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Del. Code Ann. tit. 10, § 3114 does not apply to contract claims asserted by third parties against a corporation; rather, it applies in actions alleging breach of fiduciary duties on the part of individual directors. And under Del. Ch. Ct. R. 12(b)(6), a court must take the allegations of a complaint as true and draw all reasonable inferences therefrom. The matter will be dismissed only where it is not reasonably conceivable that the plaintiff could prevail.
Defendant Walt Disney Company owned the trademark for a fictional vehicle created in connection with the movie Star Wars. Plaintiff Joseph Alfred believed that a non-party enterprise was capable of producing a vertical take-off and landing vehicle, which vehicle the user could program for flight to a given destination and which would then be remotely operated. The vehicle would revolutionize travel and reduce the need for maintenance and improvement of existing roadway infrastructure. In plaintiff's conception, this vehicle would be built to resemble defendant’s fictional vehicle. He then developed a marketing plan, pursuant to which defendant would license the enterprise the right to use the fictional vehicle’s name and appearance. Plaintiff made an unsolicited proposal to defendant, wherein a conference call was arranged. The conference call took place, shortly after, plaintiff called the office of defendant’s officer to further discuss the proposed promotion of the fictional vehicle. The officer did not take the call but it appeared that on the same day, its executive assistant, contacted plaintiff and stated that defendant was not interested in his proposal. According to plaintiff, the conference call represented a change in defendant’s prior policy not to accept unsolicited proposals, which he took as a guarantee that his proposal would be accepted. For their part, defendant individuals moved to dismiss for lack of jurisdiction under Chancery Court Rule 12(b)(2) and for failure to state a claim upon which relief can be granted under Chancery Court Rule 12(b)(6). Defendant company also moved to dismiss under Rule 12(b)(6).
Should the defendants’ motions to dismiss a complaint sounding in contract be granted?
The court granted the motions. The court held that in a breach of contract claim against defendant by pro se plaintiff, who sought a license to develop a flying car, personal jurisdiction under Del. Code Ann. tit. 10, § 3114 did not exist over defendant's CEO because § 3114 applied in actions alleging breach of fiduciary duties on the part of individual directors and not contract claims asserted by third parties against a corporation. The court also found that plaintiff failed to sufficiently plead a breach of contract claim because at most, the complaint alleged that contrary to its usual policy against accepting unsolicited proposals, defendant attended a telephone conference at which plaintiff pitched his ideas. However, there were no allegations that defendant agreed to do anything, let alone what the terms of that anything might have been.