D.R. Horton, Inc. - New Jersey v. Bunting Macks LLC and Roxanna Road LLC

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

D.R. HORTON, INC. – NEW JERSEY, )
)
Plaintiff, )
)
v. ) C.A. No. 2024-0070-BWD
)
BUNTING MACKS LLC and )
ROXANA ROAD LLC, )
)
Defendants. )

FINAL REPORT

Final Report: June 18, 2024
Date Submitted: May 29, 2024

Daniel F. McAllister, MCALLISTER FIRM LLC, Wilmington, Delaware; Attorney
for Plaintiff D.R. Horton, Inc. – New Jersey.

Sean A. Meluney and William M. Alleman, Jr., MELUNEY ALLEMAN &
SPENCE, LLC, Lewes, Delaware; Attorneys for Defendants Bunting Macks LLC
and Roxana Road LLC.

DAVID, M.
In this action, plaintiff D.R. Horton, Inc. – New Jersey (“Horton”) seeks to

compel defendant Bunting Macks LLC (“Bunting Macks”) to specifically perform

its obligations under a Land Purchase Contract (the “Agreement”) and close on the

phased sale of real estate in Selbyville, Delaware. The Agreement provides that time

is of the essence and includes a mechanism setting an outside date by which the

closing “shall” occur.

Horton alleges that Bunting Macks breached the Agreement by failing to

diligently and in good faith seek certain governmental approvals and encumbering

the property. As the outside closing date approached, Horton told Bunting Macks

that it “ha[d] not yet made a decision as to” whether it would exercise its contractual

right to extend the outside closing date. Ultimately, it chose not to do so; instead, it

allowed the outside closing date to pass, waited another month, then initiated this

action for specific performance. In this final report, I conclude that the remedy of

specific performance is no longer available under the Agreement.

I. BACKGROUND

A. The Agreement And The Amendments
This case concerns an Agreement pursuant to which Horton agreed to

purchase, and Bunting Macks agreed to sell, property in Selbyville, Delaware (the

“Property”), to be developed into a residential community called “Coastal Villages.”

Compl. ¶ 1, Dkt. 1.
The Agreement governs the purchase of the Property in four phases. Compl.,

Ex. A [hereinafter, “Agt.”] § 3. Section 5(a)(2) of the Agreement conditions

Horton’s obligation to close on the purchase of the Property in each phase on certain

“Primary Contingencies,” including the issuance of governmental “Approvals”:

Buyer’s obligation to close on the purchase of the Property under this
Contract is contingent upon each and all of the following (collectively,
the “Primary Contingencies”): . . . all applicable governmental
authorities having jurisdiction over the Property, including, without
limitation, the Town of Selbyville, Sussex County, and the State of
Delaware (and their respective agencies) (collectively and as
applicable, the “Governing Jurisdiction”) shall have issued, or be in a
position to issue, subject to Buyers posting of bonds and payment of
permit and Inspection fees for grading site utilities and paving, building
permit and connection fees, all final, non-appealable site plan
approvals, construction plan approvals, zoning approvals, variances,
land disturbance permits, wetlands permits, stormwater permits, curb
cut approvals, and other Federal, State and municipal approvals and
permits that are necessary for the development of the Phase of the
Property being purchased as reflected by this Agreement (collectively
the “Approvals”) . . . .

Agt. § 5(a)(2). Effective June 8, 2021, the parties executed a second amendment to

the Agreement (the “Amendment”). Section 1(e) of the Amendment amends Section

5(f) of the Agreement to require that “Seller shall diligently and in good faith seek

the Approvals.” Compl., Ex. B § 1(e).

Amended Section 6(b) sets the closing date for Phase II. Id. § 1(f)(b). It

provides that “[t]he Phase II Closing shall be held on or before that date which is

one (1) year after the Phase I Closing (‘Phase II Closing Date’) and is conditioned

upon the satisfaction of all of the Primary Contingencies with respect to Phase II at

2
least thirty (30) days prior to the Phase II Closing Date.” Id. If the Primary

Contingencies are not satisfied thirty days prior to the Phase II Closing Date, the

Agreement creates a decision tree. In that case, “Buyer may, in its sole and absolute

discretion, waive such Primary Contingencies and proceed to the Phase II Closing.”

Id. Or, “[i]f Buyer elects to not waive such Primary Contingencies and proceed to

the Phase II Closing, then either party may extend the Phase II Closing Date in

successive thirty (30) day periods (each a ‘Phase II Extension Period’), not to exceed

one hundred eighty (180) days in total (the ‘Phase II Outside Closing Date’), to allow

Seller additional time to satisfy the Primary Contingencies applicable to Phase II

Closing.” Id.

Under the second scenario—where Horton does not waive the Primary

Contingencies and either party instead elects to extend the Phase II Closing Date—

the Agreement provides three additional paths. If the Primary Contingencies still

“are not satisfied at least thirty (30) days prior to the Phase II Outside Closing Date,

Buyer may, in its sole and absolute discretion, (i) terminate this Contract in its

entirety and receive a refund of the remaining unapplied portion of the Earnest

Money, subject to delivery of the Release, or (ii) waive such Primary Contingencies

and proceed to the Phase II Closing.” Compl., Ex. B § 1(f)(b). Or, Section 6(b), as

amended, provides a third alternative:

If Seller, despite Seller’s good faith efforts, has not obtained the
Approvals with respect to Phase II at least thirty (30) days prior to the

3
Phase II Outside Closing Date, then Buyer may, upon written notice to
Seller delivered prior to the Phase II Outside Closing Date (the ‘Phase
II Approvals Election Notice’), elect to pursue receipt of the Approvals,
and in such event the Phase II Outside Closing Date shall be extended
by an additional sixty (60) days and Seller shall have an additional sixty
(60) days to obtain the Approvals. In the event Seller still has not
obtained the Approvals within such sixty (60) day period, the Phase II
Outside Closing Date shall be extended for a period of six (6) months
from the expiration of such sixty (60) day period to allow time for
Buyer to obtain the Approvals with respect to Phase II (the ‘Phase II
Approvals Extension Period’). 1

Id.

If Bunting Macks breaches its obligations under the Agreement, Section 15(b)

states as follows:

If Seller defaults in the performance of any covenant or obligation
hereunder, or if any of Seller’s representations or warranties prove to
be false, inaccurate, incomplete or misleading in any material respect,
then Buyer’s sole and exclusive remedy shall be either: (1) to seek
specific performance of this Contract, or (2) to terminate this Contract,
receive an immediate refund of all Earnest Money and sue for damages
for Seller’s breach; provided, however, that any damages recoverable

1
Section 6(b), as amended, further provides:
In the event the Approvals are obtained during the Phase II Approvals
Extension Period, then Buyer shall receive a reimbursement from Seller at
Closing for the actual costs incurred by Buyer in pursuing the Phase II
Approvals, not to exceed $60,000. . . . If the Approvals with respect to the
Phase II Closing are not obtained prior to the expiration of the Phase II
Approvals Extension Period, then Buyer may, in its sole and absolute
discretion, terminate this Contract in its entirety and receive a refund of the
unapplied portion of the Earnest Money, subject to delivery of the Release,
as hereinafter defined, or waive such Primary Contingencies and proceed to
the Phase II Closing.
Compl., Ex. B § 1(f)(b).

4
from Seller for the default shall not exceed Sixty Thousand and No/100
Dollars ($60,000.00) for each Phase for which a Closing has not already
occurred. Notwithstanding the foregoing or anything herein to the
contrary, in the event specific performance is not available as a remedy
as result of actions taken by Seller, then Buyer may exercise all
remedies available at law or in equity.

Agt. § 15(b).

B. Horton Contends The Primary Contingencies Are Not Satisfied
And Refuses To Close on Phase II Without Extending The Phase II
Outside Closing Date.
On May 3, 2022, Horton and Bunting Macks closed on Phase I. Compl. ¶ 17.

Horton alleges that after the Phase I closing, it “discover[ed] . . . that Bunting Macks

had not met all of the Primary Contingencies contained in the Agreement,” “causing

Horton significant delays and increased costs in developing Phase I.” Id. ¶ 18.

The Agreement initially set the Phase II Closing Date for May 3, 2023, the

one-year anniversary of the Phase I closing. Id. ¶ 21. Bunting Macks extended the

Phase II Closing Date five times. Id. On August 1, 2023, Bunting Macks sent its

fifth extension notice to Horton, extending the Phase II Closing Date to October 3,

2023. Id. ¶ 22 (citing Ex. C). The notice informed Horton that Bunting Macks

anticipated receiving all Approvals for Phase II on or before August 31, 2023. Id.

On August 16, 2023, Horton sent a letter to Bunting Macks disputing that all

Approvals for Phase II would be obtained by August 31, 2023. Id. ¶ 23 (citing Ex.

D). Horton advised that it “ha[d] not yet made a decision as to what it w[ould] elect

to do when the Primary Contingencies are not satisfied by the required deadline” and

5
“reserve[d] all rights and remedies it may have under the Agreement, including the

right to take over the Approvals process as outlined in the Agreement.” Compl., Ex.

D at 6. On August 18, 2023, Bunting Macks responded that all Primary

Contingencies for Phase II had been satisfied. Compl. ¶ 25 (citing Ex. E).

Thereafter, Horton and Bunting Macks agreed to a tolling period for

performance and notices under the Agreement. Id. ¶ 26. The tolling period ran for

seventy-six days, from August 31 to November 15, 2023. See id., Ex. F at 4. When

the tolling period expired on November 15, 2023, Bunting Macks noticed the Phase

II closing to occur on December 19, 2023. Compl. ¶ 29; see also id., Ex. G at 1-2;

Agt. § 6(e).

On December 4, 2023, Horton sent a default notice to Bunting Macks,

asserting that Horton had breached the Agreement by, among other things, failing

“to diligently and in good faith seek the Approvals for Phase II” as required under

Section 5(f) and “encumbering the Property with an interconnection to Seller’s

adjacent parcel” in breach of Sections 13(a) and 17 of the Agreement. Compl. ¶ 36;

see also id., Ex. I at 2.

On December 20, 2023, Bunting Macks sent a default notice to Horton based

on Horton’s failure to attend the Phase II closing on December 19, 2023. Ans. Of

Bunting Macks LLC And Roxana Road LLC To Pl.’s Compl. With Affirm. Defenses

And Countercl., Ex. 11, Dkt. 5. Horton did not close on its purchase of Phase II

6
within the 45-day cure period provided in the Agreement,2 nor did it deliver a Phase

II Approvals Election Notice to extend the Phase II Outside Closing Date. Id.

C. Horton Files Suit Seeking Specific Performance.

On January 29, 2024, Horton initiated this action through the filing of a

verified complaint (the “Complaint”). Dkt. 1. The Complaint alleges that Bunting

Macks breached the Agreement by “fail[ing] completely to pursue almost any of the

contractually required [A]pprovals,” including “DelDOT entrance permits, DelDOT

offsite approvals, stamped approved plans from the Town of Selbyville, DNREC

approvals, and Sussex Conservation District Approvals.” Compl. ¶ 7. The

Complaint further alleges that the Approvals Bunting Macks pursued “were not even

consistent with what the Agreement requires.” Id. ¶ 3. According to the Complaint,

“the plans that Bunting Macks submitted for approval of Phase II of Coastal Villages

do not contain the correct number of lots or lot dimensions, and, contrary to the

requirements of the Agreement, spill on to land reserved for a later Phase of the

development.” Id. ¶ 4. In addition, the Complaint alleges that “the plans encumber

Phase II with an interconnection . . . to a neighboring property being developed by

Bunting Macks’ affiliate,” Roxana Road LLC (“Roxana”), and “show a pump station

and accompanying force main . . . far larger than needed for Coastal Villages, with

2
See Agt. § 15(d) (providing for notice and forty-five-day cure period).

7
the intent to benefit the neighboring Roxana Road development, without

compensation to Horton.” Id. ¶¶ 5-6.

The Complaint asserts five counts. Count I alleges a claim for breach of

contract premised on allegations that Bunting Macks “pursu[ed] the wrong

development plan and [did] not pursu[e] at all any of the other contractually required

approvals, and . . . encumber[ed] the Property with the Interconnection and a Pump

Station System design that is larger and costlier than required for the sole benefit of

Roxana Road.” Id. ¶ 51. Count II “seeks specific performance of the Agreement,

requiring that Bunting Macks be required to cure its defaults and perform its

obligations under the Agreement with respect to obtaining all contractually required

approvals, including, without limitation[,] the satisfaction of any outstanding

Primary Contingencies,” as well as an “injunction preventing Bunting Macks from

processing plans for the Pump Station System . . . .” Id. ¶¶ 56, 60. Count III alleges

a claim for unjust enrichment; Count IV alleges a claim against Roxana for tortious

interference with contract; and Count V seeks various declarations arising from

Horton’s other counts. Id. ¶¶ 62-82.

On February 6, 2024, Defendants answered the complaint and asserted

counterclaims. Dkt. 5.

On March 27, 2024, Defendants moved for partial judgment on the pleadings

(the “Motion”) and filed their opening brief in support thereof. See Defs.’ Op. Br.

8
In Supp. Of Their Mot. For Partial J. On The Pleadings Concerning Approvals

[hereinafter, “OB”], Dkt. 31. On April 30, 2024, Horton filed an answering brief in

opposition to the Motion. See Pl.’s Ans. Br. In Opp’n To Defs.’ Mot. For Partial J.

On The Pleadings Concerning Approvals [hereinafter, “AB”], Dkt. 39. On May 14,

2024, Defendants filed a reply brief in further support of the Motion. See Defs.’

Reply Br. In Further Supp. Of Their Mot. For Partial J. On The Pleadings

Concerning Approvals [hereinafter, “RB”], Dkt. 47. The Court heard oral argument

on the Motion on May 29, 2024. Dkt. 51.

II. ANALYSIS

A. Standard of Review
“This court will grant a motion for judgment on the pleadings pursuant to Rule

12(c) when there are no material issues of fact and the movant is entitled to judgment

as a matter of law.” Menna v. Weidhaas, 2023 WL 4851547, at *6 (Del. Ch. July

28, 2023) (internal quotation marks omitted) (quoting Lillis v. AT & T Corp., 904

A.2d 325, 329 (Del. Ch. 2006)). “[J]udgment on the pleadings . . . is a proper

framework for enforcing unambiguous contracts because there is no need to resolve

material disputes of fact.” Id. (alteration and ellipsis in original) (citation omitted).

Through the Motion, Bunting Macks seeks a “partial judgment on the

pleadings on Plaintiff’s claims that are based upon Plaintiff’s allegations that

Approvals for Phase II were not obtained.” Dkt. 31. Bunting Macks asks the Court

9
to dismiss bits and pieces of Counts I, II, and V and to trim remedies sought in the

Complaint’s Prayer for Relief. 3 This final report declines to prune the thicket of

Horton’s pled claims, 4 but addresses a key issue raised in the Motion—namely, the

availability of specific performance under the plain terms of the Agreement.

At the pleadings stage, a party seeking specific performance must allege facts

from which “it is reasonably conceivable that [it] could establish a right to specific

performance by clear and convincing evidence.” Pulieri v. Boardwalk Props., LLC,

2015 WL 691449, at *5 (Del. Ch. Feb. 18, 2015).

3
See [Proposed] Order Granting Defs.’ Mot. For Partial J. On The Pleadings Concerning
Approvals ¶ 2, Dkt. 31 (seeking judgment in Defendants’ favor on the following:
(1) “Count I of Horton’s Complaint, to the extent it is based on Horton’s claim that
‘Bunting Macks has breached the Agreement by pursuing the wrong development plan and
not pursuing at all any of the other contractually required approvals’”; (2) “Count II of
Horton’s Complaint, to the extent that ‘Horton seeks specific performance of the
Agreement, requiring that Bunting Macks be required to cure its defaults and perform its
obligations under the Agreement with respect to obtaining all contractually required
approvals, including, without limitation, the satisfaction of any outstanding Primary
Contingencies’”; (3) “Count V of Horton’s Complaint, to the extent that Horton seeks a
declaration that ‘the Agreement requires Bunting Macks to deliver Phase II with full
development approvals (including DelDOT approvals) to develop Phase II of the Property
in accordance with the plat plan attached to the Agreement; [and] that Bunting Macks has
failed to do so’”; and (4) “Prayer ¶ B of Horton’s Complaint, to the extent that Horton seeks
‘permanent injunctive relief requiring Bunting Macks to . . . sell[] the Property to Horton
with all . . . contingencies . . . met and with all contractually required approvals.’” (first
quoting Compl. ¶ 51; then quoting Compl. ¶ 56; then quoting Compl. ¶ 82(2); and then
quoting Compl. Prayer ¶ B)).
4
See inVentiv Health Clinical, LLC v. Odonate Therapeutics, Inc., 2021 WL 252823, at *4
(Del. Super. Jan. 26, 2021) (“[A]t the pleading stage of a case, a trial judge is not a robed
gardener employing Rule 12(b)(6) as a judicial shear to prune individual theories from an
otherwise healthily pled claim or counterclaim.”).

10
B. Specific Performance Is Not Available Under The Agreement.
Bunting Macks’ primary argument in support of the Motion is that the passing

of the Phase II Outside Closing Date, as defined in Section 6(b) of the Agreement,

forecloses Horton’s request for specific performance.

Section 18(b) provides that “time is of the essence in . . . the performance of

all obligations hereunder[,]” and Section 6(b) imposes a clear deadline—the Phase

II Outside Closing Date—by which the transaction “shall” close. See Agt. § 18(b);

id. § 6(b). That language creates a condition subsequent, such that if closing does

not occur by the Phase II Outside Closing Date, then the parties’ obligations to close

are extinguished.5 The parties did not close by the Phase II Outside Closing Date,

and Horton did not exercise its right to extend it.6 As Bunting Macks argues, by

waiting until after the Phase II Outside Closing Date to seek relief, Horton “is asking

the Court to rewrite the contract by extending the closing deadline,” even though

“[t]he parties did not bargain for [such] an extension . . . .” Appleby Apartments LP

5
This Court has explained that
[w]here the parties have created a condition precedent, the occurrence of that
condition is necessary to give rise to the other party’s duty to perform; if the
condition does not occur, the duty never arises. A condition subsequent is
an event that discharges a party from a preexisting duty to perform
immediately; the occurrence of the condition extinguishes that duty.
Ainslie v. Cantor Fitzgerald, L.P., 2023 WL 106924, at *10 (Del. Ch. Jan. 4, 2023) (internal
footnotes omitted), rev’d on other grounds, 312 A.3d 674 (Del. 2024).
6
See Compl. ¶ 26 (“[T]he outside closing date has passed . . . .”).

11
v. Appleby Apartments Assocs., L.P., 2023 WL 5620830, at *5 (Del. Ch. Aug. 30,

2023) (overruling exceptions to a Magistrate in Chancery’s final report denying a

request for specific performance on the pleadings). 7

Horton counters that the passing of the Phase II Outside Closing Date does

not foreclose specific performance for two reasons: (1) the Agreement does not

provide that time is of the essence, and (2) Bunting Macks was in breach of the

Agreement when the Phase II Outside Closing Date passed. As explained below,

both arguments fail.

1. The Agreement Provides That Time Is Of The Essence.

Horton argues that “Defendants overstate the force of the time is of the

essence clause” because “[u]nder Delaware law, the specific dates included in a real

estate sales contract are, at best, good faith estimates, and courts will allow a

reasonable amount of additional time for the parties to perform their obligations, in

order to effectuate the purpose and intent of the Agreement.” AB at 31-32. But as

the authority on which Horton relies makes clear, Delaware courts enforce strict

deadlines in contracts, including real estate agreements, where the parties have

7
Cf. Roma Landmark Theaters, LLC v. Cohen Exhibition Co. LLC, 2020 WL 5816759, at
*9 (Del. Ch. Sept. 30, 2020) (“Having agreed to [certain] terms, Buyer cannot create new
free-floating contractual protections that it did not bargain for . . . .”); GRT, Inc. v.
Marathon GTF Tech., Ltd., 2012 WL 2356489, at *6 (Del. Ch. June 21, 2012) (“Under
Delaware law, courts will not rewrite contracts to read in terms that a sophisticated party
could have, but did not, obtain at the bargaining table.”).

12
agreed that time is of the essence. See Cornell Glasgow, LLC v. LaGrange Props.,

LLC, 2012 WL 6840625, at *11 (Del. Super. Dec. 7, 2012) (explaining that a time

is of the essence provision means “that exact compliance with the terms of the

contract in this respect is essential to the right to require counter-performance”

(quoting 15 Williston on Contracts § 462 (4th 2000))). 8

Horton notes that the Agreement does not make “the specific date of the

closing” “static[,]”9 but this argument misses the point. The parties agreed that

“[t]ime is of the essence in the occurrence of all events, the satisfaction of all

conditions and the performance of all obligations hereunder[,]” and negotiated a

mechanism setting an outside date by which the transaction “shall” close. See Agt.

8
Compare Lewes Inv. Co. v. Est. of Graves, 2013 WL 508486, at *14 (Del. Ch.) (“If the
contract does not expressly say time is of the essence, ‘settlement dates in contracts without
this language [are], at best, good faith estimates of when the transaction will be
consummated.’” (emphasis added) (citation omitted)), aff’d, 74 A.3d 654 (Del. 2013);
Walton v. Beale, 2006 WL 265489, at *6 (Del. Ch.) (“Generally time is not of the essence
in a contract for the sale of land and will not be deemed of the essence unless it is
specifically stated in the contract.” (emphasis added)), aff’d, 913 A.2d 569 (Del. 2006);
Bryan v. Moore, 863 A.2d 258, 261 (Del. Ch. 2004) (allowing a “reasonable time” to
perform under the contract where “the words ‘time is of the essence’ [we]re not in the
contract and [could not] reasonably be inferred by the language used”), with Morris v.
Delmarva Real Est. Hldgs., LLC, 2024 WL 413512, at *7 (Del. Ch. Feb. 5, 2024)
(enforcing a firm deadline in a purchase option agreement where time was of the essence);
Peden v. Gray, 886 A.2d 1278, 2005 WL 2622746, at *2-4 (Del. 2005) (TABLE) (affirming
denial of a buyer’s request for specific performance where the real estate contract contained
a time is of the essence clause and the closing date had passed).
9
AB at 32; see also id. (“[T]he closing date of each previous Phase can vary by as much
as nearly a year depending on how many extension options are exercised, and whether
Horton elects its option under Section 6 to pursue the Approvals itself.”).

13
§ 18(b); see also id. § 6(b). The extension options available through that mechanism

do not change that fact. Horton’s argument fails in light of the plain language of the

Agreement.

2. The Complaint Fails To Plead That Bunting Macks’ Alleged
Breaches Contributed Materially To The Passing Of The
Phase II Outside Closing Date.

Horton also contends that the passing of the Phase II Outside Closing Date

does not foreclose specific performance because Bunting Macks breached the

Agreement. Horton raises this argument in a single sentence of its brief, asserting

that “it is reasonably conceivable based on the allegations in the Complaint that the

Court could find Bunting Macks prevented Horton from closing by deliberately

seeking incorrect approvals that encumbered the Property, and that Horton is

therefore entitled to specific performance of the Agreement.” AB at 26. Horton

cites no contractual or doctrinal support for this contention, but read charitably, it

appears to reference the prevention doctrine.

“The prevention doctrine provides that ‘where a party’s breach by

nonperformance contributes materially to the non-occurrence of a condition of one

of his duties, the non-occurrence is excused.’” Snow Phipps Gp., LLC v. Kcake Acq.,

14
Inc., 2021 WL 1714202, at *52 (Del. Ch. Apr. 30, 2021) (citation omitted). 10 The

prevention doctrine is an awkward fit here. Although Horton alleges that Bunting

Macks breached the Agreement by failing to diligently and in good faith seek the

Approvals and encumbering the Property,11 Bunting Macks does not rely on the non-

occurrence of a condition precedent to avoid any obligation under the Agreement.

The condition precedent in dispute—receipt of Approvals—is a condition to

Horton’s, not Bunting Macks’, obligation to close. See Compl., Ex. B § (1)(f)(b).

Bunting Macks has not cited, nor could it cite, the failure to obtain Approvals as a

basis for avoiding its obligation to close under the Agreement.

10
See also, e.g., Murphy Marine Servs. of Del., Inc. v. GT USA Wilm., LLC, 2022 WL
4296495, at *1 (Del. Ch. Sept. 19, 2022) (“To the extent that KPMG finalizing its work
was a condition precedent to [the defendant]’s performance, its failure is excused under the
prevention doctrine.”); Snow Phipps, 2021 WL 1714202, at *55 (“[U]nder the prevention
doctrine, [the defendant] is barred from asserting the absence of Debt Financing as a basis
to avoid specific performance under Section 11.14(b) . . . .”); Mobile Commc’ns Corp. of
Am. v. Mci Commc’ns Corp, 1985 WL 11574, at *4 (Del. Ch. Aug. 27, 1985) (“The
‘prevention doctrine’ provides that a party may not escape contractual liability by reliance
upon the failure of a condition precedent where the party wrongfully prevented
performance of that condition precedent.” (citation omitted)); but see Neurvana Med., LLC
v. Balt USA, LLC, 2020 WL 949917, at *19 (Del. Ch. Feb. 27, 2020) (at the pleading stage,
rejecting the argument that “the prevention doctrine applies because [the defendant]’s
supposed breaches impeded the conditions that would have triggered the milestone
payments”).
11
See AB at 27 (“Bunting Macks’s breach with respect to the Approvals is the intentional
failure to pursue what is required by the Agreement, not in the absolute failure to obtain
Approvals.”).

15
Instead, Bunting Macks cites the occurrence of a condition subsequent—the

passing of the Phase II Outside Closing Date—as extinguishing the parties’

obligations to close. Assuming breach can excuse the occurrence of such a

condition,12 the Complaint nevertheless does not plead facts supporting a reasonably

conceivable inference that Bunting Macks’ alleged breaches contributed materially

to the passing of the Phase II Outside Closing Date. That is because none of Bunting

Macks’ alleged breaches caused the Phase II Outside Closing Date to pass—rather,

Horton’s choice not to extend the Phase II Outside Closing Date did.

Under Section 6(b), the parties expressly contemplated the possibility that

Bunting Macks would not receive the Approvals by the Phase II Outside Closing

Date. Compl., Ex. B § 1(f)(b). In that case, the contract provided Horton with three

12
The parties have not briefed, so I do not address, whether a party’s breach could in fact
excuse the passing of a carefully negotiated outside closing date where, as here, the non-
breaching party waited to assert its rights until after the outside date passed. But see, e.g.,
Akorn, Inc. v. Fresenius Kabi AG, C.A. No. 2018-0300-JTL, at 32:18-24 (Del. Ch. May 2,
2018) (TRANSCRIPT) (granting motion to expedite and explaining that “on a preliminary
read . . . if [the plaintiff] proved and I found that [defendant] had . . . failed to perform [its]
obligations under the agreement and, hence, w[as] a principal cause of the failure to close,
then [defendant] would be held under the agreement, notwithstanding the outside date.”);
Walton, 2006 WL 265489, at *6 (“If . . . the defendants’ actions cause the plaintiff to fail
to meet the contractual settlement date, the plaintiff will not be held liable for the breach
induced by the defendants.”); cf. Vintage Rodeo Parent, LLC v. Rent-a-Ctr., Inc., 2019 WL
1223026, at *21 (Del. Ch. Mar. 14, 2019) (“For [the defendant] to lose its right to terminate
under Section 8.01(b)(i), its breach must be one that causes a failure to consummate the
Merger by the End Date. . . . Even had the Plaintiffs demonstrated a breach of
commercially reasonable efforts inhering in [the defendant’s] failure to warn, they have,
nonetheless, not shown that such a breach prevented consummation of the Merger by the
End Date.”).

16
options: Horton could (1) terminate the Agreement and receive a refund of the

remaining unapplied portion of the Earnest Money, (2) waive the Primary

Contingencies (including the Approval condition) and proceed to closing, or

(3) extend the Phase II Outside Closing Date by delivering a Phase II Approvals

Election Notice prior to the Phase II Closing Date and pursue the Approvals itself.

Id.

Horton argues, unconvincingly, that it was not permitted to extend the Phase

II Outside Closing Date to pursue the Approvals. Section 6(b) states that “[i]f Seller,

despite Seller’s good faith efforts, has not obtained the Approvals with respect to

Phase II at least thirty (30) days prior to the Phase II Outside Closing Date, then

Buyer may, upon written notice to Seller delivered prior to the Phase II Outside

Closing Date . . . , elect to pursue receipt of the Approvals . . . .” Compl., Ex. B

§ 1(f)(b) (emphasis added). Horton suggests that because Bunting Macks did not

make “good faith efforts” to obtain Approvals, this option was unavailable to

Horton. AB at 28. In other words, Horton interprets this language to mean that

Horton could extend the Phase II Outside Closing Date to pursue the Approvals only

if Bunting Macks first made good faith efforts to obtain them. That interpretation is

nonsensical; Horton offers no explanation for why the parties might have agreed to

foreclose Horton’s option to extend the Phase II Outside Closing Date in the event

17
Bunting Macks failed to use good faith efforts.13 The only reasonable reading of

Section 6(b) is that, notwithstanding (or irrespective of) Bunting Macks’ good faith

efforts, Horton could elect to extend the Phase II Outside Closing Date to pursue

receipt of the Approvals itself.

Although Horton could have extended the Phase II Outside Closing Date, it

chose not to do so. As the deadline approached, Horton told Bunting Macks that it

“ha[d] not yet made a decision as to what it w[ould]elect to do[,]” while purporting

to “reserve[] all rights and remedies it may have under the Agreement, including the

right to take over the Approvals process as outlined in the Agreement.” Compl., Ex.

D at 6. Horton then chose not to extend the Phase II Outside Closing Date, waited

more than a month, then filed the Complaint seeking an order of specific

performance to extend the parties’ obligations under the Agreement indefinitely—

an extension for which the parties did not bargain. Horton’s choice not to extend the

Phase II Outside Closing Date had consequences—namely, that with the passing of

the Phase II Outside Closing Date, Horton lost its ability to compel Bunting Macks

to close. See Appleby Apartments LP, 2023 WL 5620830, at *4 (“[The plaintiff]

admittedly opted not to proceed. That choice had a consequence.” (footnote

13
See RB at 26 (“Under Horton’s interpretation, Horton could not take over the Approvals
process in precisely the situation when Horton would naturally want to take it over the
most, where it believed that Bunting Macks was not making good faith efforts to seek the
Approvals.”).

18
omitted)); Realogy Hldgs. Corp. v. SIRVA Worldwide, 2020 WL 4559519, at *6

(Del. Ch. Aug. 7, 2020) (declining to “reach the abstract or doctrinal boundaries of

the prevention doctrine because . . . [the plaintiff], and not [the defendant], caused

the conditions to fail by filing the Non-Retained Claims”). 14

Horton argues that it “was not required to exercise the option for the ‘Phase II

Approvals Extension Period’” because “the option to extend the Outside Closing

Date” “was at the discretion of Horton and Horton alone.” AB at 25. That is true;

yet Horton’s decision not to extend the Phase II Outside Closing Date also has

consequences under the plain language of the Agreement. Separately, Horton argues

that Bunting Macks’ alleged breaches of Sections 13(a) and 17 provide an

independent basis to order specific performance, 15 but it does not explain how such

breaches prevented Horton from extending the Phase II Outside Closing Date. And

while Horton contends that extending the Phase II Outside Closing Date would have

14
Cf. Georgetown Crossing LLC v. Ruhl, 2006 WL 4782273, at *12 (Del. Ch. Dec. 5,
2006) (denying a purchaser’s request for specific performance of a land sale agreement
where its decision to terminate the agreement prior to closing had consequences under the
agreement—namely, foreclosing “its right to insist upon closing”).
15
See AB at 6 (claiming that “[t]he Court . . . cannot ‘refuse [as a matter of law] Horton’s
request [to] extend the Phase II Outside Closing Date’ without resolving these other aspects
of Horton’s breach claim” concerning the encumbrance of the Property “with an
Interconnection and enlarged Pump Station System”).

19
been “futile”16 due to Bunting Macks’ alleged breaches of Sections 13(a) and 17,

Horton has no answer for why it could not have extended the Phase II Outside

Closing Date and also sought specific performance of Bunting Macks’ outstanding

obligations.

For these reasons, as a matter of law, specific performance is not available

under the Agreement.

III. CONCLUSION
For the reasons explained above, the Complaint does not plead facts

supporting a reasonably conceivable inference that an order of specific performance

is available under the terms of the Agreement.

Within fourteen days, the parties shall submit supplemental memoranda, not

to exceed 8,000 words, addressing the basis (if any) for the Court’s continuing

subject matter jurisdiction over the remaining issues in this action. Exceptions to

this final report are stayed under Court of Chancery Rule 144(f) pending a ruling on

subject matter jurisdiction.

16
See id. (“Horton could not and cannot remedy the[] [encumbrances] simply by electing
to extend the outside closing date and obtaining the remaining Approvals itself because
the[] breaches result from Bunting Macks encumbering the property separate and apart
from Bunting Macks’s failure to pursue the contractually required Approvals.”).

20