Paul Elton, LLC v. Rommel Delaware, LLC, 2019-0750

Background

Court: Delaware Court of Chancery (Chancellor McCormick). Parties: Paul Elton, LLC (Plaintiff) v. Rommel Delaware, LLC, Rommel Motorsports Delaware, Inc., and David Rommel (Defendants).
On Dec. 30, 2021 the court found Defendants liable for breaching Plaintiff’s Proceeds Right and ordered Defendants to participate in the contractual appraisal process for the “Additional Space.”
Purchase Agreement appraisal clause: each side selects an appraiser; if the two appraisals differ by ≤5% the average is the price; if >5% the two appraisers select a third and the average of the two closest appraisals controls.
Plaintiff’s appraiser valued the Additional Space at $5.6M by identifying 2.5 acres (based on an August 2017 Exploratory Resubdivision Plan/Royal Farms site plans). Defendants’ appraiser valued a 1.25‑acre pad at $1.74M (relying on a 2010 plat and the lease’s focus on the dealership as primary use).
The court held that interpretation of “Additional Space” is for the court, concluded the term referred to the 2.5 acres as Plaintiff represented, and gave Defendants options (double their appraised value for 1.25 acres or obtain a new appraisal of 2.5 acres and report within five days).
Defendants moved for reargument under Court of Chancery Rules 59(e), 59(f), and/or 60(b) and to reopen discovery; alternatively they sought time to perform a new appraisal. The court denied reargument and reopening discovery, held Rules 59(e)/60(b) inapplicable to an interlocutory opinion, but granted Defendants 30 days to complete a new appraisal; fee‑shifting was denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether interpretation of the contractual term “Additional Space” was delegated to the third appraiser	Court should interpret the contract; Plaintiffs’ position that 2.5 acres is Additional Space	The Purchase Agreement and appraisal mechanism delegate interpretation to the appraisers/third appraiser	The court held interpretation is a judicial question, not contractually delegated to the third appraiser; court defined Additional Space as the 2.5 acres claimed by Plaintiff
Whether the court erred by considering extrinsic evidence (Exploratory Resubdivision Plan) when defining Additional Space	The plan supports Plaintiff’s identification of 2.5 acres and was properly before the court	The plan is non‑final, extrinsic, and should carry little weight; court should not have relied on it without fuller record	The court relied on extrinsic material already in the record but rejected Defendants’ belated attempt to present new/excluded evidence on reargument; reargument unavailable to add new evidence
Whether Defendants could obtain reargument or relief under Rules 59(e) or 60(b) and whether Rule 59(f) permits reconsideration	Plaintiff opposed reconsideration	Defendants sought reconsideration under Rules 59(e), 59(f), 60(b); argued the opinion relied on extrinsic evidence and discovery should be reopened	The Aug. 3 opinion was interlocutory so Rules 59(e)/60(b) inapplicable; under Rule 59(f) Defendants bore a heavy burden and reargument was denied because they rehashed arguments and tried to introduce evidence that was not newly discovered
Whether discovery should be reopened, whether Defendants get more time for appraisal, and whether fee‑shifting is warranted	Plaintiff opposed reopening and sought fee‑shifting for Defendants’ litigation conduct	Defendants sought reopening of discovery and additional time (asked 60 days) to appraise	Discovery reopening denied; court granted a truncated 30‑day window to obtain a new appraisal of the 2.5 acres; fee‑shifting denied because conduct did not warrant sanctions

Key Cases Cited

None — the opinion’s authorities are cited only by Westlaw/Unreported citations; no officially reported decisions were cited that have a reporter citation for Bluebook style listing.