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declining to consider the defendant's meritorious defense as a basis for relief under Rule 60(b), because it determined that the defendant's delay in seeking relief was unreasonable
Summary of this case from Gibbs v. Fairbanks Capital Corp.Opinion
C.A. No. 97C-11-010
Submitted: May 15, 2000
Decided: September 26, 2000
William E. Wright, Esquire, P.O. Box 215, Lewes, Delaware 19958, attorney for Sharon Phillips
William W. Pepper, Sr., Esquire, P.O. Box 497, Dover, Delaware 19903, attorney for Thomas Taylor, t/a TNT Landscaping
Pending before the Court is an emergency motion to quash levy ("motion to quash") which Thomas Taylor, t/a TNT Landscaping ("Taylor"), filed in response to action plaintiff Sharon Phillips ("Phillips" or "plaintiff") has taken to execute on a judgment entered against defendant Anthony Siano ("Siano") in this matter. The Court held a hearing on the motion to quash on May 2., 2000, and this constitutes my decision thereon.
FACTS
Keith Phillips owned a 1983 Chevrolet two-door truck (the "Truck"), which he used in his business, All Seasons Lawn Care. Keith Phillips sold the Truck and some other equipment to Siano. Siano never placed the Truck's title in his name.
Keith Phillips was plaintiff's husband. He now is deceased.
On November 18, 1997, plaintiff filed a complaint against Siano. In that complaint, she asserted that Siano owed her $186,346.00, in connection with the sale of All Seasons Lawn Care. Siano initially participated in the litigation, but after his trial counsel withdrew from representation he refused to comply with discovery. On November 20, 1998, as a sanction for noncompliance with discovery, the Court entered judgment against Siano in the amount of $170,000.00 plus interest at the legal rate of 8% from November 12, 1997.
On March 18, 1999, Phillips filed a praecipe instructing the Sheriff of Sussex County to levy and sell goods and chattels of Siano located at Anthony Sons Lawn Care, Inc, RD 1, Box 255, Lewes, DE 19958. On April 1, 1999, the Sheriff levied on property which included the Truck.
Subsequent thereto, Siano moved that the Court vacate the judgment against him. The Court stayed the Sheriff's sale pending a decision on the motion. Ultimately, the Court denied the motion to set aside the default judgment. Phillips v. Siano, Del. Super., C.A. No. 97C-11-010, Graves, J. (October 29, 1999)
Thereafter, in a praecipe filed on November 9, 1999, Phillips instructed the Prothonotary to issue a venditioni exponas to the Sheriff of Sussex County to sell goods and chattels of Siano located at Anthony Sons Lawn Care, Inc., RD 1, Box 255, Lewes, DE 19958. On February 17, 2000, the Sheriff's sale took place. The sale did not include the Truck.
On February 18, 2000, Phillips filed an alias praecipe instructing the Prothonotary to issue an alias fi fa to the Sheriff of Sussex County to levy, seize, impound and sell all remaining goods and chattels of Siano located at Anthony Sons Lawn Care, Inc., RD 1, Box 255, Lewes, DE 19958 or at Sea Bright Condo., Old Landing Road, Rehoboth Beach, DE 19971. The Sheriff levied upon numerous items of property and a sale was scheduled, for April 15, 2000. The Sheriff seized the Truck.
On March 29, 2000, Taylor filed the motion to quash. Plaintiff and Taylor agreed to a stay of the sale pending resolution of the motion. At the hearing on the motion, the following additional facts were established.
After the levy on the vehicle was made in April, 1999, Siano sold the Truck for $1,500.00 to Taylor. Taylor paid Siano for the Truck by paying a repair bill which Siano owed to Coastal Towing. Siano and Taylor then went to the Department of Motor Vehicles on September 17, 1999. Records at the Department of Motor Vehicles did not show any lien on the Truck. Even though the Truck remained titled in Keith Phillips' name, Siano and Taylor were able to transfer the title to Taylor.
Taylor spent another $2,000.00 on the Truck for repairs. He used it in his business, TNT Landscaping, until the Sheriff of Sussex County impounded it.
The factual issue in dispute is whether Taylor knew of the Sheriff's levy on the truck before he purchased it from Siano. Taylor maintains he is a bona fide purchaser for value and holds title to the Truck free and clear of any lien created by the levy. Plaintiff disputes Taylor's status as a bona fide purchaser for value.
Taylor, who had worked for Siano in his landscaping business, admitted during his testimony that he knew Siano had "problems" with plaintiff, but denied knowing anything about a lawsuit between them. He also denied knowing about the Sheriff's levy on the Truck before he purchased it. Taylor did testify that Siano had told him that "everything had been taken care of" regarding the Truck.
Doug West, who works with Taylor in his landscaping business, testified that Taylor never discussed the matter with him.
Two witnesses offered testimony that, if believed, showed that Taylor knew about the levy on the Truck before he purchased it.
Andrew Hritz ("Hritz"), who worked for both Keith Phillips and Siano, testified as follows. He had a conversation with Taylor in Siano's driveway about the levy. Taylor told him that he was going to buy the Truck from Siano. Hritz then told Taylor that everything Siano owned was being levied upon. Taylor responded by saying that Siano told him that "everything was taken care of."
Joan Wendler ("Wendler") , who is a secretary for William E. Wright, Esquire, plaintiff's attorney, testified that she heard Taylor tell Wright that he knew about the levy on the Truck, but that Siano had told him that "everything had been taken care of." Taylor denies this, but does admit that he told Wright that Siano had told him that "everything had been taken care of."
DISCUSSION
As is frequently the case, the testimony is in conflict. In order to resolve the conflicting testimony, the Court has to judge the credibility of the witnesses by looking at, among other things, the motives affecting the witnesses, and each witness' bias, prejudice, or interest in the outcome of this litigation.
Taylor clearly has the most at stake in this litigation. He has spent over $3,500.00 on the Truck. Hritz, on the other hand, appears to have no interest at all in the outcome of this case. Wendler, even though she works for plaintiff's attorney, certainly has no direct interest in the outcome of this litigation. Also noteworthy is the fact that the testimony of Hritz and Wendler is wholly consistent.
In order to believe Taylor, the Court would have to conclude that Hritz and Wendler, two witnesses with no connection to each other and no interest in the outcome of this litigation, have offered false testimony. The Court is not prepared to do this. Moreover, the fact that Taylor admits that Siano told him that "everything had been taken care of" supports the testimony of Hritz and Wendler. It makes perfect sense that Taylor, who admittedly was aware of the problems between plaintiff and Siano, went to Siano for an explanation. Siano told Taylor that "everything had been taken care of", and Taylor then purchased the Truck.
I conclude that Taylor had at least constructive, if not actual, notice of the Sheriff's lien. Consequently, Taylor was not a bona fide purchaser for value.
Because I so rule, no need exists to resolve the issue of whether a levy vests in the Sheriff paramount title which even a bona fide purchaser for value without knowledge cannot preempt. I note, however, that the answer to this question is not clear. See 6 Del. C. § 2-403; 10 Del. C. § 5081; Flemming v. Thompson, Del. Supr., 343 A.2d 599 (1975) ("Flemming") . In Flemming, the Supreme Court held that 6 Del. C. § 2-403, which allows a person with voidable title to transfer good title to a bona fide purchaser for value, supersedes the portion of 10 Del. C. § 5081 specifying that a lien arises upon delivery of the writ, and it concluded that the Sheriff's lien does not defeat the rights of a bona fide purchaser for value if the bona fide purchaser for value purchased the property before the Sheriff executed the writ. The Court in Flemming, however, did not examine what occurs where the Sheriff has levied on the property and then the property is sold to a bona fide purchaser for value. The courts have spoken of the Sheriff as having vested in him or her a "special property."Short v. Landes, Del. Super., 39 A.2d 17, 19 (1944); Cochran v. Clements, Del. Super., 183 A. 632, 633 (1936); Polite v. Jefferson, Del. Super., 5 Harr. 388, 389 (1852) . This "special property" continues even if the Sheriff allowed the debtor to maintain possession of the property after the levy was executed. Polite v. Jefferson, 5 Harr. at 389. Case law establishes that a bona fide purchaser for value buys the property subject to the lien. Doeber v. Thackston, supra; Cubbage v. Clements, Del. Super., 14 A.2d 378 (1940); Cochran v. Clements, 183 A. at 634; Polite v. Jefferson, supra. In light of this legal ambiguity, those judgment creditors who allow property to remain in the debtor's hands after a Sheriff's levy run a risk of losing their lien to a bona fide purchaser for value.
Therein, it is provided in pertinent part:
(1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased. A person with voidable title has power to transfer a good title to a good faith purchaser for value.
Therein, it is provided:
An execution shall not bind goods and chattels until it is delivered to the sheriff or other proper officer to be executed. An execution shall, from the time it is so delivered, bind all the goods and chattels of the defendant within the bailiwick, which shall be actually levied upon within 60 days thereafter. No levy upon goods and chattels, made by virtue of execution process, shall be of any force or effect as against a subsequent execution levied upon the same goods and chattels for a longer period than 3 years from the making of such first mentioned levy.
I also take this opportunity to call attention to the fact that the Sheriff is liable to the creditor for any taken property since "after the levy he is responsible for the safe keeping and production of all the goods, and for their value at a fair public sale.... If any of the property have been disposed of or wasted by the defendant, the sheriff is bound to make good the deficiency." Janvier v. Vandever, Del. Super., 3 Harr. 29, 34 (1839). Accord Short v. Landes, 39 A.2d at 20.
CONCLUSION
Based on the foregoing, I conclude that Taylor purchased the Truck subject to the Sheriff's lien. Consequently, I deny the motion to quash and order that the stay of the sale of the Truck be lifted and that the sale proceed.