Schlosser & Dennis, LLC v. Traders Alley, LLC
N16C-05-190 RRC
| Del. Super. Ct. | Jul 6, 2017Background
- Schlosser & Dennis (Plaintiff) and Traders Alley (Defendant) are parties to a 2007 cross-easement agreement granting mutual parking, ingress/egress, and access rights; the easement can be modified only in writing.
- Traders Alley obtained City of Newark approval in March 2016 for a redevelopment plan that Plaintiff alleges will require construction staging and post-construction uses that conflict with the easement.
- Plaintiff sued in Superior Court seeking declaratory relief and later added a breach-of-contract count (seeking equitable rescission and an injunction); Traders Alley filed counterclaims and moved to dismiss. Plaintiff also filed a substantially identical Verified Complaint in the Court of Chancery.
- The courts consolidated the Superior Court and Court of Chancery actions; the trial was scheduled for April 23, 2018.
- The Superior Court dismissed Plaintiff’s breach and equitable-rescission claims there for lack of equitable jurisdiction, leaving the declaratory claim; the Court of Chancery retained the breach claim (including equitable rescission) but dismissed Plaintiff’s declaratory-judgment and permanent-injunction claims there as duplicative or moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff adequately pleaded breach by anticipatory repudiation | Traders Alley’s approval and steps toward redevelopment render litigation inevitable and constitute a voluntary, affirmative act repudiating the easement | Claim is unripe; no construction or damages yet; Superior Court lacks equitable jurisdiction | Court: Breach-by-repudiation adequately pleaded; breach claim dismissed in Superior Court (equitable remedy) but survives in Court of Chancery |
| Whether Court of Chancery has jurisdiction over breach/equitable-rescission claim | Equitable rescission is a proper remedy for breach and may be sought in Chancery; rescission need not be pled as separate cause | Plaintiff conceded availability of money damages, so equitable jurisdiction is lacking; rescission requires grounds like fraud/mistake | Court: Equitable rescission is a remedy (not a separate cause) and may be pleaded in the prayer; Chancery retains jurisdiction over breach and rescission |
| Whether injunction claim in Chancery must be dismissed for lack of equitable jurisdiction because a declaratory judgment in Superior Court is adequate | Injunctive relief pleaded adequately; money damages may be nominal and not necessarily adequate | Declaratory judgment in Superior Court would provide the same practical relief; Chancery should not grant injunction duplicative of Superior Court declaratory relief | Court: Permanent-injunction claim dismissed in Chancery as duplicative/moot of Superior Court declaratory remedy |
| Whether Superior Court or Chancery should proceed first / whether stay is warranted | Plaintiff prefers Chancery; does not intend duplicative suits | Defendant sought stay of Chancery pending Superior Court resolution to conserve resources | Court: Actions consolidated; stay denied as moot; consolidation preserves single trial date |
Key Cases Cited
- Citi Steel USA, Inc. v. Connell Ltd. P’ship, 758 A.2d 928 (Del. 2000) (court looks to Restatement for definition of repudiation in contract law)
- Wilmont Homes, Inc. v. Weiler, 202 A.2d 576 (Del. 1964) (equity that obtains jurisdiction may grant complete relief including monetary awards)
- Diebold Computer Leasing, Inc. v. Commercial Credit Corp., 267 A.2d 586 (Del. 1970) (Chancery jurisdiction analysis vis-à-vis declaratory judgments and parallel legal remedies)
- Norton v. Poplos, 443 A.2d 1 (Del. 1982) (discusses common grounds for rescission, including fraud and mistake)
- E.I. du Pont de Nemours & Co. v. HEM Research, Inc., (Del. Ch. 1989) (Del. Ch. 1989) (discusses equitable rescission as a remedy restoring parties to original condition)