Court Of Chancery Denies Declaratory Judgment And Anticipatory Breach Of Contract On Ripeness Grounds
Ubiquitel Inc. and Ubiquitel Operating Co. v. Sprint Corp, et al., C.A. No. 1489-N, 1518-N, 2006 WL 44424 (Del. Ch. Jan. 04, 2006).
Horizon Personal Communications, Inc. et al. v. Sprint Corp., et al
., C.A. No. 1518-N (Del. Ch. Jan. 04, 2006).
These cases pertain to summary judgment and a request for declaratory judgment involving an anticipatory breach of a commercial agreement concerning a merger transaction.
Defendants are the merged entity "Sprint Nextel." Sprint Nextel was alleged to have anticipatorily breached its contract with plaintiffs. Both parties moved for partial summary judgment on several issues. The court held that the declaratory judgment could not issue because the matter was not ripe for adjudication as an actual controversy did not exist at that time and if adjudicated would inappropriately cause the court to render an "advisory opinion."
The claims arose from the merger of Nextel Communications, Inc., with and into a subsidiary of Sprint Corp. The parties operated wireless networks. Plaintiffs and Sprint earlier entered into a management agreement that conferred the sole right to operate the wireless ranges only on plaintiff. In 2004, prior to the merger, Nextel was authorized by the Federal Trade Commission to operate in the 1910-1915 and 1990-1995 MHz range (the "G Block"). Accordingly, subsequent to the merger, plaintiffs moved for a declaration that any network built, owned, managed or operated by Sprint would violate the management agreement with reference to the "G Block."
In denying the relief, the Court of Chancery balanced the plaintiffs' legitimate interests in seeking an immediate resolution with the hardship accruing to it if that resolution was deferred. The court thus found that the claim of anticipatory breach of contract was at best speculative and not supportive of an actual controversy at that time.