Superior Court of Delaware Grants Motion for Summary Judgment Regarding Duty to Defend Under Wisconsin Law

The Complex Commercial Litigation Division of the Superior Court of Delaware recently held that Travelers Indemnity Company (“Travelers”) breached its duty to defend and indemnify plaintiff CNH Industrial America LLC (“CNH”) in underlying asbestos-related lawsuits. More ›

Best Lawyers® 2017 Recognizes 20 Morris James Attorneys

Twenty Morris James attorneys in twenty-six practice areas were selected by their peers for inclusion in The Best Lawyers in America 2017 edition. Morris James also has been recognized in four new practice areas, Personal Injury Litigation – Defendants, Arbitration, Corporate Governance Law and Mediation.  The Best Lawyers® list is based on an extensive survey involving detailed evaluations of leading lawyers by their peers. More ›

Superior Court of Delaware Confirms D&O Policy Provides Coverage for Investigation Costs Associated with Shareholder Derivative Demands

In a series of decisions regarding a matter of first impression under Delaware law, the Superior Court of Delaware held that the “Investigation Costs” for two related shareholder derivative demands made by Robert Ammerman (“Ammerman”) were covered under Defendant and Counterclaim Plaintiff XL Specialty Insurance Company’s (“XL”) Management Liability and Company Reimbursement Insurance Policy (the “XL Policy”) that XL issued to Ameritrans Capital Corporation (“Ameritrans”).  See Ameritrans Capital Corp. v. XL Specialty Ins. Co., C.A. No. N14C-10-019 (EMD) (Nov. 30, 2015) (granting Ameritrans’ Motion for Judgment on the Pleadings); (June 15, 2016) (granting XL’s Motion for Reargument but upholding November 30, 2015 decision).   More ›

Court denies summary judgment after claim construction

Cronos Technologies, LLC v. Expedia, Inc., et al., C.A. Nos. 13-1538-LPS; 13-1541-LPS; 13-1544-LPS, July 22, 2016.

Stark, C. J. Claim construction opinion issues regarding three terms from one patent. Defendants’ motion for summary judgment is deferred pending the filing of a status report.

The disputed technology relates to website remote ordering systems. The following terms were considered:

  1. “Item Code”/ “identifying code”
  2. “data entry device for providing said terminal with said ... item codes"
  3. “user inputting said identifying code"

Plaintiff contends that hyperlinks implemented in defendants’ websites are infringing item codes, The court concludes that defendants have met their burden of showing no genuine issue of material fact that their websites do not infringe. However, the court acknowledges that actual claim constructions are only being provided with this opinion and concludes that plaintiff should be permitted to consider new infringement theories even if it is unlikely it court persuade the court to allow them with the pretrial conference just a week away. The parties are directed to meet and confer and to provide their positions on whether summary judgment of non-infringement should be entered.

Chambers USA Recognizes 14 Morris James Attorneys and 5 Practice Areas Among the Nation’s Best

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Morris James is pleased to announce that fourteen of its partners and five practice areas have been recognized by Chambers USA 2016.  More ›

Morris James Attorneys Participate in Delaware Mock Trial

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Morris James attorneys and staff continued the firm’s longstanding support for the Delaware High School Mock Trial Competition with twelve attorneys serving as judges or coaches at the annual competition held at the New Castle County Courthouse on February 26-27, 2016.  Jason C. Jowers, a partner in the firm’s Corporate and Commercial Litigation Group, completed his seventh year as Chair of the competition and received the Pete Jones Award, named after Morris James partner Pete Jones, given to an individual who has demonstrated sustained commitment to the goals and values of the mock trial program. Eric Hacker, an associate in the firm’s Georgetown office, coached Sussex Central, the first team from Sussex County to advance to the finals of the competition. In addition to Jowers and Hacker, the Morris James attorneys who participated as coaches or judges included partners Kevin Healy, Pete Jones,  Lewis Lazarus, Dennis Schrader, Joe Slights, and David Soldo, and associates Megan Adams, Nick Krawitz,  Beth Powers,  and Laura Readinger. Also, Morris James administrative assistant Margie Touchton served as the Judge Volunteer Coordinator.

Delaware Supreme Court Justice Collins J. Seitz, Jr.,  the presiding judge of the championship round, commented that the future of the practice of law in Delaware is bright based on the skill demonstrated by the finalists.  David Williams, the firm’s managing partner, expressed his gratitude to the attorneys and staff who gave so generously of their time to aid the next generation of Delaware lawyers, noting that “this type of dedication exemplifies the type of community service for which the firm is proud.”

U.S. News - Best Lawyers Ranks Eighteen Morris James Practice Areas among 2016 “Best Law Firms” in Delaware

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Eighteen Morris James practice areas were recognized in the 2016 “Best Law Firms” rankings by U.S. News – Best Lawyers®. These rankings complement the twenty-one Morris James attorneys who were selected by their peers for inclusion in the “The Best Lawyers in America” 2016 edition.

The practice areas recognized include: More ›

Morris James Receives Christopher W. White 2015 Distinguished Access to Justice Leadership Award

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Morris James LLP was presented the Leadership Award at the Delaware State Bar Association’s Christopher W. White 2015 Distinguished Access to Justice Awards Breakfast on October 29th, 2015. The Leadership Award is given to the firm who has demonstrated outstanding leadership in the field of pro bono service to the impoverished in Delaware, and who fosters a culture which recognizes the value of Access to Justice service.  More ›

Sixteen Morris James Lawyers Recognized in Delaware Today's "Top Lawyers 2015"

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Morris James LLP is pleased to congratulate the lawyers listed below, who were most recommended by their professional peers in a survey of Delaware attorneys conducted by Delaware Today magazine. Sixteen Morris James attorneys were distinguished in their respective practice areas, with seven named as “top vote-getters,” listed below in bold. More ›

Morris James LLP Receives NAMI Delaware’s "Corporate Partner of the Year" Award

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The National Alliance on Mental Illness (NAMI) of Delaware has recognized Morris James as its “Corporate Partner of the Year.”  Managing partner, David H. Williams, accepted this award given in recognition for the firm’s service to the community and support for NAMI Delaware’s mission. National Alliance on Mental Illness (NAMI) is a nonprofit group that raises money and awareness for the treatment of people with mental illness.  Over the past 13 years, a dedicated team of Morris James employees has raised money each year in the NAMI Delaware Walk. Margie Touchton, a long-term employee, has led Morris James’ effort which contributes money to fund people in group homes around the state.  More ›

Best Lawyers® 2016 Recognizes 21 Morris James Attorneys

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Twenty-one Morris James attorneys in twenty-six practice areas were selected by their peers for inclusion in The Best Lawyers in America 2016 edition. Additionally, three of those attorneys were named “Lawyer of the Year” for their respective practices, including Richard Galperin for Personal Injury Litigation – Defendants, Gretchen S. Knight for Family Law, and Mark D. Olson for Tax Law.  More ›

Fourteen Morris James Attorneys Recognized in Chambers USA 2015

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Morris James LLP is pleased to announce that fourteen attorneys in six separate practice areas have been ranked among the leading Delaware lawyers in the 2015 edition of Chambers USA: America's Leading Lawyers for Business.  The Chancery, Intellectual Property and Labor & Employment practice areas also received recognition from Chambers USA. More ›

Bank of Delmarva v. South Shore Ventures, LLC, Del. Super., C.A. No. S13C-05-008 THG (Oct. 21, 2014)

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The Superior Court granted the Bank of Delmarva’s (“Bank”) motion for summary judgment as to each of Defendant John E. O’Brien’s (“Defendant”) counterclaims.  In 2005, Defendant along with South Shore Ventures, LLC (“Shore”) and Clayton Evans (“Evans”) (collectively “the Defendants”), secured a loan from the Bank to develop a piece of property known as “The Cove.”  As per the loan agreement, Defendants executed a bond for $500,000, the original principal amount, in favor of the Bank.  In 2010, the Bank and Defendants also negotiated modifications to the loan agreement, but those modifications were never enacted.  Defendants subsequently defaulted on the loan agreement.

Defendant counterclaimed that the Bank breached fiduciary duties owed to Defendants when the Bank failed to notify Defendants that the Bank had made a claim under the Bank’s title insurance policy due to a defect in a property’s title.  Defendant also claimed that the Bank’s conduct constituted a breach of the covenant of good faith and fair dealing.  Finally, Defendant claimed that the Bank was negligent in its handling of the original property appraisal.

First the Court granted summary judgment as a matter of law on Defendant’s counterclaim that the Bank breached a fiduciary duty that was created by the loan agreement and insurance policy.  For one, although commercial relationships may implicate fiduciary duties, the mere existence of a commercial relationship does not automatically implicate such duties.  But, more importantly, under Delaware law, the Court of Chancery has exclusive jurisdiction over equitable causes of action such as breach of fiduciary duty.  Relying on Reybold Venture Grp. XI-A, LLC v. Atl. Meridian Crossing, LLC, 2009 WL 143107, at *2 (Del. Super. Jam. 20, 2009), the Court found it lacked subject matter jurisdiction and granted the Bank summary judgment on the counterclaim.

The Court next granted summary judgment on Defendant’s counterclaim that the Bank breached the covenant of good faith and fair dealing.  The covenant of good faith and fair dealing is implied in every contract, and requires a party to refrain from arbitrary or unreasonable actions that would frustrate the ultimate purpose of the contract or disadvantage an opponent.  The doctrine is most often asserted to prevent a party from taking an action that they would have sought to prevent at the time of contract, had they anticipated such conduct at the time. The Court found no breach because the loan agreement, which required Defendant to take out an insurance policy naming the Bank as a beneficiary, did not require the Bank to then keep Defendant apprised of any subsequent claims on the policy.  The Court also found that, even if there was merit to Defendant’s bad faith counterclaim, the counterclaim was barred by the relevant statute of limitations, three years for a contract claim.

Finally, the Court found that Defendant’s negligence claim, which was also subject to a three-year statute of limitations, was also time-barred. Defendant had argued that the statute of limitations should have been tolled because of the “time of discovery rule.”  The rule permits tolling where no observable facts alert a party of the injury such that the complaining party is “blamelessly ignorant” of the injury.  In such a case, the statute of limitations is tolled until the complaining party discovers the alleged wrong.  The Court declined to toll the statute of limitations, however, because it found that Defendant was not “blamelessly ignorant.”  Rather, the record revealed that Defendant not only owned the property, but also acted as the closing agent and was, at the time, a Delaware attorney.  These facts together indicated that the Defendant understood the importance of an accurate appraisal, and should have been aware of the alleged negligent appraisal when it was conducted in 2005.  For all the reasons stated above, the Court granted the Bank’s motion for summary judgment in its entirety.

North River Ins. Co. v. Mine Safety Appliances Co., --- A.3d ---, 2014 WL 5784588 (Del. 2014)

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Mine Safety Appliances Company (“MSA”), a safety appliances company, faced a multitude of personal injury claims due to alleged defects in its safety equipment.  MSA, in turn, sought costs, including legal fees, costs of judgments and settlement amounts from its insurers, including The North River Insurance Company (“North River”).  North River, however, disputed the applicability and availability of certain insurance policies, which resulted in litigation in state and federal courts in Pennsylvania between MSA, on the one hand, and North River and some, but not all, of MSA’s other insurers, on the other hand, as to certain policies issued to MSA.  More ›

RSUI Indem. Co. v. Sempris LLC, C.A. No. N13C-10-096 MMJ CCLD (Del. Super. Ct. Sept. 3, 2014)

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In this case, brought in the Delaware Superior Court’s Complex Commercial Litigation Division, the Court considered whether RSUI Indemnity Co. (“RSUI”) owed insurance coverage obligations to Sempris, LLC (“Sempris”).  RSUI issued a Director and Officer Liability Policy (the “Policy”) to Sempris effective March 1, 2013 through March 1, 2014.  The parties’ dispute stems from an underlying lawsuit, Toney v. Quality Res., Inc. (the “Toney Lawsuit”),[1] a putative class action in which the plaintiff alleged two claims under the Telephone Consumer Protection Act (“TCPA”).  RSUI denied that it owed Sempris an obligation under the Policy’s Insuring Agreement and filed this action on October 8, 2013 seeking a declaratory judgment stating the same.  On February 28, 2014, RSUI moved for summary judgment on its declaratory judgment claim.  On the same day, Sempris moved for partial summary judgment seeking a declaration that RSUI did indeed owe Sempris a coverage obligation.

The Insuring Agreement provided for coverage where “a Claim for a Wrongful Act is first made against the Insured Organization during the Policy Period.”  Under Section V., paragraph B.3 of the Insuring Agreement, any claims arising out of similar facts, circumstances, or transactions would be deemed first made when the earliest of such similar claims was first made:

All Claims based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances, situations, transactions or events, or the same or related series of circumstances, transactions or events, shall be deemed to be a single Claim for all purposes under this policy . . . and shall be deemed first made when the earliest of such Claims is first made . . . .

In addition, the Insuring Agreement explicitly excluded coverage for any “Loss arising out of or in connection with any Claim . . . arising out of, based upon or attributable to, directly or indirectly relating to” Dioquino v. Sempris, LLC;[2] Daniell v. Sempris, LLC;[3] Valencia v. Sempris, LLC;[4] and Herman v. Sempris, LLC (the “Prior Lawsuits”).[5]  RSUI denied Sempris coverage based on its assessment that the Toney Lawsuit was related to the Prior Lawsuits.

The Court first considered whether the Toney Lawsuit fell within the Insuring Agreement.  RSUI argued that the Toney Lawsuit fell outside the definition of the Insuring Agreement because it was related to the Prior Lawsuits, and therefore under Section V., paragraph B.3, was an action first made prior to the Policy Period.  Even though the Court acknowledged that the “arising out of” language employed by the Insuring Agreement is a broadly construed contract term, it nonetheless distinguished the Toney Lawsuit from the Prior Lawsuits on factual grounds.  In the Toney Lawsuit, the plaintiff alleged that, after placing an online order for Stompeez children’s slippers, she received several calls on her cell phone from Quality Resources, a third-party telemarketer.  The telemarketer verified Ms. Toney’s online order and then attempted to sell her Sempris’ Budge Savers goods and services.  Ms. Toney was never charged for the Budget Savers program, but her cell phone number was listed on the national Do Not Call Registry, a violation of the TCPA.

In the Dioquino Lawsuit, the plaintiff placed a telephone call to order a book sold by Wealth Systems, LLC, a Sempris partner.  Following the call, the plaintiff was charged for Sempris’ Value Plus Membership Program.  Plaintiff alleged fraud, negligence, unfair competitions, and violation of the Electronic Funds Transfer Act.  In the Daniell Lawsuit, plaintiff alleged fraud, deceptive business practices, breach of contract, and unjust enrichment after she provided her billing information during an online order and was subsequently charged for a Sempris Membership Program without her consent.  In the Valencia Lawsuit, the plaintiff made a call to order a product after viewing an infomercial and, without having to reauthorize a charge to his credit card, was then charged for a three-month of membership in a Sempris Membership program.  The plaintiff alleged violations of consumer protection laws as well as fraud by omission, breach of contract, and unjust enrichment.  Finally, in the Herman Lawsuit, the plaintiff also placed a call to order a product he viewed on an infomercial.  During the call, he opted for a risk-free trial in a Sempris Membership Program, which he almost immediately cancelled.  Nonetheless, the plaintiff was charged for two-months in the program, and he alleged inter alia, fraud by omission and unjust enrichment.

The Court determined that Toney was not related to the Prior Lawsuits, reasoning that the Toney Lawsuit was distinguishable from the Prior Lawsuits on factual grounds.  Namely, Toney involved an inbound call to the plaintiff’s cell phone, whereas the Prior Lawsuits involved outbound calls to Sempris partner or affiliates.  For that reason, none of the facts alleged in the Prior Lawsuits would give rise to a claim under the TCPA.  Although RSUI relied on United Westlabs, Inc. v. Greenwich Insurance Co., 2011 WL 2623932 (Del. Super. Ct. June 13, 2011), the Court determined Westlabs was distinguishable because in Westlabs, the subject claims were “fundamentally identical.”  In contrast, the facts in Toney Lawsuit and the Prior Lawsuits were not analogous.  Unlike the plaintiffs in the Prior Lawsuits, Ms. Toney was never enrolled in a Sempris program.  Because the Toney Lawsuit was factually distinct from the Prior Lawsuits, neither the Insuring Agreement’s Prior Notice Exclusion, nor the Insuring Agreement’s “Exclusion-Specific” Endorsement operated to bar coverage.

Next, the Court determined that the Unfair Trade Practices Exclusion also did not operate to bar coverage.  This exclusion barred coverage “For actual or alleged violation of any law . . . with respect to any of the following activities: . . . unfair trade practices or tortuous interference in another’s business or contractual relationships.”  The exclusion, however, was limited, the Court found, to “another’s business or contractual relationships,” which was not triggered by the Toney Lawsuit.  And lastly, the Court found that the Professional Services Exclusion did not bar coverage because there was no suggestion in the Toney complaint that Sempris provided professional services for a fee.  In all, the Court determined that Sempris met its burden to prove that the Toney Lawsuit was unrelated to the Prior Lawsuits, and therefore granted Sempris’ Motion for Partial Summary Judgment.  RSUI’s Motion for Summary Judgment was denied.

[1] Case No. 1:13-cv-42 (N.D. Ill.).

[2] Case No. 11-CV-05556-SJO-MRW (C.D. Cal.).

[3] Case No. 12-CH-44123 (Cook Cty. Ill.).

[4] Case No. 12-CV-2985 (S.D. Cal.).

[5] Case No. 13-CV-0020 (W.D. Mich.).