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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Showing 18 posts from February 2005.

Superior Court Denies Defendant's Motion for Summary Judgment in Breach of Asset Purchase Agreement Case

MerchantWired, LLC v. Transaction Network Services, Inc., 02C-08-244 FS, 2005 WL 468241 (Del. Super. Ct. Feb. 28, 2005). The plaintiff brought a breach of contract action against the defendant when the defendant refused to close on the purchase of the plaintiff's business. The defendant moved for summary judgment, claiming that the plaintiff failed to meet two pre-closing conditions. Rejecting this argument, the court denied the defendant's motion for summary judgment. More ›

Federal Court Approves Transfer Of Case To Connecticut Court Based On Valid Forum-Selection Clause In Franchise Agreement

Bbdova, LLC v. Automotive Technologies, Inc., 358 F.Supp.2d 387 (D.Del. 2005). This is a diversity suit between plaintiff, a New Jersey limited liability corporation authorized to do business in Delaware with its principal place of business in Newark, Delaware and a Connecticut corporation with its principal place of business in that state. Defendant operated a business of franchising third parties to own and operate retail wireless stores. The plaintiff filed for declaratory judgment, challenging the validity of the Franchise Agreement and its Amendment. The defendant removed the case to the Federal District Court for the District of Delaware and then sought to either dismiss the case or transfer it to a court in Connecticut. The Court approved the forum selection clause and ordered transfer. More ›

Court Of Chancery Ropes In Florida Corporation On Conspiracy Theory For Jurisdictional Nexus

Benihana of Tokyo, Inc. v. Benihana, Inc., et al., C.A. No. 550-N (Del. Ch. Feb. 28, 2005). This case deals with several motions to dismiss on several grounds, the upholding of personal jurisdiction under a conspiracy or aiding/abetting theory and plaintiff's request for a declaratory judgment. More ›

Federal Court Permits Motion To Compel Deposition Of Rule 30(b)(6) Witness

Jurimex Kommerz Transit G.M.B.H. v. Case Corp., No. Civ.A. 00-083 JJF, 2005 WL 440621 (D.Del. Feb. 18, 2005). Plaintiffs filed a motion to compel deposition testimony of defendant's subsidiaries in a matter involving an international transaction. The motion was granted in part and denied in part. More ›

Superior Court Denies Motion to Dismiss Damages Claim as Speculative in Breach of Contract Case

Enigma Information Retrieval Systems, Inc. v. Radian, Inc., C.A. No. 04C-06-069 FSS, 2005 WL 445568 (Del. Super. Ct. Feb. 23, 2005). Plaintiff, Enigma Information Retrieval Systems, Inc. ("Enigma"), brought breach of contract and tortious interference claims against Defendants, Radian, Inc. and Portal Dynamics, Inc., military contractors that helped supply light armored vehicles. Enigma acted as the subcontractor for the defendants and provided the computer software for training manuals and parts catalogs. The defendants claimed to have terminated Enigma for poor performance. Radian moved to dismiss the damages claim, and the court denied the motion to dismiss, finding that the arguments were premature. More ›

Constructive Trusts Circumvent Limitations Period Under 10 Del. C. Section 8113

Nicholas A. Ruggerio v. Estate of Michael A. Poppiti, Sr., et al., C.A. No. 18961-NC, 2005 WL 517967 (Del. Ch. Feb. 23, 2005). This is an action for breach of fiduciary duties, commingling of assets and a failure to account involving two Delaware limited partnerships. Defendants brought an unsuccessful motion to dismiss. The court however granted their summary judgment motion for claims predating June 18, 1998 but denied judgment as to all other claims. More ›

Superior Court Denies Motion to Dismiss for Failure to State a Claim Because Indemnification Provision Required a Court to Rule on the Merits Before Provision Could be Invoked

Midland Red Oak Realty, Inc. v. Friedman, Billings & Ramsey & Co., Inc., C.A. No. 04C-05-091 CLS, 2005 WL 445710 (Del. Super. Ct. Feb. 23, 2005). Plaintiffs Midland Oak Realty, Inc. and MRO Southwest, Inc. ("MRO") sued Defendants Friedman, Billings, Ramsey & Co., Inc. ("FBR") and Velasco Group, L.L.C. ("Velasco") for breach of a real-estate financing contract. FBR moved to dismiss based on an indemnification provision. The Superior Court denied FBR's motion to dismiss, holding that the indemnification provision's language made it applicable only after a court had reached a decision on the merits of the claim. More ›

Court of Chancery Refuses Depositions and "Reasonableness" Argument Under 8 Del. C. - 275

Belanger v. Fab Indus., Inc., et al., C.A. No. 054-N, 2005 WL 493593 (Del. Ch. Feb. 17, 2005). The court granted defendant's motion for protective order in a case arising out of a dissolution petition under 8 Del. C. §275. More ›

Superior Court Grants Plaintiff's Motion for Summary Judgment and Finds that Former Employee Was Obligated to Repay Gains Realized from Exercising Stock Options

W.R. Berkley Corp. v. Hall, C.A. No. 03C-12-146WCC, 2005 WL 406348 (Del. Super. Ct. Feb. 16, 2005). The Plaintiff brought an action in the Superior Court to enforce a provision under the Stock Option Plan (the "Plan") and subsequent agreements. Under the provisions of the Plan, if a former employee engaged in "Noncompetitive Action" within six months of termination and exercised stock options within that time frame, the company could recapture the profits. The court found the agreement to be enforceable, and granted the plaintiff's motion for summary judgment. More ›

Federal Court Declines To Transfer Case To Arizona After Applying The Jumara Test

J-Squared Technologies, Inc. v. Motorola, Inc., No. Civ.04-960-SLR, 2005 WL 388599 (D.Del. Feb. 4, 2005). Plaintiff brought suit alleging: (1) breach of contract; (2) promissory estoppel; (3) negligent misrepresentation; (4) breach of the duty of good faith and fair dealing; and (5) violation of Arizona's Consumer Fraud Act. Plaintiff sought compensatory and punitive damages. The defendant moved to transfer the action to the District of Arizona or alternatively dismiss the case under Fed.R.Civ.P. 9(b) and 12(b)(6). The Court denied the Motion to Transfer. More ›

Federal Court Denies Re-Argument In Fiduciary and Contract Breach Case

Damage Recovery Systems, Inc. v. Tucker, No. Civ. 02-1647-SLR, 2005 WL 388596 (D.Del. Feb. 2, 2005). Defendant filed a motion for re-argument in a matter involving breach of contract and breach of fiduciary duties. The plaintiff prevailed on its Motion for Summary Judgment. Defendant then filed this motion which the Court denied. More ›

Plaintiff Loses Motion To Dismiss For Lack Of Jurisdiction

American Scheduling, Inc. v. Radiant Systems, Inc., C.A. No. 725-N, 2005 WL 736889 (Del. Ch. Feb. 09, 2005). This is a motion to quash jurisdictional discovery. The court granted the motion, quashing the discovery. More ›

Federal Court Denies Jury Trial in Breach Of Contract And Fiduciary Duty Breach Claims

Damage Recovery Systems, Inc. v. Tucker, No. Civ. 02-1647-SLR, 2005 WL 388597 (D.Del. Feb. 2, 2005) . Plaintiff filed an action in 2002 alleging that the defendant had breached: (1) a non-compete covenant in his Consulting Agreement with Plaintiff; and had (2) aided and abetted the breach of fiduciary duties owed by plaintiff's former officer. Plaintiff sought compensatory and punitive damages and the defendant demanded a jury trial on both claims. While plaintiff moved to strike the defendant's demand for jury trials, the defendant filed a Memorandum stating that he was not opposed to the denial of a jury trial to the extent the parties Consulting Agreement provided. The Court denied the requests for a jury trial on both claims. More ›

Following Bench Trial in Breach of Contract Case, Superior Court Awards More than a Million Dollars to Plaintiff

Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513 (Del. Super. Ct. 2005), aff'd, 886 A.2d 1278 (Del. 2005). In this case, the purchasers of a home health care company brought an action against the seller to recover for multiple alleged breaches of a stock purchase agreement ("Agreement") and recovery under indemnification provisions. Following a non-jury trial, the court found for the plaintiff on certain claims, and awarded the plaintiff $1,070,719.47 in damages. More ›

Court Tolls Appraisal Statute Despite First-Filing In Bankruptcy Court

Encompass Services Holding Corp. v. Prosero Incorp. f/k/a FacilityPro.com Corp., C.A. No. 578-N, 2005 WL 332810 (Del. Ch. Feb. 03, 2005). This is a 8 Del. C. §262 share appraisal case brought by a "debtor in possession" after the dismissal of its earlier filed adversarial proceeding in the bankruptcy court. More ›

Court of Chancery Stays Discovery Applying The "Special Circumstances" Test

George D. Orloff, et al. v. Lloyd J. Shulman, et al., C.A. No. 852-N, 2005 WL 333240 (Del. Ch. Feb. 02, 2005). Minority shareholders of LLC brought a derivative suit for corporate waste and breach of fiduciary duties. Defendants filed a motion to stay discovery pending the resolution of a motion to dismiss. The court granted it. More ›