LOUIS J. CAPANO, III, Plaintiff,
DARIN A. LOCKWOOD and DON A. LOCKWOOD, jointly and severally, Defendants.
Submitted: December 3, 2013
Plaintiff's Renewed Motion for Summary Judgment – GRANTED IN PART, DENIED IN PART Defendants' Renewed Joint Motion for Summary Judgment – GRANTED IN PART, DENIED IN PART
Defendant Darin A. Lockwood's Motion for Leave to File an Amended Answer, Counterclaim, and Third-Party Complaint – DENIED
Defendant Donald A. Lockwood's Motion for Leave to File an Amended Answer, Counterclaim, and Third-Party Complaint – DENIED
Jeffrey M. Weiner, Esquire, Attorney for Plaintiff Louis J. Capano, III.
John W. Paradee, Esquire and Nicole M. Faries, Esquire, Prickett, Jones & Elliott, PA, Attorney for Defendant Darin A. Lockwood.
Constantine Malmberg, III, Young, Malmberg & Howard, P.A., Attorney for Defendant Don A. Lockwood.
William C. Carpenter, Jr. Judge
Before the Court are the following four (4) motions: (1) Plaintiff's Renewed Motion for Summary Judgment; (2) Defendants' Renewed Joint Motion for Summary Judgment; (3) Defendant Darin A. Lockwood's ("Darin") Motion for Leave to File an Amended Answer, Counterclaim, and Third-Party Complaint; and (4) Defendant Donald A. Lockwood's ("Don") Motion for Leave to File an Amended Answer, Counterclaim, and Third-Party Complaint. On the Cross-Motions for Summary Judgment, Plaintiff's and Defendants' Motions are both GRANTED IN PART and DENIED IN PART. Defendants' Motions for Leave to File an Amended Answer, Counterclaim, and Third-Party Complaint are hereby DENIED.
The motions currently before the Court arise from a failed business venture that dates back to 2004. Specifically, Plaintiff ("LIII") and Louis J. Capano, Jr. ("LJC") formed a company, Milton Investments, LLC ("Milton"), in which they were the sole members and Defendants formed a company, Lockwood Brothers II, LLC ("LBII"), in which they were the sole members. In December 2004, Darin and Plaintiff, as authorized members of their respective companies, LBII and Milton, signed an agreement to form a new company, North Milton Development Group, LLC ("NMDG"). Under NMDG, a series of agreements were negotiated and executed in connection with the purchase of land located outside of Milton, Delaware (the "Rust Property"). The parties intended to use the Rust Property for both commercial and residential real estate development.
In order to purchase the Rust Property, NMDG entered into a loan agreement with Wilmington Trust Company ("WTC") for two (2) loans: (1) a December 17, 2004 acquisition loan for $7, 130, 000.00 (the "Acquisition Loan"); and (2) an October 15, 2007 loan for $1, 000, 000.00 (the "Working Capital Loan") (collectively, the "Loans"). The Loans were originally represented to this Court as having been guaranteed by all of the principals of Milton and LBII. However, LJC never signed the loan documents and, although Plaintiff admits that he personally guaranteed the Loans, there is no copy of his execution of some critical documents.
The day prior to NMDG's formation, a contribution agreement (the "2004 CA") was created that would have had the four principals of Milton and LBII personally guaranty the Acquisition Loan. The 2004 CA was intended to not only guarantee the Acquisition Loan from WTC but also give the parties a right of contribution in the event that WTC made a demand on one or more, but not all, of the guarantors. Unknown to Defendants, LJC never signed the 2004 CA. Further, although the 2004 CA stated that all parties thereto were personally guarantying the Acquisition Loan, LJC did not execute any documents to commit to the personal guaranty.
Although WTC loaned over $8 million to NMDG, the downturn in the housing market precluded the development project on the Rust Property from proceeding as planned. As a result, at all times relevant to this litigation the land has largely remained farmland that has been rented out for agricultural purposes. The land's rental income of approximately $15, 000, the only gross revenue from the Rust Property, was insufficient to pay the monthly interest and by August 20, 2010, NMDG was behind on ...