The LLC filed a lawsuit over the handling of a prominent Louis Beach plot

A Wilmington-based real estate developer has sued White Bucks LLC and its principal owners Rick Coyle, Joe Johnson and Carla Johnson, claiming that the defendants agreed to sell a prominent plot of land in Lewis Beach before seeking a higher sale price from the city.

Says Apennine Acquisition Co. LLC that it was presented to the trio by real estate broker Joseph Latina in November 2021 about the development of a property at the corner of Savannah Road and Cape Henlopen Drive across from Dairy Queen. According to the June 9 filing, the parties verbally agreed to form a joint venture, which will be signed and notarized once the terms are finalized. The lawsuit says a sale agreement was drawn up in December 2021, with a purchase price of $1.8 million. On February 2, the lawsuit says, Joe Johnson initialed, signed and transferred the terms to Apennine Acquisition from a fax machine at Blue Water House, a bed and breakfast owned by Quill.

Apennine Acquisition claims to have committed significant resources, including adhering to Quill’s specific request to approve the site engineer and providing detailed feedback on development plans. It is believed that Apennine Acquisition is part of a joint business venture, and it also prepared initial financing formulas, carried out marketing analysis, allocated cash, negotiated with banks, and carried out assessments of financing project development costs. Apennine Acquisition claims that it was hit by a significant loss of income that it had reasonably expected from the joint venture.

The lawsuit says the final terms of the joint venture agreement were verbally agreed upon when Quill and the developers met on February 16 and shook hands. The lawsuit says the Johnsons’ stake in White Bucks was to be purchased as part of the deal. A week later, Apennine Acquisition sent Quill and Latina an email, detailing the Johnsons’ money and the reorganization of the new business partnership. The White Bucks will pay the Johnsons $400,000 for its 50% interest, giving Quill 100% of the LLC. Then in exchange for $200,000 from Apennine Acquisition, Quill will assign 10% of the company to Latina and 45% to Apennine, resulting in a 45%/45%/10% ownership split. The White Bucks operating agreement will be modified to give Apennine Acquisition management control, except for actions that require unanimous consent. While Quill will remain an investor in the property, he said he believed those terms were not part of the initial verbal agreement.

Coyle said his agreement with developers has always been a verbal one. In the lawsuit, Apennine Acquisition maintains that the joint venture agreement was never drawn up in writing, but it cites precedent in Delaware for respecting oral agreements and spells out the criteria it must meet to prove it happened. Supporting evidence shows that the fax from Blue Water House’s Joe Johnson set a deadline of May 15. The property developers are seeking a judgment against the White Bucks along with attorneys’ fees and other relief the court deems appropriate.

In addition to breach of oral contract, Apennine Acquisition also seeks damages from the White Bucks for breach of an implied covenant of good faith and fair dealing, forfeiture of permission, equitable closure, interference with potential economic advantage, wrongful enrichment, and constructive trust. The plaintiff is represented by William R. Firth III and Emily A. Letcher of Cohen Seglias Pallas Greenhall & Furman, PC

The lawsuit alleges that Apennine was alerted on May 25 of the White Bucks’ intentions to sell the property to the City of Lewes. On May 23, Louis Mayor and the city council set a public hearing for June 6 regarding the city’s consideration of the property purchase.

During the public comment period at the board’s July 11 meeting, Quill announced, for the second month in a row, his complaints with elected officials. He said he was not only disgusted, but deeply disdainful of the process that led to the city’s refusal to pay $2.5 million for the eviction. While the city passed the opportunity to own the parcel, it agreed to Quill’s plans for 12 relocation homes on the property, plus another 12 homes on a nearby parcel also owned by White Bucks LLC.

Coyle asked city attorney Glenn Mandalas if a referendum was required for the city to purchase the property. Mandalas responded that a referendum was not required. According to Mandalas, the city will borrow the money under Chapter 32 of the city code, which does not require a referendum, but does require the city to repay the loan within 10 fiscal years. A referendum is required under Chapter 20, which would concern larger amounts of money.

Referring to the positive comments received during the public hearing, and in the belief that the purchase did not get votes to approve it from the start, Coyle said officials are wasting people’s time. While discussing the overall plan, Coyle noted the incentivization of owners of commercial properties on the beach side of the city. He said he feels that no one from the city is communicating with these landlords.

Councilwoman Carolyn Jones asked Coyle what the purpose of his comments was, to which he replied that he was angry. Jones cited the financial responsibility during the June 13 meeting as the reason for her vote to reject the purchase. Quill and his colleagues set the price at $2.5 million for the city despite verbal agreement to sell the property for $1.8 million to Apennine Acquisition and an appraisal that found the value to be $2.1 million. Coyle said he didn’t tear up the city with a $2.5 million order, in fact his initial asking price was $3 million. The owner of Blue Water House said he believes he will be able to generate more profits by developing the property. Lewis officials thought it was unwise to make such a purchase and mentioned other financial obligations when voting against the purchase.

Quill and the Johnsons filed a motion to dismiss the Apennine’s suit on July 15, believing that the Chancery Court had no jurisdiction over the matter and that the plaintiff had failed to make a claim for which relief could be granted. Richard E. Pearl, Jr. represented the defendants, but did not file a warrant to support their motion for dismissal. Coyle said he believes the lawsuit has no merit and will not work with the Wilmington-based development group on the drug in the future.

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