Alex Brola v. Christopher Lundgren

CourtCourt of Chancery of Delaware
DecidedDecember 1, 2025
Docket2024-1108-LWW
StatusPublished

This text of Alex Brola v. Christopher Lundgren (Alex Brola v. Christopher Lundgren) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alex Brola v. Christopher Lundgren, (Del. Ct. App. 2025).

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ALEX BROLA, derivatively on behalf of CREDIT GLORY INC., a Delaware corporation, Plaintiff,

v. C.A. No. 2024-1108-LWW

CHRISTOPHER LUNDGREN,

Defendant.

OPINION

Date Submitted: August 5, 2025 Date Decided: December 1, 2025

Joseph L. Christensen, Anne M. Steadman, CHRISTENSEN LAW LLC, Wilmington, Delaware; Attorneys for Plaintiff Alex Brola Christopher Lundgren, New York, New York; Defendant, Pro Se

Will, Vice Chancellor This case invites the court to erase the boundary between employment law

and corporate governance.

The defendant, a director and former officer of a closely held corporation,

sexually harassed two employees. His actions were abhorrent. It led to his

termination and to monetary judgments against both him and the company in New

York state court.

The plaintiff, a stockholder and fellow director, seeks to extract a second

recovery—this time under an expansive theory of fiduciary duty. He argues that

because sexual harassment is selfish and unlawful, it is a per se breach of the duty

of loyalty.

Delaware law does not reach so far. The defendant’s misconduct was

interpersonal, not a matter of corporate internal affairs. The legal system provided

a remedy for his wrongdoing through New York’s employment laws. This court

cannot—and should not—supply a second one.

I. BACKGROUND1

Credit Glory Inc. (the “Company”) is a private Delaware corporation that

assists subscribers in disputing credit report inaccuracies.2 Its sole stockholders and

1 The factual background is drawn from the complaint and the documents it incorporates by reference. Verified Compl. (Dkt. 1) (“Compl.”). 2 Id. ¶¶ 5, 7.

1 directors are plaintiff Alex Brola and defendant Christopher Lundgren.3 Brola is a

cofounder of the Company and serves as its President.4 Lundgren is the Company’s

former Vice President and Secretary.5

Lundgren allegedly “used his positions at the Company to sexually harass its

employees and expose them to his reprehensible racist views and conduct” in

violation of positive law and Credit Glory policies.6 One employee was repeatedly

sent offensive sexual messages and demands, promoted, then excluded from

communication channels and a meeting after rebuffing Lundgren until she resigned.7

Another was repeatedly sent degrading comments and inappropriate requests that

also led to her resignation.8 The former employees filed successful charges with the

Equal Employment Opportunity Commission (EEOC), and lawsuits in New York

state court followed.9 The suits led to judgments totaling over $1.8 million:

approximately $1.35 million against the Company and Lundgren jointly, and over

$235,000 against the Company and Lundgren each individually.10

3 Id. ¶¶ 3-4. 4 Id. ¶¶ 3, 7. 5 Id. ¶¶ 4, 21. 6 Id. ¶ 1; see also id. ¶¶ 18-59. 7 Id. ¶¶ 27-38; Compl. Ex. A. 8 Id. ¶¶ 41-57; Compl. Ex. B. 9 Id. at Exs. A, B; id. ¶¶ 39, 58. 10 Id. ¶¶ 40, 59.

2 Brola seeks to hold Lundgren liable to the Company for those judgments and

other losses on the theory that Lundgren’s actions breached his duty of loyalty. He

asserts that Lundgren breached his fiduciary duty by “[a]cting in pursuit of his own

personal interests and gratification, and contrary to the best interests of the

Company.”11

II. ANALYSIS

Lundgren, acting pro se, moves to dismiss this suit on procedural and

substantive grounds, primarily relying on Court of Chancery Rules 12(b)(2),

12(b)(6), and 23.1.12 He argues that this court lacks personal jurisdiction, that the

complaint fails to plead demand futility or damages, that the claims are time-barred,

11 Id. ¶ 66; see id. ¶ 67. 12 See Opening Br. in Supp. of Def.’s Mot. to Dismiss (Dkt. 23) (“Def.’s Opening Br.”); see also Br. in Opp’n to Def.’s Mot. to Dismiss the Verified Compl. (Dkt. 28) (“Pl.’s Opp’n Br.”). A hearing was held on August 5, 2025, at which Lundgren orally presented his reply to Brola’s opposition brief. See Govette v. Elec. Referral Manager, Inc., 2021 WL 2311956, at *2 (Del. Ch. June 7, 2021) (“Delaware judges traditionally (and naturally) treat self- represented individuals with some degree of latitude when it comes to procedure in order to do justice on the merits.”); see also Letter Explaining Late Filing (Dkt. 24).

3 and that Brola is an inadequate derivative plaintiff. My analysis begins with personal

jurisdiction and ends with the absence of a cognizable claim.

A. Personal Jurisdiction

I first address the threshold jurisdictional inquiry.13 “When a defendant moves

to dismiss a complaint pursuant to Court of Chancery Rule 12(b)(2), the plaintiff

bears the burden of showing a basis for the court’s exercise of jurisdiction over the

defendant.”14 The plaintiff must “demonstrate the two bedrock requirements for

personal jurisdiction: (1) a statutory basis for service of process; and (2) the requisite

‘minimum contacts’ with the forum to satisfy constitutional due process.” 15 The

plaintiff “need only make a prima facie showing of personal jurisdiction, and the

record is construed in the light most favorable to the plaintiff.”16

Brola cites 10 Del. C. § 3114(a) as the basis for personal jurisdiction over

Lundgren, a director of Credit Glory.17 Section 3114(a) provides that a nonresident

who accepts appointment as a director of a Delaware corporation is deemed to have

13 See, e.g., Gibralt Cap. Corp. v. Smith, 2001 WL 647837, at *5 (Del. Ch. May 9, 2001) (describing personal jurisdiction as a “threshold issue”). 14 Ryan v. Gifford, 935 A.2d 258, 265 (Del. Ch. 2007). 15 Fish Ventures, LLC v. Segal, 2008 WL 1961156, at *6 (Del. Ch. May 7, 2008) (citation omitted). 16 Ryan, 935 A.2d at 265 (citation omitted). 17 Pl.’s Opp’n Br. 3-7; see Compl. ¶ 6. Lundgren was served under Section 3114 by serving Credit Glory’s registered agent, Credit Glory’s principal place of business, and Lundgren’s last known address. See Dkts. 3, 6, 8; 10 Del. C. § 3114(c); Actrade Fin. Techs. Ltd. v.

4 consented to the appointment of the registered agent of such corporation (or, if there is none, the Secretary of State) as an agent upon whom service of process may be made [(1)] in all civil actions or proceedings brought in this State, by or on behalf of, or against such corporation, in which such director . . . is a necessary or proper party, or [(2)] in any action or proceeding against such director . . . for violation of a duty in such capacity[.]18

Because Brola claims that Lundgren breached the duty of loyalty he owed to Credit

Glory as an “officer and director,”19 the second clause of Section 3114(a) is

satisfied.20

Exercising personal jurisdiction over Lundgren also comports with due

process.21 Section 3114 “provided explicit notice to [Lundgren] that, by accepting a

position as a director and officer of a Delaware corporation, he consented to appear

in this state to defend claims” accusing him of violating “a duty in such capacity.”22

Aharoni, 2003 WL 22389891, at *4-5 (Del. Ch. Oct. 17, 2003) (holding that service under Section 3114 was accomplished upon service on the company’s Delaware registered agent). 18 10 Del. C. § 3114(a). 19 Compl. ¶¶ 65-67. 20 See In re USACafes, L.P. Litig., 600 A.2d 43, 52 (Del. Ch.

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