SUPERIOR COURT

OF THE
STATE OF DELAWARE
ABIGAIL M. LEGROW LEONARD L. WILLIAMs JUsTIcE CENTER
JUDGE 500 N. KlNG STREET, SUITE 10400

WILMINGTON, DELAWARE 19801
TELEPHONE (302) 255-0669

Submitted: July 13, 2017
Decided: July 18, 2017

Donald L. Logan, Esquire Samuel L. Guy, Esquire
Victoria K. Petrone, Esquire Samuel L. Guy, Attorney at LaW
Logan & Petrone, LLC P.O. BoX 25464

100 Commons Blvd., Suite 300 Wilmington, DE 19899

NeW Castle, DE 19801

RE: SC&A Construction, Inc. v. Charles Potter, Jr. et al.
C.A. No. N12L-09-022 AML

Dear Counsel,

On June 26, 2017, the defendants, Charles Potter, Jr. and Velda C. Jones-
Potter (collectively, the “Potters”), filed a Motion for a Stay of Execution of
Judgment Pending Appeal (the “Motion to Stay”). After nearly five years of
litigation in multiple forums, this Court entered judgment and a mechanic’s lien in
favor of the plaintiff, SC&A Construction, Inc. (“SC&A”), and against the Potters’
property. The Potters are appealing that judgment and lien. In my View, the

Motion to Stay is not supported by the analysis required by Kirpat, Inc. v.

SC&A Construction, Inc. v. Potter, et al.
July 18, 2017
Page 2

Delaware Alcoholic Beverage Control Corm'r¢ission1 and I deny the stay on that
basis.
BACKGROUND

The factual background of this case is set forth at length in my
Memorandum Opinion dated May 31, 2017 (the “May 2017 Opinion”), as Well as
in a previous decision of the Court of Chancery.2 lt Will not be repeated here,
except as necessary for the pending Motion to Stay.

My May 2017 Opinion granted SC&A’s Motion to Enter Arbitration Award
as a Final Mechanic’s Lien Judgment and denied the Potters’ request to amend
their answer and affidavit of defense. After denying the Potters’ motion for
reargument, I entered an order (the “Mechanic’s Lien Order”) on June 21, 2017,
Which entered judgment in rem in the amount of $116,364.00, plus post-judgment
interest, and placed a lien for that amount on the Potters’ house and land. It is
execution of this judgment and lien the Potters seek to stay pending resolution of
their appeal of the Mechanic’s Lien Order.3

The procedural history of the parties’ dispute leading up to this point is

complicated and not directly related to the Motion to Stay. Sufflce to say, the

 

1 741 A.2d 356 (Del. 1998).

2 SC&A Constr., Inc. v. Potter, 2016 WL 70901 (Del. Ch. Jan. 6, 2016).

3 The Potters filed a notice of appeal on July 6, 2017. That Notice of Appeal refers only to the
Mechanic’s Lien Order and not to the May 2017 Opinion or the letter opinion denying the
Potters’ motion for reargument See Potter v. SC&A Constr., Inc., No. 274, 2017 (Del. July, 6,
2017).

SC&A Construction, Inc. v. Potter, et al.
July 18, 2017
Page 3

Potters entered into a contract With SC&A for improvements to the Potters’ home.
Disputes arose regarding those improvements and SC&A filed a mechanic’s lien
action in this Court. The parties’ disputes ultimately vvere resolved in arbitration,
pursuant to an arbitration clause in the parties’ contract. The mechanic’s lien
entered by the Court relates to amounts the arbitrator determined the Potters owed
SC&A for improvements to the Potters’ property.

ln addition to this litigation, the associated arbitration, and proceedings in
the Court of Chancery to confirm the arbitration award, the Potters also have an
ongoing dispute With SC&A before the Department of Licenses and Inspections of
the City of Wilmington (the “L&I Department”). In support of their Motion to
Stay, the Potters filed a recent letter the L&I Department issued, purportedly
identifying various deficiencies in the construction of the Potters’ roof.4 The
Potters contend these deficiencies are attributable to SC&A and have affected both
their property value and their ability to post a bond in support of the Motion to
Stay.
ANALYSIS

Delavvare Supreme Court Rule 32 governs motions to stay pending appeal.5
Such motions must be made to the trial court in the first instance, Which has

discretion to grant such a stay provided the appellant gives sufficient security as

 

4 D.I. 93
5 See super. Ct. Civ. R. 62(d).

SC&A Constructz'on, Inc. v. Potter, et al.
July 18, 2017
Page 4

required by the Delaware Constitution.6 In exercising its discretion, the court
considers four factors: (1) “a preliminary assessment of likelihood of success on
the merits of the appeal”; (2) “Whether the [movant] Will suffer irreparable injury if
the stay is not granted”; (3) “Whether any other interested party Will suffer
substantial harm if the stay is granted”; and (4) “Whether the public interest Will be
harmed if the stay is granted.”7

The Potters contend their arguments on appeal have a good likelihood of
success and that they Will suffer irreparable injury if the stay is not granted because
“[t]he judgment is a substantial sum Which [the Potters] Will not likely be able to
recover” if they prevail on appeal.8 The Potters also argued at the hearing on the
Motion to Stay that, if forced to pay the judgment or post a bond While the appeal
is pending, they Will be unable to afford the repairs to their roof identified as
necessary by the L&I Department. If they do not pay the judgment, they argue,
they may face a sheriff’s sale With the property fetching less than full value due to
the ongoing roof issues.

As to the possibility of harm a stay might cause SC&A, the Potters argue

SC&A does not face any substantial harm because “[t]here is no indication that a

 

6 supr. Ct. R. 32(3).
7 Kirpar, Inc., 741 A.2d at 357.
8 Mot. to Stay il 4.

SC&A Construction, Inc. v. Potter, et al.
July 18, 2017
Page 5

stay Will detrimentally impact [SC&A’s] economic position.”9 A stay, the Potters
further contend, is favored by public policy because the judgment already is
secured through the mechanic’s lien,10 and because the L&I Department has
ordered SC&A to obtain necessary permits and complete an inspection, an order
the Potters contend SC&A has ignored.

The Potters also argue that, if the Court stays execution pending appeal, no
additional security or bond should be required because the mechanic’s lien serves
the purpose usually served by a bond. The Potters, Without citing any record
support, assert “[t]he value of properties in [the Potters’] neighborhood far exceeds

”11 Finally, the Potters urge, if the Court

the value of the mechanic[’]s lien.
concludes the mechanic’s lien is not sufficient, it should reduce the amount of the
bond to an unspecified figure less than the total judgment.

SC&A argues, on the other hand, that the Potters have failed to demonstrate
any of the Kirpat factors Weigh in favor of a stay of execution. Even if the Court
concludes a stay is Warranted, SC&A argues the mechanic’s lien is not a sufficient

substitute for a supersedeas bond and that the Potters should be required to post a

bond in the full amount of the judgment in order to obtain a stay.

 

916-1 alj 5_

“’ la 31116.

ll fd. at 1[ 8. At oral argument, the Potters provided the Court With a 2011 letter regarding
“Property Value/Aesthetics,” but did not provide any explanation of how the letter relates to their
arguments in this Motion. See D.I. 95.

SC&A Construction, Inc. v. Potter, et al.
July 18, 2017
Page 6

In my view, the Potters have not established that the relevant factors Weigh
in favor of a stay. In exercising its discretion to grant or deny a stay, this Court
must “consider all the relevant [Kirpat] factors together to determine Where the
appropriate balance should be struck.”12 The first Kirpat factor, the moving party’s
likelihood of success on appeal, cannot be interpreted “literally or in a vacuum,”
because to do so Would require a trial court “first to confess error in its ruling.”13
Accordingly, if the other three factors “strongly favor interim relief,” a stay should
be granted provided the moving party has presented on appeal “a serious legal
question that raises a ‘fair ground for litigation and thus more deliberative
investigation.”’14

In my view, the Potters present one legal question that raises a fair ground
for litigation, namely Whether this Court erred in dismissing the Potters’
counterclaim in favor of arbitration. The other three Kirpat factors, however, do
not strongly favor interim relief in this case. The irreparable harm the Potters
identify is the possibility they Will have to pay the judgment or face sheriff’ s sale

during the pendency of the appeal, Which they argue Will present a financial

hardship to them. The Potters may avoid sheriff’ s sale, however, by paying the

 

12 Kirpat, Inc., 741 A.2d 356. (citations omitted).

'3 Id. at 357-58 (citing Evans v. Buchanan, 435 F. supp. 832, 843-44 (D. Dei. 1977)).

14 Kirpat, Inc., 741 A.2d at 358 (quoting Wash. Metro. Area Transit Comm ’n v. Holiday Tours,
Inc., 559 F.2d 841, 844 (D.C. Cir. 1977)).

SC&A Construction, Inc. v. Potter, et al.
July 18, 2017
Page 7

judgment, which they have not even argued they would be unable to do.15 A
payment of money is not irreparable harm, even if it will present a financial
hardship for the Potters, and the Potters have identified absolutely no facts
suggesting SC&A would not be able to repay any monies owed if the Potters
prevail on appeal.16

In addition, the Potters’ argument that SC&A is in a good financial position
and will not suffer economic harm if collection is delayed ignores the substantial
delay SC&A already has endured in this case, due in no small part to numerous
frivolous arguments the Potters raised, and continue to raise, at all stages of this
litigation. SC&A has incurred substantial attomeys’ fees through several stages of
litigation and has been almost completely successful to date. The Potters have not
demonstrated that SC&A’s financial condition will not suffer if execution of the
judgment is delayed further.

Finally, the Potters’ contention that public policy supports a stay is
unconvincing The Potters’ argument in their brief regarding public policy relates

to the purpose of a supersedeas bond and whether a mechanic’s lien is sufficient

 

15 Given their argument that there is substantial equity in their home, it seems likely the Potters
could raise the necessary funds to pay the judgment

16 See Mountaire Farms, Inc. v. Pitts, 2001 WL 789650, at *1 (Del. Super. June 8, 2001)
(holding the possibility that funds paid to appellee would not be recoverable if appellant was
successful on appeal did not constitute irreparable harm because methods existed to recover any
benefits paid).

SC&A Construction, Inc. v. Potter, et al.
July 18, 2017
Page 8

security for the judgment17 This argument does not relate to public policy. At
oral argument, the Potters pointed to their disputes with SC&A before the L&I
Department, but those disputes are not related to this appeal and therefore are not
relevant to this Motion. In my view, public policy would be harmed by a stay in
this matter, which is a relatively simple breach of contract action that has been
pending for almost five years and has taxed the parties’ and several courts’
resources.

Balancing all relevant factors, I conclude a stay of execution is not
warranted in this case.18 Accordingly, the Potters’ Motion for a Stay of Execution

of Judgment Pending Appeal is DENIED. IT IS SO ORDERED.

Yours very truly,

M:£/

Abigail l%i. LeGrow, Judge

Original to Prothonotary

 

17 Mot. to Stay 11 6.
18 Having denied the stay, l need not reach the issue of what constitutes sufficient security.

