Alexis Stombaugh v. Ashburn Homes, Inc. and Sobrook, LLC

• Court: Court of Chancery of Delaware
• Decided: July 8, 2026
• Docket: C.A. No. 2022-0076
• Status: Published

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ALEXIS STOMBAUGH,

Plaintiff,

v.

ASHBURN HOMES, INC. and SOBROOK, LLC,

Defendants.

ASHBURN HOMES, INC. and C.A. No. 2022-0076-CDW SOBROOK, LLC,

Counterclaim Plaintiffs,

Counterclaim Defendant.

POSTTRIAL REPORT

Date Submitted: February 26, 2026 Date Decided: July 8, 2026

Gary R. Dodge, CURLEY, DODGE, FITZGERALD & FUNK, LLC, Dover, Delaware; Patrick C. Gallagher, JACOBS & CRUMPLAR, P.A., New Castle, Delaware; Counsel for Plaintiff and Counterclaim Defendant Alexis Stombaugh

Peter K. Schaeffer, Jr., AVENUE LAW, Dover, Delaware; Counsel for Defendants and Counterclaim Plaintiffs Ashburn Homes, Inc. and Sobrook, LLC

WRIGHT, M. This is a case that should not have gone to trial. A buyer entered into a

contract with a developer to buy a home that the developer would build. An

executed addendum to the contract forbade the developer from escalating the

purchase price of the property after breaking ground. The developer did it

anyway. The buyer sought answers but received no response from the

developer. Instead, the developer wrongly accused the buyer of breaching the

contract and purported to terminate the contract unilaterally.

Before, during, and after trial, the defendants dug in their heels. They

dismissed any notion of responsibility and continued to maintain that

everything they did was within their rights. Defendants’ owner, in an attempted

“gotcha,” asserted that the wrongful escalation was retracted when it never was.

He put this whole dispute at the feet of his counsel and the buyer.

In this posttrial report, I conclude that the contracting defendant breached

the contract between the parties without justification and the buyer is, therefore,

entitled to specific performance. I further recommend that the buyer’s attorney

fees be shifted to the defendants. I. BACKGROUND

These are the facts as the court finds them after trial. The facts are drawn

from 54 trial exhibits (including two deposition transcripts) and live testimony

from eight fact witnesses and two expert witnesses. 1

A. The Parties

Plaintiff and counterclaim defendant Alexis Stombaugh (“Stombaugh”)

is a Delaware resident who, in 2020, was looking to buy a home in Kent

County. 2 Defendant and counterclaim plaintiff Ashburn Homes, Inc.

(“Ashburn”) is a property-development company that builds homes in Kent

County. 3 Defendant and counterclaim plaintiff Sobrook, LLC (“Sobrook”) is a

holding company that owns the land in Riverview that Ashburn developed. 4

Nonparty Jordan Ashburn (“Mr. Ashburn”) is the owner of Ashburn and

Sobrook’s managing member. 5

1 Volume I of the trial transcript (pages 1–272) is at Docket Number 65, and Volume

II of the trial transcript (pages 273–382) is at Docket Number 80. Trial transcript citations are in the form of “Trial Tr. ___.” The parties did not submit a single set of joint trial exhibits, so trial exhibits are cited as “PX __” and “DX __.” 2 See Trial Tr. 13–16, 70–71.

3 See id. 153–155.

4 See id. 154, 303.

5 Id. 303.

-2- B. Stombaugh Picks the Property

Stombaugh focused her search for a home on the Riverview subdivision

of Frederica, Delaware, where Ashburn was building homes.6 Ashburn worked

with Rush Home Realty to list its Riverview homes for sale. 7 Ashburn only

communicated to buyers of its homes through its realtors. 8

By mid-January 2021, Stombaugh had selected a lot in Riverside and a

model home to be built on the lot (“Property”). 9 She worked with Rush Homes

Realty, through its agents, Bert Ferguson (“Ferguson”) and Marcus Rush

(“Rush”), to execute the sale of the lot and construction of the Property. 10

During this period, Ferguson requested information on specific “options,

upgrades and other selections,” for the Property, including “tile selections for

the master bathroom for the [Property].” 11 Stombaugh provided the requested

information and, on January 28, selected tiling for the master bathroom. 12

6 Id. 15–16.

7 Id. 155, 158.

8 See id. 324.

9 See id. 17–18.

10 See id. 40.

11 Pl. Alexis Stombaugh’s Opening Post Trial Br. (“Pl.’s Opening Br.”), Dkt. 71 at 3

(citing Trial Tr. 18). 12 PX 21 at P-389.

-3- Stombaugh made her tiling selection by sending a picture of a different

Ashburn home’s shower tiling to Ferguson. 13 She chose “the Calcutta tile, [a]

white tile with gray veining.” 14 Ferguson confirmed that her tile selection

would be reflected in the eventual contract for the Property.15

1. The Agreement of Sale

On March 3, the parties executed the Agreement of Sale for the purchase

of the Property (“Agreement”). 16 The Agreement reflects a base purchase price

of $334,900 and a total price (including options and discounts) of $350,411. 17

The Agreement “emphasize[s] that time is of the essence for” two parts

of the transaction: (1) Stombaugh’s mortgage application and commitment;

and (2) Stombaugh’s option selections for the home.18 The Agreement requires

options for the home to be selected “within 14 days” of the Agreement’s

execution. 19 Stombaugh’s failure to comply with these deadlines constitutes a

default on the agreement. 20 If Stombaugh defaults, the Agreement gives

Ashburn the right to (1) cancel the transaction and retain Stombaugh’s deposit,

13 See Trial Tr. 19–20; see also PX 21.

14 See Trial Tr. 23, 42.

15 PX 21 at P-389.

16 PX 11 at P-332 to P-341.

17 Agreement ¶ 5.

18 Id. ¶ 7.

19 Id. ¶ 7(2).

20 Id. ¶¶ 15, 20.

-4- (2) seek specific performance of the Agreement, and (3) exercise any other

right or remedy available at law. 21

Additionally, the Agreement gives Ashburn discretion to terminate the

contract in three situations: (1) “[Ashburn] determine[s] that [Stombaugh’s]

Mortgage Approval: (a) does not meet the requirements of this Agreement;

(b) was not obtained within the required time; (c) is conditional or non-binding;

or (d) [Stombaugh] do[es] not make a reasonable effort to obtain a mortgage;”

(2) “[Ashburn] determine[s] that for reasons beyond [its] control, [Ashburn]

cannot achieve Substantial Completion within a reasonable period of time after

the Estimated Date of Substantial Completion; or” (3) “[Ashburn] [is] not able

to obtain all necessary public or private approvals and permits within a

reasonable time.” 22 If Ashburn terminates the Agreement and Stombaugh is not

at fault, Ashburn must return to Stombaugh whatever money she actually

paid. 23

2. The Addendums

The parties executed several addendums with the Agreement, three of

which are important here. First, the parties executed the Addendum to Contract

for Sale and Purchase, which reflected the options and selections Stombaugh

21 Id. ¶ 15.

22 Id. ¶ 16.

23 Id.

-5- chose for the Property. 24 Second, the parties executed the “Selection Time

Limit Addendum,” which gave the deadlines for Stombaugh’s selections in

order “to eliminate any additional costs and to best meet completion

schedules.” 25 The Selection Time Limit Addendum also reflects Ashburn’s

commitment to scheduling four specific meetings with Stombaugh before

settlement of the Property.26 These meetings included a pre-drywall meeting.27

Third, the parties executed the “Price Escalation Addendum.”28 This addendum

explains that, although “an escalation charge may be added to [Stombaugh’s]

purchase price prior to the start of construction . . . [,] [n]o additional escalation

charges will be added once [Ashburn] ha[s] broken ground on the start of

construction.” 29 As with the Agreement, the parties executed these addendums

on March 3, 2021. 30

24 PX 11 at P-347. Stombaugh included an additional form, dated January 22, 2021,

which reflects her tiling selection. PX 13. This form and the Addendum to Contract for Sale and Purchase describe Stombaugh’s tile section only as “4x6 tile.” They do not provide the color of the tiling or that the tiling is “Calcutta” tiling. See PX 11, 13. 25 PX 11 at P-342 to P-343. Relevant here, the addendum says “All options must be

submitted within 14 days after the Agreement of Sale is ratified.” Id. at P-342. It essentially duplicates the 14-day options deadline language in the Agreement. See Agreement ¶ 7. 26 Selection Time Limit Addendum at P-342.

27 Id.

28 PX 12.

29 Price Escalation Addendum.

30 See Agreement at P-343, P-347; Price Escalation Addendum.

-6- C. Stombaugh Prepares for Closing

Stombaugh selected color options for the home on March 7, during a

meeting with Ferguson. 31 At the meeting, Ferguson did not inform Stombaugh

of any other options that she needed to make. 32 To Stombaugh, her transaction

was proceeding as planned.

Stombaugh obtained a mortgage commitment on March 10. 33 The

mortgage bore an interest rate of 2.750% and was locked for the duration of the

commitment, which expired on April 2, 2021. 34 Stombaugh timely submitted

the mortgage commitment and nobody from Ashburn or Rush Home Realty

notified her of any issues with the mortgage. 35

On August 17, Stombaugh met with Ferguson and Rush for a pre-

construction meeting at the Property. 36 By then, Ashburn had broken ground

on the Property. 37 At the meeting, Rush asked Stombaugh if she had met with

nonparty L&L Tile Company (“L&L”) to make her carpeting and tile

31 Trial Tr. 37.

32 Id.This is consistent with testimony from Ashburn’s representative, Jacqueline McCann (“McCann”), who testified that selections like colors, trim, and tile are not covered by the 14-day deadline and simply need to be done by the preconstruction meeting. See Trial Tr. 163–64. McCann was the corporate officer who signed the Agreement for Ashburn. 33 PX 43.

34 Id. at P-461.

35 See Trial Tr. 80–81.

36 Id. 38–39.

37 See id.

-7- selections. 38 Stombaugh—who had never before received notice of L&L’s

participation in the options-selection process—said she had not. 39 This

prompted Rush to contact McCann to ask her if L&L had ever contacted

Stombaugh. 40 McCann responded that L&L had not, and stated:

That was my fault. I didn’t send [Stombaugh’s] information to L&L. I just sent it to them. Give them a couple of days to get this into the system and they’ll reach out to [Stombaugh]. 41

McCann sent Stombaugh’s information to L&L by email and wrote: “I

forgot to send this to your office. Can we get these buyer’s [sic] scheduled

ASAP to make selections. Please see L&L contact sheet, house plans, colored

flooring sheet, etc.” 42 L&L promptly contacted Stombaugh and scheduled an

options-selection meeting with her for August 21, 2021. 43

1. The Tiling Selection

At the options-selection meeting, Larry Mocadlo (“Mocadlo”) of L&L

informed Stombaugh that the meeting was the time for Stombaugh to make

upgrades to any selections for the Property. 44 Mocadlo and Stombaugh

38 Id. 39.

39 Id.

40 See id.

41 PX 26.

42 Id.

43 Trial Tr. 40.

44 Id. 41.

-8- discussed Stombaugh’s tile selections. Mocadlo was unaware that Stombaugh

had already selected the Calcutta tiling for her master shower because Ashburn

did not include it in the paperwork that it sent to L&L. 45 He informed

Stombaugh that the Calcutta tiling she chose in January would require an

additional upgrade not reflected in the Agreement’s price.46 But Mocadlo could

not give Stombaugh a specific upgrade price at that time. He told Stombaugh

the upgrade price would need to be resolved before they could execute a formal

option selection agreement.47 He also told Stombaugh they would proceed with

selecting the rest of her options. 48

Between August and November 2021, Stombaugh wrote to Mocadlo

numerous times to request an update on the tiling upgrade price. Mocadlo’s

responses were minimal and vague. Stombaugh did not receive a specific

estimate for the increased tile price until September, when Mocadlo informed

her that the tiling upgrade would cost “almost $2000.” 49 After this, however,

Mocadlo again became unresponsive.

45 Id. 41–42.

46 Id.

47 Id. 42.

48 Id.

49 PX 39 at P-451.

-9- On November 15, Mocadlo told Stombaugh that her desired tiling would

require another escalation—this time, “an additional $416.00.” 50 Mocadlo

added that, if Stombaugh desired floor-to-ceiling tiling, it “would cost an

additional $395.00.” 51 On November 20, L&L sent to Stombaugh a formal

selection agreement for the tiling. 52 Stombaugh signed the agreement on the

same day. 53

2. The Property Price Escalation

Separately, on October 22, McCann told Rush of a price escalation

Ashburn sought to impose on the purchase of the Property. McCann

acknowledged that Ashburn “started construction on this home without . . .

providing the escalation charge to be added to the contract.” 54 She

acknowledged that Ashburn “should not have started this home without . . .

providing this information prior to the breaking of ground.” 55 But she

explained to Rush that Ashburn needed to impose a $42,363 price escalation on

50 Id. at P-450.

51 Id. at P-451.

52 See PX 14. The agreement is dated “August 21, 2021.” Id. 53 Id.

54 PX 32 at P-431.

55 Id.

- 10 - the sale. 56 At trial, McCann testified, under questioning from defendants’

counsel, “I’m sure I discussed it with [Mr. Ashburn], and I sent it.” 57

Ferguson informed Stombaugh of the requested price escalation. 58

Because Ashburn had already broken ground on the Property, Stombaugh was

understandably confused about the escalation and asked to contact Ashburn

directly to discuss it. 59 Stombaugh contacted McCann by phone and email on

October 22, October 25, and October 26, but received no response each time. 60

Ferguson later informed Stombaugh that Ashburn was refusing to proceed with

the Agreement until the parties resolved the attempted price escalation. 61

At trial, Mr. Ashburn conceded the Price Escalation Addendum

unambiguously prohibited Ashburn from increasing costs after it broke ground

on the Property. 62 He suggested sending this was a mistake, and that once

Ashburn understood “after the fact” the price escalation was unenforceable, he

56 Id.

57 Trial Tr. 252. Mr. Ashburn, for his part, said he did not recall the conversation but

McCann would have no reason to lie about it. Id. 340. 58 PX 33 at P-434.

59 Id. at P-435.

60 PX 34. Mr. Ashburn maintained at trial that the reason Ashburn ignored Stombaugh’s communications was because she had copied her counsel on emails so Ashburn would, in turn, only communicate with Stombaugh through its own counsel. See, e.g., Trial Tr. 347. 61 See Trial Tr. 74.

62 See id. 307, 338–39.

- 11 - instructed counsel (defendants’ trial counsel here) to retract it. 63 Defendants

did not offer any contemporaneous evidence to support this bare assertion and

did not address it during posttrial briefing or at posttrial argument. 64

On October 29, defendants’ counsel wrote to Stombaugh’s counsel.

Defendants’ counsel asserted that Stombaugh defaulted on the Agreement by

purportedly failing to timely make options selections. 65 Defendants’ counsel

insisted Ashburn had the right to terminate the Agreement and that

Stombaugh’s purported failure entitled defendants to retain her deposit. 66

Defendants’ counsel told Stombaugh she could receive her deposit back if she

agreed to terminate the Agreement. 67 Counsel for Stombaugh and Defendants

traded correspondence on this issue into November. 68

In January 2022, still anticipating her purchase of the Property would

close, Stombaugh obtained a new mortgage commitment, at a rate of 3.625%.69

Despite this, the parties’ dispute over the price escalation and Stombaugh’s

63 See id.

64 The court does not find this testimony to be credible. There was nothing accidental

about what Ashburn did. McCann testified the price escalation notice was sent intentionally, knowing they had already broken ground, after she talked to Mr. Ashburn about it. Id. 252. 65 PX 16 at P-359.

66 Id.

67 Id.

68 Id.

69 Trial Tr. 365.

- 12 - purported default led to the transaction stalling and construction on the Property

stopping. Stombaugh testified that, because of this, the Property stayed “open

to the elements” after November 2021, until the Property’s eventual completion

in late 2024. 70 The parties never conducted the pre-drywall inspection of the

Property and Stombaugh has yet to attend a final walkthrough. 71

D. Recent Developments

Still in need of a home, in 2023, Stombaugh purchased a different

property in Magnolia. 72 Stombaugh executed a mortgage for the home with

Capital Bank Home Loans (“Capital Bank”), through its agent, Mr. Joe

Gensoli. 73 She still wants to purchase the Property but now as an investment

property—one that she can “rent . . . out and hopefully be able to have . . . as a

passive income.” 74 Stombaugh testified that she could pay a down payment for

the Property of up to $85,000.75

Stombaugh’s previous commitments for the Property have expired. In

2024, Capital Bank issued Stombaugh a mortgage preapproval letter for the

70 Id. 70.

71 See id. 73.

72 Id. 71.

73 See id. 97–98.

74 Id. 71.

75 See id. 72.

- 13 - Property.76 The loan amount requires a 10% down payment and its principal

bears an interest rate of 6.375%. 77

Capital Bank issued the 2024 preapproval letter to Stombaugh while it

was still unclear whether she would use the Property as her primary residence.78

Since then, however, Stombaugh has chosen to use the Property for investment

purposes. Accordingly, Capital Bank issued Stombaugh updated mortgage

terms reflecting the Property’s investment purpose. The updated terms require

a 20% down payment and would carry an interest rate of 7.5%. 79 Gensoli

testified Capital Bank can issue the new mortgage within 21 days of this

action’s resolution. 80

II. PROCEDURAL POSTURE

On January 24, 2022, Stombaugh filed the original complaint. 81 On

February 11, Stombaugh filed a notice of lis pendens in the Kent County

Recorder of Deeds office. 82 On February 16, Stombaugh filed the amended

76 PX 44. Gensoli reviewed and prepared the letter but had his processor, Lisa Deal,

sign the letter. Trial Tr. 102. Gensoli maintains this is Capital Bank’s standard practice. Id. 77 PX 44 at P-465.

78 See Trial Tr. 107–08.

79 See id. 112.

80 See id. 115.

81 Dkt. 1.

82 Notice of Filing of Lis Pendens Pursuant to 25 Del. C. § 1605, Dkt. 5.

- 14 - complaint. 83 The amended complaint asserts defendants’ breach of the

Agreement and seeks specific performance of the Agreement. 84 Stombaugh

also seeks damages stemming from interest differential between her past and

present mortgages. 85

On July 7, defendants filed their amended answer and counterclaim. 86

Defendants’ counterclaim asks the court to declare (1) Stombaugh “failed to

make option selections within the required time” and (2) this purported failure

“allows, at Defendant Ashburn’s election, to declare the Sales Agreement void,

and in addition, allows forfeiture of Plaintiff’s deposits.” 87

On May 29, 2024, defendants filed the “Motion for Mandatory

Cancellation of Lis Pendens Pursuant to 25 Del. C. § 1606, or in the alternative,

for Settlement within Thirty (30) Days of 16 Douglas Drive, Frederica,

Delaware 19946.” 88 As the name suggests, the motion generally requested

either cancellation of the lis pendens on the Property or “an order requiring

closing on the Property within thirty (30) days of the date of the Order[.]” 89

83 Verified Am. Compl. (“Am. Compl.”), Dkt. 4.

84 Id. ¶ 1.

85 See id., Req. for Relief ¶ 2.

86 Dkt. 8.

87 Id. at 23–24.

88 Dkt. 25.

89 Id., Req. for Relief ¶¶ A–B.

- 15 - The parties briefed the motion and the court heard oral argument on July 18. 90

On July 19, the court denied the motion. 91 As for defendants’ requested order

for prompt settlement, the court explained such a request “essentially asks the

[c]ourt to force a piecemeal resolution without [Stombaugh]’s buy-in.” 92

On January 9, 2025, the court held the first day of trial on the parties’

claims. 93 On March 18, the court held a second day of trial to allow parties to

finish examining their witnesses. 94 The parties filed posttrial briefs through

September.95 On February 26, 2026, the court heard oral argument and took the

matter under advisement. 96

III. ANALYSIS

Stombaugh asserts a claim of breach of contract against defendants. She

seeks (1) an order of specific performance requiring defendants to comply with

the Agreement; (2) specific damages reflecting the interest differential between

her past and present mortgages; and (3) an award of attorney fees. 97

Defendants, in turn, seek a declaration that Stombaugh failed to timely select

90 See Dkt. 33.

91 Dkt. 34.

92 Id.

93 Dkt. 63.

94 Id.

95 Dkts. 71–74.

96 Dkt. 79.

97 Pl.’s Opening Br. 58.

- 16 - options and, as such, defendants can terminate the Agreement. 98 I begin with

defendants’ counterclaim.

A. The Counterclaim

Defendants argue that Stombaugh breached the Agreement by failing to

timely select her options through L&L. 99 Defendants point to the “time is of

the essence” language in paragraph 7 of the Agreement, note that Delaware

courts routinely enforce such language, and say it is fatal to Stombaugh’s

claims here because she did not select her tile within 14 days. 100 Near the end

of trial, defendants unveiled a new argument for why Stombaugh allegedly

breached the Agreement’s “time is of the essence” clause: Stombaugh failed to

maintain a valid mortgage commitment throughout the pendency of the parties’

dispute over the Property. 101 Both arguments fail.

1. The Purported 14-Day Options Deadline

Defendants’ argument that Stombaugh breached the Agreement’s “time

is of the essence” clause by not selecting her tile within 14 days fails for at least

three reasons.

98 See Posttrial Opening Br./Answering Br. of Defs./Countercl. Pls. (“Defs.’ Opening

Br.”), Dkt. 72 at 15. 99 See id. 33.

100 See Posttrial Reply Br. of Defs./Countercl. Pls. (“Defs.’ Reply Br.”), Dkt. 74 at 11,

27–33. 101 Trial Tr. 315–17; see also Defs.’ Opening Br. 15, 18–20.

- 17 - First, the argument fails because the 14-day options deadline did not

apply to Stombaugh’s tile selection, as McCann, the Ashburn officer who

signed the Agreement, testified. 102 Items like color, trim, and tile did not need

to be done until the preconstruction meeting. 103

Second, even if Stombaugh needed to select tile within 14 days of

signing the Agreement, she did. In fact, she selected tile before the Agreement

was signed. 104 The Agreement says only that options (however defined) must

be selected within 14 days; it does not say that any options, once selected, may

never be changed.105 Defendants drafted the Agreement and the addendums,106

so ambiguities and gaps in their language must be construed against defendants:

“If the contractual language at issue is ambiguous and if [one party] did not negotiate for the agreement’s terms, [Delaware courts] apply the contra proferentem principle and construe the ambiguous terms against the drafter.” If “the articulation of contract terms . . . appears to have been entirely within the control of one party . . . that party bears full responsibility for the effect of those terms.” This is because “[a]s the entity in control of

102 Trial Tr. 163–64.

103 Id.

104 PX 21 at P-388 to P-389. Defendants now concede Stombaugh made her initial tile selection by the time the parties signed the Agreement. See Defs.’ Opening Br. 7 (“Petitioner made her initial option[s] selections as to the bathroom at issue on March 3, 2021.”). 105 See Selection Time Limit Addendum at P-342.Structural changes, on the other hand, “will not be made after plans have been submitted for [the] construction permit[.]” Id. 106 See Trial Tr. 91–92, 252–53.

- 18 - the process of articulating the terms of the [agreements], it [is] incumbent on the [drafter] to make their terms clear.”

Leo Invs. H.K. Ltd. v. Tomales Bay Cap. Anduril III, L.P., 342 A.3d 1166, 1209

(Del. Ch. 2025) (first quoting Norton v. K-Sea Transp. P’rs L.P., 67 A.3d 354,

360 (Del. 2013); then quoting SI Mgmt. L.P. v. Wininger, 707 A.2d 37, 43 (Del.

1998); and then quoting Juul Labs, Inc. v. Grove, 238 A.3d 904, 911 (Del. Ch.

2020)).

Third, there is a heavy amount of inequity in defendants’ position that

further counsels against accepting their self-serving interpretation of the

Agreement and the addendums. Defendants concede Stombaugh made “initial

options selections” on March 3, 2021, 107 but then insist that the only way

Stombaugh could comply with the 14-day options deadline was by working

with L&L. 108 This is dirty pool. The Agreement and the addendums do not

mention L&L. 109 Defendants and their agents said nothing about L&L when

the parties signed the Agreement,110 and they did not even remember to connect

Stombaugh and L&L until months later. 111 There was no way for Stombaugh

to know on March 3, 2021 that defendants believed she had 14 days to meet

107 Defs.’ Opening Br. 7.

108 Id. 15–16.

109 See generally PX 11.

110 See Trial Tr. 91–92.

111 See id. 39–40, 91–93, 167–74.

- 19 - with L&L, because the only parties that knew L&L had a role to play—

defendants and their agents—stayed silent. 112 Defendants having withheld the

information from Stombaugh, it would be inequitable to allow them to profit

from that withholding.

Fourth, and finally, even if March 17, 2021 was Stombaugh’s deadline

and even if she failed to meet it, defendants still lose. “Time is of the essence”

clauses simply do not work the way defendants contend. They have

approached this case as if violation of such a clause turns the contract into an

open-ended option for the non-breaching party, who can continue to perform

under the contract as long as it suits them, then declare the contract void and

walk away as soon as it does not. But that is wrong. “[T]ime [is] of the

essence may be waived by inconsistent conduct subsequent to the time fixed for

performance.” Goldstein v. Buiano, 1962 WL 69603, at *1 (Del. Ch. Oct. 31,

1962). “After a contractual time limit has lapsed, a party may not, for months,

act as if the contract remains in effect and then suddenly treat the time limit as

critical and the contract as void when performance under the contract is not

rendered as that party had hoped.” Keyser v. Curtis, 2012 WL 3115453, at *10

(Del. Ch. July 31, 2012). That is precisely what defendants did here. They

112 This assumes defendants actually held this view before they needed a defense to

Stombaugh’s breach of contract claim. McCann’s trial testimony suggests otherwise. See id. 163–64.

- 20 - have waived the “time is of the essence” clause even if Stombaugh triggered it

by failing to make options selections with L&L by March 17, 2021. 113

In short, defendants cannot credibly maintain Stombaugh defaulted by

failing to select her options and upgrades through L&L. Stombaugh first

selected her tiling in January 2021 and Ferguson confirmed he would include

her selections in the Agreement.114 Stombaugh then confirmed those selections

with L&L in August, after Ashburn finally connected Stombaugh and L&L. 115

This is all that could reasonably be required of Stombaugh under circumstances

where defendants knew they held the cards and did not show their hand.

2. Defendants’ Untimely Mortgage Commitment Argument

As noted, on the second day of trial, months after discovery closed116 and

the court granted the parties’ pretrial order, 117 defendants unveiled a new

113 Defendant’s reliance on the Agreement’s non-waiver clause does not help them

here. See Agreement ¶ 24 (“The start of any activity by us in connection with the Property is not to be deemed a waiver of any of our rights under this Agreement[.]”); Defs.’ Opening Br. 24–25, 32–33; Defs.’ Reply Br. 15–16. “[T]he law is clear that non-waiver clauses are not iron-clad protections that preclude courts from holding [a party] responsible for their post-contracting behavior.” In re Coinmint, LLC, 261 A.3d 867, 899 (Del. Ch. 2021) (quoting Viking Pump, Inc. v. Liberty Mut. Ins. Co., 2007 WL 1207107, at *28 n.116 (Del. Ch. Apr. 2, 2007)); see also Rehoboth Mall L.P. v. NPC Int’l, Inc., 953 A.2d 702, 703 (Del. 2008) (“The landlord argues that the lease’s ‘no waiver’ provision allows the landlord to enforce the tenant’s past defaults at any time. We disagree. The no waiver provision allows the landlord to strictly enforce future defaults notwithstanding its acquiescence in past defaults.”). 114 See PX 21 at P-389.

115 See Trial Tr. 39–42.

116 See Dkt. 45 ¶ 1(c).

- 21 - argument for why Stombaugh allegedly breached the Agreement’s “time is of

the essence” clause: Stombaugh failed to maintain a valid mortgage

commitment throughout the pendency of the parties’ dispute over the

Property.118

I will not dwell long on this argument. Defendants raise the issue far too

late for me to consider it. They should have raised it in their counterclaim, but

did not. 119 They should have raised it during discovery, but did not. 120 They

should have identified it in the pretrial order as an issue that remained to be

litigated, but did not. 121 They could have questioned Stombaugh about it at

117 Dkt. 59.

118 Trial Tr. 315–17; see also Defs.’ Opening Br. 15, 18–20.

119 See Dkt. 8, Countercl. ¶¶ 1–4 (identifying as the basis for the counterclaim only

“Plaintiff[‘s] fail[ure] to make option selections within the required time”). 120 Defendants did not raise the mortgage commitment letter in their responses to

Stombaugh’s interrogatories. See PX 7; see also Marshall Fam. Props., LLC v. Fusco, 2026 WL 221459, at *4 (Del. Ch. Jan. 28, 2026) (“The Supreme Court ‘has long recognized the purpose of discovery is to advance issue formulation, to assist in fact revelation and to reduce the element of surprise at trial.’”) (quoting Levy v. Stern, 1996 WL 742818, at *2 (Del. Dec. 20, 1996) (ORDER)). 121 Defendants did not identify the validity of Stombaugh’s mortgage commitment as

an issue to be tried in the pretrial order. See Dkt. 59 at 8–10; see also Zhou v. Deng, 2022 WL 1024809, at *2 (Del. Ch. Apr. 6, 2022) (finding waiver when parties failed to raise arguments in their pleadings or in the pretrial order and stating “[b]y that time, the opposing party has already shaped his trial plans, and it is simply too late and unfair to expect him meaningfully to confront the arguments so close to (or after) trial.”) (citations omitted); ABC Woodlands, L.L.C. v. Schreppler, 2012 WL 3711085, at *3 (Del. Ch. Aug. 15, 2012) (finding party waived an argument by not raising it in the pretrial order); New Start Hldgs., LLC v. Zhou, 2024 WL 4039440, at *16 n.250 (Del. Ch. Sept. 4, 2024) (“[T]he pretrial order is meant to be an ‘efficacious’ and ‘salutary’ aid for the Court ‘toward sifting the issues in order that the suit will go to trial only on questions involving honest disputes of fact or law.’”) (citations omitted).

- 22 - trial, but did not. 122 Defendants waived this argument. 123 The court will not

consider it now. 124

* * *

For all of these reasons, I recommend judgment in favor of Stombaugh

on defendants’ counterclaim.

B. Breach of Contract

“To prove a breach of contract, the plaintiffs must demonstrate (1) the

existence of a contract, (2) the breach of an obligation imposed by the contract,

and (3) resulting damages.” O’Connor v. Beachy Keen Servs., LLC, 2025 WL

801165, at *2 (Del. Ch. Mar. 13, 2025) (citing Kuroda v. SPJS Hldgs., L.L.C.,

971 A.2d 872, 883 (Del. Ch. 2009)). Stombaugh has met each element.

1. The Existence of a Contract

It is undisputed that the Agreement is a valid contract. In exchange for

consideration of $350,411, Ashburn agreed to transfer to Stombaugh the deed

122 See Trial Tr. 74–82, 370.

123 The Agreement’s non-waiver clause does not help defendants here either. See supra note 113. 124 Not only did defendants engage in improper trial-by-ambush, their multi-year,

unreasonable, and prejudicial delay in raising Stombaugh’s mortgage commitment as a defense means they are also guilty of laches. See Whittington v. Dragon Gp., LLC, 991 A.2d 1, 7 (Del. 2009) (“Laches is an unreasonable delay by a party, without any specific reference to duration, in the enforcement of a right, and resulting in prejudice to the adverse party.”). The court notes, also, that Stombaugh was told by Ferguson, the Rush Realty agent who served as the official go-between for Stombaugh and defendants, that her March 2021 mortgage commitment letter would remain valid throughout construction, and defendants never asked Stombaugh for an updated mortgage commitment. Trial Tr. 80–81, 366–67.

- 23 - to the constructed Property.125 The Agreement obligated Ashburn to

substantially complete the Property’s construction, “in any case, on or before

two (2) years from the Agreement of Sale Date.” 126 Once substantial

completion occurred, Ashburn must select and notify Stombaugh of the “date,

time, and place for Settlement.” 127

Moreover, through the Selections Time Limit Addendum, Ashburn

agreed to schedule a pre-drywall meeting for Stombaugh to attend. 128 And

through the Price Escalation Addendum, Ashburn agreed not to escalate the

purchase price after ground broke on the Property.129

2. The Breach

Stombaugh argues defendants breached the Agreement by refusing to

engage with her after Ashburn’s improper price escalation. 130 Stombaugh

maintains defendants’ failure to schedule a pre-drywall meeting before drywall

installation is further evidence of defendants’ breach. 131 I conclude Ashburn

125 See Agreement 2 (“SETTLEMENT”).

126 Id. ¶ 13.

127 Id. ¶ 12.

128 Id. at 11.

129 PX 12.

130 See Am. Compl. ¶ 71.

131 See Pl.’s Opening Br. 36.

- 24 - breached the Agreement. Sobrook cannot have breached the Agreement

because it was not part of it. 132

a. Ashburn Repudiated the Agreement

“A repudiation of a contract is an outright refusal by a party to perform a

contract or its conditions.” W. Willow Bay Ct., LLC v. Robino-Bay Ct. Plaza,

LLC, 2009 WL 458779, at *5 (Del. Ch. Feb. 23, 2009) (quoting PAMI-LEMB I

Inc. v. EMB-NHC, L.L.C., 857 A.2d 998, 1014 (Del. Ch. 2004)). “A party may

repudiate an obligation through statements when its language, reasonably

interpreted, indicates that it will not or cannot perform[.]” Id. (citations

omitted). “An attempt to renegotiate terms will not constitute repudiation

absent an unqualified refusal to perform unless the non-repudiating party

accedes.” Id. (citing HIFN, Inc. v. Intel Corp., 2007 WL 1309376, at *12 (Del.

Ch. May 2, 2007)) (emphasis added).

The Price Escalation Addendum imposed on Ashburn the plain

obligation to not add “additional escalation charges . . . once [Ashburn] ha[s]

broken ground on the start of construction.” 133 The record is clear Ashburn

132 See, e.g., Wallace ex rel. Cencom Cable Income P’rs II, L.P. v. Wood, 752 A.2d

1175, 1180 (Del. Ch. 1999) (“It is a general principle of contract law that only a party to a contract may be sued for breach of that contract.”) (citing Crabtree v. Tristar Auto. Gp., Inc., 776 F. Supp. 155, 166 (S.D.N.Y. 1991)); see also Agreement 9 (signatures). Even though Sobrook is not a named party to the Agreement, Mr. Ashburn testified that specific performance of the Agreement would result in Sobrook directly transferring the Property to Stombaugh. See Trial Tr. 337. 133 PX 12.

- 25 - knew of this obligation but nevertheless attempted to impose a price escalation

after it broke ground on the Property, and thus breached the Agreement.134 Nor

is there any tangible, credible evidence Ashburn ever retracted the escalation,

just Mr. Ashburn’s self-serving trial testimony. 135 Ashburn repudiated the

Agreement when, after its wrongful escalation, it (1) refused to engage with

Stombaugh, (2) wrongfully declared her in default, and (3) threatened to retain

her deposit if she chose not to terminate the Agreement herself. 136

b. Ashburn’s Other Breaches

The Selections Time Limit Addendum imposed on Ashburn the plain

obligation to schedule a pre-drywall meeting with Stombaugh. 137 Ashburn

never did this. 138 If, as Mr. Ashburn insists, Ashburn has always been ready to

perform the Agreement, 139 it failed to be here.

Ashburn also failed to settle the Property with Stombaugh within the

time the Agreement required. Although it appears conceded that, by 2024,

134 See Trial Tr. 338–39.

135 See id. 307, 339.

136 See PX 16 at P-360 (“Please let me know Ms. Stombaugh’s decision within five

business days. Should there be no response within this time period, Ashburn will elect its contractual right to terminate the Sales Agreement and retain Ms. Stombaugh’s deposit(s).”); see also Trial Tr. 74. 137 Agreement 11.

138 See Trial Tr. 73.

139 See id. 310.

- 26 - construction of the Property’s exterior was complete, 140 it may not be the case

that the Property was substantially completed under the Agreement because,

again, Ashburn failed to notify Stombaugh of an impending settlement of the

Property.141

In more ways than one, Ashburn breached its obligations under the

Agreement. The second element of Stombaugh’s breach claim is therefore

established.

c. Defendants Fail to Defend the Breaches

Defendants defend their breach in two ways. As previously addressed,

defendants argued Stombaugh’s own breach entitled them to terminate the

Agreement. I have rejected that claim. Defendants’ other argument is that,

under paragraph 25 of the Agreement, Ashburn was not bound by Ferguson’s

statement that Ashburn was delaying performance until the price escalation

issue resolved. 142

Paragraph 25 of the Agreement states, in full:

140 See id. 70.

141 See Agreement 2 (“SUBSTANTIAL COMPLETION: When an occupancy permit

is issued by the local building authority; or when the Home is otherwise habitable.”), ¶ 12 (“Settlement will take place upon Substantial Completion at a date, time, and place that we select. * * * We will give you at least ten (10) days prior notice of the date, time and place for Settlement.”) (emphasis added). 142 See Trial Tr. 75–76; Defs.’ Opening Br. 27 (“Emails in evidence are devoid of any

communication indicating apparent agency that would lead [Stombaugh] to believe Ferguson had authority to make decisions in violation of paragraph 25.”).

- 27 - (25) No Other Agreements: Except as provided in your Ashburn Home Warranty Program, and except for applicable statutory warranties, we make no other representations or warranties of any kind, express or implied, with regard to the Property, and no other representation or warranty of any kind, express or implied, forms a basis of the bargain between you and us. If requested, you agree to sign at settlement under this Agreement of Sale a written instrument confirming your consent to exclude and modify the express warranties relating to the Property. We make no oral or written agreements or representations, directly or indirectly, connected with this Agreement of Sale except as set forth in this Agreement of Sale. We make no oral or written agreements or representations, directly or indirectly, connected with this Agreement of Sale except as set forth in this Agreement of Sale. We make no representation concerning any land adjacent to or near the Property. We will not be bound by any representations or promises made by any salesperson or other person unless they are included in this Agreement of Sale. By including the following terms, we are making them a part of this Agreement of Sale[.] 143

Defendants argue that this language shields them from a finding that

Ashburn wrongly imposed a price escalation because Ferguson, a Rush Home

Realty employee, conveyed the escalation request to Stombaugh. 144 The

argument fails because paragraph 25 concerns representations that “form[] a

basis of the bargain,” i.e., representations regarding the terms of the Agreement

that induced Stombaugh to execute it. Paragraph 25 does not extend to post-

143 Agreement ¶ 25.

144 Defs.’ Opening Br. 27.

- 28 - execution representations made during the course of performance at the

principal’s (i.e., Ashburn’s) direction. 145

Ashburn breached its obligations under the Agreement. Defendants

failed to sufficiently defend Ashburn’s breach.

2. The Resulting Damage

Ashburn’s breach of the Agreement damaged Stombaugh.

Fundamentally, Stombaugh has “been deprived of the home [she] chose and

contracted to purchase.” O’Connor, 2025 WL 801165, at *3. Even if the court

orders specific performance of the Agreement, Stombaugh will be financing the

transaction with a higher interest rate than she initially secured for the home.

This, too, constitutes damage. See Stephenson v. Capano Dev. Co., 462 A.2d

1069, 1077 (Del. 1983). Accordingly, Stombaugh established the third element

of her breach of contract claim. She prevails on her claim against Ashburn.

B. Specific Performance

Stombaugh seeks specific performance of the Agreement. As explained

by the Supreme Court of Delaware in Osborn ex rel. Osborn v. Kemp:

145 See Airborne Health, Inc. v. Squid Soap, LP, 984 A.2d 126, 140 (Del. Ch. 2009)

(“The purpose of an anti-reliance provision is to make clear what information the contracting party did and did not rely upon when entering into the transaction.”) (emphasis added); Abry P’rs V, L.P. v. F & W Acq. LLC, 891 A.2d 1032, 1059 (Del. Ch. 2006) (“The integration clause must contain ‘language that . . . can be said to add up to a clear anti-reliance clause by which the plaintiff has contractually promised that it did not rely upon statements outside the contract’s four corners in deciding to sign the contract.”) (quoting Kronenberg v. Katz, 872 A.2d 568, 593 (Del. Ch. 2004), aff’d, 867 A.2d 902 (Del. 2005)).

- 29 - A party must prove by clear and convincing evidence that he or she is entitled to specific performance and that he or she has no adequate legal remedy. A party seeking specific performance must establish that (1) a valid contract exists, (2) [s]he is ready, willing, and able to perform, and (3) that the balance of equities tips in favor of the party seeking performance.

991 A.2d 1153, 1158 (Del. 2010) (citations omitted). As an initial matter,

Stombaugh has sufficiently established that she lacks an adequate remedy at

law. “The Agreement—a contract for the sale of real property—‘is the

quintessential contract for which specific performance is available.’”

O’Connor, 2025 WL 801165, at *3. Indeed, “specific performance of a real

estate sale contract is often the only adequate remedy for a breach by the seller,

except in rare circumstances.” Szambelak v. Tsipouras, 2007 WL 4179315, at

*7 (Del. Ch. Nov. 19, 2007).

Moving to the elements, the court has already determined a valid

contract, the Agreement, exists between Stombaugh and Ashburn. I discuss the

remaining two elements below.

1. Ready, Willing, and Able

Stombaugh has shown by clear and convincing evidence she is ready,

willing, and able to perform. First, she has complied in all respects with her

end of the Agreement. Second, she has received a new, conditional loan

- 30 - commitment for the Property.146 Third, she has enough liquid cash to make a

down payment on the Property. 147

Defendants argue that Stombaugh needs more than this to show she is

ready, willing, and able to perform the Agreement. 148 Citing the Supreme

Court’s opinion in Osborn ex rel. Osborn v. Kemp, defendants argue that “[a]

buyer who is dependent on uncommitted financing or who cannot demonstrate

access to the full purchase funds is not ‘able to perform.’” 149 This argument

misstates the holding in Osborn and thus fails.

In Osborn, the Supreme Court upheld the determination that a buyer was

ready, willing, and able to perform even though “he did not have the necessary

financing at the time of trial” in the Court of Chancery. 991 A.2d 1153, 1161

(Del. 2010). The Supreme Court explained that Delaware courts “permit the

parties a reasonable time to obtain financing and conclude the transaction”

unless doing so would be inconsistent with a “time is of the essence” clause in

the contract. Id. (citing WILLISTON ON CONTRACTS § 67:15 (4th ed. 2009)).

Quoting Williston on Contracts, the court explained “[a] purchaser will be

deemed ready and able to perform . . . where the agreement is subject to

financing, and the purchaser is able to obtain it.” Id. at 1161 n.26.

146 See Trial Tr. 112–15.

147 See id. 72.

148 See Defs.’ Answering Br. 12.

149 Defs.’ Reply Br. 23.

- 31 - Here, the Agreement contains a “time is of the essence” clause that

required Stombaugh to obtain and deliver to Ashburn a mortgage commitment

within 30 days of the Agreement’s execution. 150 She did. 151 So the

Agreement’s “time is of the essence” clause was satisfied. Giving Stombaugh a

reasonable amount of time now to obtain financing and conclude the

transaction is consistent with the Supreme Court’s ruling in Osborn and an

appropriate remedy for Ashburn’s breach of the Agreement. Capital Bank has

indicated that Stombaugh will be able to receive her loan within 21 days of this

action’s resolution. 152 Stombaugh has thus put herself in a position to procure

financing for the Property in a timely manner under the Agreement. She is

ready, willing, and able to perform.

2. The Balance of Equities

Balancing the equities requires the court to “consider whether ‘specific

performance of a validly formed contract would cause even greater harm than it

would prevent.’” White v. Russell, 2023 WL 3191746, at *7 (Del. Ch. May 2,

2023) (quoting Hastings Funeral Home, Inc. v. Hastings, 2022 WL 16921785,

at *8 (Del. Ch. Nov. 14, 2022)). Here, the balance of equities tilts decisively in

Stombaugh’s favor.

150 Agreement ¶ 7(1)(b).

151 See PX 43.

152 Trial Tr. 115.

- 32 - The parties executed a contract. Stombaugh performed her obligations

under it. Ashburn chose to escalate the purchase price despite knowing it was

prohibited from doing so. 153 When Stombaugh took issue with this, Ashburn

tried to bully her into dropping the issue by falsely accusing her of breaching

the Agreement. 154 And when that failed, Ashburn simply stopped dealing with

Stombaugh. 155

Defendants did not show that they would be harmed from specific

performance of the Agreement. 156 They argue the equities balance in their

favor because Stombaugh “defaulted on crucial terms of the contract;

meanwhile, Defendants, despite being ready to perform, have been left holding

an empty property for years in a rising market[.]” 157 As explained, Stombaugh

did not breach the Agreement by failing to timely select her options. And to the

extent defendants argue that the Property’s appreciated value tips the equities in

their favor, they are incorrect as a matter of law. 158

153 See, e.g., PX 32 at P-431.

154 See PX 16 at P-359 to P-360.

155 See Trial Tr. 52.

156 See Osborn, 991 A.2d at 1161 (“When balancing the equities, we must be

convinced that specific enforcement of a validly formed contract would not cause even greater harm than it would prevent.”) (citation modified). 157 Defs.’ Reply Br. 24.

158 See, e.g., Osborn, 991 A.2d at 1162 (“We do not discount that beach front property

has appreciated over the span of twenty years, however, the ‘mere increase in land values, unaccompanied by other circumstances showing inequity, is not such hardship

- 33 - In short, the balance of equities tilts decisively toward Stombaugh. The

third element of specific performance is established. The court thus grants

Stombaugh’s request for specific performance of the Agreement.

C. The Requested Damages

In addition to specific performance, Stombaugh seeks damages stemming

from the interest rate differential between the interest rate she had obtained in

2021 versus the interest rate she would have to pay today to finance the

Property’s purchase. 159

“This court may ‘award damages or pecuniary compensation along with

specific performance when the decree as awarded does not give complete and

full relief.’” O’Connor, 2025 WL 801165, at *4 (quoting Tri State Mall

Assocs. v. A.A.R. Realty Corp., 298 A.2d 368, 371 (Del. Ch. 1972)). “In the

context of real estate transactions, interest rate differentials have been awarded

as damages for breach of contract and as ancillary relief in actions for specific

performance.” Stephenson, 462 A.2d at 1077 (collecting cases). This is

because, often, “[t]he increased financing cost is a predictable consequence of

the vendor’s delay in completing the transaction.” Id. (collecting cases).

That said, Stombaugh’s request for damages is only ancillary to her

primary request for specific performance. See id. “[I]n decreeing specific

as justifies a court of equity in denying specific performance.”) (quoting Cunningham v. Esso Standard Oil Co., 118 A.2d 611, 614 (Del. 1955)). 159 See, e.g., Pl.’s Opening Br. 58.

- 34 - performance [this court] will adjust the equities of the parties in such a manner

as to put them as nearly as possible in the same position as if the contract had

been performed according to its terms.” Tri State Mall Assoc. v. A.A.R. Realty

Corp., 298 A.2d 368, 371-72 (Del. Ch. 1972) (emphasis in original). In doing

so, “the [c]ourt must consider the gains enjoyed by the parties over the [period

of breach] by reason of their failure to exchange the consideration required

under the contract.” Vaughan v. Creekside Homes, Inc., 1994 WL 586833, at

*2 (Del. Ch. Oct. 7, 1994).

Absent Ashburn’s breach of the Agreement, Stombaugh would have

purchased the Property in late 2021 or early 2022 with a 30-year mortgage at an

interest rate of 3.625%. 160 Now, the interest rate available to her to obtain a

mortgage on the Property is much higher. 161 This is, in the Stephenson court’s

words, a “predictable consequence” of the breach, so some measure of relief

would ordinarily be equitable and appropriate.

But that is not the end of the inquiry. As the court explained in Tri State,

equity’s role is to put the parties, not just Stombaugh, in the positions they

would have been in had the transaction been performed in late 2021 or early

2022. See Tri State, 1994 WL 586833, at *2. Had Ashburn conveyed the

Property in late 2021 or early 2022, Stombaugh would have paid Ashburn

160 Trial Tr. 364–66.

161 Id. 112.

- 35 - $350,411 and Ashburn would have been able to use those funds for the ordinary

sort of things that a builder will do with the proceeds—such as paying

subcontractors and suppliers, and reinvesting or distributing net profits.162

In the Vaughan court’s words, it appears defendants here enjoyed no

“gains” by reason of the failure to convey the Property in late 2021 or early

2022. Defendants have received no rent or profits from the Property, and they

have, presumably, been incurring the normal expenses associated with

ownership, such as maintenance, taxes, and insurance, that Stombaugh would

have paid upon acquiring ownership. Stombaugh, for her part, gained from

being able to use the unpaid purchase price to purchase her primary residence,

and she will gain from being able to acquire the Property at a substantial

discount to its current appraised value. 163 See Vaughan, 1994 WL 586833, at

*2–3.164

162 See Hastings Funeral Home, Inc. v. Hastings, 2022 WL 16921785, at *9 (Del. Ch.

Nov. 14, 2022) (“In addition, if delivery had occurred, Hastings would have received the sale proceeds from HFH on January 25, 2021, and he is entitled to a credit for interest on the unpaid purchase money since January 25, 2021 . . . . [P]re-judgment interest at the legal rate on the $850,000.00 sale price should be added for the same period.”). 163 Defendants presented credible and unopposed evidence that as of November 2024

the Property was worth $95,589 more than when the parties first executed the Agreement. See Trial Tr. 224; see also DX 6 (November 17, 2024 Appraisal Report). 164 In Vaughan, the court identified “three distinct ‘returns’” from the parties’ failure

to close the transaction and convey the property in exchange for payment of the purchase price: (1) seller’s receipt of rental income; (2) buyers’ ability to use the unpaid purchase price for other purposes; and (3) the property’s appreciation in value. 1994 WL 586833, at *2. The court declined to award seller interest on the unpaid purchase price because the buyers were willing to let the seller retain the rental

- 36 - In short, if the court is to put the parties “nearly as possible in the same

position as if the contract had been performed according to its terms,” 165 the

court needs to account for both the present value of the interest rate differential

and interest on the unpaid purchase price. Doing that here is essentially a wash.

Stombaugh asserts that the present value of the interest rate differential is

$83,656.13. 166 An award of simple interest on the unpaid purchase price at the

legal rate of interest from early 2022 through today is $82,784.60.167 Adding to

the difficulties here, Stombaugh did not provide all of the necessary inputs to

calculate the present value of the interest differential—there is no evidence in

the record as to what down payment Stombaugh would have been required to

income instead of paying it over. See id. (“[D]uring the period of nonperformance, both parties benefited from their use of the assets they had contracted to exchange. Therefore, an order that requires them to exchange those assets now, while permitting them to retain the benefits produced by those assets, is fair and equitable, because neither party would gain at the expense of the other.”) (emphasis in original). 165 Tri State, 298 A.2d at 371–72.

166 PX 45.

167 The legal rate of interest in Delaware is 5% over the federal discount rate. See 6 Del. C. § 2301(a). The federal discount rate between March 16, 2020 and March 17, 2022 was 0.25%. See Federal Reserve Discount Window, Primary and Secondary Credit Rates, https://www.frbdiscountwindow.org/-/media/documents/primary secondary.xlsx?sc_lang=en&hash=B65867DA7B6731BF73623F3417357B9A; see also Federal Reserve Bank of St. Louis, Rates Related to Monetary Policy, THE FRED® BLOG (Apr. 15, 2024), https://fredblog.stlouisfed.org/2024/04/rates-related- to-monetary-policy/ (explaining that the Federal Reserve’s primary credit rate is “often referred to as the discount rate”). Using a date range of January 1, 2022 through June 30, 2026, simple interest on the purchase price of the Property is $82,784.60. Compounded monthly, the interest would be $93,152.72. The court did the calculations itself using Microsoft Excel.

- 37 - make on the mortgage in late 2021 or early 2022, so the actual amount of that

loan is unproven. 168

In considering the equities of an ancillary damages award, I conclude

Stombaugh has gained greater benefit than defendants from the delayed

performance of the Agreement. Indeed, it does not appear that respondents

gained anything from their refusal to perform. Specific performance of the

Agreement is warranted, but an award of interest-differential damages, in light

of the foregoing, would amount to a windfall for Stombaugh that equity does

not permit. 169 I therefore decline to award Stombaugh interest-differential

damages.

D. The Request for a Court-Supervised Inspection Right

Stombaugh also requests “an Order requiring Defendants to permit

Plaintiff access to the Property,” with “contractors and other professionals of

her choice to confirm the structure meets the terms of the Agreement and has

168 Stombaugh testified only to the interest rate (3.625%) and the points she would

have paid (1.25). See Trial Tr. 364–66. Stombaugh’s March 2021 commitment letter (PX 43) identifies a 5% down payment, but also reflects a different interest rate, so its utility here is unclear. And her expert, Dr. Butkiewicz, used a 10% down payment amount for his calculations, see PX 45, but the record does not explain where the 10% came from. The figures for the new mortgage are also unclear. Stombaugh’s expert assumed a 6.375% interest rate and 10% down payment (see id.), but on the first day of trial Gensoli testified that the interest rate was then 7.5% with a 20% down payment (see Trial Tr. 112). 169 Cf. Hastings Funeral Home, 2022 WL 16921785, at *9 (“And, ‘equity may require

a party to pay interest on the purchase price as a condition to obtaining specific performance where one party would otherwise inequitably receive a windfall at the other’s expense.”) (quoting Vaughan, 1994 WL 586833, at *3) (emphasis in original).

- 38 - been completed in a manner consistent with local industry standards[.]” 170

Stombaugh notes that “the Residence sat unfinished for some period of time

between 2021 and 2024[.]” 171 During that time, she “observed the [Property]’s

garage door [was] open and moss growing on the” Property’s exterior. 172

Stombaugh argues that this, together with Ashburn’s “wrongful escalation of

the price,” should entitle her to receive these a professional home inspection

and air quality inspection. 173

Defendants object to this request. They argue that granting Stombaugh’s

request would require the court to “supervise a personal service,” which goes

against “longstanding policy.”174 Defendants also argue that Stombaugh would

have an adequate remedy at law—a damages claim—if Stombaugh discovers

defects in the Property. 175

I agree with Stombaugh that her request is not one for court supervision

of a personal service. Stombaugh plainly requests the court order respondents

to facilitate pre-transfer access to the Property. 176 That is a request for

170 Dkt. 57 at 2.

171 Pl. Alexis Stombaugh’s Answering/Reply Post-Tr. Br. (“Pl.’s Reply Br.”), Dkt. 73

at 54. 172 Id.

173 Id. 55.

174 Defs.’ Reply Br. 22.

175 Id.

176 See Pl.’s Reply Br. 54–55 (“Because the Residence sat unfinished for some period

of time between 2021 and 2024, during which time Alexis observed the Residence’s

- 39 - injunctive relief separate from Stombaugh’s request for specific performance of

the Agreement. It does not require defendants’ agents do any inspection

themselves.

I award Stombaugh the relief sought. Defendants promised Stombaugh

four meetings during construction: (1) a pre-construction meeting prior to

breaking ground; (2) a pre-drywall meeting; (3) a pre-final walk meeting at

least one week before settlement; and (4) a final walk meeting on the day of

settlement. 177 The pre-drywall meeting is important—it is the homebuyer’s

final chance, after framing, electrical, plumbing, and HVAC (heating,

ventilation, and air-conditioning) are “roughed in,” to “identify and correct any

observed material defects before they become hidden behind drywall, where

they could be more costly and challenging to address.” Int’l Assoc. of Certified

Home Inspectors, Pre-Drywall Inspection Standards of Practice,

https://www.nachi.org/sop-pre-drywall.htm (Mar. 6, 2025). 178

garage door open and moss growing on the outside of the Residence, she requests an opportunity to have a more detailed inspection.”). 177 Agreement 11.

178 See also Katherine Lutge, How Pre‑Drywall Inspections Work in New Construction Homes, HOMES.COM (Feb. 25, 2026) (“It’s very important to identify and address any underlying issues before installing the drywall, or the buyer may face costly problems later.”); Carolina Premier Inspections, Pre-Drywall Inspections, https://www.carolinaphi.com/pre-drywall-inspections (“This is a narrow window of time that provides a certified home inspector the only opportunity to examine the ‘bones’ of the house—identifying structural defects, safety hazards, or installation errors that would be permanently hidden once the walls close up.”).

- 40 - As Stombaugh notes, defendants’ unilateral decision to complete

construction without any input from Stombaugh while in breach of the

Agreement means no pre-drywall meeting is possible. 179 The pre-final walk

meeting is, however, still possible and required under the Agreement. The only

question is what it should entail. I find, under the circumstances of this case,

where the Property sat unfinished for several years, during which Stombaugh

observed the Property’s garage door open and mold growing on the Property’s

external surfaces, 180 and where defendants did not give Stombaugh the pre-

drywall meeting the Agreement requires, that Stombaugh’s request to have a

home inspector and air quality inspector, both of her choosing, inspect the

Property prior to closing is appropriate.

E. Attorney Fees

Stombaugh requests “reimbursement of her attorneys’ fees and costs in

light of” defendants’ “bad faith behavior both before and during this

litigation.” 181

Delaware courts follow the American Rule, which means that “litigants

are normally responsible for paying their own costs.” Mahani v. Edix Media

Gp., Inc., 935 A.2d 242, 245 (Del. 2007). An exception to the American Rule

179 Trial Tr. 187.

180 Id. 69–70, 187.

181 Pl.’s Reply Br. 69.

- 41 - is where a party litigates an action in bad faith. See, e.g., New Start Hldgs.,

LLC v. Zhou, 2024 WL 4039440, at *30 (Del. Ch. Sep. 4, 2024) (quoting

Kaung v. Cole Nat’l Corp., 884 A.2d 500, 506 (Del. 2005)). “Fee shifting

under the bad faith exception may be appropriate ‘if a prevailing party

demonstrates that the losing defendants: [(1)] engaged in bad faith conduct that

increased the costs of the litigation; or [(2)] engaged in pre-litigation conduct of

a sufficiently egregious nature.’” Enhabit, Inc. v. Nautic P’rs IX, L.P., 2024

WL 4929729, at *43 (Del. Ch. Dec. 2, 2024) (quoting HMG/Courtland Props.,

Inc. v. Gray, 749 A.2d 94, 124 (Del. Ch. 1999)). “To find bad faith, a party

must have acted in subjective bad faith, which involves a higher or more

stringent standard of proof, i.e., clear evidence.” Hastings Funeral Home, 2022

WL 16921785, at *11 (citation modified). Stombaugh has shown clear

evidence of Defendants’ bad faith conduct sufficient to warrant fee shifting.

1. Pre-Litigation Conduct

“A litigant’s conduct must rise to a level of ‘glaring egregiousness’

before this court will find bad faith for purposes of shifting fees, and ‘merely

being adjudicated a wrongdoer . . . is not enough to justify fee shifting.’” In re

Will of Grooms, 2025 WL 1587960, at *2 (Del. Ch. June 5, 2025) (quoting

eBay Domestic Hldgs., Inc. v. Newmark, 16 A.3d 1, 47 (Del. Ch. 2010)). This

court has previously found a defendant’s conduct glaringly egregious when it

forces a plaintiff to file suit to secure a clearly defined and established right.

- 42 - See Pettry v. Gilead Scis., Inc., 2021 WL 3087027, at *1 (Del. Ch. July 22,

2021) (quoting McGowan v. Empress Ent., Inc., 791 A.2d 1, 4 (Del. Ch. 2000)).

I conclude that defendants’ pre-litigation conduct was glaringly egregious.

Defendants escalated the purchase price of the Property despite clear

knowledge that doing so was in contravention of the Agreement. 182 Their

agents refused to engage with Stombaugh when she attempted to resolve the

issue amicably. 183 Instead of engaging, defendants threatened Stombaugh with

termination of the Agreement and retention of her deposit, and falsely accused

her of breaching the Agreement by failing to timely select options for the

Property through L&L. 184

Ashburn’s pre-litigation actions—its bullying tactics, repudiation of its

obligations, and assertion of the plainly frivolous counterclaim—caused

Stombaugh to initiate this litigation to secure her bargained-for rights.

Ashburn’s pre-litigation actions were glaringly egregious and justify an award

of attorney fees.

2. Litigation Conduct

“Courts have found bad faith for the conduct of litigation ‘where parties

have unnecessarily prolonged or delayed litigation, falsified records or

182 See, e.g., PX 32 at P-431.

183 See Trial Tr. 52.

184 See supra Part III.A.

- 43 - knowingly asserted frivolous claims.’” Hastings Funeral Home, 2022 WL

16921785, at *11 (quoting Kaung v. Cole Nat’l Corp., 884 A.2d 500, 506 (Del.

2005)). Here, I conclude that defendants’ conduct in the litigation justifies fee

shifting.

In fairness to defendants, I first note that defendants did not

unnecessarily prolong or delay this litigation. Defendants, albeit obliquely,

proposed a settlement with Stombaugh.185 Additionally, Stombaugh did not

clearly show that defendants falsified records during this action.

Defendants’ counterclaim and defense, however, smacks of frivolity.

Defendants insisted on litigating Stombaugh’s purported breach of the

Agreement’s “time is of the essence” clause regarding tile selection and L&L

all the way through trial despite (1) their own agent and witness (McCann)

making it clear there was no basis in the Agreement to support defendants’

argument that Stombaugh was contractually obligated to select her final tiling

options through L&L by March 17, 2021, 186 and (2) clear and indisputable

evidence neither defendants nor their agents did not connect Stombaugh and

L&L until long after the purported March 17 tile selection deadline. 187

185 Dkt. 25.

186 See Trial Tr. 163–64.

187 See, e.g., PX 26.

- 44 - To make matters worse, defendants’ arguments shifted over time. On the

second day of trial, defendants tacked on a new theory for why Ashburn was

entitled to terminate the Agreement: Stombaugh’s mortgage commitment was

not satisfactory under the Agreement. 188 Defendants’ shifting contentions

further indicate a bad faith attempt to defend Ashburn’s indefensible breach of

the Agreement. 189

But the frivolity of defendants’ defense reached its zenith with the Price

Escalation Addendum. On the first day of trial, McCann testified defendants

deliberately imposed the price increase even though they knew they had already

broken ground, and she was sure she discussed this with Mr. Ashburn before

moving forward. 190 Then, six weeks later, on the second day of trial, Mr.

Ashburn testified he had known Ashburn could not impose the price escalation

and he directed defendants’ counsel to withdraw it sometime before litigation

188 See Trial Tr. 315–17; see also Defs.’ Opening Br. 18–19; Defs.’ Reply Br. 11–14,

22–24. 189 See Pearl Cty. Elevator, Inc. v. Gieseke, 2021 WL 1099230, at *20 (Del. Ch. Mar.

23, 2021) (“Writing for the Seventh Circuit, Judge Posner observed that . . . when ‘[a] party . . . hokes up a phony defense to the performance of his contractual duties and then when that defense fails (at some expense to the other party) tries on another defense for size [he] can properly be said to be acting in bad faith.’”) (quoting Harbor Ins. Co. v. Cont’l Bank Corp., 922 F.2d 357, 363 (7th Cir. 1990)); see also Johnston v. Arbitrium (Cayman Islands) Handels AG, 720 A.2d 542, 546 (Del. 1998) (“Since the Defendants constructed their entire defense in bad faith, the Court of Chancery did not abuse its discretion in awarding Vendel his full reasonable attorney[] fees.”). 190 Trial Tr. 252.

- 45 - was filed. 191 The record is clear that no such retraction was ever made. So one

of two things must be true: (1) Mr. Ashburn testified truthfully, defendants’

counsel ignored his direction, and defendants forced Stombaugh to litigate this

issue despite knowing they did not have a good faith basis to maintain the

defense; or (2) Mr. Ashburn testified untruthfully, he never gave that direction

to defendants’ counsel, and the testimony is a misguided attempt to deflect

blame onto defendants’ counsel without providing any evidence to back up the

assertion. Whichever of these is true, it is litigation “so strained and wholly at

odds with the operative reality that it [falls] outside the bounds of good faith

advocacy.” In re Grupo Dos Chiles LLC, 2006 WL 2507044, at *2 (Del. Ch.

Aug. 17, 2006) (citing Ct. Ch. R. 11).

Defendants’ pre-litigation conduct was glaringly egregious. Defendants’

insistence on asserting their baseless breach defense and counterclaim cost the

parties and the court time and the expenditure of valuable resources.

Defendants’ unwillingness to yield to reality constitutes bad faith litigation

conduct and warrants fee shifting. Accordingly, I grant Stombaugh’s request

for fee shifting.

191 Id. 338–39.

- 46 - IV. CONCLUSION

For the foregoing reasons, Stombaugh has shown her entitlement to an

order of specific performance directing defendants to convey the Property to

her. I decline to grant her additional damages request, but grant her request for

a more thorough inspection of the Property prior to conveyance. Defendants’

counterclaim fails, and I recommend Stombaugh’s fees be shifted to

defendants. Stombaugh must submit a Rule 88 affidavit if the parties cannot

agree on the reasonableness of her attorney fees. Stombaugh is the prevailing

party, so I award her costs under Court of Chancery Rule 54(d).

This is a Report under Court of Chancery Rule 144(b)(1). Because the

court has awarded Stombaugh attorney fees in an amount to be determined, this

Report does not conclude this action so it is not a Final Report. 192 Exceptions

to this report are stayed pending entry of my Final Report.

192 See Delaware Bay Surgical Servs., P.A. v. Swier, 869 A.2d 327 (Del. Feb. 15,

2005) (TABLE) (“This Court consistently has held that that a judgment on the merits is not final until an outstanding related application for an award of attorneys fees has been decided.”) (citing Lipson v. Lipson, 799 A.2d 345, 348 (Del. 2001)).

- 47 -