Justia Delaware Supreme Court Opinion Summaries

A question of Delaware law was certified from the United States Court of Appeals for the Ninth. The issue focused on whether under the "fraud exception" to Delaware's continuous ownership rule, shareholder plaintiffs may maintain a derivative suit after a merger that divests them of their ownership interest in the corporation on whose behalf they sue by alleging that the merger at issue was necessitated by, and is inseparable from, the alleged fraud that is the subject of their derivative claims. The Delaware Court answered that question in the negative. View "Arkansas Teacher Retirement System, et al. v. Countrywide Financial Corporation, et al." on Justia Law

A Superior Court jury convicted the defendant in this case of Failing to Stop at the Command of a Police Officer, Reckless Driving, and several other offenses. At issue in this appeal was the State's obligation to produce relevant material in response to a defendant's discovery appeal. The State failed to produce a recording of the officers' communications with the dispatcher in response to the defendant's discovery request. The recording contained evidence that the officers’ siren had not been activated, contrary to the officers’ testimony. Upon review, the Supreme Court concluded that the dispatch recording fell within the scope of the defendant’s discovery request and Superior Court Criminal Rule 16, and that failure to produce this evidence prejudiced the defendant because the siren’s was material to the State’s case and impeached the credibility of its key witnesses. Accordingly, we the Court reversed the Superior Court's judgment and remanded for a new trial. View "Valentin v. Delaware" on Justia Law

Plaintiff appealed a Court of Chancery order that granted summary judgment and dismissed his suit on laches grounds. The underlying dispute arose over capital investments plaintiff made in two companies. Upon review, the Supreme Court concluded plaintiff's arguments made on appeal lacked merit, however, the Court reversed and remanded on different grounds. View "Levey v. Brownstone Asset Management, LLP, et al." on Justia Law

Defendant-appellant DV Realty Advisors LLC appealed a Court of Chancery declaratory judgment that plaintiffs-appellees properly removed DV Realty as the General Partner of Chicago-based Delaware limited partnership DV Urban Realty Partners I, L.P. In its two issues raised before the Supreme Court on appeal, DV Realty DV Realty argued: (1) the Court of Chancery improperly found that the Limited Partners believed in good faith that because of untimely delivered audited financial statements, removing DV Realty was necessary for the best interest of the partnership; and, (2) "Red Flag Issues" raised by an advisor were not sufficient to support a finding that the Limited Partners removed DV Realty in good faith. Upon review, the Supreme Court concluded that both of DV Realty's arguments were without merit. View "DV Realty Advisors LLC v. Policemen's Annuity & Benefit Fund of Chicago, et al." on Justia Law

The issue before the Supreme Court in this case centered on a general partner's obligations under a limited partnership agreement. The plaintiffs alleged that the general partner obtained excessive consideration for its incentive distribution rights when an unaffiliated third party purchased the partnership. Notably, the plaintiffs did not allege that the general partner breached the implied covenant of good faith and fair dealing. Upon review of the matter, the Supreme Court concluded that the limited partnership agreement's conflict of interest provision created a contractual safe harbor, not an affirmative obligation. Therefore, the general partner needed only to exercise its discretion in good faith, as the parties intended that term to be construed, to satisfy its duties under the agreement. The general partner obtained an appropriate fairness opinion, which, under the agreement, created a conclusive presumption that the general partner made its decision in good faith. Therefore we the Supreme Court affirmed the Court of Chancery's dismissal of the complaint. View "Norton v. K-Sea Transportation Partners, L.P., et al." on Justia Law

On August 26, 1992, Jermaine Wright was convicted of first degree murder and other crimes arising from a 1991 robbery at the Hi-Way Inn bar and liquor store. Following a penalty hearing, Wright was sentenced to death. The issue on appeal before the Supreme Court in this case was whether Wright's murder conviction should have been overturned. The trial court granted Wright's fourth motion for postconviction relief, finding that his confession should have been excluded from evidence, and that the State improperly withheld evidence of a similar crime that the police determined he did not commit. The trial court then granted bail. Upon review, the Supreme Court held that the trial court erred in reviewing the admissibility of the confession sua sponte, and in concluding that there was a so-called Brady violation. The trial court also erred in deciding that Wright could be granted bail. Therefore the trial court's judgment was reversed and the matter remanded for further proceedings. View "Delaware v. Wright" on Justia Law

Plaintiff–Appellee PharmAthene, Inc., and Defendant–Appellant SIGA Technologies, Inc., are both Delaware corporations engaged in biodefense research and development. SIGA appealed the Vice Chancellor's finding that it breached a contractual obligation to negotiate in good faith and was liable under the doctrine of promissory estoppel. The Supreme Court reaffirmed that where parties agree to negotiate in good faith in accordance with a term sheet, that obligation to negotiate in good faith is enforceable. Where a trial judge makes a factual finding that the parties would have reached an agreement but for the defendant's bad faith negotiation, the Court held that a trial judge may award expectation damages. In regard to the facts of this case, the Court reversed the Vice Chancellor's promissory estoppel holding because a promise expressed in a fully enforceable contract cannot give rise to a promissory estoppel claim. The Court also reversed the Vice Chancellor's equitable damages award based on his factual conclusion that the parties would have reached an agreement. The case was remanded for further proceedings in light of the Court's decision in this opinion. View "Siga Technologies, Inc. v. Pharmathene, Inc." on Justia Law

New Cingular Wireless PCS (now known as "AT&T") filed an application with the Sussex County Board of Adjustment ("the Board") for a special use exception to construct a 100-foot telecommunications cell tower on a commercially zoned property located just outside of Bethany Beach. A special use exception was required before a cell tower may be erected within 500 feet of a residential zone. The Sea Pines Village Condominium Association of Owners, along with individual residents who lived near the proposed location opposed the application. The Board ultimately denied AT&T's application. On appeal to the Superior Court, the court acknowledged in its opinion that while this appeal was pending "Bethany voted unanimously to reject AT&T's request to use [Bethany's] water tower as an antenna location" and that "Bethany was in fact unwilling to negotiate with AT&T." The trial court did not explain its reasoning for refusing to allow a collocation on the Bethany water tower. The Superior Court affirmed based on the record presented. In its written decision denying AT&T's application, the Board concluded that AT&T "had not met its burden [under the Sussex County Code] of proving that the proposed use would not affect adversely the uses of adjacent and neighboring properties." The Superior Court explained AT&T's burden with similar language. But the Sussex County Code required a lesser burden, "special use exceptions shall be granted unless the Board finds such exceptions will not substantially affect adversely the uses of adjacent and neighboring property." AT&T argued that the Board's decision should have been reversed because the Board failed to apply the correct legal standard. Upon review, the Supreme Court agreed, and remanded the case for further proceedings. View "New Cingular Wireless PCS v. Sussex County Board of Adjustment" on Justia Law

In a reformation action concerning cash flow distributions in three real estate joint venture agreements, the Supreme Court held that the Vice Chancellor properly reformed the agreements on the basis of unilateral mistake and knowing silence by the other party. "Negligence in discovering an alleged mistake does not bar a reformation claim unless the negligence is so significant that it amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing. Ratifying a contract does not create an equitable bar to reformation unless the ratifying party had actual knowledge of the mistake giving rise to the reformation claim." In this matter, the Court reversed the Vice Chancellor's fee award because a contractual fee-shifting provision incorporating the words "incurred" and "reimburse" did not apply where counsel for the party seeking fees represented the party free of charge to avoid a malpractice claim. View "Scion Breckenridge Managing Member, LLC, et al. v. ASB Allegiance Real Estate Fund, et al." on Justia Law

Claimant-appellant Stephen Arrants appealed a superior court order that affirmed an Industrial Accident Board's order granting employer-appellee Home Depot's petition to terminate appellant's total disability benefits. Appellant raised two claims on appeal: (1) the Board's decision was in error because all experts agreed that his condition had not improved since the 2007 Board finding of total disability; and (2) the Board's decision was not supported by competent evidence in the record. Upon review, the Supreme Court concluded that both arguments were without merit, and affirmed the superior court. View "Arrants v. Home Depot" on Justia Law