Justia Delaware Supreme Court Opinion Summaries

A sports agent entered into a written agreement with a professional basketball player’s company to receive a commission on all marketing income generated from leads initially produced by the agent. Under an endorsement contract with a sportswear company negotiated by the agent, the player’s company received compensation in several forms, including one million shares of restricted stock that vested over time. The agent was paid commissions on cash compensation as EmTurn, the player’s company, received it. However, no commission was paid or invoiced for the stock compensation until years later, after the player was no longer represented by the agent and had sold a substantial number of the shares.The Superior Court of the State of Delaware, after cross-motions for summary judgment, concluded that the stock compensation qualified as “marketing income” under the agreement and thus was commissionable. However, the court found the agreement was ambiguous as to when the commission on the stock was due. By examining the parties’ course of performance, the court decided the commission was due when the stock vested, not when it was sold. Because the last shares vested in 2016 and the lawsuit was not filed until 2022, the court held the claim was barred by the three-year statute of limitations and dismissed the agent’s claims.On appeal, the Supreme Court of the State of Delaware affirmed that the stock was commissionable under the agreement, rejecting the player’s argument that the absence of specific payment mechanisms rendered it non-commissionable. However, the Supreme Court reversed the Superior Court’s statute of limitations ruling, finding genuine factual disputes regarding when payment was due for the stock commission—either at vesting or at sale. The Supreme Court remanded the case for further proceedings for a factfinder to determine what constituted a reasonable time for payment, which would resolve the limitations issue. View "F.A.M.E. LLC v. Emturn LLC" on Justia Law

A man was charged with several felony offenses arising from the sexual assault of a 13-year-old girl. The State’s case relied on the child’s testimony, physical evidence including DNA, and proof that the child was below the age of consent. DNA testing revealed male DNA on multiple parts of the child’s body; some matched the defendant, but DNA found in the child’s vaginal vestibule was inconclusive—it could not include or exclude the defendant. Importantly, spermatozoa found on the child’s underwear was conclusively not the defendant’s. The defense sought to admit this evidence to suggest another individual could have been the source of the male DNA, but the trial court excluded it.The Superior Court of the State of Delaware conducted a jury trial on most charges and a bench trial on one. The court admitted a redacted DNA report, omitting the evidence of another male’s DNA on the underwear. The jury convicted the defendant of all charges, unanimously finding that he engaged in vaginal intercourse with the child. The bench trial also resulted in conviction on the remaining charge. The defendant was sentenced to a lengthy prison term and appealed, arguing that exclusion of the DNA evidence deprived him of a fair trial on the most serious charges.The Supreme Court of the State of Delaware held that the trial court abused its discretion by failing to appreciate the high probative value of the excluded DNA evidence, which was directly relevant to whether the defendant engaged in sexual intercourse with the child. The Court found that the danger of unfair prejudice did not substantially outweigh this probative value and that the Rape Shield Statute did not bar the evidence. The Supreme Court reversed the convictions on charges that depended on proof of sexual intercourse and remanded for further proceedings. Convictions not dependent on that element were left undisturbed. View "Baldwin vs. State" on Justia Law

A privately held investment fund with ERISA plan investors (the Fund) contained provisions in its governing agreements granting indemnification and advancement rights to its general partner, management company, and their principals, all of whom served as ERISA fiduciaries. After these fiduciaries were removed in late 2023, the Fund sued them in the Delaware Court of Chancery, alleging breach of contract and violations of the fund’s governing documents for withholding information and assets. The defendants counterclaimed, seeking advancement of their litigation expenses, as provided in the fund’s agreements.The Fund argued that advancement from ERISA assets was barred by section 1110 of the Employee Retirement Income Security Act (ERISA), which voids contractual provisions that relieve fiduciaries from responsibility or liability for their ERISA duties. The Court of Chancery held that, even though advancement was permitted under Delaware law, ERISA section 1110 rendered these advancement provisions void because they would improperly relieve fiduciaries from ERISA liability. The court also noted that a bar on advancement was appropriate since the fiduciaries had not shown an ability to repay advanced funds. The defendants appealed this ruling.The Supreme Court of the State of Delaware reviewed the case. It held that advancement of litigation expenses for the defense of state-law claims, subject to a written undertaking to repay if indemnification is ultimately unwarranted, does not violate ERISA section 1110. The Court distinguished advancement from indemnification, emphasizing that advancement with an undertaking does not abrogate the fund’s right to recover from fiduciaries for ERISA breaches. The Court also found that neither statutory language nor relevant federal case law categorically barred such advancement under these circumstances. Accordingly, the Supreme Court of Delaware reversed the Court of Chancery’s decision and remanded the matter. View "Invictus Global Management, LLC v. Invictus Special Situations Master I, L.P." on Justia Law

An eight-year-old child, N.R., alleged that her father, Gerald Roberson, had sexually abused her over several years, with the most recent incident occurring two months before she was taken by her mother to a hospital for a sexual assault examination. While the examination found no physical evidence of abuse, N.R. gave a detailed statement about repeated abuse and indicated that Roberson threatened her to keep her silent. Roberson was charged with multiple serious offenses relating to sexual abuse of a child.The State moved before trial to allow N.R. to testify remotely using closed-circuit television (CCTV), citing a Delaware statute permitting such testimony for children under certain conditions. After a hearing that included expert testimony from N.R.’s counselor about the child’s fear and likely inability to communicate in her father’s presence, the Superior Court found that remote testimony was warranted and that the statute permitting it did not violate the Delaware Constitution. The court also denied Roberson’s request for a limiting instruction after the prosecutor, during closing arguments, asked the jury to consider why a child would endure the ordeal of reporting and testifying if her claims were untrue. The jury convicted Roberson on all counts, and he was sentenced to 125 years in prison.The Supreme Court of the State of Delaware reviewed whether the statutory procedure allowing child witnesses to testify by CCTV violated the state constitutional right to confront witnesses “face to face,” and whether the prosecutor’s closing argument constituted impermissible vouching for the witness’s credibility. The Court held that the statute does not violate the Delaware Constitution, relying on precedent that interprets the confrontation right to allow such procedures in the interest of protecting child victims while preserving the defendant’s right to cross-examination. The Court also found that the prosecutor’s comments did not amount to misconduct. The judgment of the Superior Court was affirmed. View "Roberson v. State" on Justia Law

A dispute arose between a South Korean electronics manufacturer and a group of Delaware-based patent holding entities after the manufacturer paid $12.8 million to license certain patents in order to protect itself and its customers from infringement claims. Despite this agreement, the patent holders later sued two of the manufacturer’s major automotive customers in Texas, alleging infringement based on those customers’ use of the manufacturer’s telematics units. The customers settled with the patent holders and then sought indemnification from the manufacturer for their legal expenses and settlement payments, as contemplated by supply agreements between the manufacturer and its customers.The manufacturer initiated a breach of contract action in the Delaware Superior Court, alleging that the patent holders’ Texas lawsuits violated the license agreement, which was intended to provide “patent peace” for both the manufacturer and its customers. The parties disputed whether the telematics units at issue were covered by the license or excluded as “Foundry Products.” The Superior Court ruled on summary judgment that the telematics units were covered and not excluded. The jury found for the manufacturer, awarding over $17 million in damages. The court then capped damages at $12.8 million per the contract but, after trial, further reduced the award to $4.9 million based on a new argument by the patent holders about which entity had received the license fee. The court also denied prejudgment interest and costs.On appeal, the Supreme Court of the State of Delaware affirmed the findings that the telematics units were covered by the license and that sufficient evidence supported the manufacturer’s damages and indemnification obligations. It reversed the post-trial reduction of damages to $4.9 million, finding that argument was raised too late and prejudiced the manufacturer, reinstating the $12.8 million cap. The court also reversed the denial of prejudgment interest and costs, remanding for their calculation and award. View "LG Electronics Inc. v. Invention Investment Fund I, L.P." on Justia Law

Shari Redstone exercised control over National Amusements Incorporated, which in turn held a majority of the voting shares of Paramount Global, giving her control over Paramount. In 2023 and 2024, media outlets reported on efforts to sell National Amusements and possible bids for Paramount itself. Some reports suggested that Redstone, acting as Paramount’s controller, blocked a sale of the entire company in favor of selling only National Amusements’ controlling stake. The Employees’ Retirement System of Rhode Island, a Paramount shareholder, made a demand under Section 220 of the Delaware General Corporation Law to inspect Paramount’s books and records for evidence of potential corporate wrongdoing, specifically the possible usurpation of a corporate opportunity and breaches of fiduciary duty by Redstone and National Amusements. Paramount rejected the demand, leading Rhode Island to file a complaint to compel inspection.A trial was held before a Magistrate in Chancery, who declined to consider evidence arising after the demand and found that Rhode Island lacked a credible basis to infer wrongdoing, recommending judgment for Paramount. Rhode Island took exceptions to this report. The Vice Chancellor, conducting a de novo review, considered both pre- and post-demand evidence, including confidentially sourced news reports, and found Rhode Island had established a credible basis to infer possible wrongdoing. The court ordered the matter remanded for a hearing on the scope of production and later certified two questions for interlocutory appeal.The Supreme Court of the State of Delaware affirmed the Vice Chancellor’s decision. It held that, while generally stockholders are limited to pre-demand evidence in Section 220 actions, courts may, in exceptional circumstances and at their discretion, consider post-demand evidence that is material and not prejudicial. The court also determined that reliable hearsay from reputable news outlets can be considered in the credible basis inquiry. The judgment was affirmed and remanded for further proceedings. View "Paramount Global v. State of Rhode Island Office of the General Treasurer" on Justia Law

A former high-level employee left her position at a company after receiving incentive equity agreements that included non-compete, non-solicitation, and confidentiality provisions. She subsequently joined a competitor. The company alleged that she breached those provisions by working for the competitor and that, in the short time since her move, at least five important clients had also moved to the competitor, an unusual loss rate for the business. The employee’s role at her former employer was not confined to a single region, and she was involved in high-level strategic decisions affecting company operations nationwide. The restrictive covenants at issue included an 18-month, nationwide non-compete and were supported by incentive units that would vest over time or upon sale of the company.After the company filed suit, the Court of Chancery of the State of Delaware denied a temporary restraining order but expedited proceedings. The defendants moved to dismiss. The company amended its complaint with more detailed allegations. The Court of Chancery granted the motion to dismiss, holding that the non-compete was unenforceable due to its breadth and the minimal value of the consideration provided, and that the allegations of breach of the non-solicitation and confidentiality provisions were conclusory. It also dismissed related tortious interference claims.On appeal, the Supreme Court of the State of Delaware reviewed the dismissal de novo. The Supreme Court held that the Court of Chancery improperly drew inferences against the employer at the pleading stage and failed to credit factual allegations supporting the claims. The Supreme Court found it was reasonably conceivable that the non-compete, non-solicitation, and confidentiality provisions could be enforceable, and that the complaint sufficiently alleged breaches. The Supreme Court reversed and remanded for further proceedings, limiting its holding to the adequacy of the pleadings and expressing no view on ultimate enforceability. View "Payscale Inc. v. Norman" on Justia Law

Two neighboring landowners in Middletown, Delaware, disputed whether a cross-easement existed that would allow one parcel (Reybold’s) to use a highway entrance situated on the other parcel (Summit’s). The properties were originally subdivided from a larger tract owned by Viola Carter. During the subdivision and rezoning process in the 1980s, the developer’s engineer, at the request of government agencies, included a note on the record plan stating that “a cross-easement is hereby established” between the parcels for vehicular and pedestrian access. Carter signed the record plan, certifying her ownership and intent to develop according to the plan. The record plan was recorded, and both properties were subsequently sold to new owners, with deeds referencing the plan.Years later, after Reybold purchased one parcel, it sought to enforce the cross-easement to gain more valuable access to the main road. Summit, the owner of the adjoining shopping center parcel, refused to recognize the easement. Reybold sued Summit in the Court of Chancery. A Magistrate in Chancery found that an express cross-easement had been created and could be enforced by Reybold. However, the Vice Chancellor, on de novo review, disagreed, holding that the record plan note was a “notation” under the County Code, which only the County could enforce, and that there was insufficient evidence of the original owner’s intention to create a private easement.The Supreme Court of the State of Delaware reversed the Court of Chancery. It held that the landowner’s signature and certification on a recorded plan containing a note establishing a cross-easement were sufficient to create an enforceable express easement appurtenant. The Court ruled that Summit, as a subsequent purchaser, is bound by this easement, and entered judgment for Reybold. View "Reybold Venture Group IX, LLC v. Summit Plaza Shopping Center, LLC" on Justia Law

A dispute arose between an investment banker and the firm where he was employed regarding his status and compensation. Initially, the banker joined the firm under an employment offer letter that set out specific compensation terms. Over time, both sides attempted to negotiate changes to this arrangement, exchanging draft agreements and addenda. They met to discuss these terms but left with differing understandings. The banker believed an oral partnership agreement had been reached, while the firm contended only his compensation as an employee was modified. When the banker later made a demand for access to certain records, the firm denied his request, asserting he was not a partner.The case was first addressed by the Court of Chancery of the State of Delaware, which found after trial that no oral partnership agreement had been formed, meaning the banker was not a partner entitled to records access under Delaware law. The court also noted that questions about the banker’s compensation as an employee would be determined in a separate, subsequent action. Following this, the banker filed counterclaims in the ongoing plenary action seeking relief based on his employment letter, but the Court of Chancery dismissed most of these counterclaims. It held that they were barred by collateral estoppel because they relied on facts the court had found against the banker in the earlier proceeding.On appeal, the Supreme Court of the State of Delaware reviewed whether collateral estoppel properly barred the banker’s counterclaims about his compensation. The Supreme Court concluded that the earlier factual findings about the banker’s compensation were not essential to the judgment that he was not a partner. The Supreme Court reversed the Court of Chancery’s dismissal of the banker’s counterclaims relating to his compensation as an employee and remanded the case for further proceedings. View "Handler v. Centerview Partners Holdings LP" on Justia Law

The case concerned Jeffrin Cabrera, who was convicted by a jury of three counts of first-degree rape, two counts of first-degree burglary, one count of attempted first-degree rape, and one count of terroristic threatening. The events leading to these charges involved Cabrera’s repeated threats and coercion against Flor Munoz Coto, with whom he had previously been in a relationship. Cabrera followed, threatened, and extorted Munoz for money, and ultimately sexually assaulted her multiple times between August 20 and August 23, 2023. Forensic evidence, including DNA analysis, corroborated Munoz’s testimony about the assaults.The Superior Court of the State of Delaware presided over Cabrera’s trial. During jury selection, the court did not question prospective jurors about potential bias against individuals with limited English proficiency. The court later instructed the jury that such bias was impermissible. Cabrera did not testify. The jury convicted him on all counts, and the court sentenced him to 72 years in prison. Cabrera appealed, raising two issues for the first time: the adequacy of the jury instruction about the mens rea required for kidnapping (a predicate felony for two of the rape counts), and the absence of voir dire regarding juror bias against non-English speakers.The Supreme Court of the State of Delaware reviewed the case under the plain error standard, since neither issue had been raised below. The court found that, although the kidnapping instruction omitted the statutory definition of “intentionally,” it did not constitute plain error, given the evidence and context. The court further held that the failure to conduct voir dire regarding language bias was not plain error, especially in light of the jury instructions given and the absence of a request by defense counsel. The Supreme Court affirmed Cabrera’s convictions. View "Cabrera v. State" on Justia Law