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DE Equity 2006


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When does equitable jurisdiction exist?
a. To determine whether equitable jx exists, Chancery examines the (i) Allegations of the Complaint in light of what Π really seeks to gain and (ii) Determines the existence or absence of equitable jx as of the time the Complaint is filed.
(1) Π has the burden to establish Chancery jx.
(2) The prayer of relief does not control subject matter jx.
(3) If, after the Complaint is filed, events occur which make the award of equitable relief impracticable, Chancery MAY retain its jx, OR a Chancellor has discretion to decline jx.
What is equitable jx based upon?
(1) substantive equity or equitable rights historically developed in Chancery i. Injunction, Constructive Trust, Specific Restitution, etc. and/or
(2) a request for an equitable remedy – a remedy historically developed in Chancery such as an injunction when damages are inadequate. ii. An equitable right may be remedied by the award for money damages in appropriate instances, but the fact that such relief is the only relief sought does NOT deprive the Court of jx.
What is the subject matter jurisdiction of the equity court?
a. Equitable Jx extends over disputes involving certain relationships or property interests – called substantive equity or equitable rights. 1) Fiduciary Duties 2) Accounting by a Fiduciary 3) Trusts & Administration of Estates 4) Appointment or Rights of Obligations of Guardians 5) Certain Property Disputes 6) Charges of Fraud / Mistake
Which property matters does Chancery court have jx over?
i. 10 Del. C. § 365 allows a Π to proceed in rem against property of a Δ who intentionally avoids service of process.
ii. Actions to determine “lawful owner” of Corp Stock under 8 Del. C. § 168 where claimant w/ equitable title is not registered owner.
iii. Actions to remove clouds on title.
iv. Actions to Partition Real Estate.
What are factors that bar equity jx?
i. Available to Π as a matter of right;
ii. Full, Fair and Complete; and
iii. As Practical and efficient to the ends of Justice and as prompt as the equitable remedy.
What is the concurrent jx of Chancery?
(1) Chancery is not ousted of its jx simply b/c a Court of Law has expanded its jx into a particular area, but Equity jx can be abandoned or the Court can decline to exercise its jx over some matters.
(2) Chancery will no longer entertain a suit simply b/c it’s brought by the assignee of a debt or chose in action.
(3) Mortgages is an area of concurrent jx b/n Law and Equity - Equity did not abandon foreclosure of mortgages on the arrival of foreclosure statutes.
What is the ancillary jx of Chancery?
(1) Once Equity jx is established over a portion of a suit, Chancery MAY adjudicate all related matter (even legal issues) in order to avoid multiplicity of lawsuits and to effect complete relief as b/n parties. (2) Clean Up Doctrine – Ancillary jx is based on the proposition that “Once equity obtains jx, it may go on to decide the whole controversy.”
i. Jx exists even though doing so requires an award of a purely legal remedy, e.g., money damages.
ii. However, Chancery may transfer a case to Superior when it is indisputable that all that remains of a case is a suit for damages
Equitable Defenses (ED), Generally.
A. General – Unlike legal remedies, Π has NO absolute right to equitable relief. Chancery has discretion on whether or not to issue an equitable remedy in a given circumstance. In making its decision, the Court MAY take into account the presence or absence of one of he following equitable defenses. In addition, these defenses MAY be raised in response to Π’s assertion of a legal remedy [Ch. Rule 8(c)]. Δ has the burden of persuasion and burden of pleading affirmative defenses.
ED of Lack of Case or Controversy Ripeness or Mootness
a. Chancery may deny equitable remedy were the case is not ripe for adjudication.
b. may also be denied where circumstances occurring after the complaint is filed make it moot
(1) if the court dismisses a case for Mootness, the Court determines nothing except that the claims are being dismissed as moot. No claims are released, no class is certified, and no attorney’s fees are awarded.
ED of Hardship
a. Chancery may deny or set conditions upon the award of equitable relief to avoid undue hardship to a Δ even where Π has shown a strong case for relief.
(1) E.g., in an action for specific performance of a K for the sale of land, where 4 yrs had passed and property values had risen, Π was awarded specific performance on the condition that he pay interest to Δ in addition to the K price.
ED of Impracticability
a. Chancery may deny relief where it would be impracticable to enforce, as when an order may only be enforced over a substantial period of rime or by a series of corrective acts.
b. However, Court may temper its consideration of impracticality and grant a remedy where there is an important public policy at stake, e.g., integration of the public school system.
ED of Lack of Specificity
a. Chancery will grant equitable remedies only when it can do so w/ specificity and precision.
(1) If a party seeks to enforce a K by specific performance or an equitable order, the terms of the K MUST be particularly definite.
(2) Ex. Chancery will order the specific performance of a K of sale to sell a particular plot of land for a set price.
(3) However, where Δ’s were obligated under a K to use their “best efforts” to seek regulatory approval of a merger, the Court refused to issue an injunction enforcing the best efforts clause in part b/c the term “best efforts” was so vague in the context of that complicated transaction as to give little or no specific direction to the person who would have been subject to the injunction.
(4) Note: a K’s terms may be specific enough to be enforced at law in Superior Court and yet Chancery may deny specific performance of the same K for lack of specificity. [See infra IV.B.1.a)].
ED of Equitable Estoppel
a. Arises when one party, by his conduct or words intentionally or unintentionally induces a 2nd party, who is ignorant of the truth and lacked the means of knowledge of the truth, to act in reliance on such words or conduct and to change his position to his detriment.
(1) Where purchasers bought land relying on county records which failed to show that delinquent taxes were owed on the land, the County is estopped from asserting liens against the property or the purchasers.
(2) Town officials may not apply a zoning amendment retroactively to prevent a property owner from using his land for a purpose which would have been permitted b/f the amendment.
(3) An insurer can be estopped from disputing coverage and refusing to defend and insured after an “unalterable 4 yr course of litigation undertaken” by the insurer.
b. Standard for estopping a Gov’t entity is higher.
(1) Chancery applies equitable estoppel cautiously against a gov’t and only as necessary to avoid manifest injustice,
i. E.g., when the gov’t entity makes representations that land was properly subdivided and innocent 3rd parties detrimentally rely in good faith on those representations.
c. Equitable Estoppel is NOT a remedy for enforcing a bargained for K right supported by consideration.
ED of Waiver
a. Waiver is the intentional relinquishment of a known right.
(1) Unlike estoppel, there is NO requirement that another party rely on the acts or words which constitute the waiver.
(2) Waiver operates like estoppel in barring a party from raising a claim or an argument.
(3) Party asserting waiver has burden of proof.
i. E.g., Court held that a party waived the attorney-client privilege relying on fundamental questions of fairness, even though the party clearly did not intend a waiver, also
ii. An insurer was found to waive statutory subrogation right on basis of inconsistent conduct to the injury of another.
ED of Acquiescence
a. Type of Waiver which can be used to bar a party from raising an objection to a transaction when the conduct of the party subsequent to the transaction is such that it is reasonable to conclude that the party has accepted or adopted it.
b. Unlike Estoppel, a person raising the defense of acquiescence does NOT have to be ignorant of the truth nor does he have to act in reliance on the lack of an objection.
(1) E.g., Π watches his neighbor build a damn and flood Π’s land w/out objecting for a year. If Π sues for an order requiring Δ to remove the dam, defense of acquiescence may be raised.
(2) Acquiescence by a civic association in violation of a deed restriction may render the restriction unenforceable.
(3) Where SH accepts consideration offered in a cash-out merger SH may be barred from challenging the validity of the merger.
ED of Ratification
a. SH can be barred from raising an objection to a BOD action on the basis of ratification.
(1) Generally ratification can be accomplished by a majority vote of SHs.
(2) However, where the claim is raised that acts of the directors or officers were void (i.e., fraud, gift, waste of assets, or ultra vires conduct), unanimous SH ratification is required.
(3) Directors of a Corp cannot ratify a void act even w/ a formal vote.
(4) Additionally, ratification must be fairly accomplished, that is, full disclosure must be provided to the SH b/f they vote.
ED of Laches
a. An equitable defense based on the theory that a person w/ knowledge of an impending transaction should not be permitted to sit by in silence while positions are fundamentally changed by potential adversaries and the rights of 3rd parties accrue.
b. Should be raised in an Answer as an affirmative defense; and generally not raised in a motion to dismiss.
c. Essential Elements:
(1) Π must have knowledge of the claim;
(2) There must be an unreasonable delay by Π in bringing the claim;
i. Unreasonable delay is a question of fact.
ii. Mere delay w/out an accompanying prejudice is insufficient.
(3) There must be prejudice to the Δ arising from the delay.
i. Prejudice may be found where a party dies while Π sits on his claim, or
ii. When substantial improvements mare made to property.
When is the ED of laches precluded?
d. A tolling agreement can expressly preclude the assertion of the defense of Laches.
e. Equity Follows the Law – maxim used in determining whether a suit is barred by Laches, Chancery will assign considerable weight to whether the SOL for analogous actions at law has passed.
(1) Analogous SOL is not necessarily controlling.
(2) Chancellor may apply a period either longer or shorter.
(3) In the absence of unusual or mitigating circumstances, where the analogous SOL has run, Π will be barred w/out the necessity for the Court to engage in the traditional Laches analysis.
f. It is sometimes held that the expiration of a SOL period raises a presumption of prejudice.
(1) If a SOL has run, burden shifts to Π to demonstrate that laches is inapplicable;
(2) If SOL has not run, Burden remains on Δ to demonstrate the applicability of laches.
g. When relief sought in Chancery is of a legal nature, Chancery will apply the SOL rather than the doctrine of Laches.
(1) SOL may be tolled in derivative actions charging actionable self-dealing by Fiduciaries until the SH’s knew or had reason to know of the facts constituting the alleged wrong.
(2) Equitable tolling must be raised in a timely manner to give notice to one relying on the statute.
ED of Unclean Hands
a. derived from equitable maxim – “he who comes into equity must do so w/ clean hands.”
b. If Π himself is guilty of inequitable conduct, the Court may refuse to grant him an equitable remedy.
c. One who seeks equity must do equity – doctrine is invoked to protect the Court’s good name.
d. Π’s conduct MUST relate directly to the matter in controversy.
(1) E.g., a wife who commits adultery after a separation agreement is executed is not barred from enforcing the agreement.
(2) A litigant who engages in reprehensible conduct in relation to the matter in controversy forfeits his right to have the Court hear his claim, regardless of its merit.
e. When Π’s inequitable conduct touches upon a matter of public policy, the Court may be willing to stretch in determining whether his unclean hands relate to a matter in controversy.
(1) The doctrine should not be invoked when the only party losing is the public.
ED of Unconscionability
a. Chancery MAY deny Specific Performance of a K where: [Restatement, Contracts § 367]
(1) The consideration for the K was grossly inadequate or its terms were otherwise unfair;
(2) Enforcement of the K will cause unreasonable or disproportionate hardship to Δ or 3rd parties; or
(3) Δ’s agreement to enter in the K was induced by misrepresentation, mistake, or questionable Biz practices.
b. Generally, there must be something about the K that “Shocks the Conscience.”
(1) Simple fact that the consideration is adequate is probably not enough, standing alone, to render a K unconscionable.
(2) Ex. Chancellor rescinded a K as unconscionable where (a) the financial terms were shockingly one-sided, (b) the Π seeking rescission innocently failed to understand the transaction, and (c) Δ engaged in sharp, predatory practices.
(3) Court can strike a portion, but not all, of a K on grounds of Unconscionability.
(4) Bad Faith has been raised as a defense based on actions taken in violation of a FD.
ED of Impossibility
a. Chancery will refuse to issue orders which cannot be performed.
b. this rule protects the Court’s integrity.
c. Illegality = impossibility [Restatement, Contracts § 368]
What is an injunction?
1. Chancery has exclusive jx where injunctive relief is sought.
2. Injunction is an extraordinary equitable remedy that operates in personam to enforce personal or property rights and prevent future injury.
3. In Personam – directed against a specific person or persons.
a. Contrast w/ a proceeding In Rem which is not directed against a specific person, but against or w/ reference to the subject matter in controversy and to all whom it might concern.
4. Injunctive Relief is appropriate ONLY to prevent harm that is imminent, unspeculative, and genuine.
What is a Mandatory Injunction?
a. Order compelling Δ to perform a specific act.
(1) It operates to remedy a wrong (e.g., Δ is ordered to remove all of the boulders he’s deposited on Π’s land).
(2) Movant must clearly establish that such an injunction changing the status quo is warranted.
(3) Recent case – a mandatory injunction can only be issued when the undisputed facts show movant is entitled to the relief – decision was only limited to a Preliminary Injunction.
What is a Prohibitory Injunction?
a. Order directing Δ no to do a specific act.
(1) Operates to prevent a wrong (e.g., Δ is enjoined from trespassing on Π’s land).
(2) They are traditionally awarded more liberally than mandatory injunctions b/c they’re easier to enforce.
What are the 3 forms of Injunctions?
TRO, Preliminary Injunction, & Permanent Injunction
Describe a TRO & what Plaintiff must show.
a. operates to prevent irreparable injury and to preserve the status quo pending a hearing on an application for a Preliminary Injunction.
b. To obtain a TRO, Π must show:
(1) There is an imminent threat of irreparable injury to its interests in the absence of such relief (Ch. Rule 65(b) requires Π to file affidavits or a verified complaint evidencing such injury);
(2) There exists a reasonable probability that Π will succeed on the merits of its complaint and final trial; and
(3) The balance of hardships arising from the issuance of such an order tips in Π’s favor on the record presented.
How long is a TRO issued for?
c. TRO is usually issued for a limited period (e.g., less than 10 days) and may be issued w/out notice to Δ.
(1) TRO’s are generally issued on a very limited record, and are designed to protect the status quo while the parties brief their positions and develop an evidentiary record.
(2) Π MUST post security bond.
What is the effect of a limited factual record when a TRO is requested?
(1) In cases where the movant has not had an opportunity to develop a factual record through discovery or otherwise, the focus is on the injury that Π will likely suffer if it’s not granted, the threat of imminent irreparable harm v. the damage to Δ which might be caused if the relief is granted.
(2) If Movant shows that he will suffer immediate irreparable harm unless the TRO is granted, the Court will issue the order unless:
i. Movant’s legal claim is frivolous or not litigable, i.e., not colorable;
ii. The risks posed to the other party by the TRO outweigh the risk to movant from its absence; OR
iii. The Movant has not proceeded promptly.
(3) If Movant has had a chance to develop a record, the Court will apply a standard closer to the traditional test for a preliminary injunction.
(4) Laches will be applied more readily to bar TRO applications.
Describe a Preliminary Injunction
a. Purpose is to preserve the status quo pending a final determination on the merits.
(1) Δ must be given notice of Π’s application. Ch. Ct. R. 65(a)
(2) Hearing is usually informal and precedes trial.
(3) Motions for Prelim injunction usually considered by the Court on a paper record – depos, and affidavits.
(4) Will be denied where remedy sought is excessive in relation to, or unnecessary to prevent the injury threatened.
b. Required Elements – similar to TRO – Π must show that:
(1) He has a reasonable probability of success on the merits;
(2) There is a reasonable probability of irreparable harm in the absence of such preliminary injunctive relief; and
(3) The balance of hardships tips in Π’s favor (i.e., the harm Π will suffer if relief denied outweighs the harm Δ will suffer if granted).
What will the Chancery Court require as a condition for granting a Preliminary Injunction?
c. Court will require a bond be set as a condition for granting the order.
(1) Chancellor has discretion in setting amount of bond – will set it at amount necessary to compensate Δ for any injury if the injunction was issued wrongfully.
(2) Bond may be altered later.
Describe a Permanent Injunction.
a. If issued, this is the Court’s final word in the litigation.
b. Moving Party MUST prove:
(1) Actual success on the merits;
(2) Irreparable harm; and
(3) The harm resulting from failure to issue an injunction outweighs the harm befalling the opposing party if the injunction is issued.
c. Permanent Injunction will issue ONLY after a final determination on the merits.
(1) Will NOT issue by reason of mere apprehension of uncertain speculative damage at an indefinite time in the future.
(2) An Injunction is never final.
i. E.g., Chancery enforces a deed restriction barring all but single family residences from a development. Years later after circumstances have changed, a Δ may be granted relief from this permanent injunction.
Steps for evaluating an injunctive relief request for tortuous conduct.
1) Identify the Tort (Waste of Real Property [voluntary, permissive, ameliorative]; Trespass; Public & Private nuisance; Injuries to Personal Rights [defamation, invasion of privacy]; Injuries to Economic Interests [trade libel, inducing breach of K, misappropriation of trade secrets, trademark & tradename infringement]. 2) Is there a protectable interest? 3) Is the legal remeduy inadequat? 4) Are the hardships balanced? 5) Does defendant have any defenses? 6) is enforcement feasible?
Specific Performance
1. SP is an extraordinary remedy that requires actual performance of the K by Δ – only available IF:
a. Terms of the K are definite, AND
b. Money damages will afford a poor substitute for performance.
2. Court can tailor SP to fit each particular case
Requirements for Specific Performance.
1) Is there a valid K? 2) Are all the conditions of the K satisfied? 3) Is the legal remedy adequate? 4) Is enforcement feasible? 5) Is there mutuality of performance? 6) What are defenses to specific performance?
Specific Performance of Negative Covenants Generally.
(1) Negative Covenants may also be enforced by Permanent Prohibiting Injunctions and by Preliminary Injunctions where there’s a danger of irreparable harm if the negative covenant is not enforced immediately.
(2) Exercise caution when a preliminary injunction deprives Δ of an opportunity to earn a living and special equities favor more limited relief.

DE Modern Rule – Court MAY enforce a K which is different from the agreement reached by the parties themselves.
Covenant not to Compete
(1) Chancery will specifically enforce a Covenant Not to Compete in a personal services K provided these requirements are met:
i. Covenant MUST be expressly and validly contained in the K.
a. They are strictly construed, e.g., a covenant that prohibits an employee from contacting former client after he leaves a firm will not prevent him from doing biz w/ clients who contact him.
ii. Services covered by the K are so unique that Π will be w/out an adequate remedy (i.e., money damages)
iii. Covenant MUST be reasonable.
a. it must be reasonably necessary to protect the employer
b. It must be reasonable in scope, in terms of geographic scope, the activities to be restricted, and the duration of the restriction.
c. Covenant will be unreasonable if it imposes an undue hardship on the person restricted – e.g., it completely prevents him from earning a living.
d. Court MAY refuse to enforce a covenant that’s against public policy.
Covenant in Sale of Biz
Covenant MUST:
i. Reasonably protect a legitimate interest,
ii. Cannot be inconsistent w/ the public interest, and
iii. The Restriction must be reasonable in terms of
a. time,
b. geography, and
c. The scope of activities prohibited.
Covenant not to disclose trade secrets
(1) Same analysis as Sale of Biz
(2) Legal remedy is inadequate b/c of the difficulty in computing damages and the irreparable injury to Π.
Time is of the Essence Clause in Wholly Executory K
i. Time of the essence clauses will be strictly enforced – it’s a condition precedent
ii. If broken – no SP
Time is of the Essence Clause in Partially Executed K
iii. Equity Courts will take the following into consideration to avoid this result:
a. Loss to Other Party Small
1. If the loss suffered by the other party to the K by virtue of the time delay is small
b. Undue Hardship
1. If denial of SP would result in undue hardship to the forfeiting party
c. Waiver
1. Court will go out of its way to find waiver of such clauses, e.g., if vendor has previously excused late payments.
d. Tardiness is de Minimis
1. If the time-lapse b/n date specified in the clause and the proffered consideration is de minimis
e. Judicial Sale
1. Some Courts, require that the land be sold and the proceeds distributed on an equitable basis, i.e., require what is, effectively tantamount to judicial foreclosure.
Equitable Conversion: 1
i. T, by will, devises personal property to A and real estate to B. T enters into a valid, binding K to sell land for cash. Before closing, T dies.
ii. Here, the doctrine of EC applies at the time the K is made to convert the land into cash. Thus, the Court will probably rule that, at the time T died, he held an interest in cash and not land. Since A is entitled to inherit T’s cash, A takes the proceeds of the sale.
Equitable Conversion: 3
i. T makes a will giving a life estate in land to B and a remainder to A. T enters into the same option K as in example 2. (these are the precise facts of Eddington v. Turner).
ii. Here, at T’s death, B gets a life estate in the land and A gets the remainder all subject to O’s option. O’s option is, as in example 2, specifically enforceable. When exercised, EC takes place. Accordingly, O is entitled to the land, A is entitled to the proceeds from the sale, and B is entitled to interest on the proceeds of the sale for life (representing B’s life estate in the land).
Equitable Conversion & Condemnation of Real Estate
i. In Bank of Delaware v. Hargraves, (Del. Ch. 1968), T willed personal property to A, some of her real estate to A and B, and the rest and residue of the estate to A. After T’s will was made, she became incompetent and guardians were appointed to manage her estate. Thereafter, part of the real estate willed to A and B was condemned; the guardians consented to the condemnation proceedings and accepted proceeds from the State. Years later, T died. Chancery ruled that, under these circumstances, condemnation could not be treated the same way as the sale of the land. Instead, the proceeds of the condemnation retained the character of real estate for purposes of T’s will.
ii. Therefore, A and B were entitled to share in the proceeds under the clause devising the real estate, and A was not entitled to all of the proceeds under the clauses devising T’s “personal property” or the rest and residue of T’s estate.
Equitable Conversion & Guardian Sells Incompetent's Real Estate to maintain that person
Proceeds retain the character of realty.
What is the difference between legal and equitable rescission?
1. The equitable remedy of rescission results in the cancellation or “unmaking” of an agreement and attempts to return the parties to the status quo.
a. Legal rescission results in a Court of Law granting Π money or other property of which he has been deprived.
b. Equitable Rescission, on the other hand, is necessary when an instrument, doc, obligation, or other matter must be set aside and annulled in addition to the other relief which may be obtained at law, e.g., where Π may be exposed to 3rd party liability.
2. Generally when a party is fraudulently induced to enter into a K, the defrauded party MAY elect either
a. Affirm the K and sue at law for money damages; or
b. Disaffirm the K and seek rescission in equity.
What are the Grounds for Rescission?
Misrepresentation [Negligent Misrepresentation & Common Law Fraud], Mistake [Mutual & Unilateral Mistake of Material Fact], Misconduct, Duress, Undue Influence, Illegality, Lack of Capacity, and Failure of Consideration.
Mutual Mistake of Material Fact
a. Mutual Mistake of a Material Fact by the parties to a K is grounds for rescission.
b. Π must show by clear and convincing evidence:
(1) Both parties were mistaken as to a basic assumption;
(2) The mistake materially affects the agreed upon exchange of performances; and
(3) The parties adversely affected did not assume the risk of the mistake.
c. The mistaken fact MUST go to the essence of the K itself.
Unilateral Mistake of Material Fact
d. Unilateral Mistake of Material Fact is NOT grounds for rescission, unless the other party knew or should have known of the mistake.
(1) In the absence of such knowledge by the other party, the Court MAY be persuaded to rescind IF the mistaken party establishes severe hardship or enforcement of the K would be unconscionable.
Other grounds for Rescission
3. Other Grounds for Rescission
a. Other grounds:
(1) misconduct;
(2) duress;
(3) undue influence;
(4) illegality;
(5) lack of capacity; and
(6) failure of consideration.
b. NOTE – Watch out for one party exerting excessive pressure or knowingly taking advantage of another who is particularly vulnerable – Court may consider these factors in granting rescission.
Rescission & Offer to Restore Other Party to the Status Quo
1. Π MUST offer or tender restoration of Δ’s former status quo.
2. It MUST be possible to place Δ in the status quo ante.
Defenses to an Action for Rescission
1. Equitable Defenses
a. usual equitable defenses may be relied on in an action for rescission.
2. Negligence of Π
a. Generally NOT a defense in an action for rescission.
1. Designed to change the written agreement to reflect the true intent of the parties – to correct a scrivener’s error.
a. must be a valid K b/f Π may seek to change it.
(1) Rescission – may be decreed only where the original K is voidable b/c of mistake, misrepresentation, etc.;
(2) Reformation – may be decreed only where a valid K exists, but for some reason the written K does not reflect the true intent of the parties.
b. NOTE – right to reform an insurance policy belongs solely to the insured and not to others, e.g., accident victims, who might benefit from insurance coverage.
Approach for Reformation
1) Is there a Valid K? 2) Grounds for Reformation 3) Defenses to Reformation
Reformation: Grounds
1. Mistake
a. Must be mutual mistake; generally a unilateral mistake cannot be the basis for reforming a K.
(1) However, in some appropriate cases, a unilateral mistake on Π’s part, coupled w/ knowing silence of Δ’s part is sufficient.
(2) Knowledge by one party of the other’s mistake regarding the expression of the K is equivalent to mutual mistake.
(3) Reformation is arguably available where Δ should have known of Π’s mistake.
2. Misrepresentation
a. Reformation is available where a written agreement is incorrect as a result of either an innocent or intentional misrepresentation.
(1) Π may seek to change the written agreement to reflect the parties’ true intent instead of seeking to rescind or void the agreement.
Defenses to Reformation
1. Equitable Defenses – the usual equitable defenses may be relied on.
2. Π’s Negligence – NOT a defense in action for reformation.
3. Parol Evidence Rule
a. Generally, there must be clear and convincing evidence of the true intent of the parties prior to the inaccurate written agreement.
b. Parol evidence will be admitted ONLY to show that the written agreement does not reflect the actual agreement of the parties, NOT to contradict the agreement.
(1) Notice that equity modifies the general parol evidence rule of K law.
4. Statute of Frauds
a. Generally, Court will NOT apply SOF to a reformation action.
(1) However, Court MAY deny Reformation where it would add land to a written agreement AND the party seeking reformation fails to present sufficient evidence that the K does not reflect the parties’ true intent.
Other Applications for Reformation
1. Reformation also applies to:
a. deeds;
b. gifts;
c. trusts;
d. and even COI’s.
A. Requires Δ to pay money to Π which Δ acquired under circumstances which might be deemed unjust enrichment or a windfall.
1. Π does NOT have to prove that he has been damaged by Δ’s conduct or even that Δ’s conduct was unreasonable.
2. Example – in Topps Chewing Gum, Inc. v. Fleer Corp., (Del. Ch. 1985), Π sued to prevent Δ from selling bubble gum cards. Π lost at trial and, while appeal was pending, Δ continued to sell cards, based on the lower court’s decision. On appeal, however, the decision was reversed. Chancery ruled that Δ could be required to pay Π an amount equal to the net profits made from the sale of cards while the appeal was pending. Note the balance the Court struck. Since Δ’s conduct was ultimately proven wrongful, Δ was not entitled to any windfall from the card sales. However, since Δ was justified in relying on the trial court, it was entitled to recoup the expenses it incurred as a result of the card sales.
A. Equity generally acts in personam, by directing people or entities to do or not do certain acts. Parties who fail to obey Chancery’s orders may be found in contempt.
1. Chancery uses its contempt powers flexibly in order to tailor its response to the problem before it, e.g., a union may be fined when its members disobey a restraining order requiring them to return to work.
2. Or, a party who files an improper collateral attack on a valid settlement finally approved by the Court can be forced to pay the other side’s reasonable attorney’s fees in defending the collateral action.
Grounds to find a person in contempt
1. Court MUST have Jurisdiction over the subject matter of the controversy AND the person subject to the order;
2. Person MUST have notice of he order;
3. Order MUST be clear and definite;
4. Person MUST be able to follow the terms of the order; and
5. Violation of the order MUST be proven to the Court’s satisfaction.
a. Party proposing the sanction has the burden of proving the order’s been violated – cannot be satisfied by affidavits alone.
b. Where a prima facie case of violation has been made, burden shifts to the other party to show impossibility of compliance.
Misc. Issues Surrounding Contempt
C. Court MAY fine a person for failing to obey an injunction or restraining order or even attach his property.
D. Generally, Court may sanction a person for contempt in addition to other punishments, e.g., criminal indictment or disbarment.
1. Court will levy fines to prompt parties to take or refrain from certain actions or to compensate one party for the misconduct of another.
2. Court will NOT levy fines solely to punish a party for disobedience.
E. Criminal Contempt – whether Δ gave false, relevant testimony which had a obstructive effect.
1. a Superior Court action for Criminal Contempt MAY be initiated against one who deliberately disobeys or resists an order of Chancery.
Misc. Equitable Remedies
1. Accounting
2. Receivership
3. Appointment of Custodian
4. Constructive Trust
a. When Δ’s fraudulent, unfair, or unconscionable conduct causes him to be unjustly enriched at the expense of another to whom he owed a duty
5. Resulting Trusts
a. Arises from the presumed intentions of the parties and upon circumstances surrounding particular transaction
b. Court has discretion in appointment
6. Guardianship
a. largely governed by statute
7. Chancery Court can Appoint a Master
a. Court will review a Master’s rulings of law & fact de novo; although review can be on the record
Chancery Court Procedure - The Complaint
1. Register in Chancery (Court Clerk)
a. Complaint is filed w/ the Register in Chancery w/ such add’l copies as are necessary to effect Service of Process.
b. *An action in Chancery is commenced by filing the Complaint, not by the Service of Process.
(1) This is an important distinction for purposes of “first to file” venue disputes & transfer Motions.
c. Plus Supplemental Information form (used for internal administrative purposes) and check for the filing fee (non-refundable).
d. NOTE: The Register of Wills is by statute also the Clerk of Chancery w/ respect to matters falling w/in its jx. So, some matters originate w/ Register of Wills.
(1) Challenges to inventories & accounts of Personal Representatives are filed with the Register of Wills.
(2) Will Contests – filed w/ Register in Chancery.
(3) Remember, nearly all litigation is filed w/ Register in Chancery &, as a rule of thumb, the matters that are filed w/ the Register of Wills are those that arise out of an existing estate except for formal will challenges.
(4) When something is filed with the Register of Wills, the same kind of Discovery & Sanctions are available as if the matter were field w/ the Register of Chancery.
Rule 3(aa)
a. Certain Pleadings need to be Verified if that’s required by a Statute or by a Rule of the Court.
(1) All applications for Preliminary Injunctions or Temporary Restraining Orders under Rule 65 must be supported by an Affidavit or by a Verified Complaint.
b. What does “verification” mean?
(1) To verify a document means to confirm the correctness, truth, or authenticity of the pleading by an Affidavit, Oath, or Deposition.
(2) Application for Injunctive Relief is usually verified by π. The attorney, however, may verify by Affidavit the correctness of the allegations asserted in the application for injunctive relief.
(3) Under Rule 33 – Answers to Interrogatories must be made under Oath of the answering party.
Service of Process
1. Rule 4
a. Unlike Superior Court, where Praecipe is filed w/ Complaint that directs Prothonotary to issue Summons to the Sheriff, it’s sufficient to notify the Register in Chancery by letter giving specific directions for Service of Process.
b. Can also use a Praecipe.
c. Process can be served by the Sheriff’s office or in the case of expedited or special proceedings, by a specially appointed process server.
d. Service won’t be made unless there’s a request to make service as stated above.
Personal Service
2. Personal Service
a. Upon an Individual Other Than an Infant or an Incompetent Person
(1) Delivery of Summons & Complaint to them personally or leave copies w/ a person of suitable age (18 or older) at his dwelling house or usual place of abode, or serving the individual’s registered agent in DE.
b. Upon Corps
(1) Deliver Summons & Complaint to Corp’s registered agent in DE or personally serve any officer or director of the DE Corporation.
(2) A DE or foreign Corp registered to do biz in DE must have a registered agent in DE
i. Foreign Corps doing biz in DE who don’t register to do biz are deemed to have consented to the Sec. of State as their agent for service of Process.
ii. Hovde v. Thomas, Del.Ch.2002: Court upheld as proper compliance w/ the rule – service on the registered agent pursuant to 4(d)(7) where the Corp. had contractually consented to DE jx & venue but was not subject to be served under the general long-arm statute.
c. Upon DE LP’s
(1) Deliver Summons & Complaint to the LP’s registered agent in DE, or personal service on any general agent or general partner in DE. 6 Del. C. §17-105
Service on Non-Resident Director of Corp
[10 Del. C. § 3114]
(1) A non-resident director of a DE Corp consents to the appointment of the Corp’s registered agent as his registered agent for Service of Process in DE, and he can’t revoke this consent.
i. Nonresident director’s consent to service of process is for actions against the Corp where he is a necessary party & for actions against him for violation of his duties as a director.
(2) §3114 doesn’t provide personal jx over the alter-egos of a director.
(3) §3114 applies to nonresidents only as to acts performed in their capacity as director of a DE Corp at the time of an alleged breach of duty to the Corp.
i. Does not apply to individual torts or K claims that don’t arise from the alleged breach of the director’s duty to the Corp.
Service on GP or Liquidating Trustee of a DE LP
b. Service on General Partner or Liquidating Trustee of a DE LP – [6 Del. C. § 17-109]
(1) Permits service on general partners or liquidating trustees of DE limited partnerships.
(2) Service is effected by serving the Summons & Complaint on the registered agent of the LP or if no registered agent, the Sec. of State.
(3) Register in Chancery shall, w/in 7 days of such service, mail copies of the Process by registered mail, postage pre-paid, to the general partner or liquidating trustee.
DE Long Arm Statute
[10 Del. C. § 3104]
(1) Permits the assertion of personal jx over nonresident Δs for acts that constitute legal presence in DE – a nonresident may be served under this statute if he
i. Transacts any biz or performs any character of work or service in DE
ii. Ks to supply services or things in DE
iii. Causes tortuous injury in DE by an act or omission in DE
iv. Causes tortuous injury in DE or outside of DE by act/omission outside DE if he regularly does or solicits biz, engages in other persistent course of conduct in DE or derives substantial revenue from services or things used or consumed in DE
v. Has an interest in, uses or possesses real property in DE or
vi. Ks to insure or act as surety for or on, any person, property, risk, K, obligation or agreement located, executed, or to be performed w/in DE at the time K is made, unless parties otherwise provide in writing
Single Act & Long Arm Statute
i. This is a “single act” statute – a single event/occurrence falling w/in the language of the statute satisfies the statutory requirement. However, personal jx inquiry is a 2-step process
a. does the act fall w/in the language of the statute and
b. does the act satisfy the minimum contacts test for DP purposes
ii. The Act (which constitutes legal presence in DE) can actually take place outside DE so long as it has an impact in DE, or Δ engages in persistent course of conduct in DE or derives substantial revenue from services or things used & consumed w/in DE.
What must Plaintiff's attorney do in Long Arm Statute procedure?
iii. Under §3104, Π’s attorney must write a letter to the Register in Chancery
a. requesting the Register to direct Sheriff of Kent County to serve Δ, through its agent, the Sec. of State.
b. W/in 7 days after return of service, the attorney must send, by registered (not certified) mail, return receipt requested, a letter to Δ & enclose copies of the Complaint & Sheriff’s return. The Register in Chancery does not do this for the attorney.
c. Letter must also state that Service of Process is being effectuated pursuant to 10 Del. C. § 3104 & that Service under this statute is effective for all intents & purposes as if service had been personally made on Δ w/in DE.
d. W/in 10 days after receipt of the registered mail receipt, an Affidavit should be filed w/ the Register in Chancery setting forth all the procedures followed pursuant to the Statute. iv. The Court upon request may appoint a person to serve process – Rule 4(c). In special cases, the Court may Order service to be made in a special manner. – Rule 4(d)(7)
Constructive Service of Process: in rem actions in Corporate Litigation
v. 10 Del. C. §365 – embraces in rem actions and is sometimes used to obtain jx in Corporate Litigation. §365 provides for constructive Service of Process in cases where the relief sought relates to the status, title, or ownership of property physically located w/in DE. Court can’t award a $ judgment in such a suit, since only the res may be affected by the relief sought. Hence, it’s typically used to settle title to personal property. § 365 becomes operative only when a Δ fails to respond to process issued from the Chancery Court.
Quasi-In-rem Sequestration Statute
vi. 10 Del. C. §366 – DE’s quasi-in-rem sequestration statute. In sequestration, property is seized in order to enforce the personal appearance of a Δ who has refused to appear. Unlike §356 $ damages can be obtained in a suit wherein the sequestration statute is employed. §366 was examined by the US Supreme Court 1977. The Court didn’t hold that it was unconstitutional, but it held that §366 was unconstitutional as it was applied to the facts of the case in Shaffer v. Heitner, US.1977. Thus, any sequestration will be judged by the minimum contacts test elucidated by the US Supreme Court.
a. Cable Advertising Networks v. DeWoody, Del.Ch.1993: it’s possible to have an ex parte sequestration if there’s prima facie evidence, either by affidavit or by verified pleading, that the sequestration is permissible under the DPC of the 14th Amendment to the US Constitution. It also holds that sequestration isn’t allowed if one isn’t seeking $ damages.
Due Process Considerations
a. For jx purposes, Chancery Court insists the requirements of DP be met: “in order to obtain substituted service of process over a foreign Δ, a π must show that Δ had such meaningful, minimum contacts, ties, or relations with the forum state that he would have warning that he might be subject to jx of a foreign Court. A foreign Δ’s conduct & connection w/ the forum state must be such that he should reasonably anticipate being hailed into Court in the state. And in order to be subject to substituted service of process a Δ must have invoked the benefits and protection of the forum state by purposefully availing himself of the privilege of conducting biz w/in the state”
b. Another case held that ownership of property in DE isn’t a basis for jx under §366 if the property isn’t the source of the liquidation (litigation?).
c. NOTE: Generally, in a case field in the US District Court for the District of DE, service is the Π’s responsibility – not that of the Court or the US Marshall.
The Answer & Defenses
a. In most Bar Exam questions, the 3-yr. statute of limitations period will apply as set forth in 10 Del. C. §8106.
(1) Claims for Breach of FD: the limitations period doesn’t begin to run until the SH or trust beneficiary knew or had reason to know of the alleged wrongful conduct.
(2) Fraudulent Concealment: running of SOL will also be tolled.
(3) SOL doesn’t run while π is under 18 (except in personal injury cases §8119)
(4) SOL bars counterclaims but not defenses.
b. Bar Exam qs sometimes involve removal of actions from State to Federal Courts. This allows Δ to remove a state Court action to the US Dist. Ct. for the Dist. of DE. It’s complicated, but for bar exam purposes, it arises only where there’s diversity of citizenship. Remember this:
(1) Only Δ can remove a case to Federal Court
(2) Where removal is predicated on diversity a case is only removable if none of the parties joined & served as Δs are citizens of DE and a Δ must remove a case w/in 30 days after service of Complaint or other initial pleading.
(3) To establish jx under the diversity doctrine, you must allege diversity of citizenship, not residency. Complaint can be dismissed for lack of jx if you don’t allege the citizenship of the parties as opposed to where they reside.
Motions to Dismiss
a. Generally, a Court won’t consider matters outside the pleadings in ruling on a 12(b)(6) Motion. B/c a Motion to Dismiss for the failure to state a claim must be decided w/o the benefit of a factual record, Chancery Court may not resolve material facts, instead it’s required to assume as true the well-plead allegations in the Complaint.
(1) A limited exception to this rule is that the Chancery Court may consider a document alleged to contain misrepresentations or omissions, for purposes of determining what the document actually states.
(2) Otherwise, if matters outside the pleadings are considered, the Motion is converted into one for Summary Judgment. A Motion for Summary Judgment generally is not ripe for decision until the non-movant has the opportunity to take Discovery.
Discovery & Motion Practice
a. Just b/c one files a Motion to Dismiss doesn’t mean that the record is confined to the Complaint. On a Motion to Dismiss for lack of personal jx or for lack of Subject Matter Jx, inter alia, the Court may look at facts outside the Complaint. Therefore, it is wrong to assume that discovery is inappropriate just because a Motion to Dismiss has been filed. Instead, the Chancery Court will generally take a practical approach and Stay Discovery only if there is a reasonable chance that the Motions to Dismiss will obviate the need for discovery.
Counterclaims & Crossclaims
1. Chancery Rule 13 is just like the Fed. Rules except for one distinction – although a legal counterclaim or cross-claim that arises out of the same transaction / occurrence can be brought in an equitable action, an unrelated legal counterclaim or cross-claim that does not have an independent basis for equitable jx will probably be dismissed or transferred to Superior Court.
Class Actions
1. Rule 23(a) – this was recently added to the Superior Court Rules.
a. 4 Basic Requirements for Class Action Status
(1) Numerous – the class must be so numerous that Joinder is impracticable. A class action π satisfies this standard by demonstrating the numerosity of the class, the small size of many individual claims, or the varied location of individual class members.
(2) Common Qs of Law & Fact Among Class Members
(3) Claims & defenses of the class action π are typical of claims & defenses of class - There’s no requirement of “identical” claims and defenses. This standard is satisfied by demonstrating a common basis for liability such as a breach of FD regardless of varying fact patterns or amount of damages. (4) A Would-be representative has the burden of proving that he is fit to represent the class – The representative must show that he is more than an uninterested party who intends to rely heavily on an attorney to handle the case. Thus, while the representative need not be a lawyer he should have some familiarity with the facts of the case, the contentions of the parties, the interests of the class, and the legal theory upon which recovery is sought.
i. The class action π must be able to protect the interests of the class adequately and fairly. To determine the adequacy of the class representative, Chancery Court will examine the class representative’s interests, conflicts, and financial ability as well as the capabilities of counsel for the class.
Class Actions in Corp. Mergers & Takeovers regarding "Claims & defenses of the class action Plaintiff are typical of claims & defenses of class"
i. Corporate Mergers & Takeovers – these present unique questions under Chancery Court Rule 23 due to the varying positions taken by SHs in the transactions. With respect to the “typicality” issue under Rule 23(a)(3), the focus of the inquiry is whether the would-be representative’s interests are truly aligned with those of the class. If the claims of the representative and the class arise from the same event, practice, or course of conduct and are based on the same legal theory, factual differences will not necessarily support a finding of atypicality.
In addition to the 1st 4 requirements for a class action: 3 types of class actions
(1) 23(b)(1) – prosecution of separate actions would create the risk of inconsistent adjudications or impair the interests of class members who are not parties. There must be a realistic likelihood of separate actions and inconsistent adjudications.
(2) 23(b)(2) – the party opposing the class has acted or refused to act on grounds generally applicable to the class, making injunctive or declaratory relief appropriate for the class as a whole. A class action under Rule 23(b)(2) can’t be predominantly one in which $ damages are the major goal.
(3) 23(b)(3) – Common Qs of law & fact predominate over any questions affecting only individual members and a class action is a superior method for fair and efficient adjudication of the claim. Notice to class members is mandatory under this subsection.
Settling a class action
b. To settle a class action proceeding, the Court exercises its own judgment to determine whether the settlement is fair to all class members. In undertaking its analysis, the Court will examine the nature of the claims & defenses, the strengths and weaknesses of each party’s case, the amount of the settlement as compared to the amount of a potential judgment, and the position of objectors, if any.
(1) Here’s how it works: in class actions, the Chancery Court will
i. Class Certification - First, determine on the record all the tests in Rule 23(a) and (b).
a. This may be made at the end of the settlement hearing when a temporary settlement class has been established to facilitate the effectuation of a proposed settlement, or
b. it may be made at some earlier time, like in conjunction with Notice to the class.
ii. An award of disparate benefits to class representative will be closely scrutinized by the Court.
iii. And, Class Certification at the judgment stage isn’t prohibited – but it must be undertaken cautiously, taking into account whether the lateness of the Certification is prejudicial to the parties who may have tried the case differently had they been aware that a class judgment was at stake.
Discovery - Depositions
1. Depositions – in DE, once a deposition starts, counsel for a witness can’t consult with the witness about the subject matter of their testimony until the deposition is over. Counsel can object, direct the witness not to answer based on a-c privilege, etc. In DE, deponents & their attorneys cannot go “off the record” to discuss the substantive response to a particular question. This is unique to Delaware.
Federal Discovery Procedures
a. under Fed. Rule 45, a party may take the deposition of a non-party in another state.
b. The party can get a blank subpoena signed by the clerk of the Court for the district in which the deposition is to be held.
c. The party can also have their attorney fill out and sign the subpoena form, as long as the attorney is authorized to practice in either
(1) The court for the district where the deposition happens or
(2) The court in the district where the underlying proceeding is pending.
d. The subpoena must be served in the district where the deposition is to take place OR w/in 100 miles of the place of the deposition.
e. Service isn’t effective unless it’s accompanied by a tender of the mileage expense allowed by law and one day’s attendance fee.
f. The witness or a party can file a Motion to Quash the subpoena in the district in which the subpoena was issued.
g. Before any deposition takes place, the party seeking the deposition should also serve a Notice of Deposition on all other parties.
Filing Docs under seal
1. Effective in 1990 – docs can only be filed under seal w/ the Court after a party obtains, for good cause shown, a Court Order specifying those docs or categories of docs which should be filed under seal.
a. Brief filed under seal – a redacted copy should be filed for public inspection by the party seeking confidentiality.
b. Note – the Court must be informed of the need to seal a document.
c. If no appeal from a final judgment, the sealed docs will be unsealed after 30 days unless application is made w/in that time to keep the doc under seal.
d. Also, if a case is appealed to the DE S.Ct. and no application is made w/in 3 days from the filing of the Notice of Appeal, the docs sealed by Chancery Court become unsealed.
A. 12 Del. C. §3901(k) & disabled persons: gives the Superior Court and the CCP the authority to appoint guardians for the person, property, or both, and to approve settlements of a single-transaction matter that arises out of a tort claim for a disabled person. After the guardian is appointed and the matter settled, the Statute requires that jx be transferred to Chancery Court.
a person lawfully invested w/ the power and charged with the duty of taking care of the person and managing the property and rights of another person, who, because of status or age, or understanding or self-control, is considered incapable of administering his own affairs.
Disabled Person
the person for whom a guardian is appointed is referred to as a disabled person.
a. Legally incapable of managing his property or making decisions for himself with respect to the care of his person by virtue of not yet being 18 or
b. By reason of mental or physical incapacity, they are unable to do these things and is thereby in danger w/ respect to his property of losing the property or becoming the victim of designing persons, and with respect to his health, is in danger of substantially endangering it. It’s the duty of the Court to advance the best interests of the disabled person.
Forms of Guardianships
a. Guardian of the Property
b. Guardian of the Person
Mental Incapacity
a. a pattern demonstrating an inability to recognize as relevant to decisions of significance, facts or considerations that one would expect reasonable and competent persons to recognize as relevant to such a decision
b. a pattern demonstrating an inability to reason w/ respect to decisions that are relatively simple but personally important, in a way that is internally consistent or
c. the presence of a mental disease or condition that interferes with the operation of the prospective ward’s perceptions or reasoning to such an extent as to raise a substantial likelihood that decisions relating to matters of importance to her have been affected by that mental disease or condition.
Petition for Appointment of a Guardian
1. filed w/ the register in Chancery w/ medical report attesting to mental infirmity or physical incapacity
2. Preliminary Form of Order proposing a tentative hearing date and provide for the giving of the required notice.
3. Notice of the hearing must be personally served on the alleged disabled person at least 10 days before the hearing date, unless the verified report of a physician states that it would be meaningless or harmful to serve the infirm individual personally.
4. Where service isn’t required to be made on the alleged disabled person
a. Service must be made upon the person in charge of the institution or home where the alleged disabled person resides, or
b. If the Petitioner has custody of the alleged disabled person, personal service must be made on the spouse & next of kin who are 18 and older and who reside in DE.
5. Notice by registered or certified mail, return receipt, of the time, place, & purpose of the hearing must be given to the spouse and to the next of kin of the alleged disabled person who are 18 or older.
6. Notice doesn’t have to be given to persons who consent in writing to the granting of the petition or who waive notice.
7. Proof of Service and Notice must be field w/ Register in Chancery prior to the hearing or be presented at the hearing.
After Petition & notice of Hearing for appointment of guardian are filed & considered by the Court
C. After the Petition & Notice of Hearing filed & considered by Court, a date for a hearing will be set. At the hearing, if there’s no controversy re guardian’s appointment, Court will ordinarily sign the Final Order. If there’s opposition, Court will either receive evidence at the hearing or adjourn the hearing to another date.
1. In order to protect the ward’s assets, the Court has the discretion to order the guardian to post bond, with or w/o surety. Surety refers to a bond from a bonding company and is usually required when there are negotiable, transferable instruments among the ward’s assets. An annual premium must be paid to the insurance carrier for the surety bond.
If guardian appointed
1. he has to file progress reports. After 30 days from appointment, he has to file an inventory of assets w/ Register in Chancery – a description of property & real estate & must be attached to a notarized affidavit that the guardian was diligent.
2. file account of all additions and subtractions form the estate. Accountings must be done regularly but how often they’re done is determined by the value of the estate.
3. Then, guardian has to give notice of the filing to all beneficiaries. Then, beneficiaries have 15 days to inspect the accounting and if necessary, take exception by filing a formal objection w/ the Court. E. The guardian oftentimes has to Petition the Court to expend funds from the estate – like if it’s a kid, the Court must be petitioned for the right to expend $. There are some situations when the Court doesn’t have to be petitioned to expend $ for a minor.
Termination of a Guardian
F. Termination of a Guardian – effective upon notification to & approval by the Court.
1. Resignation
2. Removal by Court
3. Death of disabled person
4. When kid turns 18 (but it’s not automatic – they both have to go to Court w/ proof of age & statement from the depository bank showing the balance in the guardianship account)
5. If it’s a disabled adult, it can terminate when the adult gets better
Wills - Letters Testamentary
A. Letters Testamentary – upon a person’s death, the threshold question is whether or not a Will exists. If one exists,
1. File Will w/ Register of Wills
2. Will must be proven – Ws must present themselves to the Reg. of Wills & sign Affidavit (not necessary if it’s a self-proving will – which includes an affidavit of the Ws that’s acknowledged by a Notary).
3. Opening the Estate – present to the Register a Petition for Letters Testamentary & Death Certificate
a. Advise Register of
(1) name of bond company which will act as surety on the bond of the personal representative
(2) name of newspaper in which Letters are to be published
(3) # of short certificates that will be required.
b. Register will arrange for the bonding & publication & will calculate the opening costs which must be paid at that time. Register will also issue the # of short certificates ordered.
Inventory Form
4. W/in 3 months of the date of the grant of Letters in the estates of decedents dying subsequent to January 1, 1977, an Inventory Form is to be filed w/ the Register of Wills.
5. W/in 9 mos of the date of decedent’s death, Inventory Form 600 (an original only) must be filed with the State Division of Revenue. No filing fee.
6. After the Inventory is filed w/ the Reg. of Wills & has been audited & w/in 1 year from the date of grant of Letters, an accounting must be filed w/ the Reg. of Wills w/ a list of beneficiaries & waiver of each beneficiary.
Closing the Estate
7. Closing the Estate – at closing, the personal representative will sign an affidavit, be administered an Oath, and present a check for closing costs.
Letters of Administration
When No Will Exists
1. Anytime after decedent’s death, the next of kin may apply for Letters of Administration.
a. Next of Kin – 12 Del. C. §1505(b) goes in this order
(1) Spouse
(2) Children
(3) Parents
(4) Siblings
b. So, if there’s a spouse, a child can’t be the Administrator unless the spouse renounces his right to act. If no spouse and 2 or more kids, for example. 2 or more should renounce in favor of the 1 or 2 agreed upon because it’s cumbersome for all 4 to act as Co-Administrators.
c. If no living next of kin or none apply w/in 60 days, at the expiration of that period the Register may, at its discretion, permit the appointment of any interested person.
d. Once the Administrator is determined, the Estate can be Opened and proceed in the same manner as if a Will exists.
e. If the waiting period expires w/o a family member being appointed, a creditor may apply for appointment in order to pay whatever bills are owing.
When no Will Exists - when must the estate be opened?
a. Decedent had more than $20,000.00 in personal property in his or her name alone
b. Decedent had an interest in real estate in his name alone
c. Decedent had no next of kin and has less than $20,000.00 in his name alone.
The Estate doesn't have to be opened when...
a. Decedent’s real & personal property is owned jointly w/ a surviving joint tenant. In this case, the surviving JT need only file an Inventory w/ the Reg. of Wills & an Inventory w/ the State Division of Revenue if the solely held estate is less than $20,000.00
b. Decedent doesn’t have any jointly owned property but has next of kin (spouse, children, parents, brothers, or sisters), then the next of kin may acquire that personal property by executing a “small estate” affidavit at the Office of the Register of Wills.

Deck Info