Facts
- Plaintiff, Landon D. Deal, sustained personal injuries in a vehicle collision on July 13, 2023, involving defendants INO Transportation Corp. and Godwin F. Okpalaku, and Bank of America Leasing Capital, LLC and Kwok W. Lam [lines="22-24"].
- The accident occurred at the intersection of Avenue D and New York Avenue in Brooklyn, where Okpalaku's vehicle allegedly entered against a red light [lines="22-23"].
- Lam asserted he was traveling on a green light, had an unobstructed view, and collided with Okpalaku's vehicle suddenly entering the intersection [lines="25-26"].
- INO Transportation Corp. and Okpalaku contended that the motion for summary judgment was premature due to incomplete discovery and other document issues [lines="28-29"].
- The plaintiff did not file a response to the summary judgment motion, leading to an assumption of conceding the defendants' claims [lines="30-31"], [lines="43"].
Issues
- Whether Bank of America Leasing Capital, LLC and Kwok W. Lam were entitled to summary judgment dismissing the complaint and cross-claims based on their assertion that the other vehicle entered the intersection against a red traffic light [lines="19"].
- Whether the motion was prematurely filed due to incompleteness in discovery as claimed by INO Transportation Corp. and Okpalaku [lines="28-29"].
Holdings
- The court granted summary judgment to Bank of America Leasing Capital, LLC and Kwok W. Lam, ruling they established that the other vehicle was at fault by entering the intersection against a red light [lines="21"], [lines="31"].
- The court rejected the assertion of premature filing for the motion due to discovery as unnecessary since Okpalaku could provide facts about the accident [lines="42"].
OPINION
Kuramo Capital Management, LLC, et al. v. Seruma, et al.
C.A. No. 2021-0323-KSJM
COURT OF CHANCERY OF THE STATE OF DELAWARE
September 6, 2024
KATHALEEN ST. JUDE MCCORMICK, CHANCELLOR
LEONARD L. WILLIAMS JUSTICE CENTER, 500 N. KING STREET, SUITE 11400, WILMINGTON, DELAWARE 19801-3734
J. Clayton Athey
John G. Day
Mary S. Thomas
Christine N. Chappelear
Prickett, Jones & Elliott, P.A.
1310 North King Street
Wilmington, Delaware 19801
Eric A. Veres
Abrams & Bayliss LLP
20 Montchanin Road, Suite 200
Wilmington, Delaware 19807
Re: Kuramo Capital Management, LLC, et al. v. Seruma, et al., C.A. No. 2021-0323-KSJM
Dear Counsel:
On April 30, 2024, I issued a Post-Trial Memorandum Opinion in this action (the “Opinion“).1 In the Opinion, I gave the parties leave to submit letters identifying any arguments or claims that they believed were fairly raised but that the Opinion did not address.2 I further instructed the parties to summarize those claims or arguments, identify where they were first raised, and state where in the briefs and pleadings they were developed.3
A. Kuramo‘s Request
Kuramo asks that I address “what remedy should follow from Seruma‘s/Nile‘s adjudicated-to-be wrongful refusal to comply with Kuramo‘s February 10, 2021 exercise of its contractual redemption rights?”6 Kuramo also proposes an answer—an order “compelling Seruma to redeem Kuramo‘s interest in both KN Agri and Nile Global in-kind.”7
Kuramo identified and developed this issue in their briefs and pleadings. Kuramo asked in its amended proposed joint pre-trial order for “an order compelling Seruma to redeem Kuramo‘s interests in both KN Agri and Nile Global in-kind.”8 And in its post-trial opening brief, Kuramo argued that an in-kind redemption is the “only means of remedying Seruma‘s wrongdoing.”9
The Amended Nile LLC Agreement does not clearly support Kuramo‘s position. Under Delaware law, an LLC member has “no interest in specific company property.”13 Section 13.10 of that agreement governs redemption; it does not provide for redemption in kind.14 The agreement contemplates distributions, governed by Article X and defined to “includ[e] distributions upon liquidation.”15 The agreement provides that distributions “shall be made to each Member as outlined in Exhibit B.”16 Exhibit B states that “Distributions to Members” “will be subject” to certain “terms and conditions,” including Nile‘s ability to “secur[e] the funding” and otherwise
Although the plain language of the agreement favors the Nile Parties’ position, there is an argument that the equities favor Kuramo. As I stated in the Opinion, “[o]nce a fiduciary breach has been established, this court‘s powers are complete to fashion any form of equitable and monetary relief as may be appropriate.”19 Further, “Delaware law dictates that the scope of recovery for a breach of the duty of loyalty is not to be determined narrowly.”20
Here, however, Kuramo did not meaningfully grapple with why the court should grant its requested relief despite the plain language of the contract. That is forgivable to a degree, in light of the unwieldly number of issues litigated. Given that Seruma breached his fiduciary duties, and the remedy for such cause of action is not to be determined narrowly, Kuramo has one more shot at this. The parties are granted leave to submit cross opening and cross responsive briefs. Please confer on a briefing schedule that completes briefing by mid-October.
The Nile Parties ask that I address: “(i) Kuramo‘s misappropriation of the Nile Fund Parties’ management fees, and (ii) the proper source of collateral for the 2020 Bridge Loan.”21 Because the Nile Parties neither identified nor developed the second issue, I do not reach it. The Nile Parties argue my findings that they breached the 2020 Bridge Loan Agreement and that Mpala remains ring-fenced in KN Agri Series C raised a new issue.22 Specifically, whether Mpala is encumbered by the 2020 Bridge Loan.23 The briefs and pleadings are silent as to this issue. The Nile Parties could have raised this issue in briefing—they did not.
I will address the first issue only, which the Nile Parties identified and developed in their briefs and pleadings. The Nile Parties ask that I address their contention that they are entitled to management fees.24 The Opinion found that the Nile Parties breached the fiduciary duties owed to Kuramo by misappropriating its investment to benefit Seruma. “[W]hen a fiduciary engages in ‘acts of conscious wrongdoing and breaches of a fiduciary duty of loyalty,’ the wrongdoer must ‘disgorge
IT IS SO ORDERED.
Sincerely,
/s/ Kathaleen St. Jude McCormick
Chancellor
cc: All counsel of record (by File & ServeXpress)