Delaware Business Litigation Report

In Bench Trial, Superior Court Finds Defendants Did Not Commit Common Law Fraud

DCV Holdings, Inc. v. ConAgra, Inc., C.A. No. No. 98C-06-301-JEB, 2005 WL 698133 (Del. Super. Ct. March 24, 2005). The Plaintiffs brought an action against ConAgra, Inc. ("ConAgra") and E. I. Du Pont de Nemours and Co. and Du Pont Chemical and Energy Operations, Inc. (collectively "DuPont"). The Plaintiff alleged that the defendants committed common law fraud. In a bench trial, the Superior Court found for the defendants. ConAgra and DuPont set up a multiple limited partnerships under the jointly owned general partner DCV, Inc, which oversaw 13 DuPont/ConAgra joint ventures involving the animal nutrition and food ingredients business. After the businesses under performed, the defendants sold the businesses. The businesses continued to perform poorly after DuPont and ConAgra sold them. Subsequently, the purchaser filed an action against the defendants seeking recession of the agreement and either punitive damages or indemnification for its losses. Plaintiff alleged that the defendants committed common law fraud when they failed to disclose certain facts. Rejecting this argument, the court determined that the facts were not material. Furthermore, the court found that the defendants did not have a duty to engage in "self-flagellation" by characterizing negative facts. Finally, the court held that based on the contract language the defendants were not required to indemnify the plaintiff for losses resulting from one of the business's antitrust activity. Authored by: Jason C. Jowers 302-888-6860 jjowers@morrisjames.com Share