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

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Photo of Delaware Business Litigation Report Meghan A. Adams
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madams@morrisjames.com
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Meghan A. Adams is a member of the firm's Business Litigation group and focuses her practice on Corporate and Commercial Litigation. Meghan represents clients in a wide variety of …

Showing 9 posts by Meghan A. Adams.

Delaware Superior Court Explains Impact Of European Data Rules On Forum Motion

Posted In Discovery

Ethica Corporate Finance S.r.L. v. Dana Incorporated, C.A. No. N17C-10-145 EMD CCLD (August 16, 2018)

Under the Cryo-Maid decision, a forum non conveniens motion must consider the impact on a defendant forced to litigate in Delaware when discovery is needed in a foreign land.  Here the Court considered the impact of the recent amendments to the Italian Data Protection Code on discovery and found that it did not impose an undue hardship under the facts present in this case. This may become more important as those European laws on privacy protection start to be considered for their effect on litigation outside of the EU.

Delaware Superior Court Upholds Recovery Of Insurance Defense Costs

Posted In Case Summaries

Catlin Specialty Insurance Company v. CBL & Associates Properties Inc., C.A. No. N16C-07-166 PRW CCLD (August 9, 2018)

This is an important decision because it upholds the right of an insurance company to recover defense costs it advanced when it is later determined there was no insurance coverage for the underlying litigation. While the opinion applies Tennessee law, some parts of the opinion suggest that the Court would reach the same result if Delaware law applied. That is so even though the Court recognized that permitting such a recovery is the minority positon in the United States. The opinion is also useful for its explanation of how an insurer may preserve its right to recover those advances by making it clear that it is advancing the costs subject to its right to recover them later if a court decides there was no insurance  coverage.

Federal District Court Explains Incorporation By Reference Rules

Posted In Case Summaries

Askari v. Pharmacy Corporation of America, C.A. 16-1123-RGA (D. Del. August 8, 2018)

It is not always clear when two agreements are to be read as one. This is because incorporating one agreement into a second agreement may not be explicit. This decision sets out the principles under Delaware law that govern how to decide if two agreements should be read together, including that there must be an “explicit manifestation of intent” to incorporate one document into another.

Federal District Court Dismisses Contradictory Claims

Posted In Case Summaries

Hiller & Associates LLC v. Garden Fresh Restaurants LLC, C.A. 18-152-VAC-MPT (D. Del. August 9, 2018)

This is an interesting decision because it dismisses a counterclaim that is contradicted by the claimant’s answer to the complaint. Thus it goes beyond the normal rule that requires a factual pleading to be accepted as true when considering a motion to dismiss.

Delaware Superior Court Defines “Including”

Posted In Case Summaries

Triumph Aerostructures-Tulsa LLC v. Spirit Aerosystems Inc., C.A. N17C-11-262 MMJ CCLD (August 8, 2018)

Contracts often use the word “including” as part of a definition of a term. But is that to limit or enlarge what that term means?  This decision holds that “including” is a term of enlargement or extension when used that way and grants a partial summary judgment based on that interpretation.

Supreme Court of Delaware, Applying New York Law, finds that Settlement Amounts were not Uninsurable Disgorgement Under D&O Policies

Posted In Case Summaries

In re: TIAA-CREF Insurance Appeals, Nos. 478, 2017; 479, 2017; 480, 2017; 481, 2017 (Del. July 30, 2018)

The Supreme Court of Delaware affirmed the Superior Court’s finding that under the relevant D&O policies at issue, the settlement amounts TIAA-CREF paid to class action plaintiffs did not represent uninsurable disgorgement.  In doing so, the Supreme Court distinguished certain cases from New York relied upon by the insurance companies that held settlements represented uninsurable disgorgement.  Unlike the cases cited by the defendants, the settlement amounts at issue in the underlying cases here did not represent the return of ill-gotten gains.  After this decision, whether or not a claim will be treated as uninsurable disgorgement should be an important consideration by defendants when deciding whether to settle merger objection litigation with a payment to the class.

Delaware Superior Court Applies The McWane Doctrine

Posted In Stay

Lincoln Benefit Life Company v. Wilmington Trust N.A., C.A. N18C-01-082 EMD CCLD (July 31, 2018)

This decision has an extensive discussion of when a Delaware court will stay a matter in favor of litigation in another forum.  Its application of the McWane doctrine governing stays of second filed cases is particularly helpful.  Under the circumstances of this case, a stay in favor of the foreign jurisdiction was warranted.

Delaware Superior Court Explains When Fraud Claims May Survive An Integration Clause

Posted In Fraud

Flowshare, LLC v. Georesults Inc., C.A. N17C-07-227 EMD CCLD (July 25, 2018)

This decision explains when a fraud claim survives a motion to dismiss that is based on the argument that an integration clause in a contract precludes reliance on extra contractual representations. The short answer is that the contract must specifically deny reliance on those statements before the fraud claim is precluded.

Delaware Superior Court Explains How To Assert Fraud Exclusion

Posted In Coverage

Gallup v. Greenwich Insurance, C.A. N14C-02-136 FWW (January 30, 2017)

This is an important insurance coverage decision. It upholds the claim of an insurer to bring a coverage suit to determine that a fraud exclusion applies to bar coverage on an underlying litigation that asserted a claim for fraud. This is important because fraud exclusions often depend on a finding in a final judgment of fraud by the insured in the underlying litigation. An insured may try to avoid such a judgment by settling and then asking the insurer to pay the settlement.  See e.g. the decision in Arch Insurance Company v. Murdock, Del. Super. C.A. N16C-01-104 EMD (December 21, 2016), denying the use of a fraud exclusion when the underlying case was settled.