Murphy v. Pentwater Capital Management, LP
N16C-12-433 WCC CCLD
| Del. Super. Ct. | Oct 31, 2017Background
- Murphy was Co‑Head of Fixed Income at Pentwater (Chicago) from July 2013 until August 2015; his Employment Agreement and Pentwater Bonus Plan governed post‑termination incentive bonuses.
- Employment Agreement required a signed waiver and release within two weeks of termination, "in a form reasonably determined by Pentwater," as a condition to post‑termination bonus payments.
- The Bonus Plan provided that employees terminated other than for cause (and not in breach) could receive annual Incentive Bonuses until a Post Termination Incentive Bonus Cap was reached; the Plan was amended several times while Murphy worked there.
- After Murphy left in August 2015 (disputed whether he resigned or was terminated), Pentwater refused to pay certain Post Termination Incentive Bonus amounts, citing Murphy's failure to sign the release and/or that he resigned.
- Murphy sued in the Court of Chancery; the case was transferred to Superior Court. He pleaded breach of contract, IWCPA violation, and fraudulent inducement; moved for partial summary judgment on Count I; defendants moved to dismiss, including for lack of personal jurisdiction over individual defendant Halbower.
- Court dismissed claims against Halbower for lack of personal jurisdiction, but denied dismissal of the breach claims against the Delaware corporate defendants and denied Murphy's partial summary judgment motion; ordered mediation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Halbower (individual) | Halbower regularly transacts business in DE and is estopped from contesting jurisdiction because as CEO he was foreseeable to be sued in Delaware relating to the Bonus Plan | Halbower is an Illinois resident with no Delaware contacts aside from corporate roles; fiduciary‑shield protects him; he is not a signatory/third‑party beneficiary | Court: Dismissed claims against Halbower for lack of personal jurisdiction — plaintiff failed to plead Delaware contacts or foreseeability sufficient to bind Halbower personally |
| Forum‑selection estoppel for non‑signatory (binding Halbower via Bonus Plan forum clause) | Non‑signatory can be bound if clause valid, non‑signatory is third‑party beneficiary or closely related, and claim arises from agreement; Halbower was foreseeable as an individual defendant | Defendants: no direct benefit to Halbower; no prior consent to Delaware forum; fiduciary‑shield and factual distinctions from cited cases | Court: Plaintiff failed to show Halbower was closely related or a third‑party beneficiary; forum‑selection estoppel did not overcome lack of jurisdiction |
| Breach of contract re: waiver/release condition precedent | The release requirement is not a material term; Murphy performed his obligations; Pentwater failed to "reasonably determine" and provide a form, preventing performance | Pentwater: the clause is an unambiguous condition precedent; Murphy failed to sign within two weeks, excusing payment; also contends Murphy resigned so not eligible for post‑termination supplement | Court: Denied dismissal — factual disputes (whether condition precedent was satisfied or prevented, and whether Murphy resigned or was terminated) preclude resolution on 12(b)(6) at this stage |
| Partial summary judgment that Murphy was not terminated for cause (entitling him to Plan benefits) | Murphy: no dispute he was not terminated for cause; entitled to payment | Defendants: issue tied to waiver/release and factual disputes over separation; not suitable for summary disposition now | Court: Denied summary judgment — intertwined factual issues require discovery |
Key Cases Cited
- McKamey v. Vander Houten, 744 A.2d 529 (Del. Super. 1999) (plaintiff bears burden to make prima facie showing for personal jurisdiction under Delaware law)
- Mobile Diagnostic Grp. Holdings, LLC v. Suer, 972 A.2d 799 (Del. Ch. 2009) (Delaware long‑arm requires that some act actually occur in Delaware to support jurisdiction)
- AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428 (Del. 2005) (standards for assessing forum‑selection clauses and personal jurisdiction under Delaware law)
- Solomon v. Pathe Commc'ns Corp., 672 A.2d 35 (Del. 1996) (Delaware pleading standards: assume well‑pleaded allegations true at motion to dismiss)
- VLIW Tech., LLC v. Hewlett‑Packard Co., 840 A.2d 606 (Del. 2003) (Delaware notice‑pleading principles and inference rules at dismissal stage)