J.M.L., Inc. v. Shoppes of Mount Pleasant, LLC

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
J.M.L., INC., a Delaware Corporation,
and Lawrence Gillen, an individual,
Appellants,
v. C.A. No. N17A-09-004 FWW
)
)
)
)
)
)
)
)
SHOPPES OF MOUNT PLEASANT, )
LLC, a Delaware Limited Liability )
Company, )
)
Appellee. )
Submitted: January 23, 2018
Decided: April, 30, 2018
On Appeal from the Court of Comrnon Pleas:
AFFIRMED.
M
Lawrence P. Gillen, pro se, PO Box 674, Middletown, Delaware 19709; Appellant.
Josiah R. Wolcott, Esquire, Connolly Gallagher, LLP, 267 East Main Street,
Newark, Delaware 19711; Attorney for Appellee.
WHARTON, J.
This 30th day of April, 2018, upon consideration of Appellant LaWrence
Gillen’s (“Gillen”) Opening Brief,l the Answering Brief of Appellee Shoppes of
Mount Pleasant, LLC (“Shoppes”), Gillen’s Reply Brief, and the record, it appears
to the Court that:
l. The underlying complaint in this appeal Was for breach of contract.2
Judgment Was entered in favor of the plaintiff, Shoppes, and affirmed as to liability
by the this Court.3 ln its decision, the Court of Common Pleas (“Trial Court”)
found that Gillen signed as a personal guarantor of J.M.L., Inc.’s payment
obligations under a lease between the parties.4 That finding is the genesis of the
current round of litigation.
2. On March 15, 2017, Gillen filed a motion to vacate (“Motion”) the
judgments entered by the Trial Court in favor of Shoppes.5 Gillen maintained, as he
did at trial, that he did not sign the lease at issue as a personal guarantor, nor Was
there a provision for a personal guarantor in the lease.6 In the Motion, Gillen argued
'Gillen, acting pro se, is the sole appellant. J.M.L., lnc. is an unrepresented
corporation and, thus, is not an appellant in this appeal.
2 Shoppes of Mount Pleasant, LLC v. J.ML., Inc., 2017 WL 3605355, at *l (Del.
C. P.).
3 J.ML., Inc. & Lawrence Gillen v. Shoppes of Mount Pleasant, LLC, 2016 WL
6072367 (Del. Super.).
4 Shoppes of Mount Pleasant, LLC v. J.ML., Inc., 2015 WL 3824118, at *2 (Del.
C. P.).
5 Appellee’s Answering Br., D.I. 8 at 2.
6 Ia’. at 3.
that Shoppes defrauded the Trial Court by submitting a fraudulent copy of the lease
between J.M.L., Inc. and Shoppes.7 As proof of Shoppes’ fraud, Gillen presented
the Trial Court with a copy of the lease found in the files of the Office of the
Alcoholic Beverage Control Commission (“OABCC”), which did not contain a line
for a personal guarantor.8
3. Gillen also argued that the applicable standard for his Motion was Court
of Common Pleas Civil Rule 60(b)(3) - fraud on the Court.9 Gillen maintained that
the fact the lease was fraudulent was sufficient in and of itself to warrant vacating
the judgment or, at the least, reopening the case for an evidentiary hearing.10
4. Shoppes opposed the Motion, arguing that Gillen failed to prove the
necessary elements of fraud and that his argument lacked trustworthinessll
Specifically, Shoppes argued that Gillen’s assertion of fraud was conclusory and that
Gillen failed to prove he was unaware of the lease filed with OABCC, or that he
could not have obtained a copy of the alternative lease through the exercise of due
diligence12 Additionally, Shoppes challenged the validity of Gillen’s purported
7 Appellant’s Opening Br., D.I. 7 at 7-8.
8 Id. at 4.
9See Shoppes, 2017 WL 3605355 at *3.
10 Id.
11 Id.
12 Id.
OABCC lease because the bottom of the final page was cut off; the last page being
on letter-sized paper, while the rest of the lease was on legal-sized paper.13
5. After oral argument, the Trial Court held that Rule 60(b)(2),14 dealing
with newly discovered evidence, not Rule 60(b)(3),15 dealing with fraud, was the
applicable rule. According to the Trial Court, under Rule 60(b)(3) “relief will not
be granted for fraud. . .that would be revealed in the normal judicial process, but will
be granted when fraud. . .impairs the judicial process itself.”16 Therefore, “the
primary distinction between the newly-discovered evidence rule and fraud is
whether the allegation was properly sifted through the adversarial process.”17
Gillen’s failed defense was not an injury to the process; he was afforded a fair and
reasonable opportunity to test evidence and present and support his defense.18 The
Trial Court concluded that the discovery of new evidence, here the OABCC lease,
13 Id.
14 CCP Civ. R. 60(b)(2): “On a motion and upon such terms as are just, the Court
may relieve a party or a party’s legal representative from a final judgment, order,
or proceeding for the following reasons: newly discovered evidence which by due
diligence could not have been discovered in time to move for a new trial under
Rule 59(b).”
15 CCP Civ. R. 60(b)(3): “On a motion and upon such terms as are just, the Court
may relieve a party or a party’s legal representative from a final judgment, order,
or proceeding for the following reasons: fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party.”
16 Shoppes, 2017 WL 3605355 at *5 (quoting Smith & Loveless, Inc. v. JJID, Inc.,
2016 WL 3929867 at *10 (Del. Super. Jul. 16, 2016)).
17 Shoppes, 2017 WL 3605355 at *5.
18 Id. at 6.
to support the defense must be tested under Rule 60(b)(2), particularly where the
evidence merely buttresses an existing defense.19
6. The Trial Court denied Gillen’s Motion because he failed to meet his
burden under Rule 60(b)(2).20 First, Gillen could not demonstrate that the OABCC
lease came to his knowledge since trial. Rather, both parties acknowledged knowing
the OABCC had a copy of the lease back to 2005.21 Second, the Trial Court noted
the ease with which Gillen could have obtained the OABCC lease in advance of
trial.22 Even assuming Gillen acted with reasonable diligence and failed to discover
the evidence, the Trial Court still found that he could not demonstrate that the newly
discovered evidence was material and would change the outcome of the trial.23 The
Trial Court concluded that permitting Gillen to introduce the new evidence would
allow him a second opportunity to present the case he should have presented at
trial.24
7. On September 11, 2017, Gillen appealed the Trial Court’s decision.25
Gillen argues: (1) that Shoppes committed a fraud upon the Court by submitting a
19 Ia'.
20 Id.
21 Id.
22 Id. at 7.
23 Id.
24 Id. at 8-9.
25 Appellee’s Answering Br., D.I. 8 at 2.
5
fraudulent copy of the lease which included Gillen as a personal guarantor, and (2)
that Rule 60(b)(3) is the correct standard because Shoppes committed a fraud.26
8. In answer, Shoppes argues that Gillen’s appeal is meritless.27 Shoppes
maintains that the Trial Court did not err in analyzing the Motion under Rule
60(b)(2).28 Rule 60(b)(3) relates to fraud which impairs the judicial process itself,
such as where one is prevented from maintaining a defense.29 At trial, according to
Shoppes, Gillen was not prevented from maintaining his defense; instead his defense
failed, and he merely was offering new evidence in support of that failed defense.30
Furthermore, Shoppes argues that the Trial Court did not abuse its discretion in
denying the Motion because Gillen could not satisfy the elements of either Rule
60(b)(2) or Rule 60(b)(3).31
9. The standard of review by the Superior Court for an appeal from the
Court of Common Pleas is the same standard applied by the Supreme Court to
appeals from the Superior Court.32 In addressing appeals from the Court ofCommon
Pleas, this Court is limited to correcting errors of law and determining whether
26 Appellant’s Opening Br., D.I. 7 at 7, 18.
27 Appellee’s Answering Br., D.I. 8 at l.
28 Ia'.
29 Ia'. at 6-7.
30 Ia'. at 7.
31 Id. at 8-10.
32 Robert./. Smith C0., Inc. v. Thomas, 2001 WL 1729143 at *2 (Del. Super.).
6
3 Substantial evidence is
substantial evidence exists to support factual findings.3
“relevant evidence that a reasonable mind might accept as adequate to support a
conclusion.”34 If factual findings are “sufficiently supported by the record and are
the product of an orderly and logical[ly] deductive process,” then they will not be
challenged.35 Questions of law are reviewed de n0v0.36 Moreover, the standard of
review of an order denying a motion to vacate a judgment based on newly discovered
evidence under Rule 60(b)(2) is abuse of discretion.37
10. The Court finds that the Trial Court did not err in concluding that Rule
60(b)(2) is the applicable rule. “A Rule 60(b)(3) motion is reserved for situations
where a party has engaged in fraud or misrepresentation that prevents the moving
party from fairly and adequately presenting his or her case.”38 The Trial Court
33 Hemy v. Nissan Motors Acceptance Corp., 1998 WL 961759 at *l (Del. Super.)
(citing Shahan v. Landing, 643 A.2d 1357, 1359 (Del. Super. 1994)).
34 Thomas, 2001 WL 1729143 at *2 (citing Oceanport Indus., Inc. v. Wilmington
Stevedores, Inc., 636 A.2d 892, 899 (Del. 1994)).
35 Levitt v. Bouvier, 287 A.2d 671, 673 (Del. 1972).
36 Hemjy, 1998 WL 961759 at *1.
37 See Albu Trading, Inc. v. Allen Family Foods, Inc., 2002 WL 31681803 at *1
(Del.).
38 Anderson v. State, 21 A.3d 52, 60 (Del. 2011) (quoting MCA, Inc. v. Matsushita
Elec. Indus. Co., 785 A.2d 625, 639 (Del.2001)). See also Smith & Loveless, Inc. v.
JJID, Inc., 2016 WL 3929867 at * 10 (Del. Super.) (“Relief would be appropriate
where a defendant with a valid legal defense was prevented from maintaining the
defense by fraud, misrepresentation, or mistake... 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.”); Hudson v. Layton, 107 A. 785, 787 (Del. Ch.
1919) (“The ground for the exercise of this jurisdiction is that there has been no
7
similarly interpreted Rule 60(b)(3) and determined that it was not applicable.39 Here,
no fraud undermined the judicial process, Gillen Was able to present his personal
guarantor defense _ it just failed.46 The Trial Court concluded, and this Court agrees,
that a failed defense is not an injury to the process.41 The Trial Court also was correct
that Gillen’s Motion would not fall under Rule 60(b)(3). Rather, Rule 60(b)(2) was
the more appropriate rule. “The discovery of evidence to support the defense must
logically fall under Rule 60(b)(2), particularly where the evidence buttressed an
existing defense, rather than create grounds for a new theory of the case.”42 Gillen
had the ability to prepare and support his personal guarantor defense at trial. The
OABCC lease merely supports Gillen’s trial defense. The Trial Court’s decision
that the Motion would be analyzed under 60(b)(2), is not in error, much less an abuse
of discretion.
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 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.”).
39 Shoppes, 2017 WL 3605355 at *5-6.
46 Id.
41 Id.
42 Id. at 6.
11. The Court finds that the Trial Court did not abuse its discretion in
denying the Motion. There was substantial evidence to support the Trial Court’s
finding that Gillen failed to meet his burden of proving any reasonable grounds for
relief under Rule 60(b)(2). The predicates for relief under Rule 60(b)(2) are that the
newly discovered evidence: (1) has come to the [proponent's] knowledge since the
trial; (2) could not, in the exercise of reasonable diligence, have been discovered for
use at trial; (3) is so material and relevant that it would probably change the result if
a new trial were granted; (4) is not merely cumulative or impeaching in character;
and (5) there is a reasonable possibility that the evidence will be produced at trial.43
12. The Trial Court found that Gillen, prior to trial, knew OABCC had a
copy of the lease and he easily could have obtained it in advance of trial, since a
copy of the lease was required for OABCC to process Gillen’s application for a
liquor license. 44 Gillen, however, declined to pursue that avenue of investigation as
he believed the OABCC lease Was no different than what would be offered at trial.45
Thus, Gillen failed to establish the first two Rule 60(b)(2) requirements_absence
of prior knowledge and inability to obtain in the exercise of reasonable diligence.
Those failures alone are sufficient to deny Gillen’S Motion.
43 Smith & Loveless, Inc. v. JJID, Inc., 2016 WL 3929867 at * 10 (Del. Super.)
(quoting Hudson v. Layton, 107 A. 785 787 (Del. Ch. 1919)).
44 Shoppes, 2017 WL 3605355 at *6-7.
45 Id. at 7.
13. As to the third and fourth requirements the evidence supports the Trial
Court’s conclusion that the newly discovered evidence was not material, but merely
cumulative. The burden of proving the materiality of newly discovered evidence is
high; there must be a fair probability of the evidence changing the outcome of the
trial.46 Here, the newly-discovered evidence raised three additional facts: the date is
in a different format; the signatures between the two leases all appear to be different;
and the OABCC lease does not contain a provision for a personal guarantor.47 Rule
60(b)(2), was not meant to bolster failed defenses, however. Gillen already raised
the forged signature allegation. The “newly discovered evidence” was merely an
attempt to present his case a second time. The Trial Court properly found the newly-
discovered evidence to be cumulative and, as a result, immaterial.
14. The Trial Court also noted that the “newly discovered evidence” would
not perfect Gillen’s defense, but only would raise an issue of credibility.48 The Trial
Court had already determined credibility in favor of Shoppes and the additional facts
did not change that determination.49 Since the Trial Court made the original
credibility determination, it was best positioned to judge the impact the proposed
new evidence would have had on that determination Accordingly, the Court finds
46 Id.
47 Id.
43 Id. at 8.
49 Id.
10
that the Trial Court’s conclusion was the result of an orderly and deductive process,
supported by substantial evidence, and not an abuse of discretion. This Court will
not disturb the Trial Court’s decision,
THEREFORE, the decision of the Court of Common Pleas is AFFIRMED.
IT IS SO ORDERED.
<.-""'MA!(/
Ferri(s" W. Wliarto'n, J.
ll