Justia Delaware Supreme Court Opinion Summaries

Two cases consolidated for review by the Delaware Supreme Court involved automobile accidents. John Henry and Charles Fritz sustained injuries in accidents while operating employer-owned vehicles during the course of their employment. In both cases, the accidents were allegedly caused by a third-party tortfeasor. Both employees received workers’ compensation from their respective employers’ insurance carriers. In each case, the vehicle was covered by an automobile liability insurance policy issued to the employer by Cincinnati Insurance Company. The superior court issued an order in Henry’s case first, finding the exclusive-remedy provision in the Delaware Workers’ Compensation Act in effect at the time of his accident precluded Henry from receiving underinsured motorist benefits under the Cincinnati policy. Following that decision, the Fritz court granted Cincinnati’s motion for summary judgment on the same ground. Henry and Fritz argued on appeal to the Delaware Supreme Court that the superior court erred in finding the Act’s exclusivity provision precluded them from receiving underinsured motorist benefits through the automobile liability policies their respective employers purchased from Cincinnati. The Supreme Court agreed both trial courts erred in finding the Act’s exclusivity provision prevented underinsured motorist benefits. The Court reversed and remanded for further proceedings. View "Henry v. Cincinnati Insurance Co." on Justia Law

The City of Lewes and its Historic Preservation Commission approved Ernest and Deborah Nepa’s plans to renovate a house in the historic district. The Nepas violated the conditions of the approvals by building a two story addition on the back of the house and increasing its already nonconforming setbacks from neighboring properties. After the City discovered the violations and issued a stop work order, the Nepas applied to the City’s board of adjustment for three area variances to complete the unauthorized addition; the board turned them down. The Nepas appealed the variance denials to the Superior Court, arguing that the City Code provision used by the board to evaluate their variance applications conflicted with a more lenient state law addressing municipal variances. The Superior Court agreed and reversed the board’s decision. On appeal, the City argued the Superior Court erred because the state statute relied on, 22 Del. C. 327(a)(3), only prohibited the City from loosening the state law requirements for granting a variance. The City was thus free to require stricter standards. The Delaware Supreme Court agreed with the City and reversed the Superior Court’s decision. “As long as the variance standards applied by the City of Lewes’ board of adjustment meet the minimum state statutory standards, nothing in the state statute prohibits the City, through its board of adjustment, from applying variance standards stricter than those set by the State.” View "City of Lewes & The Board of Adjustment v. Nepa" on Justia Law

Tiffany Greenfield appealed after the lawsuit she filed on behalf of minor Ethan Ford, was dismissed. Greenfield alleged that the defendants, who worked for the Delaware Division of Family Services (“DFS”), contributed in some way (as case workers, others as managers and supervisors) to four faulty investigations of reports that Ford and his half-sister, Autumn Milligan, were being abused and neglected by their mother, Tanasia Milligan. According to Greenfield’s complaint, the defendants’ dereliction of duty resulted in the tragic death of Autumn and permanent and irreversible damage to Ford that she averred necessitated long-term physical care and psychological services. The Delaware Supreme Court determined that Ford’s guardian sought redress from individuals who were charged with protecting him but who were unable to do so. "Those same individuals, however, are also required to preserve and foster the family unit, which creates an obvious tension between their duties that requires the exercise of judgment. Under such circumstances, our law requires that complaints against such individuals be written to a higher standard. We agree with the Superior Court that Greenfield’s complaint did not satisfy that standard and therefore affirm." View "Greenfield v. DFS Director Miles, et al." on Justia Law

In late 2013, Steven Baynum broke into his estranged wife’s residence and physically accosted her and her new romantic partner. Approximately one year later, a Superior Court jury found Baynum guilty of first-degree burglary, third-degree assault, offensive touching, and a host of other crimes. After Baynum was sentenced as a habitual offender to 17 years, he appealed and the Delaware Supreme Court affirmed his convictions. Baynum then moved for postconviction relief under Superior Court Criminal Rule 61 claiming, among other things, that his trial counsel provided ineffective assistance of counsel in violation of his rights under the Delaware and United States Constitutions. The Superior Court denied Baynum’s motion, and he once again appealed to the Supreme Court. On appeal, Baynum argued: (1) his lawyers should have asked the trial court to instruct the jury to consider the charge of offensive touching as a lesser-included offense of third-degree assault in connection with his attack on the romantic partner, which would have had the possibility of a lighter sentence, and the corresponding acquittal of the more serious third-degree assault charge would have undermined the State’s prosecution of the first-degree burglary charges, which also had a physical-injury component; and (2) his counsel during his direct appeal made a prejudicial mistake by not appealing the trial court’s refusal to grant a mistrial following the State’s introduction of improper opinion testimony from one of the lead detectives. The Superior Court rejected both of Baynum’s claims. The Delaware Supreme Court agreed with Baynum on his first claim, and reversed the denial of postconviction relief as to the third-degree assault and first-degree burglary convictions. However, the Court disagreed with Baynum on his ineffective-assistance claim against his appellate counsel: the Court saw no reasonable probability that it would have reversed Baynum’s convictions on the ground that the Superior Court should have ordered a mistrial in the wake of the detective’s testimony, which was offered in response to similar testimony elicited by Baynum and was the subject of a curative instruction. The Court therefore affirmed the denial of postconviction relief as to the balance of Baynum’s convictions. View "Baynum v. Delaware" on Justia Law

This appeal centered on a manufactured housing community owner’s attempt to raise the rent for its homeowner–tenants after installing a new water filtration system and commissioning a report on market rents for comparable manufactured housing communities. After the homeowners petitioned for an arbitration under the Rent Justification Act, the arbitrator concluded that the rent increase was justified. On appeal, however, the Superior Court reversed on the grounds that the community owner did not establish that the installation of the water filtration system “was an increase in its costs” or that the expenditure caused “its original expected return [to] decline[].” The community owner appealed the Superior Court’s decision. The Delaware Supreme Court found after its review of this matter that the Superior Court overruled the arbitrator’s order allowing the rent increase, finding that the community owner “would have had to offer evidence about its original costs and original expected return and how the expenditure . . . altered that relationship.” Because that reasoning grafted onto the Act a requirement that the statute did not contain, the Supreme Court reversed the Superior Court’s judgment and remanded the case for the entry of a judgment affirming the arbitrator’s order. View "Sandhill Acres MHC, LC v. Sandhill Acres Home Owners Association" on Justia Law

Appellant-father Garrett Irwin appealed a Family Court order granting appellee-mother Jenny Shelby sole custody and primary residential placement of their two children. Father argued: (1) the Family Court abused its discretion by siding with the mother’s treating psychologist instead of relying on the expert requested by the father; and (2) the Family Court’s order granting sole custody and primary placement to the mother was against the weight of the evidence and an abuse of discretion. According to Father, the court drew all inferences in Mother’s favor, minimized her mental health and substance abuse issues while giving undue weight to Father’s history of drug use, ignored the mother’s role in their physical altercations, and was generally biased against him. Furthermore, Father expressed concern the Family Court judge was biased in favor of Mother. Although it might have weighed the evidence differently and come to a different conclusion, the Delaware Supreme Court found the Family Court’s factual determinations were adequately supported by the record, thus affirming its judgment. View "Irwin v. Shelby" on Justia Law

In 2008, Invenergy Wind LLC, a wind energy developer, was raising money for a Series B investment round, and Leaf Clean Energy Company (“Leaf Parent”), an investment fund, expressed interest. After extensive negotiations, Leaf Parent invested $30 million in Invenergy Series B notes through a vehicle called Leaf Invenergy Company (“Leaf”). The agreement governing the Series B notes gave noteholders such as Leaf the right to convert to equity and incorporated an LLC agreement that the noteholders and Invenergy would execute upon conversion. The Series B Note Agreement and the Series B LLCA also included provisions that prohibited Invenergy from conducting a “Material Partial Sale” without Leaf’s consent unless Invenergy paid Leaf a premium called a “Target Multiple.” Although the parties renegotiated several aspects of their agreements with one another over the next few years, the consent provisions persisted in substantially similar form into a Third Amended and Restated LLC Agreement, which was the operative agreement in this dispute. Leaf filed suit after Invenergy closed a $1.8 billion asset sale - a transaction that Invenergy conceded was a Material Partial Sale - without first obtaining Leaf’s consent or redeeming Leaf’s interest for the Target Multiple. After a trial, the Court of Chancery concluded that, although Invenergy had breached the Material Partial Sale consent provisions, Leaf was not entitled to the Target Multiple. The court then awarded only nominal damages because, according to the court, Invenergy had engaged in an “efficient breach.” The Court of Chancery directed the parties to complete a buyout of Leaf’s interests pursuant to another LLC Agreement provision that Invenergy had invoked after Leaf had filed suit. The Delaware Supreme Court disagreed with the Court of Chancery’s interpretation of the consent provision and its award of nominal damages and therefore reversed. Because Invenergy conducted a Material Partial Sale without Leaf’s consent and without paying Leaf the Target Multiple, Leaf was entitled to the Target Multiple as contractual damages. The Court awarded Leaf the Target Multiple in damages on condition that it surrenderd its membership interests in Invenergy. View "Leaf Invenergy Co. v. Invenergy Renewables LLC" on Justia Law

The Court of Chancery found that the fair value of Aruba Networks, Inc., as defined by 8 Del. C. 262, was $17.13 per share, which was the thirty-day average market price at which its shares traded before the media reported news of the transaction that gave rise to the appellants’ appraisal rights. The issue this case presented for the Delaware Supreme Court's review centered on whether the Court of Chancery abused its discretion in arriving at Aruba’s thirty-day average unaffected market price as the fair value of the appellants’ shares. Because the Court of Chancery’s decision to use Aruba’s stock price instead of the deal price minus synergies was rooted in an erroneous factual finding that lacked record support, the Supreme Court answered that in the positive and reversed the Court of Chancery’s judgment. On remand, the Court of Chancery was directed to enter a final judgment for petitioners, awarding them $19.10 per share, which reflected the deal price minus the portion of synergies left with the seller as estimated by the respondent in this case, Aruba. View "Verition Partners Master Fund Ltd., et al. v. Aruba Networks, Inc." on Justia Law

In 2015, Jacquez Robinson was indicted for his alleged involvement in separate shootings on November 25 and 26, 2014, which left two people injured and one person dead. The issue his appeal presented for the Delaware Supreme Court's review centered on whether the State violated Robinson’s Sixth Amendment right to the effective assistance of counsel, and if yes, whether the trial court erred in dismissing his indictment for first degree murder. The Supreme Court affirmed the trial court’s conclusion that the State violated Robinson’s Sixth Amendment right to counsel as a result of its wrongful and unjustified intrusion into his attorney-client privileged materials. "But based upon our assessment of the record, and on our interpretation of 'Morrison’s' requirement that the remedy must be tailored to the harm, we reverse the Superior Court’s dismissal of the indictment. Although the Superior Court has discretion to sanction litigants, it failed to tailor its remedy to the violation and actual prejudice that it found." The trial court’s dismissal of the indictment failed to adequately "preserv[e] society’s interest in the administration of criminal justice." The matter was remanded for further proceedings. View "Delaware v. Robinson" on Justia Law

Nicholas Olenik, a stockholder of nominal defendant Earthstone Energy, Inc., brought class and derivative claims against defendants, challenging a business combination between Earthstone and Bold Energy III LLC. As alleged in the complaint, EnCap Investments L.P. controlled Earthstone and Bold and caused Earthstone stockholders to approve an unfair transaction based on a misleading proxy statement. Defendants moved to dismiss the complaint, claiming the proxy statement disclosed fully and fairly all material facts about the transaction, and Earthstone conditioned its offer on the approval of a special committee and the vote of a majority of the minority stockholders. The Court of Chancery agreed with the defendants and dismissed the case. While the parties briefed this appeal, the Delaware Supreme Court decided Flood v. Synutra International, Inc. Under Synutra, to invoke the MFW protections in a controller-led transaction, the controller must “self-disable before the start of substantive economic negotiations.” The controller and the board’s special committee must also “bargain under the pressures exerted on both of them by these protections.” The Court cautioned that the MFW protections would not result in dismissal when the “plaintiff has pled facts that support a reasonable inference that the two procedural protections were not put in place early and before substantive economic negotiations took place.” So the Supreme Court determined the Court of Chancery held correctly plaintiff failed to state a disclosure claim. But, the complaint should not have been dismissed in its entirety: applying Synutra, which the Court of Chancery did not have the benefit of at the time of its decision, plaintiff pled facts supporting a reasonable inference that EnCap, Earthstone, and Bold engaged in substantive economic negotiations before the Earthstone special committee put in place the MFW conditions. The Court of Chancery’s decision was affirmed in part and reversed in part, and the case remanded for further proceedings. View "Olenik v. Lodzinski, et al." on Justia Law