Twin Willows, LLC v. Lewis Pritzkur
2020-0199-PWG
| Del. Ch. | Jul 27, 2021Background
- Property (≈81.9 acres in Smyrna, DE) was subject to a 2007 partition; court appointed Lewis Pritzkur as trustee and directed any sale to have court approval.
- Trustee signed an Agreement of Sale on Sept. 27, 2016 (approved by the Court Nov. 14, 2016); JMW assigned the Agreement to Twin Willows in 2017.
- Agreement key terms: 120-day due diligence (from court approval); a 24‑month permitting period with two optional 6‑month extensions (for fees); buyer may waive approvals or terminate; contract contains a "time is of the essence" clause with a 10‑day cure provision.
- The permitting period extensions were used; the permitting deadline lapsed on March 14, 2020; Twin Willows filed suit on March 13, 2020 seeking specific performance, an 18‑month extension to complete permits, possession orders, and damages/fees.
- The Master raised subject‑matter‑jurisdiction sua sponte because equitable relief (specific performance) is sought after the contract deadlines lapsed; after briefing, the Master found the Court of Chancery has jurisdiction to hear the case and ordered further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Court of Chancery have subject‑matter jurisdiction over Twin Willows’ claims? | Twin Willows seeks specific performance (equitable relief) because defendants prevented performance; equity thus confers jurisdiction. | If an adequate remedy at law (damages) exists, equity lacks jurisdiction; agreement expired so equity relief is unavailable. | Court has jurisdiction: complaint may disclose a genuine need for specific performance, so case may proceed in equity. |
| Can specific performance be ordered despite a "time is of the essence" clause and lapsed deadlines? | Equity can fashion appropriate relief (extend deadlines) where defendants prevented performance. | Time‑is‑of‑the‑essence should be given substantial weight; lapse generally precludes specific performance. | Time‑is‑of‑the‑essence is important but not absolute; specific performance remains possible if plaintiff proves justification (e.g., prevention). Court did not decide merits; allowed claims to proceed. |
| Is Twin Willows excused from timely performance by defendants’ alleged interference (prevention doctrine)? | Gibbs’ conduct and Trustee’s failure to control her prevented access and thus timely permitting; prevention doctrine excuses non‑performance. | Twin Willows was not ready, willing, and able to close within contract time; prevention doctrine not demonstrated. | Whether prevention doctrine applies is a merits question requiring proof; not resolved at this stage. |
| Does Oxbow (remedies flexibility) authorize equitable extensions absent explicit contractual authority? | Oxbow supports equity fashioning remedies (like deadline extensions) even without express contract language. | Oxbow is not controlling here; its remedies opinion was vacated by the Supreme Court. | Oxbow cannot be relied on as controlling precedent; equitable relief still possible but must be grounded in established principles (e.g., prevention doctrine, readiness to perform). |
Key Cases Cited
- Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) (elements for specific performance and equitable jurisdiction principles)
- Candlewood Timber Grp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989 (Del. 2004) (Court looks beyond labels to determine if equitable relief is genuinely needed)
- Cerberus Int’l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141 (Del. 2002) (reformation is an equitable remedy tied to mistake and the parties’ real agreement)
- Tri State Mall Assocs. v. A. A. R. Realty Corp., 298 A.2d 368 (Del. Ch. 1972) (definition and purpose of specific performance to effectuate contract)
- Wells v. Lee Builders, Inc., 99 A.2d 620 (Del. 1953) (a plaintiff must perform on time to obtain specific performance unless prevented by defendant)
- Glazer v. Pasternak, 693 A.2d 319 (Del. 1997) (vacated decisions do not govern future law)
- Penden v. Gray, 886 A.2d 1278 (Del. 2005) (courts give substantial weight to time‑is‑of‑the‑essence provisions)