COURT OF CHANCERY OF THE STATE OF DELAWARE NATHAN A. COOK LEONARD L. WILLIAMS JUSTICE CENTER 500 N. KING STREET, SUITE 11400 VICE CHANCELLOR WILMINGTON, DELAWARE 19801-3734
December 8, 2025
Scott G. Wilcox Kevin R. Shannon Giordano & Gagne, LLC Daniel M. Rusk, IV 5315 Limestone Road Heather S. Townsend Wilmington, DE 19808 Potter Anderson & Corroon LLP 1313 North Market Street Wilmington, DE 19801
William J. Rhodunda, Jr. Nicholas G. Kondraschow Brandywine Plaza West 1521 Concord Pike, Suite 205 Wilmington, DE 19803
RE: NVR, Inc. v. Spring Oaks Development Purchaser, LLC, et al., C.A. No. 2025-0852-NAC
Dear Counsel:
This letter decision resolves Defendants’ motions to dismiss as they relate to
Plaintiff NVR, Inc.’s (“NVR”) claims against Defendant Spring Oaks Development
Purchaser, LLC (“Development Purchaser”) and Defendant U.S. Home, LLC (“U.S.
Home” and, together with Development Purchaser, “Defendants”). 1 For the reasons
stated below, NVR’s claims must be dismissed.
1 NVR, Inc. v. Spring Oaks Development Purchaser, LLC, et al., C.A. No. 2025-0852-NAC,
Dkt. 9, Defendant U.S. Home, LLC’s Motion to Dismiss Amended Complaint (“U.S. Home Motion”); Dkt. 15, Defendant Spring Oaks Development Purchaser, LLC’s Motion to Dismiss NVR, Inc.’s Amended Complaint (“Development Purchaser Motion,” and, together with U.S. Home Motion, “Motions”). C.A. No. 2025-0852-NAC December 8, 2025 Page 2
I. FACTUAL BACKGROUND
I have drawn the relevant facts from the Amended Complaint (“Amended
Complaint”) and the documents incorporated by reference or integral to it. 2
A. The Parties
Plaintiff NVR, Inc. (“NVR”) is a Virginia corporation licensed to do business in
Delaware as a real estate developer. Defendant Spring Oaks Development
Purchaser, LLC (“Development Purchaser”) is a Delaware limited liability company.
Defendant U.S. Home, LLC (“U.S. Home”) is a Delaware limited liability company
and a direct competitor to NVR in the real estate development industry.
B. The Property
The property at issue (“Property”) is the Spring Oaks development in
Middletown, Delaware. The Property consists of 246 lots zoned for residential use.
Three entities originally owned the Property: Spring Oaks Development, LLC;
Hoover & Hoover, LLC; and Spring Oaks Lots 47-85, LLC (collectively, “Original
Owners”).
C. The LPA
On March 27, 2018, NVR and the Original Owners entered into a Lot Purchase
Agreement (“LPA”). 3 Pursuant to the LPA, NVR agreed to purchase 158 of the 246
lots. The LPA provided that NVR’s purchase would take place in a phased sequence
2 See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004). Citations in the form of “AC ¶ __” refer to Plaintiff NVR, Inc.’s Amended Complaint. Dkt. 2. 3 AC ¶ 9. C.A. No. 2025-0852-NAC December 8, 2025 Page 3
and was contingent on the completion of site work and the availability of permits and
certificates of occupancy. Pursuant to the LPA, NVR provided an upfront investment
in the form of a $1,050,000 deposit to secure these rights and recorded a mortgage
against the property (“NVR Mortgage”). 4 In particular, the LPA provides that “the
Deposit, or any portion thereof, shall be used by Seller solely for the development of
the Property and for no other purpose. . . . The return of the Deposit to Purchaser as
provided in this Agreement shall be secured by a mortgage . . . on the Property in
form as provided in Exhibit ‘C-1’” to the LPA. 5
The NVR Mortgage was recorded with the New Castle County Recorder of
Deeds. 6 That recorded document referenced the LPA, but the LPA itself was not
recorded. This was by agreement. Subsection 12(i) of the LPA provided that
“[n]either this Agreement nor any memorandum thereof shall be recorded in the
Recorder’s Office by either party.” 7
NVR subsequently began acquiring the lots in phases as they became ready for
delivery. Over the years, NVR purchased and developed 130 of the 158 lots for
residential use. NVR then sold these homes to third-party buyers. By October 2020,
4 Id. ¶ 10.
5 Dkt. 27, Defendant U.S. Home, LLC’s Opening Brief in Support of its Motion to Dismiss
Amended Complaint (“U.S. Home OB”), Ex. 1, § 3(i) and Ex. C-1 thereto. 6 Id., Ex. 2 (“Mortgagor pursuant to [the LPA] is indebted to Mortgagee in the principal
amount of . . . $1,050,000” and “Mortgagor, in consideration of the indebtedness and as security for the payment of the same, does hereby mortgage, grant and convey to the Mortgagee, its successors and assigns: SEE ATTACHED EXHIBIT ‘A’” listing the 158 lots that were the subject of the LPA). 7 Id., Ex. 1. C.A. No. 2025-0852-NAC December 8, 2025 Page 4
only 24 lots remained undelivered (“Remaining Lots”). Spring Oaks Development,
LLC, which was controlled by Zachary Pearce (“Pearce”), owned the Remaining Lots. 8
The lots remained undelivered due to development and permitting delays.
D. The Foreclosure
On October 13, 2020, Spring Oaks Development executed and recorded a
second mortgage on the Remaining Lots (“Spring Oaks Mortgage”). 9 Nearly two
years later, the Remaining Lots still had not been conveyed to NVR. On May 12,
2022, Spring Oaks Development defaulted on the Spring Oaks Mortgage, and the
mortgagee initiated foreclosure proceedings. 10 NVR notified the mortgagee in writing
that any foreclosure or sale would remain subject to NVR’s purchase rights under the
LPA. 11 NVR also provided a copy of the LPA to the Spring Oaks Mortgage mortgagee.
Public records show that, on May 23, 2022, NVR recorded a Satisfaction of Mortgage,
and requested the Register of Deeds to “enter satisfaction of” the NVR Mortgage. 12
On August 9, 2022, the Remaining Lots were sold at a sheriff’s sale to
Defendant Spring Oaks Development Purchaser, LLC (“Development Purchaser”). 13
8 AC ¶ 12.
9 U.S. Home OB, Ex. 3.
10 AC ¶ 13.
11 Id. ¶ 14.
12 U.S. Home OB, Ex. 4
13 AC ¶ 15. C.A. No. 2025-0852-NAC December 8, 2025 Page 5
NVR alleges Pearce formed Development Purchaser as a new entity the day prior to
the sheriff’s sale to receive title to the foreclosed lots.
E. Post-Foreclosure Events
In the days following the sheriff’s sale, NVR contacted Pearce seeking to
continue the parties’ performance under the LPA. NVR alleges that Pearce
“responded affirmatively and suggested he wanted to ‘rekindle relationships’ and
move forward.” 14 Yet, Pearce requested higher lot prices from NVR than those set
forth in the LPA. Pearce claimed this increase was due to higher site work costs. On
April 3, 2023, NVR conveyed that it was willing to discuss pricing adjustments, “but
only after Development Purchaser fulfilled its obligations to complete the site work
and obtain permits, as required by the LPA.” 15
The pleadings do not allege discussions after this; it seems communications at
this point went dark. As one might suspect, Pearce did not perform under the LPA.
Instead, Pearce negotiated a sale of twelve of the Remaining Lots to U.S. Home,
NVR’s direct competitor. U.S. Home subsequently recorded the deeds to these twelve
lots. NVR alleges it did not discover the breach until July 12, 2025, when it observed
U.S. Home’s signage and marketing materials advertising property at Spring Oaks. 16
On July 17, NVR sent a formal notice of breach to Development Purchaser.
NVR initiated this action on July 22, naming Development Purchaser and Lennar
14 Id. ¶ 17.
15 Id. ¶ 19.
16 Id. ¶ 21. C.A. No. 2025-0852-NAC December 8, 2025 Page 6
Corporation (“Lennar”) as defendants. Two days later, on July 24, NVR filed its
Amended Complaint, swapping out Lennar for U.S. Home. NVR asserts four counts:
(i) Quiet Title / Declaratory Judgment, (ii) Specific Performance, (iii) Breach of
Contract (Damages), and (iv) Tortious Interference with Contract. NVR seeks a
declaration that NVR holds equitable title to the Remaining Lots and U.S. Home’s
recorded deeds are void; an order of specific performance of the LPA by Development
Purchaser; an injunction preventing U.S. Home from marketing or building on the
Property; and an award of compensatory “and punitive” damages. 17
Also on July 24, NVR also filed a Notice of Pendency of Action with the
Recorder of Deeds, which it then amended the next day (“Notice of Lis Pendens”). On
August 8, NVR moved to expedite this proceeding. On August 26, U.S. Home filed a
Motion to Cancel Lis Pendens pursuant to 25 Del. C. § 1606 and 25 Del. C. § 1608
(“Cancellation Motion”). 18 U.S. Home simultaneously filed a motion to expedite its
Cancellation Motion. Following further submissions, I denied NVR’s expedition
motion and granted U.S. Homes’ expedition motion on September 3. I directed
17 “Absent a statutory grant of authorization, the Delaware Court of Chancery does not have
jurisdiction to assess punitive damages.” Metro Storage Int’l LLC v. Harron, 275 A.3d 810, 886 (Del. Ch. May 4, 2022) (citing Beals v. Wash. Int’l, Inc., 386 A.2d 1156, 1159 (Del. Ch. 1978)). 18See DiSabatino v. Salicete, 695 A.2d 1118, 1120 (Del. 1997) (explaining the General Assembly enacted 25 Del. C. ch. 16 to “codify in clear terms the protections to be afforded to real property owners against unscrupulous plaintiffs, who might misuse the lis pendens doctrine and cause irreparable harm to legitimate titleholders”). C.A. No. 2025-0852-NAC December 8, 2025 Page 7
counsel to contact chambers to schedule a prompt hearing on the Cancellation
Motion.
NVR cancelled its Notice of Lis Pendens voluntarily the next day. U.S. Home
then requested a prompt hearing on its motion to dismiss given NVR’s action to
moot—or some might say avoid—a hearing on U.S. Home’s Cancellation Motion.
Despite having asked me to expedite this action in its reply papers the week prior,
NVR now opposed accelerated consideration of U.S. Home’s motion to dismiss. I held
a scheduling conference on September 17 and granted U.S. Home’s request for a
prompt dismissal hearing. I heard argument on the Motions on October 21.
II. LEGAL STANDARDS
A. Motion to Dismiss Standard
The standard for deciding a Motion to Dismiss under Court of Chancery Rule
12(b)(6) is well-settled:
(i) all well-pleaded factual allegations are accepted as true; (ii) even vague allegations are “well-pleaded” if they give the opposing party notice of the claim; (iii) the Court must draw all reasonable inferences in favor of the non-moving party; and (iv) dismissal is inappropriate unless the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances susceptible of proof. 19
B. Quiet Title
NVR contends that Development Purchaser’s conveyance to U.S. Home created
an unlawful cloud on NVR’s equitable title in the Property. “In Delaware, a plaintiff
19 Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002) (citation omitted). C.A. No. 2025-0852-NAC December 8, 2025 Page 8
seeking to quiet title property must show that he has superior title over the defendant
regarding the property at issue.” 20
C. Specific Performance
“Specific performance for the transfer of real property is an extraordinary
remedy” and is not awarded lightly by courts. 21 A party must prove entitlement to
specific performance by clear and convincing evidence and that “he or she has no
adequate legal remedy.” 22 A party seeking specific performance must establish that
“(1) a valid contract exists, (2) he is ready, willing, and able to perform, and (3) that
the balance of equities tips in favor of the party seeking performance.” 23
D. Tortious Interference
NVR alleges that both Development Purchaser and U.S. Home have tortiously
interfered with the LPA. “As traditionally framed, a claim for tortious interference
with contract requires ‘(1) a contract, (2) about which defendant knew and (3) an
intentional act that is a significant factor in causing the breach of such contract (4)
without justification (5) which causes injury.’” 24
20 Toelle v. Greenpoint Mortgage Funding, Inc., 2015 WL 5158276, at *6 n.71 (Del. Super. Ct.
Apr. 20, 2015) (citing Marvel v. Barley Mill Rd. Homes, 104 A.2d 903, 911 (Del. Ch. 1954)). 21 Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010) (citations omitted).
22Id. (citing West Willow–Bay Court, LLC v. Robino–Bay Court Plaza, LLC, 2007 WL 3317551, at *12 (Del. Ch. Nov. 2, 2007)). 23 Id. (citing Morabito v. Harris, 2002 WL 550117, at *2 (Del. Ch. Mar. 26, 2002)).
24 NACCO Indus., Inc. v. Applica Inc., 997 A.2d 1 (Del. Ch. 2009) (quoting Irwin & Leighton,
Inc. v. W.M. Anderson Co., 532 A.2d 983, 992 (Del. Ch. 1987)). C.A. No. 2025-0852-NAC December 8, 2025 Page 9
III. ANALYSIS
NVR posits several theories to support their claim of superior title over the
Remaining Lots. First, NVR contends that the LPA granted them equitable
ownership over the Remaining Lots, thereby shielding NVR against future claims to
the Property. This claim fails to overcome a plain reading of 10 Del. C. § 5066, which
provides:
The person to whom any lands and tenements shall be sold, or delivered, under § 5065 of this title, and such person’s heirs and assigns, shall hold the same, with their appurtenances, for such estate, or estates, as they were sold, or delivered for, discharged from all equity or redemption, and all other incumbrances made and suffered by the mortgagor, the mortgagor’s heirs, or assigns; and such sale shall be available in law.
10 Del. C. § 5066 (emphasis added). NVR argues that their interest remains binding
on the Property because the statute does not extinguish equitable ownership upon
foreclosure. Case law says otherwise.
In Matter of Spencer, the United States District Court for the District of
Delaware, applying Delaware law, held that “after a foreclosure judgment and
execution both the equity of redemption and equitable ownership are extinguished.” 25
25 115 B.R. 471, 480 (D. Del. 1990) (emphasis added). The Spencer court goes so far as to note that “in Delaware the rights granted by equitable ownership and the equity of redemption are extinguished by a foreclosure sale, thereby indicating the unity of the two concepts.” Id. The phrase “equity or redemption” in 10 Del. C. § 5066 may strike some readers as arguably unusual given the common usage of the phrase “equity of redemption.” The parties have focused on the disjunctive as indicative of meaning. I note that the original version of this law seems to have been enacted in the 1700’s as one of Delaware’s very earliest laws. Indeed, it appears to have been the forty-sixth law enacted by our General Assembly and immediately follows a law “to prevent swine from running at large in the town of Dover.” 1 Laws of the State of Delaware, ch. XLV (1777). Notably, this initial 1700’s version of the statute provides C.A. No. 2025-0852-NAC December 8, 2025 Page 10
This makes sense. “[I]n Delaware, it is ‘the equitable interest and not the bare legal
title in the property which [has] value to the purchaser.’” 26 Just as a mortgagor’s
right to equity of redemption is extinguished by a sheriff’s sale, prior equitable
ownership is also eliminated and instead vested in the purchaser at the sale. 27 Thus,
Spencer reinforces the principle that a foreclosure sale creates a new equitable owner
in property. 28
Here, to the extent that NVR had an equitable interest in the Property by
virtue of the LPA, those rights ceased upon the sheriff’s sale. Equitable ownership
in this context may be thought of as a zero-sum game. Upon the sale, a new equitable
owner—Development Purchaser—was created, while any claim to equitable
ownership that NVR might have had ceased. 29
that all lands sold via sheriff’s sale shall be sold “discharged and freed from all equity and benefit of redemption, and all other incumbrances made and suffered by the mortgag[o]rs[.]” 1 Laws of the State of Delaware, ch. XLVI, § 5 (1777). The law, as amended, retains the reference to “all equity and benefit of redemption” until the mid-nineteenth century, when it changes to “all equity of redemption[.]” Del. C. 1852, § 59. This formulation, in turn, remains in place until 1935, when the disjunctive makes its first appearance in the printed version of the law as “all equity or redemption[.]” Del. C. 1935, § 4863. It is not clear that this change results from any statutory enactment at the time or whether it was perhaps instead a typographical error, made in the middle of the Great Depression. In any event, in 1974, the General Assembly codified the Delaware Code Annotated. 1 Del. C. § 101. In doing so, there is no question that the General Assembly adopted and enacted the version of the statute containing the disjunctive. 10 Del. C. § 5066; 1 Del. C. § 103 (providing that all prior codes are repealed unless expressly continued by specific provision of this Code). 26 Spencer, 115 B.R. at 483 (quoting Hogg v. Walker, 1989 WL 128572 (Del. Ch. Oct. 26, 1989)).
27 Id. at 480.
28 See also id. at 483 (“In Delaware, equitable ownership from a sheriff's sale is so respected
that it is a constitutionally protected property right.”) (citing Gelof v. First Nat’l Bank of Frankford, 373 A.2d 206, 208 (Del. 1977)). 29 See generally id. at 478–79. C.A. No. 2025-0852-NAC December 8, 2025 Page 11
NVR contends that the only interests extinguished in a sheriff’s sale are
subordinate nonmortgage liens. 30 For support, NVR relies upon on the Delaware
Supreme Court’s decision in Eastern Savings Bank, FSB v. CACH, LLC. 31 There, our
high court held that, although nonmortgage liens were indeed extinguished by
foreclosure sales, certain other unique encumbrances—namely, easements and
restrictive covenants—were not. 32 NVR construes this holding to mean that
“equitable property rights . . . are not extinguished by foreclosure or sheriff’s sale.” 33
But this interpretation expands the holding in Eastern Savings Bank and ignores key
aspects of the decision’s reasoning. The Eastern Savings Bank decision does not go
so far as to say that all equitable interests survive a sheriff’s sale. 34 Instead, the
Court held that, subject to certain caveats, real estate sold by a foreclosure process
30 Dkt. 35, Plaintiff NVR Inc.’s Answering Brief in Opposition to Defendant U.S. Home, LLC’s
Motion to Dismiss (“AB to U.S. Home Motion”), at 10. 31 55 A.3d 344, 348 (Del. Ch. 2012).
32 Id.
33 AB to U.S. Home Motion, at 9.
34 In Eastern Savings Bank, the appellant relied on two decisions that it suggested showed a
narrowing of otherwise longstanding case law concerning the expansive effect of a foreclosure sale. The Delaware Supreme Court, however, described the text from both those decisions on which the appellant relied as “erroneous dicta” and took pains to cabin the decisions to their specific circumstances, one involving a utility easement and the other a restrictive covenant. See 55 A.3d at 348–49 (citing Atkinson v. B.E.T., Inc., 1984 WL 159375 (Del. Ch. Dec. 4, 1984); PNC Bank, Delaware v. Philben, Inc., 1997 WL 717786 (Del. Super. Oct. 1, 1997)). Far from suggesting a broad equitable carveout to 10 Del. C. § 5066, the analysis in Eastern Savings Bank suggests the exact opposite. C.A. No. 2025-0852-NAC December 8, 2025 Page 12
“must be free from all liens against the previous owner” consistent with
“[l]ongstanding statutory and common law precedent[.]” 35
Today’s decision is consistent with the Eastern Savings Bank holding. As an
initial matter, NVR had a recorded mortgage interest in the Property. 36 The
mortgage interest, as explained above, arose out of and was expressly contemplated
by the terms of the LPA. If anything, this confirms this matter falls squarely within
the ambit of 10 Del. C. § 5066, which refers to the discharge of all “incumbrances
made and suffered by the mortgagor[.]” 37
As explained above, the recorded NVR Mortgage contained only one bare
reference to the intentionally unrecorded LPA. And NVR recorded a satisfaction of
the NVR Mortgage on May 23, 2022, three months before Development Purchaser
35 Id. at 348–49; see id. at 347 (“The second statute cited by the parties, 10 Del. C. § 5066,
also provides that land sold after foreclosure shall be discharged from all incumbrances incurred by the prior owner.”). 36 See U.S. Home OB, Ex. 2; id., Ex. 1 (“The return of the Deposit to Purchaser as provided in
this Agreement shall be secured by a mortgage . . . on the Property in the form as provided in Exhibit ‘C-1’”). 37 NVR argues that even if its “interest were treated as a lien, which it should not,” the
sheriff’s sale would not result in dismissal because “sheriff’s sales discharge only subordinate liens, not senior property interests.” Dkt. 34, Plaintiff NVR, Inc.’s Answering Brief in Opposition to Defendant Spring Oaks Development Purchaser, LLC’s Motion to Dismiss (“AB to Development Purchaser’s Motion”), at 9 (citing E. Sav. Bank, 55 A.3d at 349). In making this argument, NVR seems to be pointing to quoted text from PNC Bank, Del. v. Philben, Inc., 1997 WL 717786 (Del. Super. Oct. 1, 1997), that the Delaware Supreme Court describes as “erroneous dicta” in Eastern Savings Bank. 55 A.3d at 349 (discussing Philben, 1997 WL 717786, at *4); see AB to Development Purchaser’s Motion, at 10 (also citing the reversed trial-court decision in Eastern Savings Bank for the same rejected proposition from Philben). In any event, NVR’s argument runs counter to the analysis in Eastern Savings Bank, which explains that “[l]ongstanding statutory and common law precedent requires that land sold at a sheriff’s sale be transferred free of all nonmortgage liens[,]” regardless of seniority status. 55 A.3d at 349. C.A. No. 2025-0852-NAC December 8, 2025 Page 13
purchased the Remaining Lots at the sheriff’s sale. 38 Thus, any recorded interest
that NVR may have had in the Property was voluntarily erased before the foreclosure
sale. And, to the extent NVR retained equitable ownership rights in the Property,
that interest was extinguished when Development Purchaser purchased the
Remaining Lots at the sheriff’s sale. Simultaneously, NVR lost any ability it might
otherwise have had to obtain specific performance of the LPA insofar as it concerned
delivery of the lots sold at the sheriff’s sale.
Next, NVR argues that U.S. Home was under actual or inquiry notice of NVR’s
rights and, therefore, is not a bona fide purchaser. Bathla v. 913 Market, LLC,
however, is instructive here. 39 In Bathla, the Delaware Supreme Court was asked to
resolve a dispute over a failed commercial real estate transaction between seller 913
Market, LLC and buyer Kamal Bathla. 913 Market had previously entered into a
contract for the property with a different buyer, but the deal fell through. 40 The
purchase agreement between 913 Market and Bathla included the representation
that the property would be sold “free of all liens and encumbrances.” 41 Bathla’s title
insurer would not issue a title commitment without exceptions for the previous
purchaser. 42 So, Bathla argued the purchase agreement’s condition precedent was
38 U.S. Home OB, Ex. 4.
39 200 A.3d 754 (Del. 2018).
40 Id. at 757.
41 Id. at 758.
42 Id. C.A. No. 2025-0852-NAC December 8, 2025 Page 14
not satisfied. Our high court disagreed, explaining that “under Delaware’s ‘pure race
statute,’ any potential claim that [the original purchaser] might have on the property
would have been extinguished had Bathla closed and recorded his deed.” 43 The Court
continued: “It is irrelevant that Bathla had notice of the prior [third-party sale]
contract.” 44
Applying this reasoning, NVR’s unrecorded equitable-ownership interest was,
in any event, extinguished at the latest when U.S. Home recorded its deeds to the
Remaining Lots. Pursuant to Delaware’s pure race regime, the result is the same
even if U.S. Home had knowledge of NVR’s earlier claims. 45 Any other result would
vitiate the purpose of the pure race statute. 46 The Court need not reach the issue of
whether U.S. Home was a bona fide purchaser for purposes of this ruling. NVR’s
requested remedies of Quiet Title and Specific Performance are, for the reasons
discussed, unavailable against U.S. Home.
Next, I conclude NVR’s breach of contract claim must also be dismissed.
Neither Development Purchaser nor U.S. Home was a contractual counterparty to
43 Id. at 761 (citations omitted).
44 Id. at 761–62; see generally id. at 762 n.41.
45 Id. at 761–62; see also Guarantee Bank v. Magness Const. Co., 462 A.2d 405, 407–08 (Del.
1983) (same). 46 In supplemental briefing, NVR cited to Cieniewicz v. Sliwka, 133 A. 695 (Del. Ch. 1926),
for the proposition that a subsequent purchaser must demonstrate that they are bona fide purchasers for value. Dkt. 45. Cieniewicz is inapplicable, as it predates the adoption of Delaware’s pure race statute. 25 Del. C. § 153; see N & W Dev. Co. v. Carey, 1983 WL 17997, at *3 (Del. Ch. Jan. 27, 1983), aff’d, 474 A.2d 138 (Del. 1983) (“This statute in its present form, differs from the pre-1968 version which was not a pure race statute.”). C.A. No. 2025-0852-NAC December 8, 2025 Page 15
the LPA; any viable claim that NVR has or had for breach of contract would be against
the Original Owners. And NVR failed to allege or meaningfully argue that
Development Purchaser somehow actually assumed the LPA. At best, NVR points,
in passing, to its allegation that NVR contacted Development Purchaser’s owner,
Pearce, after the sheriff’s sale and that Pearce suggested he wanted to “rekindle
relationships” with NVR. 47 But NVR goes on to allege that Pearce sought new terms.
And, quite notably, NVR does not allege that it ever reached any agreement with
Development Purchaser. Nor does NVR allege it did anything in the years after its
meager correspondence died out, until rushing to court in July 2025 upon seeing U.S.
Home advertising homes for sale. Put simply, NVR fails to adequately allege that
Development Purchaser assumed the LPA following the sheriff’s sale. Indeed,
neither the word “assume” nor any variant thereof appears in NVR’s amended
complaint.
Instead, NVR’s arguments basically boil down to these: First, Pearce was also
involved with the Original Owners and, indeed, signed the LPA. Second, according
to NVR, it defies common sense to believe U.S. Homes did not have notice of NVR’s
unrecorded equitable-ownership interest, even if the precise source of that interest
was unknown to U.S. Homes.
47 AB to U.S. Home Motion, at 11; AB to Development Purchaser Motion, at 8. C.A. No. 2025-0852-NAC December 8, 2025 Page 16
As to the first argument, it is by now a truism that Delaware law respects
corporate separateness. 48 NVR would have me ignore corporate separateness in
pursuit of its breach of contract claim against a non-party to a contract. NVR,
however, fails to meaningfully engage with this fundamental problem with its claim.
As to the second argument, I have already explained why, in a pure race state like
ours, NVR’s arguments about notice in favor of its unrecorded equitable interest fall
flat in the face of U.S. Home’s recorded deeds.
In a similar vein, NVR’s claims for tortious interference against Development
Purchaser and U.S. Homes fail. The critical element of a tortious interference claim
requires an intentional act by the defendant that is a significant factor in causing the
breach of the contract. 49 Pearce’s knowledge of the LPA may be imputed to
Development Purchaser. 50 But knowledge alone is insufficient without a requisite
act causing breach of contract. Here, Development Purchaser has taken no such
action. Any claim to equitable ownership in the Property that NVR might have had
was cut off by the foreclosure sale. The subsequent sale by one non-contractual party
to another non-contractual party, following a sheriff’s sale, had no impact on any of
NVR’s alleged interests in the Remaining Lots.
48 Delaware law recognizes and respects the concept of corporate separateness. See In re
Aearo Techs. LLC, 2025 WL 2312921, at *10 n.77 (Del. Aug. 12, 2025) (collecting cases). 49 Bhole, Inc. v. Shore Investments, Inc., 67 A.3d 444, 453 (Del. 2013).
50 NAMA Holdings, LLC v. Related WMC LLC, 2014 WL 6436647, at *27 (Del. Ch. Nov. 17,
2014). C.A. No. 2025-0852-NAC December 8, 2025 Page 17
For similar reasons, NVR’s claims against U.S. Home also fail. NVR’s beef lies
with the foreclosure sale because that is what terminated its equitable ownership
interest. U.S. Home plainly did not, by entering into a contract with Development
Purchaser after the sheriff’s sale, somehow tortiously interfere with the terms of an
LPA that NVR could no longer enforce. Any other conclusion here would run contrary
to policy, including that discussed in Eastern Savings Bank and Bathla.
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motions are granted. The Amended
Complaint is dismissed with prejudice.
IT IS SO ORDERED.
Sincerely,
/s/ Nathan A. Cook
Vice Chancellor