Justia Delaware Supreme Court Opinion Summaries

The issue this case presented for the Delaware Supreme Court’s review centered on whether, under their respective bylaws, two closed-end investment funds, BlackRock Credit Allocation Income Trust (“BTZ”) and BlackRock New York Municipal Bond Trust (“BQH”, and with BTZ, the “Trusts”), properly excluded their shareholder, Saba Capital Master Fund, Ltd. (“Saba”), from presenting its slate of dissident trustee nominees for election at the respective annual meetings. The Court of Chancery held that such exclusion was improper, reasoning that the supplemental questionnaires that Saba’s nominees were asked to complete, exceeded the bylaws’ scope and, thus, the Trusts were “not permitted to rely on the five-day deadline for Saba’s compliance with that request.” It also held that laches did not bar Saba’s claims for equitable relief. On appeal, Appellants-Trusts contended the Court of Chancery erred by issuing an injunction requiring the Trusts to count the votes for Saba’s nominees at the respective annual meetings, since they claimed that Saba’s nominees were ineligible for election because of their failure to timely provide supplemental information in accordance with the clear and unambiguous bylaws. Appellants also contended the court erred in holding that Saba’s claims for equitable relief were not barred by laches. On appeal, the parties continued to dispute whether the Questionnaire was the type of “necessary” and “reasonably requested” subsequent information that falls within the meaning of Article I, Section 7(e)(ii) of the Trusts’ bylaws. The Delaware Supreme Court agreed with the Vice Chancellor that Section 7(e)(ii) was clear and unambiguous, but disagreed that Saba should have been excused from complying with the Bylaws’ clear deadline. Further, the Court affirmed the Vice Chancellor’s holding as to laches. View "BlackRock Credit Allocation Income Trust, et al. v. Saba Capital Master Fund, Ltd." on Justia Law

The Delaware Board of Medical Licensure and Discipline (the “Board”) reprimanded Dr. Bruce Grossinger, for violating various regulations governing the use of controlled substances for the treatment of pain. Specifically, the Board adopted the detailed report and recommendation of a Division of Professional Regulation hearing officer, who had found that Dr. Grossinger, in his care of a heroin-addicted patient (“Michael”), had not complied with the Board’s rules and regulations. The Board found that Dr. Grossinger failed to, among other things, document Michael’s history of substance abuse, discuss with Michael the risks and benefits of treatment with controlled substances, order urine samples or require pill counts, and keep accurate and complete treatment records. After a hearing, the hearing officer recommended that the Board find Dr. Grossinger guilty of unprofessional conduct and discipline him by placing his medical license on probation for six months and requiring him to complete additional medical education and pay a fine. Board adopted the hearing officer’s findings but reduced Dr. Grossinger’s discipline from probation to a letter of reprimand. Dr. Grossinger appealed the Board’s decision to the Superior Court, which reversed on all but one of the five findings. The Superior Court’s reversal of the Board rested on several legal conclusions, including that some of the regulations that Dr. Grossinger was said to have violated were unconstitutionally vague as applied to him, that expert testimony was required to establish the standard of care under the regulations, and that Dr. Grossinger’s due process rights were violated because the Board relied on evidence - its own expertise - outside the record. The parties cross- appealed: the Board appealed the Superior Court’s reversal of all but one of the findings; and Dr. Bruce Grossinger appealed the Superior Court’s failure to reverse the final finding. The Delaware Supreme Court disagreed with the Superior Court’s reversal of the Board’s decision and, therefore, reversed. View "Delaware Bd. of Med. Licensure & Discipline v. Grossinger" on Justia Law

Elizabeth Imbragulio appealed a Superior Court decision that reversed the decision of the Unemployment Insurance Appeals Board (“the Board”) and concluded that she had been terminated for just cause by her employer, Civic Health Services, LLC (“Civic Health”). The Board cross-appealed, arguing that the Superior Court lacked jurisdiction to consider Civic Health’s appeal in the first instance because it was not filed in a timely manner. The issue raised by the cross-appeal was whether Superior Court Civil Rule 6(a)’s method for computing time applied to the requirement in 19 Del. C. section 3323(a) that a party seeking judicial review of a decision by the Board must do so within ten days after the decision becomes final. After careful consideration, the Delaware Supreme Court agreed with the Board that it did not, and therefore concluded that the Superior Court did not have jurisdiction over Civic Health’s appeal. Accordingly, the Supreme Court directed the Superior Court to vacate its judgment. View "Imbragulio v. UIAB" on Justia Law

Stephen Powell appealed a Delaware Industrial Accident Board ("IAB") decision to deny his petition for workers' compensation benefits. Powell alleged he sufered a work injury in 2016 while employed by OTAC, Inc. d/b/a Hardee’s (“Hardees”). The IAB held a hearing regarding Powell’s petition in 2018. The IAB heard testimony by deposition from a doctor on Powell’s behalf and from a doctor on Hardees’ behalf. It also heard live testimony from a Hardees General Manager and from Powell himself. After the hearing, the IAB denied Powell’s petition, ruling that he had failed to establish that he injured his rotator cuff while working at Hardees. The IAB concluded that the testimony and evidence was “insufficient to support a finding that Claimant’s injuries were causally related to his work for [Hardees].” Specifically, the IAB noted that both Powell’s “inability to report a specific day of injury” as well as his “failure to seek medical treatment immediately” after the alleged incident detracted from his credibility. Further, it found that although “both medical experts agreed that [Powell’s] treatment was reasonable for his rotator cuff tear, there was insufficient evidence that the rotator cuff tear occurred as the result of the alleged work accident." Powell argued on appeal to the Delaware Supreme Court: (1) the Board erred as a matter of law in denying his petition, and he claims that he did present sufficient evidence to demonstrate that his injuries occurred while working at Hardees; and (2) the Superior Court erred in affirming the IAB’s decision and that it exceeded the scope of review by making findings of fact unsupported by the record. After review of the IAB and Superior Court record, the Delaware Supreme Court affirmed. View "Powell v. OTAC, Inc." on Justia Law

Plaintiff-appellee Paula Knecht, individually and as executrix of the estate of her late husband, Larry Knecht filed suit against 18 defendants alleging defendants failed to warn Mr. Knecht of the dangers of asbestos. During his lifetime, Mr. Knecht developed mesothelioma from exposure to asbestos. While the case was awaiting trial, Mr. Knecht passed away. When the trial date arrived, there was only one remaining defendant appellant Ford Motor Company. A jury held Ford liable for Mr. Knecht's illness and awarded damages. Negligence was apportioned between the parties, Ford was assigned a 20% share of the total negligence. The trial judge then applied 20% to the $40,625,000 damages award and arrived at a compensatory damages award against Ford of $8,125,000. The jury also awarded plaintiff $1,000,000 in punitive damages. After the jury returned its verdict, Ford filed two motions: (1) a renewed motion for judgment as a matter of law under Superior Court Rule 50(b) or, in the alternative, a new trial; and (2) a motion for a new trial, or, in the alternative, remittitur. The trial judge denied both motions. On appeal to the Delaware Supreme Court, Ford argued: (1) the Superior Court erred by not granting Ford judgment as a matter of law on the ground that plaintiff failed to prove that Mr. Knecht’s injury was caused by Ford’s failure to warn of the dangers of asbestos; (2) the Superior Court erred by not granting a new trial on the ground that the jury rendered an irreconcilably inconsistent verdict; and (3) the Superior Court erred by not granting a new trial or remittitur on the ground that the compensatory damages verdict is excessive. The Supreme Court concluded the Superior Court’s rulings against Ford on the first two claims were correct. However, the Court concurred the third contention had merit, reversed judgment and remanded to the Superior Court for further consideration of Ford’s motion for a new trial, or, in the alternative, remittitur. View "Ford Motor Company v. Knecht, et al." on Justia Law

Appellant Christiana Care Health Services, Inc. (“CCHS”) brought an interlocutory appeal of a Superior Court decision to deny its motion for partial summary judgment. The alleged medical negligence at issue in the underlying case occurred during surgery performed on Margaret Rackerby Flint at Christiana Care Hospital, which is operated by CCHS. The surgery allegedly caused her death two days later. The complaint was filed by Meeghan Carter, Ms. Flint’s daughter, individually and as administratrix of Ms. Flint’s estate. It named as defendants Dr. Michael Principe, who performed the surgery, Dr. Eric Johnson, who assisted him, and CCHS. Later, the medical practices of the two doctors were added as defendants. The sole claim against CCHS was that the two doctors were its agents and it is vicariously liable for their alleged negligence. Mediation resolved claims against Dr. Principe and his medical practice. As part of that settlement, plaintiff signed a release which released all such claims. CCHS was not a party to the settlement or the release. Following that settlement, CCHS filed its motion for partial summary judgment against plaintiff on the theory that the release of Dr. Principe released it from any vicarious liability for Dr. Principe’s alleged negligence. The Superior Court denied the motion. CCHS argued: (1) the release of an agent released a vicarious liability claim against the principal as a matter of law; and (2) the terms of the release which plaintiff signed when she settled with Dr. Principe and his medical practice also released it from liability for Dr. Principe’s conduct. The Delaware Supreme Court agreed with CCHS’s second contention, finding that the written release operated as a complete satisfaction of plaintiff’s vicarious liability claim against CCHS arising from Dr. Principe’s alleged conduct, and the motion for partial summary judgment should have been granted. View "Christiana Care Health Services Inc. v. Carter, et al." on Justia Law

Appellant, Barry Whitmore (father) appealed a Family Court order granting appelle Michelle Robinson's (mother) petition to terminate his parental rights to their now eight-year-old child, C.R. His rights were terminated under 13 Del. C. 1103(a)(5) for his alleged failure or inability to plan for the child’s physical needs or mental and emotional health and development. The father brought four claims on appeal; the first was an allegation the Family Court erred in applying the definition of “necessary care” in 10 Del. C. 901(17) as part of its analysis of the criteria which must be shown to justify termination of parental rights under 13 Del. C. 1103(a)(5). The other three claims challenged the sufficiency of the evidence. After review, the Delaware Supreme Court concluded the first claim had merit: it was evident from the Family Court’s opinion that the court applied the definition of necessary care contained in Title 10 as the “relevant definition” in assessing whether the father had failed to plan for his child under 13 Del. C. 1103(5). The definition of necessary care, however, applied only in Chapter 9 of Title 10, and was not one of the criteria governing whether parental rights should be terminated under 13 Del. C. 1103(a)(5). The Family Court judgment was reversed and the matter remanded for further proceedings. View "Whitmore v. Robinson" on Justia Law

In 2006, Verizon divested its print and electronic directories business to its stockholders in a tax-free “spin-off” transaction. As part of the transaction, Verizon created Idearc, Inc. and appointed John Diercksen, a Verizon executive, to serve as Idearc’s sole director. Verizon then distributed Idearc common stock to Verizon shareholders. Idearc launched as a separate business with $9.1 billion in debt. In connection with the Idearc spinoff, Verizon and Idearc purchased primary and excess Executive and Organizational Liability Policies (“Idearc Runoff Policies"). The Idearc Runoff Policies covered certain claims made against defined insureds during the six-year policy period that exceeded a $7.5 million retention. Relevant here, Endorsement No. 7 to the policies stated that “[i]n connection with any Securities Claim,” and “for any Loss . . . incurred while a Securities Claim is jointly made and maintained against both the Organization and one or more Insured Person(s), this policy shall pay 100% of such Loss up to the Limit of Liability of the policy.” “Securities Claim” was defined in pertinent part as a “Claim” against an “Insured Person” “[a]lleging a violation of any federal, state, local or foreign regulation, rule or statute regulating securities (including, but not limited to, the purchase or sale or offer or solicitation of an offer to purchase or sell securities).” Under the policy, Verizon could recover its “Defense Costs” when a Securities Claim was brought against it and covered directors and officers, and Verizon indemnified those directors and officers. Idearc operated as an independent, publicly traded company until it filed for bankruptcy in 2009; a litigation trust was set up to pursue claims against Verizon on behalf of creditors. Primary amongst the allegations was Dickersen and Verizon saddled Idearc with excessive debt at the time of the spin-off. This appeal turned on the definition of a "Securities Claim;" the Superior Court found the definition ambiguous. Using extrinsic evidence, the court held that fiduciary duty, unlawful dividend, and fraudulent transfer claims brought by a bankruptcy trustee against Verizon Communications Inc. and others were Securities Claims covered under the policy. The Delaware Supreme Court disagreed, finding that, applying the plain meaning of the Securities Claim definition in the policy, the litigation trustee’s complaint did not allege any violations of regulations, rules, or statutes regulating securities. Thus, the Superior Court’s grant of summary judgment to Verizon was reversed and that court directed to enter summary judgment in favor of the Insurers. View "In Re Verizon Insurance Coverage Appeals" on Justia Law

Appellants Jeffrey Sheldon and Andras Konya, M.D., Ph.D., alleged in the Delaware Court of Chancery that several venture capital firms and certain directors of IDEV Technologies, Inc. (“IDEV”) violated their fiduciary duties by diluting the Appellants’ economic and voting interests in IDEV. Appellants argued their dilution claims were both derivative and direct under Gentile v. Rosette, 906 A.2d 91 (Del. 2006) because the venture capital firms constituted a “control group.” The Court of Chancery rejected that argument and held that Appellants’ dilution claims were solely derivative. Because Appellants did not make a demand on the IDEV board or plead demand futility, and because Appellants lost standing to pursue a derivative suit after Abbott Laboratories purchased IDEV and acquired Appellants’ shares, the court dismissed their complaint. On appeal, Appellants raised one issue: that, contrary to the Court of Chancery’s holding, they adequately pleaded that a control group existed, rendering their claims partially “direct” under Gentile. Therefore, according to Appellants, their complaint should not have been dismissed. The Delaware Supreme Court agreed with the Court of Chancery’s determination that Appellants failed to adequately allege that the venture capital firms functioned as a control group. Accordingly, the Supreme Court affirmed dismissal of the complaint with prejudice. View "Sheldon, et al. v. Pinto Technology Ventures, L.P., et al." on Justia Law

Parke Bancorp (“Parke”) made a loan to 659 Chestnut LLC (“659 Chestnut”) in 2016 to finance the construction of an office building in Newark, Delaware. 659 Chestnut pleaded a claim in the Superior Court for money damages in the amount of a 1% prepayment penalty it had paid under protest when it paid off the loan. The basis of 659 Chestnut’s claim was that the parties were mutually mistaken as to the prepayment penalty provisions of the relevant loan documents. Parke counterclaimed for money damages in the amount of a 5% prepayment penalty, which it claimed was provided for in the agreement. After a bench trial, the Superior Court agreed with 659 Chestnut and entered judgment in its favor. After review, the Delaware Supreme Court reversed and directed entry of judgment in Parke’s favor on 659 Chestnut’s claim. Although Parke loan officer Timothy Cole negotiated on behalf of Parke and represented to 659 Chestnut during negotiations that there was a no-penalty window, the parties stipulated that: (1) everyone knew that Cole did not have authority to bind Parke to loan terms; and (2) everyone also knew that any terms proposed by Cole required both final documentation and approval by Parke’s loan committee. It was evident to the Supreme Court that 659 Chestnut did not offer clear and convincing evidence that Parke’s loan committee agreed to something other than the terms in the final loan documents. Accordingly, it Directed entry of judgment for Parke. View "Parke Bancorp Inc., et al. v. 659 Chestnut LLC" on Justia Law