IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ASPEN PROPERTIES GROUP,
LLC AS TRUSTEE FOR ASPEN _— : C.A. No. K19L-04-014 WLW
G REVOCABLE TRUST, :
Plaintiff,
V.
ESTATE OF SHEILA L. JOHNSON- :
BROWN c/o RICHARD F. BROWN :
Personal Representative, and
RICHARD F. BROWN, Heir,
Defendants.
Submitted: March 2, 2020
Decided: June 18, 2020
ORDER
Defendants’ Motion for Judgment on the Pleadings
Denied.
Catherine Di Lorenzo, Esquire and Darlene Wyatt Blythe, Esquire of Stern &

Eisenberg Mid-Atlantic, P.C., Newark, Delaware; attorneys for Plaintiff.

Frances Gauthier, Esquire of Legal Services Corporation of Delaware, Wilmington,
Delaware; attorney for Defendants.

WITHAM, R.J.
Aspen Properties Group, LLC v. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

INTRODUCTION

Presently before the Court is Defendant’s Motion for Judgment on the
Pleadings. After considering Defendant’s Motion, Plaintiff's Response in Opposition,
the applicable legal authority, and the record of the case, it appears to the Court that:

FACTUAL AND PROCEDURAL HISTORY

1. Sheila L. Johnson-Brown passed away on October 21, 2016.' For several
months before her death, her husband, Richard F. Brown, Defendant in this case,
looked after her and handled her financial affairs.” Defendant knew that Mrs. Johnson-
Brown obtained a loan in the amount of $165,830 (“First Mortgage”) from Dollar
Mortgage Corporation on April 6, 2005, which was secured by a mortgage on the
couple’s house located at 150 Greens Branch Lane, Smyrna, Delaware.’ Defendant
made payments on the loan during Mrs. Johnson-Brown’s illness and after her death.*
In 2018, Defendant received some correspondence regarding another loan of which
he had no knowledge.”

2. On May 7, 2019, Defendant was served a Complaint filed by Plaintiff.° The

 

' Defendant’s Motion for Judgment on the Pleadings (““Def. Mot”) § 1.
? Id. at J 2.
* Id. at J 3.
‘Td. at 4 4.
> Id. at 95.

Id. at § 6.
Aspen Properties Group, LLC v. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

Complaint stated that on April 6, 2005, Mrs. Johnson-Brown also obtained another
loan in the amount of $71,070 (“Second Mortgage”) secured by the couple’s home
located at 150 Greens Branch Lane, Smyrna, Delaware.’ This mortgage was recorded
with the Kent County Recorder of Deeds on May 24, 2005.* The Complaint further
stated that the loan was in default, that Plaintiff sent Defendant a Notice of Intent to
Foreclose on October 2, 2018, and that Defendant had not cured the default.’ Dollar
Mortgage Corporation was the original lender of the second loan.'° A mediation was
held on July 1, 2019.'’ During the mediation, Defendant claimed that Mrs. Johnson-
Brown never received any funds in connection with the Second Mortgage.’* On July
19, 2019, Plaintiff emailed Defendant several documents related to the Second
Mortgage."
PARTIES’ CONTENTIONS
3. Defendant argues that Plaintiff never made advances to Mrs. Johnson-Brown

in connection with the Second Mortgage, and, therefore, cannot foreclose on the

 

"Td.

* Td.

* Compl. § 4.

'° Id. at | 7. The loan was subsequently assigned to Plaintiff.
"Td. at 911.

2 Td.

3 Id. at | 12.
Aspen Properties Group, LLC v. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

property.'* Defendant further claims that Mrs. Johnson-Brown never received any
correspondence from Plaintiff or its predecessors prior to 2018.'° Defendant points out
that the financial documents Plaintiff provided support his position that Mrs. Johnson-
Brown never received any funds in connection with the Second Mortgage.’
Furthermore, Defendant claims that Plaintiff never presented an underlying note that
corresponds to the Second Mortgage and never established that the assignment of the
note was proper in this case.’

4. Plaintiff states that discovery and evidentiary hearings are necessary in this
case.’* Plaintiff claims that the borrowers made payments on this loan for some time,
which indicates that the funds were, in fact, disbursed.'’ Plaintiff further points out
that even though Defendant appears to expect Plaintiff's case to be proven in the
pleadings, he does not present any evidence supporting his position that the funds
were never received by Mrs. Johnson-Brown and is just asking the Court to take his

t.29

word for it.’ Plaintiff claims that the loan involved in this case is valid and was

 

4 Id. at 99.

'S Id. at J 10.

'6 Id. at J 13.

7 See Id.

'’ Plaintiff's Response to Motion for Judgment on the Pleadings (“PI. Response”) 13.
9 Td,

° Td.
Aspen Properties Group, LLC vy. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

properly assigned.”' Furthermore, Plaintiff states that a copy of the note was provided
to Defendant’s counsel.” Plaintiff requests the Court to convert Defendant’s Motion
into a motion for summary judgment because Defendant is asking the Court to
consider documents and facts outside of the pleadings.”
STANDARD OF REVIEW
5. Defendant is seeking the dismissal of the Complaint based on the failure to
state a claim upon which relief can be granted. On a motion to dismiss pursuant to
Rule 12(b)(6), the moving party bears the burden of demonstrating that “under no set
of facts which could be proven in support of its [complaint] would the [plaintiff] be
entitled to relief.”** Upon this Court's review of a motion to dismiss, “(i) all well-
pleaded factual allegations are accepted as true; (ii) even vague allegations are well-
pleaded if they give the opposing party notice of the claim; (iii) the Court must draw
all reasonable inferences in favor of the non-moving party; and (iv) dismissal is
inappropriate unless the plaintiff would not be entitled to recover under any
reasonably conceivable set of circumstances susceptible of proof.”

6. Plaintiff is asking the Court to convert the Motion into one for summary

 

2 Id.
2 Id.
2 Id. at § 16.

* Alpha Contracting Services, Inc.,2019 WL 151482, at *1 (Del. Super. Jan. 9, 2019) (citing Daisy
Constr. Co. v. W.B. Venables & Sons, Inc., 2000 WL 145818, at *1 (Del. Super. Jan. 14, 2000)).

* Savor, Inc. v. FMR Corp., 812 A.2d 894, 896-97 (Del. 2002).

5
Aspen Properties Group, LLC y. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

judgment. Summary judgment will be granted when, viewing all evidence in the light
most favorable to the non-moving party, the moving party demonstrates that “there
are no material issues of fact in dispute and that the moving party is entitled to
judgment as a matter of law.” The moving party bears the initial burden of
demonstrating the nonexistence of material issues of fact; the burden then shifts to the
non-moving party to show that there are material issues of fact in dispute.”’ The Court
views the record in the light most favorable to the non-moving party.” If, after
discovery, the non-moving party cannot make a sufficient showing of the existence
of an essential element of the case, then summary judgment must be granted.”
However, when material facts are in dispute, or “it seems desirable to inquire more
thoroughly into the facts, to clarify the application of the law to the circumstances,”
summary judgment will not be appropriate.*”
DISCUSSION

7. Delaware courts generally do not consider documents outside the pleadings

 

*° Enrique v. State Farm Mutual Auto-Mobile Insurance Co., 2015 WL 6330920, at *3 (Del. Super.
Oct. 14, 2015) aff'd 142 A.3d 506 (Del. 2016) (citing Burkhart y. Davies, 602 A.2d 56, 59 (Del.
1991); see also Super. Ct. Civ. R. 56(c)).

*” Bishop v. Progressive Direct Insurance Co., 2016 WL 7242582, at *1 (Del. Super. Dec. 15, 2016).
*® Moore v. Sizemore, 405 A.2d 679, 680 (Del. Aug. 6, 1979).

* Slaubaugh Farm, Inc., et. al. v. Farm Family Cas. Ins. Co., 2018 WL 5473033, at *2 (Oct. 29,
2018) (citing Burhart, 602 A.2d at 59 cert. den., 504 U.S. 912 (1992); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-24 (1986)).

° Ebersole v. Lowengrub, 180 A.2d 467, 468-69 (Del.1962).
Aspen Properties Group, LLC v. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

under Rule 12(b)(6).*' In limited circumstances, the Court may rule on a 12(b)(6)
motion relying on documents outside the pleadings.*” “Courts that have employed this
relatively limited course when deciding a motion to dismiss will only consider those
documents that are the ‘very documents that are alleged to contain the various
misrepresentations or omissions and are relevant not to prove the truth of their
contents but only to determine what the documents stated.’””** Otherwise, when
matters outside the pleadings are presented in support of a motion to dismiss, the
Court may treat the motion as one for summary judgment.** Here, because the
documents are being considered to prove the truth of their content and the fact that
Mrs. Johnson-Brown did not receive any funds in connection with the Second
Mortgage, it is appropriate to consider them as a part of a motion for summary
judgment.

8. Further discovery is appropriate when a motion to dismiss is converted into

35

a motion for summary judgment.” The Court must give an adequate notice of

 

* See Highland Capital Management, LP. v. T.C. Group, LLC., 2006 WL 2128677, at *2-3 (Del.
Super. July 27, 2006); see also Sloan v. Segal, 2008 WL 81513 at *6 (Del. Ch. Jan 3, 2008).

” Highland Capital Management, L.P.2006 WL 2128677, at *2-3.

* Id. at *3 (quoting In re Santa Fe Pac. Corp. S'holder Litig., 669 A.2d 59, 670 (Del.1995) (holding
that a document may not be considered in a motion to dismiss where it “is not put forth by plaintiffs
as an admission of the truth of the facts referred to therein,” but may be used to “establish formal,
uncontested matters’)).

4 See Id.

3% See Id.
Aspen Properties Group, LLC y. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

conversion to the parties.*° “Adequate notice allows parties an opportunity to submit
evidentiary materials to support or oppose summary judgment and protects opposing
parties from what, in effect, is ‘summary judgment by ambush.’”*’ Specifically,
“Superior Court must give the parties at least ten days notice of its intent to convert
a Rule 12(b)(6) motion to dismiss into a Rule 56 motion for summary judgment.””®
The notice is not required only when all parties are aware of the true nature of the
proceedings and have already submitted all evidence related to dispositive issues.*”
This does not appear to be the case here. Therefore, the parties should engage in
discovery to determine whether Defendant is responsible for the loan balance in
connection with the Second Mortgage. The parties have 60 days to submit their

discovery and any additional memoranda for the Court to consider on a Motion for

Summary Judgment.

 

*° Appriva Shareholder Litigation Co., LLC. v. EV3, Inc., 937 A.2d 1275, 1286 (Del. 2007).

*7 Id. (quoting Geco Corp. v. H.D. Smith Wholesale Drug Co., C.A. No. 06-0685, 2006 WL
3359652, at *2 (D.N.J. Nov. 17, 2006).

8 Td. at 1288.

® Td.
Aspen Properties Group, LLC v. Estate of Sheila Johnson-Brown
C.A. No. K19L-04-014 WLW
June 18, 2020

CONCLUSION

9. For the reasons mentioned above, Defendant’s Motion for Judgment on the
Pleadings is DENIED.

IT IS SO ORDERED.

/s/ William L. Witham, Jr.
Resident Judge

WLW/dmh
