C.A. No. 2022-0076
Del. Ch.Jul 8, 2026Background
- Stombaugh contracted to buy a home Ashburn would build, and the agreement plus addenda barred post-groundbreaking price escalation and required Ashburn to schedule construction meetings and eventual settlement. 1
- Stombaugh selected tile before signing, later gave mortgage commitment documents on time, and only learned months later that Ashburn had not connected her with L&L for final options selections. 2
- After Ashburn told Stombaugh it wanted a $42,363 price escalation despite the addendum, Stombaugh sought direct contact but received no response and Ashburn instead accused her of default and sought to terminate the contract. 3
- Construction stalled for years, the parties never held the required pre-drywall or final walkthrough meetings, and Stombaugh later sought to buy the property as an investment with updated financing terms. 4
- Stombaugh sued for breach, specific performance, damages, and fees; defendants counterclaimed that she missed the options deadline and later raised a mortgage-commitment defense at trial. 5
- The court recommended judgment for Stombaugh, specific performance, denial of interest-differential damages, an inspection right before closing, and fee shifting against defendants. 6
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Stombaugh miss the options deadline? 7 | Stombaugh selected tile before signing and later confirmed options when Ashburn finally connected her with L&L. | Ashburn says she had to finalize options through L&L within 14 days and did not. | No; the deadline did not apply that way, and defendants waived it. 8 |
| Could defendants raise a mortgage-commitment defense? 9 | Stombaugh timely obtained the required commitment and defendants never pleaded or pursued this defense earlier. | Ashburn claimed Stombaugh lacked a valid mortgage commitment during the dispute. | No; the defense was waived as untimely. 10 |
| Did Ashburn breach the contract? 11 | Ashburn wrongfully imposed a post-groundbreaking price increase, refused to proceed, and missed required meetings. | Ashburn claimed it was entitled to stop performance and that paragraph 25 insulated it. | Yes; Ashburn breached and repudiated the agreement. 12 |
| Is specific performance warranted? 13 | Stombaugh has a valid contract, is ready and able to perform, and damages are inadequate for a home purchase. | Ashburn says Stombaugh was not able to perform and equities favor Ashburn because of delay and market appreciation. | Yes; Stombaugh proved specific performance. 14 |
| Should Stombaugh recover damages and fees? 15 | She sought interest-differential damages and attorney fees because Ashburn acted in bad faith. | Ashburn argued damages would be a windfall and no fee shifting was justified. | Damages denied, but fees shifted for bad faith. 16 |
Key Cases Cited
- Leo Invs. H.K. Ltd. v. Tomales Bay Cap. Anduril III, L.P., 342 A.3d 1166 (Del. Ch. 2025) (ambiguous contract terms are construed against the drafter 17)
- Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) (specific performance requires a valid contract, readiness to perform, and a balance of equities favoring relief 18)
- Stephenson v. Capano Dev. Co., 462 A.2d 1069 (Del. 1983) (interest-rate differential can be recoverable as real-estate breach damages 19)
- Tri State Mall Assocs. v. A.A.R. Realty Corp., 298 A.2d 368 (Del. Ch. 1972) (equity seeks to place parties as nearly as possible in the position performance would have created 20)
- Airborne Health, Inc. v. Squid Soap, LP, 984 A.2d 126 (Del. Ch. 2009) (anti-reliance provisions address extra-contractual inducements to sign 21)
- Abry P'rs V, L.P. v. F & W Acq. LLC, 891 A.2d 1032 (Del. Ch. 2006) (clear anti-reliance language is required to bar reliance on extra-contractual statements 22)
- Mahani v. Edix Media Gp., Inc., 935 A.2d 242 (Del. 2007) (Delaware follows the American Rule for attorney fees 23)