AM General Holdings LLC v. The Renco Group, Inc. -and- The Renco Group, Inc. v. MacAndrews AMG Holdings LLC
CA 7639-VCS & CA 7668-VCS
| Del. Ch. | Jul 18, 2017Background
- Renco and MacAndrews AMG are joint venturers under the AM General Holdings LLC Holdco Agreement (Aug. 10, 2004) and have long-running disputes over interpretation of that agreement.
- The parties filed cross-motions for partial summary judgment seeking declarations about Sections 8.3(a) and 8.3(b) of the Holdco Agreement; the court denied those motions in a May 17, 2017 Letter Opinion because the provisions were ambiguous.
- Renco filed a motion for reargument under Court of Chancery Rule 59(f), arguing the court misapplied the canon that contracts must be construed to give effect to all provisions and that MacAndrews AMG’s interpretation would render Section 8.3(b) superfluous.
- The court reviewed whether Renco identified any overlooked law or facts that would change the outcome; it found Renco merely repeated prior arguments presented in its earlier briefs.
- The court had already considered and rejected Renco’s contention that MacAndrews AMG’s construction conflated hypothetical revalued capital accounts with actual capital accounts, accepting MacAndrews AMG’s plausible reading that Section 8.3(b) could address imbalances in actual accounts.
- The court denied reargument, reiterating that when both parties offer reasonable, competing contract constructions, summary judgment may be denied so the facts can be developed at trial.
Issues
| Issue | Renco's Argument | MacAndrews AMG's Argument | Held |
|---|---|---|---|
| Whether court misapplied the rule against superfluity in construing Sections 8.3(a) and 8.3(b) | MacAndrews AMG’s reading renders 8.3(b) meaningless; thus court should reject it | 8.3(b) reasonably applies to actual capital-account imbalances and is not superfluous | Denied reargument; court previously considered superfluity canon and applied it; disagreement insufficient |
| Whether MacAndrews AMG’s construction impermissibly conflates hypothetical revalued accounts with actual accounts | Argued the construction collapses revalued and actual accounts, making 8.3(b) unnecessary | Offered a credible alternative: 8.3(a) governs revalued allocations; 8.3(b) remedies actual-account imbalances | Court found both constructions reasonable and accepted MacAndrews AMG’s explanation as plausible |
| Whether Rule 59(f) relief is warranted | Renco argued misapprehension of law/facts justifying reargument | MacAndrews AMG argued Renco simply reiterated prior arguments | Court denied motion: Renco only rehashed prior arguments; no overlooked controlling law or facts |
| Whether summary judgment was appropriate on the contract interpretation | Renco asserted its construction should prevail as a matter of law | MacAndrews AMG asserted its competing reasonable construction defeats summary judgment | Court previously denied summary judgment because the provisions are ambiguous and both constructions are reasonable |
Key Cases Cited
- No authorities with official reporter citations were relied upon in the opinion. The opinion cites several unpublished or WL decisions and prior WL opinions in this litigation, but none with Bluebook reporter citations.