Windsor v. CWCapital Asset
238 A.3d 863
Del.2020Background
- Windsor owned a commercial property encumbered by a $7.4M loan ultimately held by U.S. Bank; Best Buy (sole tenant) announced its departure in 2015 and Windsor sought to buy/ refinance the loan.
- In April 2017 CWCAM (special servicer) offered to sell the loan to Windsor for $5,288,000, but the offer was expressly subject to credit-committee approval and other conditions; the committee later rejected the Proposed Transaction.
- CWCAM/U.S. Bank conducted an online auction in February 2018; a Windsor-affiliated representative (Stella) bid. The auction terms & conditions (Auction T&C) contained a broad general release.
- Windsor paid WM Capital $7.4M after WM bought the loan; Windsor sued in Superior Court asserting promissory estoppel and unjust enrichment (and earlier contract claims).
- The Superior Court dismissed the amended complaint, concluding Windsor’s claims were barred by the auction release and, alternatively, that the quasi‑contract claims failed on the merits. The Supreme Court affirmed on alternative substantive grounds while noting procedural issues about extrinsic affidavits.
Issues
| Issue | Plaintiff's Argument (Windsor) | Defendant's Argument (CWCAM / U.S. Bank) | Held |
|---|---|---|---|
| Whether the auction general release precludes Windsor’s claims | Stella did not execute/assent to the Auction T&C; release therefore does not bar the claims | Stella assented as condition of bidding; release is broad and bars all claims | Appellate court declined to rest the affirmance solely on the release (procedural concern about extrinsic evidence) and did not reverse on that ground |
| Whether the release covered the Proposed Transaction | Release was limited to auction; did not include pre-auction Proposed Transaction | Release language was broad and encompassed all claims arising from the loan/transaction | Court did not rely on this as the basis for affirmance; addressed claims on merits instead |
| Unjust enrichment — sufficiency of pleading | Defendants unjustly retained fees and auction proceeds after wrongfully rejecting Windsor’s purchase | Sale was lawful; any fees/losses flowed from valid loan sale and preexisting loan terms, not unjust enrichment | Dismissed: Windsor failed to plead elements of unjust enrichment |
| Promissory estoppel — sufficiency of promise and reliance | CWCAM’s offer induced Windsor to prepare financing and incur costs; injustice requires enforcement | Offer was expressly conditional (credit committee); not a definite promise inducing reasonable reliance | Dismissed: conditional offer not sufficiently definite; no reasonable expectation of inducement or remedy by enforcement |
| Procedural: whether dueling affidavits required conversion to summary judgment | Stella’s affidavit created disputed facts about assent to the Auction T&C, so 12(b)(6) should have converted to summary judgment | Windsor never objected below to consideration of affidavits and relied on the record; testimony showed assent process | Court acknowledged the procedural concern and that conversion would have been preferable, but affirmed dismissal on independent substantive grounds |
Key Cases Cited
- Deuley v. DynCorp Int’l, Inc., 8 A.3d 1156 (Del. 2010) (standard of review for Rule 12(b)(6): view complaint favorably and accept well‑pled allegations).
- In re General Motors (Hughes) S’holder Litig., 897 A.2d 162 (Del. 2006) (permitting consideration of extrinsic documents on 12(b)(6) when integral to the complaint).
- Central Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC, 27 A.3d 531 (Del. 2011) (contract interpretation reviewed de novo).
- Nemec v. Shrader, 991 A.2d 1120 (Del. 2010) (elements and scope of unjust enrichment).
- SIGA Techs., Inc. v. PharmAthene, Inc., 67 A.3d 330 (Del. 2013) (elements required to prove promissory estoppel).