CHESAPEAKE INSURANCE ADVISORS, INC., a Delaware Corporation, and ROBERT HOUSER, Plaintiffs,
STEPHANIE DESOLA, JOSEPH DESOLA, and PRIME SERVICES LLC, a de facto Partnership of Stephanie DeSola and Joseph DeSola, Defendants.
MEMORANDUM OPINION GRANTING
PLAINTIFFS'/COUNTERCLAIM DEFENDANTS' MOTION TO
DISMISS DEFENDANTS'/COUNTERCLAIM PLAINTIFFS' COUNTS I
AND II OF THE AMENDED COUNTERCLAIM COMPLAINT
M. Davis, Judge.
Court previously allowed Defendants Stephanie DeSola, Joseph
DeSola, and Prime Services (collectively, the
"Defendants") to file amended counterclaims. The
Court instructed Defendants that any future filings needed to
conform to the Delaware Superior Court Rules of Civil
Procedure. Defendants failed to comply with the rules when
filing their amended counterclaims. After a hearing, the
Court permitted Defendants to file a second amended
counterclaim by December 1, 2017.
filed the Defendants' Amended Answer and Amended
Counterclaim on December 1, 2017 (the "Second Amended
Counterclaim"). On December 14, 2017, Plaintiffs
Chesapeake Insurance Advisors, Inc. and Robert Houser
(collectively, the "Plaintiffs") filed the
PlaintiffsCounterclaim Defendants' Motion to Dismiss
Defendants'/Counterclaim Plaintiffs' Counts I and II
of the Amended Counterclaim Complaint (the
reasons set forth below, the Court GRANTS
filed their initial counterclaims in response to
Plaintiffs' complaint. On September 5, 2017, the Court
dismissed Defendants' Answer and Counterclaim in Response
to Second Amended Complaint. The Court allowed Defendants to
file amended counterclaims. On October 5, 2017, Defendants
filed their amended counterclaims.
November 27, 2017, the Court held a hearing on
Plaintiffs' Motion to Strike Defendants' Amended
Answering Brief in Response to Plaintiffs' Motion to
Dismiss Defendants' Amended Counterclaim Complaint. At
the conclusion of the hearing, the Court allowed Defendants
to file an amended counterclaim by December 1, 2017. The
Court required the parties to remove any adjectives and
adverbs not part of a legal standard. The Court advised
Defendants to state facts in order to properly plead a
counterclaim. The Court further advised the parties that the
Court would rule on the papers.
December 1, 2017, Defendants filed the Second Amended
Counterclaim. In the Second Amended Counterclaim, Defendants
allege: (1) fraud; (2) fraudulent concealment; and (3) unjust
for fraud, Defendants allege "Plaintiffs' verbal and
written representations and pretenses caused the Defendant to
make payments on Plaintiffs behalf" Further,
"Plaintiffs made guarantees of shared profits. . .
." Defendants further argue that Plaintiffs
removed Ms. DeSola as secretary and treasurer on August 27,
2013, but Plaintiffs never informed Ms. DeSola that she had
been removed from these executive positions. Ms. DeSola
continued to act as secretary and treasurer of the business
based on Plaintiffs' failure to inform Ms. DeSola.
Plaintiffs removed Ms. DeSola as Secretary and Treasurer, Mr.
Houser communicated with Ms. DeSola via text message and told
Ms. DeSola "[y]ou are really an incredible employee,
associate, and friend." In another text message, Mr.
Houser states: "You know that anything you might have to
put in you will get back with interest. There will be no
other way. You guys will be whole."
relating to fraudulent concealment, Defendants allege that
Plaintiffs did not disclose "any of the evidence or
transactions reviewed during the course of the State's
Criminal investigation." Defendants argue that
"Plaintiffs concealed numerous transactions during the
investigation . . . which misled the State in their
investigation." Defendants content that if the concealed
transactions were brought to light, then the complaint would
have no basis.
Motion, Plaintiffs argue that Count I and Count II of the
Second Amended Complaint must be dismissed. First, Plaintiffs
contend that Defendants failed to articulate elements one,
two, three, and five for Fraud. Additionally, Plaintiffs
argue that Defendants failed to plead fraud and fraudulent
concealment with particularity as required under Delaware
Superior Court Civil Rule 9(b) ("Rule 9(b)").
Further, Plaintiffs claim that fraudulent concealment cannot
survive without an underlying fraud.
STANDARD OF REVIEW
motion to dismiss, the Court (i) accepts all well-pleaded
factual allegations as true, (ii) accepts even vague
allegations as well-pleaded if they give the opposing party
notice of the claim, (iii) draws all reasonable inferences in
favor of the non-moving party, and (iv) only dismisses a case
where the plaintiff would not be entitled to recover under
any reasonably conceivable set of
circumstances. However, the court must "ignore
conclusory allegations that lack specific supporting factual
9(b) requires all allegations of fraud to be pleaded with
particularity. In order to meet the particularity
requirement, a complaint "must state the time, place,
and contents of the alleged fraud, as well as the individual
accused of committing the fraud."
"[A]verments of time and place are material. . .,
" "The purpose of [Rule 9(b)] is to
appraise the adversary of the acts or omissions by which it
is alleged that a duty has been violated."
must plead the following elements to ...