Partial Relief Per Rule 56(d) on Interpretation of Purchase Price Adjustment Terms
In AHS New Mexico Holdings, Inc. v. Healthsource, Inc., (Del. Ch., Feb. 2, 2007), 2007 WL 431051, read opinion here, the Chancery Court addressed cross-motions for summary judgment based on a complaint and a counterclaim in connection with a stock purchase agreement that related to a post-closing purchase price adjustment and issues as to what claims were subject to binding arbitration. The parties had consented to the jurisdiction of the Chancery Court. AHS filed a complaint to obtain specific performance of the terms of the agreement. Because the parties contested the assertions of each other regarding disputed facts, Chancery Court Rule 56(h) does not apply.
The court discussed familiar standards for summary judgment as well as reciting Delaware's "objective" theory of contract analysis, viewing it from the perspective of an independent and reasonable third party, as well as noting the truism that simply because the parties' disagree on the meaning of a contract does not make it ambiguous. Only if the court determines the contract is ambiguous would it consider extrinsic evidence to assess the parties' intentions. Although the court denied both motions, it did determine based on Rule 56(d) that certain facts were deemed established for purposes of further proceedings in the case.
