Justia Delaware Supreme Court Opinion Summaries

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

The Delaware Court of Chancery was asked to resolve a dispute between a company and one of its former directors over the meaning of a stock option agreement and option grant notice. Applying the plain text of the agreement, the Court of Chancery determined that the dispute was to be resolved in accordance with a board committee’s interpretation of the agreement and notice. After the board, acting through a committee, interpreted the agreement and notice in a manner favorable to the company, the Court of Chancery, without hearing further from the former director, promptly dismissed the former director’s complaint for lack of subject matter jurisdiction. The Delaware Supreme Court found the Court of Chancery properly stayed the action to permit the board’s committee to interpret the agreement and notice in the first instance. The Supreme Court disagreed, however, with the court’s decision to dismiss the former director’s complaint without any meaningful review of the committee’s interpretation. The Court of Chancery’s order of dismissal was therefore reversed, and the case remanded for a review of the committee’s conclusions. View "Terrell v. Kiromic Biopharma, Inc." on Justia Law

Ronnie Williams was convicted of several sexual offenses committed against two children. On appeal, Williams claimed that during the course of his trial, the Superior Court erroneously denied his requests that the court declare a mistrial when the jury was exposed to evidence that Williams deemed to be highly prejudicial. The evidence that, according to Williams, was so prejudicial as to warrant a mistrial falls within two categories: (1) “outbursts” by the victims’ mother and, specifically, her two references to Williams as a “liar;” and (2) references to a friend of the victims—another child who resided with Williams named Cyree, should have been excluded because it might have caused the jury to improperly infer that Williams may have engaged in uncharged sexual misconduct with him. The Delaware Supreme Court's review of the trial record persuaded it to rule that while the victims’ mother’s outbursts may have been inappropriate, they were still unlikely to have misled or prejudiced the jury. "And Williams does not explain how the testimony referring to Cyree was inadmissible, let alone prejudicial." Accordingly, the Supreme Court affirmed Williams' convictions. View "Wililams v. Delaware" on Justia Law

A grand jury indicted Raquan Womack on five counts: (1) Possession or Control of a Firearm by a Person Prohibited (“PFBPP”); (2) Possession or Control of Ammunition by a Person Prohibited (“PABPP”); (3) Carrying a Concealed Deadly Weapon (“CCDW”); (4) Resisting Arrest; and (5) Possession of Marijuana. Following a three-day jury trial, the jury returned guilty verdicts on all counts except the marijuana charge. Womack was sentenced to 20 years at Level 5, suspended after five years with decreasing levels of probation. Before his trial began, Womack moved to suppress the evidence seized during his arrest in light of the Delaware Supreme Court’s decision in Juliano v. Delaware, 260 A.3d 619 (Del. 2021). The trial court denied Womack’s motion, and Womack appealed. He argued that the Superior Court erred because there was no justification for his detention beyond that of a routine traffic stop and because there was no probable cause for his arrest. Finding that claim lacked merit, the Supreme Court affirmed the denial of Womack's motion to suppress, and his convictions. View "Womack v. Delaware" on Justia Law

Defendant-appellant Aaron Thompson was convicted by jury of multiple crimes for his role in the 2013 double murder of Joe and Olga Connell. The Delaware Supreme Court affirmed his convictions on direct appeal. Thompson moved for postconviction relief under Superior Court Criminal Rule 61. The Superior Court denied his motion. The court found that Thompson’s trial counsel was not constitutionally ineffective for failing to investigate the connection between Thompson and a property near the crime scene at the time of the killings. The court also held that trial and appellate counsel did not have a conflict of interest when he represented the State’s ballistics expert in an unrelated criminal proceeding during Thompson’s direct appeal. Thompson appealed the Superior Court’s denial of his motion for postconviction relief. But finding no error, the Supreme Court again affirmed the Superior Court’s judgment. View "Thompson v. Delaware" on Justia Law

William West, the founder of Access Control Related Enterprises, LLC (“ACRE”), was forced out as an officer of the company by its majority owners, LLR Equity Partners, IV, L.P. and LLR Equity Partners Parallel IV, L.P. (collectively, “LLR”). He filed a wrongful termination suit against ACRE and others in California state court. The California court stayed the case based on the forum selection provisions in the controlling agreements that designated Delaware as the exclusive forum for disputes arising out of the agreements. After a failed detour to Delaware District Court, West filed the same claims in the Delaware Superior Court. A Delaware jury eventually found against West on his breach of contract claim. West did not appeal the jury’s adverse verdict. Instead, he sought to undo his loss in Delaware by challenging the Superior Court’s procedural rulings, arguing: (1) the Superior Court no longer had jurisdiction once it issued the order transferring the case to the Court of Chancery; (2) the Superior Court improperly denied his motions for voluntary dismissal; and (3) if the Superior Court had applied forum non conveniens, it would have dismissed the Delaware case in favor of the California litigation. Finding no reversible error, the Delaware Supreme Court affirmed the Superior Court's decisions. View "West v. Access Control Related Enterprises, LLC" on Justia Law

Defendant-appellant Stephen Wheeler Stephen Wheeler was convicted in on four felonies for his role in a violent home invasion. He was sentenced to 13 years in prison. After the Delaware Supreme Court affirmed those convictions, Wheeler returned to the superior court seeking postconviction relief in the form of a new trial. He argued his convictions were the product of an ill-advised waiver of his right to have his case heard and decided by a jury. According to Wheeler, his lawyer counseled him to let a judge, sitting without a jury, determine his guilt or innocence. Wheeler contended that he gave up a vitally important constitutional right because of his lawyer’s constitutionally deficient representation and that his convictions were so tainted by that decision that they could not stand. The superior court denied the motion for relief based primarily on its assessment of the relative credibility of Wheeler and his trial counsel: crediting counsel’s account of the advice he had shared with Wheeler, while discounting Wheeler’s version. The court also found, after hearing from Wheeler and his trial counsel at a postconviction evidentiary hearing, that Wheeler had made an informed strategic decision to proceed with a bench trial. Deferring to these credibility determinations, and finding no other reversible error, the Supreme Court affirmed the denial of Wheeler's motion. View "Wheeler v. Delaware" on Justia Law

Brian Winningham was driving a fully loaded tractor-trailer on Interstate 95 in Delaware when he diverted his attention from the road ahead and failed to notice stopped traffic backed up in the travel lane waiting to exit the highway. Winningham crashed his tractor-trailer at highway speed into three stopped cars and killed two people while injuring two others. After a bench trial, the judge found Winningham guilty of two counts of criminally negligent homicide and other offenses. On appeal, Winningham argued that his criminally negligent homicide convictions should have been overturned because his only driving infraction was a momentary inattention from the roadway. Winningham also argued that the trial court erred because it found only that he failed to perceive a risk of “serious physical injury” instead of a failure to perceive a risk of “death.” The Delaware Supreme Court affirmed, finding a rational trier of fact could have found that under the circumstances, Winningham’s inattention was prolonged enough that it was a gross deviation from the standard of care that a reasonable person would observe. Further, the trial court’s verdict shows that the court did not misunderstand or misapply the law. Even if it did, the Supreme Court held the error was harmless beyond a reasonable doubt. View "Winningham v. Delaware" on Justia Law

Wilmington Trust National Association, acting as securities intermediary for Viva Capital Trust, was the downstream purchaser of two high- value life insurance policies issued by Sun Life Assurance Company of Canada. After the insureds died, Sun Life, believing that the policies were “stranger originated life insurance” ("STOLI") policies that lacked an insurable interest, filed suit in the Superior Court, seeking declaratory judgments that the policies were void ab initio. Sun Life sought to avoid paying the death benefits and to retain the premiums that had been paid on the policies. Wilmington Trust asserted affirmative defenses and counterclaims, alleging that Sun Life had flagged the policies as potential STOLI years before Wilmington Trust acquired them. Wilmington Trust sought to obtain the death benefits or, in the alternative, a refund of all the premiums that it and former owners of the policies had paid on the policies. Sun Life countered that allowing Wilmington Trust to recover the death benefits would constitute enforcing an illegal STOLI policy and that Wilmington Trust could not recover the premiums because, among other arguments, Wilmington Trust knew that it was buying and paying premiums on illegal STOLI policies. The trial court denied Wilmington Trust’s bid to secure the death benefits, but ordered Sun Life to reimburse, without prejudgment interest, all premiums “to the party that paid them.” The Delaware Supreme Court agreed with the trial court’s disallowance of Wilmington Trust’s death-benefit claim, accomplished in part by an earlier dismissal of Wilmington Trust’s promissory- estoppel counterclaim and the striking of certain of its equitable defenses, finding it was consistent with STOLI precedents. But its application of an “automatic premium return” rule—that is, ordering all premiums to be returned without conducting the fault-based analysis we adopted in Geronta Funding v. Brighthouse Life Ins. Co., 284 A.3d 47 (Del. 2022)—was not. Nor was the trial court’s denial of prejudgment interest. Therefore, the Supreme Court affirmed in part, reversed in part, and remanded to the superior court for reconsideration of its ruling on Wilmington Trust’s premium-return claim, including its claim for prejudgment interest. View "Wilmington Trust National Association v. Sun Life Assurance Company of Canada" on Justia Law