Justia Delaware Supreme Court Opinion Summaries

Articles Posted in Civil Procedure
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A borrower misrepresented his authority to act on behalf of two corporations he intended to acquire, providing false documents to a lender. Despite having documents contradicting the borrower's claims, the lender proceeded with a $7 million loan, including a confession-of-judgment affidavit naming the corporations as additional borrowers. When the borrower defaulted, the lender sought a confessed judgment against all borrowers, including the corporations, whose true officers were unaware of the transaction until served with notice of the judgment.The Superior Court of Delaware conducted a hearing and entered judgment in favor of the lender, finding that the borrower had apparent authority to bind the corporations. The court focused on the borrower's conduct and representations, concluding that they created the impression of authority sufficient to warrant the entry of a confessed judgment against the corporations.The Supreme Court of Delaware reviewed the case and found that the Superior Court's formulation of the test for apparent authority was flawed. The Supreme Court emphasized that apparent authority must be based on the principal's manifestations, not solely on the agent's conduct. The evidence did not support a finding that the corporations acted in a way that created a reasonable belief in the lender that the borrower was authorized to bind them. Consequently, the Supreme Court reversed and vacated the Superior Court's judgment, concluding that the borrower lacked apparent authority and that the corporations did not effectively waive their due process rights. View "Caribbean Sun Airlines Inc. v. Halevi Enterprises LLC" on Justia Law

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Jason Terrell, M.D., provided consulting services and served on the board of directors of Kiromic Biopharma, Inc. between December 2014 and May 2021. During this period, Kiromic awarded Terrell stock options through three separate agreements. The first agreement granted Terrell an option to purchase 500,000 shares at $0.50 per share for consulting services. The second agreement, made when Terrell joined the board, granted him an option to purchase 500,004 shares at $0.17 per share. The third agreement, which included a waiver clause, granted him an option to purchase 500,004 shares at $0.19 per share. After Terrell resigned from the board in September 2019, Kiromic refused to honor the options from the first two agreements, claiming that Terrell waived his rights to those options in the third agreement.The Court of Chancery dismissed Terrell’s complaint seeking specific performance of the first two option grants, finding that the waiver clause in the third agreement unambiguously extinguished Terrell’s rights to the previous option awards. The court held that the language in the waiver clause, which stated that Terrell had no other rights to any other options or securities of the company, was clear and that the carveout for "securities issued" did not include unexercised options.The Supreme Court of the State of Delaware reviewed the case and found that the waiver language was susceptible to more than one reasonable interpretation. The court noted that the term "securities" could reasonably include options and that the parties' use of the word "issued" did not exclusively refer to shares. Therefore, the court concluded that the waiver clause was ambiguous and that the case should not have been dismissed at the pleadings stage. The Supreme Court reversed the Court of Chancery’s dismissal of the complaint and remanded the case for further proceedings. View "Terrell v. Kiromic Biopharma, Inc." on Justia Law

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In this case, SARN SD3 LLC ("SD3") brought a breach of contract action against Czechoslovak Group A.S. ("CSG") regarding an option contract for shares in RETIA A.S. ("RETIA"). The contract stipulated that if CSG ceased to own a majority of RETIA before SD3's call option expired, CSG would pay SD3 a "Penalty Amount" based on an "Independent Valuation" of RETIA. CSG sold RETIA, triggering the Penalty Amount, but disputes arose over access to valuation information, leading SD3 to file suit.The Superior Court of Delaware granted SD3's entitlement to the Penalty Amount and calculated the Independent Valuation as the average of two valuations from Big Four accounting firms, despite CSG's objections. The court later determined that SD3's valuation was independently determined and in good faith. SD3 then filed a Rule 37 Motion for sanctions, alleging CSG withheld important valuation documents, but the court denied the motion, suggesting SD3 seek relief under Rule 60(b) for newly discovered evidence. SD3's subsequent Rule 60 Motion was also denied, as the court found the documents were not newly discovered and no exceptional circumstances warranted relief.The Delaware Supreme Court reviewed the case and affirmed the Superior Court's decisions. The Supreme Court held that the contract's provisions were clear and unambiguous, not requiring judicial inquiry into the valuation methodologies. The court also found no abuse of discretion in the Superior Court's handling of the Rule 37 and Rule 60 motions, as SD3 had the documents in question well before the summary judgment ruling and failed to demonstrate due diligence. Additionally, the Supreme Court upheld the Superior Court's decision to convert the judgment to U.S. dollars using the exchange rate as of the valuation date, rejecting SD3's arguments for a different conversion date. View "Czechoslovak Group A.S. v. SARN SD3 LLC" on Justia Law

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In response to the COVID-19 pandemic, the Governor of Delaware issued a series of emergency orders that included restrictions on religious services. These restrictions, which were lifted by June 2020, limited in-person worship to ten people and imposed various other mandates. Over 18 months later, two religious leaders filed suit in the Court of Chancery seeking injunctive relief against these restrictions, which were no longer in effect. The Court of Chancery dismissed the case for lack of subject matter jurisdiction, concluding that the plaintiffs could not demonstrate a reasonable apprehension of future harm.The plaintiffs then transferred their action to the Superior Court, seeking declaratory judgment and damages for alleged violations of their constitutional rights. The Superior Court dismissed the claims, ruling that the requests for declaratory relief were not justiciable because the restrictions had been lifted and there was no ongoing controversy. Additionally, the court found that the Governor was immune from the damages claims under the State Tort Claims Act and the doctrine of qualified immunity.On appeal, the Delaware Supreme Court affirmed the lower courts' decisions. The Court agreed that the plaintiffs failed to show a reasonable apprehension of future harm, which is necessary for injunctive relief. The Court also held that the plaintiffs' claims for declaratory judgment were not justiciable because there was no ongoing controversy and the alleged harm could not be redressed by a declaratory judgment. Finally, the Court upheld the Superior Court's finding that the Governor was immune from damages claims, as his actions were discretionary and taken in good faith during an unprecedented public health crisis. View "In re Covid-Related Restrictions on Religious Services" on Justia Law

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Harrison Sanders and Trinity Turner, divorced parents of two children, were involved in a legal dispute over compliance with a Family Court Order of Protection From Abuse (PFA Order) against Turner. The PFA Order required Turner to undergo evaluations by a certified treatment program and obtain a psychological evaluation. Turner failed to comply, leading to a contempt finding and a daily fine of $200 until compliance.The Family Court Commissioner found Turner in contempt twice. The first contempt order imposed a daily fine for noncompliance, and the second contempt order calculated the total fine at $51,200 for continued noncompliance. Initially, the Commissioner directed that the fine be paid to Sanders. Turner sought review by a Family Court Judge, who upheld the contempt finding and fine amount but ruled that the fine should be paid to the court, not Sanders. Sanders filed a motion for reargument, which the court denied, maintaining that the fine was to be paid to the court as it was intended to coerce compliance with the court's order.The Supreme Court of Delaware reviewed the case and affirmed the Family Court's decision. The court held that coercive contempt fines, unless compensatory in nature, should be paid to the court. The court reasoned that it is the court's authority being vindicated through such fines, not the rights of a private litigant. The court also addressed procedural arguments, concluding that the Family Court Judge had the authority to review and modify the Commissioner’s orders and that Sanders suffered no prejudice from the court’s decision to consider the payment recipient issue. The Supreme Court denied Sanders' request for attorneys' fees, affirming the Family Court's judgment. View "Sanders v. Turner" on Justia Law

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The case involves a challenge to two Delaware voting statutes: one allowing absentee voters to request "permanent absentee" status, and the other authorizing qualified, registered voters to vote in person at least 10 days before an election. The plaintiffs, a citizen who plans to serve as an election inspector and a Delaware State Senator, argued that these statutes conflict with the Delaware Constitution's provisions governing elections and voting.The case was initially filed in the Court of Chancery, which dismissed it on jurisdictional grounds. The plaintiffs then pursued their claims in the Superior Court. The Superior Court found that the plaintiffs had standing to bring the case and ruled in their favor, declaring the challenged statutes unconstitutional.On appeal, the Supreme Court of the State of Delaware reversed the Superior Court's decision. The Supreme Court found that neither plaintiff had standing to challenge the statutes. The court held that the State Senator, who was not up for re-election until 2026, did not face an imminent or particularized harm. The court also found that the citizen, who planned to serve as an election inspector, did not have standing because his role as an inspector did not give him the authority to turn away lawful voters based on his personal belief that the challenged statutes were invalid. Finally, the court rejected the plaintiffs' claim that they had standing as registered voters, finding that their alleged injury was a generalized grievance shared by all voters, not a particularized harm. As a result of these findings, the court did not address the merits of the plaintiffs' constitutional claims. View "Albence v. Mennella" on Justia Law

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The case involves a plaintiff who was bitten by a dog at a facility operated by an animal welfare organization. The plaintiff filed a lawsuit against the organization, invoking Delaware's "dog bite statute," which imposes strict liability on a dog owner for any injury caused by the dog. The Superior Court of Delaware granted summary judgment in favor of the organization, ruling that the statute does not apply to animal welfare organizations. The court reasoned that the statute was intended to target irresponsible dog owners who keep vicious dogs as pets, not organizations like the defendant.The Superior Court's decision was based on its interpretation of the legislative intent behind the dog bite statute. The court also held that the plaintiff could not establish negligence on the part of the organization without expert testimony, as the standard of care applicable to animal shelters was outside the common knowledge of laypersons.The plaintiff appealed the decision to the Supreme Court of the State of Delaware. The Supreme Court disagreed with the lower court's interpretation of the dog bite statute. It found that the statute unambiguously imposes strict liability on any person who owns, keeps, harbors, or is the custodian of a dog, without any exception for animal welfare organizations. The court also disagreed with the lower court's requirement for expert testimony to establish negligence, ruling that the standard of care in handling a domestic animal with known vicious propensities is within the common knowledge of laypersons. The Supreme Court reversed the Superior Court's decision and remanded the case for further proceedings. View "Riad v. Brandywine Valley SPCA, Inc." on Justia Law

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The case involves Ferrellgas Partners L.P. and its subsidiaries (collectively "Ferrellgas") and Zurich American Insurance Company ("Zurich"). Ferrellgas had an insurance policy with Zurich, which included a provision for the advancement of defense costs for litigation. Ferrellgas was involved in a separate lawsuit with Eddystone Rail Company, LLC ("Eddystone") over a breach of contract. Ferrellgas sought to have Zurich cover the defense costs for the Eddystone litigation under their insurance policy.In the lower court, the Superior Court of the State of Delaware, Ferrellgas filed a motion for summary judgment seeking a declaratory relief obligating Zurich to advance defense costs for the Eddystone litigation. Zurich also filed a motion for summary judgment seeking a declaration that it had no obligation to advance defense costs. The Superior Court denied Ferrellgas' motion and granted Zurich's motion, finding that the Eddystone litigation was excluded from coverage under the Zurich policy.On appeal, the Supreme Court of the State of Delaware affirmed the decision of the Superior Court. The Supreme Court found that the Eddystone litigation was a claim seeking relief for a breach of contract that occurred after the commencement of the Run-Off Coverage Period in the Zurich policy. As such, Zurich had no duty to advance defense costs for this matter due to the Run-Off Exclusion in the policy. The court also found that Ferrellgas' appeal was timely filed. View "Ferrellgas Partners, L.P. v. Zurich American Insurance Company" on Justia Law

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The case involves NGL Energy Partners LP and NGL Energy Holdings LLC (collectively, "NGL") and LCT Capital, LLC ("LCT"). NGL, entities in the energy sector, engaged LCT, a financial advisory services provider, for services related to NGL's 2014 acquisition of TransMontaigne Inc. However, the parties failed to agree on payment terms, leading LCT to file a lawsuit in 2015. The Superior Court held a jury trial in July 2018, which resulted in a $36 million verdict in LCT's favor.NGL appealed the Superior Court's decision, challenging the $36 million final judgment and a set of evidentiary rulings. LCT cross-appealed, contesting the Superior Court's methodology for computing post-judgment interest. NGL argued that the Superior Court erred by admitting evidence and arguments about the value/benefit supposedly gained by NGL in the Transaction, asserting that such evidence is prejudicial and irrelevant to a quantum meruit claim. NGL also argued that the Superior Court erred by admitting evidence of benefit-of-the-bargain or expectancy damages when assessing the quantum meruit value of LCT’s services.The Supreme Court of the State of Delaware affirmed the Superior Court’s evidentiary rulings and rejected NGL's contention that the Superior Court incorrectly allowed LCT to recover benefit-of-the bargain/expectancy damages. However, the Supreme Court disagreed with the Superior Court’s post-judgment interest determination. The Supreme Court held that prejudgment interest is part of the judgment upon which post-judgment interest accrues under Section 2301(a). Therefore, the Supreme Court reversed the Superior Court as to this issue and remanded the case to the Superior Court for entry of judgment consistent with its opinion. View "NGL Energy Partners LP v. LCT Capital, LLC" on Justia Law

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In this case, the Supreme Court of the State of Delaware reversed a lower court’s decision to terminate a biological father’s parental rights to his child. The father, Jack Mitchell, had consented to the child's guardianship by Rachel and Joshua Thayer, following the unexpected death of the child's mother. Six months later, the Thayers petitioned to terminate Mitchell’s parental rights on grounds of intentional abandonment. The Family Court granted their petition, finding clear and convincing evidence of abandonment and deciding termination was in the child’s best interests. However, the Supreme Court found that the evidence did not meet the high standard of clear and convincing proof of intentional abandonment required to terminate Mitchell's parental rights. The court noted that Mitchell had expressed a desire for reunification with his child and had taken steps toward that goal. The Supreme Court therefore reversed the Family Court’s decision and remanded the case for further proceedings regarding Mitchell's petition to rescind the Thayers' guardianship. View "Mitchell v. Thayer" on Justia Law