Title: Delphi Petroleum, Inc. v. Magellan Terminal Holdings, L.P.

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
DELPHI PETROLEUM, INC,  
§ 
 
 
 
 
 
 
§ 
No. 413, 2018 
 
Plaintiff Below, 
 
 
§ 
 
 
Appellant,  
 
 
§ 
Court Below: Superior Court 
 
 
 
 
 
 
§ 
of the State of Delaware  
 
v. 
 
 
 
 
§ 
 
 
 
 
 
 
 
§ 
C.A. No. N12C-02-302 
MAGELLAN TERMINAL 
 
§ 
 
HOLDINGS 
, L.P.,  
 
 
§ 
 
 
 
 
 
 
§ 
 
Defendant Below,  
 
§ 
 
 
Appellee. 
 
 
 
§ 
 
Submitted: April 3, 2019 
Decided: 
April 15, 2019 
 
Before STRINE, Chief Justice; VALIHURA and TRAYNOR, Justices. 
 
O R D E R 
 
 
This 15th day of April 2019, after careful consideration of the parties’ briefs 
and the record on appeal, it appears to the Court that: 
(1) 
In this hard-fought contest between former contractual partners, every 
matter has been the subject of a fight.1  This is the second pass before us of this 
                                         
1 For example, during the pendency of this appeal, Delphi filed an exhibit with its reply brief 
containing a simplified version of some calculations.  This filing appears to have been motivated 
by the fact that the Superior Court had ruled in favor of Magellan, who had presented their 
calculations more simply.  Three days later, Magellan filed a motion to strike, arguing that Delphi 
was attempting to introduce new evidence not presented to the trial court.  Delphi responded that 
the exhibit was not new evidence, but rather an immaterially different presentation of evidence it 
had properly introduced.  We, however, have given no credit to simplicity for simplicity’s sake 
and did not consider Delphi’s exhibit when making our decision.  Magellan’s motion to strike is 
thus denied as moot. 
2 
 
dispute, which revolves around overcharges by Magellan in its provision of oil 
storage services to Delphi.  
(2) 
Among other things, Magellan charged Delphi 18% interest on what 
Magellan alleged were overdue balances even though a proper accounting showed 
that Magellan actually owed money to Delphi for most of their relationship due to 
the overcharges that Delphi had paid.  In the Superior Court’s original post-trial 
decision, it held that Delphi was entitled to a refund equal to 29.5% of the overdue 
balance interest because, exclusive of that refund, Delphi was entitled to recover 
29.5% of the $2.1 million it had paid to Magellan.2 
(3) 
In the first appeal, we remanded the case to the Superior Court for a 
redetermination of prejudgment interest.  We also encouraged the Superior Court to 
verify its determinations regarding the overdue balance interest refund.3  On remand, 
the parties presented significantly disparate figures. 
(4) 
Magellan argued that its methodology used a “simple, common-sense 
formula.”4  It essentially took its heating bill overcharges and assumed that the 
overcharge in each month was the annual overcharge divided by the number of 
months in which overbills occurred in that year.  It then applied the statutory interest 
                                         
2 App. to Op. Br. at A73–74 (“A__” hereafter); Delphi Petroleum, Inc. v. Magellan Terminal 
Holdings, L.P. (Delphi I), 2017 WL 6371162, at *2 n.7, 177 A.3d 610 (Del. 2017) (Table), 
reargument denied (Jan. 11, 2018). 
3 Delphi I, 2017 WL 6371162, at *2 n.7. 
4 Answering Br. 4. 
3 
 
rate to each overcharge, calculating interest on a monthly basis.  After correcting an 
interest rate error at the behest of Delphi, Magellan proposed a figure of $442,833.92 
in prejudgment interest.  
(5) 
Delphi’s approach was created with the assistance of Donald Dahl, a 
certified public accountant with 34 years of experience.  Dahl added up the running 
balance of payments and obligations between the parties for each day, and on days 
where the balance favored Delphi, he affixed the statutory prejudgment interest rate, 
and on days where the balance favored Magellan, he affixed a penalty rate of 18%.  
Delphi ultimately proposed a figure of $840,145.63 in prejudgment interest and 
interest refunds exclusive of the interest refund already awarded. 
(6) 
As the Superior Court’s written decision shows, it believed itself 
constrained by our remand order to examine only a portion of the relationship 
between the parties and to focus its award of prejudgment interest on that portion.5  
It accordingly adopted Magellan’s corrected figure. 
(7) 
But we do not think our first remand so constrained the Superior Court.  
As noted, our remand order suggested that the Superior Court reexamine its 
calculations regarding the overdue balance interest.6  Although we did not 
specifically address this possibility in our remand order, Delphi might be entitled to 
                                         
5 Delphi Petroleum v. Magellan Terminals Holdings, L.P., 2018 WL 3385611, at *3 (Del. Super. 
July 10, 2018) (citing Delphi I, 2017 WL 6371162, at *2). 
6 Delphi I, 2017 WL 6371162, at *2 n.7. 
4 
 
additional refunds of overdue balance interest if it had made payments to Magellan 
before Magellan began charging interest or while Magellan was charging interest.  
Depending on the amount and timing of such payments, the supposed overdue 
balances on which Magellan was charging interest might consist of mostly 
overcharges, or at least more than 29.5%. 
(8) 
Delphi has demonstrated that its approach fairly took into account the 
parties’ entire relationship, gave Magellan credit for periods where Delphi had 
outstanding overdue balances, and conformed with the principles of our first remand.  
By contrast, Magellan’s approach, though presented more simply, failed to account 
for a significant portion of its misconduct during the parties’ relationship, in 
particular the misconduct that related to the overdue balance interest. 
(9) 
Rather than burden the Superior Court with the task of adjudicating 
further disputes between these parties, we direct it to enter a final judgment in 
accordance with Delphi’s calculations. 
 
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior 
Court is REVERSED and REMANDED for the entry of an order consistent with 
this opinion. 
 
 
 
 
 
 
BY THE COURT: 
 
 
 
 
 
 
 
/s/ Gary F. Traynor 
 
 
 
 
 
 
 
 
Justice