Edward Scot Husbands v. Dwight Alexander Hamilton

• Court: Court of Chancery of Delaware
• Decided: February 24, 2025
• Docket: C.A. No. 2023-1134-BWD
• Status: Published

Opinion

COURT OF CHANCERY OF THE STATE OF DELAWARE BONNIE W. DAVID COURT OF CHANCERY COURTHOUSE VICE CHANCELLOR 34 THE CIRCLE GEORGETOWN, DE 19947

Date Submitted: February 14, 2025 Date Decided: February 24, 2025

Dean A. Campbell, Esq. Amit U. Vyas, Esq. Law Office of Dean A. Campbell, PA Hudson, Jones, Jaywork & Fisher, LLC 703 Chestnut Street 225 S. State Street Milton, DE 19968 Dover, DE 19901

RE: Edward Scot Husbands v. Dwight Alexander Hamilton, et al., C.A. No. 2023-1134-BWD

Dear Counsel:

This letter opinion denies Plaintiff’s Motion for Partial Summary Judgment

(the “Motion”).

This action concerns an alleged contract memorialized in text messages, under

which plaintiff Edward Scot Husbands (“Plaintiff”) agreed to transfer real property

in Milton, Delaware (the “Property”) to his longtime friend, Dwight Alexander

Hamilton, and Hamilton’s spouse, Shirley Zebovitz (together, “Defendants”), in

exchange for $130,000 to satisfy a mortgage and an additional $200,000 upon a

future sale of the Property. Am. Compl. Seeking Imposition of Equitable Trust for

Breach of Fiduciary Duty [hereinafter Compl.] ¶¶ 1–4, 11–12, 14, Dkt. 6. Edward Scot Husbands v. Dwight Alexander Hamilton, et al., C.A. No. 2023-1134-BWD February 24, 2025 Page 2 of 5

Plaintiff’s Amended Complaint Seeking Imposition of Equitable Trust for

Breach of Fiduciary Duty (the “Complaint”) alleges that Plaintiff was awarded the

Property as part of a divorce proceeding. Id. ¶ 7. At the time, the Property was

encumbered by a mortgage with a balance of approximately $130,000. Id. ¶ 6.

Hamilton advised Plaintiff to either “refinanc[e] [the Property] in reliance on

[Defendants’] credit” or sell the Property to Defendants at a price sufficient to pay

off the mortgage, with Defendants holding Plaintiff’s equity in the Property in trust

until a later date. Id. ¶¶ 8–11. The parties ultimately decided on the second path,

agreeing in a November 2020 text message exchange (the “Text Agreement”) that

“[Defendants would] buy the [Property] as an investment property. [Plaintiff] would

pay the rent and utilities. . . . [And] 2–3 years down the road [Defendants] would

sell the [Property] and [Defendants] would make sure [Plaintiff] received $200K

. . . .” Id. ¶¶ 10, 12.

In January 2021, Plaintiff and Defendants executed a Contract of Purchase

and Sale (the “Sales Agreement”), under which Plaintiff agreed to sell, and

Defendants agreed to purchase, the Property for $130,000. Id. ¶¶ 14–15. After

closing, Defendants leased the Property back to Plaintiff, who continued to reside at

the Property, paying rent and utilities. Id. ¶ 16. Edward Scot Husbands v. Dwight Alexander Hamilton, et al., C.A. No. 2023-1134-BWD February 24, 2025 Page 3 of 5

In November 2023, Plaintiff initiated this action, alleging that Defendants had

listed the Property for sale and planned to repudiate the Text Agreement. Id. ¶¶ 17–

18. The Complaint alleges counts for breach of fiduciary duty, constructive fraud,

breach of contract, aiding and abetting a breach of fiduciary duty, and imposition of

an equitable trust. Id. ¶¶ 22–50. Defendants sold the Property on January 5, 2024.

Plaintiff has moved for partial summary judgment on his breach of contract

claim. See Pl.’s Opening Br. on Mot. for Partial Summ. J. [hereinafter OB], Dkt. 14.

A two-day trial is scheduled to begin on June 23, 2025.

“[T]here is no absolute right to summary judgment, and it is within the

discretion of the presiding judicial officer to require a developed record before

rendering a decision on the merits.” Gerald N. & Myrna M. Smernoff Rev. Trs. v.

King’s Grant Condo. Ass’n., 2022 WL 6331860, at *1 (Del. Ch. Oct. 10, 2022)

(footnote omitted). “Even where the facts are not in dispute, a court may decline to

grant summary judgment where a more thorough exploration of the facts is needed

to properly apply the law to the circumstances.” In re Tri-Star Pictures, Inc., Litig.,

1995 WL 106520, at *5 (Del. Ch. Mar. 9, 1995); see also In re El Paso Pipeline

P’rs, L.P. Deriv. Litig., 2014 WL 2768782, at *9 (Del. Ch. June 12, 2014) (“[T]he

court may, in its discretion, deny summary judgment if it decides upon a preliminary Edward Scot Husbands v. Dwight Alexander Hamilton, et al., C.A. No. 2023-1134-BWD February 24, 2025 Page 4 of 5

examination of the facts presented that it is desirable to inquire into and develop the

facts more thoroughly at trial in order to clarify the law or its application.”).

In support of the Motion, Plaintiff argues that “Defendants breached the [Text

Agreement] by failing to pay Husbands $200,000.00 when they sold the . . .

Property.” OB at 11. Defendants respond that the Motion implicates material issues

of fact, including, among others, whether the parties intended the Sales Agreement

to supersede the Text Agreement; whether “subsequent dealings between the

part[ies] modified, superseded, and/or terminated” the Text Agreement; and whether

Plaintiff failed to disclose material defects in the Property that necessitated costly

repairs. See Resp’ts’ Opening Br. in Supp. of Resp’ts’ Mot. to Dismiss and Resp’ts’

Answering Br. to Pet’r’s Mot. for Partial Summ. J. at 22–28, Dkt. 22. 1

1 The existence of a fiduciary relationship also raises a material issue of fact. See, e.g., Malca v. Rappi, Inc., 2021 WL 2044268, at *6 (Del. Ch. May 20, 2021) (noting that an agency relationship can give rise to fiduciary duties and “[t]he determination of whether an agency relationship exists is normally a question of fact” (alteration in original) (quoting WaveDivision Hldgs., LLC v. Highland Cap. Mgmt., L.P., 49 A.3d 1168, 1177 (Del. 2012))); Meyer Ventures, Inc. v. Barnak, 1990 WL 172648, at *4 n.5 (Del. Ch. Nov. 2, 1990) (concluding that “since it is a question of fact, it is inappropriate for this court to assume, sua sponte, on a motion for summary judgment that a fiduciary relationship, in fact, existed”); White v. Lamborn, 1977 WL 9612, at *4 (Del. Ch. Mar. 15, 1977) (explaining that “the question of whether or not the particular relationship is of such a confidential and dependent nature as to rise to fiduciary status is one of fact”). Although Defendants contend that the Complaint fails to allege facts giving rise to an inference of a fiduciary relationship, they have not moved to dismiss the Complaint. Instead, they answered the Complaint. See Dkt. 9. Edward Scot Husbands v. Dwight Alexander Hamilton, et al., C.A. No. 2023-1134-BWD February 24, 2025 Page 5 of 5

After careful review of the parties’ briefing, I have concluded that the Motion

raises fact questions that will be resolved most efficiently after trial, which,

regardless of the outcome of the Motion, is necessary to resolve the remaining four

counts. Accordingly, the Motion is DENIED.

Sincerely,

/s/ Bonnie W. David

Bonnie W. David Vice Chancellor

cc: All counsel of record (by File & ServeXpress)