StayTerra Vacations, LLC v. Shawn T. Kaleta

Court of Chancery of Delaware·Decided May 27, 2026·No. C.A. No. 2025-1111-KSJM·Published

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

STAYTERRA VACATIONS, LLC (f/k/a ) GSP PRIME BUYER, LLC), PRIME ) VACATIONS, LLC, and GSP PRIME ) HOLDINGS, LLC, )

)

Plaintiffs, )

)

v. ) C.A. No. 2025-1111-KSJM )

SHAWN T. KALETA, BALI HAI JV ) LLC, TRI STAR PROPERTIES, LLC, ) TRISTAR PROPERTIES ) ACQUISITION PRIME LLC, ) TRISTAR SEASIDE TROPIC LLC, ) TRISTAR PD LLC, 791 JACARANDA ) LLC, 111 CEDAR AVE LLC, ) COCONUT BEACH RESORT LLC, ) 1015 FLEMMING ST LLC, and 171 ) MCKINLEY LLC, )

)

Defendants. )

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’

MOTION TO DISMISS THE VERIFIED AMENDED COMPLAINT

1. The facts are drawn from the Verified Amended Complaint (the “Amended Complaint”).1 In September 2024, entities affiliated with private equity firm Garnett Station Partners—Plaintiffs StayTerra Vacations, LLC (f/k/a GSP Prime Buyer, LLC) and GSP Prime Holdings, LLC—acquired Plaintiff Prime Vacations, LLC (with StayTerra and GSP, “Plaintiffs”), a property rental management brand created by Defendant Shawn Kaleta. The acquisition comprised an Equity Purchase Agreement (the “Purchase Agreement”), a Property Management

1 C.A. No. 2025-1111-KSJM, Docket (“Dkt.”) 36 (Am. Compl.).

Agreement (the “Management Agreement”), a Contribution Agreement, and a Hotel Agreement.

2. Plaintiffs allege that after the acquisition closed, Kaleta began indirectly competing with Plaintiffs. Kaleta transferred dozens of properties, in many cases for $10, to his ex-wife, Jen Kaleta, and his girlfriend, Kiri Stewart. Jen Kaleta and Stewart then stopped using Plaintiffs’ property management services. Instead, Stewart, an interior designer, formed Magnolia Cottages, LLC and Jen Kaleta incorporated AMI Premier Properties, Inc. Magnolia Cottages and AMI Premier then began offering property management services in Florida to the newly transferred properties.

3. Plaintiffs also allege that Kaleta assisted Jen Kaleta and Kiri Stewart with a shadow listing scheme. Jen Kaleta and Stewart used booking platforms to list properties Kaleta owned. Plaintiffs listed the exact same properties but for higher rates. Kaleta prevented double booking by blocking the properties for personal use whenever Stewart or Jen Kaleta booked a guest. This alleged scheme allowed Jen Kaleta and Stewart to capture revenue that Plaintiffs would have received.

4. Plaintiffs claim that Kaleta breached his obligations under the transactional agreements. They filed this suit against Kaleta and counterparties to some of the transactional agreements referred to as the “Hotel Defendants”2 (with Kaleta, “Defendants”). Plaintiffs assert twelve Counts:

2 The Hotel Defendants are Bali Hai JV LLC, Anna Maria Beach Resort LLC, Tri Star Properties, LLC, TriStar Properties Acquisition Prime LLC, Tristar Seaside

• Count I against Kaleta for breach of the Purchase Agreement’s non-

competition covenant;

• Count II against Kaleta for breach of the Purchase Agreement’s non-

solicitation covenant;

• Count III against Kaleta for breach of the Purchase Agreement’s non-

interference covenant;

• Count IV against Kaleta for breach of the Management Agreement;

• Count V against Kaleta for breach of the Purchase Agreement’s and Management Agreement’s implied covenants of good faith and fair dealing;

• Count VI against Kaleta for breach of the Contribution Agreement;

• Count VII against Kaleta for tortious interference of the Management Agreement;

• Count VIII against Defendants for breach of the Hotel Agreement, alleging failure to pay hotel fees;

• Count IX against Defendants for breach of the Hotel Agreement, alleging removal of access from property management software;

• Count X against Kaleta for anticipatory breach of the Hotel Agreement;

• Count XI against Kaleta for anticipatory breach of the Management Agreement; and

• Count XII against Defendants for account stated for failure to pay hotel fees.

5. Defendants have moved to dismiss the Amended Complaint under Court of Chancery Rule 12(b)(1) for lack of subject matter jurisdiction, Rule 12(b)(2) for lack of personal jurisdiction, and Rule 12(b)(6) for failure to state a claim.3

Tropic LLC, Tristar PD LLC, 791 Jacaranda LLC, 111 Cedar Ave LLC, Coconut Beach Resort LLC, 1015 Flemming St LLC, and 171 McKinley LLC. 3 Dkt. 32 (“Defs.’ Opening Br.”) at i–ii; Dkt. 29.

6. Rule 12(b)(1). Defendants’ motion to dismiss for lack of subject matter jurisdiction is denied because Plaintiffs pled a basis for equitable jurisdiction in Counts I through III and the court may exercise jurisdiction over the remaining claims under the clean-up doctrine.

a. The court “can acquire subject matter jurisdiction over a cause in only three ways, namely, if (1) one or more of the plaintiff’s claims for relief is equitable in character, (2) the plaintiff requests relief that is equitable in nature, or (3) subject matter jurisdiction is conferred by statute.”4 Plaintiffs seek injunctive relief—to enforce restrictive covenants to prevent Kaleta from interfering with Plaintiffs’ business and customers. The loss of customer relationships and goodwill can qualify as irreparable harm warranting injunctive relief.5 b. “Fundamentally, once a right to relief in Chancery has been determined to exist, the powers of the Court are broad and the means flexible to shape and adjust the precise relief to be granted so as to enforce particular rights and liabilities legitimately connected with the subject matter of the action.”6 Under the clean-up doctrine, “the court may also exercise ancillary

4 Candlewood Timber Gp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 997 (Del.

2004) (internal citations omitted). 5 L & W Ins., Inc. v. Harrington, 2007 WL 2753006, at *11 (Del. Ch. Mar. 12, 2007)

(“The protection of substantial business relationships and goodwill are legitimate business interests whose impairment may give rise to irreparable harm.”). 6 Wilmont Homes, Inc. v. Weiler, 202 A.2d 576, 580 (Del. 1964) (citing 1 John N.

Pomeroy, A Treatise on Equity Jurisprudence § 115 (5th ed. 1941)).

jurisdiction over purely legal causes of action that are ‘part of the same controversy over which the Court originally had subject matter jurisdiction in order to avoid piecemeal litigation.’”7 If a plaintiff has adequately pled a basis for subject matter jurisdiction, then the court applies a multi-factor analysis to determine whether to assert ancillary jurisdiction.8 Those factors include judicial efficiency.9 c. Defendants argue that this court lacks subject matter jurisdiction because money can remedy any alleged harms. But they ignore that the Amended Complaint seeks injunctive relief to enforce the restrictive covenants at issue in Counts I through III.10 As discussed below, Counts I through III state a claim. Plaintiffs have thus pled a basis for equitable jurisdiction.

Judicial efficiency warrants exercising jurisdiction over the remaining Counts under the clean-up doctrine. This court therefore has subject matter jurisdiction over all claims in this action.

7 Rodriguez v. Great Am. Ins. Co., 2021 WL 4892216, at *3 (Del. Ch. Oct. 20, 2021)

(quoting Kraft v. WisdomTree Invs. Inc., 145 A.3d 969, 974 (Del. Ch. 2016)). 8 Acierno v. Goldstein, 2004 WL 1488673, at *5 (Del. Ch. June 25, 2004) (citing Clark

v. Teeven Hldg. Co., Inc., 625 A.2d 869, 882 (Del. Ch. 1992)) (listing the factors as “whether retention of the claims will: 1) resolve a factual issue which must be determined in the proceedings; 2) avoid a multiplicity of suits; 3) promote judicial efficiency; 4) do full justice; 5) avoid great expense; 6) afford complete relief in one action; or 7) overcome insufficient modes of procedure at law”). 9 Id.

10 Am. Compl. ¶¶ 102–17.

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