Posts tagged Case Summaries

Superior Court Declines To Expand Economic-Loss Doctrine in Dismissing Negligent Mispresentation Claim

Millsboro Fire Company v. Construction Management Service, Inc., C.A. No. 05-06-137 MMJ, 2006 WL 1867705 (Del. Super. Ct. June 7, 2006). Plaintiff fire company sued its contractor on a significant renovation and improvement project, alleging numerous design and workmanship defects. The defendant contractor in turn filed a third-party complaint against several parties hired by plaintiff who were involved in the design and management of the project, alleging negligence, breach of contract, and negligent misrepresentation. The third-party defendants subsequently filed a motion for summary judgment, which was granted. More › Share

Court of Chancery Remedies Breach of LLC Agreement

Eureka VIII LLC v. Niagara Falls Holdings LLC C.A. No. 1203-N, 899 A.2d 95 (Del. Ch. June 6, 2006). This case illustrates the ability of the Court of Chancery to fashion a remedy that is non-traditional and fits the exact circumstances of the case before it. Here the remedy for the breach of a LLC agreement is to hold the breaching party, who is no longer a member in the LLC but only an assignee, with limited rights. More ›

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Court of Chancery Rejects Invalid Bylaw And Charter Provisions

Lions Gate Entertainment Corp.v. Image Entertainment Inc., C.A. No. 2011-N, 2006 WL 1668051 (Del. Ch. June 5, 2006). The Court of Chancery has again ruled that provisions in corporate bylaws or certificates of incorporation that violate the Delaware General Corporation Law are invalid. Thus, the Court struck down a bylaw provision that attempted to give the directors the power to amend the bylaws when that power was not conferred by the certificate of incorporation as required. The Court also voided a certificate of incorporation provision that tried to give the directors alone the right to amend the certificate. More › Share

Court of Chancery Holds Veto Power May Constitute Control

Williamson v. Cox Communications, Inc., C.A. No. 1663-N, 2006 WL 1686375 (Del. Ch. June 5, 2006). For the first time, the Court of Chancery has ruled that the power to veto a transaction may constitute the power to control a Delaware corporation. This is significant because a controlling stockholder has fiduciary duties to the other stockholders. While the facts of this case are probably unique and its implication for the litigants are unclear at this early stage, the complaint has withstood a motion to dismiss. Share

Court of Chancery Aids The Missing Stockholder

Gildor v. Optical Solutions, Inc., C.A. No. 1416-N, 2006 WL 1596678 (Del. Ch. June 5, 2006). It is often not clear what a corporation is to do when it cannot find a missing stockholder. While 8 Del. C. §230 answers that question for stockholder meetings, what to do in other circumstances is less clear. In this decision, the Court of Chancery held that the corporation should at least look through its records to try to find the missing stockholder to give him notice of the right to acquire corporate stock. The failure to try harder led the court to extend the stockholder's time when he finally appeared. Share

Court of Chancery Appoints Receiver To Remedy Breach of Duty

Kevin McGovern, et. al. v. General Holding, Inc., et. al., C.A. No. 1296-N (Del. Ch. June 2, 2006). In this action to recover for the diversion of partnership property, the Court of Chancery fashioned a unique remedy by ordering that the partnership be sold by a receiver so as to realize the special value of its technology. More › Share

Court of Chancery Rescues Janitor

Elite Cleaning Company, Inc. v. Capel, C.A. No. 690-N, 2006 WL 1565161 (Del. Ch. June 2, 2006). In this precedent setting case, the Court of Chancery refused to enforce a non-compete agreement against a janitor of the Elite Cleaning Company, apparently concluding his services were not so elite after all. More › Share

District Court Grants Leave to File Third-Party Complaint

Federal Insurance Company v. Lighthouse Construction, Inc., 230 F.R.D. 387 (D. Del. 2005). A property insurer brought a subrogation action against a building contractor to recover for loss caused by a roof collapse. The contractor sought leave to filed third-party complaint against erection contractor. Insurer also sought leave to filed a claim against it. The District Court held: (1) the contractor was entitled to add third-party claim of contractual indemnification against erection contractor; (2) the insurer could not assert claim against third-party defendant after expiration of two-year statute of limitations; and (3) insurer's amendment of complaint to add erection contractor would not relate back to subrogation action against building contractor. Share

Court of Chancery Orders Parties to Modify Release Language in Settlement Agreement

Unisuper Ltd. v. News Corp., C.A. No. 1699-N, 2006 WL 1550809 (Del. Ch. May 31, 2006) News Corporation shareholder objected to settlement, arguing the release was overly broad. More › Share

Court of Chancery Grants Defendants' Motion to Dismiss Where Plaintiffs Asserted Derivative, Not Direct, Claim and Failed to Make Demand or Establish Demand Was Excused

Gatz v. Ponsoldt, C.A. No. 174-N, 2006 WL 1510467 (Del. Ch. May 26, 2006). Plaintiffs asserted direct claim arising from recapitalization. Defendants moved to dismiss, arguing that Plaintiffs' claim was actually derivative, not direct, and Plaintiffs had failed to make demand or establish demand was excused. More › Share

Court of Chancery Grants Summary Judgment for Defendants in Case Arising From Interpretation of Limited Partnership Agreement

Anglo American Security Fund, L.P. v. S.R. Global Int'l Fund, L.P., C.A. No. 20066-N, 2006 WL 1494360 (Del. Ch. May 24, 2006). Plaintiffs and defendants brought cross-motions for summary judgment on claims arising from disputes over interpretation of limited partnership agreement ("LPA"). More › Share

Court of Chancery Grants Motion for Summary Judgment in Favor of Arbitration of Dispute

Delta & Pine Land Co. v. Monsanto Co., C.A. No. 1970-N, 2006 WL 1510417 (Del. Ch. May 24, 2006). Plaintiff moved for summary judgment on its claim for arbitration of a dispute with Defendant. More › Share

District Court Denies Defendants' Motion to Dismiss Securities Class Action Pursuant to the Heightened Pleading Requirements of the PSLRA.

In re Veritas Software Corp. Securities Litig., C.A. No. 04-831-SLR (Consol.) (D. Del. May 23, 2006). Defendants moved to dismiss a consolidated securities class action that alleged violations of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 on the grounds that the plaintiffs failed to allege fraud with particularity as required by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). More ›

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Court of Chancery Grants Plaintiffs' Motion for Judgment on the Pleadings on Claim for Attorneys' Fees and Expenses Incurred in Bringing Action

Lillis v. AT&T Corp., C.A. No. 717-N, 2006 WL 1468709 (Del. Ch. May 22, 2006). Plaintiffs moved pursuant to Court of Chancery Rule 12(c) for judgment on the pleadings on one count of their complaint, which sought attorneys' fees and expenses incurred in bringing the case. More › Share

District Court Dismisses Breach of Contract and Misappropriation of Trade Secrets Action for Lack of Personal Jurisdiction

Childcraft Education Corp. v. Alice's Home, et al., C.A. No. 05-461 (GMS) (D. Del. May 22, 2006). Plaintiff filed complaint alleging breach of contract, miappropriation of trade secrets and unjust enrichment claims. Defendants moved to dismiss the action for lack of personal jurisdiction. More › Share