Little River Landing LLC v. Allstate Vehicle and Property Insurance Company

• Court: Court of Chancery of Delaware
• Decided: February 21, 2025
• Docket: C.A. No. 2021-0012-SEM
• Status: Published

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

LITTLE RIVER LANDING LLC, ) ) Plaintiff, ) ) v. ) C.A. No. 2021-0012-SEM ) ALLSTATE VEHICLE AND ) PROPERTY INSURANCE COMPANY, ) ) Defendant. )

ORDER ON EXCEPTIONS TO MAGISTRATE’S DECISION

WHEREAS:

1. On July 1, 2024, Senior Magistrate Judge Molina issued a final post-

trial report 1 denying Plaintiff’s request for reformation of an insurance contract to

change the named insureds from its members, Love and Michee Mbuntcha (the

“Members”), to itself, the true owner of the Property. 2

2. On July 12, 2024, Plaintiff filed timely exceptions to the Final Report. 3

Plaintiff argues that Senior Magistrate Judge Molina erred by (i) failing to impose

proper sanctions against Defendant as a result of its spoliation of telephone

recordings between Mrs. Mbuntcha and Defendant’s agents; (ii) misapplying

1 Little River Landing, LLC v. Allstate Vehicle and Prop. Ins. Co., C.A. No. 2021-0012-SEM,

Docket (“Dkt.”) 45, Magistrate’s Final Post-Trial Rep. (the “Final Rep.”).

2 Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in

the Final Report.

3 Dkt. 46, Pl.’s Exceptions to Magistrate’s Final Rep. (“Pl.’s Exceptions”). principles of agency in concluding that Plaintiff was an undisclosed principal; and

(iii) concluding that the Plaintiff had failed to prove mutual mistake. 4

3. On July 15, 2024, Defendant filed Cross Exceptions to the Final Report. 5

Although Defendant’s Exceptions were not timely filed, on July 16, 2024, Defendant

filed a motion for extension of time, explaining that Defendant’s Exceptions were

being filed for the purpose of preserving arguments for appeal and that “[a]s

Defendant Allstate was the prevailing party, Defendant’s exceptions, if the only

exceptions filed, would have been moot[.]” 6 Defendant further explained that

Plaintiff did not object to the Motion for Extension. 7 The Motion for Extension was

granted on July 30, 2024. 8

4. Defendant’s Exceptions argue that Senior Magistrate Judge Molina

erred by (i) concluding that Plaintiff had standing to sue for reformation; (ii) finding

that a lack of any insurable interest did not make the policy unenforceable as a matter

4 Dkt. 53, Pl.’s Opening Br. in Supp. of Exceptions to Final Rep.

5 Dkt. 47, Notice of Def.’s Cross Exceptions to Master’s Final Post-Trial Rep. and Cross Exceptions to the Denial of Def.’s Summ. Judgment Mot. (the “Def.’s Exceptions,” and together with the Pl.’s Exceptions, the “Exceptions”).

6 Dkt. 49, Def. Allstate Vehicle and Prop. Ins. Co.’s Mot. for Extension of Time for Cross-Mot.

for Exceptions (the “Mot. for Extension”) ¶ 9.

7 Id. at ¶ 17.

8 Dkt. 52, Order Granting Def. Allstate Vehicle and Prop. Ins. Co.’s Mot. For Extension of

Time for Cross-Mot. Of Exceptions.

2 of law and not subject to reformation; and (iii) declining to grant summary judgment

prior to trial. 9

5. The parties have fully briefed the Exceptions.

6. Oral argument on the Exceptions was held on December 18, 2024.

NOW, THEREFORE, the Court having carefully considered the briefing and

oral argument on the Exceptions, IT IS HEREBY ORDERED, this 21st day of

February, 2025, as follows:

1. The Court has reviewed the record and the Magistrate Judge’s

determinations de novo. 10 Having done so, the Court has determined it can conduct

a de novo review without a further trial or evidentiary hearing.

I. Plaintiff’s Exceptions.

2. With respect to Plaintiff’s Exceptions concerning the severity of

spoliation sanctions, application of agency principles, and conclusion that the

Plaintiff failed to prove mutual mistake, “[b]elieving the [Magistrate Judge] to have

dealt with the issues . . . in a proper manner, and having articulated the reasons for

her decision well, there is no need for me to repeat her analysis.” 11 I endorse the

Magistrate Judge’s analysis and her conclusions.

9Dkt. 51, Allstate Vehicle and Prop. Ins. Co.’s Opening Br. in Supp. of Exceptions to Magistrate’s Post-Trial Final Rep. and Final Rep. on Denial of Mot. for Summ. Judgment.

10 See DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999) (“[T]he standard of review for a

[Magistrate’s] findings—both factual and legal—is de novo.”).

11Blackburn v. Hooks, 2018 WL 4643812, at *2 (Del. Ch. Sept. 26, 2018) (quoting In re Erdman, 2011 WL 2191680, at *1 (Del. Ch. May 26, 2011)).

3 3. After de novo review, I am satisfied that Plaintiff’s Exceptions to the

Magistrate Judge’s Final Report should be denied, and that the Final Report must be

adopted and affirmed.

II. Defendant’s Exceptions.

4. Defendant acknowledged in its Motion for Extension that, because it

was the prevailing party, its exceptions would have been moot if Plaintiff had not

filed exceptions. 12 Because I have denied the Plaintiff’s Exceptions and affirmed the

Final Report, Defendant’s Exceptions regarding Plaintiff’s standing and the

availability of reformation where the named insured did not have an insurable

interest are therefore moot. 13 “The law is well settled that our courts will not lend

themselves ‘to decide cases which have become moot, or to render advisory

opinions.’” 14

5. Defendant’s Exceptions regarding the Magistrate Judge’s denial of

summary judgment are arguably also moot, given Defendant’s continued status as

the prevailing party. Regardless, “[t]here is no ‘right’ to summary judgment,” and

where, as here, the Magistrate defers judgment to a record to be created at trial, she has not made a finding of fact or law that determines a legal right. Just as with a decision to not permit a summary judgment motion, the Magistrate has merely exercised control over her docket, in

12 Dkt. 49, Mot. for Extension ¶ 9.

13 Further, to the extent that Defendant’s Exceptions mirror those presented to Vice Chancellor Glasscock on Defendant’s Exceptions to Masters Final Report Denying Allstate Vehicle and Property Insurance Company’s Motion to Dismiss (Dkt. 16), they were resolved properly at that stage and need not be reconsidered now.

Stroud v. Milliken Enterprises, Inc., 552 A.2d 476, 480 (Del. 1989) (quoting State v. 14

Mancari, 223 A.2d 81, 82-83 (Del. 1966)).

4 the interest of efficiency and justice. Consequently, in such a case, there is nothing to review on exceptions. 15

6. As such, it is not necessary for me to review Defendant’s Exceptions on

the merits at this time. Notwithstanding the foregoing, I acknowledge that the

Defendant’s Exceptions have been raised at the trial court level, insofar as they must

be for the purpose of any future appeal.

/s/ Nathan A. Cook Vice Chancellor Nathan A. Cook

15 August v. Glade Prop. Owners Ass’n, Inc., 2023 WL 5431953, at *1 (Del. Ch. Aug. 23, 2023).