Nancy Rosado v. MidCities Auto Sales, LLC

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY

NANCY ROSADO,
Plaintiff,
C.A. No.: CPU4-23-003464

V.

MIDCITIES AUTO SALES, LLC.,

Nee eee eee eee ae“ SS

Defendant.

Submitted: August 7, 2025
Decided: October 2, 2025

DECISION AFTER TRIAL

Nancy Rosado, Se/f-represented Plaintiff
James J. Haley, Jr., FERRARA & HALEY, Wilmington, Delaware; Counsel for

Defendant

Mayer, J.
This is a breach of contract action that began with a romantic relationship and
ended with a breakup. Nancy Rosado (“Plaintiff”) left a $20,000 cashier’s check
with Ezra Richards, payable to the order of Mid Cities Auto Sales, LLC
(‘“Defendant”).' Plaintiff insists the check was a loan; Defendant argues that it was
an investment.? On August 7, 2025, the parties convened for trial and the Court

reserved decision. This is the Court’s final decision after trial.

FACTS AND PROCEDURAL HISTORY

Trial in this case originally started on April 3, 2025, however, it soon became
apparent that both parties were exceedingly unprepared. The Court continued the
trial and ordered the parties to collect all relevant videos, proof of the $20,000 check,
proof of payments to Plaintiff, and paperwork for all vehicles sold after the date the
initial check was cashed.

On August 7, 2025, the parties appeared for the continuation of the trial. Four
witnesses testified, including the parties; three videos and four checks were admitted

into evidence.’

' Ezra Richards was also a defendant, but the Court granted his Motion to Dismiss as unopposed on
October 14, 2024.

In its Answer, Defendant “[a]dmitted that Plaintiff Joaned Defendant Mid Cities Auto, LLC $20,000.00
for the purchase of vehicles.” (emphasis added).

+ Defendant attempted to enter documentation prepared, for trial, by Defendant’s accountant showing the
balance sheet of the company; this document was not admitted into evidence.

2
As finder of fact, the Court is tasked with reconciling any inconsistencies in
the evidence presented and drawing all reasonable inferences from the proven facts.
After considering the testimony and evidence presented at trial, the Court finds the
relevant facts as follows:

Sometime in the spring of 2023, Plaintiff and Ezra Richards began a romantic
relationship. On or about May 29, 2023, Plaintiff indicated that she wanted to invest
in Mr. Richards’ company, Mid Cities Auto Sales, LLC. Mr. Richards relayed
Plaintiff's intentions to the co-owner, Jasmine Carter, who expressed some concern
but left the decision with Mr. Richards.

After a Memorial Day pool party, Plaintiff, Mr. Richards, and Ms. Carter,
discussed the venture. It was determined that Plaintiff would invest and the three
would equally split the profits from the vehicles sold. It is unclear how long this
profit-sharing structure would continue, i.e. indefinite, cease upon Plaintiff's
recoupment of her entire investment, cease once all the cars were sold, etc.

Nonetheless, a few days after this discussion, Plaintiff left a cashier’s check
for $20,000 with Mr. Richards. The memo line of the check reads: “MIDCITY
AUTO RE: INVESTMENT NANCY ROSADO.” Plaintiff claims that she did not
request this wording on the check and that the clerk at the bank wrote those words

on their own accord.
After Mr. Richards cashed the check, Ms. Carter used the money to purchase
vehicles at auction.’ Of the vehicles purchased, at least three were sold and the
profits were split between the three parties. On July 2, 2023, Plaintiff received a
check for $580.00 for the profit from the sale of a 2011 Buick; on July 21, 2023,
Plaintiff received a check for $600.00 for the profit from the sale of a Chevy Cruz;
and on August 2, 2023, Plaintiff received a check for $450.00 for the profit from the
sale of a 2000 Lexus ES 300.°

Then, sometime in October 2023, Plaintiff and Mr. Richards’ relationship
took a turn for the worse, and the two were no longer romantically involved. Two
vehicles were later sold but Plaintiff did not receive the profits from Defendant, and
she demanded all of her money back. Defendant, at some point, indicated that
Plaintiff would receive her payment back once the sale of Mr. Richards’ house was
finalized. However, after the sale of the home, no payments were made. Thus, this

lawsuit ensued.

DISCUSSION

* It is not entirely clear how many vehicles were purchased, no documentation was produced of the
purchases, however based on Ms. Carter’s testimony, roughly 10 vehicles were purchased.

> It is also unclear what “profit” means in this case. It is either the sale price in its entirety or the
difference between the auction price and the sale price. Plaintiff may be entitled to one third of the profit
plus the offsetting price of the vehicle, which would presumably bring a greater return than $20.000.00.

4
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.

In order for Plaintiff to prevail on her claim for breach of contract, she must
establish by a preponderance of the evidence that: (1) a contract existed between the
parties; (2) the defendant breached an obligation imposed by the contract, and (3)
the plaintiff suffered damages as a result of the breach.® “Delaware law adheres to
the objective theory of contracts, i.e., a contract's construction should be that which
would be understood by an objective, reasonable third party.” When the plain
meaning of a contract is susceptible to more than one reasonable interpretation,
“courts may consider extrinsic evidence to resolve the ambiguity.”

Here, there is no written contract, only the testimony and evidence produced.
Nonetheless, the parties do not dispute the existence of an oral contract, nor that
Defendant is in breach of that contact and damages are owed. Therefore, the Plaintiff

has met her burden of proving her claim of breach of contract.

® Reynolds v. Reynolds, 237 A.2d 708, 711 (Del. 1967).

TTd.

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

° Brace Industrial Contracting, Inc. v. Peterson Enterprises, Inc., 2016 WL 6426398, at *6 (Del. Ch. Oct.
31, 2016).
However, the crux of the parties’ contentions is whether the $20,000 payment
was an investment or a loan; thus, the Court is called upon to determine the nature
of the ambiguous oral agreement.

The burden is on both parties to establish by a preponderance of the facts,

whether the payment was a loan or an investment.!®

The only concrete evidence
before the Court are the three checks from Defendant to Plaintiff and the one from
Plaintiff to Defendant, which contain the words ‘investment’ and ‘profit’. Less
credible is the testimony from the Plaintiff and her witnesses only being able to recall
the word ‘loan’ being used to define the payment.'! In contrast, Defendant’s witness
could only recall ‘investment’ being used to describe the payment.'”

A loan is generally a financial agreement where one party lends money to
another with an expectation of repayment along with interest over time.'? While an

investment typically involves a party seeking to generate returns through ownership

or profit sharing.'4

'0 See Tanyous v. Happy Child World, Inc., 2008 WL 2780357, at *6 (Del. Ch. 2008) (“The Court,
therefore, will assume that the burden rested on each individual party to prove his theory of the agreement
by a preponderance of the facts.”).

"| Defendant did not request sequestration.

12 Defendant’s Counsel in closing did make the argument that the payment in question was, “in effect, a
sweetheart loan—a no interest loan from one sweetheart to another sweetheart.”

'3 See Bank of New York Mellon v. Realogy Corp., 979 A.2d 1113, 1122 (Del. Ch. 2008).

'4 See generally S.E.C. v. W.J. Howey Co., 328 U.S. 293 (1946) (legal standard established by the United
States Supreme Court to determine whether a transaction qualifies as an investment contract).

6
The facts of this case are unclear, however what is clear is the parties’
informality and carelessness; nonetheless the Court “will not disturb a bargain
because, in retrospect, it appears to have been a poor one.””!°

What is puzzling is that it appears that both parties have picked the wrong
argument. If Plaintiff's payment is found to be an investment, then she would
potentially be entitled to one third of the profit of all cars sold, even if it was just the
profit from the vehicles purchased with her money. If Plaintiff's payment is found
to be a loan, as Plaintiff insists, then the most she could recover is $18,370.'°

The Court posited this query to the parties before closing arguments.
Defendant quickly changed course and argued in closing that the payment was a
“sweetheart loan” with no interest and damages must not exceed $20,000.00.
Plaintiff did not change her position and insists that the payment was a loan and
requests $20,000.00 minus the amounts already paid. Both parties ultimately
concluded that the payment was a loan. The Court finds that the parties have failed
to prove the payment was an investment, therefore based on the final mutual

contentions that the payment was a loan, the Court finds that the payment was a loan.

'S West Willow-Bay Court, LLC, v. Robino-Bay Court Plaza, LLC, 2007 WL 3317551, at *9 (Del. Ch.
2007).
'6 $20,000.00 - $1,630.00 = $18,370.00
The standard remedy for breach of contract is based upon the reasonable
expectations of the parties to the contract.'’ Expectation damages are measured by
determining “the amount of money that would put the promisee in the same position
as if the promisor had performed the contract.”!* “Damages for a breach of contract
must be proven with reasonable certainty. Recovery is not available to the extent

that the alleged damages are uncertain, contingent, conjectural, or speculative.”!”

The damages in this case are certain, Plaintiff loaned Defendant $20,000.00
and she has not received repayment in full. Defendant repaid $1,630.00. At no point
was there any discussion about interest nor a time period for payments, but both
parties assert that this was a “sweetheart” loan.”° Therefore, Plaintiff is entitled to

$18,370.00.

'7 Duncan v. Thera Tx, Inc., 775 A.2d 1019, 1022 (Del. 2001).

18 Id.

'9 Dill y. Dill, 2016 WL 4127455, at *1 (Del. Super. Aug. 2, 2016) (internal citations omitted).

20 Under Delaware law, the absence of time for payment is not material to contract formation. The courts
may infer that payment should be made within a reasonable time period. Gilronan v. Birmingham, 2020
WL 247326 (Del. Com. PI. 2020) (C.J. Smalls) “If no Time for performance is fixed, the Court will imply
a reasonable time.” Stone Creek Custom Kitchens & Design v. Vincent, 2016 WL 9048784 (Del. Super.

8
CONCLUSION

Therefore, the Court finds in favor of Plaintiff Nancy Rosado against

Defendant Mid Cities Auto Sales, LLC, in the amount of $18,370.00.

Katharine L. Mayer
Judge