Title: Equity Trust Company v. Interactive Brokers LLC

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
EQUITY TRUST COMPANY,  
§ 
 
 
 
 
 
 
§ 
No. 172, 2018 
 
Plaintiff Below, 
 
 
§ 
Appellant,  
 
 
§ 
Court Below: Superior Court 
 
 
 
 
 
 
§ 
of the State of Delaware 
v. 
 
 
 
 
§ 
 
 
 
 
 
 
§ 
INTERACTIVE BROKERS LLC, 
§  
C.A. No. N17C-05-252 WCC[CCLD] 
 
 
 
 
 
 
§ 
 
 
Defendant Below,  
 
§ 
 
Appellee. 
 
 
 
§ 
 
Submitted: October 24, 2018 
Decided: 
October 26, 2018 
 
Before STRINE, Chief Justice; VAUGHN and SEITZ, Justices. 
 
O R D E R 
 
This 26th day of October 2018, it appears to the Court that: 
(1)  
Under a service agreement between the parties, Equity Trust provided 
trust and related services to Interactive Brokers’ customers in connection with the 
customers’ retirement plans.  Section 9 of this agreement provided for automatic 
renewal on the first day of the next year unless either party gave sixty days’ notice 
that it would terminate the agreement.  In October 2016, Interactive Brokers gave 
notice under Section 9 that it would not renew the agreement for 2017. 
(2) 
Equity Trust alleges Interactive Brokers’ choice to not renew the 
agreement triggered closing fees that Interactive Brokers has refused to pay.  Equity 
2 
 
Trust claims the fees are owed under Section 2(k) of the service agreement.  The 
amount of these fees is set forth in Exhibit B of the agreement, which provides for 
both a “Closing Fee” and a “Bulk Closing Fee.”1 
(3)  
Based upon Interactive Brokers’ refusal to pay these fees, Equity Trust 
brought a claim for breach of contract.  The court below granted Interactive Brokers’ 
motion to dismiss, holding that the contract provided the parties with a non-renewal 
option and exercising that option did not trigger any closing fees.2  Equity Trust 
appeals from that decision.  We review motions to dismiss de novo.3 
(4) 
The Superior Court correctly rejected Equity Trust’s argument that 
declining to renew the agreement prompted the payment of fees.  The agreement 
shows that the obligation to pay closing fees is triggered not when the entire 
agreement is terminated, but rather when individual accounts are closed.  Section 
2(k), which is the basis for the alleged breach, requires Interactive Brokers to “[p]ay 
all [Equity Trust] fees for Accounts closed during a calendar quarter and all quarterly 
trustee fees for all open Accounts.”4  Thus, closing fees are payable only on the 
closing of “Accounts.”  “Accounts” are in turn defined as “retirement plan accounts 
                                                          
 
1 App. to Opening Br. at A037 (Amended Fee Schedule). The Closing Fee is $20.00 per account 
and is also referred to as the “Non-Bulk Closing Fee.”  The Bulk Closing Fee of $40.00 applies if 
more than 20% of the account based is terminated during any one-year period of the agreement.   
2 Equity Tr. Co. v. Interactive Brokers LLC, 2018 WL 1216082, at *4 (Del. Super. Ct. Mar. 6, 
2018). 
3 Ramirez v. Murdick, 948 A.2d 395, 399 (Del. 2008). 
4 App. to Opening Br. at A023 (Service Agreement § 4(k)). 
3 
 
established by Customers,” with “Customers” defined as Interactive Brokers’ 
customers.5  Therefore, “Account” means an individual retirement plan account; that 
is, an account that an Interactive Brokers customer has with Interactive Brokers.  
Customers do not have “Accounts” with Equity Trust, which is only the trustee of 
the retirement plans.  That means that the obligation to pay a closing fee is triggered 
only when an Interactive Brokers customer’s account is closed. 
(5)  
At no point in the complaint does Equity Trust plead facts supporting a 
rational inference that all the “Accounts” were closed.  In fact, the complaint alleges 
that Interactive Brokers merely “assumed control of the Accounts,” “removed 
Equity Trust’s name from the Accounts,” and substituted itself “as trustee for the 
Accounts.”6  Those statements imply that Interactive Brokers did not close the 
Accounts, but instead just replaced Equity Trust as trustee once the agreement 
expired. 
(6) 
If Equity Trust wanted the non-renewal of the agreement to result in 
automatic Bulk Closing Fees, then it should have negotiated for a non-renewal to 
have that effect by operation of the agreement’s express terms.  The easy way to do 
that would have been to provide that a non-renewal under Section 9 would be 
deemed to have the same effect as closing all the Accounts under Section 2(k), 
                                                          
 
5 Id. at A021. 
6 Id. at A016 (Compl. ¶¶ 31, 33). 
4 
 
thereby requiring payment of Closing Fees and Bulk Closing Fees.  But, Section 9 
never cross-references to Section 2(k) at all, much less suggest that exercising the 
termination option would have the consequence of exposing Interactive Brokers to 
Closing Fees or Bulk Closing Fees under Section 2(k).7  Put simply, neither Section 
9, Section 2(k), nor the Amended Fee Schedule makes any connection between the 
non-renewal of the agreement and any fee owed for that action.  Therefore, the 
Superior Court correctly granted Interactive Brokers’ motion to dismiss. 
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior 
Court is AFFIRMED.   
 
 
 
 
 
BY THE COURT:  
 
 
 
 
 
 
 
 
/s/ Leo E. Strine, Jr. 
 
 
 
 
 
 
 
 
Chief Justice  
 
                                                          
 
7 Section 9 of the agreement provides for an initial non-cancelable term through 2001 and then 
automatic renewal “for additional one-year periods effective January 1st unless either party, upon 
at least sixty (60) days’ written notice prior to the renewal date, terminates the Agreement.”  App. 
to Opening Br. at A026 (Service Agreement).