GMG Capital Investments LLC v. Athenian Venture Partners I, LP, No. 514, 2010 (January 3, 2012)
This decision is a clear explanation of how to determine if a contract is ambiguous on a point. If it is, then evidence of the parties' intentions is necessary to decide what the contract provides.
Brandywine Smyrna Inc. v. Millennium Builders Inc., No. 53, 201 (December 9, 2011)
When a prevailing party is entitled to interest on its judgment has sometimes been confusing. This decision affirming the general right to interest clarifies Delaware law.
PharmAthene Inc. v. SIGA Technologies Inc., C.A. 2627-VCP (September 22, 2011)
This is an important decision for 2 reasons. First, it clarifies the extent of a duty to negotiate in good faith. Second, it crafts a remedy for a breach of that duty. This is important because deal term sheets often provide for further "good faith" negotiations and what that means has been unclear in the past. Further, it is also common for the mediation of commercial disputes to end with the basic terms set out in a memorandum of understanding with the details to be "negotiated in good faith."
First, it is important to understand when there is a binding obligation to negotiate in good faith. In this case, 2 formal contracts between the parties required they have such further negotiations. Without a binding contract to do so, it remains doubtful that just a simple agreement to continue discussions binds anyone.
Second, when the duty to negotiate does arise, what constitutes good faith is hard to define in the abstract. This decision points out, however, that a refusal to continue to honor past agreements is "bad faith." In short, you cannot go back on terms already agreed to as a way to get other concessions.
Third, when the duty to negotiate is violated, the remedy is critical. As this decision points out, specific performance and a damage award of what one side says were its expectation damages may not be available for a variety of reasons. Here, the Court provided a remedy that gave the non-breaching party what the Court felt were the benefits that the parties had agreed on generally, even if the details were not finalized. This highlights the importance of reviewing the history of their negotiations to determine what is likely to have been the outcome had they fairly negotiated.
This important decision clarifies that Delaware courts should apply the "conceivability" test to determine if a complaint states adequate facts to state a claim. Previously, Delaware's trial courts had applied the "plausibility" test from the United States Supreme Court's Twombly decision. As the Delaware Supreme Court makes clear, the "conceivability" test is the more liberal test and will result in sustaining more complaints in response to motions to dismiss.
For years, the Chief Justice has cautioned in public statements that Twombly was not Delaware law. While his opinion in this case may leave that open for a later review, for now he has the last word.
The decision also significantly liberalizes the scope of a "good faith and fair dealing" claim. So long as such a claim does not depend on an actual breach of the contract involved, it may survive a motion to dismiss as well.
K&K Screw Products LLC v. Emerick Capital Investments Inc., C.A. 5633-VCP (August 9, 2011)
Sometimes a lingering contract dispute causes problems in obtaining financing or just getting on with a company's business. Here the Court upheld the use of a declaratory judgment action to establish the parties rights in such a dispute.
Roseton OL LLC v. Dynegy Holdings Inc., C.A. 6689-VCP (July 29, 2011)
This decision explains the limits on a parent's guaranty of a subsidiary's performance in the context of what the parent can do with its assets and its ability to later honor the guaranty. It is an illustration of the need to understand the client's business and for careful drafting of such agreements.
Textron Inc. v. Acument Global Technology Inc., C.A. 10C-07-103-JRJ CCLD (April 6, 2011)
The new Complex Civil Litigation Division of the Delaware Superior Court has attracted over 40 new cases because of its special treatment of business disputes. This opinion illustrates that Court will provide the careful treatment of contract disputes that is needed by the parties. Applying settled Delaware law to the issues presented, the Court denied a motion for judgment on the pleadings while providing the litigants guidance that may lead them to resolve their dispute.
Great-West Investors LP v. Thomas H. Lee Partners LP , C.A. 5508-VCN (January 14, 2011)
Sometimes a contract cannot have been intended to mean what is says. This decision is an example where the contract read literally would require 1 party's compensation to double every year forever. The opinion contains a good overview of the remedies available in such a situation.
Microstrategy Inc. v. Acacia Research Corp., C.A. 5735-VCP (December 30, 2010)
This decision explains the proper role of grammar and punctuation in the interpretation of a contract. Briefly, grammar and punctuation do not overcome common sense and errors in either may be ignored when appropriate.
Interestingly, the decision relies on the United States Supreme Court Twombly case rule that requires more fact-specifc pleadings in complaints. Several other Court of Chancery decisions have also cited to Twombly. However, to date the Delaware Supreme Court has not expressly adopted Twombly and has only cited to it once, in a vague footnote. Hence, it is not clear if Delaware really does follow Twombly's pleading rules and some Delaware lawyers doubt that it will if the Supreme Court is called upon to decide that issue.
In May 2010, the Delaware Superior Court established its Complex Commercial Litigation Division ( the "CCLD") in response to the growing need for more efficient treatment of complicated commercial litigation. The Division has special procedures designed to move litigation forward, deal with the problem of electronically stored information and otherwise address issues that have come to plague civil litigation in recent years. At a seminar on December 7, 2010, one of the judges appointed to the new CCLD, Jan Jurden, reported on its progress.
The CCLD is off to a good start. To date, 30 cases have been filed or transferred to the CCLD and at least 1 trial has been held already. Judge Jurden confirmed that:
In short, the CCLD is well positioned to rival the Delaware Court of Chancery in its ability to provide prompt justice to litigants.
ASDI, Inc. v. Beard Research, Inc., C.A. Nos. 296/301/308, 2010 (November 23, 2010)
In this decision, the Supreme Court held the Court of Chancery erred in holding plaintiffs had failed to establish a tortious interference with contract claim where a third party had lawfully terminated the contract with plaintiffs. According to the Supreme Court, the focus of a tortious interference claim is whether the defendant wrongfully induced contractual termination, not whether the termination was legal. While an unlawful termination will support a tortious interference claim, a plaintiff can also state a tortious interference claim when the defendant's tortious conduct causes a third party to terminate a contract lawfully.
Pharmathene Inc. v. SIGA Technologies Inc., C.A. 2627-VCP (November 23, 2010)
When is a letter of intent or term sheet an enforceable contract? Delaware says it is enforceable when the parties intend to be bound and when the agreement contains "all essential terms." Exactly what all that means is often disputed. This decision summarizes case law in a manner that will help to resolve this important question.
TR Investors LLC v. Genger, C.A. 3994-VCS (July 23, 2010)
Stockholder agreements frequently provide that notice must be given before any stock subject to the agreement may be transferred. Usually, the notice triggers a right to buy. Here the Court, as expected, held that the failure to give the notice does not end the other party's right to buy, but the stock and informal notice is not good enough to comply with the formality required by the agreement.
Cambridge North Point LLC v. Boston & Maine Corporation, C.A. 3461-VCS (June 17, 2010)
This is another example of the Court of Chancery enforcing the contract the parties wrote despite one party's second thoughts. Saying that you did not read it does not help either.
Concord Real Estate CDO 2006-1 Ltd v. Bank of America N.A., C.A. 5219-VCL (May 14, 2010)
This is an intesting case even though it deals with how to interpret a complicated indenture. As the Court explains, it will look to the commentary to the Model Debenture Indenture for guidance. The reason is that there is a need for uniform interpretation of such documents. It does not follow, necessarily, that the Court will accept "expert" testimony on what other contracts are supposed to mean.
Nemec v. Shrader , C.A. 305, 2009 (April 4, 2010)
In a rare split amongst the Justices, the Delaware Supreme Court has divided over when the duty of good faith and fair dealing applies. The majority opinion is an example of the views of Chief Justice Steele who is noted for his stance that a contract should be held to fix the parties' rights and there is little room to add to those rights under the so-called duty to act in good faith and with fair dealing. If the circumstances that the plaintiff complains of might have been anticipated when the contract was drafted, it is too bad if the contract does not give the plaintiff what he now wants.
The two Justices in the minority, Justices Jacobs and Berger, are not so sure they want to rely entirely on what the parties put into their contract to define their rights in all circumstances. They are more inclined to expand a party's rights when they feel the other side has acted in a way that would not have been agreed to had they thought about it beforehand.
For now at least, the strict upholding of the contracts limits has won the day.
Mangano v. Pericor Therapeutics Inc., C.A. 3777-VCN (December 1, 2009)
This decision illustrates another loop hole in a stockholder agreement designed to restrict voting rights. Briefly, the agreement provided that an otherwise controlling stockholder would place his stock in a voting trust that would then vote his stock as did the other stockholders. However, there was a provision that permitted the otherwise majority stockholder to transfer his stock to a family member and another provision that terminated the trust if the majority stockholder's stock in trust fell below 45% of the stock outstanding.
Of course, what the majority stockholder did was transfer enough stock to his sister to make him own less than 45% and thereby terminated the trust. His sister then voted with him, and they took control of the corporation.
The Court held that the stockholder did not have a beneficial ownership in the sister's stock as she had no obligation to vote with him or give him any benefit from her ownership of the stock. To be a beneficial owner you have to have some interest in the stock.
Amirsaleh v. Board of Trade of The City of New York, Inc., C.A.2822-CC (November 9, 2009)
The law of good faith and fair dealing in contracts is a “judicial tool used to imply terms in a contract that protect the reasonable expectations of the parties." This decision clearly explains Delaware law in this area, including the point that not acting in good faith involves bad faith and that is proved by showing an improper motive.
Leeseberg v. Converted Organics Inc., C.A. No. 08-926-GMS (D. Del. Oct. 7, 2009).
Applying Delaware law, the district court concluded that a late fee provision was not a liquidated damages clause and dismissed the defendant’s motion to dismiss the plaintiff’s claim for actual damages. The late fee provision did not bear the label liquidated damages and there was no explicit evidence in the contract indicating that the late fee was the plaintiff’s sole damages in the event of a breach.
Southern Track & Pump Inc. v. Terex Corp., C.A. No. 08-543-JJF (D. Del. June 9, 2009)
By granting, in part, the defendant’s motion to dismiss its claim for breach of the implied covenant of good faith and fair dealing, the district court found that financing promises may not be regarded as an implied contractual obligation when there is no explicit reference in the agreement.
This dispute arose out of a distributing agreement, whereby the plaintiff agreed to distribute the defendant’s products. By the plaintiff’s account, the defendant represented that it had a relationship with a financier and could leverage this relationship to secure favorable financing. The plaintiff obtained financing and, thereafter, defaulted on its obligation. When the defendant refused to intervene on the plaintiff’s behalf, the plaintiff brought suit for an implied breach. The district court dismissed the plaintiff’s claim to the extent it was based on the alleged explicit promise regarding financing.
Boyce Thompson Institute For Plant Research v. MedImmune, Inc., C.A. No. 07C-11-217 JRS (Del. Super. May 19, 2009) (applying New York law per choice of law provision)
This opinion discusses some interesting contractual interpretation and jurisdictional issues arising out of a licensing agreement. The dispute arose because the licensees denied any obligation to pay royalties to the licensor for products they are manufacturing in a country where, they claim, the licensor does not hold a patent.
The Superior Court found that the contract was ambiguous on whether “covered” products included those that were protected by the licensor anywhere or only those that were protected by a patent in the locations where they were manufactured. In any case, the Court denied the licensees’ motion to dismiss on the basis that there was no evidence presented to rule out the possibility that the licensees are, in fact, infringing on the patent by their acts in this other country.
The Court also raised the issue of whether it had subject matter jurisdiction to decide the case. While the Court deferred resolution of the issue, it noted that, if the contract claim requires the Court to determine whether the patent was infringed, then it would likely follow that patent law is a “necessary element” of the breach of contract claim and the federal courts have exclusive subject matter jurisdiction.
STMicroelectronics N.V. v. Agere Sys., Inc., C.A. No. 08C-09-099 MMJ (Del. Super. May 19, 2009) (applying New York law per choice of law provision)
This case illustrates the series of events that may arise when a subsidiary is party to a licensing agreement, but its parent is not.
Here, the licensor sued the parent company for patent infringement in the Eastern District of Texas and before the International Trade Commission. In response, the parent and subsidiary brought this action in Delaware, claiming that the filing of the patent infringement actions, though only naming the non-signatory parent, violated the licensing agreement’s covenant not to sue.
The Superior Court permitted the claim to move forward, denying the defendant-licensors’ McWane motion on the basis that the Delaware action did not present the same legal and factual issues as the first-filed proceedings. Further, the Court denied the defendants’ motion to dismiss for failure to state a claim and for lack of standing on the basis that additional discovery was necessary to resolve those issues.
Sunstar Ventures, LLC v. Tigani, C.A. No. 08C-04-042 JAP (Del. Super. April 30, 2009)
This case illustrates the exception to the statute of frauds of "substantial part performance."
The seller of a $5MM home, and other items, brought a breach of contract action, because the buyer backed away. The buyer moved to dismiss on the grounds that there was no meeting of the minds, and, in any case, the statute of frauds bars enforcement of such a handshake agreement.
But the Superior Court denied the motion to dismiss, holding, among other things, that the fact that the buyer took possession and began making modifications to the home supported an inference that there was substantial part performance, an exception to the statute of frauds.
Nemec v. Shrader, C.A. 3878-CC (April 30, 2009)
A contract right does not create a fiduciary duty. Here the plaintiffs had a contract that gave their former employer the right to buy back company stock at book value. The employer did so on the eve of a big transaction, greatly increasing the company's book value. The Court held that plaintiffs' contract did not give them the right to insist that the company hold off on stock redemption until the big deal was done.
Ivize of Milwaukee, LLC v. Compex Litigation Support LLC, C.A. 3158-VCL (April 22, 2009)
While a statement may not be a lie unless the speaker knows he has failed to tell the truth, a contractual representation does not require knowledge that it is false for it to be actionable if untrue. This decision then puts to rest the argument that scienter is needed to prove a breach of a contractual representation.
Lynch v. Coinmaster USA, Inc., C.A. No. 06-365-JJF (D. Del. Mar. 30, 2009)
In this opinion, the court denied a broad application of the ultra vires doctrine. Seeking damages for breach of an employment agreement with Coinmaster USA, Inc., the plaintiff claimed that he was owed outstanding monthly pay, a termination fee, profits, and stock options. Moving for summary judgment, the defendants argued, inter alia, that the agreement was void ab initio in light of the plaintiff’s pre-existing employment agreement with Coinmaster Gaming PLC, a company related to Coinmaster USA, Inc. The defendants cited Solomon v. Armstrong, 747 A.2d 1098 (Del. Ch. 1999), noting that ultra vires acts are void ab initio. Although the court was not entirely clear on the defendants’ position, the court ascertained that the defendants were arguing that the plaintiff, by contracting with Coinmaster USA, Inc. for additional compensation, breached the Coinmaster Gaming PLC agreement and, hence, breached a fiduciary duty to Coinmaster PLC. Under Solomon, the defendants claimed that such a contract is ultra vires and, therefore, void ab initio.
Rejecting the defendants' argument, the court found that the Coinmaster USA, Inc. agreement was not void ab initio. Delaware law severely restricts the categories of claimants who can raise the ultra vires defense. The defendants cited no cases, and the court could not identify any authority, suggesting that such a contract was ultra vires and, hence, void ab initio merely because it conflicts with a contract involving a third party. Finding that Solomon does not stand for this proposition, the court denied the defendants’ motion for summary judgment with respect to the plaintiff’s breach of contract claim.
United States Magistrate Judge Leonard P. Stark denied Tyson Refrigerated Processed Meats, Inc.’s (“Tyson”) motion for partial summary judgment of Zwanenberg Food Group (USA) Inc.’s (“ZFG”) contract-based claim that Tyson breached the implied covenant of good faith and fair dealing.
Both Tyson and ZFG are producers and manufacturers of canned meats and other food products. Pursuant to the contract at issue, ZFG purchased from Tyson inventory and equipment used to manufacture canned luncheon meat for private label customers. Wal-Mart Stores, Inc. (“Wal-Mart”) was Tyson’s largest customer for the goods it produced using the assets that were sold to ZFG. Tyson and ZFG, without the involvement of Wal-Mart, executed an Asset Purchase Agreement (“APA”) and the deal closed.
Continue Reading...It is sometimes difficult to decide when a writing is an enforceable contract or merely an agreement to agree. This decision sets out the methodology to decide that question. Particularly important is the way that other businesses operate in the same field for that may provide guidance on how to “fill in the blanks.”
Christ v. Cormick, 2008 WL 4889127 (D. Del. Nov. 10, 2008)
In this opinion the Court sanctioned the defendant’s conduct, including discovery abuse, by awarding punitive damages. The Court first entered default judgment against the defendant after his “repeated dilatory discovery conduct and his refusal to appear for deposition.” The plaintiff sought punitive damages in addition to compensatory damages, and the Court found that the entry of default did not preclude awarding punitive damages. The failure to appear for deposition was “but one example of the kind of willful conduct that requires an award of punitive damages.” The plaintiff also sought attorneys’ fees and expenses both for the Delaware action and proceedings in South Africa. The Court, however, denied this claim, finding that an award for fees in the South African litigation was unsupported by law, and the summary information submitted for fees for the Delaware proceeding was inadequate as a matter of law because it did not allow the Court to make a thorough analysis of the time records.
Kempski v. Toll Bros., Inc., 2008 WL 4642633 (D. Del. Oct. 21, 2008)
In this opinion, the District Court reinforced Delaware’s law that indemnity provisions that require one party to indemnify another party for the second party’s own negligence are void as against Delaware’s public policy. Here the Defendant, Toll Brothers, Inc., contracted with Delaware Heating and Air Conditioning Services, Inc. (“DHAC”), to perform HVAC work on Defendant’s housing developments. One of DHAC’s employees was injured while performing the work, and sued Defendant. Defendant sought indemnification from DHAC pursuant to their contract. Both Defendant and DHAC sought summary judgment on the indemnification claim. The Court found that under Delaware law, the contractual indemnification provision that Defendant sought to invoke was against Delaware public policy, and granted summary judgment for DHAC.
Continue Reading...Capano Homes, Inc. v. Syed, 2008 WL 4182039 (Del. Super. Ct. Sept. 8, 2008).
This decision implements the objective theory of contracts adopted by the Delaware courts. The dispute involved a homebuyer who refused to proceed to settlement, claiming that the builder breached their written agreement and that the buyer should therefore be excused from performing. The homebuyer alleged that the completed home did not meet the parties’ agreed upon specifications for the dimensions of the garage and type of veneer. The court granted summary judgment to the builder.
Continue Reading...This decision briefly reviews the three types of authority by which an agent may bind a principal: actual authority, implied authority, and apparent authority. The principal was a limited liability company, which failed to pay the vendor it purportedly engaged to perform marketing services.
The issue that arose on summary judgment was whether the purported agent, who was removed as the general manager of the LLC two days before signing on behalf of the entity, had authority to bind the entity. The court denied the vendor’s motion for summary judgment, holding that it was up to a jury to determine that question based on the factual circumstances.
LaPoint v. Amerisourcebergen Corp., 2008 WL 2955511 (Del. Super. Ct. July 25, 2008).
This decision will counsel plaintiffs to seek indemnification under a contract during the underlying action for breach of that contract, and not to initiate a subsequent, separate action.
The plaintiff shareholders of a subsidiary brought an action against the parent company for breach of the merger agreement between the two companies. The plaintiffs prevailed in that action and were awarded damages. They sought attorneys’ fees and costs, but the Court of Chancery’s final order did not address that issue.
After the final order and judgment was entered, the plaintiffs requested reimbursement for their attorneys’ fees, pursuant to the indemnification provision in the merger agreement. When the defendant refused, the plaintiffs filed this action in Superior Court.
Continue Reading...Gay v. Delmarva Pole Bldg. Supply, Inc., 2008 WL 2943400 (Del. Super. Ct. July 18, 2008).
This case will give pause to contracting parties who consider taking on responsibilities beyond the written terms of the contract.
Here, the parties entered into a contract for the construction of a building. The property owner made a down payment to the builder, pursuant to a contract which placed the responsibility on the property owner to make sure the location did not conflict with any building code or zoning ordinance. But the proposed use violated the zoning code, so a variance was needed.
Continue Reading...Segovia v. Equities First Holdings, LLC, 2008 WL 2251218 (Del. Super. Ct. May 30, 2008).
This decision offers predictability to parties entering into straightforward secured loan transactions under Delaware law. It assures that a security interest will not be treated as a conveyance of legal title. And, it prescribes that if a party intends for a transaction to result in the conveyance of rights to the secured lender greater than a security interest, then that party must set forth crystal clear and unequivocal language in the parties’ contract.
Continue Reading...Solae, LLC v. Hershey Canada Inc., 2008 WL 2011914 (D. Del. May 9, 2008)
Solae LLC (“Solae”), a Delaware LLC with a principal place of business in Missouri, brought a declaratory relief and breach of contract action in Delaware District Court against Hershey Canada, Inc. (“Hershey Canada”), a Canadian corporation with its principal place of business in Ontario. The claims arose out of a contract for Solea’s provision of soy lecithin to Hershey Canada’s Ontario facility. A shipment of the product contained salmonella, prompting a recall of Hershey Canada’s product in Canada and a Canadian government investigation. Hershey Canada informed Solae that it was liable for any ensuing damages from the recall and investigation, and also refused to accept or pay for additional deliveries of the product under the contract. Solae thereafter initiated this declaratory relief and breach action, and Hershey Canada sought dismissal, among other things, on lack of personal jurisdiction grounds.
Continue Reading...Wilmington Trust Co. v. Tropicana Entertainment LLC, C.A. 3502-VCN (Del. Ch. February 29, 2008)
The Court of Chancery rarely interprets bond indentures; so in the spirit of the date of this decision, the Court did so here. What is particularly interesting about this case is the way the Court reasoned to the result. While focusing on the specific language of the indenture, the Court did not hesitate to apply that language to circumstances that probably were not considered by the drafters. In this very un-Justice Scalia way, the Court held the indenture was violated.
The lesson here is that the Court is very realistic about what language should mean in the business world. It will not be swayed by hyper-technical interpretations that are not what the drafters would have said had they focused on the circumstances at hand. This does not mean that the Court will stretch language beyond what it really means, however. Instead, a sort of middle ground of interpretation is the mark of Delaware law in this regard.
Millett v. Truelink, Inc., 2008 WL 345937 (D.Del. Feb. 7, 2008)
In this opinion the District Court granted the provider of a credit report monitoring service summary judgment on claims that it violated state consumer protection provisions and contractual obligations. Plaintiffs, who were spouses, had purchased a subscription to Defendant’s service, and alleged that Defendant failed to alert them to activity that resulted from theft of the husband’s social security number. Plaintiffs alleged that Defendant had violated Kansas’ Consumer Protection Act (“KCPA”) as well as breached the Credit Monitoring Member Agreement (“Member Agreement”) that Plaintiffs entered into when purchasing the service. Plaintiffs moved for class certification and summary judgment on their KCPA claims, and Defendant moved for summary judgment on the KCPA and several breach of contract claims. The Court found that neither the activity nor the advertising and marketing activities of Defendant were in violation of the KCPA provisions on unconscionable acts and practices, and Defendant was not in breach of the Member Agreement.
Continue Reading...Drexel v. Harleysville Ins. Co., 2008 WL 356938 (D.Del. Feb. 11, 2008)
Here the District Court evaluated a claim from an insured that a denial of coverage based on policy expiration constituted a breach of contract. The insured owned a property that sustained fire damage, and submitted a claim to Defendant, his insurer. The policy required annual renewal, but the insured did not submit the payment required for renewal until after both the policy expiration date and the subsequent grace period. However, the insured submitted his claim during the grace period, such that Defendant began to process the request and retain an adjuster and contractor. Defendant subsequently determined that the policy had expired prior to the insured’s claimed damages, and the insured had not submitted payment during the grace period. Defendant therefore denied coverage, and the insured sued on a theory of breach of contract, estoppel, and waiver. Defendant moved for summary judgment on all claims, while the insured moved for summary judgment on the breach claim.
Continue Reading...Mizel v. Xenonics, Inc., 2008 WL 116203 (Del. Super. Jan. 11, 2008).
This decision addresses the question of whether an expert can testify as to materiality under the securities laws. The moving party argued that materiality was an ultimate issue in this breach of contract action and thus could not be the subject of expert testimony, citing Hill v. Equitable Banks, 1987 WL 8953 (D. Del. 1987), a case in which the ultimate issue was whether certain alleged misrepresentations and omissions were material.
The court, however, distinguished this case from Hill, finding that materiality was not the core question before the jury. The critical issue was whether the plaintiff, a warrant holder, was prevented from exercising his purchase rights—a fact the company denied completely.
Continue Reading...Pharmathene Inc. v. SIGA Technologies. Inc., C.A. No. 2627-VCP (January 16, 2008).
Whether an agreement to agree may be enforced seems like an odd question. After all, if the parties really had an agreement then why not just say so and not use a term sheet or other vague type of "agreement to agree" to express their intent. This decision illustrates just why that may occur because the parties apparently were uncertain if they really wanted to bind themselves to one another just yet. Nonetheless, they did list all the essential terms of what they wanted in their contract in a term sheet and when they seemed to have acted to carry out their deal, the court here indicated it will enforce an agreement to agree when to let one party walk away seems inequitable.
MAA Real Estate LLC v. Patel, C.A. No. 06C-02-249 (Del. Super. Ct. Dec. 7, 2007).
In this breach of contract action, there was no written agreement, only an unsigned pricing sheet prepared by the contractor making the repairs. The court had to determine whether the parties nonetheless mutually assented to any of the terms on the sheet or otherwise entered into an oral contract.
The court held that there was no mutual assent to the items on the pricing sheet, as it did not state the specific materials required to complete the renovation. The customer could only show that the contractor represented that he would install non-skid tile flooring. That created an oral contract. By failing to install non-skid tile, the contractor breached the agreement.
The measure of damages was the cost of replacement and repair for the proper flooring.
United Rentals Inc v. RAM Holdings Inc. C.A. No. 3360-CC (December 12 and 21, 2007).
In these two decisions the Court of Chancery sets out how it will interpret a contract. Following the objective theory of contract interpretation, the court searches for the "common understanding" of the parties. It will not hear evidence of a party's subjective mental impressions or unilateral understandings.
However, the court will apply the "Forthright Negotiator Principle" when a contract is ambiguous. Under that approach, a reasonable interpretation of contract language of one of the parties will be binding on the other party to the contract if he knew or should have known of the other party's understanding and did not object to it when the contract was signed. Silence then may be fatal.
Appriva Shareholder Litig. Co., LLC v. EV3, Inc., -- A.2d --, 2007 WL 3208783 (Del. Nov. 1, 2007)
Deciding whether a motion to dismiss based on lack of standing is considered under Rule 12(b)(6) or 12(b)(1) has implications and has divided some courts. First, lack of subject matter jurisdiction under 12(b)(1) is non-waivable and can be raised by the court sua sponte, whereas failure to state a claim under 12(b)(6) must be raised by motion. Second, a 12(b)(6) motion for failure to state a claim may be converted to a motion for summary judgment, considering matters outside the pleadings, but a 12(b)(1) motion may not. In this consolidated appeal, the Supreme Court held that when the issue of standing is closely related to the merits, a motion to dismiss for lack of standing is properly considered under 12(b)(6) for failure to state a claim.
Continue Reading...Boerger v. Heiman, 2007 WL 3378667 (Del. Super. Oct. 31, 2007)
The three-year statute of limitations under 10 Del. C. § 8106, which begins to run at the time of the alleged breach in the case of a contract claim and at the time the injury occurs for a tort claim, may be tolled by, among other circumstances, the absence of observable factors that would place a layman on notice. This exception is called the date of discovery rule. When it applies, the statute of limitations begins to run when the defect is or should have been discovered.
In this legal malpractice action, the Superior Court held that the statute of limitations expired prior to the filing of the complaint and that it was not tolled because “multiple factors and plaintiff’s own statements indicate knowledge of the relevant facts which establish a potential claim . . . .” The plaintiff argued that the defendant attorneys fraudulently concealed his potential tax liability, but based on the evidence, the court concluded that the plaintiff should have discovered this fact, at the very least, by the time he hired an independent consultant who brought the matter to his attention.
Dubuque v. Taylor, 2007 WL 3106451 (Del. Super. Oct. 1, 2007)
This case demonstrates that a Delaware court will not consider extrinsic evidence of the parties’ intent at the time of entering an agreement if the terms of the document are unambiguous.
The buyer/plaintiff purchased a transmission business called Goodeal Discount Transmissions of Dover, Inc., thinking it was a sole proprietorship. But after the closing, the franchisor—not the seller—came knocking on the buyer’s door seeking unpaid franchise fees and stating the amount to be paid going forward. Soon thereafter, the buyer sued the seller/former owner for breach of contract for failing to disclose that the business was a franchise, for breach of the contractual warranties, and for fraudulent misrepresentation.
Seidensticker v. The Gasparilla Inn Inc., C.A. No. 2555-CC (November 8, 2007).
In this decision, the Court of Chancery has once again held that a contract means what it says, not what the parties say they subjectively intended. Thus, if the contract is unambiguous in its language, the Court will not accept explanations of what it was supposed to mean. Instead, the Court will enforce the contract as written. This opinion is useful for its review of recent case law that some have suggested adopted a "subjective" theory of contract interpretation under which, as the Cheshire Cat once said, "A word means what I say it means." Not so in Delaware.
XO Communications LLC v. Level 3 Communications Inc., C.A. No. 2131-VCL (November 2, 2007).
While the actual terms of a contract will control its meaning, there are occasions when legal rules will determine the result of a contract dispute. Here, the Court of Chancery noted the rule that in the case of a requirements contract, it is bad faith for the buyer to produce for its own use the materials that it committed to buy from the other party to the contract. The Court held that rule did not apply when at the time the requirements contract was entered into, the buyer had the means of producing the goods it had agreed to buy from the other party as well. In short, the requirement was not to use the producing party exclusively.
MBIA Ins. Corp. v. Royal Indem. Co., 2007 WL 3125319 (D.Del. Oct. 25, 2007)
In this opinion the District Court resolved cross-motions for summary judgment on the defendant’s counterclaim for breach of contract. The relationship between the plaintiffs and the defendant arose out of the underwriting of student loans. Student Finance Corporation (“SFC”) underwrote loans to students using funds from banks, then allegedly fraudulently issued “forbearance payments” in order to hide delinquent and defaulting loans. SFC transferred the loans to several trusts, which then issued fixed income notes, called Certificates, to investors. Plaintiff #1 was the trustee of trusts holding the securitized student loans. Defendant insured the loans that backed the Certificates with insurance policies that unconditionally guaranteed the students’ repayment of principal plus 90 days interest. Plaintiff #2 guaranteed payment of the Certificates in the event that the Defendant failed to honor its policies on the loans. Plaintiffs sued Defendant seeking to enforce its unconditional guarantee to repay the loans. Defendant counterclaimed against Plaintiff #1 for breach of contract, arguing that Plaintiff #1 did not adequately fulfill its oversight responsibilities under applicable Pool Servicing Agreements (“PSAs”) with respect to the servicing of the loans, and thus did not discover the allegedly fraudulent forebearance payments, resulting in Defendant engaging in continual transactions with SFC. Plaintiffs’ claim for enforcement of Defendant’s guarantee obligation was settled, leaving the Court only Defendant’s counterclaim to resolve.
Continue Reading...Norman v. Elkin, 2007 WL 2822798 (D.Del. Sept. 26, 2007)
In this action the District Court evaluated the application of the statute of limitations to claims that a corporate fiduciary engaged in self-dealing at the corporation’s expense. Plaintiff was a 25% shareholder in a closely-held Delaware corporation with Pennsylvania headquarters, formed to participate in the wireless communications industry. Defendant #1 owned the remaining shares of the corporation, and also served as its President and sole director. Plaintiff alleged that Defendant #1 breached his duties to the corporation when he personally obtained newly-issued communications licenses from the FCC, then sold them along with the corporation’s pre-existing licenses to a third party, keeping the proceeds of the sale himself. Plaintiff further alleged that Defendant #1 took the action without notifying Plaintiff in his capacity as a shareholder, without holding an annual meeting, and without making any disclosure of the sale. Plaintiff sued Defendant #1, along with his wholly owned corporation and another corporate officer, in the Delaware Court of Chancery for breach of contract, unjust enrichment, declaratory relief, and breach of various fiduciary duties. Defendants removed the action to District Court based on diverse citizenship and moved for summary judgment, arguing that all claims were time-barred.
Continue Reading...LaPoint v. Amerisourcebergen Corporation, C.A. No. 327-CC (September 7, 2007).
In this otherwise fairly common breach of contact case, the Court of Chancery has once again emphasized the importance of evidence that is contemporaneous with the parties' contract and their conduct. Explanations after the fact are viewed as much less convincing than, as in this case, emails created at the time when litigation was not on everyone's mind.
This case sets forth the appropriate measure of damages under a quasi-contract theory (in this instance quantum meruit): the value of the services provided, not the value of the benefit received.
The plaintiff made a typical business loan to the defendant to be paid back with interest, but also agreed to provide additional services to help the defendant avoid foreclosure on other loans, reduce the businesses debt load, and restore profitability. In return for these services, the defendant offered the plaintiff a partnership interest in the business.
But when the business improved, the defendant allegedly stopped working with the plaintiff—and eventually sold the business for a profit.
Continue Reading...Roarty v. Tyco Int'l Ltd. Group, 2007 WL 2248086 (D. Del. Aug. 2, 2007)
In this action alleging violations of ERISA and state contract law, Defendants moved to dismiss two of the claims under F.R.C.P. Rule 12(b)(6). Plaintiff’s husband was employed by one of the defendants. Plaintiff brought the action against the employer and its insurance company, alleging that Defendants wrongfully denied her claim under an employee welfare benefit plan after her husband was killed while on a business trip. She alleged that defendants wrongfully denied benefits under ERISA, breached fiduciary duties owed under ERISA, and violated state contract law. Defendants moved to dismiss the fiduciary breach and state contract claims. The Court allowed the breach of fiduciary duties claim, but dismissed the state contract claim.
Data Mgmt. Int’l v. Saraga, C.A. No. 05C-05-108, 2007 WL 2142848 (Del. Super. Ct. July 25, 2007).
Generally, a plaintiff bringing a claim based entirely upon the breach of a contract must sue in contract and is limited to contract remedies. No tort exists merely because a party breaches a contract—even if intentionally. But, the same conduct upon which the breach of contract claim is grounded may give rise to a tort claim if the conduct independently amounts to the breach of such an independent duty imposed by law. And with a tort claim comes the availability of punitive damages.
Homsey v. Vigilant Ins. Co., C.A. No. 07-338-JJF (D. Del. July 31, 2007)
In this action alleging, inter alia, bad faith breach of contract and consumer fraud, the defendant insurance company sought dismissal of those counts pursuant to F.R.C.P. Rule 12(b)(6) for failure to state a claim for which relief could be granted. Plaintiffs held an insurance policy with Defendant that contained provisions covering credit card fraud and check forgery. Plaintiffs submitted a claim pursuant to those provisions for over $250,000 in allegedly fraudulent credit card charges and forged checks. Nearly one year later, Defendant tendered payment of $10,000 for the claim, contending that this amount represented the maximum amount due under the policy. Plaintiffs argued that the policy provided broader coverage, and alleged that Defendant denied or delayed payment on Plaintiffs’ claim without reasonable justification. Defendants argued that there was a bona fide dispute as to the policy’s language, such that Defendant could not be found to have acted unreasonably. Defendant also argued that Plaintiffs did not plead consumer fraud with particularity. The Court denied Defendant’s motion, finding that Plaintiffs pled sufficient facts to state both the bad faith and consumer fraud claims.
Continue Reading...Christ v. Cormick, 2007 WL 2022053 (D.Del. Jul 10, 2007)
In this action for damages based on promissory estoppel, breach of contract, fraud and civil conspiracy, Plaintiff sued the founding member of a Delaware LLC (“Member Defendant”), as well as various foreign individuals and entities (“other Defendants”) associated with the Member Defendant. Plaintiff’s claim arose out of an alleged agreement with the Member Defendant to invest $350,000 in exchange for a 50% equity interest in a South African investment management corporation and a Delaware LLC which owned certain intellectual property rights. Plaintiff claimed that the Member Defendant accepted $250,000 from Plaintiff, but diverted the money to another entity he was affiliated with. Plaintiff further alleged that the Member Defendant promised to repay Plaintiff the $250,000 that was invested, but did not do so. The Defendants moved to dismiss the action under F.R.C.P. Rule 12(b)(2) for lack of personal jurisdiction. The Defendants also moved for dismissal of the conspiracy claim under F.R.C.P. Rule 12(b)(6) for failure to state a claim, and dismissal of both the fraud and conspiracy claims as being outside the statute of limitations. Finally, the Defendants moved for a stay of the action under principles of comity in favor of Plaintiff’s earlier filed action in South Africa.
Continue Reading...Alcoa Inc. v. Alcan Inc., 2007 WL 2083813 (D.Del. July 17, 2007)
In this action for declaratory judgment, Plaintiff sought a ruling that it was not liable to various Defendants for the clean-up costs associated with environmental contamination on a property Plaintiff formerly owned. Plaintiff sold the contaminated property to Defendant 1 pursuant to an acquisition agreement that provided for a 12 year indemnification for certain environmental liabilities. Defendant 1 then sold the property to Defendant 2 with a separate indemnification agreement. Defendant 3 later acquired Defendant 2 and its subsidiary. When Defendant 3 sought to sell the contaminated property to the city in which the property was located, the city first required, both as part of the purchase agreement and through a letter to Plaintiff, that the contamination be sufficiently remedied. Defendant 3 sought indemnification from Defendant 1, which then sought indemnification from Plaintiff. Plaintiff responded to the city’s letter that Defendant 3 was responsible for the clean up, and rejected Defendant 1’s indemnification demand under the argument that it was outside the scope of the acquisition agreement. Plaintiff sought declaratory judgment that it was not liable to any of the Defendants. Defendant 1 moved to dismiss under F.R.C.P. Rule 12(b)(7) for failure to join an indispensable party, arguing that Plaintiff should have joined the city.
Continue Reading...Alcoa Inc. v. Alcan Inc., C.A. No. 06-451-SLR (D.Del. July 17, 2007)
In this action for declaratory judgment, Plaintiff sought a ruling that it was not liable to various Defendants for the clean-up costs associated with environmental contamination on a property Plaintiff formerly owned. Plaintiff sold the contaminated property to Defendant 1 pursuant to an acquisition agreement that provided for a 12 year indemnification for certain environmental liabilities. Defendant 1 then sold the property to Defendant 2 with a separate indemnification agreement. Defendant 3 later acquired Defendant 2 and its subsidiary. When Defendant 3 sought to sell the contaminated property, the contamination was detected. Defendant 3 sought indemnification from Defendant 1, which then sought indemnification from Plaintiff. Plaintiff rejected the indemnification demand under the argument that it was outside the scope of the acquisition agreement, and sought declaratory judgment that it was not liable to any of the Defendants. Defendant 3, a Canadian corporation, moved to dismiss for lack of personal jurisdiction.
Continue Reading...Centreville Veterinary Hospital Inc. v. Butler-Baird, C.A. No. 1552-VCP (July 6, 2007).
Second thoughts sometimes reach the right conclusion. The problem, however, is that they may get there too late. This decision holds that once a contract offer is made, the rejection of that offer revokes the power to change your mind and later accept the offer. Based on the reasoning of the Restatement of Contracts (2nd) Section 38, the Court noted that rule works both ways and is grounded on the need to have a bright line test in such matters.
AT&T Wireless Services, Inc.v. Federal Insurance Company, C.A. No. 030-12-232-WCC (June 25, 2007).
What law applies is often a thorny issue in complicated business cases. It is even more complicated when tort and contract claims are mixed together. Throw in a merger or two and it is a real mess. Here, the Superior Court has cut through this fog to decide that one state's law applies in the whole litigation.
First, the Court determined that the principles of the Restatement of Conflict Section 188 that governs choice of law in contract cases would apply. This was done even though tort claims were also raised by the complaint. The Court reasoned that as the tort claims were based on the existence of the contract, it met the parties' probable expectations to apply contract choice of law principles.
In doing so, the Court focused on the principle place of business of the insured in this contract dispute with its insurers. While that is one of the five factors set out in the Restatement, the Court gave it great weight under the unusual circumstances of this case.
Gallagher v. E.I. Du Pont de Nemours & Co., C.A. No. 07-47-JJF (D. Del. June 19, 2007).
In this suit for breach of contract, specific performance, and wages under the Delaware Wage Payment and Collection Act, Plaintiff filed the action in Superior Court. Defendant subsequently filed Notice of Removal to the District Court, asserting that the state law claims were completely preempted by ERISA. The Court held that Plaintiff’s claims did not implicate ERISA, and no grounds existed for federal jurisdiction. Plaintiff’s Motion to Remand to Superior Court was therefore granted.
Continue Reading...Seidensticker v. The Gasparilla Inn Inc., C.A. No. 2555-CC (June 17, 2007).
Agreements among stockholders of privately held companies usually restrict the sale of company stock and give the other stockholders a right of first refusal. As with any contract, these agreements will be enforced by Delaware courts in accordance with their terms and not as the stockholders may wish years later when a dispute arises. Here, the Court enforced the time limits set out in such an agreement for when the option to acquire a fellow stockholder's shares must be exercised.
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CIT Commc’ns Fin. Corp. v. Level 3 Commc’ns, LLC, 2007 WL 951799 (D.Del. Mar. 29, 2007).
In this suit alleging breach of contract, unjust enrichment and conversion, Plaintiff moved for the District Court to remand the case to Delaware Superior Court, asserting that the District Court did not have subject matter jurisdiction. Plaintiff leased a telephone system to a company that later filed for bankruptcy. Through that bankruptcy, Defendants acquired the telephone system lease from the debtor, and the debtor was later liquidated pursuant to the Bankruptcy Court’s Confirmation Order. After the dissolution, Plaintiff filed several claims in the bankruptcy proceedings related to lease payments due by the debtor prior to Defendants’ acquisition of the lease. Plaintiff later filed the breach of contract, unjust enrichment and conversion claims against Defendants in the Delaware Superior Court, based on non-payment of Defendants’ non-payment of obligations under the acquired lease. Defendant filed notice of removal of the suit to federal court, alleging that the claims were pending in, and therefore related to, the bankruptcy proceedings, such that the District Court had subject matter jurisdiction over the claims. In seeking remand, Plaintiff argued that the claims against Defendants existed independent of the bankruptcy, such that the federal court did not have subject matter jurisdiction.
Continue Reading...Wilmoth v. Kuhn, No. 06A-10-002-JEB, 2007 WL 925616 (Del. Super. Ct. Mar. 28, 2007).
Homebuyer entered into contract with defendant builder for purchase of a lot and construction of a home. The contract provided that the buyer’s obligations were contingent on being able to install an in-ground pool according to the buyer’s specifications. If such a pool could not be installed, the buyer could terminate and the seller had to return the deposit.
A month after the buyers signed the contract, they informed the seller that they were unable to build a pool of their choice and thus were terminating the agreement. They asked the seller to return their $50,000 deposit. The seller rejected the termination and refused to turnover the funds.
Continue Reading...Brasby v. Morris, No. 05C-10-022-RFS, 2007 WL 949485 (Del. Super. Ct. Mar. 29, 2007).
A homebuyer brought this suit for breach of contract, negligence, and fraud after the builders delayed construction of his new modular home. The initial sales contract did not set a date for completion, but the parties entered into a subsequent, separate agreement setting a specific deadline. The defendants assured plaintiff they would finish by this date, but the buyer became concerned upon learning that no physical structure had been erected. So he demanded written assurance of timely performance or return of his deposit. The defendants responded, but informed the buyer that construction was 30 days behind schedule.
The plaintiff, then, filed a complaint with the Delaware State Police seeking return of his deposit. And, the builders returned most of it. Soon thereafter, the buyer brought this action in Superior Court, and the builders moved for summary judgment.
Continue Reading...Viking Pump, Inc .v Liberty Mutual Insurance Company, C.A. No. 1465-VCS (Del. Ch. April 2, 2007).
Perhaps no rule of contract construction is more often applied to ambiguous contracts than the rule that the parties' actions show their intent. This decision applies that maxim with full force to decide the parties' obligations over a 20 year old dispute on insurance coverage.
While this decision turns on its unique facts, the Court's reasoning illustrates a method of proceeding that has implications for all contract disputes. First, the Court carefully considered the business problems faced by the parties at the time they entered into their contract. Next it considered how a rational business would have resolved those problems to fit the business needs. Then the Court reviewed what the parties actually did as evidence of what they intended their contract to mean.
Rimmax v. RC Components, Inc., 2007 WL 521214 (D.Del. Feb. 21, 2007).
Plaintiff asserted breach of contract, fraud, and intentional interference with contractual relations, arising out of a purported agreement between the parties to manufacture wheel covers for motorcycles. Under Plaintiff’s theory, Plaintiff and Defendant agreed to manufacture the covers based on allegedly confidential information and proprietary technology that Plaintiff provided. Plaintiff asserted that Defendant breached their contract to manufacture and supply the covers, then misappropriated Plaintiff’s confidential information, proprietary technology, and actual and potential contractual relations. The District Court of Delaware granted Defendant’s motion for summary judgment, finding that Plaintiff had not provided sufficient evidence on any of its claims to withstand the motion.
Continue Reading...Chase Manhattan Bank v. Iridium Africa Corp., 2007 WL 518440 (D.Del. Feb. 16, 2007)
In this breach of contract case, the defendant members of a bankrupt LLC asserted various defenses to their alleged contractual obligation to make capital contributions after the bankruptcy. The plaintiff lender had made an $800 million dollar loan to the LLC, and asserted that the members were contractually obligated to continue capital contributions despite the bankruptcy. The District Court entered summary judgment for the plaintiff on its breach of contract claim, but delayed entering final judgment until the parties could brief remaining “open issues”. The defendants argued that the plaintiff’s alternate theory of recovery should be dismissed as moot prior to a final entry of summary judgment for the plaintiff, that the plaintiff was not entitled to attorneys’ fees, and that the Court’s grant of summary judgment had left unresolved various defenses asserted by the defendants. The Court concluded that the entry of summary judgment was appropriate without addressing the plaintiffs’ alternate theories of recovery and did not leave any defenses unresolved, and that the plaintiff was contractually entitled to attorneys’ fees. The Court therefore found that the entry of final judgment for the plaintiff was appropriate.
Continue Reading...Creedon Controls, Inc. v. Banc One Bldg. Corp., 2007 WL 149002 (D.Del. Jan. 22, 2007)
In this opinion, the District Court granted one co-defendant’s motion for summary judgment while denying the other’s. Defendant Banc One was involved in construction of two data centers, and contracted with Defendant Forest to coordinate all electrical power and data connections work on the project. Forest then contracted with Plaintiff as an electrical subcontractor on the project. Plaintiff later filed suit against both defendants, alleging that their inefficiency and improper behavior resulted in significant delays and cost increases. Banc One moved for summary judgment as to Banc One because it had no contractual relationship with Plaintiff and no agency relationship with Forest could be established, and therefore it was not liable for damages to Plaintiff. Forest moved for partial summary judgment, arguing that its contract with Plaintiff expressly precluded damages for delay, and that it was merely an agent of Banc One and therefore could not be held liable for damages. The court granted Banc One’s motion, finding that there was no contractual relationship with Plaintiff and no jury could reasonably find that Forest served as Banc One’s agent. The court denied Forest’s motion, however, finding that there were genuine issues of material fact as to how the alleged delays arose and whether the contract provision precluding delay damages was enforceable.
Continue Reading...Rimmax Wheels LLC v. RC Components, 2007 WL 81829 (D.Del. Jan. 9, 2007)
In this order denying Defendant’s motion to transfer venue, the District Court reviewed the applicable standards and guidelines employed to evaluate motions to transfer. Plaintiff, a Delaware limited liability company holding patents for motorcycle rims, sued Defendant, a Kentucky corporation engaged in the manufacturing of motorcycle rims, for breach of contract, fraud, and intentional interference with contractual relations. Defendant moved for transfer of venue to the Western District of Kentucky, contending that it was the locale of the parties’ contractual negotiations, Defendant’s business, and two essential witnesses who refused to appear in Delaware to testify. After reviewing the standards developed by the U.S. Supreme Court, Third Circuit Court of Appeals, and District Court of Delaware, the court denied Defendant’s motion to transfer, finding that Delaware had a substantial connection to the case.
Continue Reading...Cypress Associates LLC v. Sunnyside Cogeneration Associates Project C.A. No. 1607-N (Del. Ch. January 17, 2007).
It is often plead that a party to a contract has acted unreasonably in withholding consent if the contract requires for the other party to take certain action. This decision holds that such a pleading, even as an affirmative defense where vagueness is a tradition, must state facts that support the claim. The opinion is also enlightening in applying long settled corporate law principles that a party to a contract has the right to act in its own self-interest in exercising its contractual rights.
Continue Reading...Psilos Group Partners, L.P. v. Towerbrook Investors L.P., C.A. No. 1479-N (Del. Ch. January 17, 2007).
When the terms of a contract do not quite cover what one party, in retrospect, wished was included, there is a great temptation to argue the court should rewrite the deal to include what the disappointed party wants. Naturally, the courts reject such attempts, as in this case, when the other party to the contract objects to its rights being altered after the fact. This case illustrates this scenario. The court's method of analysis included not just reviewing the contract terms, but understanding the economics behind the deal. These facts show that the "reformation" the plaintiff sought would not have been agreed to had the parties thought about it when the contract was signed. That is important in denying the claim to change the contract terms, absent fraud or mistake.
Continue Reading...PNC Bank v. Sills, 2006 WL 3587247 (Del. Super. Ct. Nov. 30, 2006)
In this opinion denying Defendants’ motion to vacate confessed judgment against them, the Superior Court examined whether the Defendants had satisfied any of the considerations relevant to whether an entry of confessed judgment should be vacated. Defendants guaranteed a loan that Plaintiff made to a Delaware limited liability company for a boat. Plaintiff recorded a mortgage on the boat, and upon the limited liability company’s default, initiated proceedings in Superior Court to confess judgment against Defendants. After Defendants failed to appear to object to the entry of judgments, the Court issued final judgments against them. The mortgaged boat was then sold at a court approved judicial sale for less than the outstanding loan balance, and Plaintiff initiated proceedings to execute upon the confessed judgment to recover the deficiency. Defendants filed an objection to execution and the motion to vacate the confession of judgment under Superior Court Rule 60(b). The Court found that Defendants had received proper notice of the confessed judgment, had no meritorious defense to the confessed judgment, and did not use reasonable diligence in filing the motion to vacate. The motion was therefore denied.
Continue Reading...In this fact intensive decision the Court of Chancery reviewed the Delaware law on contract construction and remedies. It upheld the general rule that the unilateral mistake of one party to a contract that is not known by the other party will not justify the cancellation of the contract on the basis of that mistake.
Tropical Nursing, Inc. v. Ingleside Homes, Inc., 2006 WL 3579075 (Del. Super. Ct. Dec. 11, 2006).
In this opinion granting Defendant’s motion for summary judgment, the Superior Court evaluated the liquidated damages provision contained in Defendant’s contract with Plaintiff. Plaintiff had a non-exclusive agreement with Defendant to provide temporary nursing employment services to Defendant on an “as needed” basis. Timecards that the temporary nurses were required to have signed by Defendant contained a clause that restricted Defendant’s ability to hire the nurses, and provided for a “work release payment” in the event that Defendant breached that was equivalent to 500 times the hourly billing rate for the employee. Defendant sought a ruling from the court that the provision was an unenforceable penalty clause. The Superior Court found that the provision did not meet the standards for an enforceable liquidated damages clause, and therefore granted Defendant’s motion for summary judgment.
Continue Reading...Tropical Nursing, Inc. v. Accord Health Serv., Inc., 2006 WL 3604783 (Del.Super. Ct. Dec. 7, 2006).
In this breach of contract case, the Superior Court found that Defendant became contractually bound to Plaintiff based on actual and apparent authority it granted to both its permanent and temporary employees, and subsequently breached those contracts. Plaintiff was a provider of temporary nursing staff, and supplied temporary nurses to Defendant’s healthcare facility. Plaintiff’s contract claim was based on the terms provided for on the back of the temporary nurses’ timecards, which stated that Defendant would not interfere with the temporary nurse’s contractual relationship with Plaintiff, and if it did so Defendant would immediately pay a “work release payment”. Plaintiff alleged that Defendant breached these contracts with respect to 14 former employees of Plaintiff’s that Defendant had hired. Defendant argued that the nursing supervisors who signed the timecards did not have the authority to contractually bind Defendant to their terms. The Court found that Defendant had in fact given the supervisors actual and apparent authority to bind Defendant to the terms of the timecards, and Defendant was therefore in breach when it did not honor those terms.
Continue Reading...Tulstar Prods., Inc. v. Ionsep Corp., 2006 WL 3604782 (Del. Super. Ct. Dec. 7, 2006)
In this breach of contract case, the Superior Court evaluated Defendant’s counterclaim that it had an exclusive distributorship contract with Plaintiff that was breached, thus entitling it to offset the amount of that contract from any amount owed to Plaintiff. Plaintiff, a chemical distributor, sued Defendant, a chemical process developer, alleging that Defendant owed almost $175,000 in past due invoices for orders of Plaintiff’s product. Defendant counterclaimed that Plaintiff owed Defendant $250,000 under the alleged exclusive distributorship contract. After reviewing the testimony and evidence produced at trial, the Superior Court found that there was inadequate support for a finding that the parties had agreed to an exclusive distributorship contract, and therefore awarded Plaintiff its claimed damages for the past due invoices, and dismissed Defendant’s counterclaim with prejudice.
Continue Reading...Pisano v. Delaware Solid Waste Auth., C.A. No. 05-C-03-132-FSS (Del. Super. Nov. 30, 2006).
In this opinion granting Defendant’s motion for summary judgment, the Superior Court rejected Plaintiff’s argument that Defendant had breached an alleged contract with Plaintiff to sell used waste-processing equipment, and found that Plaintiff’s argument that Defendant granted apparent authority to a third party to sell the equipment unconditionally lacked merit. Plaintiff alleged that he had entered into an unconditional contract with a third party serving as Defendant’s agent to acquire the equipment for $150,000, and that Defendant breached that contract when it later sold some of the equipment to another party. Defendant argued that it did not have a contractual relationship with Plaintiff, and that Plaintiff’s argument that the third party had authority to act on Defendant’s behalf was clearly unfounded. The Superior Court concluded that even viewing the facts in a light most favorable to Plaintiff, there was no basis for a jury to determine that Defendant had breached any contract with Plaintiff or had given the third party authority to act on Defendant’s behalf.
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Pell v. E.I. DuPont de Nemours & Co. Inc., Civil Action No. 02-21 KAJ, 2006 WL 3391375 (D. Del. Nov. 22, 2006).
Plaintiffs filed a Motion for Reconsideration and/or Alteration in Judgment pursuant to Fed.R.Civ.P. 59(e). The Court had earlier found for plaintiffs under an equitable estoppel theory of relief involving misrepresentation but had denied the plaintiffs’ request for restitution for unduly low pension payments made to him. Plaintiffs now sought to have the Court reconsider its earlier holding that the defendants did not owe them compensation for unduly low pension payments because - allegedly - the Court had viewed the governing ERISA provision – Section 502(a)(3) - more restrictively that the Supreme Court did in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002).
The Court denied the motion because there were no grounds presented for reconsideration. Specifically, the Court noted that the motion failed because the plaintiffs did not demonstrate: (1) an intervening change in the controlling law; (2) that new evidence was available; or (3) that there was clear error of law or fact present on the record or to avoid causing manifest injustice. Here, plaintiffs sought to implicate the “clear error of law or fact” provision but did not discharge the high burden required to prevail on such a motion. Accordingly, the Court denied the motion.
Allied Capital Corporation v. GC-Sun Holdings, LP, C.A. No. 1954-N (Del. Ch. November 22, 2006).
This is the first decision that applies the law of civil conspiracy in the context of a parent and its subsidiaries. While there is authority that entities under common control cannot be held to have conspired together, that is not now the law of Delaware. This holding is particularly important in the way it may be applied to deal with coordinated conduct by related entities. The implications include that civil conspiracy may take the place of other legal theories, such as veil piercing, that previously were used to hold parent entities responsible for the wrongful conduct of their subsidiaries.
Continue Reading...Gibbs v. Fairbanks Capital Corp., C.A. No. 04C-06-258-JRJ (Del. Super. Nov. 20, 2006).
In this opinion denying Defendant’s motion for summary judgment, the Superior Court rejected Defendant’s argument that the affirmative defense of res judicata barred Plaintiffs’ claims for damages. Plaintiffs, residential mortgage customers of Defendant, sued for breach of contract, consumer fraud, defamation, and violation of the Uniform Deceptive Trade Practices Act. After Defendant failed to answer the complaint, the Court entered default judgment against it, and Defendant’s subsequent motion for an order vacating that judgment was denied. Defendant then moved for summary judgment as to Plaintiffs’ damages claims, arguing that res judicata barred the claims because Plaintiffs were class members in a similar suit in Massachusetts, and could not relitigate the same damages claims in the Delaware action. The Superior Court denied Defendant’s motion for summary judgment, concluding that it “[could not] assert res judicata as an affirmative defense under the particular circumstances….”
Continue Reading...Millennium Validation Services, Inc. v. Thompson, C.A. No. 02-1430 (GMS), 2006 WL 3159821 (D. Del. Nov. 3, 2006).
Plaintiff, a Delaware corporation, and defendant filed motions to vacate/modify and confirm the arbitration award respectively. The Court granted the defendant’s motion to confirm the award. Defendant Thompson and two others founded Millennium Validation Services, Inc. (“Millennium”) with equal shareholding. Due to some differences, the two other members sought to compel defendant Thompson to withdraw from Millennium, by triggering some clauses under their Shareholder Agreement (“Agreement”). Subsequently, plaintiff sought to buy-out the defendant’s shareholding, with its valuation computed under the Agreement. In the interim, the plaintiff discovered through its agents that defendant was allegedly violating the terms of his non compete provisions of the Agreement because he was employed by a competitor. Plaintiff therefore suspended its buy-out of his shares.
Plaintiff then filed suit for breach of contract and interference with prospective contractual relations and the defendant cross-claimed for breach of fiduciary duty. Thereafter, the parties stipulated to binding arbitration. The independent arbitrator denied the plaintiff’s claims for lost profits, breach of contract and tortious interference and ordered it to pay defendant a far greater amount representing the buy-out value of his shares and accumulated interest, in addition to a loan that the defendant had advanced the plaintiff company. The arbitrator declined to amend or modify the award and the above cross-motions ensued.
The Court held that the limited grounds on which the arbitration award could have been vacated were absent in the present matter. Here, the plaintiff alleged that the arbitrator had exceeded his powers by revaluing the shares of the defendant, a matter solely governed by the Agreement. This argument was dismissed because the parties had agreed to arbitration of the entire dispute – a term that included the valuation of the shares too. Similarly, the Court found that plaintiff’s non-compete violation and other claims failed to assert any grounds for vacating the arbitration award. Finally, the Court dismissed plaintiff’s argument that it was impermissible for the arbitrator to order a subsequent hearing to determine attorney fees and costs because there was no authoritative support for that contention.
Fuller v. Gemini Ventures, LLC, C.A. No. 05C-06-019-RFS (Del. Super. Ct. Oct. 2, 2006).
Plaintiff moved for summary judgment on its breach of contract claim, notwithstanding another agreement (the "Release") subsequently executed between the parties that purported to release each of them from any claims related to the contract and cancel the terms of the contract.
Continue Reading...This decision answers the question of when a minority shareholder may block a dividend payment pursuant to the authority to do so in the company's certificate of incorporation. The Superior Vision charter provided that a dividend could not be paid absent the consent of 2/3 of the shareholders. As a 44% owner, the defendant refused to consent to the dividend. The company sued alleging that the defendant had violated a fiduciary duty to consent to the dividend and its duty of good faith and fair dealing.
The Court first held that absent actual control over the board of directors, a minority shareholder would not be deemed to be in control of the board just because it can block a board decision to pay a dividend. As a result, the Court concluded that the defendant did not owe a fiduciary duty to the company or its shareholders. In addition, the Court held that when, as here, the certificate of incorporation confers a power to veto a transaction and does not condition the exercise of that right, then there is no duty to act reasonably in that regard. Hence, the duty of good faith and fair dealing was not implicated and the Court dismissed the complaint.
Continue Reading...Plaintiff entity controlled by certain former stockholders of acquired corporation sued acquirer alleging breach of merger agreement and fraud. Upon motion by defendant acquirer, the court dismissed the action on ground that plaintiff lacked standing.
The court noted that the merger agreement appointed two individuals as shareholder representatives who were required to act in concert, one of whom the complaint reflected was not affiliated with plaintiff in any way. The court also noted that the merger agreement did not permit assignment of the shareholder representatives' rights without defendants' consent, which was never given. Finally, the court rejected plaintiff's argument that it be permitted to bring the action as a third-party beneficiary as inconsistent with the merger agreement's express terms.
Moore v. O'Conner, C.A. No. 01C-02-103 MJB, 2006 WL 2442027 (Del. Super. Ct. Aug. 23, 2006).
Doctor sued former colleague for money allegedly owed pursuant to agreements the parties entered into upon the separation of their ophthalmology practice. Defendant counterclaimed for various alleged breaches of those same agreements, including (1) plaintiff's alleged misfiling or changing the labels on defendant's patients charts to reflect plaintiff as the treating physician; (2) plaintiff's alleged promise not to operate under the parties' prior trade name; (3) plaintiff's failure to return to defendant any of the amounts he paid to join the practice; (4) plaintiff's failure to list defendant as a Medicare provider; and (5) plaintiff's failure to include an agreed-upon automated telephone message on her office telephone.
After trial and post-trial briefing, the court held that defendant was bound by the parties' agreement even though he was not aware of several of the terms at issue, including a provision requiring defendant to pay plaintiff a $30,000 "good will payment." The court also rejected most of defendant's counterclaim, finding no evidence of much of the alleged misconduct. The court did find, however, that plaintiff's failure to include an agreed-upon automated telephone message on her office telephone was a breach of the parties' agreement and that defendant's loss of patients was directly attributable to that breach. The court awarded defendant $128,102 in actual damages on this basis.
Plaintiff sued defendant medical facility for breach of an alleged oral agreement under which plaintiff was to serve as defendant's medical director from October 1, 2003, until October 1, 2004. Plaintiff claimed that this oral agreement was made on September 4, 2003. The court granted defendant's motion for summary judgment on the ground that, even if it had reached an oral agreement with plaintiff, such agreement would be unenforceable under the statute of frauds because it could not be performed within a year.
Continue Reading...The Court of Chancery frequently is called upon to interpret a corporate certificate of incorporation. In this decision, the Court held that a certificate provision permitting a corporation to withhold a reserve for contingent liabilities in connection with calculating the liquidation preference for preferred shareholders did not automatically authorize the board to hold back the highest possible amount, even if doing so was unreasonable based on objective factors. The Court also held that the authority granted by 8 Del C. §281 to hold back a reserve for continent liabilities did not authorize the board to do so under the charter. Instead, the terms of the certificate need be interpreted on its own terms.
Continue Reading...Horizon Personal Communications, Inc. v. Sprint Corp., C.A. No. 1518-N, 2006 WL 2337592 (Del. Ch. Aug. 4, 2006).
There is no duty that is more often cited and so little understood as that requiring a contracting party to act in good faith and deal fairly with the other contracting parties. In this case the Court of Chancery exhaustively examined the contract between the parties, determined what was required to act in good faith, and fairly awarded an injunction to preclude a breach of that duty. In doing so, the Court's analysis provides a road map for tracking the duty to act in good faith in the performance of a contract.
Continue Reading...This decision upholds for the first time the defense to a contract claim that the plaintiff has acted in bad faith in the performance of the contract. It has long been recognized that all contracts include the obligation to act in good faith and to deal fairly. Exactly what that means is more difficult to state. In what it characterized as a case of first impression, this decision holds that the so-called covenant of fair dealing may be raised as a defense in a breach of contract case. Because this is an affirmative defense, the lack of fair dealing must be proved by the defendant.
Continue Reading...Plaintiff sued former employer for breach of contract and wrongful discharge. The court ruled that plaintiff had resigned pursuant to a resignation agreement between the parties, which was binding upon both parties. The court also ruled, however, that the employer had failed to make severance payments required under that same agreement. After granting the employer a set off based on property that plaintiff took with him when he left and unemployment benefits plaintiff received, the court found that plaintiff was entitled to approximately $18,000.
Eureka VIII LLC v. Niagara Falls Holdings LLC C.A. No. 1203-N, 899 A.2d 95 (Del. Ch. June 6, 2006).
This case illustrates the ability of the Court of Chancery to fashion a remedy that is non-traditional and fits the exact circumstances of the case before it. Here the remedy for the breach of a LLC agreement is to hold the breaching party, who is no longer a member in the LLC but only an assignee, with limited rights.
Continue Reading...Kevin McGovern, et. al. v. General Holding, Inc., et. al., C.A. No. 1296-N (Del. Ch. June 2, 2006).
In this action to recover for the diversion of partnership property, the Court of Chancery fashioned a unique remedy by ordering that the partnership be sold by a receiver so as to realize the special value of its technology.
Continue Reading...Federal Insurance Company v. Lighthouse Construction, Inc., 230 F.R.D. 387 (D. Del. 2005).
A property insurer brought a subrogation action against a building contractor to recover for loss caused by a roof collapse. The contractor sought leave to filed third-party complaint against erection contractor. Insurer also sought leave to filed a claim against it.
The District Court held:
(1) the contractor was entitled to add third-party claim of contractual indemnification against erection contractor;
(2) the insurer could not assert claim against third-party defendant after expiration of two-year statute of limitations; and
(3) insurer's amendment of complaint to add erection contractor would not relate back to subrogation action against building contractor.
Unisuper Ltd. v. News Corp., C.A. No. 1699-N, 2006 WL 1550809 (Del. Ch. May 31, 2006)
News Corporation shareholder objected to settlement, arguing the release was overly broad.
Continue Reading...Plaintiffs and defendants brought cross-motions for summary judgment on claims arising from disputes over interpretation of limited partnership agreement ("LPA").
Continue Reading...Childcraft Education Corp. v. Alice's Home, et al., C.A. No. 05-461 (GMS) (D. Del. May 22, 2006).
Plaintiff filed complaint alleging breach of contract, miappropriation of trade secrets and unjust enrichment claims. Defendants moved to dismiss the action for lack of personal jurisdiction.
Continue Reading...Following the court's earlier decision granting defendant's motion to dismiss, the plaintiff moved for reargument. Because the court did not misapprehend the law or the facts in its previous decision, the motion for reargument was denied.
Continue Reading...Plaintiff Shadewell Grove IP, LLC sought declaratory judgment, specific performance and damages resulting from Defendant Mrs. Fields Franchising, LLC's alleged breaches of three licensing agreements.
Continue Reading...I.U. North America, Inc. v. A.I.U. Ins. Co., 896 A.2d 880 (Del. Super. Ct. 2006).
This case involved claims for breach of contract and for declaratory judgment and ancillary relief to determine the responsibility for payment of liabilities incurred as a result of numerous claims and actions seeking to recover damages allegedly due to exposure to asbestos resulting from the conduct of the plaintiffs. The plaintiffs, the insureds, argued that a settlement agreement to resolve coverage issues arising out of asbestos claims required insurer to indemnify insureds for payments on behalf of defaulting parties to settlements. The plaintiffs moved for summary judgment, and the Superior Court found that the settlement agreement did not require insurer to reimburse insureds for payments on behalf of defaulting parties.
Continue Reading...AES Puerto Rico, L.P. v. ALSTOM Power, Inc., C.A. No. 04-1282-JJF, 2006 WL 1154786 (D. Del. Apr. 28, 2006).
Plaintiff alleged that defendant breached an accelerated corrosion warranty in the parties' agreement and that plaintiff suffered damages as a result. Defendant moved for partial summary judgment, claiming that any warranty liability was subject to a condition precedent in the parties' contract, which condition was never met.
Continue Reading...This was an insurance coverage case involving Directors and Officers and Company ("D & O") liability policies purchased by plaintiff AT & T Corp. ("AT & T") and At Home Corp. ("At Home") from various primary and excess insurers. AT & T sought coverage, including indemnity, payment of defense fees, costs, and settlements or judgments, relating to several underlying shareholders suits brought against AT & T and certain officers and directors of AT & T and At Home. The defendants brought motions for partial summary judgment, alleging that AT & T's clams fell outside the scope of coverage under the D & O policies. Ultimately, the court granted the defendants' motions.
Continue Reading...American Homepatient, Inc. v. Collier, C.A. No. 274-N, 2006 WL 1134170 (Del. Ch. Apr. 19, 2006).
Plaintiff alleged that a former employee of plaintiff breached a confidentiality and non-compete agreement (the "Non-Compete"), that the former employee and his new employer both breached a related settlement agreement (the "Settlement" and collectively with the Non-Compete, the "Agreements"), and that the new employer tortiously interfered with the Non-Compete and prospective business relations. Plaintiff sought damages and injunctive relief. The court concluded that while the Agreements were enforceable, they were not breached by defendants and there was no tortious interference.
Continue Reading...Regal Entertainment Group v. Amaranth LLC, C.A. No. 1226-N, 2006 WL 948257 (Del. Ch. Apr. 12, 2006).
Plaintiff, Regal Entertainment Group, asked the Court of Chancery to grant its motion for certification of defendant class. Plaintiff is the issuer of a series of convertible notes under an indenture and defendant Amaranth is one of the largest holders of these notes. After a public dispute regarding Regal's method of calculating the number of shares of common stock upon conversion, Regal filed a lawsuit against Amaranth seeking a declaration that its calculation was correct. Amaranth counterclaimed that its calculation of conversion was correct. The only objection that Amaranth raised to the motion for certification was that its status as a hedge fund should relieve it of the obligation to serve as the representative of a defendant class. The court granted Regal's motion for class certification finding that Amaranth is well-positioned to represent the class as it seeks to advance an interpretation of the calculation provisions of the indenture contrary to Regal's, which affects all noteholders.
Continue Reading...Ramone v. Lang, C.A. No. 1592-N, 2006 WL 905347 (Del. Ch. Apr. 3, 2006).
This case involved a dispute between two businessmen who hoped to work together on a project to open a swim and fitness center, but who failed to achieve this despite months of efforts and negotiations. Plaintiff and defendant intended to formalize their relationship in a written LLC agreement. Ultimately, defendant closed on the property for himself, frustrated by his inability to reach a final agreement with plaintiff. Plaintiff sued for breach of contract, breach of fiduciary duty, and promissory estoppel. The Court of Chancery found that there was no contract between the parties and that the parties were not partners, therefore defendant did not owe any fiduciary duties. The court did, however, find that plaintiff had a claim for promissory estoppel and awarded reliance damages.
Continue Reading...Plaintiff Spantis Tiles, Ltd. D/b/a Terra Tile and Marble ("Terra Tiles") and Plaintiff Steel Buildings, Inc. d/b/a Northern Steel buildings, Inc. ("NSB") brought an action against Kurt and Ken Hensey (the "Henseys") for breach of contract, tortious interference with contracts and prospective contracts, violation of the Deceptive Trade Practices Act, common law fraud, unlawful practice and defamation. The defendant moved to dismiss for failure to state a claim and moved for a more definite statement. The court denied both motions.
Continue Reading...Plaintiff sued Defendant for breach of contract claiming raw materials provided by Defendant to Plaintiff's customers were defective. Defendant agreed to provide polypropylene staple fiber for Plaintiff's state-of-the-art factory, but the raw materials routinely clogged the machinery. Plaintiff sought more than $10 million in damages.
Continue Reading...Signature entered into multiple contracts with Sonitrol pursuant to which Sonitrol would install electronic security equipment and provide security services at various locations. Signature accepted the services and equipment, but failed to pay approximately $491,523.59 for certain equipment and services.
Continue Reading...Carlson v. Hallinan, C.A. Nos. 19808, 19466, 2006 WL 771722 (Del. Ch. Mar. 21, 2006).
This case involved a direct and derivative action arising out of a dispute between two men engaged in the business of making short term, unsecured loans. Plaintiffs asserted direct claims for breach of contract and derivative claims for breach of fiduciary duties. Specifically, plaintiffs alleged that defendant Hallinan breached an oral contract with plaintiffs by paying himself and another defendant executive compensation. Plaintiffs also asserted that the defendants breached fiduciary duties they owed nominal defendant CR Services Corp. by paying themselves an excessive amount of executive compensation. The Court of Chancery found, among other things, that Hallinan breached the oral contract with plaintiffs and defendants committed multiple breaches of their fiduciary duties to CR because they failed to meet the entire fairness standard regarding their compensation.
Continue Reading...In this case, plaintiff buyer and defendant seller in the sale of a business argued over the type of contractual arbitration that should be used to solve a disagreement over the form of arbitration each preferred. The Court of Chancery granted seller's motion on the pleadings because buyer's claims were for breaches of representations and warranties, which fell under the indemnity provisions of the contract and the form of arbitration set forth in those provisions must be used by buyer.
Continue Reading...Cypress Associates, LLC v. Sunnyside Congregation Associates Project, C.A. No. 1607-N, 2006 WL 668441 (Del. Ch. Mar. 8, 2006).
This case involved a dispute between a bondholder and the borrower that succeeded to most of the issuer's duties and rights. The parties argued over the extent to which the borrower could amend certain contracts without approval from the bondholders. Plaintiff bondholder refused to provide its assent to an amendment the borrower desired because it believed that the amendment would lower the value of its bonds. The other bondholders supported the amendment. The Court of Chancery denied in part and granted in part the borrower's motion to dismiss.
Continue Reading...HSMY, Inc. v. Getty Petroleum Mktg., Inc., C.A. No. 05-818-JJF, 2006 U.S. Dist. LEXIS 8268 (D. Del. Mar. 2, 2006).
Plaintiff filed a complaint for breach of contract, breach of the covenant of good faith and fair dealing, fraud, and violations of Article 2 of the Uniform Commercial Code, the Delaware Retail Gasoline Sales Law ("DRGSL") and the Delaware Deceptive Trade Practices Act ("DDTPA") in the Delaware Superior Court. Defendant removed the case to the U.S. District Court for the District of Delaware and moved to dismiss the complaint. Plaintiff subsequently amended its complaint.
Continue Reading...This is plaintiffs' suit for rescission of a corporate acquisition contract. The seller moved to dismiss the case for failure to state a claim. The court focused on the law and policy of the unambiguous bar to recessionary relief and limitations in damage recovery for misrepresentations through the contract's exclusive indemnity-limiting provision.
The court reconciled the power of privately ordered contracts allocating risk between the parties and Delaware's public policy disfavoring a bar on recessionary remedies and damages for willful misrepresentations. Additionally, the court examined the elective remedies available to the plaintiff-buyer.
Continue Reading...Ramunno v. Capano, et al., C.A. No. 18798-NC, 2006 WL 375541 (Del. Ch. Feb. 10, 2006).
This is a fiduciary claim based action to appraise the fair value of real property brought by the trustee of four trusts that held a 12.1% interest in that property held by the defendant entity and its two majority interest holders, after that entity's merger into a new Delaware limited partnership.
Continue Reading...Deloitte & Touche USA LLP v. Lamela, C.A. No. 1542-N, 2005 WL 2810719 (Del. Ch. Oct. 21, 2005).
Plaintiffs sought a preliminary injunction against Defendant to prevent him from soliciting any current, former or prospective clients that he had contact with while employed by Plaintiffs.
Continue Reading...Eames v. Nationwide Mutual Insurance Co., C.A. No. 04-1324-KAJ, 412 F. Supp. 431 (D. Del. 2006).
Plaintiffs filed a proposed class action alleging that defendant Nationwide Mutual Insurance Company ("Nationwide") misrepresented to class members the limits of liability of the Personal Injury Protection ("PIP") coverage that was included in Nationwide's automobile policies. Nationwide moved to dismiss for failure to state a claim.
Continue Reading...In this post-trial opinion, the court examines an untimely claim on stock-options against employer-corporation after expiration of contractually agreed limitations period and the corporation's claim against another employee for violation of duties related to the claim of options.
Continue Reading...Wit Capital Group, Inc. v. Benning, No. 568, 2004, 2006 WL 249983 (Del. Jan. 31, 2006).
The plaintiffs sued the defendants, Wit Capital Group Inc. and Wit Capital Corporation ("Wit"), securities broker/dealers, alleging that the defendants breached their account agreement by failing to allow the plaintiffs to purchase certain IPO shares. The plaintiffs argued, pursuant to Superior Court Civil Rule 23(b)(3), that common questions of law or fact predominated over questions affecting individual class members. Reversing the Superior Court's decision to certify a class, the Delaware Supreme Court found that the plaintiffs failed to show fact of common injury affecting all plaintiffs.
Continue Reading...After the board of directors of an LLC terminated the plaintiff, the plaintiff filed suit, alleging, among other things, that the board's actions were void. The defendants moved to dismiss plaintiff's suit. The court found that one of the directors was immune from suit pursuant to 10 Del. C. § 8133, which grants immunity to an organization's volunteers. Another defendant, the LLC from which plaintiff had been terminated, argued that the claim against it should be dismissed because the board's actions were voidable rather than void. However, there was no indication that the Board had ever ratified the voidable acts. The Court directed the Plaintiff to file a more definite statement as to what it was claiming against that defendant.
Continue Reading...Minority shareholders brought a breach of fiduciary duty action against the managing member of the LLC. Additionally, they plead aiding and abetting conspiracy and unjust enrichment claims against defendants' affiliate entities. Relying on Delaware Supreme Court precedent, the defendants insist all claims require mandatory arbitration under the LLC agreement. The court agreed.
Continue Reading...This case was decided on a motion for judgment on the pleadings. Plaintiff sought to obtain advancement of attorney fees allegedly contractually agreed, to defend a New York action and fees on fees for initiating and prosecuting this action. The plaintiff was sued in the New York action by affiliates-entities of her then employer.
Continue Reading...Radiancy, Inc. v. Zion Azar, et al., C.A. No. 1547-N, 2006 WL 224059 (Del. Ch. Jan. 23, 2006).
This is a summary judgment motion for advancement of legal fees made by defendant-officers. Their corporation alleged fraud, fiduciary violations and usurpation of corporate opportunity against defendants as a bar to advancement. Defendants replied with counterclaims under their respective employment contracts. The motion was granted and denied in part.
Continue Reading...Unisuper, Ltd. v. New Corporation, C.A. No. 1699-N (Del. Ch. Jan. 20, 2006).
Opinion and order granting interlocutory appeal on two contract issues, after court dismissed corporate allegations of fraud, negligent misrepresentation and fiduciary duty breach.
Continue Reading...Caudill v. Sinex Pools, Inc., C.A. No. 04C-10-090 WCC, 2006 WL 258302 (Del. Super. Ct. Jan. 18, 2006).
In his complaint, the plaintiff, Ken Caudill, alleged that Sinex Pools, Inc. breached its contract to build Caudill an in-ground swimming pool. Subsequently, plaintiff amended his complaint to include Romie Bishop and Shirley Bishop, individually, based on the theory that Sinex Pools, Inc. was not a legal entity. The Bishops moved for summary judgment, arguing that Sinex Pools, Inc., while not formally incorporated, amounted to a de facto corporation. A de facto corporation is a company that was not properly incorporated despite a good faith and bona fide effort, but is still treated as a corporation by the courts. Granting the Bishops' motions for summary judgment, the Superior Court found that they had met the three-pronged test to establish a de facto corporation.
The plaintiff, Barker Capital LLC ("Barker"), a Delaware LLC, sued Rebus LLC ("Rebus"), also a Delaware LLC, Mark A. Fox ("Fox"), and Twinlab Corporation ("Twinlab"), a Delaware corporation, alleging breach of contract, quantum meruit, tortious interference with contract, and unjust enrichment. Rebus and Barker entered into an Engagement Agreement, pursuant to which Barker would act as Rebus' nonexclusive financial advisor to identify and consummate a transaction to purchase two medical newsletters. Under the terms of the Engagement Agreement, Barker was entitled to an Advisory Fee in the amount of 2.5% of the transaction's value. Both sides moved for summary judgment. The court found that Barker was entitled to 2.5% of a $12 million loan associated with the deal, but was not entitled to a percentage of a $35 million loan connected with the deal. The court also found against the plaintiff on the quantum meruit claim because the plaintiff had been made whole when the court ruled in his favor on the breach of contract claim. Turning to the tortious interference claim, which was only alleged against Fox, the court found that it did not have the subject matter jurisdiction to pierce the corporate veil.
Continue Reading...Willie Gary LLC. v. James & Jackson LLC., C.A. No. 1781, 2006 WL 75309 (Del. Ch. Jan. 10, 2006), aff'd, (Del. Mar. 14, 2006)(Berger, J.)
Plaintiff sought to enjoin defendant to remedy an alleged breach of the LLC Agreement and to specifically enforce the defendant's alleged promise to guarantee a debt of the LLC. Alternatively, plaintiff sought to dissolve the entity in which he owned 80% of stock because of an alleged decisional deadlock.
Continue Reading...and
Horizon Personal Communications, Inc. et al. v. Sprint Corp., et al., C.A. No. 1518-N (Del. Ch. Jan. 04, 2006).
These cases pertain to summary judgment and a request for declaratory judgment involving an anticipatory breach of a commercial agreement concerning a merger transaction.
Continue Reading...Bonham v. HBW Holdings, Inc., C.A. No. 820-N, 2005 WL 3589419 (Del. Ch. Dec. 23, 2005).
Former stockholders sued acquirer for release of $25 million held in escrow for purpose of indemnification for breach of warranty claims and other relief. The acquirer moved to dismiss the complaint on the grounds that it properly and timely noticed claims for breach of warranty and other issues, Plaintiffs failed to allege that those claims were made in bad faith, and certain of the claims were subject to mandatory arbitration under the terms of the stock purchase agreement.
Continue Reading...Unisuper v. News Corp., C.A. No. 1699-N, 2005 WL 3529317 (Del. Ch. Dec. 20, 2005).
In the context of converting from an Australian corporation to a Delaware corporation, News Corp.'s board adopted a policy that if a shareholder rights plan was adopted following reincorporation, the plan would have a one-year sunset clause unless shareholder approval was obtained for an extension. The policy also provided that if shareholder approval was not obtained, the company would not adopt a successor shareholder rights plan having substantially the same terms and conditions. Several weeks later, News Corp.'s board adopted a poison pill in response to a specific third-party takeover threat. One year later, the board extended the poison pill without a shareholder vote, in contravention of its prior policy.
Continue Reading...Liquor store chain acquired leasehold rights in commercial shopping center under a Bankruptcy Court order that authorized it to operate one of its typical stores. In addition to alcohol products, those chain stores also sold food products and a wide range of products typically sold in supermarkets. Tenant who operated supermarket in same shopping center sued landlord and liquor store to enforce provision in its lease protecting it from competition by other tenants in the operation of a supermarket and in the sale of food or food products intended for off-premises consumption.
Continue Reading...Plaintiff energy company attempted to use proceeds from sale of certain assets to fund a series of purchases of natural gas for burning in its power plants. Plaintiff's note holders objected to those purchases because the relevant indenture agreements only allowed sale proceeds to be used for certain purposes. In response to the note holders' objection, the indenture trustees refused to authorize release of any additional monies to Plaintiff for those purchases. Plaintiff subsequently sued the indenture trustees seeking declaration that corporation's past and proposed use of proceeds was permissible.
Continue Reading...Rohn Industries, Inc. v. Platinum Equity LLC, 887 A.2d 983 (Del. Super. Ct. 2005), aff'd in part, rev'd in part, No. 591, 2005, 2006 WL 2988698 (Del. Oct 20, 2006).
The plaintiff, the seller, sued the buyer for breach of an asset purchase agreement that was governed by New York law. The agreement contained a provision that allowed the purchaser to terminate the deal if the purchaser "determines in good faith that there is a reasonable basis in law and in fact to conclude" that the buyer "could reasonably be anticipated to have any . . . material liability for any asbestos-related claim." Following a non-jury trial, the Superior Court found for the defendant, holding that the defendant acted in good faith.
Continue Reading...The plaintiff brought a claim against the defendant for breach of contract, fraudulent misrepresentation, negligent misrepresentation, consumer fraud, and breach of express and implied warranties. The defendant, whose principle place of business was in California, moved to dismiss for lack of personal jurisdiction, and the court granted the defendant's motion
Continue Reading...Ishimaru v. Fung, C.A. No. 929, 2005 WL 2899680 (Del. Ch. Oct. 26, 2005).
Plaintiff, a member of Paradigm Financial Products International LLC, sought to assert a cause of action on behalf of Paradigm against Defendant Ivy Asset Management Corp. for breach of contract. Ivy Asset moved to dismiss for lack of subject matter jurisdiction.
Continue Reading...Plaintiff filed a Motion To Vacate Dismissal and to enforce a Settlement Agreement that the parties had entered into earlier. Regen and Coast ATM (collectively "Defendants") contested subject matter jurisdiction. The Court vacated dismissal to the extent requested by the plaintiff. Plaintiff requested the court to: (1) reopen the case; (2) enter the settlement agreement ("Agreement") between the parties on the record; (3) permit plaintiff to depose Defendant Regen, his wife, Helene Regen, and a representative of Coast ATM ("Coast"), a joint defendant and; (4) permit Plaintiff Money Centers to recover its costs and attorney fees in connection with the case and this motion.
Continue Reading...Chrin v. Ibrix Inc., C.A. No. 20587, 2005 WL 2810599 (Del. Ch. Oct. 19, 2005).
Plaintiff, a co-founder, stockholder and former employee of Defendant Ibrix, Inc., brought a complaint against Ibrix and Steven Orszag, a co-founder and chairman of the Ibrix board of directors, asserting claims relating to his termination and a stock repurchase agreement. Defendants moved to dismiss the complaint.
Continue Reading...Worldspan, L.P. v. Ultimate Living Group, LLC., 390 F.Supp.2d 412 (D.Del. 2005).
This action was brought under the Admiralty jurisdiction of the Federal Court. It claimed breach of a single-day maritime contract for charter of a motor yacht, unjust enrichment, conversion and violation of Delaware's Deceptive Trade Practices Act ("DTPA").
The Court denied defendant's motion to dismiss with respect to all but the DTPA claim which did not survive for lack of consumer standing against the seller of the chartered motor yacht services.
Continue Reading...Lillis v. AT&T Corp., C.A. No. 717-N, 2005 WL 2149748 (Del. Ch. Aug. 23, 2005).
Plaintiffs, former owners of options to purchase shares in AT&T Wireless Services, Inc. ("Wireless"), brought suit against Wireless and AT&T Corp., seeking compensation for the value of their options, which were canceled when Wireless merged with Cingular Wireless Corp. Plaintiffs were officers and directors of MediaOne Group, Inc., a broadband telecommunications company, which AT&T purchased. At MediaOne, plaintiffs were to receive stock options as part of their compensation under the 1994 Stock Plan. After AT&T acquired MediaOne, AT&T exchanged the MediaOne options for new options in AT&T and, subsequently, for options in Wireless.
Continue Reading...Griffin Corp. Services v. Jacobs, C.A. No. 396-N, 2005 WL 2000775 (Del. Ch. Aug. 11, 2005).
Counterclaim plaintiffs Jacobs, Dobrzynski, Stewart, and Stewart Management Company ("SMC") asserted that Griffin Corporate Services ("Griffin") and other counterclaim defendants interfered with their existing contract and prospective business relationships and engaged in common law and statutory unfair trade practices. They also asserted that Griffin breached its confidentiality agreement with SMC and made misrepresentations to SMC. The counterclaim defendants moved to dismiss.
Continue Reading...The plaintiff brought a breach of contract action against two defendants on the theory that the plaintiff was a third party beneficiary to the contract between the defendants. One of the defendants moved to dismiss the suit for failure to state a claim. The court determined that one defendant subjectively intended for the plaintiff to benefit from the contract. However, the court determined that the other contracting party did not intend to benefit the plaintiff. Furthermore, there was no evidence from the contract that the parties intended for the plaintiff to be a beneficiary. Consequently, the court dismissed the plaintiff's claims that were based on it being a third party beneficiary to the contract.
Continue Reading...Royal Indemnity Company ("Royal") sought a declaratory judgment to determine whether it had an obligation to General Motors ("GM") in relation to insurance purchased by GM over the course of several decades from Royal. GM filed a motion to dismiss on forum non conveniens grounds, and the Court denied the motion to dismiss.
Continue Reading...Nutzz.com v. Vertrue Inc., C.A. No. 1231-N, 2005 WL 1653974 (Del. Ch. July 6, 2005).
Plaintiff Nutzz.com ("Nutzz") sought a preliminary injunction against defendant Vertrue Inc. ("Vertrue"), a company with which Nutzz contracted to develop an online membership program for NASCAR fans. After Vertrue terminated the agreement (claiming that Nutzz missed deadlines and promotion requirements), it sent an email to 1,200 Nutzz members advertising Vertrue's own membership program as an upgrade. Nutzz claimed that Vertrue's actions constituted a breach of their confidentiality agreement and a misappropriation of trade secrets.
Continue Reading...The plaintiff brought an action for breach of contract, and the defendant counterclaimed for fraudulent misrepresentation. Following a non-jury trial, the Court found that the defendant breached the contract, and had waived its right to claim fraudulent misrepresentation on part of the plaintiff.
Continue Reading...The defendant contracted to build a hotel on the plaintiff's property. Following completion of the structure, the defendant had to return on numerous occasions to repair leaks. Eventually, the plaintiff filed a complaint, arguing that it was entitled to compensatory and punitive damages for breach of contract, negligence, and breach of warranty. The defendant moved to dismiss, claiming that under the terms of the contract all disputes must first be submitted to the architect and any remaining claims must be heard in binding arbitration. The court granted the defendant's motion to dismiss.
Continue Reading...Frontier Oil Corporation v. Holly Corporation, 2005 WL 1039027 (Del. Ch. April 29, 2005).
Frontier Oil Corporation and Holly Corporation are petroleum refiners that sought to merge. In conducting its due diligence review of Frontier, Holly discovered that activist Erin Brockovich was planning to bring a toxic tort suit claiming that an oil rig that had been operating for decades on the campus of Beverly Hills High School caused the students to suffer from a disproportionately high incidence of cancer. This raised concerns for Holly because a subsidiary of Frontier had previously operated the Beverly Hills drilling facility. Although the terms of the merger agreement were modified to address the situation, including broadening the representation to apply to litigation that would reasonably be expected to have a material adverse effect ("MAE") on Frontier, the court found that substantial litigation costs were not a MAE and therefore the contract could not be rescinded.
Continue Reading...Thomas v. Hobbs, C.A. No. 04C-02-010 RFS, 2005 WL 1653947 (Del. Super. Ct. Apr. 27, 2005).
The Plaintiff brought an action for breach of contract against the defendant limited liability company and against the sole member of that defendant limited liability company personally. The member moved for summary judgment, arguing that she could not be held personally liable for the actions of the defendant limited liability company. The court granted the defendant member's motion.
Continue Reading...J-Squared Technologies, Inc. v. Motorola, Inc., 364 F.Supp.2d 449 (D.Del. Apr. 13, 2005).
Plaintiff brought this suit alleging: (1) breach of contract; (2) promissory estoppel; (3) negligent misrepresentation; (4) breach of the duty of good faith and fair dealing; and (5) violation of Arizona's Consumer Fraud Act. Plaintiff sought compensatory and punitive damages. The defendant moved to transfer the action to the District of Arizona or alternatively dismiss the case under Fed.R.Civ.P. 9(b) and 12(b)(6).
The Court denied the motion in part and granted it in part with respect to the Arizona Consumer Fraud Act and punitive damages claim. The Court declined to dismiss the negligent misrepresentation and estoppel claims.
Continue Reading...Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 872 A.2d 611 (Del. Ch. 2005).
Wal-Mart brought suit against all the parties involved in its purchase of corporate-owned life insurance ("COLI") policies. Its complaint alleged a broad range of legal and equitable claims against the insurance brokers and providers, all seeking to recover from them the losses it incurred in connection with this risky tax avoidance scheme. On consolidated motions to dismiss brought by the insurers and brokers, the court concluded that the retailer failed to state a claim upon which relief could be granted. The court, therefore, granted the defendants' motions to dismiss.
Continue Reading...Wilmington Savings Fund Society v. Chillibilly's, Inc., C.A. No. 03C-11-021 THG, 2005 WL 730060 (Del. Super. Ct. March 30, 2005), aff'd, 886 A.2d 1279 (Del. 2005).
Wilmington Savings Fund Society ("WSFS"), the plaintiff, sought replevin of certain collateral it claimed pursuant to a contract it held with Chillibilly's Incorporated ("Chillibilly's") and Joseph Jeffery Stein Corporation ("Stein Corp.") WSFS also alleged fraud, misrepresentation, and various other claims. Essentially, WSFS argued that it was induced into extending a loan to Chillibilly's based on certain misrepresentations by the principal of Stein Corp., Jeffrey Stein. Stein Corp. moved for summary judgment. The Court denied the motion as to replevin of items Stein Corp. had earlier conceded belonged to WSFS pursuant to its security interest. However, the court granted summary judgment as to the other claims.
Continue Reading...Kier Construction, Ltd. v. Raytheon Co., 2005 WL 628498 (Del. Ch. Mar. 10, 2005).
This action arouse out of a construction subcontract between plaintiff, Kier Construction, Ltd. ("Kier"), and a non-party, Raytheon Engineers & Constructors, UK Ltd. ("REC UK"). Kier claimed it was owed over $12 million for work performed under the subcontract. Kier contended that the contract with REC UK was transferred to defendants, Raytheon Company ("Raytheon") as part of a transaction in which Raytheon sold REC UK and other subsidiaries to Morrison Knudsen Corporation. Kier contended that Raytheon, as REC UK's assignee, was directly liable to Kier for the work it performed under the subcontract.
Continue Reading...Amaysing Technologies Corp. ("ATC") brought an action for breach of a loan agreement against CyberAir Communications, Inc. ("CyberAir"). CyberAir filed a third-party complaint alleging various misrepresentations and frauds against Robert Mays, Jr., and Raymond Atilano, both of whom were officers and shareholders of ATC, and Med Fadel, an agent of ATC (together referred to as "Third-Party Defendants"). Third-party Defendants filed a motion to dismiss under Court of Chancery Rule 12(b)(2) for lack of personal jurisdiction, which the court granted.
Continue Reading...The plaintiff brought a breach of contract action against the defendant when the defendant refused to close on the purchase of the plaintiff's business. The defendant moved for summary judgment, claiming that the plaintiff failed to meet two pre-closing conditions. Rejecting this argument, the court denied the defendant's motion for summary judgment.
Continue Reading...Plaintiffs Midland Oak Realty, Inc. and MRO Southwest, Inc. ("MRO") sued Defendants Friedman, Billings, Ramsey & Co., Inc. ("FBR") and Velasco Group, L.L.C. ("Velasco") for breach of a real-estate financing contract. FBR moved to dismiss based on an indemnification provision. The Superior Court denied FBR's motion to dismiss, holding that the indemnification provision's language made it applicable only after a court had reached a decision on the merits of the claim.
Continue Reading...Plaintiff, Enigma Information Retrieval Systems, Inc. ("Enigma"), brought breach of contract and tortious interference claims against Defendants, Radian, Inc. and Portal Dynamics, Inc., military contractors that helped supply light armored vehicles. Enigma acted as the subcontractor for the defendants and provided the computer software for training manuals and parts catalogs. The defendants claimed to have terminated Enigma for poor performance. Radian moved to dismiss the damages claim, and the court denied the motion to dismiss, finding that the arguments were premature.
Continue Reading...W.R. Berkley Corp. v. Hall, C.A. No. 03C-12-146WCC, 2005 WL 406348 (Del. Super. Ct. Feb. 16, 2005).
The Plaintiff brought an action in the Superior Court to enforce a provision under the Stock Option Plan (the "Plan") and subsequent agreements. Under the provisions of the Plan, if a former employee engaged in "Noncompetitive Action" within six months of termination and exercised stock options within that time frame, the company could recapture the profits. The court found the agreement to be enforceable, and granted the plaintiff's motion for summary judgment.
Continue Reading...Damage Recovery Systems, Inc. v. Tucker, No. Civ. 02-1647-SLR, 2005 WL 388596 (D.Del. Feb. 2, 2005).
Defendant filed a motion for re-argument in a matter involving breach of contract and breach of fiduciary duties. The plaintiff prevailed on its Motion for Summary Judgment. Defendant then filed this motion which the Court denied.
Continue Reading...Damage Recovery Systems, Inc. v. Tucker, No. Civ. 02-1647-SLR, 2005 WL 388597 (D.Del. Feb. 2, 2005) .
Plaintiff filed an action in 2002 alleging that the defendant had breached: (1) a non-compete covenant in his Consulting Agreement with Plaintiff; and had (2) aided and abetted the breach of fiduciary duties owed by plaintiff's former officer. Plaintiff sought compensatory and punitive damages and the defendant demanded a jury trial on both claims. While plaintiff moved to strike the defendant's demand for jury trials, the defendant filed a Memorandum stating that he was not opposed to the denial of a jury trial to the extent the parties Consulting Agreement provided. The Court denied the requests for a jury trial on both claims.
Continue Reading...Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513 (Del. Super. Ct. 2005), aff'd, 886 A.2d 1278 (Del. 2005).
In this case, the purchasers of a home health care company brought an action against the seller to recover for multiple alleged breaches of a stock purchase agreement ("Agreement") and recovery under indemnification provisions. Following a non-jury trial, the court found for the plaintiff on certain claims, and awarded the plaintiff $1,070,719.47 in damages.
Continue Reading...The plaintiff brought a breach of contract action in Superior Court. The defendant moved to dismiss for lack of personal jurisdiction. The court accepted the plaintiff's argument that it was appropriate for the court to exercise personal jurisdiction based on a forum selection clause in the contract.
Continue Reading...This is an insurance contract related action brought by plaintiff, who also sought an injunction demanding notice under certain insurance policies. Plaintiff also sought a declaratory judgment that the insurance settlement agreement did not impair their rights and a permanent injunction.
Continue Reading...Certainteed Corp. v. Celotex Corp., et al., C.A. No. 471, 2005 WL 217032 (Del. Ch. Jan. 24, 2005).
Plaintiff brought a breach of contract action against defendant sellers under their asset purchase agreement for indemnification of losses and other related claims.
Continue Reading...In this motion to dismiss opinion, the court examines whether the claims were tolled or untimely and held against the plaintiff. The plaintiff had instituted contract claims, fiduciary duty violation claims and a breach of the limited partnership agreement claim against the defendant-partners.
Continue Reading...This case involved a request for an injunction filed by the employer-corporation seeking to stop an arbitration of a contractual claim by a plaintiff-employee. The employee sought significant payments under a Change in Control transaction that allegedly triggered a clause vesting the right to payment in the employee. The court held the claim was time-barred under 10 Del. C. §8111 and not 10 Del. C. §8106.
Continue Reading...DeMarie v. Neff, C.A. No. 2077-S, 2005 WL 89403 (Del. Ch. Jan. 12, 2005).
This post-trial letter opinion involved plaintiff's request for specific performance of an agreement to sell land.
Continue Reading...Plaintiff-corporation, its president and major stockholder sought to enjoin defendant, a purported stockholder and former officer from acting as an officer or pursuing any claim against any officer, shareholder or contractor of the plaintiff company. Plaintiff also pursued a declaratory judgment that defendant was not an officer or director of the plaintiff under 8 Del. C. §225 and further sought to specifically enforce a stock-transfer agreement with defendant. Defendant sought to dismiss for lack of personal and subject matter jurisdictions and for forum non conveniens.
Continue Reading...All Pro Maids, Inc. v. Susan Layton, et al., C.A. No. 058-N, 2005 WL 82689 (Del. Ch. Jan. 11, 2005).
This opinion discusses a post-judgment motion objecting to the form of the judgment and order relating to prejudgment and post-judgment interest awards pursuant to 6 Del. C. §2301.
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For more information concerning any of these cases, contact Edward M. McNally at emcnally@morrisjames.com or 302.888.6880
