Justia Delaware Supreme Court Opinion Summaries

The issue before the Supreme Court in this matter was whether the Chancery Court was required to dismiss a Delaware derivative complaint after a California federal court entered final judgment dismissing the same complaint brought by different stockholders. The Chancery Court determined it was not required to give preclusive effect to the California judgment. Upon review, the Supreme Court held that the Chancery Court erred in its determination: (1) the lower court held as a matter of Delaware law that the stockholder plaintiffs in the two jurisdictions were not in privity with one another; (2) that the California stockholders were not adequate representatives of the defendant corporation; (3) California law controlled the issue, and derivative stockholders were in privity with one another because they acted on behalf of the corporation; and (4) the Chancery Court adopted a presumption of inadequacy without the record to support it. Accordingly, the Supreme Court reversed and remanded. View "Pyott v. Louisiana Municipal Police Employees' Retirement System" on Justia Law

In 2006, a German bank organized two affiliated entities under Delaware law. One sold a class of securities (Trust Preferred Securities) as part of the bank's effort to raise capital. In 2009, the bank acquired a second German bank by merger, whereby the bank assumed an obligation of the acquired bank to make certain payments with respect to a class of the acquired bank's securities. The bank made those payments in 2009 and 2010. In 2010, Plaintiff, who is the Property Trustee for the holders of the acquiror bank's Trust Preferred Securities sued claiming the 2009 and 2010 payments on the acquired bank's securities (which was a "Parity Security") triggered a contractual obligation by the bank to make comparable payments on the Trust Preferred Securities. The bank argued that it had no such contractual obligation. On cross motions for summary judgment, the Court of Chancery rejected the Trustee's claim on the basis that, because the 2009 and 2010 payments were not made on "Parity Securities," the bank had no obligation to make payments on the Trust Preferred Securities. Because the Supreme Court disagreed and concluded that the Court of Chancery erred, the Court reversed and remanded with instructions to enter final judgment for the Trustee. View "Bank of New York Mellon v. Commerzbank Capital Funding Trust II" on Justia Law

Pro se appellant Holly Noel-Liszkiewicz appealed a superior court's decision to affirm the Industrial Accident Board's denial of her claim for worker's compensation benefits. Appellant was a customer service representative for Employer La-Z-Boy before being laid off. Almost two years after the lay off, Appellant petitioned the board seeking compensation for occupational asthma, pulmonary fibrosis, and respiratory failure allegedly caused by exposure to chemicals at La-Z-Boy’s facility. La-Z-Boy denied that Applicant suffered any illness or injury that was causally related to her work. Finding Appellant's arguments to be without merit, the Supreme Court affirmed both the Board and the superior court. View "Noel-Liszkiewicz v. La-Z-Boy" on Justia Law

In this appeal, the issue before the Supreme Court was whether a derivative complaint challenging a corporate board's decision to pay certain executive bonuses without adopting a plan that could make those bonuses tax deductible states a claim for waste. The trial court concluded that the complaint failed to allege with particularity, that the board's decision not to implement a so-called "Section 162(m)" plan was a decision that no reasonable person would have made. Upon review, the Supreme Court agreed and affirmed the trial court's decision. View "Freedman v. Adams, et al." on Justia Law

Defendants-Appellants National Grange Mutual Insurance Company and The Main Street Insurance Group (collectively "NGM") appealed a Superior Court's grant of summary judgment in favor of Plaintiff-Appellee Elegant Slumming, Inc. in this property insurance coverage dispute. NGM raised two claims on appeal: (1) NGM contended the trial court erred in finding that the property insurance policy at issue requires only "some evidence," rather than "physical evidence," to show what happened to lost property; (2) and that the trial court erred in finding the amount of Elegant Slumming’s attorney’s fees reasonable. Upon review, the Supreme Court found that the trial court erred in concluding that testimonial evidence, by itself, fulfills the "physical evidence" requirement of the policy, and that Elegant Slumming did present physical evidence in addition to testimonial evidence to show what happened to the lost property and therefore coverage was not barred by the policy exclusion. Furthermore, the Court found no abuse of discretion in the award of attorney’s fees pursuant to statute in this case. Accordingly, the Court affirmed. View "National Grange Mutual Insurance Co. v. Elegant Slumming, Inc." on Justia Law

Appellant BVF Partners L.P. ("BVF") appealed a Chancery Court certification of Appellee New Orleans Employees' Retirement System ("NOERS") as class representative in this action challenging the acquisition of Celera Corporation ("Celera") by Quest Diagnostics, Inc. ("Quest"). BVF also appealed the Court of Chancery's approval of a class action settlement without an opt out right for BVF between NOERS and Defendants-Appellees Richard H. Ayers, Jean-Luc Belingard, William G. Green, Peter Barton Hutt, Gail M. Naughton, Kathy Ordonez, Wayne I. Roe, Bennett M. Shapiro, Celera Corporation, Quest Diagnostics Incorporated, and Spark Acquisition Corporation ("Spark"). BVF contended that the Court of Chancery erred in certifying NOERS as the class representative, because NOERS lacked standing to represent the class. BVF argued that when NOERS sold its stock in Celera on the public market (before the merger was actually consummated and nearly a year before the Court of Chancery certified the class) NOERS no longer had a legally cognizable stake in the outcome of the litigation. BVF raised multiple other grounds for why the Court of Chancery erred in certifying NOERS as class representative, including that NOERS was uniquely susceptible to equitable defenses and was therefore an improper class representative. Even if that certification was proper, BVF argued that the Court of Chancery should have exercised its discretionary powers to allow BVF to opt out of the class in order to pursue its individual claims for monetary damages against the defendants. Upon review, the Supreme Court agreed with the Court of Chancery that NOERS had standing to represent the class. The Court declined to adopt a rule of law that a shareholder class representative in a breach of fiduciary duty action must own stock in the corporation continuously through the final class certification. With regard to BVF's other arguments regarding NOERS' certification as class representative, the Court found them "unconvincing." The Court concluded that the Court of Chancery did not abuse its discretion in certifying the class, however, there was merit to BVF's claim that the Court of Chancery should have exercised its discretion to allow BVF to opt out of the shareholder class under the circumstances of this case. Accordingly, the Court affirmed in part and reversed in part. View "In Re Celera Corporation Shareholder Litigation, et al. v. New Orleans Employees' Retirement System, et al." on Justia Law

The plaintiff-appellants, Bruce Bermel and Pamela Jurga, as husband and wife, appealed the final judgment of the Superior Court granting the motion for summary judgment of the defendant-appellee, Liberty Mutual Fire Insurance Company. The appellants contended that the Superior Court erred by granting summary judgment in favor of Liberty. Bermel was injured in an automobile accident when his personal motorcycle was struck head-on by another driver. Bermel, then an employee of the Siemens Corporation, contended that the business policy issued to Siemens by Liberty on a company car that was assigned for his business and personal use, provided him with $100,000 in underinsured motorist coverage even when he was operating a non-work vehicle in circumstances unrelated to his employment. Bermel brought this action for underinsured benefits (“UIM”) against Liberty arguing: (1) that the Liberty Policy covering the company car he used was personal to him, even though Siemens was the named insured; (2) that he was entitled to personally access the Liberty Policy because Siemens automatically deducted a nominal fee from his paycheck for his personal use of the vehicle assigned to him that was insured by the Liberty Policy; and (3) that the Liberty Policy was ambiguously drafted and should have been construed in his favor. Upon review, the Supreme Court concluded that the Superior Court correctly found Siemens, and not Bermel, to be the named insured on the Liberty Policy, that the nominal fee charged to Bermel by Siemens for the use of the car did not make Bermel a named insured under the Liberty Policy, and that the Liberty Policy was unambiguous. Therefore, the judgments of the Superior Court were affirmed. View "Bermel v. Liberty Mutual Fire Insurance Co." on Justia Law

The issue on appeal in this case came from a decision that dismissed a complaint against a foreign business entity for lack of personal jurisdiction. The foreign company allegedly conspired with other defendants to divest appellant of his interest in a lucrative joint venture. That plan was accomplished, in part, by causing the dissolution of a Delaware limited liability company co-founded by appellant. Under the "conspiracy theory" of personal jurisdiction, a plaintiff must allege facts from which one can infer that a foreign defendant knew or should have known that the conspiracy would have a Delaware nexus. The trial court found that the foreign company did not know about the Delaware connection until after the limited liability company had been dissolved. As a result, the trial court dismissed for lack of personal jurisdiction. Upon review, the Supreme Court reversed finding that the trial court's analysis was flawed in two respects: (1) the applicable standard is whether the foreign entity knew or should have known that it was conducting activity in Delaware (here, even if the record facts did not establish that appellee knew about the dissolution before it occurred, they established that appellee should have known that it was dealing with a Delaware company); (2) the conspiracy did not begin or end with the dissolution of the Delaware company (appellee learned that its business partner had been a Delaware entity shortly after the dissolution, and the alleged conspiracy continued long after that date). View "Matthew v. Flakt Woods Group SA" on Justia Law

In resolving this dispute between the controlling member–manager and the minority investors of a Delaware Limited Liability Company (LLC), the Supreme Court interpreted the LLC's governing instrument as a contract that adopted the equitable standard of entire fairness in a conflict of interest transaction between the LLC and its manager. The Court held that the manager violated that contracted-for fiduciary duty by refusing to negotiate with a third-party bidder and then by causing the company to be sold to himself at an unfair price in a flawed auction that the manager himself engineered. The Court affirmed the trial court's damages award solely on contractual grounds, and affirmed the court’s award of attorneys' fees. View "Gatz Properties, LLC v. Auriga Capital Corp., et al." on Justia Law

In this appeal, the issue before the Supreme Court was whether a contractor's bid was responsive to the Delaware Department of Transportation's (DelDOT) Request for Proposals (RFP). The contractor's bid did not include required paint certifications. In addition, the bid reflected the contractor's plan to use new steel beams, rather than refurbish the existing ones, as required by the RFP. The contractor chose to submit a bid that did not conform to the project specifications. The Supreme Court concluded that the contractor therefore did so at its own risk. DelDOT's decision that the bid was non-responsive was not arbitrary or capricious. Accordingly, the Court affirmed the trial court's entry of summary judgment in DelDOT's favor. View "Julian v. Delaware Dep't. of Transportation" on Justia Law