Justia Delaware Supreme Court Opinion Summaries

The issue this case presented to the Delaware Supreme Court centered on the circumstances under which an arbitration award could be vacated where it was argued that the arbitrator manifestly disregarded the law. The parties to a corporate acquisition agreed to arbitrate disputes about the acquired company’s balance sheet on the effective date of the transaction. They retained an arbitrator to decide whether a workers' compensation reserve had been calculated correctly. The arbitrator decided, without any analysis, that there would be no adjustment to the balance sheet. The Court of Chancery vacated the arbitrator's decision, finding that the arbitrator did not follow the relevant provision of the parties’ share purchase agreement. But the test for “manifest disregard for the law” was not whether the arbitrator misconstrued the contract (even if the contract language is clear and unambiguous). "To vacate an arbitration award based on 'manifest disregard of the law,' a court must find that the arbitrator consciously chose to ignore a legal principle, or contract term, that is so clear that it is not subject to reasonable debate." Because the record did not support such a finding, the arbitrator’s award was reinstated. View "SPX Corporation v. Garda USA, Inc., et al." on Justia Law

This appeal stemmed from dispute in the Court of Chancery over the membership of the board of directors of Biolase, Inc. The Court of Chancery resolved the dispute by finding that the Biolase board of directors consisted of five directors, including Paul Clark. The Court of Chancery concluded that Clark was appointed to the Biolase board after a previous director, Alexander Arrow, resigned through oral statements at a board meeting. A press release issued by Biolase after the board meeting quoted Federico Pignatelli, Biolase's Chief Executive Officer and Chairman, as saying he was "thrilled" with Clark's appointment to the board. But Pignatelli quickly reversed course when he learned that Clark had aligned himself with a faction of the board that wanted to remove Pignatelli from his position as CEO. Pignatelli argued that because Arrow's resignation at the board meeting was given orally and was not reduced to writing before Clark was appointed to fill the vacancy created by Arrow's resignation, Clark had not been properly appointed to the board under 8 Del. C. section 141(b). Biolase's largest stockholder, appellee Oracle Partners, L.P., brought suit Biolase seeking a declaration that, among other things, Arrow had resigned from the Biolase board and been replaced by Clark at the board meeting. The Court of Chancery rejected the Pignatelli Faction's legal argument and held that section 141(b) was a permissive statute, that a director may resign by an oral statement, and that there was no requirement that a resignation be in writing. Because the Court of Chancery's holding that directors are permitted under section 141(b) to resign by oral statements was not legally erroneous and the Court of Chancery's determination that Arrow resigned at the board meeting was supported by substantial evidence, the Supreme Court affirmed the Court of Chancery's ruling that Clark was properly appointed to the Biolase board of directors. View "Biolase, Inc. v. Oracle Partners, L.P." on Justia Law

In 2006, Michael and Connie Jo Zimmerman obtained two separate commercial loans from Eagle National Bank, the predecessor in interest to Customers Bank. The Zimmermans later defaulted on these loans and entered into a forbearance agreement. In addition to the Forbearance Agreement, the Zimmermans each executed a Disclosure for the Confession of Judgment acknowledging that a Confession of Judgment provision in the Forbearance Agreement had been called to their attention, that they understood that the provision permitted Customers Bank to enter judgment against them without notice or opportunity for a hearing, and that the waiver of the right to notice and a hearing was knowing, intelligent, and voluntary. The Forbearance Agreement also provided that all notices, requests, demands, and other communications were to be sent to the Zimmermans at an address in Dover, Delaware with a copy sent to their attorney. Based on the Warrant of Attorney to Confess Judgment in the Forbearance Agreement, Customers Bank filed a complaint seeking the entry of a judgment by confession against the Zimmermans. The Zimmermans opposed the entry of a judgment by confession and a hearing was held where the Zimmermans argued, among other things, that at the time the Forbearance Agreement was executed they were residents of Florida and that Customers Bank had not complied with the requirements for entry of judgment by confession against a non-resident under Rule 58.1. The Zimmermans also argued that they did not knowingly, intelligently, and voluntarily waive their right to notice and a hearing before judgment could be entered against them. After deliberation, the superior court found the Zimmermans’ waiver of their right to notice and a hearing had been knowing, intelligent, and voluntary, and entered judgment by confession against the Zimmermans. The Zimmermans appealed. Finding no reversible error, the Supreme Court affirmed. View "Crothall, et al. v. Zimmerman, et al." on Justia Law

The issue this case presented to the Delaware Supreme Court arose out of a situation where a police officer retired while his conduct was under investigation by his employing police force. After the officer retired, the Council on Police Training revoked his certification as a police officer in the State of Delaware on the grounds that the officer’s retirement itself constituted a knowing and voluntary waiver of his right to a hearing under the Law Enforcement Officer’s Bill of Rights. The Supreme Court concluded that because the plain language of section 8404(a)(4)(e) provided that the Council could only revoke the certification of a retired officer if the officer both retired pending the resolution of an investigation that could have resulted in his discharge from the police force and “knowingly and voluntarily waived” his right to a hearing under the Law Enforcement Officer’s Bill of Rights, the Council erred. The Superior Court’s reversal of the Council’s revocation of his certification was affirmed. View "Council on Police Training v. Delaware" on Justia Law

Appellant Kenneth Chambers was arrested in 2013 after he failed a field sobriety test and was determined to have a blood alcohol level more than twice the legal limit. Chambers was indicted for driving under the influence of alcohol. Because Chambers had two prior alcohol-related driving offenses, the State filed a notice that it would seek to have him sentenced as a felon for third offense DUI. Chambers filed a motion to preclude the felony prosecution, arguing that the ex post facto clause of the United States Constitution1 barred his two prior alcohol-related driving offenses from counting as qualifying offenses and prevented his prosecution for felony third offense DUI in this case. Because Chambers was prosecuted for an offense that he committed in 2013, after the July 1, 2012 effective date of the applicable amendments to the sentence enhancement ultimately applied to him, the Supreme Court concluded Chambers' argument that the State extended a previously expired statute of limitations in violation of the ex post facto clause was without merit. View "Chambers v. Delaware" on Justia Law

The issue this case presented to the Delaware Supreme Court centered on whether coverage existed under certain management liability insurance policies. A bankruptcy trust sought a determination that those insurance policies covered potential future expenses and liabilities that might have arisen out of pre-bankruptcy wrongful acts allegedly committed by the insured debtor company’s directors and officers. XL Specialty Insurance Company and certain excess insurance carriers, appealed a Superior Court order denying their motion to dismiss the action. They claimed that the plaintiff-appellee, WMI Liquidating Trust lacked standing to prosecute its coverage claims, and, that the dispute did not present a ripe "actual controversy" susceptible of adjudication. Because the Supreme Court held that the Trust’s complaint must be dismissed on ripeness grounds, it did not reach the issue of standing. The parties’ dispute was not ripe because it has not yet assumed a concrete or final form. View "XL Specialty Insurance Co., et al. v. WMI Liquidating Trust" on Justia Law

Plaintiff-appellant Thomas Baird appealed on a number of grounds after a jury found in favor of defendants-appellees, Frank R. Owczarek, M.D., Eye Care of Delaware, LLC, and Cataract and Laser Center, LLC. The litigation stemmed from a LASIK procedure plaintiff received, in which he alleged that as a result of the surgery, he developed ectasia, a vision-threatening corneal disease through the medical negligence of the doctor and centers. Upon review of the issues plaintiff raised on appeal, the Supreme Court concluded that the Superior Court’s failure to conduct any investigation into alleged egregious juror misconduct (internet research), which violated the Superior Court’s direct instruction to refrain from consulting outside sources of information, constituted reversible error. In addition, the Superior Court’s failure to exclude evidence of informed consent in this medical negligence action also constituted reversible error. Accordingly, the judgments of the Superior Court were reversed and the matter remanded for a new trial. View "Baird v. Owczarek, M.D., et al." on Justia Law

In 2007, Marisco Superholdco, LLC and Marisco Superholdco Notes Corp. issued notes ("Superholdco Notes") through a private placement under an indenture between the Issuer and Wells Fargo Bank, N.A., as Trustee. In 2010, as part of a financial restructuring, the Issuer proposed amendments to the Indenture that were approved by a majority of the Superholdco noteholders. Appellees GS Mezzanine Partners 2009, L.P. and GS Mezzanine Partners V, L.P., who owned a majority of the Superholdco Notes, voted in favor of the amendments. Appellants Caspian Alpha Long Credit Fund L.P., Caspian Select Master Fund, LTD., Caspian Capital Partners, L.P., and Mariner LDC were Superholdco noteholders who sued, alleging they were injured by the amendments to the Indenture. GS Mezzanine moved to dismiss the claims against it under Court of Chancery Rule 12(b)(6), and the Court of Chancery granted that motion, finding that Section 6.06 of the Indenture could not reasonably have been read to provide Caspian with a basis to sue GS Mezzanine for voting to approve amendments to the Indenture. On appeal, Caspian argued that the Court of Chancery erred in its decision. Finding no reversible error, the Supreme Court affirmed the Court of Chancery’s dismissal of the claims Caspian brought against GS Mezzanine. View "Caspian Alpha Long Credit, Fund, L.P., et al. v. GS Mezzanine Partners 2006, L.P., et al." on Justia Law

Defendant-appellant Nathaniel Banks appealed his conviction by jury of assault in the third degree, carrying a concealed weapon and endangering the welfare of a child. He raised one issue on appeal to the Supreme Court: the trial court abused its discretion when it restricted his ability to call witnesses to testify about certain prior acts of the complainant, and thereby violated his federal Constitutional right to present a defense. Upon review, the Supreme Court concluded defendant's claim was without merit. Therefore, the Court affirmed Banks' conviction. View "Banks v. Delaware" on Justia Law

Defendant-appellant Keith Wynn appealed his conviction by jury of one count of Burglary in the Second Degree and two counts of Felony Theft. Wynn raised two claims on appeal: (1) the prosecutor committed misconduct by stating that Wynn was not permitted on the second floor of a dwelling; and (2) the prosecutor argued for an application of Delaware’s burglary statute that was not supported by the record evidence. Upon review, the Supreme Court concluded that both of Wynn’s arguments lacked merit. View "Wynn v. Delaware" on Justia Law