NVR, Inc. v. Spring Oaks Development Purchaser, LLC

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
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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
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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
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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
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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
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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
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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
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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.
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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
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“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
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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.
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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
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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.
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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
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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