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SC&A Construction, Inc. v. Potter

Superior Court of Delaware

July 18, 2017

SC&A Construction, Inc.
v.
Charles Potter, Jr. et al.

          Submitted: July 13, 2017

          Donald L. Logan, Esquire Victoria K. Petrone, Esquire, Logan & Petrone, LLC.

          Samuel L. Guy, Esquire Samuel L. Guy, Attorney at Law.

         Dear Counsel, On June 26, 2017, the defendants, Charles Potter, Jr. and Velda C. Jones-Potter (collectively, the "Potters"), filed a Motion for a Stay of Execution of Judgment Pending Appeal (the "Motion to Stay"). After nearly five years of litigation in multiple forums, this Court entered judgment and a mechanic's lien in favor of the plaintiff, SC&A Construction, Inc. ("SC&A"), and against the Potters' property. The Potters are appealing that judgment and lien. In my view, the Motion to Stay is not supported by the analysis required by Kirpat, Inc. v. Delaware Alcoholic Beverage Control Commission[1] and I deny the stay on that basis.

         BACKGROUND

         The factual background of this case is set forth at length in my Memorandum Opinion dated May 31, 2017 (the "May 2017 Opinion"), as well as in a previous decision of the Court of Chancery.[2] It will not be repeated here, except as necessary for the pending Motion to Stay.

         My May 2017 Opinion granted SC&A's Motion to Enter Arbitration Award as a Final Mechanic's Lien Judgment and denied the Potters' request to amend their answer and affidavit of defense. After denying the Potters' motion for reargument, I entered an order (the "Mechanic's Lien Order") on June 21, 2017, which entered judgment in rem in the amount of $116, 364.00, plus post-judgment interest, and placed a lien for that amount on the Potters' house and land. It is execution of this judgment and lien the Potters seek to stay pending resolution of their appeal of the Mechanic's Lien Order.[3]

         The procedural history of the parties' dispute leading up to this point is complicated and not directly related to the Motion to Stay. Suffice to say, the Potters entered into a contract with SC&A for improvements to the Potters' home. Disputes arose regarding those improvements and SC&A filed a mechanic's lien action in this Court. The parties' disputes ultimately were resolved in arbitration, pursuant to an arbitration clause in the parties' contract. The mechanic's lien entered by the Court relates to amounts the arbitrator determined the Potters owed SC&A for improvements to the Potters' property.

         In addition to this litigation, the associated arbitration, and proceedings in the Court of Chancery to confirm the arbitration award, the Potters also have an ongoing dispute with SC&A before the Department of Licenses and Inspections of the City of Wilmington (the "L&I Department"). In support of their Motion to Stay, the Potters filed a recent letter the L&I Department issued, purportedly identifying various deficiencies in the construction of the Potters' roof.[4] The Potters contend these deficiencies are attributable to SC&A and have affected both their property value and their ability to post a bond in support of the Motion to Stay.

         ANALYSIS

         Delaware Supreme Court Rule 32 governs motions to stay pending appeal.[5]Such motions must be made to the trial court in the first instance, which has discretion to grant such a stay provided the appellant gives sufficient security as required by the Delaware Constitution.[6] In exercising its discretion, the court considers four factors: (1) "a preliminary assessment of likelihood of success on the merits of the appeal"; (2) "whether the [movant] will suffer irreparable injury if the stay is not granted"; (3) "whether any other interested party will suffer substantial harm if the stay is granted"; and (4) "whether the public interest will be harmed if the stay is granted."[7]

         The Potters contend their arguments on appeal have a good likelihood of success and that they will suffer irreparable injury if the stay is not granted because "[t]he judgment is a substantial sum which [the Potters] will not likely be able to recover" if they prevail on appeal.[8] The Potters also argued at the hearing on the Motion to Stay that, if forced to pay the judgment or post a bond while the appeal is pending, they will be unable to afford the repairs to their roof identified as necessary by the L&I Department. If they do not pay the judgment, they argue, they may face a sheriffs sale with the property fetching less than full value due to the ongoing roof issues.

         As to the possibility of harm a stay might cause SC&A, the Potters argue SC&A does not face any substantial harm because "[t]here is no indication that a stay will detrimentally impact [SC&A's] economic position."[9] A stay, the Potters further contend, is favored by public policy because the judgment already is secured through the mechanic's lien, [10] and because the L&I Department has ordered SC&A to obtain necessary permits and complete an inspection, an order the Potters contend SC&A has ignored.

         The Potters also argue that, if the Court stays execution pending appeal, no additional security or bond should be required because the mechanic's lien serves the purpose usually served by a bond. The Potters, without citing any record support, assert "[t]he value of properties in [the Potters'] neighborhood far exceeds the value of the mechanic[']s lien."[11] Finally, the Potters urge, if the Court concludes the mechanic's lien ...


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