IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
DELAWARE HUMAN AND CIVIL ) RIGHTS COMMISSION, ) ) ) Plaintiff, ex rel. ) ) MOHAMMED SEDGHI and PAULA ) BURKHARDT-SEDGHI, ) ) v. ) C.A. No: S23C-04-004 MHC ) SCHELL BROTHERS, LLC, and ) JONATHAN HORNER, ) ) Defendants. )
ORDER
Submitted: July 14th, 2023 Decided: October 13, 2023
Upon Defendants’ Motion to Dismiss, MOTION GRANTED IN PART AND DENIED IN PART.
Elizabeth S. Fenton, Esquire, Ballard Spahr, LLP, 919 N. Market Street, 11th Floor, Wilmington, Delaware, 19081, Attorney for Plaintiff. Lila R. Miller, Esquire, Zoila E. Hinson, Esquire, David S. DePriest, Esquire, Relman Colfax, PLLC, 1225 19th Street NW, Washington, DC, 20036, Pro Hac Vice, Attorneys for Plaintiff.
David C. Hutt, Esquire, R. Eric Hacker, Esquire, Morris James, LLP, 107 W. Market Street, Georgetown, Delaware 19947-1438. Kelly E. Farnan, Esquire, Puja Upadhyay, Esquire, Richards, Layton, & Finger, P.A., 920 North King Street, Wilmington, Delaware 19801, Attorneys for Defendants.
CONNER, J. INTRODUCTION
Before the Court is the Motion of Schell Brothers, LLC (“Schell Brothers”)
and Jonathan Horner, General Counsel for Schell Brothers, (collectively
“Defendants”), to Dismiss. The Delaware Human and Civil Rights Commission (the
“Commission”) originated this action on behalf of Mohammed Sedghi and Paula
Burkhardt-Sedghi, a married couple. The Complaint was brought for unlawful
discrimination under the Delaware Fair Housing Act. Defendants move to have the
Complaint dismissed for lack of standing and failure to commence the action
promptly.
FACTUAL AND PROCEDURAL HISTORY
On November 20, 2020, Mr. and Mrs. Sedghi entered into an agreement to
purchase a new home from Schell Brothers in one of it’s communities in Selbyville,
Delaware. The Sedghi’s made a 10% downpayment of $82,926 to secure the
purchase. On April 19, 2021, Mr. Sedghi spoke on the phone with Mr. Horner to
seek clarification about an addendum in the home purchase agreement (“Purchase
Agreement”). Mr. Horner did not answer Mr. Sedghi’s questions and instead
allegedly threatened to terminate the Purchase Agreement pursuant to a provision
included therein which gave Schell Brothers the power to unilaterally terminate the
Purchase Agreement at any time with anyone who does not fit within the
2 “community, culture, or operations.” After hearing this threat, Mr. Sedghi advised
he would exercise his fair housing rights. This caused Mr. Horner to terminate the
Purchase Agreement, allegedly stating “I know your kind of people. I know how you
people are.”
Mr. Horner followed up with an email confirming the termination of the
Purchase Agreement, noting that it was in part occurring because Mr. Sedghi stated
he would sue Schell Brothers. Mr. Sedghi still wanted to purchase the home so he
decided to agree to the addendum he originally questioned and made numerous
requests to Schell Brothers to reconsider the Purchase Agreement. Schell Brothers
refused the requests to reconsider and Mr. Horner also refused to return the Sedghi’s
downpayment unless the Sedghi’s agreed not to pursue litigation.
On May 28, 2021, Mr. and Mrs. Sedghi filed a complaint with the Delaware
Division of Human and Civil Rights (the “Division”) and United States Department
of Housing and Urban Development. The Sedghi’s allege Defendants violated their
rights under the Delaware Fair Housing Act (“DFHA”) and federal Fair Housing Act
(“FHA”) by refusing to sell them the property they had contracted to purchase and
by retaliating against them for asserting their fair housing rights. The Sedghi’s
further allege Defendants discriminated against them based on Mr. Sedghi’s religion
and national origin. The Division investigated the claims and issued a charge
(“Charge”) pursuant to 6 Del. C. §4610(f)(2). 3 On August 11, 2022, pursuant to 6 Del. C. § 4612(a), Defendants elected to
have the claims asserted in the Charge decided in a civil action. Thus, the
Commission brought this claim against Defendants for violating 6 Del. C.
§§4603(b)(1), (2), and (3), 4604(a) and 4618.
STANDARD OF REVIEW
Superior Court Rule 12(b)(6) permits the Court to dismiss an action for failure
to state a claim upon which relief can be granted.1 The Court must accept all well-
pleaded allegations contained in the complaint as true and draw all inferences in a
light most favorable to the plaintiff.2 A complaint will only be dismissed if it appears
“with reasonable certainty that, under any set of facts that could be proven to support
the claims asserted, the plaintiff would not be entitled to relief.”3
Title 6, Section 4601 of the Delaware Code establishes the lens through which
the DFHA actions should be viewed. Particularly, §4601(b) instructs that the DFHA
shall be “liberally construed to the end that its purposes may be accomplished and
all persons may fully enjoy equal rights and access to housing for themselves and
their families.” 4
1 Gray’s Landing Dev., LLC v. Blackston Cove Dev., LLC, 2023 WL 2609633, at *2 (Del. Super. Mar. 21, 2023). 2 Thomas v. Capano Homes Inc., 2015 WL 1593618, at *2 (Del. Super. Apr. 2, 2015). 3 Id. 4 6 Del. C. § 4601(b). 4 ANALYSIS
I. Failure to Promptly Commence
Defendants argue the Complaint should be dismissed because it was not
timely filed, stressing the “promptly commenced” language of 6 Del. C.
§4612(n)(3). Defendants challenge that Plaintiffs did not promptly commence the
action because there was an approximate nine-month delay between the issuance of
the Charge and the filing of the Complaint and Praecipe.
Plaintiffs assert they promptly commenced the action once the appropriate
procedural steps were taken. When the Commission authorizes a civil action, the
action must be immediately referred to the Attorney General.5 The Attorney General
then has 30 days to pursue the civil action on behalf of the Commission in the names
of the aggrieved person or persons.6 However, if the Attorney General has a conflict
of duty, the Commission shall employ special counsel to pursue the action.7 Once
the special counsel is retained, the action shall be promptly commenced.8
In the matter before the Court, the Attorney General had a conflict of duty,
therefore the DFHA required the retention of special counsel to proceed with the
action. The Commission retained special counsel on February 10, 2023, and local
5 6 Del. C. § 4612(n)(1). 6 6 Del. C. § 4612(n)(2). 7 6 Del. C. § 4612(n)(3). 8 Id. 5 Delaware counsel on March 21, 2023. The Commission then filed the Complaint on
April 6, 2023. Due to a clerical error admitted by Plaintiffs, the accompanying
Praecipe was not filed until May 19, 2023. Superior Court Rule 3(a) and Delaware
case law make it clear that an action is not officially commenced until the plaintiff
files both the Complaint and Praecipe, which puts “the judicial machinery in
motion.”9
Although the Plaintiffs did not file the Praecipe until May 19, 2023, the time
between the retention of the special counsel and the official commencement of the
action was less than two months. There is nothing contained in the DFHA that states
an action cannot proceed if initiated after a certain time period. The language simply
reads, “such action shall be commenced promptly after the Commission employs
such counsel.”10 Defendants failed to demonstrate a set of circumstances in which
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
DELAWARE HUMAN AND CIVIL ) RIGHTS COMMISSION, ) ) ) Plaintiff, ex rel. ) ) MOHAMMED SEDGHI and PAULA ) BURKHARDT-SEDGHI, ) ) v. ) C.A. No: S23C-04-004 MHC ) SCHELL BROTHERS, LLC, and ) JONATHAN HORNER, ) ) Defendants. )
ORDER
Submitted: July 14th, 2023 Decided: October 13, 2023
Upon Defendants’ Motion to Dismiss, MOTION GRANTED IN PART AND DENIED IN PART.
Elizabeth S. Fenton, Esquire, Ballard Spahr, LLP, 919 N. Market Street, 11th Floor, Wilmington, Delaware, 19081, Attorney for Plaintiff. Lila R. Miller, Esquire, Zoila E. Hinson, Esquire, David S. DePriest, Esquire, Relman Colfax, PLLC, 1225 19th Street NW, Washington, DC, 20036, Pro Hac Vice, Attorneys for Plaintiff.
David C. Hutt, Esquire, R. Eric Hacker, Esquire, Morris James, LLP, 107 W. Market Street, Georgetown, Delaware 19947-1438. Kelly E. Farnan, Esquire, Puja Upadhyay, Esquire, Richards, Layton, & Finger, P.A., 920 North King Street, Wilmington, Delaware 19801, Attorneys for Defendants.
CONNER, J. INTRODUCTION
Before the Court is the Motion of Schell Brothers, LLC (“Schell Brothers”)
and Jonathan Horner, General Counsel for Schell Brothers, (collectively
“Defendants”), to Dismiss. The Delaware Human and Civil Rights Commission (the
“Commission”) originated this action on behalf of Mohammed Sedghi and Paula
Burkhardt-Sedghi, a married couple. The Complaint was brought for unlawful
discrimination under the Delaware Fair Housing Act. Defendants move to have the
Complaint dismissed for lack of standing and failure to commence the action
promptly.
FACTUAL AND PROCEDURAL HISTORY
On November 20, 2020, Mr. and Mrs. Sedghi entered into an agreement to
purchase a new home from Schell Brothers in one of it’s communities in Selbyville,
Delaware. The Sedghi’s made a 10% downpayment of $82,926 to secure the
purchase. On April 19, 2021, Mr. Sedghi spoke on the phone with Mr. Horner to
seek clarification about an addendum in the home purchase agreement (“Purchase
Agreement”). Mr. Horner did not answer Mr. Sedghi’s questions and instead
allegedly threatened to terminate the Purchase Agreement pursuant to a provision
included therein which gave Schell Brothers the power to unilaterally terminate the
Purchase Agreement at any time with anyone who does not fit within the
2 “community, culture, or operations.” After hearing this threat, Mr. Sedghi advised
he would exercise his fair housing rights. This caused Mr. Horner to terminate the
Purchase Agreement, allegedly stating “I know your kind of people. I know how you
people are.”
Mr. Horner followed up with an email confirming the termination of the
Purchase Agreement, noting that it was in part occurring because Mr. Sedghi stated
he would sue Schell Brothers. Mr. Sedghi still wanted to purchase the home so he
decided to agree to the addendum he originally questioned and made numerous
requests to Schell Brothers to reconsider the Purchase Agreement. Schell Brothers
refused the requests to reconsider and Mr. Horner also refused to return the Sedghi’s
downpayment unless the Sedghi’s agreed not to pursue litigation.
On May 28, 2021, Mr. and Mrs. Sedghi filed a complaint with the Delaware
Division of Human and Civil Rights (the “Division”) and United States Department
of Housing and Urban Development. The Sedghi’s allege Defendants violated their
rights under the Delaware Fair Housing Act (“DFHA”) and federal Fair Housing Act
(“FHA”) by refusing to sell them the property they had contracted to purchase and
by retaliating against them for asserting their fair housing rights. The Sedghi’s
further allege Defendants discriminated against them based on Mr. Sedghi’s religion
and national origin. The Division investigated the claims and issued a charge
(“Charge”) pursuant to 6 Del. C. §4610(f)(2). 3 On August 11, 2022, pursuant to 6 Del. C. § 4612(a), Defendants elected to
have the claims asserted in the Charge decided in a civil action. Thus, the
Commission brought this claim against Defendants for violating 6 Del. C.
§§4603(b)(1), (2), and (3), 4604(a) and 4618.
STANDARD OF REVIEW
Superior Court Rule 12(b)(6) permits the Court to dismiss an action for failure
to state a claim upon which relief can be granted.1 The Court must accept all well-
pleaded allegations contained in the complaint as true and draw all inferences in a
light most favorable to the plaintiff.2 A complaint will only be dismissed if it appears
“with reasonable certainty that, under any set of facts that could be proven to support
the claims asserted, the plaintiff would not be entitled to relief.”3
Title 6, Section 4601 of the Delaware Code establishes the lens through which
the DFHA actions should be viewed. Particularly, §4601(b) instructs that the DFHA
shall be “liberally construed to the end that its purposes may be accomplished and
all persons may fully enjoy equal rights and access to housing for themselves and
their families.” 4
1 Gray’s Landing Dev., LLC v. Blackston Cove Dev., LLC, 2023 WL 2609633, at *2 (Del. Super. Mar. 21, 2023). 2 Thomas v. Capano Homes Inc., 2015 WL 1593618, at *2 (Del. Super. Apr. 2, 2015). 3 Id. 4 6 Del. C. § 4601(b). 4 ANALYSIS
I. Failure to Promptly Commence
Defendants argue the Complaint should be dismissed because it was not
timely filed, stressing the “promptly commenced” language of 6 Del. C.
§4612(n)(3). Defendants challenge that Plaintiffs did not promptly commence the
action because there was an approximate nine-month delay between the issuance of
the Charge and the filing of the Complaint and Praecipe.
Plaintiffs assert they promptly commenced the action once the appropriate
procedural steps were taken. When the Commission authorizes a civil action, the
action must be immediately referred to the Attorney General.5 The Attorney General
then has 30 days to pursue the civil action on behalf of the Commission in the names
of the aggrieved person or persons.6 However, if the Attorney General has a conflict
of duty, the Commission shall employ special counsel to pursue the action.7 Once
the special counsel is retained, the action shall be promptly commenced.8
In the matter before the Court, the Attorney General had a conflict of duty,
therefore the DFHA required the retention of special counsel to proceed with the
action. The Commission retained special counsel on February 10, 2023, and local
5 6 Del. C. § 4612(n)(1). 6 6 Del. C. § 4612(n)(2). 7 6 Del. C. § 4612(n)(3). 8 Id. 5 Delaware counsel on March 21, 2023. The Commission then filed the Complaint on
April 6, 2023. Due to a clerical error admitted by Plaintiffs, the accompanying
Praecipe was not filed until May 19, 2023. Superior Court Rule 3(a) and Delaware
case law make it clear that an action is not officially commenced until the plaintiff
files both the Complaint and Praecipe, which puts “the judicial machinery in
motion.”9
Although the Plaintiffs did not file the Praecipe until May 19, 2023, the time
between the retention of the special counsel and the official commencement of the
action was less than two months. There is nothing contained in the DFHA that states
an action cannot proceed if initiated after a certain time period. The language simply
reads, “such action shall be commenced promptly after the Commission employs
such counsel.”10 Defendants failed to demonstrate a set of circumstances in which
Plaintiffs could not be entitled to relief. Rather, defendants simply argued a nine-
month delay between the Commission referring the action to the Attorney General
and the filing of the Complaint is violative of time limits. However, Defendants fail
to acknowledge the Attorney General’s conflict of duty and the time it took to retain
the required special counsel. The Court is satisfied the action was promptly
9 Sup. Ct. Civ. R. 3(a); see also Russell v. Olmedo, 275 A.2d 249, 250 (Del. 1971). 10 6 Del. C. 4612(n)(3). 6 commenced after special counsel was retained. As such, Defendants’ Motion to
Dismiss for failure to promptly commence the action is DENIED.
II. Lack of Standing
Defendants argue that because the Division never issued a charge on behalf
of Mrs. Burkhardt-Sedghi the Commission lacks standing to bring the Complaint on
her behalf. Defendants further argue the Complaint regarding Mrs. Burkhardt-
Sedghi must be dismissed as there was a lack of notice.
Plaintiffs argue the Commission has standing to bring an action on behalf of
an “aggrieved person or persons”11 and that Mrs. Burkhardt-Sedghi is an aggrieved
person because she is associated with her husband and was injured as a result of the
discriminatory housing practice. Plaintiffs further argue Defendants were on notice
because the same facts apply to both Mrs. Burkhardt-Sedghi’s claims and Mr.
Sedghi’s claims.
When a charge is issued pursuant to §4610, a complainant, respondent or an
“aggrieved person on whose behalf the complaint was filed, may elect to have the
claims of that charge” decided in a civil action under §4612(n).12 When such an
election is made, §4612(n)(1) commands the Commission to authorize a civil action
11 6 Del. C. § 4612(n)(1). 12 6 Del. C. § 4612(a). 7 on behalf “the aggrieved person or persons.”13 A civil action pursuant to §4612(n)
cannot occur without an election pursuant to §4612(a). Section §4612(a) requires
the complaint to be filed on behalf of “an aggrieved person.” Mr. Sedghi is the only
person on whose behalf the charge was filed. Therefore, the Commission only has
standing to authorize a civil action on his behalf, not for Mrs. Burkhardt-Sedghi
since no complaint was filed on her behalf.
Plaintiffs argue this interpretation of the DFHA is “nonsensical” and “creates
a bizarre asymmetry” because it theoretically allows Mrs. Burkhardt-Sedghi to
subsequently intervene in this civil action pursuant to §4612(n)(4) but does not allow
the Commission to authorize a civil action on her behalf. The Court agrees, but it is
nonetheless the law established in the DFHA. As stated above, the language of
§4612(n)(1) limits the claims parties may elect to have decided in a civil action to
those listed in the charge. It does not, however, limit the charges that may be decided
in the civil action. Therefore, nothing in this order precludes Mrs. Burkhardt-Sedghi
from subsequently intervening in this suit pursuant to §4612(n)(4).
Because the Commission lacks standing to assert claims in their Complaint on
behalf of Mrs. Burkhardt-Sedghi the Court need not address the issue of notice.
13 6 Del. C. § 4612(n)(1). 8 Accordingly, Defendants Motion to Dismiss regarding a lack of standing on behalf
of Paula Burkhardt-Sedghi is GRANTED.
CONCLUSION
As discussed above, Defendants’ Motion to Dismiss is DENIED as to the
promptly commenced argument and GRANTED as to Paula Burkhardt-Sedghi’s
Standing claims.
IT IS SO ORDERED.
/s/ Mark H. Conner Mark H. Conner, Judge
cc: Prothonotary