February 19, 2014
Submitted: February 14, 2014
The Court concluded in its post-trial memorandum opinion (the "Opinion") that Popescu had demonstrated by clear and convincing evidence that Millien breached the terms of the 2009 Email. The Court further concluded that Popescu had demonstrated by clear and convincing evidence that he is entitled to specific performance of the 2009 Email, by which Millien is to authorize the issue of one share of BT Voting Stock to Popescu at par value in order to assure Popescu's "control" of the enterprise.
In his motion for reconsideration (the "Motion"), filed under Court of Chancery Rule 59(f), Millien petitions the Court to reconsider two issues implicated in the Opinion: first, whether it was appropriate for the Court to consider evidence other than BT's stock ledger to determine whether Popescu was contractually entitled to be the holder of a majority of BT Voting Stock; and second, whether it was appropriate under the 2009 Email, particularly the Control Paragraph, to award specific performance on terms that would require Millien to authorize the issue of one share of BT Voting Stock to Popescu at par value.
The Court may grant a Rule 59(f) motion if the moving party demonstrates that "the Court's decision was predicated upon a misunderstanding of a material fact or a misapplication of the law" that was "outcome determinative of the earlier litigation." It has been said that the moving party "bear[s] a heavy burden on a Rule 59 motion, " and a Rule 59(f) motion in particular is "not a mechanism for litigants to relitigate claims already considered by the court."
Millien contends that it was inappropriate for the Court to consider evidence beyond BT's stock ledger in deciding Popescu's breach of contract claim related to the ownership of BT Voting Stock. For support, Millien cites to 8 Del. C. § 219(c)and several decisions of Delaware courts interpreting this statute. In response, Popescu argues that the statute and case law cited by Millien do not prevent the Court from, as it did in the Opinion, looking to evidence other than BT's stock ledger to determine whether Popescu had a contractual right against Millien to be the holder of a majority of BT Voting Stock.
The Court concludes that the Opinion was not based on a misapplication of 8 Del. C. § 219(c) or the related Delaware case law regarding the appropriate use of a corporation's stock ledger to establish its stockholders of record. The Opinion expressly distinguished this action from case law analogous to that advanced by Millien here. It was not inappropriate for the Court to look beyond BT's stock ledger because Popescu was not seeking a determination that he was the record stockholder of a majority of BT Voting Stock. Rather, Popescu sought specific performance of the 2009 Email by which Millien agreed that Popescu would be the majority stockholder of BT. In other words, the Court did not conclude that, based on BT's stock ledger, Popescu was presently the holder of a majority of BT Voting Stock. Instead, the Court concluded that, independent of the stock ledger, Popescu was contractually entitled to become the holder of a majority of BT Voting Stock.
Millien also contends that specific performance of the 2009 Email was inappropriate because the operative Control Paragraph purportedly "was not enforceable due to its unintelligible terms." He cites to Delaware case law for the proposition that the Court may not supply the essential terms of a purported agreement, such as the 2009 Email, in an award of specific performance. Popescu, in opposition, argues that the Court's awarding of specific performance was consistent with the sufficiently definite, essential terms of the 2009 Email.
Again, the Court concludes that the Opinion was not based on a misapplication of Delaware law related to specific performance. The Court carefully considered and applied Delaware precedent before holding that Popescu had established, by clear and convincing evidence, that the essential terms of the 2009 Email were sufficiently definite to support an award of specific performance for one additional share of BT Voting Stock. By the literal terms of the Control Paragraph, Millien agreed that, other than their contemplated equal ownership of a holding company which was never actually implemented, Popescu would "retain a 1% share" and thus be "the majority shareholder in BT." By necessary implication, in agreeing that Popescu would be the majority stockholder by holding an additional one percent more of BT than he effectively would, so too did Millien agree that Popescu would be the majority stockholder by holding at least one share more of BT Voting Stock than he effectively would.
In summary, Millien has not established that the Opinion was based on a misunderstanding of fact or a misapplication of law that would have been material and dispositive. Therefore, the Motion is denied.
IT IS SO ORDERED.
Very truly yours,
John W. Noble J.