Justia Contracts Opinion Summaries

Plaintiff and Defendant entered into a Master Purchase/Service Agreement (MPSA) containing a provision that, under certain conditions, allowed the prevailing party in a dispute arising under the MPSA to recovery attorneys’ fees. Plaintiff brought suit in the Delaware Superior Court, and then Defendant filed in New Jersey. The venue dispute ended with the Delaware Superior Court granting Defendant’s motion to stay in favor of the New Jersey action, which effectively mooted the Delaware action. Plaintiff sought a voluntary dismissal, but Defendant wanted dismissal with prejudice and to recover its attorneys’ fees and costs incurred in the action. The Court of Chancery dismissed this action under Court of Chancery Rule 419(a)(2), without prejudice. As a condition of dismissal, the Court retained jurisdiction to award attorneys’ fees and costs to Defendant in accordance with the MPSA, holding (1) dismissal without prejudice was appropriate as to the venue dispute; and (2) while waiting for the final outcome of the New Jersey action would be the preferable approach before awarding attorneys’ fees, at this point, under the terms of the MPSA, Defendant was entitled to its attorneys’ fees that were incurred in this action. View "Avaya, Inc. v. Charter Commc’ns Holding Co., LLC" on Justia Law

This case involved a home-improvement contract between Petitioner, a construction company, and Respondents, homeowners. Both parties argued that the other breached the contract. The superior court determined that the matter must be referred to arbitration under an arbitration provision in the contract. The arbitrator found in favor of Petitioner. Petitioner filed this action seeking to confirm the arbitration award and moved for summary judgment. Only after Petitioner filed its summary judgment motion did Respondents file an answer opposing confirmation of the award. The Court of Chancery granted the petition to confirm, holding that summary judgment was appropriate in this case. View "SC&A Constr., Inc. v. Potter" on Justia Law

VTB Bank, a Ukranian bank and company, brought this lawsuit against Development Max, LLC, a Delaware limited liability company, and Navitron Projects Corp., a Panamanian corporation and managing member of Development Max, alleging fraudulent transfer, constructive fraudulent transfer, and unjust enrichment. Development Max and Navitron filed a motion to dismiss on the grounds of forum non conveniens, among other theories. The Court granted the motion with respect to VTB’s claim against Navitron but denied the motion with respect to VTB’s claim against Development Max. On reconsideration, the Court granted, without prejudice, Development Max’s motion to dismiss on grounds of forum non conveniens, holding that Ukraine, as opposed to Delaware, was the proper forum in which to litigate this dispute. View "VTB Bank v. Navitron Projects Corp." on Justia Law

This case involved a dispute between Plaintiffs, Rexas Inc., Rexam PLC, and Rexas Overseas Holdings Ltd. (“Rexam”), and Defendant Berry Plastics Corp. (“Berry”) over the risks of potential pension liability. In 2014, Berry agreed to purchase Rexam’s healthcare containers and closures business and accepted responsibility for the pensions of certain employees at one of Rexam’s facilities that it was acquiring (the “Rexam Pension Plan”). Before the anticipated closing, the Pnesion Benefit Guaranty Corp. (“PBGC”) notified Rexam that it had initiated an inquiry into the Pension Plan Transfer (the “PBGC Inquiry”). As part of the closing, the parties agreed to defer the Pension Plan Transfer. After the closing, the PBGC sent an email regarding the Pension Plan Transfer. Berry then informed Rexam that it would not complete the Pension Plan Transfer because it considered the PBGC’s email evidence of a threatened legal or administrative action by the PBGC. Rexam sued Berry for breach of contract. The Court of Chancery entered judgment on the pleadings in favor of Rexam and against Berry, holding that the PBGC did not “threaten” to take action, and therefore, Berry’s performance - acceptance of the Pension Plan Transfer - was not excused because of the PBGC Inquiry. View "Rexam Inc. v. Berry Plastics Corp." on Justia Law

Plaintiffs - George Polk, Tulum Management USA LLC, and RED Capital Investments LP - brought this action on behalf of nominal defendant RED Parent LLC against Defendants - certain members of the RED Parent Board of Managers, Recycled Energy Development LLC and RED Investment LLC - alleging breach of fiduciary duty and breach of contract. Earlier, RED Parent filed an action in Illinois in regard to essentially the same facts upon which the Delaware action claims were brought. In the Delaware action, Plaintiffs sought advancement, indemnification, and fees on fees incurred in both the Illinois action and the case at bar. The Court of Chancery denied Defendants’ motion to dismiss in favor of the Illinois action but granted Defendants’ motion to stay in favor of the Illinois action as to the valuation and fiduciary duty claims and retained jurisdiction over the Delaware action, holding (1) the parties and issues in the Delaware and Illinois actions are functionally identical; and (2) the Illinois court is capable of rendering prompt and complete justice. View "Tulum Mgmt. USA LLC v. Casten" on Justia Law

At issue in this case was the sale of a portfolio company, Double E Parent LLC, by Prairie Capital III, LP and Prairie Capital III, private equity funds. The buyer was Double E Holding Corp. (“Buyer”), an acquisition vehicle formed by Incline Equity Partners, III, LP (“the Incline Fund”). A Stock Purchase Agreement (“SPA”) governed the transaction. Prairie Capital III, which served as the Sellers’ Representative under the SPA, later sued Buyer to compel the release of funds from escrow. The Incline Fund intervened. Thereafter, Incline Fund and Buyer asserted counterclaims and cross-claims for, inter alia, fraud and aiding and abetting fraud against the Prairie Funds and related individuals and two claims for indemnification under the SPA against the Sellers’ Representative. The counterclaim defendants filed a motion to dismiss the fraud-related claims and one of the two counts seeking indemnification. The Court of Chancery (1) granted the motion to dismiss to the extent that the Buyer and the Incline Fund grounded their fraud-related claims on omissions outside of the SPA and certain representations within the SPA; (2) granted the motion as to one aspect of the challenged indemnification claim; and (3) otherwise denied the motion to dismiss. View "Prairie Capital III, LP v. Double E Holding Corp." on Justia Law

In 2003, Plaintiffs loaned Utility Systems, Inc. (“USI”), which provided wastewater disposal services to the Woods on Herring Creek community, almost $250,000 to meet the costs of managing and improving the wastewater treatment system (“System”). Plaintiffs were not repaid by USI. In 2013, Plaintiffs filed this action seeking to recover the loaned funds under the doctrines of quantum meruit and unjust enrichment. Plaintiffs named as defendants Woods on Herring Creek Homeowners Association, which took over the System in 2004, and Sussex County, to whom the Association transferred the system in 2008. The Court of Chancery granted Defendants’ motion to dismiss, holding that Plaintiffs’ action was barred by laches. View "Carbaugh v. Woods on Herring Creek Homeowners Ass'n" on Justia Law

The parties in this dispute were Koninklijke Philips N.V. (“Philips N.V.”), a Netherlands holding company, and Carlo Vichi, an Italian businessman who had a longstanding business relationship with Philips N.V. Philips N.V. was a participant in a joint venture, LG.Philips Displays Holdings B.V. (LPD), that did business with Vichi and other entities. LPD approached Vichi for a substantial loan, which Vichi agreed to make. The joint venture eventually defaulted on the loan. Vichi filed a complaint against Philips N.V., claiming that Philips N.V. committed fraud by misrepresenting the joint venture’s financial condition and prospects and by falsely promising that it would stand behind LPD to ensure it could meet its financial obligations. The Court of Chancery held that Philips N.V. was not liable to Vichi on any of the claims he presented at trial and that Philips N.V. should not be held responsible for the loss Vichi suffered on the loan he made to LPD. View "Vichi v. Koninklijke Philips Elecs., N.V." on Justia Law

The party to an exclusive marketing, license, and distribution agreement (licensee) brought contract and tort claims in California against the other parties to that agreement and their affiliated companies (licensors). The defendants in that action, including the licensors, were the plaintiffs in this action. Plaintiff sought a declaratory judgment that the agreement was properly terminated and injunctive relief relating to the agreement's confidentiality and termination provisions. Defendant asserted counterclaims for breach of contract, among other claims. The Court of Chancery awarded the licensee damages against the licensors, their parent, and a sister company, holding (1) those plaintiffs who were parties to the agreement breached the non-compete provision of that agreement or the implied covenant of good faith and fair dealing, and those plaintiffs and a sister company were liable in tort for tortious interference with contract; (2) the additional named plaintiffs were not liable in contract or tort; (3) the agreement was properly terminated, and Defendant was required to comply with the agreement's termination and confidentiality provisions; and (4) both parties' requests for attorneys' fees were denied. View "eCommerce Indus., Inc. v. MWA Intelligence, Inc." on Justia Law

In 2009, Sirius SM Radio Inc. negotiated a capital infusion (the investment agreement) from Liberty Media Corporation in return for Liberty Media receiving preferred stock in Sirius. Under the investment agreement, Liberty Media secured the ability to take control of Sirius in 2012 without paying a premium to Sirius stockholders by purchasing additional shares needed to obtain control in the market. When Liberty Media announced in 2012 that it intended to acquire majority control, Plaintiffs sued, contending that the Sirius board had breached its fiduciary duties by adhering to the provisions of the investment agreement and that Liberty Media breached its fiduciary duties by purchasing shares on the open market to acquire majority control of Sirius without paying a premium. The Court of Chancery granted Defendants' motion to dismiss, holding (1) Plaintiffs' challenge to the investment agreement was time-barred, as it was filed after the three-year limitations period expired; and (2) Liberty Media's decision to give valuable consideration in exchange for the right to make open market purchases after the standstill period expired provided no basis for a cause of action against it. View "In Re Sirius XM S'holder Litig." on Justia Law