Opinion
C.A. No. 05C-06-009-RFS.
Date submitted: April 28, 2006.
Date decided: July 31, 2006.
1 THE CIRCLE, SUITE 2, SUSSEX COUNTYCOURTHOUSE, GEORGETOWN, DE 19947.
Craig A. Karsnitz, Esquire Young, Conaway, Stargatt Taylor, Georgetown, DE.
Mark D. Olson, Esquire Wilson Halbrook Bayard, Georgetown, DE.
Dear Counsel,
This is my decision regarding Defendants John E. Willey, II and Peninsula Oil Co., Inc.'s Motion for Summary Judgment. For the reasons set forth herein, the Motion is denied.
BACKGROUND
This case is a dispute between Plaintiff, Evelyn Willey ("Evelyn"), and her stepson, John E. Willey, II ("Defendant"). Plaintiff is the widow of Defendant's father, John E. Willey, Jr. ("Willey, Jr."). Willey, Jr. was the President of Peninsula Oil Company Inc., ("Peninsula Oil"), until his death. Since his father's death, Defendant has been the President of Peninsula Oil. There is also a dispute between Plaintiff and Peninsula Oil.
Around November of 2003, Willey, Jr. received a distribution of over $300,000 from Peninsula Oil. Simultaneously with the deposit of this money into Willey, Jr. and Evelyn's joint checking account, Evelyn wrote a check to the Defendant for $206,000. The purpose of this transaction was to help facilitate the Defendant purchasing real estate in the Lewes area. The dispute between Evelyn and Defendant surrounds the question of whether or not this money constituted a loan or a gift.
The dispute between Evelyn and Peninsula Oil concerns loans made to the Peninsula Oil by Willey, Jr., during his lifetime. The balance owed on these loans is now in dispute.
STANDARD OF REVIEW
Summary judgment cannot be granted where material issues of fact exist; only a jury can resolve them. Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979). The moving party must establish the lack of material factual issues. Id. Should the moving party establish the absence of material factual issues, the nonmoving party must prove the presence of such issues in order to prevent summary judgment. Id. at 681. In consideration of a motion for summary judgment, the evidence is viewed in a light most favorable to the nonmoving party. Id. at 680. Where the moving party has produced sufficient evidence under Superior Court Civil Rule 56, the non-moving party may not rely solely upon her pleadings. Id. Evidence must be produced showing a material issue of fact. Steffen v. Colt Industries, 1987 WL 8689, *3 (Del.Super.Ct.) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986)). Summary judgment is not appropriate if the Court determines that it does not have sufficient facts to enable it to apply the law. Reese v. Wheeler, 2003 WL 22787629, * 2 (Del.Super.Ct.) (citing Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del. 1962)).
DISCUSSION
The two claims arise from similar transactions but are distinguished by the relationships between the parties. As such, the claims against each defendant must be discussed in turn.
1. Defendant John E. Willey, II
The parties disagree as to whether or not the $206,000 received by the Defendant from the joint account of Evelyn and Willey Jr. was a gift or a loan. The presumption in Delaware, as Defendant correctly points out, is that transfers from parent to child are presumed to be gifts, and the burden is on the challenging party to overcome this presumption.
Plaintiff's argument is that this presumption is overcome based on the wording of a letter sent by Defendant's attorney, as well as the fact that Defendant never contested that the money was a loan when it was presented to him that way by Evelyn's accountant shortly after the death of Willey Jr.
However, Defendant refutes the claim that the circumstances surrounding the letter sent by Plaintiff's accountant constitutes an admission. Yet, Defendant does not address the argument that the letter from his counsel dated December 16, 2004 ("the December Letter"), to Plaintiff is an admission that the sums are a loan. The letter states in pertinent part:
I represent John E. Willey, II as Executor of the Estate of John E. Willey, Jr.
I understand there is a disagreement between you and the Executor involving loans made by the late Mr. Willey to Peninsula Oil Company and to John E. Willey, II personally.
Defendant admitted in his deposition that he had read the December Letter carefully and also that he had authorized the sending of the letter. This Court has ruled in Jackson v. Rotach, 2000 WL 1211516, at *6 (Del.Super.), that "the words of attorneys carry consequences." The decision in Rotach gives an in depth explanation of how an attorney can bind a client. Although that case was a civil case involving two separate car accidents and subsequent settlement and trial with two different parties, the pertinent circumstances are similar. The Court wrote that:
Counsel acknowledged that he was Jackson's authorized agent, shared the letter with her, and sent plaintiff a copy. These points were not disputed by Jackson. . . . The sentence in the Progressive letter was Jackson's B stating she was able to move about doing all her normal activities pain free before the second accident. Id.
In the present case, the situation is similar, Counsel for the Defendant sent a letter, as Defendant's authorized representative, after reviewing the letter with the Defendant. As such, the sentence in the December Letter is the Defendant's, calling the disputed amounts a loan and may be considered a substantive admission.
Therefore, a material question of fact is presented which a jury must resolve. As such, this issue is not suitable for resolution on a motion for summary judgment, and the Motion of Defendant, John E. Willey, II, is denied.
2. Defendant Peninsula Oil
Both parties agree that there is a substantial question of fact concerning the issue in contention between Evelyn and Peninsula Oil. Evelyn states that the balance outstanding on the loans made by Willey Jr. to Peninsula Oil is approximately $40,000. Peninsula Oil claims that the amount is closer to $25,000.
There is also a fact question as to where the funds for the loans to Peninsula Oil originated. However, there is not sufficient evidence in the record on this issue for the Court to be able to apply the law.
Consequently, this issue is also not suitable for resolution on a motion for summary judgment. These factual questions must be decided by a jury. The Motion of Defendant, Peninsula Oil, is denied.
CONCLUSION
Considering the forgoing, Defendants John E. Willey, II and Peninsula Oil Co., Inc.'s Motion for Summary Judgment is denied.