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Zutrau v. Jansing and ICE Systems, Inc.

Court of Chancery of Delaware, New Castle

December 8, 2014

Jansing and ICE Systems, Inc.

Submitted: October 23, 2014

Dear Counsel and Ms. Zutrau:

On July 31, 2014, I issued my Post-Trial Opinion (the "Opinion") in Plaintiff Leilani Zutrau's direct and derivative lawsuit against Defendant John C. Jansing and nominal defendant ICE Systems, Inc. ("ICE") in which Zutrau pursued a variety of claims relating to, among other things, a reverse stock split executed by ICE that resulted in the elimination of Zutrau's minority equity interest in the company. As the Opinion's page count suggests, I addressed Zutrau's numerous arguments in detail and at length. Ultimately, although I rejected several of Zutrau's claims, I found that Jansing had breached his fiduciary duties and that the terms of the reverse stock split were not entirely fair to Zutrau.[1] At the conclusion of the Opinion, I ordered the parties to submit adjusted damage calculations pursuant to a schedule set forth in a related order (the "Damages Order").[2] The Damages Order imposed a deadline of August 28, 2014, for Zutrau to raise any objections to Defendant's revised calculations.[3] Zutrau did not—and has not—raised any such objections.

Instead, on August 27, Zutrau terminated her counsel's representation. Shortly thereafter, those attorneys moved to withdraw and for entry of a charging lien. That motion is the subject of a separate letter opinion being filed this same date and will not be addressed further herein. Of relevance to this Letter Opinion, on September 8, Zutrau filed, on her own behalf, another motion styled "Plaintiff's Motion to Alter or Amend Judgment, or in the Alternative, for a New Trial" (the "Motion") in which she contests virtually every aspect of the Opinion. The parties fully briefed that Motion, [4]and the Court heard argument on it on October 23, 2014 (the "Argument"). This Letter Opinion constitutes my ruling on Zutrau's Motion. For the reasons that follow, the Motion is denied.

I. Legal Standard

The parties dispute what legal standard should be applied to the Motion. Zutrau characterizes the Motion as seeking either to alter or amend the judgment under Court of Chancery Rule 59(e) or, alternatively, a new trial under Rule 59(a). Jansing contends that the Motion effectively is one for reargument and must be reviewed under Rule 59(f). Additionally, I note that, although not reflected in its title, the Motion also seeks to amend Zutrau's pleadings under Rule 15(b) and requests a stay pursuant to Rule 62(b).[5] Based on these disputes and the confusion they engender, I begin by reviewing briefly the standards applicable to each of the potentially relevant rules.

A. Rule 59(e): To Alter or Amend the Judgment

"„Under Rule 59(e), a motion to alter an Order may be granted if the plaintiff demonstrates (1) an intervening change in controlling law; (2) the availability of new evidence not previously available; or (3) the need to correct a clear error of law or to prevent manifest injustice.'"[6] As with a Rule 59(f) motion for reargument, the Court will deny a motion under Rule 59(e) that "merely restates arguments already considered and rejected during the litigation."[7]

B. Rule 59(a): New Trial

"To obtain a new trial, the disappointed litigant must show that manifest injustice otherwise would result."[8] "In ruling on such a motion, the Court is charged with exercising the „judicial discretion of the Court so that injustice may be prevented.'"[9]

C. Rule 59(f): Reargument

To prevail on a motion for reargument under Rule 59(f), the moving party must demonstrate either that the court overlooked a decision or principle of law that would have controlling effect or that the court misapprehended the facts or the law such that the outcome of the decision would be different.[10] To justify reargument, a misapprehension of the facts or the law must be both material and outcome-determinative of the earlier decision.[11] Mere disagreement with the Court's resolution of a matter is not sufficient, and the Court will deny a motion for reargument that does no more than restate a party's prior arguments.[12]

Courts generally will not consider new evidence on a motion for reargument. Reargument under Rule 59(f) "is only available to re-examine the existing record."[13]In appropriate circumstances, however, a litigant may seek reargument based on newly discovered evidence.[14] "To succeed on such a basis, an applicant must show the newly discovered evidence came to his knowledge since the trial and could not, in ...

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