Teucrium Trading, LLC v. Riker

• Court: Supreme Court of Delaware
• Decided: July 25, 2023
• Docket: 251, 2023
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

TEUCRIUM TRADING, LLC, § § No. 251, 2023 Defendant Below, § Appellant, § Court Below–Court of Chancery § of the State of Delaware v. § § C.A. No. 2022-1030 DALE RIKER and BARBARA § RIKER, § § Plaintiffs Below, § Appellees. §

Submitted: July 12, 2023 Decided: July 25, 2023

Before TRAYNOR, LEGROW, and GRIFFITHS, Justices.

ORDER

After consideration of the amended notice of interlocutory appeal and its

exhibits, it appears to the Court that:

(1) In 2020, the appellant, Teucrium Trading, LLC (“TTL”), filed suit

against Dale and Barbara Riker, former TTL officers, in the Court of Chancery (“the

Plenary Action”). The Rikers then demanded that TTL advance certain fees and

expenses the Rikers had incurred and would continue to incur in connection with the

Plenary Action, relying on advancement rights granted in TTL’s Amended and

Restated LLC Agreement. When TTL refused to advance fees and expenses as

requested, the Rikers filed the underlying advancement action in the Court of Chancery. On June 13, 2023, the Court of Chancery issued a bench ruling granting

summary judgment to the Rikers, finding that they had demonstrated their

entitlement to mandatory advancement under the LLC Agreement as a matter of law

and that they were entitled to fees on fees (“the Ruling”). The Court of Chancery

instructed the parties to meet and confer regarding any remaining allocation disputes

or specific disagreements about time entries and directed any outstanding issues to

be resolved under the Fitracks process. TTL timely moved to certify the Ruling for

interlocutory review under Supreme Court Rule 42. The Rikers opposed that

application.

(2) On July 7, 2023, the Court of Chancery denied TTL’s application.1 The

Court of Chancery accepted TTL’s assertion that the Ruling decided a substantial

issue of material importance—a threshold consideration under Rule 422—because it

resolved the underlying question of liability for advancement on each claim for

which the Rikers sought advancement. But the Court of Chancery concluded that

none of the Rule 42(b)(iii) factors TTL cited—specifically, factors A (the Ruling

decided an issue of first impression in the State), B (the Ruling conflicts with other

trial court decisions), G (interlocutory review may terminate the litigation), and H

1 Riker v. Teucrium Trading, LLC, 2023 WL 4411609 (Del. Ch. July 7, 2023). 2 Del. Supr. Ct. R. 42(b)(i). 2 (interlocutory review would serve the considerations of justice)—supported

interlocutory review.

(3) First, the court held that the Ruling did not decide an issue of first

impression but rather applied straightforward and well-settled principles of contract

interpretation to the LLC Agreement and the Plenary Action. Second, the Court of

Chancery concluded that TTL had not identified any trial court decision that squarely

conflicted with the Ruling. Third, the Court explained that a successful interlocutory

appeal would not terminate the litigation because TTL still would be responsible for

advancement on the claims not challenged in TTL’s motion for summary judgment,

and the Fitracks review procedure therefore would continue regardless. Fourth, the

Court of Chancery ruled that interlocutory review would not serve considerations of

justice because Delaware public policy favors prompt advancement. Finally, the

Court of Chancery found that there was nothing exceptional about the Ruling and

the uncertain benefit from interlocutory review was outweighed by the associated

costs.

(4) We agree with the Court of Chancery that interlocutory review is not

warranted in this case. Applications for interlocutory review are addressed to the

Court’s sound discretion.3 In the exercise of its discretion and giving due weight to

the Court of Chancery’s analysis, the Court has concluded that the application for

3 Del. Supr. Ct. R. 42(d)(v). 3 interlocutory review does not meet the strict standards for certification under Rule

42(b). Exceptional circumstances that would merit interlocutory review of the

Ruling do not exist,4 and the potential benefits of interlocutory review do not

outweigh the inefficiency, disruption, and probable costs caused by an interlocutory

appeal.5

NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal be

REFUSED.

BY THE COURT:

/s/ Abigail M. LeGrow Justice

4 Del. Supr. Ct. R. 42(b)(ii). 5 Del. Supr. Ct. R. 42(b)(iii). 4