Justia Delaware Supreme Court Opinion Summaries

Appellant, husband Mitchell Garrison appealed a family court debt-division order issued after his divorce from Appellee, wife Tamika Downing. Before the Delaware Supreme Court, Husband argued: (1) the family court erred by ordering him to pay premarital debts incurred by Wife to pay for the parties’ wedding; and (2) the family court erred by finding that the parties’ prenuptial agreement barred his claim to half of the value of the Wife’s business which she operated during their marriage. After carefully considering the question presented by the Husband’s first claim, the Supreme Court concluded the equitable exception for property acquired in contemplation of marriage should have been construed narrowly to apply only as originally intended. “Due regard must be given to the fact that the rule is an exception to the Family Court’s statutory jurisdiction. In the future, the Family Court should limit the equitable exception to cases involving real property where the evidence shows that it was the parties’ intention that the property, although acquired in the name of one party prior to marriage, was to become marital property upon their marriage. Any enlargement of the equitable exception beyond that must come from the General Assembly.” Regarding Husband’s second claim, the Supreme Court found no error in the family court’s denial of his request for division of Wife’s business. View "Garrison v. Downing" on Justia Law

Anthony Calm was convicted for several weapons charges and resisting arrest. His sole argument on appeal was that the Superior Court erred in denying his motion to suppress a firearm and ammunition that the arresting officer found on Calm during a stop of a motor vehicle in which Calm was the passenger. Pat-down searches must be justified by a “reasonable articulable suspicion that the detainee is armed and presently dangerous.” The Delaware Supreme Court determined the Superior Court did not apply this standard, instead concluding that the mere removal of Calm from the vehicle for the purpose of conducting a consent search of the vehicle justified the pat-down of his person. Furthermore, the Supreme Court found the trial court’s other findings indicated that, had it applied the correct standard, the court would have found the State’s proof lacking and granted the motion to suppress. The Supreme Court therefore reversed Calm’s convictions for possession of a firearm by a person prohibited, possession of ammunition by a person prohibited, and carrying a concealed deadly weapon. Because the evidence seized from Calm was not relevant to the resisting-arrest charge, the Supreme Court affirmed that conviction. View "Calm v. Delaware" on Justia Law

McGinnis Auto & Mobile Home Salvage, LLC salvaged discarded and dilapidated mobile homes on its property in Kent County, Delaware. According to the Department of Natural Resources and Environmental Control (DNREC), a large and unsightly waste pile, possibly contaminated with asbestos, had accumulated over time. DNREC cited McGinnis for environmental violations and for operating a reclamation facility without a permit. DNREC gave McGinnis a chance to bring the property into compliance, but McGinnis failed to do so. DNREC responded by issuing a cease and desist order requiring McGinnis to remove the waste pile from the property in an environmentally responsible manner. McGinnis appealed the order to the Environmental Appeals Board, arguing that DNREC could order the illegal activity to stop, but could not order McGinnis to take affirmative action to remove the waste pile from the property. The EAB agreed with McGinnis, finding that the order exceeded the scope of its authority. The Superior Court affirmed the EAB’s decision, finding that DNREC did not have the authority under its cease and desist power to require McGinnis to remove the waste pile, direct how the waste had to be removed, or demand documentation. On appeal, DNREC contended that the EAB and Superior Court took too narrow of a view of DNREC’s cease and desist authority. The Delaware Supreme Court agreed: "it follows that the only way to cease and desist from the violation is to remove the contaminated debris from the site. ... the Secretary can require a violator to cease and desist from continuing the illegal storage of solid waste. If the violator ignores the Secretary’s order, Section 6005 provides the possible remedies for a violation of 'any order of the Secretary.' The Secretary may impose monetary penalties. The Secretary may seek injunctive relief in the Court of Chancery. And, in his discretion, the Secretary may opt for conciliation. None of the possible remedies is mandatory or inconsistent with the Secretary’s authority to enter a cease and desist order." View "DNREC v. McGinnis Auto & Mobile Home Salvage, LLC" on Justia Law

For tax reasons ISN Software Corporation wanted to convert from a C corporation to an S corporation. But four of its eight stockholders, representing about 25 percent of the outstanding stock, could not qualify as S Corporation stockholders. ISN sought advice from Richards, Layton & Finger, P.A. (RLF) about its options. RLF advised ISN that before a conversion ISN could use a merger to cash out some or all of the four stockholders. The cashed-out stockholders could then accept ISN’s cash-out offer or exercise appraisal rights under Delaware law. ISN did not proceed with the conversion, but decided to use a merger to cash out three of the four non-qualifying stockholders. After ISN completed the merger, RLF notified ISN that its advice might not have been correct. All four stockholders, including the remaining stockholder whom ISN wanted to exclude, were entitled to appraisal rights. ISN decided not to try and unwind the merger, instead proceeding with the merger and notified all four stockholders they were entitled to appraisal. ISN and RLF agreed that RLF would continue to represent ISN in any appraisal action. Three of the four stockholders, including the stockholder ISN wanted to exclude, eventually demanded appraisal. Years later, when things did not turn out as ISN had hoped (the appraised value of ISN stock ended up substantially higher than ISN had reserved for), ISN filed a legal malpractice claim against RLF. The Superior Court dismissed ISN’s August 1, 2018 complaint on statute of limitations grounds. The court found that the statute of limitations expired three years after RLF informed ISN of the erroneous advice, or, at the latest, three years after the stockholder ISN sought to exclude demanded appraisal. On appeal, ISN argued its legal malpractice claim did not accrue until after the appraisal action valued ISN’s stock because only then could ISN claim damages. Although it applied a different analysis, the Delaware Supreme Court agreed with the Superior Court that the statute of limitations began to run in January 2013. By the time ISN filed its malpractice claim on August 1, 2018, the statute of limitations had expired. Thus, the Superior Court’s judgment was affirmed. View "ISN Software Corporation v. Richards, Layton & Finger, P.A." on Justia Law

Elder Saavedra was convicted by jury of the first-degree murder of Lester Mateo and possession of a deadly weapon during the commission of a felony. The court sentenced Saavedra to life in prison for the murder conviction and ten years in prison for the weapons charge. Saavedra argued on appeal that his convictions should be overturned because of the prosecutor’s misconduct and the trial court’s erroneous admission of evidence during his trial. Saavedra also contends that the trial court abused its discretion by allowing another officer to offer lay opinion testimony under D.R.E. 701 regarding the meaning of a phrase uttered in Spanish by Saavedra at the scene, when, according to Saavedra, the opinion was not “rationally based on the witness’s perception.” Finally, Saavedra argued the prosecutor engaged in misconduct when he asked a question that implied that the witness, despite his denial, had identified Saavedra in a video clip during a pretrial interview. Although the Delaware Supreme Court found Saavedra raised some legitimate concerns regarding the officer’s narrative testimony that accompanied the important video evidence, it disagreed with his conclusion that the admission of that testimony, much of which came in without objection and was the subject of two curative instructions, was grounds for reversal. Nor was the Court persuaded that the challenged opinion testimony and the prosecutor’s question that purportedly implied a fact that was not supported by the evidence affected the fairness of Saavedra’s trial. Therefore, the Supreme Court affirmed. View "Saavedra v. Delaware" on Justia Law

USAA Casualty Insurance Company (“USAA”) sought a declaratory judgment that it was not obligated to defend, indemnify, or provide insurance coverage for claims made in two lawsuits against Trinity Carr, the daughter of a USAA homeowner’s-insurance policyholder. The plaintiffs in the underlying lawsuits sought money damages from Carr and others for personal injuries and wrongful death suffered by Amy Joyner-Francis in a physical altercation - described in both complaints as a “brutal, senseless, forseeable [sic] and preventable attack” - between Joyner-Francis and Carr and her friends. USAA argued at trial, as it did before the Delaware Supreme Court, that the incident - whether it be labeled an altercation, an attack, or otherwise - was not an “accident” and therefore not a covered occurrence under the policy and that, even if it were, the purported liability was excluded from coverage. The Superior Court disagreed and entered summary judgment in favor of Carr. The Delaware Supreme Court agreed with USAA’s interpretation of the relevant policy provisions and therefore reversed the Superior Court’s judgment. "To label an intentional assault, as the parties agree occurred here, an accident is to disregard the ordinary, everyday meaning of 'accident.' We thus hold that whether an assault is an 'accident' is determined by the intent of the insured, and not by the viewpoint of the victim. ... even though Carr may not have intended to cause [the victim's] death, she certainly intended to cause injury to her." View "USAA Casualty Ins. Co. v. Carr" on Justia Law

When Erik Knight sold KnighTek, LLC to Jive Communications, Inc., Jive allegedly agreed to pay Knight $100,000 upfront and a revenue-based payment stream capped at $4.6 million. The continuing payments would convert to a lump sum payment if Jive’s ownership changed. Years later, Jive offered to cash out KnighTek for $1.75 million, a substantial discount from the remaining cap amount. According to Knight, Jive’s representatives told him the buy-out money depended on KnighTek accepting the proposal right away. If it did not, Jive would use the funds for other buyouts. Jive’s representatives also told Knight if he turned down the offer, it would take five years for Jive to make the remaining payments. Two days after KnighTek agreed to accept $1.75 million, Jive announced publicly it was being acquired by LogMeIn for $342 million - a change of control that according to KnighTek would have netted it a $2.7 million immediate payment under their earlier agreement. Believing it had been misled and shorted about $1 million, KnighTek filed suit against Jive, alleging that Jive fraudulently induced KnighTek to take the discounted payout. According to KnighTek, Jive and its representatives knew about the imminent change of control, misrepresented the availability of buyout funds, and duped KnighTek into accepting a discount when KnighTek could have received almost $1 million more and an immediate payment after the LogMeIn transaction. A Delaware superior court dismissed the complaint, finding some of Jive’s alleged misrepresentations lacked particularity and others failed to state a claim under Utah law, the law governing their agreements. The Delaware Supreme Court disagreed, finding that, viewing the complaint in the light most favorable to KnighTek, accepting as true its well-pleaded allegations, and drawing all reasonable inferences that logically flow from those allegations, KnighTek alleged fraud with sufficient particularity and stated a claim for fraudulent misrepresentation under Utah law. Thus the Court reversed the lower court’s dismissal, and remanded for further proceedings. View "Knightek, LLC v. Jive Communications, Inc." on Justia Law

Plaintiff-appellant Germaninvestments Aktiengesellschaft (AG) (“Germaninvestments”) was a Swiss holding company formed to manage assets for the Herrling family. Defendant Allomet Corporation (“Allomet”) was a Delaware corporation that manufactured high-performance, tough-coated metal powders using a proprietary technology for coating industrial products. Defendant Yanchep LLC (“Yanchep”), was also a Delaware limited liability company with Mirta Hereth as its sole member (together, Allomet and Yanchep are referred to as “Appellees”). Allomet struggled with declining performance as early as 2002. In mid-2016, Tanja Hausfelder, an insurance professional who apparently knew or worked with the Herrlings and Hereth, advised Herrling that Hereth was looking for a joint venture partner to join Allomet. After a meeting in Switzerland, Herrling and Hereth discussed a general structure for their joint venture to raise capital for Allomet. The issue this case presented for the Delaware Supreme Court’s review centered on whether the Court of Chancery correctly determined that a provision in a Restructuring and Loan Agreement between the parties was a mandatory, as opposed to a permissive, forum selection clause. The Court of Chancery held that Austrian law governed the analysis of the forum selection provision, and determined that the provision is governed by Article 25 of the European Regulation on Jurisdiction and Recognition and Enforcement of Judgments in Civil and Commercial Matters. Based upon these conclusions, the court granted Defendants’ motion to dismiss in favor of the Austrian forum. The Delaware Supreme Court held that Appellees, who raised Austrian law as a basis for their motion to dismiss, had the burden of establishing the substance of Austrian law, and that the Court of Chancery erred in determining that Appellees had carried that burden. Accordingly, the forum selection provision analysis should have proceeded exclusively under Delaware law. Applying Delaware law, the Delaware Court determined the forum selection provision was permissive, not mandatory. “As such, the forum selection provision is no bar to the litigation proceeding in Delaware.” The Court affirmed the Court of Chancery’s holding that 8 Del. C. section 168 was not the proper mechanism for the relief Appellants sought. Therefore, this matter was affirmed in part, reversed in part, and remanded to the Court of Chancery for further proceedings. View "Germaninvestments AG v. Allomet Corporation" on Justia Law

Jeffrey Clark and two associates, Rayshaun Johnson and Christopher Harris, were indicted for first degree murder , conspiracy in the first degree, possession of a firearm during the commission of a felony, and possession of a deadly weapon by a person prohibited, for their roles in the shooting death of Theodore “Teddy” Jackson. After Harris pleaded guilty to the conspiracy charge and entered into a cooperation agreement with the State, the Superior Court granted Clark’s request that his case be tried separately from Johnson’s. Johnson’s case went to trial first, and a jury convicted him on all indicted charges. Then, after a nine-day trial in September 2017, a jury found Clark guilty of attempted assault in the second degree—purportedly a lesser-included offense of murder in the first degree, and conspiracy in the second degree, a lesser included offense of conspiracy in the first degree. Before he was sentenced, Clark moved the Superior Court for acquittal. When that was denied, Clark was sentenced to four years’ incarceration, followed by descending levels of supervision. On appeal, Clark argued that despite the inescapable fact that Teddy Jackson, the only victim identified in the indictment, was dead, the State failed to present sufficient evidence at trial to support the jury’s finding that Clark, at the time of the alleged crime, intended to cause “serious physical injury.” And because intent to cause “serious physical injury,” as opposed to mere “physical injury,” was an element of attempted assault in the second degree, according to Clark, the Superior Court erred when it denied his post-trial motion for judgment of acquittal. Finding no merit to Clark's claims, the Delaware Supreme Court affirmed his convictions and sentence. View "Clark v. Delaware" on Justia Law

In 2016, Uber Technologies, Inc. acquired Ottomotto LLC to gain more traction in the autonomous vehicle space, hiring key employees from Google's autonomous vehicle program. Though steps were taken to ensure the former Google employees did not misuse Google's confidential information, it eventually came to light Google's proprietary information had indeed been misused. Uber settled Google's misappropriation claims by issuing additional Uber stock to Google, valued at $245 million. An Uber stockholder and former Uber employee filed suit in the Delaware Court of Chancery against the directors who approved the Otto acquisition. Plaintiff claimed the directors ignored the alleged theft of Google’s intellectual property and failed to investigate pre-closing diligence that would have revealed problems with the transaction. According to plaintiff, the board should not have relied on the CEO’s representations that the transaction had the necessary protections because he and Uber had a history of misusing the intellectual property of others. Defendants responded by moving to dismiss the complaint under Court of Chancery Rule 23.1. As they asserted, the plaintiff first had to make a demand on the board of directors before pursuing litigation on the corporation’s behalf. The Court of Chancery found that a majority of the Uber board of directors could have fairly considered the demand, and dismissed the complaint. The Delaware Supreme Court found, as did the Court of Chancery, that a majority of the board was disinterested because it had no real threat of personal liability due to Uber’s exculpatory charter provision. And a majority of the board was also independent of the one interested director. Therefore, the Supreme COurt affirmed the Court of Chancery's judgment dismissing the complaint with prejudice. View "McElrath v. Kalanick, et al." on Justia Law