IN THE SUPERIOR COURT OF THE STATE OF DELAWARE IN AND

FOR NEW CASTLE COUNTY
PROFAST COMMERCIAL
FLOORING, INC., )
)
Plaintiff, )
)
) C.A. No. NlSC-09-204 FWW
v. )
)
LANDIS, LTD., )
)
Defendant. )

Submitted: July 19, 2016
Decided: August 29, 2016

Upon Plaintiff ProFast Commercial Flooring’s Motion for Surnmary Judgment
GRANTED

Patrick Scanlon, Esquire, Darlene Wyatt Blythe, Esquire, Law Offlces of Patn`ck
Scanlon, P.A., 203 NE Front Street, Suite 101, Milford, Delaware 19963;
Attorneys for Plaintiff.

Douglas A. Shachtman, Esquire, The Shachtman Law Firm, 1200 Pennsylvania
Avenue, Suite 302, Wilmington, Delaware 19806; Attorney for Defendant.

WHARTON, J.

.(M
This 29th day of August, 2016, upon consideration of Plaintiff ProFast
Commercial Flooring’s Motion for Summary Judgment, Defendant Landis’s
Response, Plaintiffs Memorandum to the Court regarding its Motion for Summary
Judgment, Defendant’s Sur Reply in Opposition to Plaintiff s Motion for Summary

Judgment, and the parties’ supplemental correspondence, it appears to the Court

that:
l. Plaintiff had an account With Defendant for the sale of materials

Defendant did not make the necessary payments on this account, and
Plaintiff subsequently filed suit against Defendant in the U.S District
Court for the Eastern District of Pennsylvania for breach of contract.l
Thereafter, Plaintiff and Defendant entered into a Settlement
Agreement resulting in a dismissal of that action.2 Defendant
breached the Settlement Agreement, however, by not making monthly
payments and by not providing financial reporting.3 As a result of this
breach, Plaintiff filed suit in this Court and asserts that Defendant

currently owes it the principal amount of $51,619.91 plus

1Pl.’s Mot. Summ. J., D.I. 6, 11 2.
2 Id. ami 3.
3 Id. ami 6.

41d.ar'|17.

prejudgment and postjudgment interest, costs, and attorney’s fees.4
Plaintiff argues that it is entitled to summary judgment because the
undisputed facts show that Defendant breached the Settlement
Agreement. Because Plaintiff argues that it is entitled to summary
judgment, Plaintiff also argues that it is entitled to “reasonable”
attomey’s fees plus costs under the Settlement Agreement.5 Plaintiff
argues that 15 percent of the principal plus interest due Would be
reasonable because it Would be lO percent less than the amount agreed
upon by Plaintiff’ s counsel and the collection agency in their
Contingency Fee Agreement.6 Plaintiff s counsel states that he has
been Working on this claim since October 29, 2013, and despite the
fact that time records Were not kept, other documentation shows the
reasonableness of the fees sought.7

Defendant does not argue that a genuine issue of material fact exists.8
Rather, Defendant argues that Plaintiff is not entitled to summary
judgment because Plaintiff is a foreign corporation that has not

registered With the Secretary of State under 8 Del. C. § 371.9 Because

5 Pl.’s Aff., D.I. 16.

61d_at1114.
7 1a at jj 12.

8 See Def.’s Resp. Mot. Smnm. J., D.I. 9.
9 fd. at1H[ 11~12. According to 8 De:'. C. § 37l(b), “No foreign corporation shall do any business

3

Plaintiff has not registered with the Secretary of State under 8 Del. C.
§ 37 l, Defendant asserts that 8 Del. C. § 383 prohibits Plaintiff from
maintaining this action.10 Although Defendant acknowledges that
Plaintiff was permitted to file suit, Defendant asserts that the suit may
not move forward until the foreign corporation is in compliance with
all of the statutory requirementsll

4. If the Court were to grant Plaintiff’ s Motion for Summary Judgment,
however, Defendant argues that Plaintiff should not be awarded
attomey’s fees because the requested amount is unreasonable12
Defendant argues that Plaintiff’ s Affidavit does not explain why 15
percent of the amount due of the principal plus interest is reasonable13
Defendant claims that Plaintiff’s “History Notes” of work done on this
case are indeterminate and speculative, and as a result, the Court

cannot adequately assess the reasonableness of the requested

in this State, through or by branch offices, agents or representatives located in this State, until it
shall have paid to the Secretary of State of this State for the use of this State, $80, and shall have
filed in the office of the Secretary of State . . . .”

10 Under 8 Del. C. § 383(a), “A foreign corporation which is required to comply with §§ 371 and
372 of this title and which has done business in this State without authority shall not maintain
any action or special proceeding in this State unless and until such corporation has been
authorized to do business in this State and has paid to the State all fees, penalties and franchise
taxes for the years or parts thereof during which it did business in this State without authority.”
1113.1.9,1111.

12 1a.ar1['[|14-15.

‘3 Pl.’sArf., D.I. 16,111[15_16.

14 ld.

amount.14

The Court will grant a motion for summary judgment When, in
viewing the record in the light most favorable to the non-moving
party, the movant has shown that there are no material issues of fact
and that the movant is entitled to judgment as a matter of laW.15 If a
motion for summary judgment is properly supported, then the burden
shifts to the non-moving party to demonstrate that there are material
issues of fact.16

In Coyle v. Peoples, a real estate broker’s successor in interest brought
an action against the defendants for an amount owed under a contract
for sale commissions17 The defendants claimed that the broker’s real
estate company Was an unqualified foreign corporation, and therefore,
it could not enforce the contract for commissions.18 Although the
plaintiff acted as a real estate broker in Delaware, the plaintiff did so
only in conjunction With a licensed Delaware broker.19 The Court

found that this one transaction Was not enough to consider the

15 Superior Ct. Civ. R. 56(c); Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).
16 State v. Regency Group, Inc., 598 A.Zd 1123, 1129 (Del. Super. l99l).
11 349 A.zd 870, 871 (Del. super. 1975).

18 1a at 872.
19 Id. at 873.

corporation as “doing business” under Section 371 .20 In so finding,
the Court noted that “[i]t is clear that s 383 is not applicable if the

corporation is not ‘doing business’ in Delaware for purposes of s 383

and is thus not required to register under 8 Del. C. s 371.”21

7. Plaintiff is not subject to Section 383 because Plaintiff has never
engaged in business in Delaware. As the case law makes clear,
Section 371 requires all corporations that Want to engage in business

in this State to pay a certain fee and to file With the Secretary of State.

If a corporation does not do so, then that corporation is “penal[ized]”ZZ

from maintaining an action in this State under Section 383. However,
if the corporation has never done business here, then the foreign
corporation is not required to file With the Secretary of State under
Section 371 , thus making Section 383 inapplicable23 In this case,

Plaintiff has never done business in Delaware_it does not have any

20
Id.
21 Ia’. See also Spam`sh Tiles, Lta'. v. Hensey, No. 05C-07-025 RFS, 2009 WL 86609, at *3 (Del.

Super. Jan. 7, 2009) (“It has not been contested from the filing of this complaint on July 14,
2005, With over two years for discovery, that Spanish Tiles Was doing business in Delaware.
Section 383 does not apply if a corporation is not ‘doing business’ in Delaware.”).

22 See Farmers Bank v. Sinwellan Corp., 367 A.Zd 130, 182 (Del. 1976).

23 Defendant relies heavily on Hudson Farms, Inc. v. McGrellis, 620 A.Zd 215 (Del. 1993), to
argue that summary judgment must be denied because Plaintiff cannot “maintain” the suit until
Plaintiff has registered However, Defendant has confused the issue in that case. There, the issue
Was whether a foreign corporation must meet the registration requirements of Section 371 before
filing suit, The Delaware Supreme Court held that a foreign corporation can f11e suit, but the suit
cannot be maintained until the corporation has properly registered. Here, however, the “file” and
“maintain” distinction in McGrellis is irrelevant because Section 383 is inapplicable When a
foreign corporation has never done business in the State.

6

employees, stores, or offices here.24 Therefore, Plaintiff can seek
summary judgment in this case Without any statutory limitations.

8. Viewing the facts in the light most favorable to Defendant, the Court
finds that no material issue of fact exists. Because of this finding,
Plaintiff is entitled to judgment as a matter of law.

9. Plaintiff has submitted a request for attomey’s fees, and Defendant
has opposed this request. The Court has decided to conduct a hearing

on this issue at Which it intends to determine the lodestar amount of

Plaintiff’ s attomey’s fees,25

Therefore, Plaintiff ProFast Commercial Flooring’s Motion for Summary
Judgment is GRANTED in all respects except for Plaintist request for attomey’s

fees. The Court Will hold a hearing regarding attomey’s fees,

IT IS SO ORDERED.

 

24 Pl.’s Mem., D.I. 15. The transaction at issue here involved Plaintiff sending materials to

Defendant in Pennsylvania. Id.
25 Eli¢e meaning Co., lnc_ v. Capel, No. 690-N, 2006 WL 4782274, at *2 (Del. ch. Nov. 20,

2006); Townsena' Bros., Inc. v. Pippin, 1986 WL 8014, at *4 (Del. Super. June ll, 1986).
7

