C & C Drywall Contractors North, Inc. v. Aguilar

SUPERIOR COURT
of the
STATE OF DELAWARE
Jeffrey J Clark Kent County Courthouse
Resident Judge 38 The Green
Dover, DE 19901
Telephone (302)735-2111
Ms. Victoria Petrone, Esquire Mr. Jorge Antonio Angulo Aguilar
Baird Mandalas Brockstedt 553 Money Road, Apt. A
& Federico, LLC Townsend, DE 19734
2711 Centerville Road, Suite 401
Wilmington, DE 19808 Mr. Jorge Antonio Angulo Aguilar
c/o JGP Contracting LLC
350 N. Main Street
Smyrna, DE 19977
Submitted: August 19, 2024
Decided: September 11, 2024
RE: C & C Drywall Contractors North, Inc., et al. v. Jorge Antonio
Angulo Aguilar, C.A. No. K24J-00450 JJC
Dear Ms. Petrone and Mr. Angulo:
Plaintiffs, C & C Drywall Contractors North, Inc. and Herminio Cisneros
Campos (collectively referred to as “C & C”), seek to confess judgment against
Defendant Jorge Antonio Angulo Aguilar (“Mr. Angulo”) in the amount of $44,000.
At Mr. Angulo’s request, the Court held a hearing pursuant to 10 Del. C. § 2306(b)
to determine if he understandingly waived notice and his opportunity to be heard
before entry of final judgment. For the reasons that follow, C & C did not
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demonstrate that Mr. Angulo knowingly, intelligently, and voluntarily consented to
the confession of judgment.
Evidence Presented at the Hearing
Mr. Angulo signed a loan agreement and promissory note on March 8, 2023.1
The terms of those agreements required him to repay a $100,000 interest-free loan
to C & C within three months.2 The promissory note contained a paragraph
conspicuously entitled “Confession of Judgment.”3 That provision ostensibly
permitted C & C to enter judgment against Mr. Angulo without notice or hearing.4
It recited that the note’s maker, Mr. Angulo, understood the provision and that he
either had the assistance of counsel before reviewing it or elected to forgo the help
of counsel before signing it.5
At the hearing, C & C presented the testimony of three credible witnesses.
First, C & C called Mr. Cisneros, one of the two plaintiffs, who testified with the
assistance of a Spanish interpreter. He confirmed that (1) he lent Mr. Angulo
$100,000; (2) Mr. Angulo signed the loan agreement and note; and (3) Mr. Cisneros
believed that Mr. Angulo understood the terms of the agreement and note when they
signed the documents.
Next, C & C presented the testimony of C & C’s chief financial officer, project
manager, and secretary, Heather Jacobs. Ms. Jacobs testified that she discussed the
documents with Mr. Cisneros and Mr. Angulo in the office, and that Mr. Angulo
appeared to understand them. Her testimony barely touched on the confession of
judgment provision, however. She merely testified that she told Mr. Angulo that the
1
(Pls’. Ex. No. 1) Loan Agreement at 2; Promissory Note at 4.
2
Loan Agreement ¶ 3.
3
Promissory Note ¶ 6.
4
Id.
5
Id.
2
confession of judgment provision meant that if Mr. Angulo did not repay the loan, C
& C “will take [Mr. Angulo] to court.”
Lastly, C & C called Mr. Angulo as a witness during its case-in-chief. Mr.
Angulo later testified in his portion of the case as well. From the outset, Mr. Angulo
conceded the note’s enforceability and that he still owed C & C a significant portion
of the funds he had borrowed. He maintained throughout his testimony and
argument, however, that he should be permitted to repay C & C through a side
agreement that he entered with Mr. Cisneros. C & C objected to the admission of
evidence regarding Mr. Angulo’s position concerning the unpaid balance and the
alleged side agreement. For the reasons explained at the hearing, the Court
sustained C & C’s objection because those issues fell outside the limited scope of
the hearing.6
The hearing record is also significant for what it did not include. Specifically,
it included no evidence to provide even an inference that Mr. Angulo understood the
agreement or could read English. The record also contained no evidence that
demonstrated that Ms. Jacobs, who spoke and read English, explained the nature of
a confessed judgment to Mr. Angulo. Nor did the record contain evidence regarding
Mr. Angulo’s sophistication in business matters. Finally, the record contained no
evidence to demonstrate how long C & C permitted Mr. Angulo to review the
documents before he signed them.
Contentions of the Parties
C & C contends that Mr. Angulo consented to this confessed judgment when
he signed the loan agreement and promissory note. At the outset, C & C stresses
that it filed a notice for entry of judgment and affidavit that met the requirements of
6
See Customers Bank v. Zimmerman, 2013 WL 6920558, at *3 (Del. Super. Nov. 22, 2013)
(recognizing that Superior Court Civil Rule 58.1 provides that a hearing for confession of judgment
is limited in scope to the issue of waiver of the rights to notice and a hearing).
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10 Del. C. §2306.7 C & C further asserts that Mr. Angulo knowingly, intelligently,
and voluntarily agreed to a confessed judgment.
In response, Mr. Angulo admits that he signed the loan agreement and
concedes that the agreement and note are enforceable. He instead focuses on an
alleged side agreement with C & C that he contends should permit him to repay the
balance due by performing continued contractual work for C & C. Mr. Angulo has
not addressed the confession of judgment provision at any point, however.
Applicable Standards and Scope of the Hearing
A debtor’s due process rights to notice and a hearing are subject to contractual
waiver provided the debtor agrees to a confessed judgment if he or she defaults.8 A
confessed judgment does not become final, however, until after the debtor has the
right to a hearing to determine if he or she “understandingly waived [the] right[s] to
notice and an opportunity to be heard.”9 In a hearing held for that purpose, a
creditor who seeks to confess judgment bears the burden of persuasion.10 There, the
creditor must demonstrate by a preponderance of the evidence that the debtor
knowingly, intentionally, and voluntarily waived the right to notice and a hearing.11
The Court considers the totality of the circumstances when making those findings.12
The General Assembly articulated the necessary prerequisites for judgments
by confession in 10 Del. C. § 2306. Section 2306 requires the Court to hold the
hearing, if requested by the defendant, before entering final judgment.13 Four
7
See 10 Del. C. § 2306 (providing the filing and notice prerequisites for seeking a confessed
judgment).
8
Mazik v. Decision Making, Inc., 449 A.2d. 202, 204 (Del. 1982).
9
10 Del. C. § 2306(b).
10
Super. Ct. Civ. R. 58.1(d)(5).
11
McQuillin v. Evans, 2023 WL 7018042, at *4 (Del. Super. Oct. 24, 2023).
12
Id.13
10 Del. C. § 2306(b); see also Super. Ct. Civ. R. 58.1(d)(5) (providing that a debtor may appear
in Court and object to the entry of judgment by confession and that a hearing is then held to
determine if the debtor effectively waived his or her rights).
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factors aid the Court in determining whether a debtor (1) understood the effect of a
confession of judgment provision, and (2) intentionally waived his or her rights to
notice and opportunity to be heard. Those factors include:
(1) The defendant’s business sophistication and experience with similar
documents; (2) whether the defendant consulted an attorney; (3)
whether all bargaining parties took the necessary steps to ensure that
the terms of the agreement were read and understood at the time the
transaction was entered; and (4) whether the defendant had the
opportunity to review the document containing the confession of
judgment [provision].14
Findings of Fact and Analysis
The two principals speak Spanish but the promissory note in this case was
written in English. The confession of judgment provision, found in paragraph 6 of
the note, conspicuously explained what the debtor agreed to waive: the rights to
notice and a hearing.15 Despite the provision’s clarity in English, on this record,
the totality of the evidence fails to demonstrate that Mr. Angulo understood the
confession of judgment provision or intentionally waived his right to advance
contractual defenses to C & C’s claim.
More specifically, C & C, the party with the burden of persuasion, offered no
evidence to support that Mr. Angulo understood the provision. At the outset, the
absence of evidence regarding Mr. Angulo’s ability to understand written English
cuts against C & C’s claim that Mr. Angulo understood it. Furthermore, Mr.
Angulo’s testimony and argument demonstrated that he did not understand it. He
14
McQuillin, 2023 WL 7018042, at *4; see also RBS, N.A. v. Caldera Mgmt., Inc., 2009 WL
3011209, at *3 (D. Del. 2009) (citing Pellaton v. Bank of N.Y., 592 A.2d 473, 476–477 (Del. 1991)
(recognizing that the fact that the totality of the circumstances, which included the fact that the
defendant had ample experience with the type of contract in question, that the defendant signed
each document with the assistance of its attorneys, and that the defendant had ample opportunity
to read and understand the documents supported the conclusion that the defendant waived its rights
voluntarily).
15
Promissory Note at 2.
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focused only on the contentions that he had repaid some of the money and that the
alleged side agreement should provide him more time to pay the balance. He could
not have intentionally waived the right to present relevant contract defenses without
at least a basic understanding of what the provision meant.
The result remains the same when applying the four factors referenced above
more granularly. First, the record contains no evidence regarding Mr. Angulo’s
business experience or experience with similar documents. Second, it contains no
evidence that suggests that Mr. Angulo consulted an attorney or had the opportunity
to do so. To the contrary, the parties held the meeting to sign the document in C &
C’s office building and none of the three persons present testified that they discussed
Mr. Angulo’s right to have an attorney review the document. Third, Ms. Jacobs
testified that she explained the documents to Mr. Angulo in only a general sense and
that she did not read or translate the documents verbatim. Moreover, she testified
that she told him that the confession of judgment provision meant merely that it
permitted C & C to take him to court if he did not pay. Fourth and finally, C & C
offered no evidence to touch upon how long Mr. Angulo had to review the documents
before he signed them.
On balance, the totality of the evidence includes (1) no evidence touching on
the four factors, (2) Ms. Jacobs’ incorrect explanation to Mr. Angulo in Spanish that
the confession of judgment simply permitted C & C to file a debt action upon breach,
and (3) the sole reasonable inference that Mr. Angulo speaks only Spanish and could
not read the confession of judgment provision because it was in English. On these
facts, C & C did not meet its meet its burden of persuasion.
As a final note, Mr. Angulo conceded the note’s enforceability and that it
required him to repay $100,000. The remaining dispute centers on how much Mr.
Angulo owes C & C. In the interest of practicality, C & C has leave to amend its
pleading to assert a civil claim for the amount it contends Mr. Angulo still owes. If
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C & C elects to do so, it may serve the amended pleading upon Mr. Angulo by first
class mail because he participated in the originally noticed civil motion, he
participated in the subsequent evidentiary hearing, and he confirmed his mailing
address in Court. Assuming C & C elects to amend its pleading to one requesting
damages in contract, Mr. Angulo must file his answer within twenty days after such
service. In Mr. Angulo’s answer, he must include the amount he concedes he still
owes. The Court will then hold a prompt scheduling conference and set an expedited
scheduling order because the trial’s focus should be a narrow one.
Conclusion
For the reasons explained above, C & C’s request to enter a confessed
judgment against Mr. Angulo is DENIED. C & C, however, has leave to amend
its pleading to advance a contract claim against Mr. Angulo.
IT IS SO ORDERED.
Very truly yours,
/s/ Jeffrey J Clark
Resident Judge
Via File & ServeXpress
U.S. Mail to Defendant Jorge Antonio Angulo Aguilar
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