Justia Delaware Supreme Court Opinion Summaries

Stillwater Mining Company filed suit against its directors’ and officers’ liability insurers to recover the expenses it incurred defending a Delaware stockholder appraisal action. The superior court granted the insurers’ motions to dismiss after it found that Delaware law applied to the dispute and the Delaware Supreme Court’s decision in In re Solera Ins. Coverage Appeals (“Solera II”) precluded coverage for losses incurred in a stockholder appraisal action under a similar D&O policy. The primary issue on appeal was whether Delaware or Montana law applied to the claims in Stillwater’s amended complaint. Stillwater argued that the superior court should have applied Montana law because Montana had the most significant relationship to the dispute and the parties. If Montana law applied, according to Stillwater, it could recover its defense costs because Montana recognized coverage by estoppel, meaning the insurers were estopped to deny coverage when they failed to defend Stillwater in the appraisal action. Before the Delaware Supreme Court issued Solera II, the Solera I court held that D&O insureds could recover losses incurred in a stockholder appraisal action. Taking advantage of that favorable ruling, Stillwater argued in its complaint that Delaware law applied to the interpretation of the policies. Then when Solera II was issued, Stillwater reversed position and claimed that Montana law applied to the policies. Its amended complaint dropped all indemnity claims for covered losses in favor of three contractual claims for the duty to advance defense costs and a statutory claim under Montana law. In the Supreme Court's view, Stillwater’s amended claims raised the same Delaware interests that Stillwater identified in its original complaint – applying one consistent body of law to insurance policies that cover comprehensively the insured’s directors’, officers’, and corporate liability across many jurisdictions. It then held the superior court did not abuse its discretion when it denied Stillwater's motions. View "Stillwater Mining Company v. National Union Fire Insurance Company of Pittsburgh, PA" on Justia Law

At a political rally for a Delaware U.S. Senate candidate, video and photographic evidence captured defendant-appellant Michael Hastings unholstering his handgun and pointing the weapon, ready-to-fire, at protesters across the street from the rally. He also left the handgun unattended on the ground. The State charged Hastings with one count of Reckless Endangering in the First Degree and one count of Possession of a Firearm During the Commission of a Felony. A jury convicted Hastings of both counts. The judge sentenced Hastings to four years at Level V incarceration followed by decreasing levels of supervision. Hastings argued: (1) the trial court incorrectly instructed the jury on what a “substantial risk” of death is; (2) the evidence was insufficient to support a reckless endangering conviction; and (3) the cumulative effect of these errors required both convictions to be vacated. Finding no reversible error, the Delaware Supreme Court affirmed Hastings' convictions. View "Hastings v. Delaware" on Justia Law

The Delaware Court of Chancery entered judgment in favor of appellee Sharon Hawkins on her request for a declaration that the irrevocable proxy which provided appellant W. Bradley Daniel (“Daniel”) with voting power over all 100 shares of N.D. Management, Inc. (“Danco GP”) (the “Irrevocable Proxy”), did not bind a subsequent owner of such Danco GP shares. The Court of Chancery also held that an addendum to the Irrevocable Proxy did not obligate the current owner of the Danco GP shares, MedApproach, L.P. (the “Partnership”), to demand that the buyer in a sale to an unaffiliated third party bind itself to the Irrevocable Proxy. Daniel appealed the Court of Chancery’s judgment that the Irrevocable Proxy did not run with the Majority Shares, arguing the court erred by: (1) rather than interpreting and applying the plain language of the Irrevocable Proxy as written, the court relied on the Restatement (Third) of Agency, which was not adopted until nearly a decade after the parties entered into the Irrevocable Proxy; (2) reading additional language into the Irrevocable Proxy in order to support its finding that the broad “catch-all” language that the parties included to prevent termination of the Irrevocable Proxy did not encompass a sale of the shares; and (3) not giving effect to all of the terms of the Irrevocable Proxy and improperly limiting the assignment clause of the Irrevocable Proxy so as not to bind assigns of the stockholder. Finding no reversible error, the Delaware Supreme Court affirmed the Court of Chancery. View "Daniel v. Hawkins" on Justia Law

A probation officer seized two guns—one a loaded 9mm Ruger, the other a .40 caliber Smith & Wesson—from a backpack recently carried by defendant Devin Coleman, a convicted felon and a person prohibited from possessing a firearm. The officer also seized two .40 caliber magazines—one from within the Smith & Wesson, the other loose in the backpack. It was later determined that one of the magazines bore the defendant’s fingerprint but no one knew whether the incriminating prints were on the magazine that was in the Smith & Wesson firearm or on the loose magazine. The defendant asked the trial court to instruct the jury that the officer’s failure to note, at the time of the seizure, which of the two magazines was in the weapon constitutes “missing evidence.” The trial court would not give the requested instruction and this refusal, defendant argued, constituted a due process violation warranting the reversal of his conviction for possession of a firearm by a person prohibited. The Delaware Supreme Court rejected defendant's argument, finding the evidence he claimed was "missing" at his trial was of dubious exculpatory value. "And to the extent it had any such value, Coleman has not explained how that would have been apparent to the probation officer upon his seizure of Coleman’s backpack and his discovery of the weapons and magazines in it." View "Coleman v. Delaware" on Justia Law

The Boardwalk Master Limited Partnership's (“MLP”) limited partnership agreement (the “Partnership Agreement”) disclaimed the general partner’s fiduciary duties, and included a conclusive presumption of good faith when relying on advice of counsel. At issue in this appeal was whether Boardwalk’s general partner properly exercised a call right to take the Boardwalk MLP private. Under the Partnership Agreement, the general partner could exercise a call right for the public units if it received an opinion of counsel acceptable to the general partner that a change in FERC regulations “has or will reasonably likely in the future have a material adverse effect on the maximum applicable rate that can be charged to customers.” The Boardwalk MLP general partner received an opinion of counsel from Baker Botts that a change in FERC policy met the call right condition. Skadden advised that: (1) it would be reasonable for the sole member, an entity in the Boardwalk MLP structure, to determine the acceptability of the opinion of counsel for the general partner; and (2) it would be reasonable for the sole member, on behalf of the general partner, to accept the Baker Botts Opinion. The sole member followed Skadden’s advice and caused the Boardwalk MLP general partner to exercise the call right and to acquire all the public units through a formula in the Partnership Agreement. The Boardwalk MLP public unitholders filed suit and claimed that the general partner improperly exercised the call right. In a post-trial opinion, the Delaware Court of Chancery concluded the general partner improperly exercised the call right because the Baker Botts Opinion had not been issued in good faith; the wrong entity in the MLP business structure determined the acceptability of the opinion; and the general partner was not exculpated from damages under the Partnership Agreement. After its review, the Delaware Supreme Court agreed with the Boardwalk entities that: (1) the sole member was the correct entity to determine the acceptability of the opinion of counsel; (2) that the sole member, as the ultimate decisionmaker who caused the general partner to exercise the call right, reasonably relied on Skadden’s opinion, and that the sole member and the general partner were therefore conclusively presumed to have acted in good faith in exercising the call right. Thus, the general partner and others were exculpated from damages under the Partnership Agreement. The Court of Chancery’s judgment was reversed and the matter remanded for further proceedings. View "Boardwalk Pipeline v. Bandera Master Fund LP" on Justia Law

In 2022, Delaware Governor John Carney, Jr. signed into law two pieces of legislation affecting how Delaware citizens register to vote and cast their ballots. Under one bill, the "Same-Day Registration Statute," the deadline for registering to vote in any presidential primary, primary, special, and general election was changed from the fourth Saturday before the date of the election to the day of the election. Under the other bill, the General Assembly enacted and the Governor approved the addition of a chapter entitled “Voting by mail ballot” to Title 15 of the Delaware Code, which contained the statutes governing elections in Delaware. The "Vote-by-Mail Statute," applied to non-presidential primary, special, and general elections, and authorized all Delaware voters to cast their ballots by mail whether or not they were able to appear at a polling place. On the very day the Governor approved the bills, two lawsuits were filed challenging the constitutionality of both enactments under various sections of Article V of the Delaware Constitution. The Plaintiffs sought declaratory and injunctive relief in the Court of Chancery, contending that the Same-Day Registration Statute conflicted with Section 4, while the Vote-by-Mail Statute ran afoul of Section 4A. The Delaware Supreme Court entered an order announcing its unanimous conclusion that neither of the newly enacted laws passed muster under the Delaware Constitution. Because of the press of time, the Court was unable then to publish a full opinion explaining the reasons underpinning that conclusion; this opinion explained the Court's reasoning. View "Albence v. Higgin" on Justia Law

A Delaware superior court held that Plaintiffs-Appellees-Cross-Appellants, two doctors who started a laboratory testing enterprise known as Bako Diagnostics (“Bako”), breached certain restrictive covenants when they left Bako to form a new, competing laboratory enterprise. Despite fee-shifting provisions in certain of the contracts, the trial court declined to award attorneys’ fees. The Delaware Supreme Court agreed with the superior court’s determinations that the two doctors breached certain of the restrictive covenants. But because it appeared that the superior court may have misapplied the formula that both sides employed for calculating damages, the Court remanded the case for the trial court to clarify how it derived its damages award and for any needed revisions. Further, the Supreme Court disagreed that no attorneys’ fees were warranted under certain of the contracts. View "Bako Pathology LP v. Bakotic" on Justia Law

A Delaware superior court affirmed an Industrial Accident Board (the “IAB” or “Board”) decision denying Appellant Joseph Wilson’s (“Wilson”) petition seeking payment for a cervical spine surgery. The parties agreed the treatment Wilson received was reasonable and necessary. Wilson was injured in a work-related accident on August 1, 2002 while working for Appellee Gingerich Concrete and Masonry (“Employer”). Sometime after the accident, Wilson started treatment with Dr. Bikash Bose (“Dr. Bose”), a certified Delaware workers’ compensation healthcare provider. Wilson’s injury necessitated two related cervical surgeries. The first surgery was performed while Dr. Bose was certified under the Delaware workers’ compensation system (the “Delaware Certification”) according to the requirements set forth in the Act. Employer’s carrier paid the bills related to Wilson’s first surgery. But Wilson’s first surgery proved unsuccessful, and Dr. Bose recommended a second surgery. During the time between Wilson’s first surgery and his second surgery, Dr. Bose’s Delaware Certification lapsed, and he did not seek re-certification for nineteen months. The issue presented was whether the second surgery was compensable given that the treating physician’s certification under the Delaware Workers’ Compensation Act (the “Act”) had lapsed by the time of treatment. If the treatment was not compensable, as the IAB and superior court held, then Wilson asked the Delaware Supreme Court to anticipatorily resolve the question of whether he could be liable for the bill even though no one asserted such a claim. The Supreme Court concluded Dr. Bose’s lapse rendered him uncertified, and, thus, the disputed bills were not compensable under 19 Del. C. § 2322D. View "Wilson v. Gingerich Concrete & Masonry" on Justia Law

Plaintiff-Appellant, Ocean Bay Mart, Inc. (“Ocean Bay”), owned a 7.71- acre parcel of real property in the City of Rehoboth Beach (“the City”). In June 2015, Ocean Bay submitted a Site Plan to the City proposing to develop the property into 63 residential condominium units. Under the plan, the 7.71 acres would remain a single, undivided parcel. The development would be known as “Beach Walk.” The submission of the Site Plan set into motion a chain of events over whether Beach Walk could be approved as a single, undivided parcel or whether the project had to be subdivided into individual lots corresponding to the residential units. The events included a decision by the City’s Building Inspector that the project could not be approved as a single, undivided parcel; a decision by the City’s Board of Adjustment overruling the Building Inspector’s decision; a decision by the City’s Planning Commission, rendered after the Board of Adjustment’s decision, that the Site Plan could not be considered unless it was resubmitted as a major subdivision application; a decision by the City Commissioners upholding the Planning Commission; an appeal of the Commissioners’ decision to the Superior Court, which reversed the Commissioners; and the City’s adoption of three amendments to its zoning code. Ocean Bay filed this action with the Delaware Court of Chancery, alleging that it had a vested right to have its Site Plan approved substantially in the form submitted without going through major subdivision approval, and that the City was equitably estopped from enforcing the zoning code amendments against Beach Walk. After a trial, the Court of Chancery ruled that Ocean Bay did not have a vested right to develop Beach Walk as laid out on the Site Plan and the City was not equitably estopped from enforcing its new zoning amendments. Ocean Bay appealed, but finding no reversible error, the Delaware Supreme Court affirmed. View "Ocean Bay Mart, Inc. v. The City of Rehoboth Beach Delaware" on Justia Law

At issue in this appeal was a breach-of-contract dispute involving a stock purchase agreement for the sale of all the shares of stock of International Specialty Products Inc. (“International Specialty”). The selling shareholders were nine trusts and RFH Investment Holdings LLC (the “Heyman Parties”). The purchaser was Appellee Ashland Inc., a leading global specialty chemical company. International Specialty had two wholly owned subsidiaries that went with the sale, Appellee ISP Environmental Services Inc. and Appellee Chemco LLC (“Chemco”). ISP Environmental owned a property known as the Linden property, which for years had been home to chemical manufacturing operations and had an extensive environmental history. As part of the transaction, the parties agreed that the Heyman Parties would keep the Linden property. At the time of closing on the Stock Purchase Agreement, ISP Environmental caused the Linden property to be transferred to Appellant Linden Property Holdings LLC, the Heyman Parties’ designated entity for that purpose. A dispute arose between the parties as to who was responsible for the Linden property’s pre-closing, environmental liabilities. The parties agreed the Heyman Parties assumed responsibility in the agreement for the environmental contamination on the property itself. They disagreed as to who was responsible for environmental contamination to areas that were not part of the Linden property but were contaminated because of the activities on the Linden property. Ashland claimed that under the agreement, the Heyman Parties were responsible for all of the liabilities. The Heyman Parties claimed they never assumed any liability in the agreement for the off-site liabilities. The Superior Court agreed with Ashland and found that the Heyman Parties assumed responsibility in the agreement for the Linden property’s off-site environmental liabilities. The Delaware Supreme Court concluded, however, that under the unambiguous language of the agreement, the Heyman Parties assumed liability only for the Linden property’s on-site environmental liabilities, and assumed no liability for the property’s off-site liabilities. View "The Samuel J. Heyman 1981 Continuing Trust for Lazarus S. Heyman v. Ashland LLC" on Justia Law