Harris v. RHH Partners, LP , et al., Del. Ch., No. 1198-VCN April 3, 2009), read opinion here.
Kevin Brady, a highly respected Delaware litigator, provides us with the benefit of his analysis of this case.
In this Chancery Court letter decision, Vice Chancellor Noble ruled on two issues in a dispute involving unrepresented entities and a limited partnership agreement: (i) the failure to secure replacement counsel for the juristic entities involved in this action; and (ii) an application to intervene.
Respondent RHH Partners, L.P. (“RHH”) is a Delaware limited partnership. Plaintiff Robert H. Harris is the sole limited partner of RHH and holds a 99% interest in RHH. One of the defendants, 1015 Broadway, Inc. (“Broadway”), is the sole general partner of RHH and owns 1% of the interests in RHH. The only asset of RHH Partners is real property known as 87 Lotus Oval South, Valley Stream, New York, 11581 (the “Property”), which is also where Harris, and his wife, reside
Claims Dismissed After Entities Warned to Get Counsel
The general rule in Delaware is that artificial business entities may appear in Delaware courts only through an attorney admitted to practice law in Delaware. After counsel who represented RHH and Broadway withdrew, the Court warned those entities that if they did not obtain counsel by a date certain, their claims would be dismissed. Those entities failed to heed Vice Chancellor Noble’s warning. When the deadline passed and no counsel had entered their appearance for those entities, Vice Chancellor Noble kept his word and found that “all claims brought by, and all defenses tendered by, those entities will be deemed abandoned, and, thus, dismissed.”
Motion to Intervene
A non-party, Don Hartman moved to intervene under Chancery Court Rule 24(a) claiming an interest in the property. Hartman argued that he had become the sole owner of Broadway for the purpose of controlling RHH, in order to protect a security interest in the property. The Court agreed finding that Hartman’s interest “would be impaired or impeded unless he was allowed to become a party” and that his interest would not otherwise be adequately represented. Therefore, the Court granted Hartman’s motion.
UPDATE: The Chancery Court, in a letter decision of April 23, 2009, denied a motion for reargument in this matter in which all parties appear pro se. The arguments in the motion referred to documents outside the record that were not submitted to the court, but instead the pro se moving party submitted what the court described as a "blunderbuss of correspondence… with regularity" to the court, which was not a substitute for the prerequisites pursuant to Rule 59(f).