MILLCREEK SHOPPING CENTER, LLC, a Delaware limited liability company, Plaintiff,
JENNER ENTERPRISES, INC., a Delaware corporation, MICHAEL P.LEVITSKY and JANET LEVITSKY, Defendants.
ORDER AWARDING DAMAGES
M. Parker Commissioner.
in this case is the award of damages to Plaintiff Millcreek
Shopping Center, LLC ("Millcreek").
the landlord, is entitled to recover damages against the
Defendants Michael Levitsky and Janet Levitsky, on their
personal guarantees guaranteeing the obligations of Jenner
Enterprises, Inc. ("Jenner"), the tenant, as a
result of Jenner's breach of a commercial retail lease
located in the Millcreek Shopping Center on Kirkwood Highway
in Wilmington, Delaware ('the "Rental Unit").
Jenner operated a Fast Signs franchise from the
determination as to the amount of damages to be awarded
Millcreek was referred to the undersigned Commissioner and
was to be decided by binding arbitration.
parties, however, advised the court that they did not believe
a binding arbitration was needed in order to determine the
amount of damages to be awarded. The parties advised that
they believed the damage award could be determined based on
written submissions by the parties.
was conducted as to damages. Defendants, in response to
Millcreek's opening submission, raised two legal issues
and several factual issues as to the amount of damages sought
by Millcreek. The two legal issues pertained to: 1) whether
interest should be awarded at the contract rate of 6.25% or
whether 6 Del. C. § 2301 operated to cap the
interest rate at 5.75%; and 2) whether 10 Del. C.
§3912 was applicable in the subject case thereby
requiring that the attorneys' fee award be capped at 20%
of the total amount due.
Millcreek's reply submission, it addressed the factual
issues raised by Defendants and provided additional support
for the amount of damages requested.
briefing was completed, on February 6, 2017, a teleconference
was held. During the teleconference, the court advised the
parties that both of the legal issues raised by Defendants
were to be resolved in Millcreek's favor. The court
advised that: 1) the interest to be awarded in this case was
the contract rate of interest of 6.25% and that this case was
not governed by 6 Del. C. § 2301, and 2) 10
Del.C. §3912 was not applicable to this case
and did not operate to cap the attorneys' fee award to
20% of the total amount due. The court explained the reasons
for its rulings on these issues.
the teleconference, the court scheduled a hearing/binding
arbitration for February 23, 2017 to resolve any and all
outstanding factual issues remaining to be resolved.
Defendants advised that the hearing/binding arbitration on
February 23, 2017 did not need to go forward. The Defendants
advised that they were not contesting Millcreek's
calculations as to the monies owed nor were they contesting
any of the amounts sought on factual grounds. There being no
factual dispute remaining to be resolved, the hearing/binding
arbitration of February 23, 2017 do not go forward.
opinion memorializes the court's decision as to damages.
Millcreek's damage claim is comprised of four categories:
1)rent and late fees;
3)common area maintenance charges; and
Rent and Late Fees: $80, 309.19
parties do not dispute that rent and late fees are owed to
Millcreek nor do they dispute that the amount of those fees
total $80, 309.19.
Interest: $16, 768.62, plus post- judgment interest
parties do not dispute that the contractual rate of interest
is 6.25%. The
parties do not dispute that the pre-judgment interest owed to
Millcreek calculated at the 6.25% contractual interest rate
is $16, 768.92.
contend that, as a matter of law, the interest rate should be
capped at 5.75% pursuant to 6 Del. C. §
2301(a), and that interest should be awarded at the 5.75%
rate rather than the 6.25% contractual rate.
case is, however, not governed by 6 Del. C. §
Del. C. § 2301(a) provides: Any lender
may charge and collect from a borrower interest at
any rate agreed upon in writing not in excess of 5% over the
Federal Reserve discount rate. .. (emphasis
the cap on the interest rate as provided by §2301(a),
does not even apply to lender/borrower relationships when the
money loaned exceeds $100, 000 and is not secured by a
mortgage against the principal residence.
Delaware Supreme Court has held that 6 Del. C.
§ 2301(a) was intended to cap interest only in cases of
personal loans. When the plaintiff does not seek interest
due for the failure to pay a personal loan, the contract rate
applies to the accrual of the interest. In a commercial dispute,
not involving a personal loan, the contractual rate set forth
in the lease applies to interest. The contractual rate of interest
applies to both pre-judgment and post-judgment interest.
Del. C. § 2301(a), by its express language,
refers to interest charged by a "lender" to a
"borrower." The relationship between Millcreek and
the Levitskys is not that of lender and borrower. The
Levitskys' liability to Millcreek is under their personal
guaranty of Jenner's obligations under the commercial
retail lease between Jenner and Millcreek. 6 Del. C.
§ 2301(a) is not applicable here.
Defendants have not cited to any case that held that the
contractual rate of interest was unenforceable and superseded
by 6 Del. C. § 2301(a) in an action involving a
commercial real estate lease. Moreover, Defendants have not
cited to any case, not involving a personal loan, in which a
contract rate of interest was held to be unenforceable and
wholly supplanted by §2301(a).
and post-judgment interest is awarded at the contractual rate
of 6.25%. Pre-judgment interest is awarded in the amount of
Common Area Maintenance Charges $7, 979.01
parties do not dispute Jenner was required pay its pro rata
share of common area maintenance charges ("CAM").
Defendants requested additional information from Millcreek as
to how it derived the CAM charges sought. Millcreek provided
the additional information sought.
Defendants wanted to contest Millcreek's calculations
following the receipt of the additional information provided
by Millcreek or wanted to pursue any other factual dispute as
to the amount of CAM charges sought, any such issues were to
have been presented and would have been resolved at the
hearing/binding arbitration. The Defendants advised that no