Chancery Dismisses Contract Case for Lack of Equitable Jurisdiction

Charlotte Broadcasting v. Davis Broadcasting of Atlanta, C.A. No. 7793-VCG (Del. Ch. April 2, 2013).

What this case is about: This opinion dismissed a breach of contract claim due to a finding that the claims did not provide a basis for equitable jurisdiction in the Court of Chancery.

Very Short Overview

This short opinion is useful to remind practitioners that a simple breach of contract claim cannot be converted into an equitable matter within the limited jurisdiction of the Court of Chancery.  The court will not allow a request for equitable relief to be used as a “kind of formulaic ‘open sesame’ to the Court of Chancery.”  See footnote 10.  Rather, the court will review the allegations of the complaint as a whole to determine the true nature of the claim.  The court also reminds practitioners that unless the record indicates some special, traditional basis for equitable jurisdiction, or a statutory basis, the court generally does not have jurisdiction in a declaratory judgment action.

Another helpful practice note: The Court of Chancery suggested that the plaintiff consider filing this case in, or transferring it to, the Delaware Superior Court, Delaware’s trial court of general jurisdiction (and “law court”), which this opinion observed, also has available expedited proceedings.  See footnote 22 and case cited therein. Most practitioners in Delaware might not be aware of that procedural option in that court.

In sum, the court determined that complete relief was available at law.  The court found that if it allowed the contractual claim to be converted to an equitable matter, that the Court of Chancery would no longer remain a court of limited jurisdiction and that:  “That would be a meal this court cannot digest consistent with its constitutional role as a court of limited jurisdiction.”