Sharon Krutz, Comfort Palace LLC v. Susan Pomerantz

IN THE COURT OF COMMON PLEAS OF THE STATE OF DELAWARE
IN AND FOR SUSSEX COUNTY
SHARON KRUTZ, )
COMFORT .I’ALACE_.. LLC. )
Defendantszppellants, ;
\ 3 CA. No. CPU6—lZ-UOU77U
SUSAN POMERANTZ, l
Plaintiff/Appellee l
)
Submitted August 11, 2015
Decided October 8, 2015
Dean Campbell, Esq. for Defenclanlsl’Appcllants
Patrick Stanton, Esq. for PiaintiffIAppelleo
ORDER ON APPEAL ON DEFENDANT’S
MOTION TD VACATE THE DEFAULT I'UDGMENT
The Court is called to determine whether to vacate default judgment in favor of
the Plaintiffj'Appellee, Susan Pomerantz, and against Defendant/Appellant, Sharon
Krutz. For the reasons outlined below, the motion to vacate the default judgment
entered by the Justice of the Peace Court is denied.
Procedural Histogg
Pomerantz filed suit against Krutz and Comfort Palace. in the Justice of the Peace
Court on February 24; 2012‘ Trial in ].P. Court was scheduled for April 25, 2012 at 1:00
pm. On April l7, 2012, Krutz sent a letter to the J.P. Court detailing various medical
ailments to put the Court on notice that she may need to sit during court as she could
not stand for long periods of time. On the morning of April 25, 2(ll2, Krutz faxed a
request for a continuance to the. LR Court approximately an hour and a halt" prior to the
1:00 pm. trial. Krutz did not appear and the LP. Court entered a default judgment at
Pomerantz's request.
On May 2, 2012, Krutz filed a motion to vacate the default judgment in j.P. COurt.
On May 25, 2012, a hearing was held in JP. Court, which resulted in a denial of Krutz’s
motion to vacate the default judgment. On May Bl, 2012, Krutz appealed the denial of
the motion to vacate default judgment to this Court2
On June 30, 2014, a hearing on the motion to vacate the default judgment was
held in this Court The Court tool: testimony from the parties at this hearing. On July ‘18,
20M, this Court denied Krutz‘s motion to vacate the default judgment, finding that the
JP. Court Magistrate had not abused their discretion in failing to vacate the default
L Comfort Palace was later dismissed from the suit.
9 Krutz’s appeal was filed as a generic notice of appeal. However, the parties and this Court later all
agreed that the issue on appeal was limited to the 1.13. COurt’s denial of the motion to vacate the default
judgment.
2
supported by clear, unequivocal, and convincing evident: .33 The evidence presented by
Krutz that rent checks were, written to Comfort Palace is not nearly enough evidence to
convince this Court that Pomerantz committed fraud on the court by intentionally suing
an improper party. Additionally; Pomerantz testified that the reason she named Krutz
as a defendant was that she “didn‘t quite know who to sue.” It was Kruts’. who was
advising Pomerantz who to write the next check to. It was also Krutz who owned the
property that Pomernntx was renting.
Krutz’s second fraud upon the court claim that Pomerantz intentionally inflated
her damage claims fails for the same reasons as above. Krutz. proffered no evidence to
illustrate how Pomeruntz attempted to or committed fraud on the court.
Third, Krutz argues that the motion to vacate should be. granted under Rule
60(b)’s extraordinary circumstance provision, Rule 60(b)(6). This provision states that a
court may relieve a party from judgment for "any other reason justifying relief from the
operation of the judgment.” After reviewing the testimony presented to the Court at the
June 30, 2014 hearing, party submissions and oral argument, this Court (toes not find a
reason to relieve Krutz from the default judgment as no extraordinary circumstances
existed to relieve her from the judgment.
Mm;
Smith v. Wiitimns, 200? WL 2193748 (Del. Sorter}.
ll
For the foregoing reasons, Defendant’s motion to vacate the default judgment is
DENIED.
IT IS SO ORDERED this day of October, 2015.
12
judgment under LP. Court Rule 60(b). On August 4, 2014, Krutz appealed this Court’s
order to the Superior Court.
On June '12, 2015, the Superior Court reversed this Court’s order and remanded
the proceedings for a new hearing. The Superior Court inetructed this Court to conduct
a new hearing on the motion to vacate the default judgment dc new) and not to apply an
abuse of discretion standard.
On remand, Krutz filed a motion to vacate the default judgment on July ’24, 20l5.
On August 3, 2015, Pomerantz filed a response motion. A hearing was held in thie
Court on August ll, 2015.
Facts
This case is the result of a reeidentia] property dispute Trial in ].P Court was
scheduled for April 25,, 2012. On April 17, 2015, eight days before the scheduled trial,
Krutz filed a letter with the LP. Court. In her letter, Krutz wrote:
“I am informing the court of my disabilities, I cannot stand for long periods of time due
to the fact that l am currently recovering from post concussion symptoms due to a fall. l
have very severe naueea, and dizziness at timee and with [sic] under Stress it makes my
condition woree.
In addition I have a Brain Aneurysm, my doctors advised me I have to he very careful
of my stress and blood preesure, due. to the fact it could affect the aneurysm.
Also I am letting the court know that I cannot afford an attorney to help me due to my
very low income and being disabled. I am advising the court ahead of time of my
problems, the trial date is April 25, 2012 o 1:00pm.”3
According to Krutz, at 8:51 a.m. on April 25, 2012, the day of trial, she contacted
the court by phone to request a continuance. Krutz was told that she would have to put
her continuance request in writing; At 11:42 3.111., the JP. Court received a fax from
Krutz in which Krutz wrote:
“I am requesting a continuance for another date because I cannot appear today, due to
the fact my witness was just served on April 24, 2012 to appear in court on April 25,
2012. I originally mailed in my request [subpoena] on April 14, 2012.
i received two Very angry emails from my witness on April 24, 2012, in one of the
emails it mentions she was just served on April 24, 2012, to appear on April 25, 2012
which is not possible. My witness Julie Banks mentions she will be in touch with the
court to provide the documentation that is needed. The second email mentions that if
she is held in contempt of court, she will seek personal action against myself.
Another reason I need a continuance is I was up all night from being very nauseous and
still am with a very bad headache. Also I am to [sic] upset to do this today.
I am faxing in a copy of my letter dated April 17, 2012, that explains my medical
condition and letters from my doctor.
Also I live over 1 1./2 hours from the Court. ..."4
Along with her fax, Krut'x: attached medical records detailing her condition.
It should be noted that Krutz did not obtain Pornerantz’s position regarding her
request for continuance. Krutz did not appear for trial even though she had not
3 Defendant’s Exhibit l.
t Defendant’s Exhibit 2.
ascertained whether the continuance had been granted by the Court. Her witness, Julie
Banks, appeared for trial, as did Pomerantz. In Krutz’s May 25, 2(112 motion to vacate
hearing, the LP. Court took testimony from l’omerants in which she stated that on the
afternoon of the April 25, 2012 trial, she saw Krutx working in her yard. Based on that
testimony, the H3. Court Magistrate denied the motion to vacate the default judgment,
finding that Krutz’s absence was not excusable neglect.‘
On June 30, 2014; a hearing, on appeal was held in this Court on the issue of
whether a motion to vacate the default judgment should have been granted. Krutz
testified that at the time of the hearing in ].P. Court she was suffering from a concussion
and also had a brain aneurisrn, Kruts testified that she explained to the judge that she
was on medication and had very strict instructions about her medication and that she
had to rest the whole day.h When asked if she explained to the judge the events that
happened the day before trial, Krutz responded “Not”?
On cross-examination, Krutz was asked whether in her motion to vacate the
default judgment in JP. Court she claimed there was fraud, misrepresentation or other
misconduct of an adverse party. Knits. tesponded “No.”a
J! Defendant’s Exhihit 5,
“ Transcript of June 30, 2014 hearing, p. 17518.
7 Id at 19—20.
5 id. at 34.
()1
Pomerantz testified as to why she named both Krutz and Comfort Palace in her
complaint by stating, “I sued both Sharon and Comfort Palace jointly because I didn’t
quite know how to, who to sue.”9 Additionally Pomerantz testified that She observed
Krutz; “washing her second story windows shortly after the scheduled LP; Court trial.
Standard of Review
On remand, the Superior Court held that this Court incorrectly applied an abuse
of discretion standard to Krutz’s motion to vacate the default judgment. The Superior
Court held that the proper standard of review on a motion to vacate a dctzrult judgment
is dc Hoot). Thus, this Court is reviewing Krutz’s motion (it? H000. 1“
q at
1“ All Courts; in Delaware 1150 an abuse of discretion standard when reviewing a lower court’s ruling
under Rule tad-(b). St‘t' Gwrmmrsm v. Maynard, 2013 WL 8844992 (Del. Cum. PL); Srrvgrm flower '0. Walters,
2011 WL 380521 (Del. SUPL'I‘.); Willing v. Wiimgrudzkt, 645 A.2d 569 (TABLE) (Del. 1994). The Superior
Court has not set forth a consistent legal standard for reviewing, a ll’. Court denial of a motion to vacate
default judgment.
Sn: Kenyan n. Setting, 1992 WL 5220i) (Del. Super.) (finding that an appeal of a ll“. Court denial of a
motion to vacate default judgment required a trial (19 mum pursuant to 10 Del, C. 53; 957], but that in
"applying the dc mum concept," the reviewing court “should hold an uvidcntiary hearing on s‘tllfizctors
yrrtinmt to that motion.” Since the reviewing court may only review the magistrato’s order denying relief
and since a motion to vacate a default judgment under Rule 6003) is left to the trial court’s discretion. the
" pertinent factors” are Whether the LP. Court abused its discretion.) (emphasis added);
Srr also Bailey’s Cflt'lsti’. Cu. '0. Clark, 2001 WL 1198948) at *1 (Del. Su per.) (stating, that the proper standard
of review For a Li? Court’s; denial of a motion to vacate: default judgment is air now review of "pertinent
factors.” 'I'hc pertinent factors are whether the magistrate abused their discretion. Thus the reviewing
court should make a rig mivu determination of whether the H”. Court abused its discretion);
fire «(so Krutz v. Pamrrrmtz, D43]. Super., CA. No. Sl4i‘i—07«llll4, Brady, I. {June 21, 2015) (finding that the
Court of Common Pleas’ dr nth review of whether the JJ’. Court abused its discretion by denying a
motion to vacate default judgment was; incorrect because (it mum review of the. motion is required. The
6
mam
Krutz argues that her motion to vacate the default judgment below should be
granted under Court Of Common Pleas Rule 6000), Specifically, Krutz argues under
three separate subsections of Rule 60(b).
First, Krutz argues under Rule 60(b)(1) that her inability to appear before the
Justice of the Peace court was caused by excusable neglect. A party moving to vacate a
default judgment under Rule 60(b)(1) must satisfy three elements before the motion is
granted: "(1) excusable neglect in the conduct that allowed the default judgment to be
taken; (2) a meritorious defense to the action that would allow a different outcome to
the litigation if the matter were heard on the merits; and (3) a showing that substantial
prejudice will Iidt be suffered by the plaintiff if the motiun is granted.”
The Court will only consider the second lWO elements it the defendant has
provided a satisfactory explanation that constituted excusable neglect. ‘2 “Excusable
neglect" is defined as "that neglect which might have been the act of a reasonably
opinion Specifically stated abuse of discretion was not the PTUPt-fil‘ standard t0 use when reviewing a
magistrate’s decision to deny a motion to vacate);
Brit tj‘Ci‘nm—Ji a, Carmina, 1998 Wt. 1333753 (Del. Super.) (finding do new review of a ].I’. Court decision to
dismiss an action should not be limited to the decision to dismiss“, but review should be conducted "as it
the pruceedings in the lower court never took place.” Thia case did not address a lower caurt’s ruling
under Rule 60(b), but rather it examined treatment of a motion in dismiss).
“- Credit Acceptance Corp. v. Bailey; 2010 WL 2346-220 {Dell Cum. Pl.) {citing Perri; r1. lit’ilsnaf 2009 WL-
196478?, at *1 {DcLSupen} [quoting Vurizuir Dw'mmre, lm‘. in. Baldwin Line Christi: Cm, 2004 WL 838610, at *1
(Delfiuperj).
l3 iii.
\1
prudent person under the circumstances.”'3A defendant‘s» failure to understand or
comply with a court’s rules and procedures does not constitute excusable neglect.M
Defendants have the burden to prove excusable neglect.15
Here, Krutz has not met her burden of proof for excusable neglect. In her letter
sent to the ].P. Court the clay of trial, Krutz. emphasized angry emails she received from
her witness. Julie Banks, which Suggested Banks would not be able to appear. She aleo
mentioned that she has a headache and she wars too upset to participate in the trial. She
also mentioned that she lived 1.5 hours from the Court. When Krutz referred to a
medical issue, She described being very nauseous the night before and having a very
bad headache. Krut'z: did not attempt to notify Pomerantz or the witness of her
continuance request.m
Notwithstanding her continuance request letter to the court, the witness did
appear for trial,” helping one of Krutz’s prime: ry reasons for not appearing and needing
a continuance. The opposing party also appeared for trial and opposed the continuance
requeat.” There was also testimony from Pomerantz at the June 310, 2014 motion hearingr
that Krutz had been seen doing physical activity shortly after the 1:00 pm. trial time.
‘3 hi.
1‘ id.
"' Perry v. Wilson, 2009 WL 194478? (Del. Super.).
“5 'I‘ranscript at 42-43.
'7 m. at 43.
13 iii.
8
Specifically, Krutz was seen washing a second story window at her townhouser The
report of her ability to wash windows refuted her statement to the court that she was
too upset or too sick to attend trial. Krutz was also unable to provide either court with
documentation of her illness on the day of trial.
The Court also notes that it had an opportunity to observe Krutz’s testimony and
demeanor at this Court’s hearing on lune 30, 20M, outlining what information she
provided the LP. Magistrate at the hearing on her motion to vacate the default
judgment. Her argument at the July 24, 2015 hearing that she had to choose between
compromising her health or attending the trial at the if. Court is simply not supported
by the documentary evidence or her testimony. The facts presented to this Court makes
it more likely that Krutz panicked when her witness became upset with the late
subpoena service because Krutz felt she. needed this witness to proceed successfully at
trial. The problem is that the witness did appear. Krutz’s testimony about her medical
condition at the June 30, 2015, hearing was exceedingly exaggerated in comparison to
her condition as described in her continuance request to the JP Court. Her statement in
"213
that request that carries some credibility is that she was too "upset to do this today.
Based on Krutz’s demeanor and the inconsistencies in her testimony, the Court can give
but little weight to her testimony.
” Transcript at 44.
3“ Defendant’s Exhibit 2.
9
Moreover, even though Delaware courts have afforded motions to vacate default
judgments under Rule 60(b) a liberal construction, reflecting the public policy favoring
a trial on the merits.21 that policy is not enough to overcome Krutz’s lack of excusable
neglect. This Court must also consider the integrity of the judicial process, which was
undermined by the untimer continuance request and Krutz’s failure to notify
Pomerantz or the witness of the continuance request. Krutz’s unreasonable behavior
disrupted the Court’s time and resources as well as wasted the time of the reluctant
witness in this case. Thus, it is moot to inquire into whether Krutz met the second two
elements of Rule 60(b)(1) as her actions were not of a reasonably prudent person, and
therefore, she did not prove excusable neglect.
Second, Krutz argues under Rule 60(b)(3) that l’omeratz committed fraud upon
the court by (l) naming both Comfort Palace and Krute as Defendants, and {2} inflating
the amount of damages requested. Krutz argues that Pomerantz intentionally
defrauded the court by naming Krutz personally in the LP. Court action even though
she made rent payments to Comfort Palace and not Krutz. Krutz also argues that
Pomerantx sought damages in excess and in violation of the Delaware LandlordfTenant
code through misrepresentations to the J.P. Court.
As to the claim that Pomerantz intentionally and improperly dragged Krutz into
this litigation, this Court finds no merit. A finding of fraud on the court must be
3‘ b’mtaglia v. Wilmington San. Fund Sun, 379 A.2d l [32, 1135 (Del. 19?? .
1U