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Resolve Funding, LLC v. Buckley Property Services, LLC

Superior Court of Delaware

February 7, 2018

RESOLVE FUNDING, LLC, Plaintiff,
v.
BUCKLEY PROPERTY SERVICES, LLC and PAM GREER BUCKLEY, Defendants.

          Date Submitted: December 13, 2017

         Upon Defendants' Motion to Dismiss. Denied.

          David B. Anthony, Esq. and Sean A. Meluney, Esq., Berger Harris LLP, Attorneys for Plaintiff.

          Michael F. Duggan, Esq. and Brett T. Norton, Esq., Marks, O'Neill, O'Brien, Doherty & Kelly, P.C., Attorneys for Defendants.

          MEMORANDUM OPINION

          STOKES, J.

         I. INTRODUCTION

         This matter is presently before the Court on the motion of Defendants, Buckley Property Services, LLC and Pam Greer Buckley (collectively "Buckley"), for dismissal pursuant to Superior Court Civil Rules 9(b) and 12(b)(6). The Plaintiff, Resolve Funding, LLC ("Resolve"), opposes the Motion. For the following reasons, Defendants' Motion to Dismiss is DENIED.

         II. FACTS

         In June 2015, Best Point, LLC ("Best Point") applied to Resolve for a loan to purchase 205 Pepper Vine Point, Dagsboro, Delaware 19939. Resolve sought a valuation of the property to determine whether to approve the loan. Resolve engaged Buckley, a property appraisal company specializing in residential properties located in Sussex County, to appraise the property. On June 23, 2015, Buckley delivered the appraisal to Resolve. Buckley represented that it had done the following during the appraisal process: (1) performed a complete visual inspection of the interior and exterior areas of the property, (2) performed the appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice ("USPAP"), (3) developed an opinion of the market value of the property, (4) used a reliable sale comparison approach for the valuation, (5) researched, verified, analyzed, and reported prior comparable sales, (6) selected and used comparable sales that were locationally, physically, and functionally similar to the property, (7) reported adjustments to the comparable sales that reflect the market's reaction to the difference between the property and the comparable sales, and (8) took into consideration the factors that have an impact on value. Buckley asserted that with certain minor improvements[1] the market value of the property in June 2015 was $1, 950, 00.00.

         Resolve approved Best Point's loan in the amount of $1, 118, 250.00. Best Point executed and delivered the mortgage to Resolve on July 23, 2015. In January 2016, Resolve retained a real estate broker in order to list the property for sale, as foreclosure appeared imminent. At that time, the real estate broker estimated that the value of the property was around $1, 000, 000.00. On February 5, 2016, Resolve instituted a foreclosure proceeding against Best Point. Ultimately, a default judgment was entered in favor of Resolve for $1, 610, 508.84. Resolve executed the judgment. On February 24, 2017, Resolve was the highest bidder at the Sheriffs sale. The property was listed on March 9, 2017. On July, 20, 2017, the property sold for $649, 000.00.

         On September 1, 2017, Resolve filed the Complaint in this action. It alleges one count of negligence and one count of negligent misrepresentation against Buckley. This Motion to Dismiss is Buckley's first responsive pleading.

         III. PARTIES' CONTENTIONS

         Buckley first argues that Resolve has not pleaded facts in the Complaint sufficient to survive Rule 9(b) scrutiny. Rule 9(b) states, "In all averments.. .of negligence.. .the circumstances constituting...negligence...shall be stated with particularity."[2] In Buckley's view, Resolve has only made conclusory statements which are not supported by fact, and which fail to support the claim of negligence. According to Buckley, the facts show that Resolve "entered into a lending market it did not understand, made underwriting mistakes, and accepted a bad borrower."[3] As part of this argument, Buckley asserts that the appraisal was not a price guaranty and the fluctuations in the real estate market are normal and expected. Essentially, Buckley believes that Resolve is attempting to recover for negligence when, in reality, it simply made a bad deal.

         In addition, Buckley argues that Resolve did not allege facts to support two of the elements of negligent misrepresentation: reasonable reliance and causation. In support of this assertion Buckley restates the arguments in the paragraph above. In short, Buckley argues that Resolve has not pleaded the ...


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