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Durham v. Grapetree

Durham v. Grapetree

Supreme Court of Delaware

November 24, 2020, Submitted; January 26, 2021, Decided

No. 343, 2019

Opinion

ORDER

After careful consideration of the parties' briefs and the record on appeal, it appears to the Court that:

(1) This appeal arises from a books and records action brought by Appellant, Andrew Durham, against Appellee, Grapetree, LLC ("Grapetree"), under Section 18-305 of the Delaware Limited Liability Company Act.1 Durham appeals the Court of Chancery's opinion that granted in part and denied in part Durham's request to inspect various books and records maintained by Grapetree, as well as the Court of Chancery's opinion and order granting Grapetree's motion for attorneys' fees.

(2) Andrew Durham is one of five siblings.2 Durham and his siblings inherited a rental property in St. Lucia known as "Les Chaudieres," which is held by Grapetree. The St. Lucia property is Grapetree's sole asset. Durham's four siblings are manager-members of Grapetree; Durham is a member but not a manager. Durham came to believe that his siblings were mismanaging Grapetree and causing the St. Lucia property's value to suffer. To assess potential derivative [*2]  litigation and evaluate the condition of his stake in Grapetree, Durham sought to inspect certain books and records under 6 Del. C. § 18-305.

(3) Grapetree failed to respond to multiple books and records inspection demands. On March 12, 2018, Durham filed a pro se Complaint for Motion to Compel Books and Records from Grapetree (the "Complaint"). Durham attached two books and records inspection demand letters to Exhibit A of the Complaint and three demand letters to Supporting Sub-Exhibits to Exhibit B of the Complaint.

(4) Grapetree did not initially respond to the Complaint, and on April 30, 2018, Durham filed a motion for default judgment against Grapetree. On May 1, 2018, counsel entered his appearance on behalf of Grapetree, and the court scheduled a telephonic hearing for July. On June 14, 2018, Durham filed a letter seeking to supplement the books and records demands in his Complaint with additional books and records requests. Durham also filed various other motions and letters throughout June and July 2018 that are not relevant to this appeal.

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2021 Del. LEXIS 33 *; 246 A.3d 566; 2021 WL 274724

ANDREW C. DURHAM, Plaintiff Below, Appellant, v. GRAPETREE, LLC, Defendant Below, Appellee.

Notice: PUBLISHED IN TABLE FORMAT IN THE ATLANTIC REPORTER.

Subsequent History: Case Closed February 11, 2021.

Prior History:  [*1] Court Below — Court of Chancery of the State of Delaware. C.A. No. 2018-0174-SG.

Durham v. Grapetree, LLC, 2019 Del. Ch. LEXIS 41, 2019 WL 413589 (Del. Ch., Jan. 31, 2019)

Disposition: AFFIRMED.

CORE TERMS

books and records, requests, documents, demands, records, communications, inspect, argues, motion for default, attorney's fees, proper purpose, teleconference, parties, emails

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Business & Corporate Law, Limited Liability Companies, Management Duties & Liabilities, Member Duties & Liabilities, Scope of Authority, Meetings, Procedural Matters