Amgine Technologies (US), Inc. v. Harold Roy Miller
C.A. No. 2020-0537-JRS
| Del. Ch. | Nov 29, 2021Background
- Amgine Technologies (US), Inc. (Amgine US) sues controlling stockholders Roy and Jonathan Miller (and affiliated entities) alleging (a) misappropriation/assignment of a contested “Medical Patent” to Seven Medical and (b) a 2017 “Inversion” reorganization of Amgine Canada that produced a unanimous stockholders agreement (CSA) with terms favoring the Millers (holders of 67.8% of new CA Preferred stock).
- The CSA contains an exclusive forum-selection clause selecting Ontario courts for disputes “arising out of or relating to” the CSA; 47 parties signed the CSA but only Amgine US and Canada Holdings are parties here.
- Amgine US pleads five counts: breach of fiduciary duty (Count I), aiding and abetting (Count II), declaration of patent ownership (Count III), unjust enrichment (Count IV), and a Section 205 declaration that the CSA and Amgine US’s entry into it are void (Count V).
- Defendants moved to dismiss on multiple grounds (forum non conveniens, forum-selection clause, statute of limitations / laches, failure to join necessary parties under Rule 19, Rule 9(b) heightened pleading, and failure to state a Section 205 claim).
- The Court denied dismissal of Counts I–IV (Patent and Inversion claims) — finding (inter alia) that forum non conveniens and statute-of-limitations defenses could not be resolved on the pleadings, the CSA forum clause does not reach fiduciary-duty or unjust-enrichment claims, and absent CA Preferred holders are not indispensable — but granted dismissal of Count V (Section 205).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Forum non conveniens for Patent claims | Delaware is appropriate; related suits elsewhere do not resolve the Medical Patent dispute | Patent claims should be litigated in Canada (or Texas) because related IP matters are pending there | Court: Patent claims are not in a first-filed action elsewhere; Cryo‑Maid factors do not show overwhelming hardship — deny dismissal on forum non conveniens |
| Statute of limitations / laches on Patent & Inversion claims | Claims are timely (discovery/assignment dates and equitable tolling may apply) | Ontario two‑year limitations (or other foreign periods) bar claims | Court: timeliness cannot be resolved on Rule 12(b)(6) pleadings; factual record needed — deny dismissal now; defendants may renew on summary judgment |
| CSA forum‑selection clause applicability to Inversion claims | CSA clause is unenforceable as to fiduciary‑duty and unjust‑enrichment claims; claims do not "arise out of or relate to" the CSA | CSA requires Ontario forum for any action arising out of or relating to the CSA | Court: Clause is valid but does not cover fiduciary‑duty claims or the unjust‑enrichment quasi‑contract claim — Delaware forum stands for Counts I, II, IV |
| Failure to join CA Preferred holders (Rule 19) | Not necessary; Court can afford complete relief against defendants without impairing absent holders' rights | Absent CA Preferreds are necessary/indispensable to adjudicate CSA validity and remedies | Court: Absent holders are not indispensable here because plaintiff seeks remedies against fiduciaries that need not rescind or reform the CSA; denial of dismissal under Rule 19 |
| Pleading standard (Rule 9(b)) for Inversion fiduciary claims | Breach of fiduciary duty governs; Rule 8 notice pleading applies even if allegations include deceit | Allegations are fraud‑based and must meet Rule 9(b) particularity | Court: Claims allege fiduciary breaches (not fraud claims proper) — Rule 8 applies; pleadings are adequate |
| Section 205 claim (Count V) | Section 205 permits relief to correct defective corporate acts and plaintiff asks for declarations voiding CSA/Amgine US’s entry | CSA and entry are void/voidable; Section 205 is available | Court: Section 205 is remedial to cure technical defects, not to launch plenary fiduciary‑duty claims or void contracts ab initio — Count V dismissed |
Key Cases Cited
- Gen. Foods Corp. v. Cryo‑Maid, 198 A.2d 681 (Del. 1964) (establishes forum non conveniens factors applied when Delaware action is first or only action)
- McWane Cast Iron Pipe Corp. v. McDowell‑Wellman Eng’g Co., 263 A.2d 281 (Del. 1970) (deference where related litigation was first filed elsewhere)
- Germaninvestments AG v. Allomet Corp., 225 A.3d 316 (Del. 2020) (interpreting forum‑selection clauses and joinder of contract parties)
- Lewis v. Ward, 852 A.2d 896 (Del. 2004) (derivative‑pleading requirements and fraud exception under Lewis v. Anderson)
- OTK Assocs., LLC v. Friedman, 85 A.3d 696 (Del. Ch. 2014) (contractual forum clause does not traditionally govern stockholder breach‑of‑fiduciary‑duty claims)
- In re Genelux Corp., 126 A.3d 644 (Del. Ch. 2015) (Section 205 is remedial to cure defective corporate acts, not a vehicle to nullify contracts for plenary fiduciary claims)
- Feldman v. Cutaia, 951 A.2d 727 (Del. 2008) (Rule 12(b)(6) standard and when dismissal is appropriate)
- Brinckerhoff v. Enbridge Energy Co., Inc., 159 A.3d 242 (Del. 2017) (scope of equitable remedies at motion‑to‑dismiss stage)