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Showing 30 posts in CCLD.

Superior Court Dismisses Successor-by-Merger’s Claims Where Underlying Contract Contained Anti-Assignment Clause

Posted In Breach of Contract, CCLD

MTA Royalty Corp. v. Compania Minera Pangea, S.A. DE C.V., C.A. No. N19C-11-228 AML CCLD (Del.  Super. Sept. 16, 2020)

Plaintiff’s predecessor-in-interest conveyed mineral rights to Defendant. Under the agreement, Defendant owed a conditional additional $1 million at a future date. Before the payments became due, the predecessor was merged out of existence. As a result, Defendant asserted it had no obligation to pay the additional amount because the sale agreement included an anti-assignment provision that barred assignment absent Defendant’s consent, which was lacking. More ›

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CCLD Finds Insurer’s Advancement Obligation Triggered Prior to Final Non-Appealable Damages Judgment

Posted In Advancement, CCLD

Ferrellgas Partners L.P v. Zurich American Insurance Company, C.A. No. N19C-05-275 MMJ CCLD (Del. Super. Aug. 20, 2020)

The Superior Court of Delaware, Complex Commercial Litigation Division recently expanded on its advancement jurisprudence regarding litigation fees and costs due under director and officer insurance policies. The insured brought a declaratory judgment action against two insurers in a tower of coverage. Judge Mary M. Johnston declared, on summary judgment, that the insured was entitled to advancement of reasonable attorneys’ fees and costs from one of the insurers. More ›

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Superior Court Reinforces Established Delaware Insurance Coverage Law that Settlement of a Claim for Less than Policy Limits Attaches to Excess Policies

Posted In Breach of Contract, CCLD, Insurance

Pfizer, Inc. v. U.S. Specialty Insurance Company, C.A. No. N18C-01-310 PRW CCLD (Del. Super. Aug. 28, 2020)
On cross-motions for summary judgment in a director and officer insurance coverage dispute, the Superior Court of Delaware, Complex Commercial Litigation Division, reaffirmed the Delaware principle, also known as a the Stargatt Rule, that a settlement of a policy between an insured and an insurer for less than the policy limit amounts to satisfaction of such policy. Thus, excess policies attach irrespective of whether the insured collected the full amount of the primary policies.  More ›

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CCLD Applies Anti-Reliance Provisions, Dismisses Buyer’s Fraud Claims

Posted In CCLD, Fraud Claims, M&A

Infomedia Group, Inc. v. Orange Health Solutions Inc., C.A. No. N19C-10-212 AML CCLD (Del. Super. Ct. July 31, 2020)

This case is a strong reminder that Delaware will enforce anti-reliance clauses to bar claims for fraud where sophisticated parties voluntarily agree to the anti-reliance clauses. Here, plaintiff Infomedia Group, Inc., d/b/a Carenet Health Services entered into an asset purchase agreement (the “Purchase Agreement”) with defendant Orange Health Solutions, Inc. (“Citra”).  More ›

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CCLD Bars Tort Claims Overlapping with Contract Claims under Economic Loss Doctrine

Posted In Business Torts, CCLD, Fraud Claims

GEA Sys. N. Am. LLC v. Golden State Foods Corp., C.A. No. N18C-11-242 EMD CCLD (Del. Super. Ct. June 8, 2020)

This case illustrates the extent to which the economic loss doctrine bars tort claims arising out of the same transaction as claims for breach of contract. In this case, plaintiff GEA Systems North America LLC (“GEA”) sold defendant Golden State Food Corp. (“Golden State”) three industrial freezers for use in Golden State’s hamburger patty facility. Golden State argued, among other things, that the freezers did not meet the production figures that GEA promised and GEA failed properly to install or repair the freezers. For this alleged misconduct, Golden State brought claims for negligence, fraudulent inducement, and intentional misrepresentation as well as for breach of contract. On a motion to dismiss, the Delaware Superior Court held that the economic loss doctrine barred the fraudulent inducement and intentional misrepresentations claims, but not the claims for negligence and gross negligence. More ›

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CCLD Offers Guidance on the Application of Tolling Doctrines to M&A Agreement Clauses Modifying the Statute of Limitations for Representations and Warranties Claims

Posted In CCLD, M&A, Statute of Limitations

AssuredPartners of Virginia, LLC v. Sheehan, C.A. No. N19C-02-175 AML CCLD (Del. Super. Ct. May 29, 2020)

A disgruntled buyer brought suit against its seller for breaches of representations and warranties four years after the execution of the applicable asset purchase agreement (“APA”). The APA contained a clause providing that certain representations and warranties survived for two (2) years post-closing except for those fraudulently given, which survived from closing until sixty days after expiration of the applicable statute of limitations. The defendant-sellers sought dismissal of the breach claims as untimely, requiring Judge Abigail M. LeGrow of the Superior Court of Delaware to determine whether the doctrine of tolling applied to the APA’s survival clause and if the parties intended to contractually extend the statute of limitations for fraudulent representation claims under 10 Del. C. § 8106(c). More ›

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CCLD Addresses Ripeness Doctrine and the “Stranger Rule” in Tortious Interference Claims, Partially Dismisses Claims for Breach of Corporate-Owned Group Variable Life Insurance Policies

Posted In Business Torts, CCLD, Insurance

Athene Life and Annuity Co., et al. v. Am. Gen. Life Ins. Co., et al., C.A. No. N 19C-10-055 PRW CCLD (Del. Super. May 18, 2020)

Policy holders (the “Plaintiffs”) brought a suit against American General Life Insurance, Co. (“American General”) for breach of corporate-owned group variable life insurance policies (the “Policies”) and against certain related entities managing the Policies, ZC Resource Investment Trust (“ZCRIT”) and ZC Resource LLC (“ZC Resource”) (together with ZCRIT, “ZC Defendants”) (together with ZCRIT and American General, “Defendants”) for tortious interference with contract. When the Defendants moved to dismiss, the Delaware Superior Court’s Complex Commercial Litigation Division (“CCLD”) granted the motion in part on ripeness grounds and denied it in part. More ›

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Delaware Superior Court CCLD Addresses Claim of Common Interest Privilege over Merger Agreement Parties’ Post-Signing, Pre-Closing Communications

Posted In CCLD, Discovery, M&A, Privilege

The American Bottling Co. v. Repole, C.A. No. N19C-03-048 AML CCLD (Del. Super. May 12, 2020)

Delaware courts will apply the common interest doctrine when two parties, represented by counsel, exchange privileged information with one another concerning a legal matter in which they have a shared interest. To maintain the privilege, the common interest must involve predominantly legal issues, rather than a common economic interest in a commercial venture. If there is no common interest, a party who shares privileged materials with a third-party will generally waive the privilege.  More ›

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Superior Court Stays First-Filed Declaratory Judgment Action in Nokia Technology Dispute

Posted In CCLD, Multi-Forum Litigation

Nokia Solutions v. Collison Comm., Inc., C.A. No. N19C-10-262 AML CCLD (Del. Super. Apr. 30, 2020)

Delaware law recognizes several doctrines intended to respect principles of comity and the efficient administration of justice when there is competing litigation across jurisdictions. Those doctrines are applied flexibly and have developed to avoid incentivizing races to the courthouse, as illustrated by this Delaware Superior Court decision staying a first-filed declaratory judgment action.  More ›

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Superior Court Allows Fraudulent Inducement and Breach of Contract Claims to Proceed in Parallel Based on Rescissory Damages Request

Posted In CCLD, Fraud

Firmenich Inc. v. Natural Flavors, Inc., C.A. No. N19C-01-320 MMJ [CCLD] (Del. Super. Apr. 7, 2020).

Fraud claims that overlap with breach of contract claims often are subject to dismissal under Delaware law. Sometimes, however, fraud and contract claims may proceed in parallel, as the Complex Commercial Litigation Division of the Superior Court determined in Natural Flavors. Here, the Superior Court declined to dismiss a fraudulent inducement claim seeking rescissory damages notwithstanding an alternatively-pled breach of contract claim. The litigation concerned an Asset Purchase Agreement and allegations of fraud arising from a former employee’s whistleblowing. After the plaintiff-buyer’s initial fraud claim was dismissed as impermissibly bootstrapped to its breach of contract claim, the plaintiff filed an amended complaint for rescissory damages as compensation for alleged fraudulent inducement to enter into the APA, while alternatively seeking relief for alleged breach of the APA. The defendant-seller, again, sought dismissal of the fraud claim as duplicative of the breach of contract count. More ›

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Delaware Superior Court Interprets Contractual Language Governing Earn-out Payment

Posted In CCLD, Earn-Out

B&C Holdings, Inc. v. Temperatsure Holdings, LLC, C.A. No. N19C-02-105 AML CCLD (Del. Super. Apr. 22, 2020).

As this decision demonstrates, Delaware courts will enforce the plain and ordinary meaning of contractual terms governing an earn-out payment, including the process by which a payment is to be calculated, noticed, and contested. More ›

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Delaware Superior Court Distinguishes Between Affirmative and Negative Covenants in Earnout Dispute

Posted In CCLD, Earn-Out

Quarum v. Mitchell Int’l, Inc., C.A. No. N19C-03-087 AML CCLD (Del. Super. Jan. 21, 2020).

Under Delaware law, parties may structure covenants in an earnout agreement as affirmative (mandating action) or negative (prohibiting action). Given the important differences in the obligations these types of covenants impose, as illustrated by this decision, parties should carefully consider the contractual language in drafting. More ›

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Delaware Superior Court CCLD Disqualifies Counsel to Ensure Fairness of Litigation Process

Posted In CCLD, Professional Conduct

Sun Life Assurance Company of Canada v. Wilmington Savings Fund Society, FSB, C.A. No. N18C-08-074 PRW CCLD (Del. Super. Dec. 19, 2019).

Motions to disqualify counsel rarely succeed in the Delaware courts. This decision illustrates the type of conflict that can justify disqualification based on prior representations. Plaintiff issued a life insurance policy of $6 million to an individual named Bartelstein. The policy was assigned to a trust whose beneficiary is an entity, with the moniker Ocean Gate, making Ocean Gate the policy’s ultimate beneficiary. Plaintiff filed this suit alleging the policy is void as a stranger-oriented life insurance wager on Bartelstein’s life procured for investors. The litigation gave rise to alleged conflict issues for involved counsel. More ›

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Delaware Superior Court Finds Purchase Agreement Language Limits the Scope of Possible Claims Concerning Earn-Out Dispute

Posted In CCLD, Earn-Out

Collab9, LLC v. En Pointe Technologies Sales, LLC, C.A. No. N16C-12-032 (MMJ) (CCLD) (Del. Super. Sept. 17, 2019).

Under an asset purchase agreement (“APA”), the purchaser (“PCM”) acquired substantially all of the assets of the “En Pointe” business from the seller (“Collab9”).  The APA provided for an earn-out payment, calculated upon a percentage of En Pointe’s Adjusted Gross Profit over several years.  The APA provided that the purchaser “shall have sole discretion with regard to all matters relating to the operation of the Business.”  The agreement further disclaimed any express or implied obligation on the part of the purchaser to take any action, or omit to take any action, to maximize the earn-out amount, and stated that the purchaser “owes no duty, as a fiduciary or otherwise” to the seller.  The APA also contained a clear combined integration and anti-reliance provision. More ›

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Superior Court CCLD Addresses Pleading Standards for Trade Secret, Fraud and Implied Covenant Claims

Brightstar Corp. v. PCS Wireless, LLC, C.A. No. N18C-10-250 PRW CCLD (Del. Super. Ct. Aug. 7, 2019).

Brightstar and PCS, two competitors that distribute new and pre-owned mobile devices, entered into a buy/sell agreement as part of negotiations for a proposed merger and strategic alliance.  Under the buy/sell agreement, PCS purchased mobile devices from Brightstar for re-sale to third parties and was subject to a non-circumvention provision that restricted PCS from purchasing these devices from certain other suppliers.  After their merger discussions faltered, PCS terminated the agreement, and Brightstar brought suit for unpaid amounts and alleged misappropriation of pricing information.  PCS counterclaimed for, inter alia, fraud and breach of the implied covenant of good faith and fair dealing. More ›

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