Posts tagged Business Torts

Superior Court Denies Defendant's Motion to Dismiss and Motion for a More Definite Statement in Breach of Contract Case

Spanish Tiles, Ltd. v. Hensey, C.A. No. 05C-07-025 RFS, 2005 WL 3981740 (Del. Super. Ct. March 30, 2006). Plaintiff Spantis Tiles, Ltd. D/b/a Terra Tile and Marble ("Terra Tiles") and Plaintiff Steel Buildings, Inc. d/b/a Northern Steel buildings, Inc. ("NSB") brought an action against Kurt and Ken Hensey (the "Henseys") for breach of contract, tortious interference with contracts and prospective contracts, violation of the Deceptive Trade Practices Act, common law fraud, unlawful practice and defamation. The defendant moved to dismiss for failure to state a claim and moved for a more definite statement. The court denied both motions. More › Share

Court of Chancery Dismisses Complaint Because a Creditor Erroneously Asserted Derivative Claims as Direct in the Hope of Escaping Bankruptcy Court Jurisdiction

Big Lot Stores, Inc. v. Bain Capital Fund VII, LLC, C.A. No. 1081-N, 2006 WL 846121 (Del. Ch. Mar. 28, 2006). In 2000, in a sponsored management buyout, a corporation sold a subsidiary business that operated a chain of toy stores (KB Toys) in exchange for $257.1 million in cash and a $45 million note due in 2010. In 2002, the new owners refinanced the business and distributed approximately $120 million to the buyout sponsor, affiliates, two officers and directors of the subsidiary that invested in the buyout, and others. In 2004, the KB Toys filed for Chapter 11 bankruptcy. Plaintiff Big Lots, Inc, an unsecured creditor and holder of the $45 million note, brought this action asserting direct claims of breach of fiduciary duties, fraud, and civil conspiracy. The plaintiff sought recovery for the amount due on the note and restitution for alleged unjust enrichment. The Court of Chancery dismissed the complaint namely because the claims were derivative in nature, not direct, and thus belong to the bankruptcy estate. More ›

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Court of Chancery Permits Third Complaint Amendment In Nigerian Judgment-Enforcement Action

Harry A. Akande v. Transamerica Airlines, Inc., et al., C.A. No. 1039-N, 2006 WL 587846 (Del. Ch. Feb. 28, 2006). This is a motion to amend the Complaint under Court of Chancery Rules 15(a) and 15(aaa) for the third time before the Court of Chancery, involving a foreign judgment enforcement action. Plaintiff sought to withdraw his petition for receivership and add factual predicates to various claims he made. In an earlier hearing, the Court of Chancery permitted plaintiff's motion for discovery and converted the defendants' motion for dismissal upon plaintiff's motion to one of summary judgment. More › Share

Court of Chancery Dismisses Caremark Claims But Retains Loyalty And Fraud Counts

Canadian Commercial Workers Industry Pension Plan v. Eric Alden, et al., C.A. No. 1184-N, 2006 WL 456786 (Del. Ch. Feb. 22, 2006). In this derivative action brought against four former directors and officers of Case Financial, Inc., the nominal defendant, the two remaining defendants moved to dismiss after two others settled. Plaintiff alleged breach of loyalty, breach of the Caremark duty of oversight, corporate waste and common law fraud. The Court of Chancery partly granted the motions. More › Share

Court of Chancery Holds "Anti-Reliance" Contract Provisions Cannot Exclude Liability For Fraudulent Misrepresentations

Abry Partners V, L.P., et al. v. F&W Acquisitions LLC, et al., C.A. No. 1756-N, (Del. Ch. Feb. 14, 2006) (published at 891 A.2d 1032 (Del. Ch. 2006). This is plaintiffs' suit for rescission of a corporate acquisition contract. The seller moved to dismiss the case for failure to state a claim. The court focused on the law and policy of the unambiguous bar to recessionary relief and limitations in damage recovery for misrepresentations through the contract's exclusive indemnity-limiting provision. The court reconciled the power of privately ordered contracts allocating risk between the parties and Delaware's public policy disfavoring a bar on recessionary remedies and damages for willful misrepresentations. Additionally, the court examined the elective remedies available to the plaintiff-buyer. More › Share

Court of Chancery Partially Grants Plaintiffs' Motion For A Preliminary Injunction Enforcing A Non-Competition Agreement

Deloitte & Touche USA LLP v. Lamela, C.A. No. 1542-N, 2005 WL 2810719 (Del. Ch. Oct. 21, 2005). Plaintiffs sought a preliminary injunction against Defendant to prevent him from soliciting any current, former or prospective clients that he had contact with while employed by Plaintiffs. More › Share

Court Of Chancery Upholds Voluntary Advancement Provisions Irrespective Of Alleged Wrongful Conduct

Radiancy, Inc. v. Zion Azar, et al., C.A. No. 1547-N, 2006 WL 224059 (Del. Ch. Jan. 23, 2006). This is a summary judgment motion for advancement of legal fees made by defendant-officers. Their corporation alleged fraud, fiduciary violations and usurpation of corporate opportunity against defendants as a bar to advancement. Defendants replied with counterclaims under their respective employment contracts. The motion was granted and denied in part. More › Share

Superior Court Finds that Plaintiff Was Entitled to Advisory Fee Pursuant to Contract

Barker Capital LLC v. Rebus LLC, C.A. No. 04C-10-269 MMJ, 2006 WL 246572 (Del. Super. Ct. Jan. 12, 2006). The plaintiff, Barker Capital LLC ("Barker"), a Delaware LLC, sued Rebus LLC ("Rebus"), also a Delaware LLC, Mark A. Fox ("Fox"), and Twinlab Corporation ("Twinlab"), a Delaware corporation, alleging breach of contract, quantum meruit, tortious interference with contract, and unjust enrichment. Rebus and Barker entered into an Engagement Agreement, pursuant to which Barker would act as Rebus' nonexclusive financial advisor to identify and consummate a transaction to purchase two medical newsletters. Under the terms of the Engagement Agreement, Barker was entitled to an Advisory Fee in the amount of 2.5% of the transaction's value. Both sides moved for summary judgment. The court found that Barker was entitled to 2.5% of a $12 million loan associated with the deal, but was not entitled to a percentage of a $35 million loan connected with the deal. The court also found against the plaintiff on the quantum meruit claim because the plaintiff had been made whole when the court ruled in his favor on the breach of contract claim. Turning to the tortious interference claim, which was only alleged against Fox, the court found that it did not have the subject matter jurisdiction to pierce the corporate veil. More › Share

Court Enforces Lease Provision Protecting Supermarket from Competition from Other Shopping Center Tenants

Penn Mart Supermarkets, Inc. v. New Castle Shopping LLC, C.A. No. 20405-NC, 2005 WL 3502054 (Del. Ch. Dec. 15, 2005). Liquor store chain acquired leasehold rights in commercial shopping center under a Bankruptcy Court order that authorized it to operate one of its typical stores. In addition to alcohol products, those chain stores also sold food products and a wide range of products typically sold in supermarkets. Tenant who operated supermarket in same shopping center sued landlord and liquor store to enforce provision in its lease protecting it from competition by other tenants in the operation of a supermarket and in the sale of food or food products intended for off-premises consumption. More › Share

Court Denies Motion to Dismiss Claims for Tortious Interference and Civil Conspiracy in Connection with Telecommunications Merger

UbiquiTel v. Sprint Corporation, C.A. No. 1489-N, 2005 WL 3533697 (Del. Ch. Dec. 14, 2005, rev'd Dec. 19, 2005). UbiquiTel was the exclusive operator of Sprint's wireless network in several states pursuant to a management agreement. In December 2004, Sprint announced that it intended to merge with Nextel and that Nextel or its successor entity would be taking over much of the work that had previously been performed by UbiquiTel. In response, UbiquiTel sued Sprint and Nextel alleging a number of claims, including tortious interference and civil conspiracy against Nextel. Nextel moved to dismiss for failure to state a claim. More › Share

Court of Chancery Grants Motion To Stay Litigation Pending Resolution Of Prior Filed Case In District Court

Davis Int'l, LLC v. New Start Group Corp., C.A. No. 1297-N, 2005 WL 2899683 (Del. Ch. Oct. 27, 2005). Defendants moved to stay Court of Chancery action pending resolution of prior filed district court case. More › Share

Federal Court Denies Motion to Dismiss For Failure To Join Indispensable Party Pending Discovery On Agency Issue But Dismisses Common Law Counts As Merged In Trade Secret Claim

Ethypharm S.A. France v. Bentley Pharmaceuticals, Inc., 388 F.Supp.2d 426 (D.Del. 2005). This action was brought by Ethypharm, a French pharmaceutical company and its Spanish subsidiary alleging fraud, violation of the Delaware Uniform Trade Secret Act ("DUTSA"), unjust enrichment and intentional interference with ongoing and prospective business relationships. Defendant Bentley Pharmaceuticals, Inc., a Delaware corporation, filed a Motion To Dismiss For Failure To Join An Indispensable Party, namely Belmac, a Spanish company, under Fed. R. Civ. P. 19(a) and (b) and a motion to dismiss the various common law claims. The Court treated the motions as that of summary judgment and held that: (1) the defendant's subsidiary Spanish company, Belmac, was an indispensable party; (2) DUTSA preempted the unjust enrichment and fraud claims; and (3) the business tort claims could exist independent of the misappropriation claim because they were not preempted by DUTSA. More › Share

Court of Chancery Allows Employer To Recover Its Confidential Information From Former Employee's Computer

Rockwell Automation, Inc. v. Kall, C.A. No. 526-N, 2005 WL 2266592 (Del. Ch. September 9, 2005). Plaintiff Rockwell Automation, Inc. filed complaint against Defendant, a former employee of Plaintiff, to obtain documents containing its confidential and proprietary information. More › Share

Court of Chancery Holds that Purchasers of Small Business Failed to Prove that Sellers Defrauded Them

Homan v. Turoczy, C.A. No. 19220, 2005 WL 2000756 (Del. Ch. Aug. 12, 2005). Plaintiffs bought a small printing and copying business from defendants, who ran the business successfully for 19 years. However, plaintiffs were not so successful. A year after the sale they filed for bankruptcy, closed down the business, and liquidated the company's assets. In their complaint, plaintiffs alleged that the defendants and their agent fraudulently misrepresented the condition of the business and thus sought rescission of the sales agreement. The court held that by waiting over a year before suing, the plaintiffs forfeited any right to seek actual rescission. As a result, the court's opinion after trial only considered whether plaintiffs were entitled to an award of damages for fraud. More › Share

Court of Chancery Refuses to Dismiss Claims for Tortious Interference, Unfair Trade Practices, and Fraudulent Misrepresentation in Connection with Sale of Business

Griffin Corp. Services v. Jacobs, C.A. No. 396-N, 2005 WL 2000775 (Del. Ch. Aug. 11, 2005). Counterclaim plaintiffs Jacobs, Dobrzynski, Stewart, and Stewart Management Company ("SMC") asserted that Griffin Corporate Services ("Griffin") and other counterclaim defendants interfered with their existing contract and prospective business relationships and engaged in common law and statutory unfair trade practices. They also asserted that Griffin breached its confidentiality agreement with SMC and made misrepresentations to SMC. The counterclaim defendants moved to dismiss. More › Share