Justia Delaware Court of Chancery Opinion Summaries

by
Plaintiffs allege Defendants discriminated against them on the basis of their national origin when assessing property taxes due on Plaintiffs’ home in Dover, Delaware and asked the court to “appoint an attorney to file a formal [c]omplaint on their behalf” under the Delaware Fair Housing Act (DFHA), 6 Del. C. 4613(a) and (b). According to Plaintiffs, they have made extensive, unsuccessful, efforts to find counsel during the past year. Plaintiffs do not claim to be unable to pay for counsel. The Chancery Court denied the motion, noting that, counting only their formal assessment appeals, this is Plaintiffs’ third suit. Even disregarding that Plaintiffs are not indigent, they have ably presented their claims thus far and made court filings while appearing pro se; their claims do not appear to be so legally or factually complex as to necessitate the assistance of counsel; Plaintiffs are not met with significant barriers or an inability to conduct a factual investigation; they have not alleged the need for expert discovery; and the case is unlikely to turn on credibility determinations. Plaintiffs do not suffer from a lack of capacity to seek counsel, as evidenced by their substantial efforts to obtain counsel to date. View "Shahin v. City of Dover" on Justia Law

by
The trustees sought instructions as to the proper distribution of the principal and income of the trust, which granted the donee a limited testamentary power of appointment. The issue is whether a divorce decree incorporating a settlement agreement in which the donee agreed to exercise his power of appointment to benefit the children of his first marriage, bound the donee and the trust, or whether the donee’s last will and testament, which subsequently exercised the donee’s power of appointment to benefit his granddaughter from his second marriage, controls. The master found that the settlement agreement incorporated in a Nevada divorce decree did not bind the trust, nor did it represent a partial release of the donee’s power of appointment. Imposing a constructive trust over the trust property is not appropriate in these circumstances, the master concluded, and recommended that the court grant the granddaughter’s motion for summary judgment and order the trustee to distribute the trust principal and income consistent with the exercise of the donee’s power of appointment in his last will and testament. View "In re: Trust for the Benefit of Samuel Frances duPont" on Justia Law

by
The Court of Chancery granted Defendants’ motion to dismiss for failure to make a pre-suit demand and failure to state a claim for relief Plaintiffs’ second amended complaint asserting a claim for breach of fiduciary duty and seeking the appointment of a receiver, holding that the motion to dismiss was properly granted. Specifically, the Court held (1) Count I of the amended complaint asserting a claim for breach of fiduciary duty must be dismissed based on Plaintiff’s failure to make a pre-suit demand on some of the defendants; and (2) Count II of the amended complaint seeking the appointment of a receiver failed to state a claim for relief. View "Stritzinger v. Barba" on Justia Law

by
The Court of Chancery granted Defendants’ motion to dismiss for failure to prosecute and denied Plaintiff’s cross-motion for a default judgment for failure to file an answer or opening brief, holding that because Plaintiff took no action for a period of one year and failed to give good reason for his inaction, the case must be dismissed pursuant to Rule 41(b) of the Court of Chancery Rules. Plaintiff filed this action on February 16, 2017. Defendants filed a motion to dismiss on March 31, 2017, and on April 21, 2017 Defendants sent Plaintiff an email seeking a briefing schedule. Plaintiff did not contact Defendants and did not file anything else in this action until June 29, 2018, after Defendants moved to dismiss the action. The Court of Chancery granted the motion, holding that the action must be dismissed for failure to prosecute and that Plaintiff’s motion for default judgment failed. View "Guy v. Mette" on Justia Law

Posted in: Civil Procedure

by
At issue was the availability of appraisal rights under section 262 of the Delaware General Corporation Law. Section 262 affords stockholders of Delaware corporations a statutory remedy for appraisal of their shares under certain circumstances. The statute provides that appraisal rights shall be available only for the shares of stock of a “constituent corporation” in a merger or consolidation, and the process for determining a stockholder’s entitlement to appraisal contemplates that the stockholder will relinquish its shares in the merger of consolidation. In the instant case, Dr. Pepper Snapple Group, Inc. and Keurig Green Mountain, Inc. agreed to combine their businesses. Dr Pepper stated that Dr Pepper stockholders would not have appraisal rights under section 262 in connection with the proposed transaction. Two stockholder plaintiffs filed this action challenging that decision. The Court of Chancery held (1) the term “constituent corporation” as used in section 262 means an entity actually being merged or combined and not the parent of such an entity, and therefore, Dr Pepper’s stockholders do not have a statutory right to appraisal under section 262(b) because Dr Pepper is not a constituent corporation; and (2) Dr Pepper stockholders are not entitled to appraisal because they are retaining their shares in connection with the proposed transaction. View "City of North Miami Beach General Employees’ Retirement Plan v. Dr Pepper Snapple Group, Inc." on Justia Law

by
The Court of Chancery concluded that Plaintiffs were entitled to specific performance of a call provision of a joint venture agreement, holding that Plaintiffs prevailed on the merits by clear and convincing evidence, and the equities supported relief. Plaintiffs had the right to call partnership interests in a series of joint ventures from Defendants. Plaintiffs called those interest sin 2014. With respect to the majority of the joint ventures, the contractual consideration for the call transactions was required to be units (Mills Units) by a defunct real estate investment trust. Plaintiffs sought to tender their own similar, but not identical, units (Simon Units). The Court of Chancery determined that the applicable joint venture agreements did not provide for such consideration. With respect to one joint venture, however, the Court of Chancery concluded that the Simon Units were valid tender because they were the units of a successor to Mills and they provided substantially the same rights as the Mills Units under the joint venture agreement, and a balancing of the equities favored an order of specific performance. View "Simon-Mills, LLC v. Kan Am USA XVI Ltd. Partnership" on Justia Law

Posted in: Business Law

by
When a trial court has awarded a party expenses under the bad-faith exception to the American Rule and that party defends the trial court’s ruling successfully on appeal, the trial court lacks authority to award the expenses that the party has incurred in defending the appeal. Further, when a trial court has awarded a party expenses under the bad-faith exception to the American Rule and the litigation results in a judgment that is final for purposes of appeal, that party cannot subsequently ask the trial court for a supplemental award if it realizes that it left certain expenses out of its previous request or determines that it subsequently incurred additional amounts at the trial level. Here, Plaintiff prevailed at trial. The Court of Chancery’s post-trial decision found that Defendants raised bad-faith arguments to contest Plaintiff’s claim, thus warranting an award of expenses under the bad-faith exception to the American Rule. Defendants appealed, and the Delaware Supreme Court affirmed. Plaintiff then moved to recover additional expenses, comprising expenses incurred successfully in defending the appeal and expenses incurred at the trial level that Plaintiff had not been able to submit as part of its previous application. The Court of Chancery denied the application for the reasons set forth above. View "Marilyn Abrams Living Trust v. Pope Investments LLC" on Justia Law

Posted in: Civil Procedure

by
The Court of Chancery granted Petitioner’s motion for summary judgment for dissolution of Royston, Inc. under 3 Del. C. 273 and appointed a receiver to dissolve the company, holding that the prerequisites for a judicial order of dissolution under section 273 have been met in this case because (1) there were no genuine issues of fact as to Petitioner’s ownership of fifty percent of the company, and (2) there was no evidence that Petitioner filed the petition in bad faith. The Court directed that a receiver be appointed to oversee the dissolution for the company and the wind up of the company’s affairs. View "Feldman v. YIDL Trust" on Justia Law

Posted in: Business Law

by
In this action arising out of a reclassification of the shares of NRG Yield, Inc. (“Yield”), a stockholder alleged that members of the Yield board breached their fiduciary duties by approving the reclassification and that NRG Energy, Inc. (“NRG”), which managed Yield’s daily affairs, breached its fiduciary duty by causing Yield to undertake the reclassification. The Court of Chancery dismissed the complaint for failure to state a claim for relief, holding (1) the reclassification was a conflicted transaction subject to entire fairness review; (2) the analytical framework articulated in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014), applied to the reclassification; and (3) that framework was satisfied in this case from the face of the pleadings. View "IRA Trust FBO Bobbie Ahmed v. Crane" on Justia Law

by
In this case, the plaintiff, a stockholder of C&J Energy Services, Inc. (“C&J”), was precluded from targeting a particular stockholder to pay a fee award when the alleged benefit redounded to the benefit of all stockholders. Here, Plaintiff sought an award of attorneys’ fees for Plaintiff’s alleged role in reducing the amount of cash that C&J needed to pay Nabors Industries Ltd. in connection with a certain transaction. The beneficiary of the price reduction was C&J and, indirectly, all of its stockholders. Plaintiff asked the court to require that the estate of Joshua Comstock, who was C&J’s CEO and chairman of the board, to pay the full amount of any fee award. The Court of Chancery denied Plaintiff’s application because (1) Defendants successfully rebutted the presumption that Plaintiff’s litigation efforts caused the price reduction; and (2) Plaintiff’s demand that Comstock’s estate - or any of C&J’s other directors - pay a fee award would be inequitable and was inconsistent with the rationale of the corporate benefit doctrine. View "City of Miami General Employees' & Sanitation Employees' Retirement Trust v. C&J Energy Services, Inc." on Justia Law

Posted in: Business Law