EFiled: Dec 28 2018 04:29PM ESTFiling ID 62806500
Case Number 447,2018

IN THE SUPREME COURT OF THE STATE OF DELAWAREJERRY NEAL,))
Defendant/Counterclaim)
Plaintiff/ Third-Party Plaintiff)
Below, Appellant,
)
)
v.
)
)
TRIPLE H FAMILY LIMITED)PARTNERSHIP, a Delaware limited)
partnership,))
Plaintiff/Counterclaim Defendant )Below, Appellee,
)
)
and
)
)
JEFFREY A. HOOPS,))
Third-Party Defendant Below,)
Appellee,)No. 447, 2018

Court Below: Court of Chanceryof the State of Delaware
C. A. No. 12294-VCMR

ANSWERING BRIEF OF APPELLEES TRIPLE H
FAMILY LIMITED PARTNERSHIP AND JEFFERY A. HOOPS
BERGER HARRIS LLPDavid B. Anthony (DE ID # 5452)
Sean A. Meluney (DE ID # 5514)
1105 N. Market St., 11th Floor
Wilmington, DE 19801
Tel: (302) 655-1140
Fax: (302) 655-1131
danthony@bergerharris.com
smeluney@bergerharris.com
Dated: December 28, 2018

TABLE OF CONTENTSTABLE OF AUTHORITIES ................................................................................... iii
NATURE OF PROCEEDINGS ................................................................................. 1
SUMMARY OF ARGUMENT ................................................................................. 3
STATEMENT OF FACTS ........................................................................................ 4I.

II.

UNDISPUTED FINDINGS OF FACT ................................................. 4
A.

Credibility of the Parties ............................................................. 4

B.

The Formation of Omni .............................................................. 7C.

The Terms of the Contract .......................................................... 9

D.

Neal Breached the Contract ...................................................... 11E.

Neal Failed to Secure Insurance for Omni’s Only
Real Customers and Lied to Hoops About Procuring
D&O Insurance ......................................................................... 12

F.

Triple H Performed as Required by the Contract ..................... 16

G.

Neal Covertly Opens Bank Account and Redirects
Commissions ............................................................................. 16

DISPUTED FINDINGS OF FACT .................................................... 17A.

The Parties Agreed to Dissolve Omni on October 15, 2014 .... 17

B.

The October 17, 2014 Meeting ................................................. 19C.

The Parties Provide Written Confirmation of Their Agreement
to Dissolve Omni on October 27, 2014 .................................... 23

ARGUMENT ........................................................................................................... 27i

I.

The Trial Court Was Not Clearly Erroneous When It Relied On
Trial Evidence Showing that Hoops and Neal Gave Their
Written Consent To Dissolve Omni. ................................................... 27
A. Question Presented ......................................................................... 27
B. Scope and Standard of Review ...................................................... 27
C. Merits of Argument ........................................................................ 29
1. The Trial Court’s Findings of Fact Should Not Be Reversed .. 29
a. Neal consented to dissolution .............................................. 29b. Hoops did not make material misrepresentations to Neal ... 30
2. The Trial Court Correctly Applied 6 Del. C. § 18-801(a) ....... 33
a. Only written consent is required .......................................... 33
b. Hoops did not misrepresent material facts in obtaining
Neal’s consent to dissolve Omni ......................................... 36

II.

The Trial Court Correctly Applied Settled Delaware Law In
Holding That Hoops Did Not Usurp Omni’s Opportunities. .............. 38
A. Question Presented ......................................................................... 38
B. Scope and Standard of Review ...................................................... 38
C. Merits of the Argument .................................................................. 38
1. Neal Argued Below That He Was Entitled To 50%
Of Commissions Generated From Revelation’s And
Hoops’s Policies In Perpetuity .................................................. 38
2. Neal Cannot Satisfy The Elements Of A Usurpation Claim .... 42

CONCLUSION ........................................................................................................ 45ii

TABLE OF AUTHORITIES
Cases

Pages

Bank of N.Y. Mellon Trust Co., N.A. v. Liberty Media Corp.,
29 A.3d 225 (Del. 2011). ...............................................................................27
Broz v. Cellular Info. Sys., Inc.,
673 A.2d 148 (Del. 1996)).............................................................................42
Cede & Co. v. Technicolor, Inc.,
758 A.2d 485 (Del. 2000) ..............................................................................28
DV Realty Advisors LLC v. Policemen's Annuity & Ben. Fund of Chicago,
75 A.3d 101 (Del. 2013) ................................................................................38
Dweck v. Nasser,
2012 WL 161590 (Del. Ch. Jan. 18, 2012) ............................................ 36, 37
Grove v. Brown,2013 WL 4041495 (Del. Ch. Aug. 8, 2013) ..................................................34
In re Mobileactive Media, LLC,
2013 WL 297950 (Del. Ch. Jan. 25, 2013) ...................................................44
OptimisCorp v. Waite,
137 A.3d 970 (Del. 2016) ..............................................................................28
Paciaroni v. Crane,
408 A.2d 946 (Del. Ch. 1979)) ......................................................................36
Pearson v. Rash,
1985 WL 149634 (Del. Ch. Feb. 13, 1985) ...................................................36
Riverstone Nat'l, Inc. Stockholder Litig.,2016 WL 4045411 (Del. Ch. July 28, 2016) .................................................43
Siga Techs., Inc. v. PharmAthene, Inc.,
132 A.3d 1108 (Del. 2015), as corrected (Dec. 28, 2015) ............................30
Sustainable Energy Generation Group, LLC v. Photon Energy Projects B.V.,
2014 WL 2433096 (Del. Ch. May 30, 2014) ................................................43iii

Triple H Family Ltd. P’Ship v. Neal,2018 WL 3650242 (Del. Ch. July 31, 2018) ......................................... passim
Yiannatsis v. Stephanis ex rel. Sterianou,
653 A.2d 275 (Del. 1995) ..............................................................................43
Statutes
6 Del. C. § 18-801 .............................................................................................passim
6 Del. C. § 18-803 .................................................................................................... 35iv

NATURE OF PROCEEDINGSOn May 4, 2016, appellee and plaintiff/counterclaim defendant-below Triple
H Family Limited Partnership (“Triple H”) filed the Verified Complaint (asamended, the “Complaint”) against appellant and defendant/counterclaim plaintiffbelow Jerry Neal (“Neal”). Triple H is controlled by appellee and third-party
defendant-below, Jeffery Hoops (“Hoops” and together with Triple H, the “Triple H
Parties”). The Complaint sought, inter alia, the dissolution of Omni InsuranceGroup, LLC (“Omni”), an insurance agency formed by Hoops and Neal. Although
Hoops and Neal were longtime friends, the two men agreed to dissolve Omni lessthan two turbulent months after its formation. Triple H was forced to file theComplaint because Neal continuously threatened to sue Hoops and tried to re-tradeon the terms of winding up Omni.
At trial, Triple H asserted three claims of relief: (i) breach of fiduciary duty
against Neal; (ii) breach of contract against Neal; and (iii) and the dissolution andwinding up of Omni. For his part, Neal asserted four claims of relief against the
Triple H Parties: (i) breach of contract against Hoops and Triple H; (ii) breach offiduciary duty against Hoops and Triple H; (iii) breach of fiduciary duty against
Hoops; and (iv) fraud against Hoops.
A three-day trial occurred before The Honorable Tamika MontgomeryReeves on November 6-8, 2017. The parties submitted over 300 trial exhibits and1the trial court heard testimony from six lives witnesses at trial. Full post-trial
briefing and post-trial oral argument followed.
On July 31, 2018, the trial court issued a 62-page, 224-footnote Memorandum
Opinion (the “Opinion”) that meticulously explains the reasoning and evidentiary
support for each of the trial court’s factual findings. The trial court found in favorof the Triple H Parties in all material respects. The Opinion detailed that Hoops and
Neal verbally agreed to dissolve Omni on October 15, 2014 and that they provided
written consent of dissolution as required by 6 Del. C. § 18-801(a) on October 27,
2014. The trial court also held that Neal breached his contractual and fiduciary
obligations owed to Triple H and awarded nominal damages.
The trial court denied all of Neal’s claims for relief, and the Opinion statesthat neither Triple H nor Hoops breached any contractual or fiduciary duties owed
to Neal. Likewise, the trial court held that Hoops did not make any material
misstatements to Neal and denied Neal’s fraud claim.
On August 7, 2018, the trial court entered a Final Order and Judgment. Under
that Order, Triple H was appointed as the liquidating trustee to wind up Omni’saffairs. On September 21, 2018, the trial court entered an Order of Dissolution of
Omni (“Dissolution Order”).

The Triple H Parties have complied with the

Dissolution Order. The Triple H Parties also filed a certificate of cancellation of
Omni with the Delaware Secretary of State.

2

SUMMARY OF ARGUMENT
1(a). Denied. The trial court’s finding that Hoops and Neal consented todissolve Omni in writing before any discussion concerning whether Hoops was
getting out of the insurance business was not clearly erroneous.
1(b). Denied. The trial court’s finding that Hoops and Neal consented inwriting to dissolve Omni before Black Diamond was formed was not clearlyerroneous.
2.

Denied. The trial court correctly applied settled Delaware law inholding that Hoops did not usurp corporate opportunities belonging to Omni.

3

STATEMENT OF FACTS1
Neal contends that this case is about corporate usurpation. The voluminousrecord below, including the Opinion, demonstrates that it is not about usurpation of
corporate opportunities, but rather a “failed venture” that unraveled because Neal
“breached the contract and breached his fiduciary duties…” and was guilty of“potentially catastrophic failures to secure insurance for Omni’s only realcustomers….”2 Following a three-day trial, depositions, hundreds of exhibits, andextensive briefing, the trial court rightly observed that, unlike Neal, the Triple H
Parties had abided by their contractual and fiduciary duties and that the parties
agreed, on multiple occasions, to dissolve Omni and end their partnership.3
I.

UNDISPUTED FINDINGS OF FACT
A. Credibility of the Parties.

The trial court weighed the documents and live witness testimony and notedthat “[t]here are several conflicts between the contemporaneous documents and thelive witness testimony given three years after the fact. I tend to give more weight to1“A__” refers to the Appendix to Appellant’s Opening Brief. “C__” refers to theCounter Appendix to Appellees’ Answering Brief.

2

Triple H Family Ltd. P’Ship v. Neal, 2018 WL 3650242, at *1, *16 (Del. Ch. July
31, 2018) (herein cited, “Triple H”).

3

Id. at *1.

4the contemporaneous evidence as it is free from the realities of litigation and closer
in time to the events that transpired.”4 The trial court also made a determination that
Hoops was described as a “seasoned

Hoops was more credible than Neal.5

businessman who seems to move with breakneck speed…[b]ut also has a strong
personal code of ethics and believes a man’s word is his bond.”6 Neal, on the other
hand, was described as a “perpetual salesman who will say whatever he needs to,regardless of veracity, in order to secure the deal and who continuously tries torenegotiate deals to get more favorable terms for himself.” 7Thus, “whencontemporaneous written evidence is lacking and Neal’s and Hoops’s testimony
conflicts, [the trial court] …[gave] Hoops’s testimony more weight.”8The credibility determination made by the trial court was based upon objective
evidence presented at trial. At footnote 11 of the Opinion, the trial court explained4

Id. at *2.

5Neal’s credibility was a hotly litigated issue. In their Post-Trial Answering Brief,
the Triple H Parties included a four-page chart of Neal’s most troubling
misrepresentations prior to, and during, this litigation. See A780-A784. The
Opinion largely adopted the arguments set forth in that chart at footnote 11 of theOpinion. See Id. at *1, n. 11.

6

Id.

7

Id.

8

Triple H, 2018 WL at *2.
5

its basis for giving Hoops’s testimony more weight by examining a number of Neal’s
misrepresentations:See, e.g., JX 23 (attempting to renegotiate the terms ofOmni to keep Neal Insurance bond and consulting income
exclusively for himself); JX 54 (telling Hoops less thantwenty-four hours before his personal policies lapsed,despite multiple assurances to the contrary, that Neal did
not succeed in getting Hoops’s assets covered); JX 72(attempting to renegotiate the terms of Omni’s
dissolution); JX 222 (opening a JP Morgan Bank accountwithout Hoops’s knowledge to redirect Omni’s biggest
commissions). Compare JX 90 (representing to West
Virginia Offices of the Insurance Commissioner that he is
the sole managing member of Omni in order to report
Hoops and Black Diamond to the InsuranceCommissioner) with Tr. 454 (Neal) (testifying after suing
Hoops for breach of fiduciary duty that, “I don’t think thatas it was unfolded and what we truly ended up doing, I was
the sole manager, no.”); compare JX 25 (representing on
September 1, 2014, that Neal did not have “a single Neal
Insurance policy renewing” until after December 31,2014) with JX 326 (invoicing November 18, 2014
renewals); compare JX 47 (telling Hoops that “[a]llcoverages are bound, went into effect at midnight on
Sunday morning”) with JX 310 (emailing an insurance
broker minutes after JX 47 was sent asking if the policy isbound and saying he is “[v]ery concerned we areexposed”).9
The importance of these credibility findings are paramount, as the parties
differed “on pretty much everything pertaining to this litigation….”10 The trial court

9

Id. at *1, n. 11.

10

Id. at *1.
6

was, therefore, required to make a number of fact-intensive, credibility-driven
determinations, one of which is the subject of this appeal, but many of which are
undisputed for the purposes of the appeal.
B. The Formation of Omni.
Hoops and Neal met almost fifty years ago in elementary school in Bluefield,
West Virginia.11 Hoops began his career in the coal mining industry right out ofhigh school as an entry level miner. Hoops continued to work in the coal mining
industry over the next 40 years, while also attending college at night. Hoops wasquickly promoted into management within a large coal company; and, ultimately,
started several coal mining businesses.12 In 2008, Hoops started Revelation Energy
LLC (“Revelation”), a coal mining business he currently runs.13
Neal has been in the insurance business for almost 30 years.14 In 2011, Neal
formed Neal Insurance, an insurance agency he owns and operates.15

11

Id. at *3.

12

Id.

13

Id. at *1.

Triple H, 2018 WL at *3. For years, Hoops sent his companies’ insurance
business to Neal. In total, Hoops sent roughly $70 to $100 million worth of
insurance premiums to Neal. A345 at 21:19-24.

14

15

Id.

7

Neal and Hoops reconnected with each other at their 40th high school reunion
in mid-August 2014. At the reunion, Hoops and Neal discussed starting an insurance
agency, similar to a shared acquaintance in the coal industry.16
From August 18, 2014 to August 25, 2014, Hoops and Neal exchanged emails
discussing the preliminary plans for starting an insurance agency together. The
parties’ concept was that Triple H would own 50% of the agency with Neal owning
the other 50%.17 Triple H, through Hoops, would provide start-up capital and theagency’s initial customers would include Revelation and Hoops personally. 18 For
his part, Neal was to roll Neal Insurance into the agency, serve as the agency’s
President, and grow the business.19
The parties agreed to call their agency Omni Insurance Group, LLC. Omni
was formed when its Certificate of Formation, which Hoops signed, was filed with
the Delaware Secretary of State on August 25, 2014.20

16

Id.

17

Id.; see also C106-C108.

Id. at *3, 4 (Hoops’s personal insurance policies secured “$15 million in assets”
and were “up for renewal on October 15….”).

18

19

Id.; see also C104-C108.

20

Triple H, 2018 WL at *4.

8

C. The Terms of the Contract.
“In the insurance world, agents make commissions, which are a percentage ofthe premium paid by the customer.”21 For Omni, securing those commissions “camewith a hitch,” as Revelation’s policies were yearlong policies that ran from October
5 to October 5.22 Immediately upon Omni’s formation, Neal was supposed to start
the process of procuring new insurance policies for Revelation and Hoops, which
had to be placed by October 5 and October 15, respectively.23 Instead, as will be
discussed below, Neal began re-trading key aspects of the parties’ agreement.
The trial court found that Omni does not have a written operating agreement.24
This is because Neal refused to sign, revise, or otherwise pay any attention to a draft
written operating agreement that Hoops paid his counsel to prepare.25 Accordingly,
the trial court held that the parties have an oral operating agreement, the terms ofwhich were reflected in the parties’ email communications (the “Contract”).26

21

Id.

22

Id.

23

Id. at *12.

24

Id. at *11.

25

Id. at *7.

26

Triple H, 2018 WL at *11.
9

The trial court found, and neither party disputes on appeal, that the Contract
had four terms. Those terms are:(1) Triple H and Neal each own 50% of Omni and haveequal voting rights; (2) Neal would roll all of Neal’s
Insurance’s insurance, consulting and bond business into
Omni starting on October 1; (3) Neal will be provided a
Base Salary plus Benefits starting October 1; and (4)Jacobs Risk Management would assist in placing
Revelation’s insurance policies and receive ten percent of
the commissions received for any existing business andthirty percent of the commissions for new business.27
Jacobs Risk Management assists small and large coal companies with regulatory
affairs and insurance needs, and it had serviced Revelation since 2009.28 Jacobs Risk
Management was run by Joseph Jacobs (“Jacobs”) and Heather Hammonds(“Hammonds”), who primarily handled Revelation’s account. When Hoops and
Neal first decided to form Omni, they met with Jacobs and Hammonds. 29 They all
agreed that “Jacobs Risk Management would receive a commission on current
business of Revelation as well as commission on any new business that’s brought tothe table”30 and Hammond continued to assist Neal through September.

27

Id.; see also C072, C085-C089 at ¶¶2, 10, 32; C109-C111.

28

Id. at *6.

29

Id.

30

Id.
10

“Adding further strain” to the work required to place Revelation’s andHoops’s insurance policies, “Neal kept attempting to renegotiate the structure andoperation of Omni.”31 On September 1, 2014, shortly after the formation of Omni,
Neal informed Hoops that he had not rolled Neal Insurance into Omni and intended
to keep Neal Insurance’s bond consulting fees, which amounted to “75 to 80
percent”32 of Neal Insurance’s profits, for himself.33 Hoops, however, responded
that he “wanted to maintain their original agreement…;” and while “Neal quickly
backed off”34 in a subsequent email and said he was “100% committed to growing
Omni,”35 Neal failed to roll Neal Insurance into Omni.
D. Neal Breached the Contract.
The trial evidence proved, and the trial court agreed, that Neal breached theContract by failing to “roll all of Neal Insurance’s insurance, consulting and bondbusiness into Omni starting on October 1.”36

31

Prior to forming Omni, Neal

Id. at *5.

See, e.g., A397 at 232:17-19 (“Q. So the bonding business was 75 to 80 percent
of Neal Insurance’s income? A. Yes.”).

32

33

Triple H, 2018 WL at *5.

34

Id. at *5-6.

35

Id.; C112.

36

Id. at *17.

11

represented to Hoops that he would immediately transfer Neal Insurance’s “base ofbusiness” to Omni.37 Neal failed to do so and engaged in multiple transactions
through Neal Insurance.38 From August 26 (the date of Omni’s formation) throughOctober 2014, Neal Insurance engaged in, at least, 15 separate transactions.39 The
trial court held that the “[t]he parties stipulated that Neal did not roll any of Neal
Insurance’s business into Omni. Therefore, Neal breached the Contract.”40
E. Neal Failed to Secure Insurance for Omni’s Only Real
Customers and Lied to Hoops About Procuring D&O Insurance.
On October 1, 2014, Neal emailed Hoops saying, “We did it.

I haveeverything done.”41 Neal then walked through the particulars of a number ofdifferent insurance policies, including workers’ compensation, director and officer(“D&O”), crime, and excess insurances, that he had allegedly procured for
Revelation.42 Hoops replied, “Amazing you got all of this pulled together in such a

37

Id. at *3; see also C104.

38

See, e.g., A457-A459 at pp. 369-378; C112-C116; C132-C134; C160-C161;
C181-C182, C186-C187; C188-C190; see also C29-C33 at pp. 18-22.

39

Id.

40

Triple H, 2018 WL at *17; see also C085-C089 at ¶¶2, 10, 32.

41

Id. at *7; see also C117-C121.

42

Id.

12

short time, great job.”43 But the celebrations were short lived. On October 4, aSaturday, Neal emailed Hoops at 6:02 p.m., “I was not able to get the policy number
on the D&O from the wholesaler representing Westchester. The wholesaler said
there was a concern with the questions on Friday.”44 Hoops replied at 6:20 p.m.,“Are we going to be without insurance for some period of time now? Having
coverage is more important than anything else as I would not Want to e itch out
insurance for one minute as we have people on our jobs 24/7.”45 While Neal tried
to reassure Hoops that “everything was likely fine,”46 Hoops remained concernedand advised Neal that if policies were not bound he would consider shutting down
operations, which would cost Revelation “$1.1mm per day” in losses.47
At 8:18 a.m. on Monday, October 6, Neal assured Hoops again that, “Allcoverages are bound, went into effect at midnight Sunday morning. I have the policy
numbers for them except the D&O.”48 At 8:20 a.m., two minutes later, Neal emailed

43

Id.

44

Id.; see also C123-C124.

45

Id. Similar to the Opinion, quotes from trial testimony and exhibits are presented
in their original form except where indicated. Sic is not used as it would makesome of the evidence unreadable.

46

Triple H, 2018 WL at *7.

47

Id.; see also C122.

48

Id.; see also C122.
13the D&O insurance intermediary asking, “Are we bound? No policy number or word
Friday. Very concerned that we are exposed. Please advise asap. Customer is not
happy with me about this.”49 The intermediary responded at 10:13 a.m. that theunderwriter and carrier both had additional questions.50 On October 6 at 9:37 a.m.,
Neal emailed a different intermediary to see if they could give him a quote for D&O
insurance.51 On October 8 at 9:58 a.m., Neal emailed yet another underwriter, “I
have a pressing need to get D&O in place on [Revelation]. Westchester is stallingand have not bound….”52 At some point after this October 8 email, Westchester
bound D&O insurance.53
The trial court found that “Revelation did not have D&O insurance” from
October 5 until at least October 8.54 This was a “potentially catastrophic failure…,”
as Revelation is a coal mining business, which is commonly known as a high-risk
industry dealing in inherently dangerous conditions.55 The trial court found that:49

Id.; see also C183-C184.

50

Id.

51

Id.; C128.

52

Triple H, 2018 WL at *7; C148-C149.

53

Id.

54

Id. at *19.

55

Id.
14

The failure to secure coverage, and the failure to truthfully
and fully inform his client of that failure, exposed Omni toa significant risk of monetary and reputational harm. At
the very least, this behavior was not in the best interest ofOmni and constitutes a breach of Neal’s fiduciary duties.56
Less than ten days later, on October 14 at 9:20 a.m., Neal emailed Hoops,“Your [Hoops’] personal policies come due tomorrow, so we need to bind today. I
was not successful in getting all policies…replaced with my agent here as I had
hoped to do….”57 Neal later wrote that he could get the policies bound “…effective
10-15. However it might be trouble getting a claim paid in the window of midnight
to whenever we send order to bind.”58 At 4:38 p.m., Hoops replied “24 hours of
exposure is unacceptable this is no way to do business.”59 Ultimately, the policies
were placed by Hammonds.
The trial court’s holding that Neal violated his fiduciary duties by failing toprocure insurance, and then failing to be truthful, is not contested by Neal.

56

Id.

57

Triple H, 2018 WL at *8; see also C135.

58

Id.

59

Id.
15

F. Triple H Performed as Required by the Contract.
The trial court held, and Neal does not challenge on appeal, that Hoops “didnot breach the contract….”60 In the end, for 30 days of work – during which Neal
actively ran a competing insurance agency (i.e. Neal Insurance) for a profit, which
he kept all of – Neal received roughly $155,000 in commissions and a pro-rated
salary of $100,000 per year, which was paid out of Hoops’s own pocket.61
G. Neal Covertly Opens an Omni Bank Account and Redirects
Commissions.
The largest policy that Omni procured for Revelation was a workers’
compensation policy for surface mining employees with Kentucky Employers’
Mutual Insurance (“KEMI”).62 The KEMI policy was not financed, and Omni’s
commission was paid on a monthly basis.63 On January 27, Hoops emailed Neal toinquire as to why Omni had not received any commissions from KEMI. 64 Neal
responded by confessing to have secretly redirected the KEMI commissions to an

60

Id. at *1.

61

See C001-C005 at ¶¶1, 3 (Showing a distribution of $79,148.46 to Neal); Triple
H, 2018 WL 3650242, at *19-*20 (showing a distribution of $75,000 to Neal).

62

A366 at 107:21-108:4.

63

Id.

64

C162.

16

account that only he controlled.65 Neal’s covert attempt to control Omni’s largest
source of commissions was one factor the trial court considered in making its
credibility determinations.66
II.

DISPUTED FINDINGS OF FACT
A. The Parties Agreed to Dissolve Omni on October 15, 2014.

On October 15, 2014, Hoops and Neal met and jointly decided to end theirpartnership and go their separate ways.67 As the trial court noted in the Opinion,
there was very little in the way of “written evidence that illuminates the events ofOctober 15-17…;” therefore, the Court had to make a determination based, in part,on credibility.68
Hoops testified that on October 15, he and Neal agreed “Omni would be
dissolved and that we would go our separate ways and that we would split thecommissions for the next year 50-50.”69 Hoops then proposed – and Neal agreed –the parties should dissolve Omni. In exchange for dissolving Omni, Neal agreed

65

A367 at 109:1-8.

66

Triple H, 2018 WL at *1, n. 11.

Id. at *12 (“The members, with Hoops as Triple H’s agent, agreed to dissolve
Omni on October 15, 2014, and memorialized that agreement in writing on
October 27, 2014.”); A359 at 78:12-16; see also C150.

67

68

Id. at *8.

69

Id.; see also A359 at p. 78.
17

that Hoops would pay for the renovations to Omni’s office, and that Neal would
receive half of Omni’s remaining commissions and all of Neal Insurance’s profits.70
Neal sent a confirmation email the following day, in which he wrote“[r]egardless, of how or whether we change our Omni concept. (sic) We are inagreement on a 50/50 split for this year. Correct?”71 As if that were not enough,
Neal admitted at trial that on October 15, he and Hoops agreed to dissolve Omni. 72
Based on the evidence and live witness testimony, the trial court ruled that “[t]hemembers…agreed to dissolve Omni on October 15, 2014, and memorialized thatagreement in writing on October 27, 2014.”73

70

Id. at *8, 17; see also A359 at 79:16-23.

71

A305.

See, e.g., A468 at 414:2-8 (“Q. And on 10/15, isn’t it true that you and Jeff talked
about unwinding Omni and going your separate ways? A. Yes. Q. And you
agreed to it. Isn’t that correct? A. Agreed in context.”); A446 at 324:1-7 (Nealfurther admitted that he agreed to end the parties’ partnership because, in part,
Omni “wasn’t going to work” without Triple H); A468 at 415:11-24 (“agreed on
the 50/50. I agreed in concept that Omni – I could see that we weren’t going to– based on what Jeff was saying, we weren’t going to go forward with it.”); A439
at 299:3-5 (At trial, when asked about the events on October 17, Neal testified“No way. I never -- I mean, it's in here a million different places. I always
accepted the 50 percent.”).

72

73

Triple H, 2018 WL at *12.

18

B. The October 17, 2016 Meeting.
Revelation financed its policy premiums for the 2014-2015 policy year,74
which required a down payment of roughly $412,000 that had to be delivered by
October 17, 2014.75 In order to execute the finance agreement, a representative of
Revelation and Neal had to sign the document.76 Because of the importance oftimely returning the executed finance agreement, Neal asked Revelation’s CFO, Lisa
Henson, to expedite Revelation’s processing of the agreement and down payment,
and set up a face-to-face meeting at Revelation’s headquarters on the morning of
October 17th.77
Hoops and Neal met in the morning on October 17.78 Neal told Hoops that herefused to sign the finance agreement, unless Hoops wrote “him a check for the fullcommissions…which were $200,000.”79 Hoops and Neal engaged in a “fairly
heated discussion,” in which Hoops argued that “emptying the checking account”

74

A358-A359 at 76:23-77:14.

75

Id.

76

A359 at 77:15-18.

77

C151-C159; see also A359-A360 at 80:24-81:15.

78

A360 at pp. 81-82.

79

Id. at 81:12-15.

19

was unwise prior to hiring someone to produce the insurance cards and prior to thecarrier’s policy audits.80 Neal eventually agreed that the parties “would distribute$150,000…$75,000 was given to Jerry Neal and 75,000 was given to Triple H….”81
Throughout this litigation, Neal has denied Hoops’s account of the October
17th meeting.82 Neal continued to push this false narrative at trial denying that heever made such an ultimatum to Hoops.83
Neal’s personal notes, however, state that: “I arranged a Premium FinanceAgreement for about half of the Revelation Premiums which generate about$200,000 of commission immediately. I demanded to get paid before I signed the
Finance Agreement and Jeff and I took $75,000 each much to his objection. No
reason not to take the money.”84 When asked if he drafted this synopsis containing
this admission, Neal testified as follows:
A. I wrote that…But my testimony is that I didn’t demand themoney….

80

Id. at pp. 81-82.

81

Id. at 82:13-17.

C170 (Neal’s verified interrogatory responses, in which he states that “Hoops
suggested that Hoops and Neal each received a distribution of $75,000. Neal
agreed.”).

82

83

A469 at 417:17-420:2 (When asked if he demanded a distribution in order tosign the finance agreement, Neal responded “Absolutely not.”).

84

C179-C180.
20Q. So then why did you write here that you went in and you
demanded to get paid before I sign the finance agreement? Why
were those words that you wrote?
A. They were just a group of words that I put together….85
Neal’s contemporaneous notes demonstrate that he used his knowledge of Hoops’s
fear of being uninsured along with Hoops’s statement that he would rather lose $1.1
million a day rather than go uninsured for a minute, to pressure Hoops into making
a $75,000 distribution.
Within an hour of the October 17th meeting, Hoops emailed Neal the terms
that the parties had discussed during their face-to-face meeting.86 The trial court
found that “consistent with their pattern of behavior,”87 at 9:15 a.m. that same day,
Hoops emailed Neal a summary of what Neal and Hoops agreed to:
As you know on September 1, 2014 we agreed to thefollowing structure for Omni:
1) Omni owned 50/50 by you and Triple H family LP
2) You would be paid a salary of $100K per year plus
benefits to manage Omni
3) All commissions including what you projected from
Neal Insurance deals in place of $65,000 would go
to Omni4) Jacobs would receive 10% commissions on
Revelation deal and 33% on any new business they
bring

85

A470 at 422:21-423:1.

86

A440 at 302:6-8.

87

Triple H, 2018 WL at *12.
21

5) Then as cash built up in Omni we would
periodically distribute earnings on a 50/50 basis
Given the recent turn of events it appears the best pathforward would be to unwind Omni and I would like foryou to surrender your 50% interest for the following
consideration:
1) You keep all income from Neal Insurance2) I will eat the expense of remodeling the main floor
for $65,000 to accommodate the offices
3) You will receive the following:- 50% of the commissions after the following
expenses are deducted- Any expense incurred to ate for benefits or 401K match- Half of the 10% commission we agreed to pay
Jacobs4) This will be paid to you by Omni as thecommissions flow into the company.88
Neal ultimately kept all of Neal Insurance’s income, Hoops paid for the renovations,and Neal has received his 50% of Omni commissions.89
With the business relationship concluded, Hoops contacted Hammond andJacobs asking whether they were interested in acquiring Neal’s 50% interest in88

Triple H, 2018 WL at *12-13; see also A306-A307.

89

Id. at *17-18; see also A360-A361 at 84:14-85:3; C001-C005 at ¶¶1, 3 (Showing
a distribution of $79,148.46 to Neal).

22

Omni.90 This was the first time that Hoops discussed owning an insurance agency
with Jacobs and Hammond.91
C. The Parties Provide Written Confirmation of Their Agreement
to Dissolve Omni on October 27, 2014.
On October 27, 2014, Neal emailed Hoops about Omni hiring a person to help
with administrative work part time.92 At 11:11 a.m. Hoops responded, in part:I am really concerned about whether we are going to beable to make this work with Lisa and Heather as I spokewith both of them and it is not good.
In the event we cannot get this worked out, I would
propose we just unwind what we were going to do with
Omni and you will get 50% of the commissions and keep
everything you earn from Neal Insurance and just let ourdeal die when it comes up for renewal. Lisa is involved as
CFO with all of my entities and she is an integral part ofeverything I am doing. It is clear you do not think much of
Heather and I know little about insurance but she has donea great job for us the past 6 years and with all she and Joe
are involved in for us, I cannot cut her loose.
My gut is just work this out with you and give you the 50%
and let you keep Neal and go back to the way it was foryou before. I will eat the remodeling downstairs as I canprobably use that space sometime in the future. If you arein agreement, I will get Eddie to draft up something that90

A308-A309.

91

Triple H, 2018 WL at *15, n. 164.

92

Triple H, 2018 WL at *10.

23

commits me to get you the 50% of commissions until
October 5th, 2015 so you will have something in writing.93
Neal responded: “I will agree to what needs to be done…I don’t see all that muchneed for communication between Lisa, Heather and I…for the rest of the policy
year….”94 Leaving no doubt, moments later Neal wrote another email confirming
his agreement: “OK. 50% is fine…Tell me how I can get out of the way. Several
questions need to be cleared up.”95 Hoops and Neal then discussed minor details
regarding how they would go about winding up Omni on October 27 and 28.96
After Neal agreed to terms for dissolution on October 15 th, then again on
October 17th, then two times on October 27th, Neal – in line with his modus operandi– tried to renegotiate the deal.97 Now, twelve days after agreeing to end theirpartnership and 45 minutes after providing written confirmation of his willingness
to accept “50%”, Neal said “you need to research normal costs associated withacquiring an agency.”98

93

Id.; see also A323.

94

Id.; see also A322-A323.

95

Id.; see also A322.

96

Id.; see also A320-A321.

97

Id.; see also A325-A330.

98

Triple H, 2018 WL at *10; see also A327.

24

In response to Neal’s attempted renegotiations, Hoops reminded Neal that theparties had already reached an agreement to go their separate ways. 99 Neal thenasked Hoops, for the first time, where Hoops intended to move Revelation’s 2015
policies.100 Hoops responded, truthfully, that he would “most likely go back to V[an]M[eter].”101 Hoops’s response was noncommittal and “certainly left the door
open…for other options.”102 At the time of the statement, Hoops, Hammond, andJacobs had not even discussed forming their own insurance agency. 103 The trial
court, after hearing the live witness testimony of Hoops, Neal, Hammonds, andJacobs, found that: “Hoops does not discuss replacing Neal until after they had
agreed to dissolve Omni…Black Diamond is not formed until after Hoops and Nealconfirm their October 15 agreement in writing on October 27. Moreover, the99

Id.; see also A326.

100

Id.; see also A327.

101

A326.

102

A363 at 95:15-20.

103

Triple H, 2018 WL at *15, n. 164; see also A493 at 512:20-23. In the Opening
Brief, Neal relies on a quote from Hammond regarding getting certain licenses
for Black Diamond. This was a misstatement that was rightly disregarded by thetrial court. Hammond made clear that the “first time” her and Hoops discussed
forming Black Diamond was after Hoops and Neal agreed in writing to dissolve
Omni. A493; see also A331 (The first document in evidence discussing Black
Diamond is dated October 30, 2014).

25

timeline on which Black Diamond was established is in line with the timeline on
which Omni was formed.”104

104

Id.
26

ARGUMENTI.

It Was Not Clearly Erroneous For The Trial Court To Rely On Trial
Evidence Showing That Hoops And Neal Gave Their Written Consent
To Dissolve Omni.
A.

Questions Presented.

Was the trial court’s finding that the parties agreed on October 15, 2014 todissolve Omni and then gave written consent to dissolve Omni on October 27, 2014
clearly erroneous?105
Was the trial court’s finding that the parties agreed and gave written consent
to dissolve Omni before Hoops discussed his future plans with Neal and before
forming Black Diamond clearly erroneous?106
Was the trial court’s holding that the parties gave their written consent todissolve Omni a misapprehension of Delaware law?107
B.

Scope and Standard of Review.

“After a trial, findings of historical fact are subject to the deferential ‘clearlyerroneous’ standard of review.”108 “That deferential standard applies not only to

105

A180-A182; A821; C068

106

A180-182; A821; C068

107

A180-182; A821; C068.

108

Bank of N.Y. Mellon Trust Co., N.A. v. Liberty Media Corp., 29 A.3d 225, 236(Del.2011).
27

historical facts that are based upon credibility determinations but also to findings ofhistorical fact that are based on physical or documentary evidence or inferences fromother facts. Where there are two permissible views of the evidence, the factfinder’schoice between them cannot be clearly erroneous.”109“When factual findings are based on determinations regarding the credibilityof witnesses, however, the deference already required by the clearly erroneous
standard of appellate review is enhanced.”110 This is because the Supreme Court“respects and gives deference to findings of fact by trial courts when supported by
the record, and when they are the product of an orderly and logical deductive
reasoning process, especially when those findings are based in part on testimony oflive witnesses whose demeanor and credibility the trial judge has had the opportunity
to evaluate.”111

109

Id.

110

Cede & Co. v. Technicolor, Inc., 758 A.2d 485, 491 (Del.2000).

111

OptimisCorp v. Waite, 137 A.3d 970, 971 n.2 (Del. 2016); Stegemeier v.
Magness, 728 A.2d 557, 561 (Del. 1999).
28

C.

Merits of the Argument.
1.

The Trial Court’s Finding of Facts Should Not Be Reversed.
a.

Neal consented to dissolution.

Under the applicable standard of review, the Court must affirm the trial court’s
findings of fact if they are the product of a reasoned and logical fact-finding processthat is grounded in the evidence presented at trial. Neal testified at trial that he andHoops agreed to dissolve Omni during the October 15 meeting.112 Neal testified thathe “always accepted the 50 percent.”113 Neal further testified that he “agreed on the
50/50. I agreed in concept that Omni – I could see that we weren’t going to – basedon what Jeff was saying, we weren’t going to go forward with it.”114
Neal’s testimony provides the context and his emails provide clear written
confirmation that he agreed to dissolve Omni. On October 27, in response to Hoops
writing that he wants to “unwind what we were going to do with Omni and you will
get 50% of the commissions and keep everything you earn from Neal Insurance andjust let our deal die when it comes up for renewal,” Neal wrote “I will agree withwhat needs to be done but it is a real shame.”115 A few moments later, Neal wrote,

112

A468 at 414:2-8.

113

A439 at 299:3-5.

114

A468 at 415:11-24.

115

Triple H, 2018 WL 3650242, at *13.
29

“OK. 50% is fine . . . Tell me how I can get out of the way. Several questions need
to be cleared up.”116
Even accepting Neal’s argument that there are two ways to read his emails,
under the clearly erroneous standard of review the trial court’s finding that Neal’s
writings provide written consent to dissolve Omni cannot be overturned on appeal.117
This is particularly so here because the trial court made its finding concerning themeaning of Neal’s emails against the context of his trial testimony. Neal’s myopic
focus on particular snippets of his emails to the exclusion of all his other statements
and the context of the parties’ discussions is misplaced. The trial court’s finding offact was based on a totality of all the evidence and a product of an orderly and logicaldeductive process in interpreting the parties’ communications. Accordingly, the trial
court’s finding of fact was not clearly erroneous.
b.

Hoops did not make material misrepresentations
to Neal.

Neal argues that the trial court erroneously found that he consented to dissolve
Omni because, according to Neal, Hoops misrepresented his future plans. Neal is

116

Id.

117

Siga Techs., Inc. v. PharmAthene, Inc., 132 A.3d 1108, 1130 (Del. 2015), as
corrected (Dec. 28, 2015) (“Where there is more than one permissible
determination to be drawn from the evidence, and the trial court chooses one, itsfinding cannot be clearly erroneous.”).

30

wrong. The trial court considered the same argument Neal advances on appeal anddenied it because it is “not supported by the evidence.”118
The trial court found that no party elicited any evidence that “Hoops’s plans
after Omni were discussed at either the October 15 or 17 meetings.”119 Neal does
not appear to challenge this finding. Next, the trial court found that at 11:11 a.m. on
October 27, Hoops wrote to Neal that “My gut is to just worth this out with you andgive you the 50% and let you keep Neal and go back to the way it was for you
before.”120 Then, at 12:59 p.m., after Neal gave written consent to dissolve Omni at
12:14 p.m., Neal asked Hoops, for the first time, what his plans were. Neal wrote“When you say you are going back to how you were, what does that mean right now?
Back to [Van Meter]? Someone else?”121 Hoops responded at 1:27 p.m., stating, inpart: “I am going to do what I said, which is keep Revelation with Omni until
October 5th, then most likely will go back to [Van Meter] as they stepped up anddone my personal at the last minute . . . .”122 Neal’s Opening Brief does not, because
it cannot, point to any evidence where he asked, or Hoops volunteered, information

118

Triple H, 2018 WL 3650242, at *13, n.134.

119

Id.

120

Triple H, 2018 WL 3650242, at *13, n.134 (JX 73; A326-328).

121

Id.

122

Id.
31

about Hoops’s future plans before Neal’s 11:59 a.m. and 12:14 p.m. emails in which
he consents to dissolve Omni.
Similarly, Neal has not offered any evidence to show that Black Diamond wasformed before Neal’s October 27 written consent to dissolve Omni. At most, Neal
points to Hammond’s license application dated October 24. But this is not surprising
given that after Hoops’s meeting with Neal on October 17, which was two days after
Hoops and Neal verbally agreed to dissolve Omni, Hoops emailed Hammond to
discuss potential future plans together.123 But Neal cannot point to any evidence that
Black Diamond was formed before October 30.124 The trial court was not concerned
about the speed with which Black Diamond was formed. In fact, the trial court foundthat “the timeline on which Black Diamond was established is in line with thetimeline on which Omni was formed.”125
The trial court considered all of the evidence Neal relies on in his Opening
Brief. The trial court was not persuaded by Neal’s arguments because Neal refuses
to consider the totality of evidence and the context underlying the parties’ emails.
Neal has not offered any reason why the trial court committed clear error when it

123

Triple H, 2018 WL 3650242, at *15, n.164 (citing JX 69; A308).

124

A331.

125

Triple H, 2018 WL 3650242, at *15, n.164.

32

considered the same evidence Neal now relies on and rejected Neal’s arguments.
Accordingly, the trial court’s factual finding that Hoops did not misrepresent
material facts to Neal should be affirmed.
2.

The Trial Court Correctly Applied 6 Del. C. § 18-801(a).
a.

Only written consent is required.

Neal’s appellate arguments are simply a continuation of his endless effort “torenegotiate the terms of the dissolution and winding up, including during the courseof this litigation.”126 Neal contends that the trial court’s holding that the parties gave
their written consent to dissolve Omni constitutes reversible error under “generalcontract principals” because he did not agree to “all material terms.” 127 Neal’s
argument is not only factually erroneous, it is also legally flawed.
Neal does not dispute the trial court’s holding that because “[t]he Contract
does not address dissolution [] the LLC Act controls.”128 Yet Neal neverthelessargues that because Delaware limited liability companies are creatures of contract,
he should be able to read material contractual terms into the Contract that did not126

Triple H, 2018 WL 3650242, at *14.

127

C043 at p. 32.

128

Triple H, 2018 WL 3650242, at *12.

33

exist.129 Neal completely ignores the requirements of the controlling Delaware
Limited Liability Company Act (“LLC Act”).
The trial court held that the Contract contained four terms, none of which
addressed dissolution.130 Accordingly, whether the parties’ consent to Omni’s
dissolution was provided in writing was correctly analyzed by the trial court under
the LLC Act, because the LLC Act controls where a limited liability company
agreement is silent on dissolution.131

The controlling provisions of the then-applicable Section 18-801(a) require nothing more to dissolve a company than the“affirmative vote or written consent of the members of the limited liability
company.”132 The trial court correctly held that Neal’s October 27 emails, whenread in context of the parties’ verbal and written communications of the preceding
two weeks, constitute “written consent of the members” to dissolve Omni.133 Neal’s

129

C045-C046 at pp. 34-35.

130

Triple H, 2018 WL 3650242, at *11.

131

Id. at *12; See also Grove v. Brown, 2013 WL 4041495, at *7 n.74 (Del. Ch.
Aug. 8, 2013) (holding that “because the Operating Agreement is silent as todissolution, the LLC Act controls” and citing 6 Del. C. § 18-801(a)(3)).
Neal does not dispute the trial court’s application of the prior version of 6 Del.
C. § 18-801(a)(3) (1999). Triple H, 2018 WL 3650242, at *11, n.121. Even if
the amended version of 18-801(a)(3) applied, the trial court’s analysis was correct
because the amended version requires the “vote or consent” of at least 2/3 of themembership interests.

132

133

Triple H, 2018 WL 3650242, at *13.
34

argument that Omni cannot be dissolved because he did not agree to all of thematerial terms of dissolution misapplies the LLC Act. Neal changes a “writtenconsent” statutory standard to an “all material terms” common law contractual
standard on terms more favorable to him.
Neal’s argument also fails even if “general contract principles” govern theterms of Omni’s dissolution and not the LLC Act, as he conflates the legal distinction
between dissolution and winding up. Neal argues that the trial court erred in holdingthat the parties agreed to dissolve Omni under Section 18-801(a) because he hadquestions about how Omni would continue to serve as agent of the 2014-2015
Revelation policies under “his insurance license,” “how Omni would be dissolved,”
and “whether one party was buying out the other.”134 At best for Neal, however,these are issues related to winding up a limited liability company under Section 18803, not dissolution under Section 18-801(a). Thus, the issues Neal contends henever agreed to cannot constitute “material terms” of an agreement to dissolve a
company.

C042-C046 at pp. 31, 34, 35. Neal’s argument that there was not an agreement
concerning “whether one party was buying out the other” is factually incorrect.
Neal and Hoops repeatedly agreed to split Omni’s profits 50/50. Triple H, 2018
WL 3650242, at *12-*13.

134

35

The trial court correctly held that “dissolution of an entity causes any new
business to cease.”135 Accordingly, at bottom, consent to dissolve a limited liability
company is an agreement to stop engaging in new business and begin the process ofwinding up the company’s affairs. Neal’s emails on October 27, when read incontext of the parties’ preceding two weeks of communications, show that Neal
agreed and consented that Omni would not engage in new business and the parties
would go their separate ways. The trial court’s reading of Neal’s communications
was not clearly erroneous and its application the LLC Act was correct. The trial
court, therefore, should be affirmed.
b.

Hoops did not misrepresent material facts in obtaining
Neal’s consent to dissolve Omni.

Neal argues that he could not have consented to dissolve Omni because Hoops
misrepresented his future plans to Neal. But the trial court soundly rejected thiscontention as both factually and legally flawed. Neal contends that this case isanalogous to Dweck v. Nasser.136 The trial court correctly held that Neal’s reliance135

Triple H, 2018 WL 3650242, at *15. See also Pearson v. Rash, 1985 WL
149634, at *3 (Del. Ch. Feb. 13, 1985) (holding that “Following dissolution, apartnership continues to exist for the purpose of winding up its affairs. As ageneral rule, during this winding up phase no new business is undertaken” andciting Paciaroni v. Crane, 408 A.2d 946 (Del. Ch. 1979)).

136

C047-C048 at pp. 36-37 (citing Dweck v. Nasser, 2012 WL 161590 (Del. Ch.
Jan. 18, 2012).

36

on Dweck is “misplaced” because Dweck is “far from on point.”137 The trial court
correctly held that Dweck involved a different situation where the parties did notagree to dissolve the company and where one member began competing against thecompany without the consent of the other party. 138 Neal’s Opening Brief offers noreason to question the trial court’s holding that Dweck is inapposite.
Neal’s argument strains credulity. It would not make sense for a member of alimited liability company to condition his consent to dissolve the company upon the
future plans of other members. The only purpose one would have in placing such a
condition on his consent would be if his aim was to frustrate and impede the othermember’s future plans. The trial court correctly found that the trial evidence showedthat after Neal failed to timely procure Revelation’s and Hoops’s policies, as well asother things, Neal and Hoops agreed to go their separate ways and dissolve Omni.
The trial court also correctly found that Neal gave such consent before ever asking
Hoops about Hoops’s future plans and, in any event, Hoops did not make any
material misrepresentations to Neal. Accordingly, the trial court’s judgment shouldbe affirmed.

137

Triple H, 2018 WL 3650242, at *13, n.134.

138

Id.

37

II.

The Trial Court Correctly Applied Settled Delaware Law In Holding
That Hoops Did Not Usurp Omni’s Opportunities.
A.

Questions Presented.

Did the trial court misapply Delaware law when it held that Hoops did notusurp Omni’s business opportunities?139
B.

Scope and Standard of Review.

This Court’s standard of review of the trial court’s legal conclusions is denovo.140
C.

Merits of the Argument.
1.

Neal Argued Below That He Was Entitled To 50% Of
Commissions Generated From Revelation’s And Hoops’s
Policies In Perpetuity.

Neal’s Opening Brief contradicts itself. Although Neal’s Opening Briefargues that he never claimed that Hoops and Triple H owed he and Omni a perpetualobligation to place Revelation’s and Hoops’s insurance policies, Neal’s Opening
Brief makes that very same argument. Neal contends that Hoops “diverted Omni’s
insurance business, including the insurance policies of Hoops and his businesses, toBlack Diamond, where they are also 50% owners.”141 This is factually wrong.

139

A165-A173; A807-A815; C065-C067.

140

DV Realty Advisors LLC v. Policemen's Annuity & Ben. Fund of Chicago, 75
A.3d 101, 109 (Del. 2013).

141

C036 at p. 25.
38

Omni’s only business was Revelation’s 2014-2015 renewal policies. Neal received
50% of the profits generated from the commissions earned on the Revelation 20142015 renewal policy. Hoops always agreed that Omni’s profits would be split
50/50,142 and Triple H, as liquidating trustee of Omni, has complied with the trial
court’s Dissolution Order and distributed Omni’s funds to Neal as directed by thetrial court.
Thus, the only way Neal can argue that Hoops “diverted Omni’s insurance
business” is if Neal also contends that Hoops had a perpetual obligation to send
Revelation’s and his personal insurance policies to Omni for renewal. Absent suchperpetual obligation, there is no conceivable way that Hoops could have “diverted
Omni’s insurance business” because Revelation’s 2014-2015 renewal policies
stayed with Omni until October 2015, and Neal received his share of thecommissions from those policies.
Neal made the same argument concerning his alleged perpetual rights both
before trial and at trial. For example, Neal’s Amended Counterclaim alleges that
“Hoops and/or Triple H have directed Omni’s insurance business, including theinsurance policies of Hoops and his businesses, to Black Diamond, causing Omni tolose commissions on millions of dollars in premiums that Hoops promised Neal

142

Triple H, 2018 WL 3650242, at *12-*13.
39

would be paid to Omni in the future.”143 Likewise, in the Pre-Trial Stipulation, Nealasserted that an issue of fact and law to be tried was “Did Hoops and/or Triple H
breach their contract with Neal by terminating Omni’s business and appropriating
and directing the present and future insurance business of Omni to Black Diamond,including, but not limited to, policies sold to Hoops, his family and his businesses
and businesses owned or controlled by Triple H, Hoops, and Revelation?”144
At trial Neal also said he thought Revelation and Hoops would send Omni
their insurance policies forever.
Q:

But yes or no, is there a writing in which Mr. Hoops
promises you Revelation’s and his own insurance business
forever?

A:

And my answer would be in maybe no direct terms, but tomy knowledge of business of this−when we had the LLC
and when we shook hands and we talked about this, I
understood that I would write that forever.

Q:

Is it your positions that you cannot respond to my question
with a yes or no? Because I’m asking if there is a writingthat actually says that.

A:

I – I don’t know of a writing. Is that fair?145

143

A092 at ¶ 111.

144

Id. at Section III(B), p. 23.

145

A448 at p. 332:10-22 (emphasis added).

40Based on Neal’s contentions, his expert opined at trial that Neal’s damages
exceeded $3,000,000.146

Neal’s expert so opined because he speculated an

approximate amount of revenues Omni could receive if every business Hoops
invested in and Hoops personally used Omni to place their insurance policies inperpetuity.147

Accordingly, Neal’s entire damages theory was based on his

contention that he was entitled to 50% of the profits generated from Hoops’s andRevelation’s insurance policies into perpetuity.
Neal now claims that the trial court committed reversible error in holding thatthe parties had no agreement under which Hoops and Triple H were required toperpetually send Revelation’s and Hoops’s insurance policies to Omni.148 But Neal
goes even further and argues that “[t]his perpetuity argument was a red herring
inserted into the case by Hoops/Triple H and not advanced by Neal.”149 Neal’s pretrial positions and trial testimony demonstrably show that Neal’s contention isincorrect. This is yet one more example of Neal being “the perpetual salesman who
will say whatever he needs to, regardless of veracity, in order to secure the deal.”150

146

A826-A829 at pp. 54-57.

147

A562 at 671; A571-72 at 707-711.

148

C006-C072 at pp. 4, 38-39.

149

Id. at 38.

150

Triple H, 2018 WL 3650242, at *2.
41

2.

Neal Cannot Satisfy The Elements Of A Usurpation Claim.

The trial court found that “Neal does not point to any evidence in the record,
however, that supports his assertion that the parties agreed that Omni would place
Revelation’s insurance policies in perpetuity.”151 In fact, the trial court found that“the evidence directly contradicts” Neal’s contention that he and Hoops agreed that
Omni would place Revelation’s policies in perpetuity.152 And Neal’s post-trial
concession – that there was no requirement that Triple H and Hoops send Omni
Revelation’s and Hoops’s insurance policies in perpetuity – highlights the fatal flaws
in his corporate usurpation claim.
In order to prove a corporate usurpation claim, the company must have “aninterest or expectancy in the opportunity.”153 Conversely, if the company “holds nointerest or expectancy in the opportunity,” the “officer or director may take [the]opportunity.”154 An “interest or expectancy” must be concrete and specific, such as
an “articulated business plan” that involves the opportunity,155 a commitment of151

Triple H, 2018 WL 3650242, at *11.

152

Id.

153

Id., at *15, n. 161 (quoting Broz v. Cellular Info. Sys., Inc., 673 A.2d 148, 15455 (Del. 1996)).

154

Id.

155

Broz, 673 A.2d at 156.
42

“significant time and resources to the development of a business model” that could
encompass the opportunity,156 or a right of first refusal to provide such services.157
Accordingly, where potential opportunities are “subject to change” there cannot bea “reasonable expectancy of being awarded the [opportunity].”158
Here, because the trial court found, and Neal now agrees, that the parties neveragreed that Omni would place Revelation’s and Hoops’s policies in perpetuity, Neal
could not have had a reasonable expectation that Omni would engage in suchperpetual business. This is further buttressed by the fact that the trial court held thatas customers or potential customers of Omni, Revelation and Hoops had a right toplace their insurance policies with any agent they choose.159 The trial court further
found that Neal’s performance as an agent was substandard and put Omni at risk ofliability. Neal failed to timely place Revelation’s and Hoops’s policies, which the156

In re Riverstone Nat'l, Inc. Stockholder Litig., 2016 WL 4045411, at *12 (Del.
Ch. July 28, 2016).

157

Yiannatsis v. Stephanis ex rel. Sterianou, 653 A.2d 275, 277, 279 (Del. 1995).

158

Sustainable Energy Generation Group, LLC v. Photon Energy Projects B.V.,
2014 WL 2433096, at *16 (Del. Ch. May 30, 2014).
Triple H, 2018 WL 3650242, at *16 (“As the client, Hoops is free to hire
whomever he pleases, whenever he pleases.”).

159

43

trial court found to be “potentially catastrophic failures to secure insurance for
Omni’s only real customers.”160
Accordingly, the trial court found that “it is more probable than not that Hoops
decided to terminate his relationship with Neal due to Neal’s performance as aninsurance agent . . .”161 For all these reasons, Neal could not have had a reasonable
expectation that Omni would place Revelation’s and Hoops’s policies after the 20142015 policy year. Thus, even assuming, arguendo, that the trial court’s finding thatthe parties consented to dissolve Omni is clearly erroneous, it was harmless error
because Neal cannot satisfy the elements of a corporate opportunity usurpation
claim.162

160

Id.

161

Triple H, 2018 WL at *16.

There is another independent reason why any error in the trial court’s factfinding with respect to the parties’ consent to dissolve Omni was harmless. The
trial court held that Neal breached his contractual obligations to Triple H byfailing to roll Neal Insurance into Omni and keeping Neal Insurance’s profits forhimself. Triple H, 2018 WL 3650242, at *17. This material breach of theContract by Neal excused Triple H’s future performance as the non-breaching
party. See In re Mobileactive Media, LLC, 2013 WL 297950, at *13 (Del. Ch.
Jan. 25, 2013). Although the trial court held that Triple H was not damaged by
Neal’s breach, the trial court did not reach the issue of whether Neal’s priormaterial breach excused Triple H from any future performance under theContract. A795-96.

162

44

CONCLUSION
Wherefore, for all the foregoing reasons, the Triple H Parties respectfully
request that the Court affirm the judgment below.

BERGER HARRIS LLP
By: /s/ David B. AnthonyDavid B. Anthony, Esq. (I.D. # 5452)
Sean A. Meluney, Esq. (I.D. # 5514)
1105 N. Market Street, Suite 1100
Wilmington, DE 19801
Telephone: (302) 655-1140
Facsimile: (302) 655-1131
danthony@bergerharris.com
smeluney@bergerharris.com
Attorneys for Triple H Family Limited
Partnership and Jeffery A. Hoops
Dated: December 28, 201845