Justia Delaware Supreme Court Opinion Summaries

Plaintiff Diane Stayton suffered serious burns while a resident at Harbor Healthcare and Rehabilitation Center ("Harbor Healthcare"), a skilled nursing center in Lewes. She sued alleging medical negligence against those responsible for her care. In addition to general damages, Stayton sought special damages for the cost of her medical care after she was burned. Absent Medicare coverage, the burn hospital and other providers who treated her for her injuries would have billed Stayton $3,683,797.11. Because Stayton qualified for Medicare, the Centers for Medicare and Medicaid Services ("CMS") paid Stayton's healthcare providers $262,550.17 in full satisfaction of the expense of Stayton's hospital stay and other care. Medicare regulations required the write-off of $3,421,246.94, and Stayton's healthcare providers could not "balance bill" her for the amount written off. Defendants moved for judgment on the pleadings seeking judgment as a matter of law that Stayton's medical expense damages were limited to the amount actually paid by CMS, rather than the amount Stayton might have been billed for her care. Stayton opposed the motion, relying on the collateral source rule. The Superior Court granted defendants' motion, and limited Stayton's medical expense claim to the amount paid by CMS. The court decided that the collateral source rule did not apply to amounts required by federal law to be written off by healthcare providers. On appeal to the Supreme Court, Stayton argued that the Superior Court should have applied the collateral source rule to the Medicare write-offs. The Supreme Court concluded the collateral source rule did not apply to amounts required to be written off by Medicare. "Where a healthcare provider has treated a plaintiff covered by Medicare, the amount paid for medical services is the amount recoverable by the plaintiff as medical expense damages." View "Stayton v. Delaware Health Corporation, et al." on Justia Law

Defendant-appellant April Milligan appealed her convictions of Driving Under the Influence and Improper Lane Change. Milligan argued on appeal: (1) the Superior Court erred by admitting documentation relating to the chain of custody in the absence of live testimony, which she contended violated her right to confront her accusers as guaranteed by the Sixth Amendment to United States Constitution and Section 7 of the Delaware Constitution; and (2) the Superior Court abused its discretion by allowing the State to introduce the results of her blood draw without first establishing a proper foundation. Finding no merit to either contention, the Supreme Court affirmed. View "Milligan v. Delaware" on Justia Law

The Delaware Supreme Court certified two questions of New York law to the New York Court of Appeals. This case was a consolidated appeal in an insurance-coverage dispute from separate trial court judgments by the Delaware Court of Chancery and the Delaware Superior Court. Viking Pump, Inc. and Warren Pumps, LLC sought to recover under policies issued to Houdaille Industries, Inc. Viking claimed it was the successor to insurance policies that Liberty Mutual Insurance Company issued to Houdaille, or in the alternative, sought partition of the Liberty policy limits. Liberty, Viking and Warrant settled their dispute, but Viking and Warren then filed new complaints in the Court of Chancery against more than twenty other insurers that had issued excess policies to Houdaille. The Court of Chancery held that Houdaille's policies unambiguously provided for an all sums allocation. The case was then transferred to the Superior Court to determine several other issues. That court held that as a matter of New York law, Viking and Warren were obligated to horizontally exhaust all triggered "primary and umbrella insurance layers before tapping" any of Houdaille's excess coverage. The legal insurers in this appeal were controlled by New York law. As such, the Delaware Supreme Court certified two questions of New York law to the New York Court of Appeals, centering on the proper method of allocation and interpretation of the policies at issue here. View "In Re Viking Pump, Inc." on Justia Law

The issue this case presented for the Supreme Court's review centered on whether the provisions of the Truth In Sentencing Act of 1989 (the “TIS Act”) that indisputably abolished parole as to Title 11 and Title 16 of the Delaware Code also applied to felony DUI offenses imposed under section 4177 of Title 21. If the answer was yes (as the State argued), felony DUI offenders were ineligible for parole. The judicial and administrative answer to the question has consistently been no: the Superior Court and the Board of Parole have operated with the understanding that the provisions of the TIS Act that eliminated parole did not apply to felony DUI offenses. In addition, the Delaware Sentencing Accountability Commission (“SENTAC”) adhered to this position in its 2014 Benchbook. The Supreme Court, in its decision in this case, adhered to the principle of stare decisis and held that the TIS did not apply to felony DUI offenses under section 4177. "If the General Assembly wishes to amend the Code to alter this long-standing interpretation, it is free to do so." View "Delaware v. Barnes" on Justia Law

The Delaware Alcoholic Beverage Control (ABC) Commissioner appealed a superior court judgment dismissing his claim against the Delaware Alcoholic Beverage Control Appeals Commission for lack of standing. The Appeals Commission overturned the ABC Commissioner's decision to deny an application for a change of license classification by Lex-Pak, Inc., d/a/b Hak's Sports Bar & Restaurant. Hak's filed a motion to dismiss on grounds that the ABC Commissioner lacked standing. The superior court agreed and dismissed the case. After its review, the Supreme Court concluded that the Delaware Code did not vest the ABC Commissioner with standing to pursue an appeal of decisions by the Appeals Commission. Accordingly, the Court affirmed the superior court's judgment. View "Office of the Commissioner Delaware Alcoholic Beverage Control v. Appeals Commission Delaware Alcoholic Beverage Control" on Justia Law

At issue before the Supreme Court in this case was a Superior Court's grant of summary judgment to defendants, Fairwinds Church and Fairwinds Christian School (collectively, “Fairwinds”), in an action brought by former student Kimberly Hecksher under the Child Victim‟s Act. Hecksher sued Fairwinds under the Act, arguing that Fairwinds, a small, religious school, was grossly negligent for failing to prevent sexual abuse by Ed Sterling (her foster father and her teacher at Fairwinds), that occurred while she was a student. Hecksher alleged that Sterling's wife and fellow-Fairwinds employee, Sandy Sterling, observed Sterling abusing Hecksher on school property, and that Sandy's knowledge of and tortious failure to report the abuse should have been imputed to Fairwinds. Hecksher also argued that Fairwinds was grossly negligent for failing to have a sexual abuse prevention policy in place and for not responding to red flags that Sterling posed a serious risk to Fairwinds students. The Supreme Court disagreed with the Superior Court's grant of summary judgment, finding several instances where reasonable jurors could have found differently than did the Superior Court. The Supreme Court therefore concluded material issues of fact remained, specifically as to whether Sandy's knowledge and conduct could be imputed to Fairwinds, and whether Fairwinds was grossly negligent for failing to have any sexual abuse prevention and detection policies in place and for failing to act on red flags that Sterling posed a serious risk to female students. Accordingly, the grant of summary judgment was reversed and the case remanded for trial. View "Hecksher v. Fairwinds Baptist Church, Inc., et al." on Justia Law

These appeals both involved damages actions by stockholder plaintiffs arising out of mergers in which the controlling stockholder, who had representatives on the board of directors, acquired the remainder of the shares that it did not own in a Delaware public corporation. Both mergers were negotiated by special committees of independent directors, were ultimately approved by a majority of the minority stockholders, and were at substantial premiums to the pre-announcement market price. Nonetheless, the plaintiffs filed suit in the Court of Chancery in each case, contending that the directors had breached their fiduciary duty by approving transactions that were unfair to the minority stockholders. In both appeals, it was undisputed that the companies did not follow the process established in "Kahn v. M&F Worldwide Corporation" as a safe harbor to invoke the business judgment rule in the context of a self-interested transaction. In both cases, the defendant directors were insulated from liability for monetary damages for breaches of the fiduciary duty of care by an exculpatory charter provision adopted in accordance with 8 Del. C. 102(b)(7). Despite that provision, the plaintiffs in each case sued the controlling stockholders and their affiliated directors, and also sued the independent directors who had negotiated and approved the mergers. The issue central to both, presented for the Supreme Court's review was whether, where the plaintiff challenges an interested transaction that is presumptively subject to entire fairness review, must plead a non-exculpated claim against the disinterested, independent directors to survive a motion to dismiss by those directors. The Court answered that question in the affirmative: a plaintiff seeking only monetary damages must plead non-exculpated claims against a director who is protected by an exculpatory charter provision to survive a motion to dismiss, regardless of the underlying standard of review for the board's conduct. The Court of Chancery in both of these cases denied the defendants' motions to dismiss because it read the Supreme Court's precedent to require doing so, regardless of the exculpatory provision in each company's certificate of incorporation. When the independent directors are protected by an exculpatory charter provision and the plaintiffs are unable to plead a non-exculpated claim against them, those directors are entitled to have the claims against them dismissed, in keeping with the Court's opinion in "Malpiede v. Townson" (and cases following that decision). Accordingly, the Court remanded both of these cases to allow the Court of Chancery to determine if the plaintiffs sufficiently pled non-exculpated claims against the independent directors. View "In Re Cornerstone Theraputics, Inc. Leal, et al. v. Meeks, et al." on Justia Law

Petitioner-appellant La Mar Gunn appealed a superior court judgment declaring a tie in the November 4, 2014 general election for the Office of the Recorder of Deed for Kent County. Defendant-appellee Betty Lou McKenna moved to dismiss Gunn's election contest, arguing that Gunn failed to state a claim upon which relief could be granted. In response to McKenna's motion, Gunn argued that the petition stated a claim, and pointed to the election recount conducted by two superior court judges, "evidenced 'malconduct on the part of election officers or clerks holding the election,'" because three different county conducted by the superior court (sitting as the Board of Canvass) resulted in three different outcomes. McKenna countered that the judges sitting as the Board of Canvass were not "election officers or clerks holding the election." The superior court denied McKenna's motion to dismiss. On appeal, McKenna argued that the superior court "missed the key point" in her motion, and that the claims asserted in Gunn's petition did not fit within the jurisdictional requirements of 15 Del. C. 5941. After review, the Supreme Court concluded that Gunn's petition failed to allege any "malconduct on the part of election officers or clerks holding the election." Therefore, McKenna's motion should have been granted. This case was remanded to the superior court with directions that the judgment be vacated. View "Gunn v. McKenna" on Justia Law

In 2013, the Superior Court granted Branch Banking and Trust Company's ("BB&T") motion for summary judgment on its foreclosure and breach of contract claims. In 2014, the Superior Court entered a final judgment order awarding damages to BB&T. The Eids failed to file a timely notice of appeal of thatorder. Instead, a little over two months after the entry of the final judgment order, the Eids filed a motion with the Superior Court under Rule 60(b) seeking vacatur of the final judgment order, contending that their counsel never received actual notice of the final judgment order. The Superior Court granted the Eids' motion to vacate. Then trial court entered a new final judgment order from which the Eids could file a timely notice of appeal. BB&T filed an appeal from the Superior Court's grant of the Rule 60(b) motion to vacate, and the Eids filed a cross-appeal of the Superior Court's grant of summary judgment in favor of BB&T. BB&T raises three issues on appeal: (1) that pursuant to Rule 77(d), the trial court lacked authority to grant the motion to vacate the final judgment order; (2) that the trial court erred as a matter of law when it applied a vague and undefined "interest of justice" standard to the motion to vacate; and (3) that the trial court abused its discretion in granting the motion to vacate because the Eids failed to establish that they were entitled to relief under Rule 60(b)(1) or (b)(6). On cross-appeal, the Eids also raised three issues: (1) that BB&T lacked standing to institute a foreclosure; (2) that the affidavit supporting the motion for summary judgment was defective; and (3) that BB&T failed to demonstrate that there were no genuine issues of material fact. After review, the Supreme Court agreed with BB&T that the trial court improperly granted the motion to vacate the final judgment, and reversed that decision. View "Branch Banking & Trust Co. v. Eid" on Justia Law

The issue this case presented for the Supreme Court's review arose from a business merger. Appellant, Lazard Technology Partners, LLC, represents former stockholders of Cyveillance, Inc. (the seller). Appellee Qinetiq North America Operations, LLC paid $40 million up-front money to the company and promised to pay up to another $40 million if the company's revenues reached a certain level. When the earn-out period ended, the revenues had not reached the level required to generate an earn-out. The seller filed suit in the Court of Chancery, arguing that the buyer breached the merger agreement. The seller also argued that the buyer violated the merger agreement‟s implied covenant of good faith and fair dealing by failing to take certain actions that the seller contended would have resulted in the achievement of revenue sufficient to generate an earn-out. After review, the Court of Chancery found that the seller had not proven that any business decision of the buyer was motivated by a desire to avoid an earn-out payment. Further, the Court found that the merger agreement's express terms were supplemented by an implied covenant. But as to whether conduct not prohibited under the contract was precluded because it might result in a reduced or no earn-out payment, the Court of Chancery held that, consistent with the language of implicated section of the merger agreement, the buyer had a duty to refrain from that conduct only if it was taken with the intent to reduce or avoid an earn-out altogether. On appeal, the seller argued the Court of Chancery misinterpreted the merger agreement. Finding no misinterpretation, the Supreme Court affirmed. View "Lazard Technology Partners v. Qinetiq North America Operations LLC" on Justia Law