Danielle Freeman v. Walter G. Scott ( 2017 )

IN THE COURT OF
COMMON PLEAS FOR THE STATE OF
DELAWARE IN AND FOR NEW CASTLE COUNTY
DANIELLE FREEMAN,
Plaintiff/Cross-Defendant
& Appellant/Cr``oss-Appellee,
v. C.A. N0. CPU4-16-002251
WALTER G. SCOTT,
Defendant/Cross-Plaintiff
& Appellee/Cross-Appellant.
\./\./\./\./VVVVVVVV
MEMORANDUM OPINION AND ORDER
Danielle Freeman Donald L. Gouge, Jr., Esq.
2913 ‘/z N. Van Buren St. 800 N. King Street, Ste. 303
Wilmington, DE 19802 Wilmington, DE 19801
Pro se Appellant Attorneyfor Appellee
RENNIE, J.
This is an appeal from the Justice of the Peace Court concerning a debt action. Trial Was
held on May 8, 2017, and the Court reserved its decision. This is the Court’s Final Order after
consideration of the pleadings, testimony, and documentary evidence introduced at trial.
I. Fa_ct§
On July 7, 2015, Patricia Dennis, then case management specialist for Wilmington
Housing Authority (“WHA”), approved, Appellant/CrosS-Appellee, Danielle Freeman
(“Appellant”) to rent 735 Warner Street, Wilmington, DE 19805 (“the Property”) from,
Appellee/Cross-Appellant, Walter G. Scott (“Appellee”), after the Property passed the initial
inspection.l On August 1, 2015, WHA entered into a Housing Assistance Payments Contract
(“HAP contract”) With Appellee on behalf of Appellant and her two children.2 The HAP
contract ran from August 1, 2015 to August 1, 2016 and stated that WHA Would pay $837.00 of
the contractual $850.00 monthly rent on Appellant’s behalf, unless circumstances required a
readjustment of WHA’s contribution. Donna Starkey Ford, Section 8 Chief at WHA, and
Appellee both signed the HAP contract. On August 17, 2015, Appellant and Appellee entered
into a rental agreement for the Property Which stated that Appellant Was responsible for $13.00
in monthly rent and an $850.00 security deposit.3 The Porter Center, a non-profit agency, paid
$450.00 of the 3850.00 security deposit on Appellant’s behalf, and Appellee allowed Appellant
to move into the Property prior to receiving the remaining $400.00 portion of the security
deposit.
’ Plaintift’ s Exhibit 5. Appellee signed a July 29, 2015 letter indicating that he received this approval Plaintift``s
Exhibit 4.
2 Defendant’s Exhibit l.
3 mainest Exhibit 3; Defendam’$ Exhibit 4.
On November 16, 2015, Appellant wrote Appellee notifying him of problems with the
Property.4 Appellant’s letter alleges there were mold spores in a bathroom’s window, a rusting
bathroom tub, faulty electrical sockets, and a water leak in the washroom that was causing mold.
Appellant threatened to “take action to pursue [her] rights under the terms of [the] lease and any
other applicable laws” if the alleged issues were not corrected5
On January 21, 2016, Kathryn H. McGinnes, Housing Choice Voucher Program
Coordinator at WHA since 1993, was asked by Appellant to perform an annual inspection of the
Property.6 During her inspection, Ms. McGinnes found minor deficiencies in the Property’s
front porch windows, front stove burner, kitchen drawers, and refrigerator door.7 On February
11, 2016, Ms. McGinnes advised Appellee that he had thirty days to correct these minor
violations, and she would return to re-inspect the Property on March 10, 2016. Ms. McGinnes
testified that she was unable to access the Property on March 10th because no one Was present to
let her into the Property; however, she noted that the glass had been replaced in the front porch
windows. Because she was unable to access the unit, the unit failed re-inspection.
In late January, snow had accumulated on the Property’s roof and the roof began to leak
into Appellant’s kitchen. The leak created a hole in a section of the kitchen’s ceiling. lt is
unclear how long Appellant lived with this hole in the ceiling, but in early February she
presented pictures of the damage to Karen Spellman, Deputy Executive Director of WHA.
Thereafter, Ms. Spellman made an administrative decision to immediately terminate the HAP
contract With Appellee. While Ms. Spellman’s directive was shared with WHA employees
“ mannist Exhibit 7.
5 ld.
° mannier Exhibit 6.
7 1d.
Patricia Dennis and Donna Starkey Ford via a conference call, no one at WHA informed
Appellee of the HAP contract’s termination8
On February 23, 2016, because of the purported termination of the HAP contract, Patricia
Dennis issued Appellant a new voucher that would allow her to enter into a new rental
agreement9 On February 29, 2016, Appellant sent WHA her sixty day notice letter, stating that
she was “giving [her] sixty day notice as of [M]arch l[], 2016 and would be vacating this
property by May[] 1st [for] unfit property issues.”10 Nevertheless, in mid-February, Appellee
testified that he wrote Ms. McGinnes a “lengthy” email detailing the steps taken to cure the
various deficiencies, including the hole in the ceiling. Ms. McGinnes testified that she intended
to visit the Property to verify that all the deficiencies were cured. However, in early March,
during further communications between Ms. McGinnes and Appellee_but before Ms.
McGinnes visited the Property_Appellee was verbally informed by Ms. McGinnes that the
HAP contract had been terminated. Appellee expressed confusion upon hearing this news since
Appellant’s furniture was still at the Property when he arrived in late February to correct the
deficiencies Ms. McGinnes was surprised that Appellant had not vacated the Property when the
HAP contract was terminated According to WHA policy, a termination of a HAP contract
divests a tenant of her right to remain in the dwelling.
Notwithstanding the oral notification of termination, Ms. McGinnes informed Appellee
that WHA would continue to make monthly payments as long as Appellant remained at the
8 Ms. Spellman’s decision to immediately terminate the HAP contract directly contravened WHA procedure which
requires a termination by WHA to be for cause. The WHA allows a landlord to correct minor deficiencies in the
rental property before terminating, allows an inspector to deem the deficiencies major and terminate the HAP
contract, or allows the tenant to give sixty day notice of a tenant’s intention to terminate her rental agreement with
the landlord. Ms. Spellman’s failure to notify Appellee of the HAP contract’s termination circumvented WHA
policy because notice is required prior to a non-automatic termination of a HAP contract. Defendant’s Exhibit 1.
9 mannier Exhibit 8.
10 On February 8, 2017, Ms. Ford replied to Appellant, per Appellant’s inquiry, that WHA had received Appellant’s
sixty day notice back in February 2016. Ms. F ord further indicated that WHA interpreted the notice as advising
WHA that Appellant would vacate the Property by May 1, 2016. Plaintiff" s Exhibit 1,
4
Property. She, however, noted that these payments were contingent on Appellee producing proof
to WHA that he had repaired the hole in the Property’s kitchen. After Appellee produced proof
that he had repaired the Property’s kitchen, WHA paid $837.00 towards Appellant’s rent for
February 2016 and continued to pay the readjusted rate of $608.00 for March, April, and May
2016.ll On April 5, 2016, Appellee mailed Appellant a letter detailing Appellant’s unpaid rent
of $897.00 for February, March, and April, and her overdue $400.00 portion of the security
deposit.12 Appellant vacated the Property on May 1, 2016, informing Appellee that she had left
the keys under the Property’s welcome mat.13 After cleaning and preparing the Property for a
new tenant, Appellee was able to re-let the Property on July 1, 2016.
II. Standard of Review
As trier of fact, the Court is the sole judge of the credibility for each fact witness and any
other documents submitted to the Court for consideration.14 If the Court finds that the evidence
presented at trial contains conflicts, it is the Court's duty to reconcile these conflicts_-if
reasonably possible_in order to find congruity.15 If the Court is unable to harmonize the
conflicting testimony, then the Court must determine which portions of the testimony deserve
more weight in its final judgment.16 In ruling, the Court may consider the witnesses’ demeanor,
the fairness and descriptiveness of their testimony, their ability to personally witness or know the
facts about which they testify, and any biases or interests they may have concerning the nature of
1
the case. 7
" mannier Exhibit 1; Defendanvs Exhibit 2.
12 Defendant’s Exhibit 5. Appellant stated at trial that she never received Appellant’s letter.
13 Plaimifrs Exhibit 2.
14 See Nat'l Grange Mut. lns. Co. v. Nelson F. Davis, Jr., et. al., 2000 WL 33275030, at *4 (Del. Com. Pl. Feb. 9,
2000).
15 See id.
16 See id.
17 See sze v. Weszfall, 2008 wL 2855030, at *3 (Del. Com. P1. Apr. 22, 2008).
5
In civil actions, the burden of proof is by a preponderance of the evidence.18 “The side
on which the greater weight of the evidence is found is the side on which the preponderance of
the evidence exists.”l9
III. The Parties’ Contentions
Appellant alleges she paid her $400.00 portion of the security deposit to Appellee in cash
and, thus, seeks the return of her security deposit. Appellee, as Cross-Appellant, claims that
Appellant neither paid her portion of the security deposit, nor her rental portion for February
through June. He was able to re-let the Property in July so he is not seeking rent for July.
Appellee also claims that Appellant owes him for an unpaid water bill and damage to the
Property beyond normal wear and tear. Appellee seeks $1,589.00 in unpaid rent, which includes
$l3.00 for February’s rent; $242.00 per month for March, April, and May 2016; $850.00 for
June 2016; $85.20 for the unpaid water bill; and $700.00 for damage to the Property.
IV. Discussion
Preliminarily, the Court notes that Appellant’s main assertion concerns the return of a
portion of the security deposit. However, the contractual relationship between the parties will be
addressed first, given the co-dependency of the two contracts at issue here.
A. The Termination of the HAP Contract
WHA failed to properly terminate the HAP contract. The HAP contract at issue is an
agreement between a public housing agency (“PHA”), WHA, and a landlord, Appellee.20 The
contract is comprised of three sections: (A) Contract Information, (B) Body of the contract, and
(C) the Tenancy addendum.21 Section (A) describes the rental agreement reached by the parties,
"‘ See Gregory v. szer, 2010 wL 4262030, at *1 (Del. Com. P1. ocr. 8, 2010).
'9 See Reynolds v_ Reynolds, 237 A.zd 708, 711 (Del. 1967).
20 Defendant’s Exhibit 1.
2' Id.
such as the lease term and rent owed by the PHA. This section of the contract is signed by
Donna Starkey Ford of WHA and Appellee. Section (B) designates the legal rights and duties
between the PHA and the landlord. Specifically, the section allows for the HAP contract to be
terminated by the PHA if it “determines that the unit does not meet all requirements of []
[HUD’s Housing Quality Standards],22 or determines that the owner has otherwise breached the
HAP contract.”23
The HAP contract further states: “[i]f the PHA determines that a breach [by the landlord]
has occurred, the PHA may exercise any of its rights and remedies under the HAP contract, or
any other available rights and remedies for such breach.”24 Thus, the PHA is given wide latitude
to act, but the HAP contract is clear that the “PHA shall notify the owner of such determination,
including a brief statement of the reasons for the deterrnination.”25 The HAP contract clarifies
that the “notice by the PHA to the owner may require the owner to take corrective action, as
n26
verified or determined by the PHA, by a deadline prescribed in the notice. The contract
allows the PHA to terminate the HAP contract if the landlord does not comply.27 This section
requires all notices from the PHA to the landlord regarding duties or obligations under the HAP
contract to be in writing Section (B) concludes by stating, “The HAP contract contains the
entire agreement between the owner and the PHA.”28 Section (C), the tenancy addendum,
governs the parameters of the rental agreement, and it states: “[i]f there is any conflict between
the tenancy addendum and any other provisions of the lease, the language of the tenancy
22 The Housing Quality Standards are promulgated by The Department of Housing and Urban Development and can
be found at 24 C.F.R. § 982.401 (2015). The standards are quite exhaustive and detail criteria ranging from
“Sanitary facilities” to “Smoke detectors.” § 982.401(3)(ii)(A)-(M).
23 Defendant’s Exhibit l.
24 Id.
25 Id.
26 Id.
27 ld.
28 Id.
1 3929
addendum shall contro Notably, this section states, under “Lease: Relation to HAP
Contract,” “[i]f the HAP contract terminates for any reason, the lease terminates
automatically.”30
The rental agreement at issue here is a contract between Appellant and Appellee as tenant
and landlord, respectively The contract is comprised of three parts: (A) Lease information, (B) a
second Tenancy addendum, and (C) Additional lease provisions.S' The rental agreement
contains the same lease information as the HAP contract, an identical Tenancy addendum, and a
piecemeal of important Landlord and tenant obligations.32
Based on the testimony and documentary evidence, there is no dispute that a valid
contract existed between WHA and Appellee in the form of the HAP contract, and a valid
contract existed between Appellant and Appellee in the form of the rental agreement. Ms.
Spellman’s directive to terminate the HAP contract mid-February 2016 would have terminated
the rental agreement between Appellant and Appellee; however, WHA never formally notified
Appellee that the HAP contract was terminated. Ms. McGinnes, in early March, verbally
informed Appellee that the HAP contract had been terminated, but Appellee was not notified in
writing, as required by the HAP contract. In addition, WHA continued making payments to
Appellee towards Appellant’s rent. Hence, because proper notice of termination was not given
to Appellee, the HAP contract was not terminated Consequently, the rental agreement remained
valid.
29 Id.
70 Id.
77 mannier Exhibit 3; Defendant’s Exhibit 4.
32 Neither party provided the Court with the rental agreement’s Tenancy addendum; however, the HAP contract
notes that the rental agreement’s Tenancy addendum is a duplicate of the HAP contract’s Tenancy addendum. See
Defendant’s Exhibit l.
This Court bases its determination on the HAP contract’s unambiguous language and
consistent testimony during trial by multiple witnesses that no WHA employee formally
informed Appellee in writing of the HAP contract’s termination The Court is certainly
sympathetic to Appellant and the miscues that she received from WHA; however, WHA’s failure
to follow its procedures cannot be placed at the feet of Appellee. Therefore, the Court finds that
the lease did not terminate in mid-February when Ms. Spellman informally directed that the HAP
contract be terminated Instead, the HAP contract continued to run. And concomitantly, the
rental agreement remained in effect.
B. Appellant’s Obligations as Tenant
Under Delaware law, a contract has been defined “as an agreement upon sufficient
-,~»33
consideration to do or not to do a particular thing. To prevail on a claim for breach of
contract, the plaintiff must establish by a preponderance of the evidence that: (1) a contract
existed between the parties; (2) the defendant breached his obligation imposed by the contract,
and (3) plaintiff suffered damages as a result of the defendant’s breach.34 “A breach of contract
occurs by a party's non-performance, repudiation, or both.”35 Additionally, for the injured
party’s remaining obligations under the contract to cease, the breach must be “material.”36 The
breach will be deemed material if it concerns the “‘root’ or ‘essence’ of the agreement between
the parties, or [is] ‘one which touches the fundamental purpose of the contract and defeats the
object of the parties in entering into the contract.”’37
32 Howlen v. Zawom, 2012 wL 1205103, at *2 (Del. Com. P1. Mar. 30, 2012) (citing Rash v. Eqm¢able Tms¢ Co.,
159 A. 839, 840 (Del. super. 1931))_
24 See VLIW Techno/ogy, LLC v. Hewlen-Packard, Co_, 840 A.2d 606, 612 (Del. 2003).
35 Preferred Fin. Servs., Inc. v. Bus. Builders for Entrepreneurs, LLC, 2016 WL 4537759, at *3 (Del. Com. P1. Aug.
30, 2016).
36 See id.
37 2009 Caiola Family Tms¢ v. PWA, LLC, 2015 wL 6007596, at *18 (Del. Ch. oct. 14, 2015).
9
1. The Security Deposit
Both the HAP contract and rental agreement expressly state that an $850.00 security
deposit is due to Appellee. According to Title 25, the landlord and tenant are required to “agree
to the consideration for rent,” and the landlord is allowed to require a security deposit payment
38 The security deposit is
equal to one month’s rent where the rental agreement is for one year.
placed in an escrow account, and can be applied to any property damage by the tenant beyond
normal wear and tear, to reimburse the landlord for unpaid rent, or to reimburse the landlord for
“reasonable expenses” incurred in renovating and re-letting the premises because of the
premature termination by the tenant.39
The Court finds that Appellant has failed to satisfy her burden of proving that she handed
Appellee $400.00 in cash to satisfy her portion of the $850.00 security deposit.40 The Court was
not persuaded by her testimony. She failed to provide the Court with specifics regarding the
circumstances of the payment. In addition, no other evidence or testimony was introduced at
trial that supported her version of events. Simply put, her bare assertion that she paid the
remaining $400.00 in cash, without obtaining a receipt, does not satisfy the preponderance
standard
Conversely, Appellee, as Cross-Appellant, has satisfied his burden that Appellant owes
him $400.00 for the security deposit. His testimony was descriptive, detailed, and he submitted
evidence that supported his version of events. Hence, the Court finds that Appellant owes
Appellee $400.00 as a security deposit. The posture of this case makes the award of a security
deposit potentially problematic since the security deposit here is a refundable deposit. In other
33 25 Del. C. § 5501(a); 25 Del. C. § 5514(3).
39 25 Dez. C. § 5514(b).
40 Four hundred and fifty dollars of the security deposit was paid to Appellee on Appellant’s behalf by a non-profit
agency.
10
words, while Appellee is entitled to the $400.00 security deposit portion, if Appellant had
originally paid Appellee her portion of the security deposit, he would have been required to
apply that $400.00 to Appellant’s overdue rent. Appellant would have then owed less in overdue
rent.41 However, in the present case, Appellant failed to pay Appellee her $400.00 portion.
Therefore, to avoid granting Appellee a windfall, the Court will subsume the security deposit
into any unpaid rental damages that Appellant owes to Appellee.42 That is, instead of requiring
two separate “exchanges” that include Appellant paying Appellee her portion of the security
deposit and the remaining overdue rent that she owes after the $400.00 is subtracted from any
rental damage award Appellee recieves, the Court will neither subtract nor add the $400.00
portion to any rental damages Appellee is awarded in this case.
2. Rental Payments
Appellant breached the contract when she failed to make rental payments for the
remainder of her lease’s term. If the tenant fails to pay rent when the rent is due, and the
landlord demands payment within five days of tenant’s default, the landlord may terminate the
3
rental agreement if the tenant fails to make a payment within those five days.4 If the tenant
refuses to satisfy the rent even after the rental agreement has been terminated, then the landlord
can bring an action against the tenant for unpaid rent.44 A tenant is allowed to terminate the
rental agreement early with thirty days notice for reasons enumerated under Title 25.45
However, if the tenant desires to vacate the Property before the end of the rental term, the tenant
must give the landlord sixty days notice of her intent to vacate.46
4' 25 Del_ C. § 5514(¢)(2).
42 See Crandle v. Wilson, 2011 WL 13175121, at *3 (Del. Com. Pl. July 29, 2011) (applying the security deposit to
the unpaid rent which defendants owed to plaintiff).
43 25 net c. § 5502(a).
44 See id.
43 25 Del. C. § 5314(b).
44 25 Del. C. § 5106(¢).
ll
The Court notes that while Appellee was not formally notified of the HAP contract’s
termination, Appellee was placed on notice that he would need to seek another tenant for the
Property in May 2016. Under Delaware law, if feasible, a party is obligated to mitigate
damages.47 “[A] party cannot recover damages for loss that he could have avoided by reasonable
efforts.”48 In other words, “the injured party has a duty to minimize . . . its costs and losses.”49
Under the circumstances in the present case, Appellee’s need to mitigate damages was
objectively apparent when Appellant indicated in her February 29th letter that she would vacate
the Property on May lst. In addition, WHA’s statements that the HAP contract was terminated
and it would cease making payments when Appellant no longer resided at the Property should
have expedited mitigation efforts. This is especially true since Appellee knew, or should have
known, that the HAP contract provides that the lease is automatically terminated once the HAP
contract terminates. As the holder of the burden of proof on this issue, Appellee failed to
introduce any proof of his mitigation efforts. Thus, Appellant is not responsible for Appellee’s
failure to mitigate damages prior to July 1, 2016. ln addition, the Court finds that Appellant
made her $13.00 payment to Appellee for her portion of February’s rent;50 therefore, she is only
liable for the $242.00 monthly payments for March, April, and May 2016_totaling $726.00.
3. Trash Removal & Property Damage
Appellee, as Cross-Appellant, has failed to prove by a preponderance of the evidence that
Appellant owes $85.20 for the unpaid water bill and $675.00 for damage to the Property.
Appellee testified during trial that he had a verbal agreement with Appellant that she would not
47 25 Del. C. § 5507(d)(2); see also John Petroleum, Inc. v. Parks, 2010 WL 3103391, at *6 (Del. Super. June 4,
2010).
48 John Petroleum, Inc., 2010 WL 3103391, at *6 (internal quotation marks omitted) (citing West Willow-Bay Court,
LLC v. Robino-Bay Court Plaza, LLC, 2009 WL 458779, at *4 (Del. Ch. Feb. 23, 2009)).
"91{1_
39 Plaimifrs Exhibit 9.
12
be required to pay for water. He noted that water overages Were not usually a problem for the
Property and, thus, he had previously covered the added cost for his tenants. He further stated he
now felt that Appellant should pay for her portion of the water bill because of the continuous
attention he expended on her rental unit. Appellee did not articulate this change in position to
Appellant. Since Appellee’s intention to charge Appellant was formed after the Landlord-Tenant
relationship began, the Court finds this stipulation was not part of the original agreement
Further, Appellee submitted six pictures into evidence; two pictures of the Property’s
trash-filled basement, one picture of a circular indent in an interior door, two pictures of the
Property’s open refrigerator, and one picture of crayon drawings on an interior wall.51 Appellee
testified that four of the six pictures were taken on May 1St and the remaining two pictures of the
open refrigerator were taken a few days later. Appellee testified that he paid an individual a total
of $675.00 to repair and clean the Property; however, he failed to provide sufficient detail at trial
to support his burden. He did not name the individual and failed to provide the Court with any
receipts from the transaction52 Appellee also failed to provide an itemized list of the damages
and the cost to repair each. Because Appellee’s damage request includes damages for normal
wear and tear, the Court is unwilling to speculate and award an arbitrary figure.53
The Court finds that Appellee has proven that Appellant owes $25.00 for special trash
removal services which Appellee paid to dispose of trash he found in the basement after
Appellant vacated the Property. The tenant is obligated under Title 25 to keep the rental unit
“clean and safe,” and to “[d]ispose from the rental unit all ashes, rubbish, garbage and other
5 4 Defendant’s Exhibit 6.
52 Appellee only submitted a June 4, 2016 check for $450.00 and a July 10, 2016 check for $225.00 to support his
property damage figure. Defendant’s Exhibit 7.
53 See Lucas v. Stephens, 2017 WL 1497881, at *3 & n.17 (Del. Com. P1. Apr. 26, 2017) (Rennie, J.) (citing Stoltz
Mgmt. C0. v. Consumer Affairs Bd., 616 A.2d 1205, 1208-10 (Del. 1992)).
13
organic or flammable waste, in a clean and safe manner.”54 Appellee’s submitted transaction
history and testimony satisfy his burden for this damage amount.55
V. Conclusion
After weighing the evidence and witness credibility, this Court finds that Appellant has
failed to satisfy her burden and prove by a preponderance of the evidence that she is entitled to a
$400.00 return of her security deposit. This Court also finds that Appellee, as Cross-Appellant,
has proven by a preponderance of the evidence that he is entitled to $751.00, which includes
unpaid rent in the amount of $242.00 for Appellant’s portion of the monthly rent for March,
April, and May 2016, and $25.00 for special trash removal services. Therefore, the Court hereby
enters judgment and awards Appellee, as Cross-Appellant, $751.00, plus pre- and post-judgment
interest at the legal interest rate according to 6 Del. C. § 2301, et seq.56
IT ls so oRDERED this 19th day 6fJune, 2017.
(° § _
SliWWiiiiie,
Judgc
cc: Ms. Tamu White, Chief Civil Clerk
34 25 De/. C. § 5503(2)-(3).
33 Defeiidam’s Exhibit 8 ; gee Siol¢z Mgmi. Co. v. Consumer A/fairs Bd., 616 A.2d 1205, 1209 (Del. 1992).
56 Appellee moved for a Directed Verdict at the close of Appellant’s case-in-chief; however, the Court Will not
address this motion as this decision renders the motion moot.
14