Justia Delaware Supreme Court Opinion Summaries

Tenant-Defendant Bhole, Inc. terminated its commercial lease before the lease expired. Before the end of the lease, Plaintiff-landlord Shore Investments, Inc. filed suit to recover the entire unpaid rent for the balance of the term. The lease agreement did not contain an acceleration clause. Upon review of the matter, the Supreme Court found that though defendants breached the lease, the trial court erred by not considering the lease did not have an acceleration clause. The trial court's award of damages and attorney's fees was inappropriate, and its decision regarding the landlord's claim for tortious interference with the lease (with a punitive damages award) was also made in error. The Supreme Court reversed the trial court and remanded the case for further proceedings.View "Bhole, Inc., at al. v. Shore Investments, Inc." on Justia Law

Carlyle Investment Management L.L.C. (CIM) and TC Group, L.L.C. (collectively, Plaintiffs) filed suit against defendant-appellant National Industries Group (NIG). Plaintiffs sought a declaratory judgment to enforce the terms of a forum selection clause contained in a Subscription Agreement between Carlyle Capital Corporation, Ltd. (CCC) and NIG. Specifically, they sought an injunction against NIG from proceeding with litigation that it filed against CCC in Kuwait in December, 2009. The Court of Chancery entered a Default Judgment against NIG. As part of the Default Judgment, the Court of Chancery issued an anti-suit injunction. NIG filed a Motion to Vacate the Default Judgment and to Dismiss the Complaint approximately one year later. The Court of Chancery denied the motion. NIG raised several related issues on appeal to the Supreme Court: (1) that the Court of Chancery erred in refusing to vacate the Default Judgment because the Default Judgment was void due to lack of subject matter and personal jurisdiction; (2) that the Court of Chancery's limited subject matter jurisdiction did not encompass actions for which a remedy at law is available or from which no irreparable harm could result; and (3) that the Court of Chancery erred in refusing to vacate the Default Judgment because, in so doing, the court effectively denied NIG the opportunity to litigate its claims against Carlyle. Upon review, the Supreme Court concluded that all of NIG's claims of error were all without merit, and affirmed the Court of Chancery's judgment.View "National Industries Group v. Carlyle Investment Management, L.L.C." on Justia Law

This case involved a dispute between two developers over the payment of property assessments allegedly due under certain restrictive covenants. The plaintiff-below, The Reserves Management, LLC appealed two Superior Court rulings that granted summary judgment to defendants R.T. Properties, LLC, Mountain Range, LLC, Fountain, LLC, Waterscape, LLC, and Wind Chop, LLC. In April 2005, Reserves Development LLC, together with The Reserves Development Corporation, entered into a contract to sell seventeen lots to R.T. Properties, LLC. The Sale Agreement recited that R.T. Properties was “acquiring the Property in order to construct homes thereon for sale to the general public.” In November 2005, R.T. Properties transferred all seventeen lots to four affiliated entities—Mountain Range, LLC, Fountain, LLC, Waterscape, LLC, and Wind Chop, LLC. Three years later, the declaration of the sales contract was amended that obligated each lot owner to pay approximately $4,000 to Reserves. In September 2010, Reserves filed an action in the Superior Court against R.T. Properties to enforce the payment of the assessments allegedly due. R.T. Properties moved to dismiss the complaint, claiming that under the Sale Agreement, the payment of assessments for each lot was to be deferred until the lot was transferred to a third party homebuyer and a certificate of occupancy was issued. The Superior Court denied the motion to dismiss, but ultimately granted summary judgment in favor of R.T. Properties with respect to all claimed assessments, except for a sewer connection assessments. Upon review of the matter, the Supreme Court concluded that the trial court erred by granting summary judgment in favor of R.T. Properties on a forbearance agreement defense, because material facts were in dispute. The Court affirmed the trial court in all other respects. View "The Reserves Management Corporation, et al. v. R.T. Properties, LLC, et al." on Justia Law

Appellant Quadrant Structured Products Company appealed the Court of Chancery's dismissal of its complaint. Quadrant holds certain Notes issued by Athilon Capital Corp., an allegedly insolvent Delaware corporation. The Notes are long term obligations covered by two separate trust indentures that are governed by New York law. Defendants EBF & Associates, LP, Athilon Structured Investment Advisors ('ASIA'), an affiliated EBF entity, Athilon's board of directors, and Athilon itself, all which indirectly own 100% of Athilon's equity. The Court of Chancery granted defendants' motion to dismiss Quadrant's complaint on the ground that all claims alleged were barred for failure to comply with the 'no-action' clauses in the Athilon trust indentures. In both cases the cited by the Court of Chancery applied New York law, and held that those bondholder actions were barred by the no-action clauses of the respective trust indentures that governed the bonds at issue. Quadrant appealed to the Delaware Supreme Court. The Delaware Court remanded the case to the Court of Chancery with directions to analyze the significance under New York law (if any) of the differences between the wording of the no-action clauses at issue in the two cited cases and in this case. In its Report, the Court of Chancery held that: (i) 'the language of the Athilon no-action clause distinguishe[d] this case from [the two cited cases],' and (ii) the motion to dismiss should have been denied except as to two (and part of a third) of the ten Counts of the Quadrant complaint. After its re-review, the Delware Supreme Court concluded that the resolution of this case depended on dispositive and unsettled questions of New York law that, in its view, were properly answered in the first instance by the New York Court of Appeals. View "Quadrant Structured Products Co., Ltd. v. Vertin, et al." on Justia Law

The issue before the Supreme Court in this case centered on whether Delaware’s personal injury protection (PIP) statute requires insurers to reserve PIP benefits for lost wages when requested. The plaintiff suffered severe injuries as a passenger in a car accident. While he was in a coma, his mother signed an assignment of insurance benefits in favor of the hospital. Plaintiff did not challenge the validity of the assignment. The hospital was promptly paid by the insurance company. When plaintiff later requested the insurers to reserve his PIP benefits for his past and future lost wages, he was informed that the benefits had been exhausted by the payment to the hospital. The Superior Court held sua sponte that the unchallenged assignment to the healthcare provider was invalid. Upon review of the facts of this case, the Supreme Court concluded the Superior Court erred as a matter of law in deciding that uncontested issue. Because the assignment on behalf of the plaintiff resulted in the exhaustion of his PIP benefits before the plaintiff requested the reservation of PIP benefits for his lost wages, the legal issue of whether the insurer was required to reserve PIP benefits for lost wages is moot. View "State Farm Mutual Automobile Insurance Co. v. Davis" on Justia Law

Plaintiffs Kylie and Michael D. Shuba appealed the Superior Court's denial of their cross-motion for summary judgment and its grant of summary judgment in favor of Defendant United Services Automobile Association's ("USAA") motion for summary judgment. The Shuba's sought to be covered persons for the wrongful death of their mother under an insurance policy issued by USAA and held by the Shubas' step-mother. It was undisputed that their mother was not a named insured under the policy or a resident of the stepmother's household as the Shubas were. The Shubas claimed the trial court erred in finding the Shubas could not recover uninsured motorist benefits under the USAA policy. In making their claim, the Shubas asked the Supreme Court to overrule two Superior Court cases, "Temple v. Travelers Indemnity Co" and "Adams-Baez v. General Accident Co.," the latter of which the Supreme Court affirmed based on the trial court opinion. The Supreme Court declined to overrule those cases as precedent, and affirmed the Superior Court's judgment. View "Shuba v. United Services Automobile Association" on Justia Law

Plaintiff appealed a Court of Chancery order that granted summary judgment and dismissed his suit on laches grounds. The underlying dispute arose over capital investments plaintiff made in two companies. Upon review, the Supreme Court concluded plaintiff's arguments made on appeal lacked merit, however, the Court reversed and remanded on different grounds. View "Levey v. Brownstone Asset Management, LLP, et al." on Justia Law

The issue before the Supreme Court in this case centered on a general partner's obligations under a limited partnership agreement. The plaintiffs alleged that the general partner obtained excessive consideration for its incentive distribution rights when an unaffiliated third party purchased the partnership. Notably, the plaintiffs did not allege that the general partner breached the implied covenant of good faith and fair dealing. Upon review of the matter, the Supreme Court concluded that the limited partnership agreement's conflict of interest provision created a contractual safe harbor, not an affirmative obligation. Therefore, the general partner needed only to exercise its discretion in good faith, as the parties intended that term to be construed, to satisfy its duties under the agreement. The general partner obtained an appropriate fairness opinion, which, under the agreement, created a conclusive presumption that the general partner made its decision in good faith. Therefore we the Supreme Court affirmed the Court of Chancery's dismissal of the complaint. View "Norton v. K-Sea Transportation Partners, L.P., et al." on Justia Law

Plaintiff–Appellee PharmAthene, Inc., and Defendant–Appellant SIGA Technologies, Inc., are both Delaware corporations engaged in biodefense research and development. SIGA appealed the Vice Chancellor's finding that it breached a contractual obligation to negotiate in good faith and was liable under the doctrine of promissory estoppel. The Supreme Court reaffirmed that where parties agree to negotiate in good faith in accordance with a term sheet, that obligation to negotiate in good faith is enforceable. Where a trial judge makes a factual finding that the parties would have reached an agreement but for the defendant's bad faith negotiation, the Court held that a trial judge may award expectation damages. In regard to the facts of this case, the Court reversed the Vice Chancellor's promissory estoppel holding because a promise expressed in a fully enforceable contract cannot give rise to a promissory estoppel claim. The Court also reversed the Vice Chancellor's equitable damages award based on his factual conclusion that the parties would have reached an agreement. The case was remanded for further proceedings in light of the Court's decision in this opinion. View "Siga Technologies, Inc. v. Pharmathene, Inc." on Justia Law

In a reformation action concerning cash flow distributions in three real estate joint venture agreements, the Supreme Court held that the Vice Chancellor properly reformed the agreements on the basis of unilateral mistake and knowing silence by the other party. "Negligence in discovering an alleged mistake does not bar a reformation claim unless the negligence is so significant that it amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing. Ratifying a contract does not create an equitable bar to reformation unless the ratifying party had actual knowledge of the mistake giving rise to the reformation claim." In this matter, the Court reversed the Vice Chancellor's fee award because a contractual fee-shifting provision incorporating the words "incurred" and "reimburse" did not apply where counsel for the party seeking fees represented the party free of charge to avoid a malpractice claim. View "Scion Breckenridge Managing Member, LLC, et al. v. ASB Allegiance Real Estate Fund, et al." on Justia Law