Justia Delaware Supreme Court Opinion Summaries

Homeland Insurance Company of New York appealed a superior court judgment entered against it in the amount of $13.5 million plus pre-judgment interest. The litigation that led to the judgment was initiated by CorVel Corporation, a Delaware company that operated a national Preferred Provider Organization (PPO) network. Homeland issued CorVel a claims-made errors and omissions liability policy with limits of $10 million and a policy period of October 31, 2005 to October 31, 2006. Thereafter, Homeland issued similar renewal policies. CorVel’s PPO network included agreements with medical providers in Louisiana. In late 2004 and early 2005, Louisiana medical providers began filing claims asserting that CorVel had improperly discounted medical payments without providing proper notice in violation of a Louisiana PPO statute. Litigation in Louisiana ultimately involved millions of dollars of claims against CorVel. In 2011, CorVel entered into a settlement of the litigation. As part of the settlement consideration, CorVel paid $9 million. In 2015, CorVel filed its complaint in this case, alleging that Homeland owed it damages and penalties under another Louisiana statute, La. R.S. 22:1973. CorVel alleged that Homeland knowingly misrepresented facts or policy provisions in a complaint that Homeland filed in a declaratory judgment action in Delaware in 2011. The alleged misrepresentation was an averment that CorVel had not timely reported the PPO claims in accordance with the policy’s requirements. The damages CorVel sought were the $9 million that it paid to settle the Louisiana litigation, penalties, attorneys’ fees, and pre-judgment interest. The Delaware superior court agreed with CorVel’s claim and awarded it $9 million in damages, $4.5 million in penalties, and pre-judgment interest. Homeland argued on appeal: (1) the allegation in its declaratory judgment complaint was a statement of a coverage position that could not give rise to a finding of bad faith under either Delaware or Louisiana law; (2) no causal connection existed between the allegation in the declaratory judgment complaint and CorVel’s decision to settle the PPO claims; and (3) the applicable statute of limitations barred CorVel’s claim. The Delaware Supreme Court concluded that the statute of limitations did bar CorVel’s claim and that the superior court erred by ruling that it did not. Because the statute of limitations barred CorVel’s claim, the Court did not address Homeland’s first two arguments. View "Homeland Insurance v. Corvel Corp" on Justia Law

Appellant CompoSecure, LLC. appealed a nearly $17 million Chancery Court judgment for past-due commissions, legal fees and expenses, pre-judgment interest, and contract damages arising out of a sales agreement with Appellee CardUX, LLC. On appeal, CompoSecure argued the Court of Chancery erred by holding: (1) the Sales Agreement was voidable, not void, under CompoSecure’s Amended and Restated Limited Liability Company Agreement; and (2) CompoSecure impliedly ratified the Sales Agreement. CardUX argued that, even if CompoSecure were correct, the Delaware Supreme Court should enforce the Sales Agreement based on a provision in the LLC Agreement that addresses reliance by third parties on certain company actions, or based upon quantum meruit. After review, the Supreme Court determined the trial court needed to determine whether the Sales Agreement was a “Restricted Activity” as that term was defined by the parties’ contract. The Supreme Court agreed with the Court of Chancery’s conclusions that: (1) the Related Party Provision (leaving aside the Restricted Activities Provision) rendered the Sales Agreement voidable, not void, and was therefore subject to equitable defenses; (2) the parties impliedly ratified the Sales Agreement under New Jersey law; and (3) the Third Party Reliance Provision did not save the Sales Agreement from a failure to comply with the Related Party or Restricted Activities Provisions. Accordingly, the Supreme Court affirmed in part, reversed in part and remanded for further proceedings. View "Composecure, L.L.C. v. Cardux, LLC, et al." on Justia Law

The question before the Delaware Supreme Court in this case was whether the Court of Chancery properly applied Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014) (“MFW”) by reading it as: (1) allowing for the application of the business judgment rule if the controlling stockholder conditions its bid on both of the key procedural protections at the beginning stages of the process of considering a going private proposal and before any economic negotiations commence; and (2) requiring the Court of Chancery to apply traditional principles of due care and to hold that no litigable question of due care exists if the complaint fails to allege that an independent special committee acted with gross negligence. In the Supreme Court's previous affirmance of the Court of Chancery in Swomley v. Schlecht, 128 A.3d 992 (Del. 2015), the Court held that an interpretation of MFW based on these principles was correct. Accordingly, the Court affirmed. View "Flood v. Synutra International, Inc., et al." on Justia Law

Licensed nurses may be disciplined if they engage in “unprofessional conduct.” The applicable Delaware statute did not define “unprofessional conduct,” so the Board of Nursing adopted a rule to flesh the term out. Two nurses who held supervisory roles at a correctional facility were disciplined by the Board under that rule after they participated in the retrieval of medication from a medical waste container for eventual administration to an inmate. The nurses appealed to the Superior Court, and the court set their discipline aside. The court read the Board’s rule to require not just proof that the nurses breached a nursing standard, but also proof that in doing so, they put the inmate or the public at risk. And in the court’s view, the State had not made that showing. Because the Board applied the correct standard and its decision was supported by substantial evidence, the Delaware Supreme Court affirmed its decision and reversed the Superior Court. View "Delaware Board of Nursing v. Francis" on Justia Law

Ron Flowers and his co-defendant, Tariq Mariney, were indicted on charges of Drug Dealing, Aggravated Possession of Cocaine, Possession of a Firearm During the Commission of a Felony (“PFDCF”), Carrying a Concealed Deadly Weapon (“CCDW”), two counts each of Possession of a Firearm By a Person Prohibited (“PFBPP”) and Possession or Control of Ammunition By a Person Prohibited (“PABPP”), Receiving a Stolen Firearm, and Conspiracy Second Degree. Flowers moved to suppress evidence before trial, but in a bench ruling, the Superior Court denied his motion. A jury ultimately convicted Flowers of two counts of PFBPP as well as the CCDW charge, for which Flowers was sentenced to five years of incarceration followed by descending levels of supervision. On appeal, Flowers argued the Superior Court abused its discretion in denying his motion to suppress. Finding no reversible error nor abuse of discretion, the Delaware Supreme Court affirmed Flowers' conviction. View "Flowers v. Delaware" on Justia Law

Gene Daskin, a Greek citizen residing in Greece, appealed two Delaware Family Court decisions finding subject matter jurisdiction over his wife's divorce petition and finding service of process on him was sufficient without requiring that service be properly made under the Hague Service Convention. The wife was a dual citizen of the United States and Greece. She was born in Wilmington and resided with her mother at her mother’s Wilmington home prior to the parties’ marriage. They married in Wilmington in 1990, and from then until November 2015, resided together in Greece. The husband contends that the time the wife has spent in Delaware since 2015 is temporary and for limited purposes. He contends she was not a resident of Delaware for the six months preceding the filing of her divorce petition. In his affidavit, the husband states that the wife pays taxes in Greece, has a Greek social security number, has a Greek identity card and has accounts in Greek banks. He also states that the wife continues to maintain a private marketing business out of their home in Greece. The husband’s position was that she was a resident of Greece, not Delaware. After review of the district court record, the Delaware Supreme Court determined the Family Court erred by dismissing the husband's motion to dismiss for lack of subject matter jurisdiction: service of process was insufficient. The matter was remanded for the Family Court to vacate the divorce decree and for further proceedings. View "Daskin v. Knowles" on Justia Law

Alan Fowler was present during two melees at which gun shots were fired, and bystanders were shot. Fowler was convicted on multiple crimes arising from the shootings. After Fowler’s trial and direct appeal were over, it emerged during post-conviction proceedings that the State had failed to provide "Jencks" statements to the defense of four of its key witnesses. In ruling on his post-conviction petition, the Superior Court held that the State had proved the error was harmless, largely based on the testimony of the State’s ballistics expert, Carl Rone, who said that the same gun was used in both incidents. When this case was on appeal, evidence emerged that the expert, who was not properly certified in the relevant area of firearms identification as of trial, was being charged by the State with Theft by False Pretense over $1,500 and Falsifying Business Records to Make or Cause False Entry for “providing false [Delaware State Police] activity sheets and receiving compensation from [Delaware State Police] for work that was not performed.” The State asked the Delaware Supreme Court to excuse the serious issues with its expert’s credibility in the Fowler case because of the compelling nature of testimony by witnesses, several of whose Jencks statements were not timely disclosed. The Supreme Court found that when the reliability of both strains of the key evidence the State used to prove Fowler was the shooter has been called into question, Rule 61 required setting aside the conviction. But rather than impose upon the Superior Court the burdensome step of conducting an evidentiary hearing under Rule 61 in these unusual circumstances, the Supreme Court vacated Fowler’s conviction and remanded for a new trial. View "Fowler v. Delaware" on Justia Law

A jury found Zamarianne Bradley guilty of first-degree assault of a law enforcement officer and resisting arrest. She appealed that conviction and the trial court’s ruling denying her motion for acquittal, arguing the evidence was insufficient for the jury to find that Bradley’s victim suffered the requisite “serious physical injury” for the First Degree Assault conviction, and that the jury instruction on that charge prevented the jury from intelligently performing its duties. Finding no reversible error, the Delaware Supreme Court denied Bradley’s requests on appeal and affirmed Bradley’s conviction. View "Bradley v. Delaware" on Justia Law

Plaintiff Amanda Norman appealed after a superior court granted summary judgment in favor of defendants All About Women, P.A. and Christine W. Maynard, M.D. in a medical negligence case. The grant of summary judgment followed an earlier ruling that the testimony of plaintiff's medical expert was inadmissible under the rules of evidence. In that ruling, the court excluded the expert’s testimony because the plaintiff failed to show that his opinions were “‘based on information reasonably relied upon by experts’ in his field.” Taking plaintiff's expert's deposition testimony as a whole, the Delaware Supreme Court found it sufficient to establish the applicable standards of care, Dr. Maynard's deviations from those standards, and injury to plaintiff caused by those deviations. As such, the Court ruled the expert's testimony admissible, reversed the superior court ruling, and remanded the case for further proceedings. View "Norman v. All About Women, P.A., et al." on Justia Law

The Delaware Supreme Court granted review to an interlocutory appeal in a Family Court divorce proceeding. The wife, Gretchen Knowles, was a dual citizen of the United States and Greece. She was born in Wilmington and resided with her mother at her mother’s Wilmington home prior to the parties’ marriage. The respondent-husband, Gene Daskin, was a Greek citizen residing in Greece. The appeal came from the husband, raising two claims: (1) the Family Court erred in finding it had subject matter jurisdiction over the wife’s divorce petition because she was not a Delaware resident for six consecutive months prior to the filing of the petition; and (2) the Family Court erred in finding that service of process upon him was sufficient without requiring that service be properly made under the Hague Service Convention. After review, the Supreme Court vacated the judgment of the Family Court denying the husband’s motion to dismiss for lack of subject matter jurisdiction. The Court reversed the denial of the husband’s motion to dismiss for lack of personal jurisdiction due to insufficiency of service of process. This matter was remanded to the Family Court to vacate the divorce decree, the trial Judge’s order of November 1, 2017 and the Commissioner’s order of August 8, 2017, and for further proceedings. View "Daskin v. Knowles" on Justia Law