Lavi v. Wideawake Deathrow Entertainment LLC,
C.A. No. 5779-VCS (Del. Ch. Jan. 18, 2011), read letter ruling here.
The issue decided by the Court of Chancery in
this books and records action under Section 18-305 of the Delaware Limited
Liability Company Act was whether a motion to dismiss the complaint should be
granted in light of the multiple documents that were attached to the motion
that went beyond what the Court could properly consider at the early stages of
the summary proceeding. Thanks to counsel for the plaintiff, David L. Finger, a
Delaware litigator, for forwarding this letter ruling to us.
Brief Overview of Decision
This short 3-page letter ruling can be most efficiently
summarized in classic bullet point fashion as follows:
1) The Court emphasizes in several parts of the ruling
that books and records actions in Delaware are summary proceedings that should
receive prompt trial dates.
2) The author of the letter ruling in this case does not
favor dispositive motions in books and records cases, in light of their nature
as summary proceedings, "when a trial can take place within two months of
filing" a complaint, (although, in the past, other members of the Court have
granted dispositive motions in books and records cases).
3) The Court provides pointed instruction on motion
practice to the extent that a motion to dismiss under Rule 12(b)(6)
is contrasted with a motion for summary judgment. Specifically, the
Court explained that when documents beyond those contained or referenced in the
pleadings are attached to a motion to dismiss, it is converted into a motion
for summary judgment.
4) The Court explained that it could not properly
consider all the documents attached to the motion of the defendant through
either judicial notice or otherwise. Instead, the Court denied the motion and
ordered the parties to submit a proposed schedule for a prompt trial "as is
contemplated in books and records actions."
Read more Delaware business
litigation case summaries and commentary on Delaware
Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X.
Pileggi, of Fox Rothschild LLP.