Wirth v. Top Bail Surety, Inc. ( 2021 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
JERZY WIRTH and FLOYD WHITE, )
Plaintiffs (Judgment Creditors), )
)
v. ) C.A. No. N14C-02-137 DCS
)
TOP BAIL SURETY, INC., JOHN S. )
DONAHUE, IV, and HARRY O. )
JENNINGS, )
Defendants (Judgment Debtors). )
Submitted: February 5, 2021
Decided: April 14, 2021
John S. Donahue IV’s Motion for Objection to Confirmation of the Sheriff
Sale – DENIED
IBDB 19 LLC, d/b/a Tri Star 218’s Motion to Deny Confirmation and Set Aside
Sheriff’s Sale – DENIED
OPINION
Jerzy Wirth, Pro Se Plaintiff
Floyd White, Pro Se Plaintiff
Donald L. Gouge, Jr., Esquire, Attorney for Sheriff
Brian T. Murphy, Attorney for IBDB
John S. Donohue, IV, Pro Se Defendant
STREETT, J.
1
Introduction
Jerzy Wirth and Floyd White (“Wirth”, “White,” and collectively, the
“Plaintiffs”) are judgment creditors of John S. Donahue IV, Harry O. Jennings, and
Top Bail Surety, Inc. (“Donahue”, “Jennings”, and “Top Bail”, collectively, “the
Defendants”). White, Donohue, and third-party bidder IBDB 19 LLC, d/b/a Tri Star
218 (“IBDB”), for various reasons, assert that the Sheriff’s sale at auction of
Donahue’s levied real estate should be set aside.
The Court now reviews Donahue’s Objection to Confirmation of Sheriff Sale
and IBDB’s Motion to Deny Confirmation and Set Aside Sheriff’s Sale.1 For the
following reasons, the Court denies the Motions.
Statement of Facts
This is a civil debt collection proceeding. The subject property is 1810
Sycamore Street, Wilmington, Delaware 19805 (the “Property”).
On February 14, 2018, the Court approved a Stipulated Judgment and,
accordingly, entered judgment in favor of Plaintiffs and jointly and severally against
Defendants in the amount of $406,856.37.
1
Plaintiff White withdrew his Motion to Set Aside Sheriff Sale on February 4, 2021.
2
On July 12, 2018, a fieri facias attachment writ was issued to attach all of the
goods, chattels, etc. belonging to all of the Defendants.2
On October 24, 2018, the Sheriff returned the writs against Donahue and
Jennings nulla bona after Plaintiffs failed to provide the Sheriff with required
documentation.
On January 24, 2020, a second fieri facias attachment writ was issued against
Donahue.3 On March 26, 2020, the Sheriff levied on the Property.
During this time, a global pandemic erupted. On March 12, 2020, Governor
John Carney issued an Emergency Declaration (“Emergency Declaration”) based on
the Centers for Disease Control and Prevention’s (“CDC”) determination that
COVID-19 had caused the pandemic.4 Several modifications of the Emergency
Declaration were then issued, including limitations on public access to government
buildings.
2
On August 9, 2018, counsel for Donahue and Top Bail filed a Notice of Bankruptcy Case Filing
with this Court. According to the attorney for 1st Choice Bail Bonds (“1st Choice”), the entity
with which Donahue subsequently became attached, Donahue emerged from Chapter 11
bankruptcy on December 4, 2019.
3
On February 26, 2020, 1st Choice responded to the writ and claimed that Donahue is not subject
to wage attachment because, pursuant to 10 Del. C. § 4913(c), Donahue is not an employee and is,
instead, an independent contractor who pays 1st Choice for using its name. White challenged this
response and the Court submitted an Order of Reference to a Commissioner in March 2020. The
wage attachment issue has not yet been heard by a Commissioner.
4
On March 22, 2020, the Emergency Declaration was modified. It closed all non-essential
businesses and required essential businesses to follow social distancing and CDC guidelines.
There have been numerous subsequent modifications and the Emergency Declaration remains in
effect as of the date of this opinion.
3
Additionally, on March 24, 2020, Governor Carney issued a Sixth
Modification of the Emergency Declaration (“Sixth Modification”).5 The Sixth
Modification stayed all Sheriff’s sales of real estate carried out by virtue of the
execution process. The stay remained in effect until June 30, 2020 and Sheriff’s sales
did not resume until October 2020.
Prior to the pandemic, and since 2003, New Castle County Sheriff’s sales had
been held in Council chambers of the Louis L. Redding City/County Building
(“City/County Building”) in Wilmington. After the stay was lifted, sales have been
held at an alternative site because public access to the City/County Building (and the
Courthouse) was limited in response to the pandemic.
As such, on October 13, 2020, an auction took place at the Wilmington Police
Athletic League (“PAL”, “PAL Center”) at 3707 North Market Street in
Wilmington, Delaware. Donahue’s levied Property was sold at that location on that
day.
IBDB was the highest bidder at the auction. IBDB had bid $75,000.00 and it
deposited the required 10% with the New Castle County Sheriff. However, on
November 17, 2020, the sale was stayed because IBDB failed to make the final
payment by the court imposed due date.
5
Sixth Modification of the Declaration of a State of Emergency for the State of Delaware due to
a Public Health Threat (Mar. 24, 2020).
4
On November 17, 2020, White filed a Motion for Application to Set Aside
Sheriff Sale based on the location of the sale. On the same day, Donahue also filed
a Motion for Objection to Confirmation of the Sheriff Sale based on health reasons.
On November 18, 2020, IBDB filed a Motion to Deny Confirmation and Set
Aside Sheriff’s Sale based on the location of the sale. IBDB also alleged that Ditech
Financial LLC and GMAC should have been given notice.
On December 31, 2020, the Sheriff filed its response to the three motions to
set aside the Sheriff’s sale.
On January 19, 2021, the Court requested clarification regarding the notice to
lien holders.
On January 20, 2021, IBDB filed its response to the Court’s query and
reiterated its notice argument.
On January 27, 2021, the Sheriff filed its response and stated that he did not
send a copy to Ditech Financial LLC (“Ditech”) because it was not listed on the
Notice to Lien Holders.
On February 4, 2021, White filed a Notice of Plaintiff’s Withdrawal of
Plaintiff’s Application to Set Aside Sheriff’s Sale and Response to Court’s Letter of
January 19, 2021.
On February 5, 2021, White filed his responses to both Donahue’s and IBDB’s
motions to set aside the Sheriff’s sale.
5
Parties’ Contentions
White’s Motion to Set Aside alleged that the sale did not occur at the premises
pursuant 10 Del. C. § 4974.6 However, White withdrew this motion to set aside on
February 5, 2021 (and surmised that IBDB sought to set aside the sale because of
financial difficulties).7
Donahue’s Motion seeks delay for personal reasons. Donahue does not allege
any legal arguments, procedural impropriety, or wrongdoing. Instead, Donohue
writes that he has health problems, was “unprepared for this [sale],” and that he and
his nephew (who purportedly lives with him) would end up homeless.
IBDB contends that the location of the Sheriff’s sale at the Wilmington PAL
was not proper because the sale was not held at the courthouse or on the premises of
the Property in violation of 10 Del. C. § 4974. IDBD also claims that Plaintiffs’
Notice to lien holders was flawed because Plaintiffs allegedly failed to send notice
6
10 Del. C. § 4974 states:
Place for public sale of real estate. All sales of real estate, made by a sheriff by
virtue of execution process, shall be made on the premises to be sold, or at the
courthouse for the county in which the premises are situated, or in Sussex
County, at the Sussex County Sheriff’s Office or at any public building in the
county seat where the premises are situated. In Kent County, sales may also be
conducted in any building in which the Sheriff’s Office is located. (Emphasis
added).
7
Prior to White’s withdrawal of his motion to set aside the verdict, White had also sought a writ
of mandamus concerning the Property (N20M-06-074). On February 26, 2021, the Honorable
Calvin L. Scott dismissed that action with prejudice.
6
to Ditech, the current holder of the mortgage, and GMAC, Inc. the holder of a
judgment lien recorded on April 30, 2012 in C.A. No. N12J-02174.
As to notice to lien holders, White states that notice was given to the proper
lien holders.8 White also submitted several exhibits and requested that the Court
take judicial notice under D.R.E. § 201 of the facts contained in Exhibits 1, 3, 4 and
5.9
The Sheriff answers that the PAL Center became the alternative auction site
in response to the COVID-19 pandemic and pursuant to H.B. 547, which was passed
in 2002, and gave sheriffs the flexibility to hold public sales anywhere in the County
8
White writes that Ditech and New Residential Mortgage LLC (“New Residential”), the original
lien holder, “are one in the same or share multiple connections and that [Ditech] was notified by
certified mail . . . .” Plaintiff’s Response to Court’s Letter, at 3 (Feb. 4, 2021).
9
White attached several exhibits to his response, including a May 2019 certified mail receipt
addressed to Ditech at P.O. Box 10826, Greenville, South Carolina 29603-0826 signed by a D.
Reynolds; an October 2, 2019 HousingWire.com article titled, “New Residential Investment buys
Ditech Financial for $1.2 billion,” which states in pertinent part that Ditech “sold off its forward
mortgage business . . . to New Residential Investment[, which] . . . acquired ‘select assets from
Ditech Holding Corporation and Ditech Financial’”; certified mail receipts from the October 13,
2020 Affidavit of Notice to Lien Holders in the present matter showing that a notice was sent to
NewRez LLC at P.O. Box 10826, Greenville, South Carolina 29603-0826 signed by a D.
Reynolds; a Transfer of Claim Other than for Security from the U.S. Bankruptcy Court for the
District of Delaware filed on April 17, 2019 showing that Ditech transferred John S. Donahue IV’s
mortgage for the Property to New Residential; and an August 21, 2018 affidavit signed by Edward
Born, “Assistant Vice President for Ditech Financial LLC as Attorney-In-Fact for New Residential
Mortgage LLC”. (Exhibits 1, 3, 4, and 5).
7
seat for each County where such real estate is located.10
The Sheriff explained that, although holding a sheriff’s sale on the subject
property is an option set forth in 10 Del. C. § 4974, the logistics of having to sell
multiple properties at different sites instead of from one location is impracticable.11
Additionally, for the past 17 years, since 2003, more than 12,000 parcels of real
property have been sold, without challenge, at locations other than the City/County
Building or the situs of the property.12 Moreover, pursuant to H.B. 547, the Sheriff
has flexibility.13
Standard of Review
This Court has broad discretion to confirm or set aside a sheriff’s sale and the
Court’s decision will be upheld absent an abuse of discretion.14 This Court has an
10
H.B. 547 is titled “An Act to Amend Title 10 of the Delaware Code Relating to Executions”.
It states:
Section 1. Amend § 4974, Chapter 49, Title 10 of the Delaware Code by adding the
following language after [“]Sussex County Sheriff’s Office[”] “or at any public
building in the County seat where the premises are situated.” (Emphasis
added).
11
The Sheriff writes that there are some months when more than 100 parcels are sold.
12
The Sheriff also writes that White and IBDB are the only parties that have challenged the
location of the October 13, 2020 or November 10, 2020 sales held at the PAL Center.
13
The synopsis for H.B. 547 explains that: “This legislation allows the Sheriff in each County to
hold the public sale anywhere in the County seat for each County where such real estate is located.
The New Castle County Sheriff does not have space in the new Courthouse in Wilmington and
seeks to conduct the real estate sales in the City/County building”. (Emphasis added).
14
Burge v. Fid. Bond and Mortg. Co., 648 A.2d 414, 420 (Del. 1994); 2 Victor B. Woolley,
Woolley’s Practice in Civil Actions, § 1108 (1906).
8
“inherent equitable power to control the execution process.”15 When reviewing a
sheriff’s sale, it is the Court’s responsibility to “protect the affected parties from
injury or injustice.”16 The Court must determine whether there was “some defect or
irregularity in the process or mode of conducting the sale, or for neglect of duty . . .
or some other sufficient matter . . . whereby the rights of parties to, or interested in
the sale are, or may have been prejudiced.”17
Regarding statutory interpretation, Delaware courts follow settled principles
that require giving effect to the plain language of unambiguous statutes.18 When
statutory language is clear and unambiguous, statutory interpretation is unnecessary
as courts “have no authority to vary the terms . . . or ignore mandatory provisions.”19
Moreover, a statute is only ambiguous if “it is reasonably susceptible to different
interpretations, or if giving a literal interpretation to the words of the statute would
15
LSF9 Participation Trust v. Truitt, 2017 WL 8787509, at *1 (Del. Super. 2017) (citing Burge,
648 A.2d at 420).
16
Id.17
LSF9, 2017 WL 8787509, at *1 (citing Petition of Adair, 190 A. 105, 107 (Del. Super. 1936)).
18
Ovens v. Danberg, 149 A.3d 1021, 1024 (Del. 2016).
19
Bd. of Adjustment of Sussex Cnty. v. Verleysen, 36 A.3d 326, 331 (Del. 2012) (quotations and
citations omitted).
9
lead to an unreasonable or absurd result that could not have been intended by the
legislature.”20
Discussion
For the following reasons, this Court finds that the Sheriff’s sale of the
Property did not violate 10 Del. §4974, all lien holders received notice, and
Donohue’s Motion lacks merit.21
The Court finds that the location of the sale was proper and that Sheriff real
estate sales can take place at the premises, the courthouse, the City/County Building,
or in a public building.
10 Del. C. § 4974 states:
Place for public sale of real estate.
All sales of real estate, made by a sheriff by virtue of execution process,
shall be made on the premises to be sold, or at the courthouse for the
county in which the premises are situated, or in Sussex County, at the
Sussex County Sheriff’s Office or at any public building in the county
seat where the premises are situated. In Kent County, sales may also
be conducted in any building in which the Sheriff’s Office is located.
(Emphasis added).
Here, the Property sale did not take place at the premises, the courthouse, or
the City/County Building. It took place in Wilmington and it is undisputed that
20
Evans v. State, 212 A.3d 308, 314 (Del. Super. 2019) (quoting Arnold v. State, 49 A.3d 1180,
1183 (Del. 2012)) (internal quotations omitted).
21
While the Court is sympathetic to Donahue’s circumstances, he fails to assert any legal basis
upon which relief could be granted.
10
Wilmington is the county seat of the county where the levied property was situated.
Moreover, despite IBDB’s parsing of the statute,22 H.B. 547 clearly allows the
Sheriff in each county to hold Sheriff’s sales of real property “anywhere in the
County seat for each County where such real estate is located”.
Furthermore, the Superior Court has determined that New Castle Sheriff sales
may be conducted in public buildings. In Re: New Castle County Sheriff,23 a 2020
decision, the Court wrote that 10 Del. C. § 4974 means that “sheriff’s sales shall
occur at the premises being sold or in a ‘public building’ in the county seat [where
the premises are situated].”24
Here, the Wilmington PAL Center is a public building in the county seat in
the county wherein the Property is located. The Sheriff explained that the PAL
Center is a “public building on the days of the Sheriff sales because the Sheriff rented
the PAL for the purpose of holding a public sale and was open to members of the
public.”25
22
IBDB maintains that public building modifies Sussex County and does not apply to New Castle
County.
23
Re: New Castle Cnty. Sheriff, 2020 WL 5555085 (Del. Super. Sept. 16, 2020) (The Sheriff
requested that the Court allow future real estate auctions to be conducted online due to the
pandemic. The Court, without prejudice, denied this motion on procedural grounds because it
deemed it to be a request for an advisory opinion).
24
Id. (Emphasis added).
25
Sheriff’s Amended Response in Opposition in Part to Three Motions to Set Aside Sheriff’s Sale,
at ¶ 11 (Dec. 31, 2020).
11
The Delaware Supreme Court explained, in Moore v. Wilmington Housing
Authority, that a building is a “public building” if it is “operated and maintained for
a public purpose” and “its function is to benefit the public or the community.”26
Additionally, a building is public if it is “open to those members of the public who
use it for its intended purpose . . . even if access is limited only to those members of
the public . . . who use it for its intended purpose.”27 The auction did not violate 10
Del. C. § 4974 when it was held at the PAL Center.
As to the lien holder notice issue, the Court finds that notice was properly
given. IBDB contends that the sale must be set aside because Plaintiffs filed a
defective Affidavit and failed to send the Notice to two lien holders - Ditech and
GMAC. However, the Affidavit clearly shows that GMAC was sent notice28 and, in
response to the Court’s request for clarification, judgment creditor supplied
sufficient information in its exhibits that Ditech and/or New Residential (its
successor) was also on notice.
Under the Delaware Rules of Evidence, the Court may take judicial notice of
26
619 A.2d 1166 (Del. 1993).
27
Id. at 1175.
28
See Docket # 117, Affidavit of Notice to Lien Holders, Tenants, Record Owners and Persons
Having an Interest of Sheriff’s Sale of Real Estate for the October 13, 2020 Sheriff Sale, at 2.
12
adjudicative facts.29 The facts contained in Exhibits 1, 3, 4, and 5 attached to White’s
response are capable of accurate and ready determination by resort to sources whose
accuracy cannot be reasonably questioned. Here, exhibits include U.S. Postal
Service certified mail receipts, a U.S. Bankruptcy Court for the District of Delaware
filing, and a notarized affidavit from an Assignment of Mortgage. The Court has
been supplied with the necessary information. Judicial notice is taken of White’s
exhibits marked 1, 3, 4, and 5. New Residential, not Ditech, is the current lien
holder. New Residential and GMAC were given notice.30
Conclusion
Accordingly, for the foregoing reasons, Defendant Donahue’s Objection to
Confirmation of Sheriff Sale is DENIED. Third party IBDB’s Motion to Deny
Confirmation and Set Aside Sheriff’s Sale is DENIED.
IT IS SO ORDERED.
/s/ Diane Clarke Streett
Diane Clarke Streett, Judge
29
D.R.E. § 201. (a) Scope of Rule. This rule governs only judicial notice of adjudicative facts. (b)
Kinds of Facts. A judicially noticed fact must be one not subject to reasonable dispute in that it
is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of
accurate and ready determination by resort to sources whose accuracy cannot reasonably be
questioned. (c) When Discretionary. A court may take judicial notice, whether requested or not.
(d) When Mandatory. A court shall take judicial notice if requested by a party and supplied with
the necessary information. (e) Opportunity to Be Heard. A party is entitled upon timely request
to an opportunity to be heard as to the propriety of taking judicial notice and the tenor of the matter
noticed. In the absence of prior notification, the request may be made after judicial notice has been
taken. (f) Time of Taking Notice. Judicial notice may be taken at any stage of the proceeding.
(Emphasis added).
30
IBDB did not dispute these exhibits.
13