Submitted: January 10, 2019
COMMERCIAL LITIGATION DIVISION
Defendant's Motion to Dismiss for Failure to State a
Christopher H. Lee, Esquire (Argued), Blake A. Bennett,
Esquire, Cooch and Taylor, P.A., Timothy S. Perkins, Esquire,
Underwood Perkins, P.C., Attorneys for Plaintiff
Clarkson Collins, Jr., Esquire, Carl N. Kunz, III, Esquire,
Kathleen A. Murphy, Esquire, Morris James LLP., George M.
Kryder, Esquire (Argued), Melissa L. James, Vinson &
Elkins LLP, Attorneys for Defendants
M. JOHNSTON, J.
AND FACTUAL CONTEXT
Richards, Layton & Finger, P.A., Raymond J. DiCamillo,
and Mark J. Gentile, seek dismissal of this legal malpractice
action on the grounds that the claims of Plaintiff, ISN
Software Corporation, are time-barred. For the reasons
detailed herein, this action is dismissed with prejudice.
is the timeline of undisputed facts.
• November 2012 - Plaintiff requested legal advice from
Defendants regarding Plaintiffs options to buy back its own
shares in order to convert from a C-Corp to an S-Corp.
• Defendants developed a merger designed to cash-out
three of the four non-qualifying stockholders at $38, 317 per
share. These stockholders (holding a total of 356 shares)
would obtain appraisal rights. The fourth stockholder
(holding 544 shares) would remain a stockholder and would not
obtain appraisal rights.
• Plaintiffs Buyout Reserve held sufficient funds to
purchase all 900 shares at $38, 317 per share. However, if
the Court of Chancery determined at the conclusion of an
appraisal action that the share value was greater than $38,
317, the Buyout Reserve could be exceeded.
• January 9, 2013 - Merger consummated.
• January 15, 2013 - Defendants notified Plaintiffs
counsel that the advice concerning appraisal rights was
erroneous. All four stockholders in fact obtained appraisal
• January 16, 2013 - The four non-qualifying
stockholders were notified of their appraisal rights.
• January 17, 2014 - One stockholder (holding 155
shares) accepted the cash merger consideration of $38, 317
• January 30, 2013 - The other three stockholders
indicated they might seek appraisal.
• February 14, 2013 - Plaintiff and Defendants executed
a conflict consent agreement ("Consent Letter").
• April 2013 - Appraisal action filed in the Court of
• August 11, 2016 - The Court of Chancery issued its
opinion valuing the shares at $98, 783 per share. The total
share value exceeded Plaintiffs Buyout ...