The feud between the founder of the popular Grotto Pizza chain and retired federal Judge Joseph J. Farnan Jr. has expanded from the Delaware Superior Court to the Court of Chancery.
After making fraud allegations against Farnan in a malpractice suit filed last fall against Duane Morris in the Superior Court, restaurateur Dominick Pulieri is now pursuing his own claims against the judge in Chancery Court in an effort to regain control of a Rehoboth Beach motel he sold to Farnan for $3.2 million in 2002.
Pulieri, who launched Grotto Pizza in 1960, filed a lawsuit, Pulieri v. Boardwalk Properties, earlier this month in the Chancery Court alleging that Farnan swindled him out of the Sunview Motel and later broke a promise to return the property. He has asked Chancery Court Chancellor Andre G. Bouchard, who is overseeing the dispute, to order Farnan to transfer the motel back to the corporation Pulieri formed to own the property. Specifically, Pulieri alleged breach of contract and specific performance claims.
In December 2002, Sunview Corp., the entity formed by Pulieri to own the motel, was facing financial difficulties and would be unable to make a balloon payment on the loan for the building, according to court documents. Farnan, who was involved with the management of Grotto Pizza and was Pulieri’s friend, allegedly advised that the financing bank, Wilmington Trust, would not refinance the loan. Farnan suggested Pulieri sell the property to Farnan-affiliated Boardwalk Properties LLC as part of a “friendly transaction” to generate funds, according to the Chancery Court complaint.
Pulieri sold the property to Boardwalk for $3.2 million in 2002 under Farnan’s assurances that the property would be returned upon request on a dollar-for-dollar basis, according to court documents. The plaintiff contends that he sold the property below its market value and did not list it for sale based on Farnan’s alleged promise to return the motel.
A fuller version of this article will be posted later when the article is completed.