This post includes a bevy of recent cases as a way of allowing me to "catch up" on recent summaries of Chancery Court cases that I could not post due to a hectic schedule over the last few weeks. With this post, I am "up to date" on my current summaries of the key business litigation decisions from the Delaware Court of Chancery and Delaware Supreme Court (though there are relevant cases from other courts I have in my "to do" folder).

 It has been almost 2 years since I started these summaries on this blog, so the search function of this blog now allows for a convenient way to find cases from these courts on key topics from approximately the last 2 years.


Smith v. McGee, (Del. Ch. Oct. 16, 2006), read opinion here. This  Chancery Court case discusses the concept of equitable tolling of statutes of limitations.  The Court notes that the three (3) year statute of limitations for breach of fiduciary duty, fraud, and conversion pursuant to 10 Del. C. §3106 begins to run at the time of the alleged wrongful act being committed.  The Court also notes that statute of limitations are applied to equitable claims only by analogy and may be suspended under several tolling theories which are threefold: (1) inherently unknowable injuries; (2) equitable tolling and (3) fraudulent concealment. 

Salem Church (Delaware) Associates v. New Castle County, (Del. Ch. Oct. 6, 2006), read opinion  here. This Chancery Court opinion discusses  the doctrine of exhaustion which is a pre-condition for a finding of ripeness.  The exhaustion doctrine provides that where a remedy before an administrative agency is provided, relief must be sought by exhausting this remedy before the courts with either review any action by the agency or provide an independent remedy.  This doctrine is judicially created. See Levinson v. Delaware Compensation Rating Bureau, Inc., 616 A.2d 1182 (Del. 1992). The Court noted that unlike the County, which has a procedure, the State of Delaware does not have an administrative procedure to challenge “inverse condemnation,” thus the Court allowed the claim to proceed in Chancery Court instead of Superior Court due to the “clean-up doctrine” in connection with the other equitable claims pending. 

Quereguan v. New Castle County, (Del. Ch. Sept. 22, 2006), read opinion here. This letter opinion addressed a Motion to Join under Chancery Court Rule 20(a).  Previous opinions in this case were summarized on this blog.


Krahmer v. Christie’s, Inc., (Del. Ch. Oct. 17, 2006), read opinion here. This Chancery Court  case involved the attempt by a purchaser of a painting at auction to have the transaction rescinded based on the fraudulent representation that it was an original work of art from a painter named Frank Weston Benson.  The Court previously denied the claim for negligent misrepresentation in a decision summarized on this blog. This case granted Summary Judgment to the defendant on a fraud claim. 


In Re: Tele-Communications, Inc. Consol. S’holders Litig., (Del. Ch. Oct. 11, 2006), read opinion here. This Chancery Court case addresses Chancery Court Rule 25(a) which provides for the substitution of a party ninety days after the party’s death is suggested upon the record.  The Court notes that the rule is permissive and grants the Court discretion to deny a Motion to Substitute even when made in compliance with the rule.  The Court denied the motion in this case due to the “unreasonable and inexcusable delay” that would result in prejudice against the estate due to the passage of at least  fifteen (15) months after actual notice of death before presenting a claim to the estate. 


Abbey v. Skokos, (Del. Ch. Oct. 10, 2006), read opinion here. This Chancery case involves appraisal rights. Plaintiff also alleged that the chairman of the company involved made fraudulent representations and induced the plaintiff to invest $4 million.  Once the investment was made, the plaintiff alleges that the chairman suggested that the investment be made via an affiliated entity.  The allegation is that the affiliated entity was a sham entity and was used for the purpose of preventing the plaintiff from interfering with a potential merger. The plaintiff asks the Court to disregard the existence of the affiliated entity and to declare him  a stockholder in the primary entity.  The goal of that remedy would be to allow the plaintiff to assert his appraisal rights. This is a letter opinion on a Motion to Dismiss.


In essence, the plaintiff asks the Court to apply principles of “ reverse veil piercing” and to address breaches of fiduciary duties, loyalty and good faith. However, the Court did not address the substantive issues and instead granted a motion to stay based on principles of comity in light of a previously filed New York action where all parties present in this case are likewise present and all the issues in both the Delaware and New York actions arose from the “common nucleus of operative facts.”  Thus, despite the internal affairs doctrine, the New York court will be deciding this case, presumably based on Delaware law.