in the record to support Plaintiff's contention that DuBroff sold his interest to Henry Thompson is the testimony of Mark Cohn, a former employee of Franklin, who testified that the company used "propriety research and investigation methods" to determine that DuBroff had transferred his interest to Thompson. Cohn Affidavit, Exhibit J to Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123.

200 Plaintiff asserts in a letter addressed to the Court that it "previously provided the Court with the transfer paperwork from his grandmother to his mother and from his mother to him of this ownership interest." Letter to Judge Brady from Kathleen Delacy, Esquire Regarding the Issue of Standing, Item 133, at *1. However, upon review of the docket the Court is unable to locate said paperwork.

201 Mr. Porter's email reflects an expectation that he would, at the least need to be informed of the sale of any shares based on the agreement. Email, Exhibit M to New Castle County's Supplemental Briefing, Item 145 ("I was not notified of the sale by DuBroff as required by the stockholders agreement noted on the reverse side of the certificate."). It is unknown whether Chanin's transfer complied with the agreement. Plaintiff has provided no evidence that it does.

Moreover, assuming, arguendo, that Simison possessed an interest in Gateway at the time the litigation commenced, he has still not demonstrated that this interest entitled him to act on behalf of Gateway. Plaintiff correctly points out that a single shareholder may act on behalf of a corporation to be revived if (a) the last acting directors and officers are not available by reason of death, unknown address or refusal or neglect to act and (b) there are no other remaining shareholders. The sole remaining shareholder will vote to elect new directors, who will in turn elect new officers to act on behalf of the company.²⁰² This is roughly the procedure that Simison claims to have carried out in the 2012 meeting held at his residence.²⁰³ The defect in this case is that Simison has not demonstrated that he is a shareholder or that he was entitled to act because he has failed to demonstrate that all of the officers and directors were not available by reason of death, unknown address or refusal or neglect to act at the time of the 2012 meeting, or that the persons who held an interest in Gateway at the time have ratified his actions. His election as President, and therefore, his presumption that, because he is President of Gateway, he has authority to act on its behalf, is not established to be valid on the record before the Court.²⁰⁴

202 8 Del. C. § 312(h).

203 Meeting Minutes, Exhibit 14 to The Gonzales Defendants' Motion for Summary Judgment, Item 120.

204 Simison claims broad authority is vested in him as President, but the authority of the President of Gateway to act is unknown as the bylaws have not been presented.

In response to the Court's request that Simison provide the names and whereabouts of the last acting officers and directors at the time Gateway became defunct, Simison only stated that DuBroff was the last acting President, and Chanin was the last acting Secretary.²⁰⁵ However, Simison failed to indentify if these were in fact the only last acting officers and directors of Gateway.²⁰⁶ Furthermore, there is no evidence that Simison attempted to contact Chanin before Simison acted to elect a new board and officers. Indeed, he failed to notify any other stockholder or heirs of stockholders of the meeting as required by 8 Del. C. § 222. For these reasons, Simison has not carried his burden of demonstrating that the last acting officers were not available by reason of death, unknown address or refusal or neglect to act at the time he voted to elect himself President of Gateway.²⁰⁷

205 Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *1.

206 See Plaintiff's Response to the Court's Request for Additional Briefing, Item 143, at *1. In fact, the record before the Court reflects that Porter is currently a shareholder and Biondi was the last acting Treasurer according to the last known annual report. See 1966 Annual Report, Exhibit G to New Castle County's Supplemental Briefing, Item 145; see also Email, Exhibit M to New Castle County's Supplemental Briefing, Item 145.

207 Cartanza v. DNREC, 2009 WL 106554, *2 (Del. Ch. Jan. 12, 2009) ("The party invoking the jurisdiction of a court has the burden to establish standing.").

Simison has failed to establish that DuBroff was a shareholder at the time of his death or that DuBroff had properly transferred his shares to Thompson; that Simison is entitled to the shares even if they were properly transferred to Thompson; that Simison was properly elected President of Gateway; that the President had the authority under the corporate bylaws to act in the scope Simison argues, that any bylaws granting the President such authority were properly adopted; or that Chanin properly transferred his shares to Simison, therefore this Court finds that Simison has not established that he has the authority to act on Gateway's behalf.

C. Gateway's Constitutional Rights Were Not Violated

Gateway argues that it was not provided notice and an opportunity for a hearing in violation of its Fourteenth Amendment rights and the Takings clause of the Fifth Amendment.²⁰⁸ Mr. and Mrs. Gonzales on the other hand argue that any constitutional claim Gateway has is barred by the statute of limitations²⁰⁹ and, in the alternative, Gateway's constitutional rights were not violated.²¹⁰

208 See Plaintiff's Motion for Summary Judgment, Item 106, at *10-11.

209 See Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at *15-16.

210 See Opening Brief in Support of Defendants' Motion for Summary Judgment, Item 123, at *23-24.

Alleged violations of federally protected constitutional rights are considered personal injury actions for purposes of the statute of limitations.²¹¹ Under Delaware law, the statute of limitations for personal injuries claims is two years.²¹² The sheriff's sale occurred on August 9, 2005²¹³ and this action was filed on July 23, 2013.²¹⁴ Furthermore, on or before June 18, 2007 Biondi learned that New Castle County had "erroneously captioned its sale as New Castle County versus Gateway Farms."²¹⁵ In addition, on June 18, 2007, NCC sent an email to Biondi enclosing copies of the Venditioni Exponas filed by the County, the accompanying long and short property descriptions, the December 7, 2005 sheriff's deed, and the deed conveying title from D&M to Paoli.²¹⁶ After Biondi received this information he contacted Chanin informing him of the sale and excess proceeds.²¹⁷ As the Court of Chancery noted, "knowledge of an officer or director of a corporation will be imputed to the corporation."²¹⁸ As a result, Biondi's knowledge of the sale in 2007 is imputed to Gateway as he was the last known Treasurer.²¹⁹ In addition, Chanin's actual notice is imputed to Gateway as he was the last known Secretary of Gateway. Therefore, the statute of limitations on Gateway's constitutional claims began to run in 2007, when Gateway had actual notice of possible violations. Accordingly, this Court finds that because Gateway waited more than two years to file this action after having actual notice, the statute of limitations has run on any constitutional claims. The Court will therefore not address whether Gateway's constitutional rights were actually violated.

211 Hall v. Yacucci, 1998 WL 986030, at *1 (Del. Nov. 23, 1998) (citing Wilson v. Garcia, 471 U.S. 261, 278 (1985); Marker v. Talley, 502 A.2d 972, 975 (Del. 1985)).

212 10 Del. C. § 8119 ("No action for the recovery of damages upon a claim for alleged personal injuries shall be brought after the expiration of 2 years from the date upon which it is claimed that such alleged injuries were sustained.").

213 Complaint, Item 1, at 4 ("On or about August 9, 2005, a sheriff's sale was held and the property located at 544 Erickson Avenue, Hockessin, DE 19707, was sold to Defendant, D & M Enterprises LLC for $27,000.").

214 Complaint, Item 1, at 1.

215 Hay Affidavit, Exhibit H to Opining Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at *1 ("Mr. Biondi advised me that the County erroneously captioned its sale as New Castle County versus Gateway Farms, but that he had no objection to the County's sale."); see also Exhibit A to Opening Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at 000091.

216 Exhibit A to Opening Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at 000091.

217 Chanin Affidavit, Exhibit I to Opining Brief in Support of Defendant's Motion for Summary Judgment, Item 123, at *1.

218 Teachers' Retirement System of Louisiana v. Aidinoff, 900 A.2d 654, n. 23 (Del. Ch. 2006)(citing Carlson v. Hallinan, 2006 WL 771722, at *21 (Del.Ch. Mar.21, 2006); In re HealthSouth Corp. S'holders Litig., 845 A.2d 1096, 1108 n. 22 (Del.Ch.2003); 18A Am.Jur.2d Corporations § 1444 (2005)).

219 See 1966 Annual Report, Exhibit G to New Castle County's Supplemental Briefing, Item 145.

D. Mr. and Mrs. Gonzales' Are Bona Fide Purchasers For Value

Mr. and Mrs. Gonzales argue that the monition sale should not be set aside as they are bona fide purchasers for value.²²⁰ The Delaware Supreme Court in Fletcher v. City of Wilmington UDAG, noted that a bona fide purchaser for value is "one who acquires legal title to property in good faith, for valuable consideration, and without notice of any other claim of interest in the [property]."²²¹ The Fletcher Court went on to note that "[a] bona fide purchaser of personal property is entitled to retain the property against the real owner."²²² The Delaware Supreme Court explained that the rule exists "to protect innocent purchasers of property from competing equitable interests in the property because as '[s]trong as a plaintiff's equity may be, it can in no case be stronger than that of a purchaser, who has put himself in peril by purchasing a title, and paying a valuable consideration, without notice of any defect in it, or adverse claim to it "²²³

220 Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, Item 120, at *9-12.

221 Fletcher v. City of Wilmington UDAG, 2006 WL 2335237, at *2 (Del. Aug. 11, 2006) (citing Restatement (First) of Restitution: Definitions and General Rules § 13 (1937)).

222 Id.

223 Id.

Mr. and Mrs. Gonzaleses bought the property for valuable consideration—$369,000.²²⁴ In addition, Mr. and Mrs. Gonzales testified that when they purchased the property they did not know, and their title search did not reveal, that Gateway had a claim to the Property.²²⁵ Accordingly, Mr. and Mrs. Gonzales acquired the property in good faith—they had no knowledge of Gateway's interest in the property; they purchased it for valuable consideration—$369,000; and they had no notice of any claim on the property. As a result, Mr. and Mrs. Gonzales are bona fide purchasers for value, having a right to the property over any equitable claim Gateway may have and are entitled to retain the property despite Gateway's interest, if any, in the Property.

224 Exhibit 6 to Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, at *3.

225 Exhibit 9 to Motion for Summary Judgment of Defendants Robert R. and Rosa Gonzales, at *2: Q. Now, when you purchased the property . . . Was there any discussion about any title problems during the whole closing and real estate settlement process? A. No, sir. Q. Were you ever given any specific instructions that the title had come back good, clear, issues, any information given to you whatsoever during that time? A. No.

VII. CONCLUSION ²²⁶

226 The Court does reach Mr. and Mrs. Gonzales' argument that Gateway lacks standing under 8 Del. C. § 312 as the Court's rulings on other issues are dispositive. --------

The Court concludes that Gateway has waived its right to bring this suit due to inexcusable delay following the corporate officers and shareholders acquiring actual knowledge of the sheriff's sale. The Court further finds that Brendan Simison, the natural person directing the litigation on behalf of Gateway, has not established his authority to act on Gateway's behalf. In addition, the Court finds that the Statute of Limitations expired as to Gateway's constitutional claims, and that Mr. and Mrs. Gonzales are bona fide purchasers for value and therefore have superior rights to the Property. Accordingly, Mr. and Mrs. Gonzales' Motion for Summary Judgment is GRANTED.

IT IS SO ORDERED.

/s/_________

M. Jane Brady

Superior Court Judge