Justia Delaware Supreme Court Opinion Summaries

Defendant-appellant Seth Kinderman was convicted by jury for the murder of Jakeith Latham. Eventually, he pled guilty to second-degree murder, attempted robbery, and possession of a firearm during the commission of a felony. In exchange for the guilty plea, the State agreed to a joint recommendation of thirty years of Level V incarceration. A few months later, Kinderman sought to withdraw his guilty plea. He claimed his plea counsel failed to advise him of the specific charges in the plea agreement and failed to conduct a mitigation investigation for use during plea negotiations. The superior court denied the plea withdrawal motion and sentenced Kinderman to thirty-seven years of Level V incarceration. Kinderman argued on appeal that the superior court erred in denying the motion to withdraw his plea because he did not knowingly and voluntarily enter into the plea agreement, and the plea was the result of ineffective assistance of counsel. After review, the Delaware Supreme Court disagreed and affirmed the superior court’s judgment: Kinderman did not show a “fair and just reason” to withdraw his guilty plea. View "Kinderman v. Delaware" on Justia Law

The corporate charter of a bank holding company capped at 10% the stock that could be voted by a “person” in any stockholder vote. During a proxy contest for three seats of a staggered board, the CCSB board of directors instructed the inspector of elections not to count 37,175 shares voted in favor of a dissident slate of directors. According to the board, the 37,175 shares exceeded the 10% voting limitation because certain stockholders were acting in concert with each other. If the votes had been counted, the dissident slate of directors would have been elected. The CCSB corporate charter also provided that the board’s “acting in concert” determination, if made in good faith and on information reasonably available, “shall be conclusive and binding on the Corporation and its stockholders.” In a summary proceeding brought by the plaintiffs, the Court of Chancery found: (1) the “conclusive and binding” charter provision invalid under Delaware corporate law; (2) the board’s instruction to the inspector of elections invalid because the individuals identified by the board were not acting in concert; and (3) the board’s election interference did not withstand enhanced scrutiny review. The court also awarded the plaintiffs attorneys’ fees for having conferred a benefit on CCSB. CCSB argued the Court of Chancery erred when it invalidated the charter provision and reinstated the excluded votes. The Delaware Supreme Court affirmed the Court of Chancery: plaintiffs proved that the board breached its duty of loyalty by instructing the inspector of elections to disregard the 37,175 votes. "The charter provision cannot be used to exculpate the CCSB directors from a breach of the duty of loyalty. Further, the court’s legal conclusion and factual findings that the stockholders did not act in concert withstand appellate review." View "CCSB Financial Corp. v. Totta" on Justia Law

Sathiyaselvam Thangavel and Sasikala Muthusamy were tenants who leased an apartment from Seaford Apartment Ventures, LLC. The complaint filed by Seaford Apartment’s insurer, Donegal Mutual Insurance Company, alleged that the tenants hit a sprinkler head while they flew a drone inside the apartment. Water sprayed from the damaged sprinkler head and caused damage to the apartment building. Seaford Apartment filed an insurance claim with Donegal, who paid $77,704.06 to repair the water damage. Donegal then brought this action against the tenants through subrogation and alleged that the tenants were negligent and breached the property’s rules and regulations. Donegal sought to recover the repair costs from the tenants. Under the "Sutton" rule, landlords and tenants are co-insureds under the landlord’s fire insurance policy unless a tenant’s lease clearly expresses an intent to the contrary. If the Sutton rule applies, the landlord’s insurer cannot pursue the tenant for the landlord’s damages by way of subrogation. In this case, a Delaware superior court ruled in the tenants’ favor at summary judgment that the Sutton rule applied because the lease did not clearly express an intent to hold the tenants liable for the landlord’s damages. To this the Delaware Supreme Court agreed and affirmed. View "Donegal Mutual Insurance Company v. Thangavel" on Justia Law

Defendant-appellant Deshaun Harris was convicted of first degree robbery, first degree assault, possession of a firearm during the commission of a felony, burglary, possession of a firearm by a person prohibited, aggravated menacing, wearing a disguise during the commission of a felony, conspiracy, theft, aggravated intimidation, and breach of conditions of bond during Commitment. After Harris’s arrest, before trial, one of the victims was confronted by individuals who offered him money to sign papers stating that Harris was not the perpetrator of the attack. They threatened the victim, warning him that if he testified on the stand or identified Harris, they would kill his family and him. At trial, the State produced three documents purporting to be affidavits of the victim recanting his identification of Harris. Each document was in a different format — one was written in cursive, one was printed, and one was typed. The victim testified that he did not draft any of the documents, but that he signed the typed affidavit under the threat of being killed. During its investigation, the State found multiple prison phone calls between a person believed to be Harris and an unidentified woman. The State sought to introduce certain portions of the calls to corroborate the victim's testimony and to contextualize the three affidavits wherein the victim had recanted his identification of Harris. These recordings were admitted to the trial record over Harris' objection, and he appealed to the Delaware Supreme Court the trial court erred in so admitting them. The Supreme Court found no merit to the appeal and affirmed Harris’s conviction and sentence. View "Harris v. Delaware" on Justia Law

After defendant-appellant Roderick Owens was convicted of possession of a firearm by a person prohibited and, separately, of possession of ammunition by a person prohibited, and the Delaware Supreme Court affirmed those convictions on direct appeal, Owens moved for postconviction relief under Superior Court Criminal Rule 61. Owens claimed the proceedings leading to his convictions were unfair in a way that was not remediable on direct appeal. Owens also complained that his trial counsel failed to investigate and present friendly witnesses at a hearing on a motion to suppress. These deficiencies, according to Owens, amounted to ineffective assistance of trial counsel, and that his case would have been resolved more favorably had his counsel more ably assisted him. The superior court rejected Owens’s bid to have his convictions set aside on those grounds. To this, the Supreme Court concurred: Owens’s trial counsel conveyed all plea offers to Owens is supported by trial counsel’s affidavit and entitled to our deference, and Owens’s trial counsel’s analysis of the relevance of the potential witnesses’ testimony and his decision not to call them was reasonable. View "Owens v. Delaware" on Justia Law

Marion Coster and Steven Schwat – the two UIP Companies stockholders who each owned fifty percent of the company – deadlocked after attempting several times to elect directors. In response to the director election deadlock, Coster filed a petition for appointment of a custodian for UIP. The UIP board responded by issuing stock to a long-time employee representing a one-third interest in UIP. The stock issuance diluted Coster’s ownership interest, broke the deadlock, and mooted the custodian action. Coster countered by requesting that the Delaware Court of Chancery cancel the stock issuance. After trial, the Court of Chancery found that the stock sale met the most exacting standard of judicial review under Delaware law – entire fairness. On appeal, the Delaware Supreme Court concluded that the court erred by evaluating the stock sale solely under the entire fairness standard of review, reasoning that even though the stock sale price might have been entirely fair, issuing stock while a contested board election was taking place interfered with Coster’s voting rights as a half owner of UIP. Therefore, the court needed to conduct a further review to assess whether the board approved the stock issuance for inequitable reasons. If not, the court still had to decide whether the board, even if it acted in good faith, approved the stock sale to thwart Coster’s leverage to vote against the board’s director nominees and to moot the custodian action. To uphold the stock issuance under those circumstances, the board had to demonstrate a compelling justification to interfere with Coster’s voting rights. On remand, the Court of Chancery found that the UIP board had not acted for inequitable purposes and had compelling justifications for the dilutive stock issuance. Upon return, the Supreme Court agreed with the court’s assessment and "appreciate[d] its work to address the issues remanded for reconsideration." View "Coster v. UIP Companies, Inc." on Justia Law

According to allegations in the complaint, for over forty years, Monsanto was the only U.S. manufacturer of polychlorinated biphenyls (“PCBs”). The federal government and states spent enormous sums cleaning up PCB environmental contamination. The State of Delaware alleged Monsanto knew that the PCBs it produced and sold to industry and to consumers would eventually be released into the environment and would cause lasting damage to public health and the State’s lands and waters. The State brought this action to hold Monsanto responsible for its cleanup costs, asserting claims for public nuisance, trespass, and unjust enrichment. A Delaware superior court dismissed the complaint, reasoning that even though the State alleged Monsanto knew for decades PCBs that were toxic and would contaminate the environment for generations, the State: (1) could not assert a public nuisance claim or trespass claim because Monsanto manufactured PCB products, which entered the environment after sale to third parties; (2) State did not have standing to bring a trespass claim because it held public lands in trust rather than outright and therefore did not have the exclusive possession of land needed to assert a trespass claim; (3) the superior court held it lacked subject matter jurisdiction to hear the unjust enrichment claim as a standalone claim; and (4) the State could not use an unjust enrichment claim to recover future cleanup costs. The Delaware Supreme Court found the State pled sufficiently that even though Monsanto did not control the PCBs after sale it substantially participated in creating the public nuisance and causing the trespass by actively misleading the public and continuing to supply PCBs to industry and consumers knowing that PCBs were hazardous, would escape into the environment after sale to third parties, and would lead to widespread and lasting contamination of Delaware’s lands and waters. Further, the Supreme Court found the State alleged that it owned some land directly and therefore had exclusive possession of that land needed to assert a trespass claim. The Court affirmed in all other respects, and remanded the case for further proceedings. View "Delaware v. Monsanto Company" on Justia Law

In 1983, Alan Bass was convicted by jury on two counts of first degree rape, three counts of first degree kidnapping, two counts of first degree robbery, two counts of second degree robbery, and one count of third degree burglary. The superior court sentenced Bass to five consecutive life sentences plus 45 years in prison. The convictions were affirmed in 1985. Bass thereafter applied for post-conviction relief, relying in part on the announcement by the FBI and Innocence Project of a years long investigation into whether trial testimony by forensic examiners contained erroneous statements regarding microscopic hair comparison analysis used in certain cases. The Delaware Department of Justice determined that the forensic examiner who testified in Bass’ case “included statements that exceeded the limits of science.” According to Bass, without this improperly admitted testimony, the State’s remaining evidence was insufficient to support a conviction. As a result, he asserted the State’s use of this unreliable hair evidence violated his right to a fair trial and that he is entitled to a new trial. The Delaware Supreme Court determined that Bass did not meet his burden to establish that the erroneous testimony offered by the forensic examiner in his case, and new evidence, created a strong inference that Bass was actually innocent. The Supreme Court thus concluded the superior court did not abuse its discretion when it denied Bass post-conviction relief. “Thus, this is not the ‘extraordinary case’ where the defendant has met his heavy burden to overcome the procedural bar of Rule 61(d)(2).” View "Bass v. Delaware" on Justia Law

At issue before the Delaware Supreme Court in this case was the 2016 all-stock acquisition of SolarCity Corporation (“SolarCity”) by Tesla, Inc. (“Tesla”). Tesla’s stockholders claimed CEO Elon Musk caused Tesla to overpay for SolarCity through his alleged domination and control of the Tesla board of directors. At trial, the foundational premise of their theory of liability was that SolarCity was insolvent at the time of the Acquisition. Because the Court of Chancery assumed, without deciding, that Musk was a controlling stockholder, it applied Delaware’s most stringent "entire fairness" standard of review, and the Court of Chancery found the Acquisition to be entirely fair. In this appeal, the two sides disputed various aspects of the trial court’s legal analysis, including, primarily, the degree of importance the trial court placed on market evidence in determining whether the price Tesla paid was fair. Appellants did not challenge any of the trial court’s factual findings. Rather, they raised only a legal challenge, focused solely on the application of the entire fairness test. After careful consideration, the Delaware Supreme Court was convinced that the trial court’s decision was supported by the evidence and that the court committed no reversible error in applying the entire fairness test. View "In Re Tesla Motors, Inc. Stockholder Litigation" on Justia Law

Tesla Inc. appealed a Delaware superior court judgment upholding a Division of Motor Vehicles’ (“DMV”) decision denying Tesla’s application for a new dealer license. The superior court agreed with the DMV Director that the Delaware Motor Vehicle Franchising Practices Act (“Franchise Act”) prohibited Tesla, as a new motor vehicle manufacturer, from selling its electric cars directly to customers in Delaware. The Delaware Supreme Court reversed, finding the Franchise Act excluded Tesla's direct sales model, where new electric cars were not sold through franchised dealers in Delaware. View "Tesla Inc. v. Delaware Division of Motor Vehicles" on Justia Law