Shoppes of Mount Pleasant, LLC. v. J.M.L., INc., and Lawrence Gillen ( 2017 )

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SHOPPES OF MOUNT PLEASANT, LLC )
)
Plaintiff, )
)
v. ) C.A. No. CPU4-14~001415
)
J.M.L., INC. and LAWRENCE GILLEN )
)
Defendants )
Submitted: July 14, 2017
Decided: August 11, 2017
Josiah R. Wolcott, Esquire Lawrence Gillen
Connolly Gallagher LLP P.O. Box 674
267 East Main Street Middletown, DE 19709
Newark, DE 19711 Pro Se Defendant
Attorneyfor Plczinl‘i]jf
MEMORANDUM OPINION AND ORDER
ON DEFENDANT’S MOTION TO VACATE JUDGMENT
The underlying action in this matter was for breach of contract. Judgment was entered in
favor of the plaintiff, Shoppes of Mount Pleasant, LLC (hereinafter “Shoppes”) and affirmed in
part by the Superior Court.] The defendant, Lawrence Gillen (hereinafter “l\/lr. Gillen”), brings
the instant Motion to Vacate the judgment with respect to his individual liability.2
' Due to the large volume of prior writing on this matter, the Court will not provide a recitation of the facts and
findings of the trial or post-trial actions. Those opinions may be found under the following citations: 2015 WL
3824118; 2015 WL 4755491; 2016 WL 6072367. For the purposes of the instant l\/lotion, the most relevant fact is
Mr. Gillen having signed a lease with Shoppes, which Mr. Gillen contends was done solely on behalf of J.M.L., lnc.
and not as a personal guarantor. The Superior Court affirmed the judgment against Mr. Gillen, but reduced the
damages awarded to Shoppes.
2 Mr. Gillen’s memorandum also raises an argument for sanctions against Shoppes’ attorney for alleged violations of
Rule l l. However, because this argument is not properly before the Court, the Court will disregard all allegations of
Rule 11 violations. A Motion for Sanctions under Rule 11 requires the party raising the motion to describe the
precise conduct at issue, with proper notice, and a reasonable opportunity to respondl Furthermore, as per Rule
On March 15, 2017, Mr. Gillen, acting through co'unsel,3 filed the instant l\/lotion.4 Both
parties provided initial briefing on the matter, and a hearing was convened on July 14, 2017. The
Court heard oral argument from the parties and reserved judgment This is the Court’s Opinion
and Order on the Motion to Vacate Judgment.
STANDARD OF REVIEW
'l``he standard for reviewing a l\/lotion to Vacate Judgment is governed by Court of
Common Pleas Civil Rule 60(b). lt is in dispute whether the Court should address the instant
Motion under Rule 60(b)(2) or Rule 60(b)(3).5 However, this dispute is immaterial, as the
underlying subject matter remains the same. Therefore, the Court shall analyze each Rule and
determine which Rule governs the l\/Iotion. Regardless of the precise Rule, under established
Delaware precedent, a “party moving to vacate a final judgment or order must show that they are
”6 l\/lotions to vacate “are
entitled to relief under Rule 60(b) by a preponderance of the evidence.
within the sound discretion of the trial court, and they are not to be taken lightly or easily
granted.”7
ll(c)(l)(A), a “motion for sanctions under this rule shall be made separately from other motions or requests”
(emphasis added).
3 Counsel for Mr. Gillen was permitted to withdraw shortly after filing the instant Motion and a corresponding
Motion to Stay.
4 While the original Motion was ostensibly for both Mr. Gillen and the corporate entity, the Court has deemed the
l\/lotion withdrawn with respect to the latter, as Mr. Gillen has stated his intention to proceed pro se. Furthermore,
Mr. Gillen permitted Shoppes to enter a default judgment against the corporate entity, with the sole issue at trial
being Mr. Gillen’s personal liability _ the same argument that is at stake with the alleged newly discovered
evidence. As the issue does not pertain to the corporate entity, there is no prejudice in not considering the Motion as
it may relate to the corporate entity.
5 Specifically, Mr. Gillen asserts the applicable standard is Rule 60(b)(3), on the grounds of the underlying
allegation sounding in Shoppes’ alleged fraud.
6 But/er v. Davl``s, 2016 WL 3144556, at *l (Del. Com. Pl. May 10, 2016).
7 [d. (internal citations omitted).
PARTIES’ CONTENTIONS
l\/lr. Gillen argues Shoppes provided at trial a fraudulent copy of the lease between
Shoppes and J.M.L., lnc. (hereinafter the “Lease”), which purported to include Mr. Gillen’s
signature as personal guarantor. Mr. Gillen maintains, as he did at trial, he did not sign as
personal guarantor and the Lease did not include a provision for a personal guarantor. As proof
of the fraudulent quality of the Lease, Mr. Gillen presented the Court with a copy of the Lease
found in the files of the Office of the Alcoholic Beverage Control Commission (hereinafter the
“OABCC”), which does not contain a line for a personal guarantor. According to Mr. Gillen,
Shoppes “knew that they did not have a cause of action against [l\/lr. Gillen] so presented a
forged lease in order to justify their fraudulent action[.]”
Mr. Gillen argues the applicable standard for his Motion is Rule 60(b)(3), on the grounds
of fraud on the Court. l\/lr. Gillen’s arguments all derive from the allegation of the Lease
introduced at trial being fraudulent, which Mr. Gillen claims is sufficient in and of itself to
warrant reopening the case for an evidentiary hearing, if not outright vacating the judgment
Lastly, Mr. Gillen asserts his delay in bringing the alleged fraud to the attention of the Court is
due to his reliance upon the testimony introduced at trial, Mr. Gillen’s need to care for his Wife
following a serious automobile accident, and a flood resulting in damage to his personal files.
Shoppes argues Mr. Gillen has failed to prove he was unaware of the lease filed with the
OABCC or, at the very least, he failed to prove he could not have obtained a copy of the
alternative lease through the exercise of due diligence. Shoppes further cast doubt on the
veracity of the purported lease, as the bottom of the final page is cut off due to the last page
being on letter-sized paper, while the rest of the lease is on legal-sized paper. Concerning the
argument for fraud, Shoppes argues Mr. Gillen’s l\/lotion is conclusory in its suppositions of
Shoppes’ alleged fraudulent conduct. While Shoppes does not evince a clear preference for
applying either Rule 60(b)(2) or Rule 60(b)(3), Shoppes argues Mr. Gillen cannot be successful
under either standard
DISCUSSION
Court of Common Pleas Civil Rule 60(b)(2) allows a party to move to vacate a judgment
on the grounds of “newly discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under Rule 59(b)[.]” To succeed, “a party must
demonstrate that the newly discovered evidence could not have been discovered by the exercise
of due diligence prior to the underlying order or judgment; that it is sufficiently material and
relevant that it would probably alter the result of the proceeding; and that it is ‘not merely
cumulative or impeaching in character.’ ”8
Conversely, Rule 60(b)(3) permits a party to move to vacate on the grounds of “fraud
(whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of
an adverse party[.]” The definition of fraud has been construed narrowly and limited to serious
misconduct undermining the ability of the Court to function impartially.9 Accordingly, “relief
would be appropriate where a defendant with a valid legal defense was prevented from
>)lO
maintaining the defense by fraud, misrepresentation, or mistake The rationale for this
application of the Rule has existed for more than a century:
The ground for the exercise of this jurisdiction is that there has been no fair
adversary trial at law. Consequently a distinction is made between fraud,
accident, mistake and the like relating to the subject-matter of the action and
similar elements relating to the conduct of the suit. Fraud relating to the subject-
matter is not of itself sufficient ground for relief. Where it relates to the conduct
8 Wilson v. James, 2010 WL 4514349, at *2 (Del. Super. Oct. 22, 2010) (internal citations omitted).
9 See Smith & Loveless, lnc. v. JJID, Inc., 2016 WL 3929867, at *10 (Del. Super. Jul. 15, 2016) (internal citations
omitted).
‘0 1a
of the suit, as where it prevents a party from asserting his rights, there is no fair
adversary proceeding, and equity will interfere. The courts commonly speak of
the former class as intrinsic and of the latter as extrinsic, fraud, etc. Thus, it is
generally said that it is extrinsic fraud, mistake and the like Which are grounds for
relief.“
The Superior Court summarized this rule as follows: “relief will not be granted for fraud,
misrepresentations, or misconduct that would be revealed in the normal judicial process, but Will
be granted when fraud, misrepresentations, or misconduct impairs the judicial process itself.’712
Accordingly, the primary distinction between the newly-discovered evidence rule and fraud is
whether the allegation was properly sifted through the adversarial process. Evidence supporting
a prior allegation of fraud relative to the subject matter of the lawsuit must meet the standard
under Rule 60(b)(2), whereas evidence of the wrongdoing of the parties in conducting the
litigation undermines the fairness of the outcome and may be raised virtually at any time.
Mr. Gillen’s position would lead to an illogical and easily exploited loophole in the
Court’s rules for vacating a judgment Granting relief under this theory Would require circular
reasoning: because a plaintiff is alleged to have perpetrated a fraud, the defendant was precluded
from proving plaintiff perpetrated a fraud. The defendant would need to utilize the new evidence
to prove there was a fraud, and only by proving a fraud would the defendant justify utilizing the
new evidence. Under Mr. Gillen’s theory, any party raising fraud as a defense to liability will be
entitled to a second bite at the apple upon discovery of evidence relating to the defense of fraud.
There Would be no requirement for diligence, as any defense of fraud would conceivably
undermine the reliability of the judicial process. The Court cannot accept this theory, as it would
lead to absurd and inconsistent results.
ll Id. (quoting Hudson v. Layton, 107 A. 785, 787 (Del. Ch. 1919) (internal citations omitted)).
12
Id.
Instead, the Court finds Rule 60(b)(3) to be limited to those circumstances where the
alleged fraud was not subjected to testing through the presentation of evidence and the
examination of witnesses. As suggested by Delaware precedent, the concern with fraud before
the Court is conduct undermining the process and leading to an unreliable outcome, rather than
an unperturbed process leading to an unreliable outcome, This interpretation is harmonious with
the other grounds for relief under Rule 60(b), which require either reasonable diligence on the
part of the movant or injury to the validity of the judgment A failed defense is not an injury to
the process, as the defendant was afforded a fair and reasonable opportunity to present and
support the defense. The discovery of evidence to support the defense must logically fall under
Rule 60(b)(2), particularly when the evidence merely buttresses an existing defense, rather than
create grounds for a new theory of the case.
Accordingly, the Court will analyze the instant Motion under Rule 60(b)(2). Mr. Gillen
therefore bears the burden of proving the following elements:
[T]he newly discovered evidence has come to the [proponent's] knowledge since
the trial; that it could not, in the exercise of reasonable diligence, have been
discovered for use at trial; that it is so material and relevant that it will probably
change the result if a new trial is granted; that it is not merely cumulative or
impeaching in character; and that it is reasonably possible that the evidence will
be produced at trial.13
The first prong hinges on Whether Mr. Gillen knew of the OABCC lease prior to the trial.
Both parties claim the other filed the lease With the OABCC. However, both parties concede
knowing the OABCC had a copy of the lease, as a copy of the lease was required for the
OABCC to process Mr. Gillen’s application for a liquor license. Furthermore, Mr. Gillen stated
13 Albu Trading, lnc. v. Allen Faml'ly Foods, lnc., 2002 WL 531203, at *3 (Del. Super. Apr. 4, 2002) (citations
omitted).
at the Hearing he knew there was a copy of the Lease in the OABCC file, but did not believe it
would be any different and, therefore, did not subpoena the file.
On the second prong, l\/lr. Gillen has all but admitted he could have discovered the
OABCC lease prior to the trial. Mr. Gillen admitted he simply did not believe that lease to be
any different, leading him to forego that avenue of investigation Mr. Gillen’s initial brief on the
Motion, filed by Mr. Gillen’s former counsel, suggests the fault belongs to Mr. Gillen’s former
attorney. This is unavailing, as an attorney’s negligence or misconduct will be imputed to the
client14 The ease with which Mr. Gillen obtained the OABCC file for the purposes of this
Motion emphasizes how easily he could have obtained the same file in advance of trial.
Therefore, Mr. Gillen has failed to demonstrate he acted With reasonable diligence
Assuming, arguendo, Mr. Gillen had acted with reasonable diligence, the l\/Iotion would
nevertheless fail on other grounds. Mr. Gillen bears the burden of proving the materiality of the
newly discovered evidence; the burden is high, as there must be a fair probability of the evidence
changing the outcome of the trial. At best, the newly discovered lease provides three additional
facts: the date is in a different format;15 the signatures between the two leases all appear to be
different; and the OABCC lease does not contain a provision for a personal guarantor. However,
l\/lr. Gillen had previously raised the allegation of a forged signature. While the differences in
dates and signatures may have bolstered his argument, it is far from likely there would have been
any difference in the outcome - particularly because Mr. Gillen was not precluded from
introducing other evidence of forgery at trial, such as a handwriting expert The newly-
discovered evidence rule is not a blank check for perfecting inadequately argued defenses and
theories.
14 See Levey v. Brownstone Assel Mariagemem‘, LP, 76 A.3d 764, 771 (Del. 2013).
15 The date of execution on the Lease reads as 2/25, whereas the date of execution on the OABCC lease reads as
2/25/05.
Furthermore, the differences in the leases with respect to the existence of a signature line
for a personal guarantor Would not perfect Mr. Gillen’s defense. lnstead, it Would simply
suggest - at most - one party or the other had altered the document l\/lr. Gillen would have
borne the burden of proving Shoppes was the party at fault, while Shoppes would have argued
the opposite conclusion. The matter would likely devolve into a question of credibility. This
Court has previously determined credibility is in favor of Shoppes. This may have moved the
needle closer to equilibrium, but it does not, by itself, tip the scales in favor of Mr. Gillen.
Because the evidence does little more than raise an additional question for pondering, it cannot
meet the burden established by Delaware precedent
At best, Mr. Gillen’s Motion raises one or two points to give the Court pause. However,
pause is not sufficient grounds to award the drastic relief of vacating a judgment Likewise, l\/lr.
Gillen has not provided adequate grounds to justify an evidentiary hearing. Mr. Gillen’s own
statements in support of his Motion are unequivocally conclusory: “[l\/lr.] Gillen surmises that
this version of the lease was generated at some point in time to wrongfully assign personal
liability to him under the lease.” l\/lr. Gillen’s request for an evidentiary hearing is plainly
intended to allow him to rehash the same arguments he made at trial while also supporting Mr.
Gillen’s conclusory allegations l\/lr. Gillen seeks a hearing so that he “can establish the facts in
the case and clearly establish that [Shoppes] submitted the fraudental [sic] lease and committed
perjury at the initial trial.”
lt is Mr. Gillen’s burden to prove he is entitled to relief under Rule 60(b)(2). The Court
cannot make Mr. Gillen’s case for him by questioning every piece of evidence, nor can the Court
instruct Mr. Gillen on how to make his case. Simply stated, the Court is not satisfied, and l\/lr.
Gillen has not provided reasonable proof, that Shoppes engaged in actual misconduct or
submitted fraudulent evidence. Likewise, the Court is not satisfied, and Mr. Gillen has not
provided reasonable proof, that Mr. Gillen could not have discovered all of the evidence he seeks
to introduce via the instant l\/lotion. Expanding the record with an evidentiary hearing would
merely permit Mr. Gillen a second opportunity to present the case he should have presented at
trial. Such an outcome is Well beyond the purpose of Rule 60(b). Therefore, the Court finds l\/lr.
Gillen has failed to meet his burden of proving any reasonable grounds for relief under Rule
60(b).
CONCLUSION
For the foregoing reasons, IT IS HEREBY OR]_)ERED this llth day of August, 2017,
that Defendant’s Motion to Vacate Judgment is DENIED.
ale Carl C. Danber.
- e
cc: Angelia McNair, Judicial Case Manager