by
Grandparents petitioned for third-party visitation rights, and the parents objected. The Family Court essentially found the parents’ objections were not unreasonable. The grandparents had attacked the parents on social media, disparaged their parenting abilities, demoralized their son (the father), and sought to meddle in the parents’ relationships with their children. Nonetheless, the court awarded the grandparents the right to visitation in a “supervised, therapeutic setting.” The court believed that visitation in such a controlled environment, and under the supervision of a trained professional, would minimize the parents’ concerns and render their objections “clearly unreasonable.” The Delaware Supreme Court determined the trial court record provided no basis for supporting the conclusion that therapeutic, supervised visitation would adequately address the reasonable objections of the parents. Furthermore, the Court found the grandparents presented no evidence to support a finding that therapeutic, supervised visitation would not substantially interfere with the parent-child relationship. Therefore, the Court held the Family Court abused its discretion in awarding visitation to the grandparents, and reversed its decision. View "Grant v. Grant" on Justia Law

Posted in: Family Law

by
A Cayman Islands investment fund and two of its Delaware subsidiaries (collectively “Gramercy”) sued a bank organized under Delaware law with offices in Illinois and Bulgaria (Bulgarian-American Enterprise Fund, or “Bulgarian-American”) and an Irish bank headquartered in Dublin (Allied Irish Banks, P.L.C., or “Allied”) over claims they admitted arose under Bulgarian law and had no connection to activity that took place in Delaware. Delaware was the second forum in which Gramercy sought to press its Bulgarian claims. The first forum was Illinois, where: (i) after extensive discovery and briefing on the issue of forum non conveniens, the Circuit Court of Cook County in Chicago granted a motion to dismiss; (ii) the Illinois Appellate Court unanimously affirmed the Circuit Court’s dismissal; and (iii) the Illinois Supreme Court denied Gramercy’s petition for leave to appeal. Rather than going to Bulgaria and suing in the forum whose laws governed its claims and where its investment in Bulgarian-American took place, Gramercy sued in Delaware. Bulgarian-American and Allied filed a motion to dismiss, arguing Bulgaria was the appropriate forum for the litigation. In granting Bulgarian-American and Allied’s motion and holding that Gramercy’s suit did not merit the overwhelming hardship standard afforded to first-filed actions under Cryo-Maid, the Delaware Court of Chancery was forced to address confusing arguments about this Court’s forum non conveniens precedent, in particular, the relationship among the Delaware Supreme Court’s longstanding decisions in “CryoMaid” and “McWane,” and a more recent decision, “Lisa, S.A. v. Mayorga.” Ultimately, the Delaware Supreme Court determined the Court of Chancery correctly held that because the Delaware action was not first filed, and that to obtain dismissal on forum non conveniens grounds, Bulgarian-American and Allied did not need to show overwhelming hardship. But, because the Illinois case was no longer pending, and was not dismissed on the merits like the first-filed action in Lisa, McWane was no longer the proper focus for the Court of Chancery’s analysis. The Illinois action had relevance in the forum non conveniens analysis because it meant that analysis would not be tilted in Gramercy’s favor under the overwhelming hardship standard. But, because the Illinois action was not dismissed on its merits, but instead for forum non conveniens, it should not have shifted the Court’s focus from Cryo-Maid to McWane. Between Cryo-Maid’s overwhelming hardship standard and McWane’s discretionary standard lies an intermediate analysis that applies to situations like Gramercy’s: a straightforward assessment of the CryoMaid factors, where dismissal is appropriate if those factors weigh in favor of that outcome. View "Gramercy Emerging Markets Fund, et al. v. Allied Irish Banks, P.L.C., et al." on Justia Law

by
Curtis White appealed a superior court’s denial of his claim for post-conviction relief under “Strickland,” which contended that White was prejudiced when his trial counsel unreasonably failed to accede to his request to ask for a lesser included offense instruction. In the post-conviction proceeding, trial counsel admitted that he did not understand the lesser included offense of the major charge that his client faced. White was charged with First Degree Reckless Endangering after he fired a gun on a residential block, and asked his counsel to seek a lesser included offense instruction on the crime of Second Degree Reckless Endangering. His counsel did not, believing that: (1) at the very least his client’s use of a gun created a risk of “serious physical injury;” (2) First Degree Reckless Endangering encompassed not just a risk of death, but also a risk of serious physical injury; and (3) therefore he could not seek the lesser included offense instruction. The Delaware Supreme Court determined a reasonable jury could have found White guilty of Second Degree Reckless Endangering because there was evidence that White was not pointing his gun at anyone in particular and was instead aiming blindly behind himself. Thus, there were factual grounds to give the lesser included offense instruction. Because trial counsel conceded he acted without a tactical purpose, and there was no plausible tactical reason for failing to request the instruction, the Supreme Court concluded counsel’s performance fell below an objective standard of reasonableness for purposes of “Strickland.” And because a jury could have concluded that White was guilty of Second Degree Reckless Endangering rather than First Degree Reckless Endangering, there was prejudice under Strickland. For those reasons, the Supreme Court reversed. View "White v. Delaware" on Justia Law

by
In 2011, Heartland Payment Systems, Inc. (“Heartland”), a credit card processing company, wanted to expand its school operations. To pursue this strategy, Heartland purchased some of the assets of School Link Technologies, Inc. (“SL-Tech”). SL-Tech marketed software products to schools to manage their foodservice operations. Through the purchase of SL-Tech, Heartland acquired WebSMARTT, a software program that allowed schools to monitor school meal nutrition through point of sale, free and reduced meal eligibility tracking, menu planning, nutrient analysis, and recordkeeping. It was intended that WebSMARTT and similar applications collect and use data collected through the programs to model the effect of menu plans on staffing, equipment, and other costs. The parties executed three contracts involving Heartland, SL-Tech, and SLTech’s CEO, Lawrence Goodman to create “inTEAM” the software to be built from the WebSMARTT technology. The contracts contained non-compete, non- solicitation, exclusivity, cross-marketing, and support obligations. The parties quickly lost sight of their post-closing contractual obligations: inTEAM developed the new software; Goodman tried to solicit one of Heartland’s customers. Heartland paired with one of inTEAM’s biggest competitors to submit a bid to provide software to the Texas Department of Agriculture. The disputes eventually found their way to the Court of Chancery through breach of contract claims and counterclaims. After trial, the Court of Chancery found inTEAM did not breach any of its contractual obligations, but Goodman and Heartland had breached certain of theirs. The Delaware Supreme Court reversed the Court of Chancery’s finding that Goodman and inTEAM did not breach their non-compete obligations under the various agreements, but otherwise affirmed the court’s decision. As for the remaining issues, the Court of Chancery properly found that Heartland breached its contractual obligations by collaborating with an inTEAM competitor, and Goodman breached by soliciting a customer of Heartland. The court also did not abuse its discretion when it required an extension of the non-competes and assessed damages against Goodman. The Supreme Court therefore affirmed in part and reversed the Court of Chancery’s decision. View "Heartland Payment Systems, LLC v. InTeam Associates LLC, et al." on Justia Law

Posted in: Business Law, Contracts

by
Appellant Prentiss Butcher appealed after he was convicted and sentenced for Possession of a Firearm By a Person Prohibited. At sentencing, the Superior Court held that Butcher had two prior “violent felony” convictions warranting a ten-year mandatory minimum sentence pursuant to Section 1448(e)(1)(c). On appeal, Butcher argued that the Superior Court erred in sentencing him because one of the two predicate offenses was no longer designated a violent felony when he committed Person Prohibited. Thus, this appeal required the Delaware Supreme Court to determine which version of Section 4201(c) controlled when a sentencing court must decide whether a prior conviction constitutes a predicate violent felony for the purpose of enhanced sentencing under Section 1448(e). The Supreme Court concluded a sentencing court must look to the version of Section 4201(c) in effect upon commission of the Section 1448 offense for which a defendant is being sentenced. Because the Superior Court in this case applied a version of Section 4201(c) that was no longer in effect when Butcher violated Section 1448, it vacated the Sentence Order and remanded for resentencing. View "Butcher v. Delaware" on Justia Law

by
DFC Global Corporation (“DFC”) provided alternative consumer financial services, predominately payday loans. The 2014 transaction giving rise to this appraisal action resulted in DFC being taken private by Lone Star, a private equity firm. DFC was a highly leveraged company. Its capital structure was comprised of about $1.1 billion of debt as compared to a $367.4 million equity market capitalization, 20 resulting in a debt-to-equity ratio of 300% and a debt-to-total capitalization ratio of 75%. In the years leading up to the merger, DFC faced heightened regulatory scrutiny in the US, UK and Canada. The parties challenged DFC’s valuation for merger purposes. The Delaware Supreme Court surmised DFC wanted the Court to establish a presumption that in certain cases involving arm’s-length mergers, the price of the transaction giving rise to appraisal rights was the best estimate of fair value. The Supreme Court declined to do so, which in the Court’s view had no basis in the statutory text, which gave the Court of Chancery in the first instance the discretion to “determine the fair value of the shares” by taking into account “all relevant factors.” The Supreme Court must give deference to the Court of Chancery if its determination of fair value has a reasonable basis in the record and in accepted financial principles relevant to determining the value of corporations and their stock. Ultimately, the Delaware Supreme Court reversed and remanded the Court of Chancery’s valuation, remanding for the Chancellor to reassess the weight he chooses to afford various factors potentially relevant to fair value, and he may conclude that his findings regarding the competitive process leading to the transaction, when considered in light of other relevant factors, such as the views of the debt markets regarding the company’s expected performance and the failure of the company to meet its revised projections, suggest that the deal price was the most reliable indication of fair value. View "DFC Global Corporation v. Muirfield Value Partners, L.P., et al." on Justia Law

by
In 2001, Luis Cabrera was convicted by jury on two counts of first degree murder and other offenses for the execution-style killing of Vaughn Rowe and Brandon Sanders. His co-defendant, Luis Reyes, was tried separately and also found guilty of first degree murder. Both defendants were sentenced to death. After Cabrera’s conviction and sentence were affirmed on direct appeal, Cabrera moved for postconviction relief claiming in part his trial counsel was ineffective in his defense. The motion took years to resolve due to events outside of counsel’s and the Superior Court’s control. The Superior Court in 2015 granted the motion in part, ruling that Cabrera’s trial counsel was ineffective during the penalty phase of the trial, and vacated Cabrera’s death sentence. The Superior Court denied the remainder of Cabrera’s postconviction claims. Cabrera appealed the Superior Court’s denial of his motion for postconviction relief. The State voluntarily dismissed its cross-appeal of the Superior Court’s vacatur of Cabrera’s death sentence in light of the Delaware Supreme Court’s decisions in Rauf v. Delaware and Powell v. Delaware finding Delaware’s death penalty statute unconstitutional and applying our ruling retroactively. The Delaware Supreme Court affirmed the Superior Court’s ruling. View "Cabrera v. Delaware" on Justia Law

by
Rule 61 is effectively a “gating mechanism” allowing a superior court to summarily dismiss certain claims. Appellant Cleveland Baldwin appealed a superior court’s summary dismissal of his first timely motion for postconviction relief. The charges against Baldwin that led to the convictions he sought to overturn were based on the allegation that he, along with two other men, assaulted a tenant who supposedly owed Baldwin’s aunt back rent. To wit, the State alleged that Baldwin confronted the victim, complained that he had disrespected his aunt, and pulled a pipe out of his pants and beat him with it. The Superior Court Rule of Criminal Procedure that governs postconviction relief, Rule 61, strikes a balance between fair consideration of postconviction claims and the preservation of scarce defense resources by granting access to counsel for certain first petitions, but also by allowing the superior court to weed out, by summary dismissal, claims that lack colorable merit. Here, the Superior Court used the mechanism of Rule 61 to summarily dismiss all the claims of a first petitioner without appointment of counsel for him, without adversarial briefing, and without any factual record beyond the form petition and trial record. On appeal, the Delaware Supreme Court concluded that the superior court was correct in most of its rulings, but that as to one claim, the superior court erred by not recognizing the potential merits of the claim and appointing counsel for the petitioner to present it in a more adequate way. View "Baldwin v. Delaware" on Justia Law

by
Chicago Bridge & Iron Company N.V. (“Chicago Bridge”) and Westinghouse Electric Company (“Westinghouse”) had an extensive collaboration and complicated commercial relationship involving the construction of nuclear power plants by Chicago Bridge’s subsidiary, CB&I Stone & Webster, Inc. (“Stone”). As delays and cost overruns mounted, this relationship became contentious. To resolve their differences, Chicago Bridge agreed to sell Stone to Westinghouse. The purchase agreement was unusual in a few key respects: (1) the purchase price at closing by Westinghouse was set in the contract at zero ; and (2) Westinghouse agreed that its sole remedy if Chicago Bridge breached its representations and warranties was to refuse to close, and that Chicago Bridge would have no liability for monetary damages post-closing (the “Liability Bar”). In contesting Chicago Bridge’s calculation of the Final Purchase Price, Westinghouse asserted that Chicago Bridge (which had been paid zero at closing and had invested approximately $1 billion in the plants in the six months leading to the December 31, 2015 closing) owed it nearly $2 billion. Westinghouse conceded the overwhelming percentage of its claims were based on the proposition that Chicago Bridge’s historical financial statements (the ones on which Westinghouse could make no post-closing claim) were not based on a proper application of generally accepted accounting principles (“GAAP”). Chicago Bridge and Westinghouse unsuccessfully attempted to resolve their differences. But, once it was clear that Westinghouse would seek to have the Independent Auditor review Chicago Bridge’s accounting practices, Chicago Bridge filed this action seeking a declaration that Westinghouse’s changes based on assertions that Stone’s financial statements and accounting methodologies were not GAAP compliant were not appropriate disputes for the Independent Auditor to resolve when those changes were, in essence, claims that Chicago Bridge breached the Purchase Agreement’s representations and warranties and therefore were foreclosed by the Liability Bar. Westinghouse moved for judgment on the pleadings, arguing that the Purchase Agreement established a mandatory process for resolving the parties’ disagreements. The Court of Chancery ruled in favor of Westinghouse, reading the process the Purchase Agreement set out for calculating certain payments (called the “True Up”) as providing Westinghouse with a wide-ranging right to challenge any accounting principle used by Chicago Bridge. The Delaware Supreme Court concluded the Court of Chancery erred in interpreting the Purchase Agreement this way. The Court therefore reversed and required entry of a judgment on the pleadings for Chicago Bridge. View "Chicago Bridge & Iron Company N.V. v. Westinghouse Electric Co." on Justia Law

Posted in: Business Law, Contracts

by
The Delaware Supreme Court found that the trial court abused its discretion in this case when it denied defendant Chistopher Clay’s motion for judgment of acquittal on his Tampering with Physical Evidence charge, but rejected his remaining claims. The Court also found the trial court erred by requiring the State to provide a copy of the Department of Justice’s intake document and copies of the prosecutor’s notes under Superior Court Criminal Rule 26.2. Clay appealed after a jury verdict found him guilty of Robbery in the First Degree, Possession of a Firearm During the Commission of a Felony, Tampering with Physical Evidence, Conspiracy in the Second Degree, and Resisting Arrest. He claimed: (1) the trial court abused its discretion by denying his motion to sever his trial from the trial of his co-defendants; (2) the trial court erred by denying his motion for judgment of acquittal on all charges; and (3) the trial court erred by finding the police possessed a reasonable, articulable suspicion to seize him and probable cause to arrest him. On cross-appeal, the State argued that the Superior Court abused its discretion by requiring the State to provide the defendant with a redacted copy of a Department of Justice intake document and a copy of the prosecutor’s notes from witness interviews under Superior Court Criminal Rule 26.2. View "Clay v. Delaware" on Justia Law