Complex Commercial Litigation Update

March 30, 2021

Publication| Commercial Litigation

The Delaware Superior Court’s Complex Commercial Litigation Division (“CCLD”) closed out 2020 with a number of opinions, including an issue of first impression.  Much like its sister court, the Court of Chancery, the CCLD has switched over to fully remote proceedings.  Judge Wallace held one of the division’s first fully remote bench trials in December in Smart Sand, Inc. v. US Well Services, LLC, C.A. No. N19C-01-144 PRW CCLD.  While it is expected that remote trials will remain the norm for some time, the Court has fully adopted remote proceedings and continues to move cases forward to trial. For past editions of this mailing or more information about the CCLD, please visit our website.    

Judge Johnston Grants Anti-Suit / Anti-Claim Injunction as Issue of First Impression
In American International Industries v. Neslemur Company, C.A. No. N19C-04-258 MMJ CCLD, Judge Johnston considered as an issue of first impression whether there is any Delaware authority for the imposition of an anti-claim injunction, as opposed to an anti-suit injunction. American International Industries (“AII”) had acquired assets from Neslemur under an asset purchase agreement.  The agreement obligated Neslemur to hold AII harmless for certain liabilities.  AII later became a named defendant in tort lawsuits in at least four non-Delaware jurisdictions. AII sued Neslemur in the Superior Court of Delaware, seeking breach of contract damages and declaratory relief under the asset purchase agreement. AII also alleged crossclaims and third-party claims against Neslemur in the non-Delaware jurisdictions.

Judge LeGrow Finds Allegations of Personal Benefit Insufficient to Void Corporate Transaction
In The American Bottling Company v. Repole, et al., C.A. No. N19C-03-048 AML CCLD, Judge LeGrow considered a motion to dismiss two counts of a second amended complaint.  Defendants Mike Repole and BA and Sports Nutrition, LLC (“Bodyarmor,” together with Repole, the “Moving Defendants”) moved to dismiss a claim for tortious interference with contract asserted against Repole, Bodyarmor’s CEO, and a claim for promissory estoppel against Bodyarmor. 

Judge Johnston finds that the Law of the Case Doctrine and Collateral Estoppel Bars Re-Litigation of Findings by the Chancery Court after Transfer to Superior Court
In Preston Hollow Capital LLC v. Nuveen LLC, 2020 WL 7365808 (Del. Super. Ct. Dec. 15, 2020), plaintiff Preston Hollow originally asserted claims against its business competitor Nuveen for tortious interference and defamation in the Court of Chancery.  Preston Hollow’s defamation claim was dismissed, with leave to transfer the claim to the Superior Court.  The Superior Court stayed the defamation action while litigation continued in the Court of Chancery.  There, the Court of Chancery ultimately found Nuveen liable on grounds that Nuveen used “threats and lies in a successful attempt to damage [Preston Hollow] in its business relationships.” 

Judge Davis Applies Cryo-Maid Factors and Denies Motion to Dismiss, or in the Alternative, Stay
In Estate of Martha Barotz v. Martha Barotz 2006-1 Insurance Tr. et al., C.A. No. N20C-04-126 EMD CCLD, Judge Davis denied the defendant’s motion to dismiss or, in the alternative, for a stay.  The dispute began when plaintiff Estate of Martha Bartoz (the “Estate”) sought to recover life insurance proceeds from the defendants, including Martha Barotz 2006-1 Insurance Trust (the “Trust”).  The Estate argued that the defendants procured a life insurance policy for Martha Barotz without an insurable interest, and brought claims for recovery of those funds, or, in the alternative, unjust enrichment.

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