Judge Wallace Grants in Part and Denies in Part Motions to Dismiss

October 31, 2018


In Coit Capital Securities, LLC v. Turbine Asset Holdings, LLC, et. al., C.A. No. N17C-05-020 PRW CCLD, Judge Wallace considered several motions to dismiss the claims brought by plaintiff Coit Capital Securities, LLC (“Coit”). Ultimately, Judge Wallace resolved four motions to dismiss brought by the defendants Turbine Asset Holdings, LLC (“TAH”), Turbine Asset Holdings Group (“TAH Group”), Turbine Inventory Holdings CC1, LLC (“TIH 1”), Turbine Inventory Holdings CC2, LLC (“TIH 2”), Turbine Inventory Holdings CC3, LLC (“TIH 3”), JSS Holdings, LLC (“JSS”), Credit Suisse Asset Management, LLC and Credit Suisse Securitized Products Fund L.P. (together “Credit Suisse”), United Technologies Corporation, Pratt & Whitney Division (“Pratt & Whitney”), and Wilmington Savings Fund Society, FSB (“WSFS”). The motions were granted in part and denied in part in a transcript ruling.

The litigation arose from a transaction between Coit and TAH in which TAH purchased aircraft parts from Pratt & Whitney and, after consigning the parts to Pratt & Whitney for storage, engaged Coit as a broker to finance the purchase of the parts. This arrangement was allegedly consummated through three letter agreements between TAH and Coit.

In its complaint, Coit alleged that it was never compensated under these agreements and alleged breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract, tortious interference with business relations, unjust enrichment, aiding and abetting, and civil conspiracy against various defendants. The defendants moved to dismiss. Judge Wallace denied the defendants’ motion to dismiss on all but two of the claims based on the lenient pleading standards in Superior Court. For the claims on which Judge Wallace granted dismissal, the dismissal was limited to certain defendants. Specifically, Judge Wallace dismissed the claim of unjust enrichment against defendants TAH Group, TIH 1, TIH 2, and JSS, and dismissed the aiding and abetting claim against WSFS.

In considering the motions, Judge Wallace started his analysis by considering whether conversion to a motion for summary judgment was appropriate because the defendants (according to Coit) relied on evidence extrinsic to the complaint. Judge Wallace noted that the Supreme Court of Delaware acknowledges two exceptions to this rule: (1) when the extrinsic documents are integral to the claim, and (2) when the documents are not relied upon for the truth of their contents. Judge Wallace chose not to convert the motion, but rather kept these exceptions in mind when considering the arguments raised by the defendants.

Upon turning to the merits of the dispute, Judge Wallace dismissed the unjust enrichment claim, holding that it arose from a breach of contract. On the aiding and abetting claims, Judge Wallace dismissed the claim against WSFS after concluding that the complaint failed to plead that WSFS provided “substantial assistance” to any tortious conduct. In so holding, Judge Wallace stated that “Delaware’s pleading standard on a motion to dismiss . . . is, maybe, minimal, but it’s not meaningless.”

Analysis: In this case, Judge Wallace decided four motions to dismiss in an expeditious fashion. The last reply brief on the motions was filed on June 8, 2018, and Judge Wallace resolved all motions by bench ruling around one month later. Such expeditious resolution of disputes is one of the fundamental principles of the CCLD. Moreover, much like Judge Davis’ KT4 case, Judge Wallace reinforced the minimal pleading standard necessary to overcome a motion to dismiss and, on that basis, denied the majority of the motions filed.

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