Delmarva Business Optimization Consultants, Inc., D/B/A Schooley Mitchell of Delmarva v. Felton Automotive Group, LLC -D/B/A Holly KIA of Selbyville

IN THE COURT OF COMMON PLEAS OF THE STATE OF DELAWARE

IN AND FOR SUSSEX COUNTY

DELMARVA BUSINESS )
OPTIMIZATION CONSULTANTS, INC.,)
D/B/A SCHOOLEY MITCHELL OF
DELMARVA

)

)

)
Appellant/Plaintiff Below, )

Vv. ) C.A. No. CPU6-21-000717
)
FELTON AUTOMOTIVE GROUP, LLC)
D/B/A HOLLY KIA OF SELBYVILLE )
AND FELTON )
)
s)

Appellee/Defendant Below

Robert S. Bria, Esq. Tasha M. Stevens-Gueh, Esq.

The Shachtman Law Firm Andrew & Stevens-Gueh, LLC

1475 South Governors Ave. 115 South Bedford Street

Dover, DE 19904 Georgetown, DE 19947

Attorney for Appellant/ Plaintiff Below Attorney for Appellee/Defendant Below
DECISION AFTER TRIAL

On April 3 2023, the Court held a trial de novo in this matter on appeal from a judgment
in the Justice of the Peace Court. The Court reserved decision and requested supplemental
briefings. For the reasons stated below, the Court finds in favor of the Defendant/Appellee
Felton Automotive Group, LLC.

FACTUAL BACKROUND

The Court finds the following from the evidence presented at trial:

Plaintiff/Appellant Delmarva Business Optimization Consultants, Inc., D/B/A Schooley
Mitchel of Delmarva (“Plaintiff”) is an Ocean View, Delaware S Corporation.
Defendant/Appellee Felton Automotive Group, LLC D/B/A Holly Kia of Selbyville and Felton
(“Defendant”) is a Delaware car dealership with locations in Felton and Selbyville.

1
Plaintiff is a franchisee of Schooley Mitchell, a Canadian company. Schooley Mitchell and
its franchisees specialize in business cost reductions. Plaintiff is owned and managed by
husband and wife Brian T. O’Sullivan and Linda K. O’Sullivan.

Sometime in 2019, Mr. O’Sullivan met with Defendant’s owner James M. Ehrler, Controller
Lucinda D. Landis and then Manager Ashley Mullhausen. Thereafter on June 25, 2019, the
parties executed a Service Agreement (“Agreement”). The contract provided that Plaintiff
would review and reduce costs and monitor expenses in the categories of Courier and Small
Package Shipping, Merchant Services, Telecommunications and Waste Management for a
period of four (4) years for Defendant, of which terms are memorialized in the parties
Agreement.’ Payment, if any, under the contract was based upon a percentage of the savings
Defendant experienced by making the changes recommended by Plaintiff, although the
Agreement did not require Defendant to act on any of the recommendations.

Plaintiff spent around 12.5 weeks performing analysis and negotiating with multiple vendors
on behalf of Defendant. Plaintiff identified approximately $1,500.00 in annual savings in
telecommunications for Defendant. Plaintiff's owner testified he found monthly waste disposal
cost savings of at least $325 if Defendant changed vendors from WM/ Waste Management to
Blue Hen Disposal. However, no documentary evidence of this report was presented at trial.
In addition, Plaintiff’s owner testified that, at the time of his recommendation, Defendant would
suffer a financial penalty if it didn’t terminate its existing contract within a narrow termination
window by December 1 before the automatic renewal on March 1.

Defendants did not opt to terminate the WM contract before December 1, 2019. In
October 2020, Plaintiff was advised by someone that Defendant had switched trash vendors
months prior. Plaintiff later discovered Defendant’s new waste vendor was Blue Hen Disposal

after he went to Defendant’s location in Felton and saw trash containers marked with Blue Hen

'Plaintiff’s Exhibit 1.
Disposal’s insignia, though no evidence of this visit nor of the trash containers were offered
into evidence at trial.

Plaintiff then contacted Ms. Landis, claiming he was entitled to a fee for this vendor change
under the Agreement. On December 21, 2020, Mr. Ehrler on behalf of Defendant, sent a letter
to Plaintiff denying any payment obligation, but offering an enclosed check for $100.00 as

reimbursement for Plaintiff’s time.’ Plaintiff did not cash the check sent by Defendant.

STANDARD OF REVIEW

This Case is a de novo appeal in the Court of Common Pleas from Justice of the Peace
Court regarding a Civil Action for breach of contract. In civil claims, the plaintiff bears the
burden to prove each and every element of his or her claims by a preponderance of the
evidence. The side on which the greater weight of the evidence is found is the side on which
the preponderance of the evidence exists. As trier of fact, the Court is the sole judge of the
credibility of each fact witness and any other information provided. If the Court finds the
evidence presented at trial to be in conflict, it is the Court's duty to reconcile these conflicts, if
reasonably possible, to find congruity. If the Court is unable to harmonize the conflicting
testimony, then the Court must determine which portions of the testimony deserve more
weight in its final judgment. The Court must disregard any portion of the testimony which
the Court finds unsuitable for consideration. In ruling, the Court can consider the witnesses’
demeanor, the fairness and descriptiveness of their testimony, their ability to personally
witness or know the facts about which they testify, and any biases or interests they may have

concerning the nature of the case.

*Plaintiff's Exhibit 1.
DISCUSSION

To establish a prima facie case of breach of contract, Plaintiff must prove each of three
elements by a preponderance of the evidence: (1) a contract existed; (2) Defendant breached
an obligation imposed by the contract; and (3) damages resulted from Defendant's breach.’ The
Court finds that Defendant met their burden of proof by establishing each element of their
contract claim by a preponderance of the evidence. The contract must also be signed by the
party or parties to be charged as the agreement is in writing.

“As a general rule the party the party first guilty of a material breach of the contract cannot
complain if the other party subsequently refuses to perform.” All a party must show is “freedom
of fault with respect to performance of dependent promises, counter-promises or conditions
precedent.” In order to recover damages for any breach of contract, a party must show
substantial compliance or performance with all provisions of the contract.®

It is undisputed that an agreement existed between the parties shown by the Service
Agreement presented at trial, and that Plaintiff agreed to monitor expenses for four (4) years
and find cost reductions. Defendant would pay Plaintiff 40% of the cost savings enabled by
Plaintiff and acted upon by Defendant.’

The Court, however, cannot find from a preponderance of the evidence presented at trial
that Defendant breached the contract, even if it did ultimately switch disposal vendors several
months after Plaintiff's recommendation. Plaintiff acknowledged that, at the time of its
recommendation, Defendant would have to decide to affirmatively provide notice of

termination by December 1, 2019 to switch vendors when the contract ended on March 1, 2020.

> See Gregory v. Frazer, 2010 WL 4262030, *1 (Del. Com. Pl. Oct. 8, 2010); VLIW Technology, LLC v. Hewlett-Packard
Co., 840 A.2d 606, 612 (Del. 2003).

“ Hudson v. D & Mason Contractors, Inc., 252 A.2d 166 (Del. Super. 1969)

5 Id.

° Emmet s. Hickman Co. y. Emilio Capaldi Developer, Inc., 251 A.2d 571, (Del. Super 1969) citing Carrol y. Cohen, 5 Boyce
233,91 A. 1001, 1003 (Del. Super. 1914).

’ Plaintiff's Exhibit 1.

Plaintiff’s evidence also showed that, for whatever reason, Defendant didn’t act upon that
recommendation and did not give notice of termination by that time. Plaintiff's owner could
only testify that he discovered, nearly a year later, that Defendant at some subsequent point in
time before October, 2020, had switched vendors. The evidence is unclear when the switch
occurred, or under what circumstances, or whether any penalty was incurred in doing so. The
facts established at trial are insufficient to find a breach of the contract.

Even if a breach had been established, the Plaintiff likewise has failed to prove its damages
with any reasonable certainty. Plaintiff offered Mr. O’Sullivan’s testimony, the Service
Agreement, and a letter sent by Mr. Ehrler to Plaintiff dated December 21, 2020.° Neither
exhibit, nor Mr. O’Sullivan’s testimony, offered any proof of cognizable damages in the form
of actual savings realized by Defendant upon which a percentage fee could be calculated, nor
any other kind of loss to Plaintiff.

CONCLUSION

Plaintiff provided insufficient evidence to convince the Court by a preponderance
thereof that Defendant breached the contract, or that Plaintiff incurred specific, proven
damages as a result of any breach of contract. Judgment is entered in favor of Defendant
Felton Automotive Group, LLC, and against Plaintiff Delmarva Business Optimization

Consultants, Inc. Each party shall bear its own costs.

IT IS SO ORDERED, this l day of JAy , 2023.

Kenn DE Jr., Judge

8 Plaintiff's Exhibits 1 and 2.