Justia Contracts Opinion Summaries

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

Plaintiff and two defendants engaged in settlement negotiations and, after the parties agreed to the amount of monetary consideration to be paid toward the settlement, one of the defendants was no longer willing to settle. Plaintiff sought to enforce what he contended was the parties' settlement agreement. The court concluded that the settlement was not enforceable because the parties did not reach an agreement on all of the essential terms to the settlement. View "Harrison v. Dixon, et al." on Justia Law

Plaintiffs Costantini, Jr. and Kahn sought indemnification for their fees and costs in underlying litigation involving Swiss Farm. The court concluded that Costantini was entitled to indemnification under Article 14 of the Operating Agreement because he was a manager of Swiss Farm and was sued by Swiss Farm in that capacity and prevailed. However, the court concluded that, although Kahn was sued for breach of fiduciary duty and prevailed, he was not a member of the Board of Managers, an officer, an employee or an agent of the company and, therefore, was not entitled to indemnification under the Operating Agreement. Accordingly, the court granted in part and denied in part plaintiffs' motion for judgment on the pleadings. View "Costantini, et al. v. Swiss Farm Stores Acquisition LLC" on Justia Law

Plaintiff and Defendant entered into a license agreement for the development of boron-based small-molecule drug candidates for the treatment of acne. As part of the agreement, the parties agreed to arbitrate certain disputes. The parties also agreed that each had the right to initiate judicial proceedings to enforce their rights through equitable relief. A dispute arose under the agreement, and Defendant initiated arbitration regarding it. Approximately two weeks later, Plaintiff filed a complaint seeking to enjoin Defendant from proceeding with arbitration and seeking specific performance of the agreement. Defendant moved to dismiss the complaint for lack of subject matter jurisdiction on the grounds that the parties agreed to resolve the claims at issue in arbitration. The Court of Chancery denied Defendant's motion to dismiss, holding that Plaintiff's claims were not subject to mandatory arbitration under the parties' license agreement. View "Medicis Pharm. Corp. v. Anacor Pharms., Inc." on Justia Law

Plaintiffs bought a townhouse condominium unit from Defendant. After the sale, repairs of leaks in the other condominium units caused by poor construction required the condominium board to collect special assessments in the amount of $65,000 from each unit holder, including Plaintiffs. Recoupment from the builder offset the sum, but Plaintiffs remained out-of-pocket over $40,000. Plaintiffs sued Defendant, alleging fraud and equitable fraud due to Defendant's allegedly insufficient disclosures made to Plaintiffs before the sale. The Court of Chancery entered judgment in favor of Defendant, holding (1) Plaintiffs failed to prove Defendant committed common-law fraud because they failed to show Defendant misrepresented or omitted some material fact before the sale of the condominium; and (2) rescission was not warranted under the facts of this case, and therefore, equitable fraud was inappropriate. View "Grzybowski v. Tracy" on Justia Law

Plaintiffs owned a house trailer on a leased lot in Defendants' trailer park. Plaintiffs desired to sell their trailer to a third party, which required a transfer of the lot lease to the purchaser. Defendants refused to approve the lease transfer unless Plaintiffs agreed to pay for the removal of an abandoned oil tank on the leasehold. Plaintiffs filed this action for damages and injunctive relief, contending Defendants' demands violated the lease agreement. More than one year after Plaintiffs served discovery requests, Defendants moved to dismiss the action with prejudice for failure to prosecute. The Court of Chancery granted the motion, holding that because Plaintiffs declined the opportunity to go forward, the case was dismissed with prejudice. View "Valdes v. MCH Mariner's Cove, LLC" on Justia Law

Plaintiffs, stockholders in Chevron and FedEx, sued the boards of Chevron and FedEx for adopting forum selection bylaws providing that the forum of litigation relating to the companies' internal affairs should be conducted in Delaware. The cases were consolidated. Defendants filed a motion for judgment on the pleadings on Plaintiffs' claims that (1) the bylaws were statutorily invalid because they were beyond the boards' authority under the Delaware General Corporation Law, and (2) the bylaws were contractually invalid and therefore could not be enforced like other contractual forum selection clauses. The Court of Chancery granted Defendants' motion, holding (1) the bylaws were facially valid as a matter of statutory law; and (2) the bylaws were valid and enforceable contractual forum selection clauses. View "Boilermakers Local 154 Ret. Fund v. Chevron Corp." on Justia Law

The board of directors of Primedia, Inc. adopted a resolution approving a merger agreement among Primedia, TPG Capital, and TPG's wholly owned acquisition subsidiaries. Primedia's majority stockholder, KKR, approved the merger agreement. At the time the transaction closed, Linda Kahn and a co-plaintiff were litigating a derivative action on Primedia's behalf, alleging that KKR traded on inside information when it purchased shares of Primedia's preferred stock and seeking disgorgement of KKR's profits under Brophy v. Cities Service Co. In this class action, Kahn and her co-plaintiff alleged that the terms of the merger were unfair because the Primedia directors failed to obtain any value for the Brophy claim. Specifically, they argued that the merger conferred a special benefit on KKR because KKR knew it was highly unlikely that any acquirer would pursue the Brophy claim. Plaintiffs also challenged a provision in the merger agreement limiting the Primedia board's ability to change its recommendation that stockholders vote in favor of the merger. The Court of Chancery (1) dismissed Defendants' motion to dismiss as to the fairness claim because Plaintiffs had standing to pursue the claim and pled a reasonably conceivable theory; and (2) otherwise granted the motion. View "In re Primedia, Inc. S'holders Litig." on Justia Law

The plaintiffs sued for damages arising out of their sales of stock in Wayport, Inc. After the defendants' motion to dismiss in part was granted, the litigation proceeded to trial against the remaining defendants on claims for breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, common law fraud, and equitable fraud. The court of chancery (1) entered judgment in favor of plaintiff Brett Stewart and against defendant Trellis Partners Opportunity Fund in the amount of $470,000; and (2) otherwise entered judgment against the plaintiffs and in favor of the defendants. View "In re Wayport, Inc." on Justia Law