Justia Delaware Court of Chancery Opinion Summaries

Seller entered into a purchase agreement with Buyer for the sale of certain equipment. The purchase agreement included an arbitration clause. Buyer eventually assigned its assets for the benefit of creditors to Assignee. Assignee sold Buyer’s tangible assets but retained choses in action. Assignee later brought a complaint in arbitration seeking damages for breach of the purchase agreement. The arbitrator concluded that Assignee had standing to bring the action and that the purchase agreement conferred jurisdiction upon him to hear the matter. Seller then brought this action seeking to enjoin the arbitration. The Court of Chancery dismissed this matter for lack of subject matter jurisdiction, concluding that a complete contractual remedy existed in arbitration. View "CVD Equip. Corp. v. Dev. Specialists, Inc." on Justia Law

American Messaging Services, LLC (AMS) purchased an ownership interest in DocHalo, LLC. The parties entered into an agreement establishing the terms of their business relationship. After AMS discovered that DocHalo had contacted some of AMS’s sales personnel about joining DocHalo and had unilaterally reached out to some of AMS’s customers, AMS filed a complaint alleging breach of contract, breach of the implied covenant of good faith and fair dealing, misappropriation of trade secrets, and tortious interference with contractual relations. AMS sought a temporary restraining order seeking DocHalo from contacting its customers and sales personnel. The Court of Chancery denied the motion, holding that while AMS established colorable claims against DocHalo, it did not appear to face imminent and irreparable harm that would justify extraordinary relief. View "Am. Messaging Servs., LLC v. DocHalo, LLC" on Justia Law

Plaintiffs were four Delaware-domiciled captive insurance companies. The State Insurance Commissioner prosecuted their claims as their receiver in liquidation, alleging fraudulent conduct on the part of the companies’ president, breach of fiduciary duty on the part of the other directors of the corporation, and, as to the companies’ auditors and their administrative management company, aiding and abetting breaches of fiduciary duty, breach of contract, and negligence. The Court of Chancery dismissed in part the claims against the auditors and their company, holding (1) the doctrine of in pari delicto applies in this case and effectively bars the relevant claims against those defendants; (2) Plaintiffs’ claims for breach of contract and negligence are dismissed on grounds of in pari delicto, but the fiduciary duty exception to in pari delicto covers Plaintiffs’ claims for aiding and abetting a breach of fiduciary duty; and (3) Plaintiffs’ motion to dismiss their claims for aiding and abetting against each of the auditors and the administrative management company is denied, except as they relate to the auditor that was retained second. View "Hon. Karen Stewart v. Wilmington Trust SP Servs., Inc." on Justia Law

The parties in this case, two corporations, were parties to a Development Agreement. Defendant claimed Plaintiff owed it approximately $60 million under the Development Agreement. Plaintiff sought a declaration that it did not owe Defendant any money, and Defendant sought reformation of the Development Agreement. After two years of discovery, and as the trial approached, the parties filed a Joint Pretrial Stipulation and Proposed Order (the Proposed Order) identifying fifteen facts as admitted and not requiring proof at trial (the Admitted Facts). Plaintiff moved to have the Court of Chancery declare that certain facts were Admitted Facts and to require Defendant to meet and confer in good faith about additional Admitted Facts. The Court granted the motion, holding (1) facts Defendant admitted in its answer, in its responses to requests for admissions, and drawn from its sworn interrogatory responses constituted Admitted Facts, and Defendant should not have objected to their inclusion in the Proposed Order; and (2) Defendant did not confer in good faith regarding Admitted Facts as required by Ch. Ct. R. 16. View "Itron, Inc. v. Consert, Inc." on Justia Law

After Plaintiff fell behind on her payments to Attorney in the underlying litigation, Attorney filed a motion to withdraw as counsel for Plaintiff and requested a charging lien in the amount of approximately $300,000. Plaintiff did not oppose Attorney’s withdrawal but did oppose the entry of a charging lien. The Court of Chancery found that a charging lien was appropriate and granted a charging lien in the amount of $200,000 against any judgment in this action, holding (1) a fee agreement between the parties did not preclude the entry of a charging lien; (2) the total amount of the charging lien that was appropriate in this case should not exceed Plaintiff’s lowest-possible net recovery of $263,872; and (3) Attorney was not liable to the experts for their fees, so there was no basis for include those fees in the charging lien. View "In re Zutrau v. Jansing & ICE Sys., Inc." on Justia Law

Plaintiff and Defendant entered into a Settlement and License Agreement to resolve then-pending patent infringement litigation. After Plaintiff’s license was terminated, Plaintiff filed a complaint for declaratory, injunctive, and other relief against Defendant. Defendant moved to dismiss, arguing that the Court of Chancery was an improper venue because the Agreement’s forum selection clause directed “any dispute” between the parties to Georgia. Plaintiff argued that the Agreement was terminated before it filed the complaint, and regardless, its claims were not subject to the forum selection clause. The Court of Chancery dismissed the complaint without prejudice, holding that the courts identified in the forum selection clause were proper forums to determine whether the Agreement had been terminated, and if the Agreement was effective when Plaintiff filed the complaint, then dismissal for improper venue would be proper. View "Scanbuy, Inc. v. NeoMedia Techs., Inc." on Justia Law

Seaport Village Operating Company, LLC (the “Company”) sought to recover from Seaport Village Ltd. (“Limited”) attorneys’ fees and expenses that the Company incurred in two lawsuits against Limited. The Company’s limited liability company agreement included a fee-shifting provision providing that the prevailing party in disputes arising out of the Agreement is entitled to recover reasonable attorneys’ fees in connection with the prosecution or defense of the action. Limited argued that because the Company did not sign the agreement, it was not a party to the agreement. The Court of Chancery awarded the Company fees and expenses, holding that, under Delaware law, the Company, although not a signatory, was a party to the operating agreement and could therefore enforce the fee-shifting provision against Limited. View "Seaport Village Ltd. v. Seaport Village Operating Co., LLC" on Justia Law

Augustus Evans, who was incarcerated, filed two actions that he sought to bring in Chancery against Bayer Corp. and Johnson & Johnson Co. alleging that he had been injured by pharmaceutical products manufactured and sold by Defendants. Evans sought to proceed in forma pauperis. The Court of Chancery denied the motions to proceed in forma pauperis, holding that Evans could not establish jurisdiction in the Court because Evans’ claims neither sought equitable relief nor involved equitable subject matter and because the statutory bases recited by Evans did not support equitable jurisdiction, and therefore, permitting Evans to proceed in forma pauperis in the Court would be futile. View "Evans v. Bayer Corp." on Justia Law

In 2003, Plaintiffs loaned Utility Systems, Inc. (“USI”), which provided wastewater disposal services to the Woods on Herring Creek community, almost $250,000 to meet the costs of managing and improving the wastewater treatment system (“System”). Plaintiffs were not repaid by USI. In 2013, Plaintiffs filed this action seeking to recover the loaned funds under the doctrines of quantum meruit and unjust enrichment. Plaintiffs named as defendants Woods on Herring Creek Homeowners Association, which took over the System in 2004, and Sussex County, to whom the Association transferred the system in 2008. The Court of Chancery granted Defendants’ motion to dismiss, holding that Plaintiffs’ action was barred by laches. View "Carbaugh v. Woods on Herring Creek Homeowners Ass’n" on Justia Law

The parties in this dispute were Koninklijke Philips N.V. (“Philips N.V.”), a Netherlands holding company, and Carlo Vichi, an Italian businessman who had a longstanding business relationship with Philips N.V. Philips N.V. was a participant in a joint venture, LG.Philips Displays Holdings B.V. (LPD), that did business with Vichi and other entities. LPD approached Vichi for a substantial loan, which Vichi agreed to make. The joint venture eventually defaulted on the loan. Vichi filed a complaint against Philips N.V., claiming that Philips N.V. committed fraud by misrepresenting the joint venture’s financial condition and prospects and by falsely promising that it would stand behind LPD to ensure it could meet its financial obligations. The Court of Chancery held that Philips N.V. was not liable to Vichi on any of the claims he presented at trial and that Philips N.V. should not be held responsible for the loss Vichi suffered on the loan he made to LPD. View "Vichi v. Koninklijke Philips Elecs., N.V." on Justia Law