J.M.L., Inc. v. Shoppes of Mount Pleasant, LLC
N15A-06-006 FWW
| Del. Super. Ct. | Oct 14, 2016Background
- Shoppes of Mount Pleasant leased commercial space to J.M.L., Inc. for a five‑year term beginning April 1, 2005; monthly rent was $3,747.33 with 2.5% annual increases and an option to renew (Article 30).
- Lease contained guaranty language (Article 22(A)) and a signature line for a guarantor; Lawrence Gillen signed the Lease and also signed an addendum and later a 2011 Memorandum of Lease Agreement that retroactively renewed the Lease.
- J.M.L. failed to provide the 90‑day written notice required to exercise the renewal option when the initial term expired; Shoppes treated the tenancy as renewed and charged rent; ledger reflected unpaid balances.
- Shoppes sued J.M.L. and Gillen, alleging breach of lease and that Gillen was personally liable as guarantor; trial court found Gillen a guarantor, awarded damages and attorney’s fees.
- On appeal the Superior Court affirmed liability and the fee award, reversed the damages calculation and remanded a corrected judgment of $21,501.70 plus 6% post‑judgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gillen signed the Lease as a guarantor (statute of frauds) | Shoppes: Lease contains guaranty language and Gillen signed; writing satisfies statute of frauds | J.M.L./Gillen: Signature was forged and guaranty language insufficient (SSN absent) | Trial court’s finding that Gillen signed as guarantor was supported by substantial evidence and writing satisfied statute of frauds; affirmed |
| Whether guaranty continued after the original term expired | Shoppes: Memorandum retroactively renewed the Lease to June 1, 2010 and renewed all terms, including guaranty | J.M.L./Gillen: Guaranty ended when lease expired and new tenancy replaced prior lease; Gillen didn’t sign Memorandum in individual capacity | Superior Court: Parties mutually agreed to renew via Memorandum; Gillen’s guaranty renewed as part of lease; affirmed |
| Proper calculation of damages owed to Shoppes | Shoppes: Trial court’s ledger‑based calculation was correct | J.M.L./Gillen: Trial court failed to deduct security deposit and CAM credit and ledger balance forward unsupported | Court found trial court erred in arithmetic/deductions; corrected joint/several liability to $21,501.70 plus 6% interest; reversed in part |
| Award of attorney’s fees and costs under lease | Shoppes: Lease entitles landlord to reasonable fees; requested $42,412 | J.M.L./Gillen: Award disproportionate and excessive | Trial court reasonably adjusted fee request after applying Rule 1.5 factors and disallowing fees for landlord’s trial scheduling error; fee award affirmed |
Key Cases Cited
- Woodcock v. Udell, 97 A.2d 878 (Del. Super. 1953) (writing must show on its face the guarantor assumed liability)
- Paul v. Deloitte & Touche, LLP, 974 A.2d 140 (Del. 2009) (clear and unambiguous contract terms are interpreted according to plain meaning)
- Motorola, Inc. v. Amkor Tech., Inc., 958 A.2d 852 (Del. 2008) (courts give priority to parties’ expressed contractual intentions)
- Eagle Industries, Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228 (Del. 1997) (contract terms control where they reflect parties’ common meaning)
- NAF Holdings, LLC v. Li & Fung (Trading) Ltd., 118 A.3d 175 (Del. 2015) (enforcement of mutually agreed commercial contract terms)
- Levitt v. Bouvier, 287 A.2d 671 (Del. 1972) (standard for appellate review of trial court factual findings)