L. Londell McMicllan v. Sharon Nelson

• Court: Court of Chancery of Delaware
• Decided: August 12, 2024
• Docket: C.A. No. 2024-0016-KSJM
• Status: Published

Opinion

COURT OF CHANCERY OF THE STATE OF DELAWARE KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734

August 12, 2024

Thomas W. Briggs, Jr. Alexandra D. Rogin Tarik J. Haskins Paul S. Seward Elizabeth A. Mullin Stoffer Eckert Seamans Cherin & Mellott, LLC Jacob M. Perrone 222 Delaware Avenue, Suite 700 Morris Nichols Arsht & Tunnell LLP Wilmington, Delaware 19801 1201 North Market Street Wilmington, DE 19801

Re: L. Londell McMillan et al. v. Sharon Nelson et al., C.A. No. 2024-0016-KSJM

Dear Counsel:

This letter resolves the defendants’ Rule 59(f) motion seeking clarification or,

in the alternative, reargument of my July 5, 2024 Memorandum Opinion (the

“Decision”).1 The defendants seek clarification on whether the Decision found that

the Prince Legacy Operating Agreement (the “LLC Agreement”), dated July 25, 2022,

was valid.2 If the Decision did find that the LLC Agreement was valid, then the

defendants seek reargument on that issue.3

Under Court of Chancery Rule 59(f), “[t]he Court will deny a motion for

reargument ‘unless the Court has overlooked a decision or principle of law that would

have a controlling effect or the Court has misapprehended the law or the facts so that

1 C.A. No. 2024-0016-KSJM, Docket (“Dkt.”) 67 (“Mot.”) at 1. 2 Id. ¶ 19.

3 Id. ¶ 20. C.A. No. 2024-0016-KSJM August 12, 2024 Page 2 of 3

the outcome of the decision would be affected.’”4 If a motion for reargument “merely

rehashes arguments already made by the parties and considered by the Court” in

rendering the decision for which reargument is sought, the motion must be denied. 5

On a motion for reargument, the movant bears a “heavy burden.”6

Motions for clarification “are essentially motions for reargument” and are

governed by the same standards.7 A motion for reargument “may not be used to

relitigate matters already fully litigated or to present arguments or evidence that

could have been presented before the court entered the order from which reargument

is sought.”8

There is nothing to clarify. The court expedited this case to resolve the

question of whether the defendants validly amended the LLC Agreement. The

Decision granted summary judgment on Count I in the plaintiffs’ favor, finding that

the defendants’ attempt to amend the LLC Agreement was invalid under the LLC

Agreement’s plain and unambiguous language. The court resolved this issue

expeditiously to eliminate any cloud of uncertainty hanging over Prince Legacy.

4 Nguyen v. View, Inc., 2017 WL 3169051, at *2 (Del. Ch. July 26, 2017) (quoting Stein

v. Orloff, 1985 WL 21136, at *2 (Del. Ch. Sept. 26, 1985)). 5 Wong v. USES Hldg. Corp., 2016 WL 1436594, at *1 (Del. Ch. Apr. 5, 2016) (citation

omitted). 6 In re ML/EQ Real Est. P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000).

7 Preferred Invs., Inc. v. T & H Bail Bonds, 2013 WL 6123176, at *2 n.6 (Del. Ch. Nov.

21, 2013) (citations omitted), aff’d, 108 A.3d 1225 (Del. 2015) (TABLE). 8 Standard Gen. Master Fund L.P. v. Majeske, 2018 WL 6505987, at *1 (Del. Ch. Dec.

11, 2018) (citation omitted). C.A. No. 2024-0016-KSJM August 12, 2024 Page 3 of 3

Here is the wrinkle—the defendants did not answer the complaint before the

court issued the Decision. They could have. Nothing prevented them from doing so.

They strategically chose not to in order to position themselves to undermine the

court’s efforts to provide certainty if they did not like the Decision. That is what they

appear to be doing. On August 6, 2024, the parties stipulated to allow the defendants

to answer the complaint ten days after this decision. So, the defendants may continue

down this path and assert their affirmative defenses. Before this litigation goes any

further, however, the plaintiffs shall have leave to raise any arguments challenging

the merits of those defenses and their effect, if any, on the Decision. That said, I will

not hesitate to shift fees in the plaintiffs’ favor if warranted.

IT IS SO ORDERED.

Sincerely,

/s/ Kathaleen St. Jude McCormick

Chancellor

cc: All counsel of record (by File & ServeXpress)