COURT OF CHANCERY

OF THE

SAM GLASSCOCK III

VICE CHANCELLOR

STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE

34 THE CIRCLE

GEORGETOWN, DELAWARE 19947

Date Submitted: June 28, 20231

Date Decided: August 1, 2023

Dean A. Campbell, Esquire

Law Office of Dean A. Campbell, P.A.

703 Chestnut Street

Milton, DE 19968

Sean A. Meluney, Esquire

Stephen A. Spence, Esquire

Meluney Alleman & Spence, LLC

1143 Savannah Rd., Suite 3-A

Lewes, Delaware 19958

Re: Candy Williams and Jackie Ferris, v. John M. Lester, Jr. et al., 

C.A. No. 2023-0042-SG

Dear Counsel:

Scientists have found that the octopus is bizarrely adept at navigating 

mazes.2 Its protean and malleable body—together with a keen brain distributed 

throughout its nervous system, so that each arm can think independently—allows it 

to make short work of finding any exit that a biologist’s apparatus has left it.3 But 

the octopus has nothing on the contortions exhibited in Plaintiffs’ attempt to 

establish jurisdiction here.

1 Following the completion of briefing on Defendants’ motion to dismiss, I asked the parties to 

submit supplemental briefing on the issue of subject matter jurisdiction. Upon reviewing both 

sets of briefs, I determined that oral argument was not necessary. I consider the matter fully 

submitted as of June 28, 2023, when the Court received the parties’ supplemental briefs. 

2

See, e.g., Giant Maze Experiment – Octopus VS Big Water Labyrinth, OctolabTV (May 4, 

2020), https://octolab.tv/giant-maze-experiment-octopus-vs-big-water-labyrinth/.

3

Id.
2

I. BACKGROUND

This matter involved a contract between the Plaintiff lot owners and the 

Defendant contractors for the latter to manage construction of a new house for the 

Plaintiffs. This Defendants did. The contract appears, from the complaint, to be a 

cost-plus-$75,000-fee contract (the “Contract”), and it provided for an estimate of 

building costs, all-in, of $414,000.4 Instead, the project cost $538,000.5 The 

Plaintiffs allege that the Defendants breached duties to maintain adequate records 

and to forgo markups of products and services bought or subcontracted for, both of 

which duties the Contract specifically provided for.6 They seek damages for this 

breach.

The matter is before me on the Defendants’ motion to dismiss.7 Defendants 

primarily rely on the doctrine of res judicata, arising from the following actions 

alleged in their brief. In September of last year, the Plaintiffs brought an action on 

the same facts here, in Superior Court.8 On December 16, oral argument was held 

on the Defendants’ motion to dismiss the Superior Court action.9 At argument, it 

appeared that the Superior Court was dubious of the merits of the contract claim, 

4 Verified Compl. for Breach of Fiduciary Duty and an Accounting (the “Compl.”) ¶ 6, Dkt. No. 

1.

5

Id. ¶ 10. 

6

Id. ¶ 7, 17, 19. 

7 Defs.’ Mot. to Dismiss, Dkt. No. 7.

8 Defs.’ Opening Br. in Supp. of their Mot. to Dismiss (the “Opening Br.”) 2, 4, Dkt. No. 7. 

9

Id. at 5. 
3

resulting in the Plaintiffs having an epiphany: their claim was “really” equitable in 

nature, and they orally requested the Superior Court grant leave to transfer the 

matter to Chancery.10 The Superior Court asked the parties for supplemental 

briefing on the adequacy of legal remedies.11 Both sides submitted the requested 

briefing on January 17, 2023.12 On the same day, the Plaintiffs filed this action in 

Chancery;13 thus, there were, as of that date, two actions seeking damages relief:

one in Chancery and one in Superior Court.

On February 25, the Superior Court delivered its opinion on the motion to 

dismiss.14 It found (1) that adequate relief was available at law, and therefore it 

would not transfer the matter to Chancery, and (2) that the Defendants’ motion to 

dismiss for failure to state a claim should be granted with prejudice.15 No appeal 

of this ruling was filed, and the Superior Court’s decision is now final.16

The Defendants have filed the motion to dismiss currently before me, 

relying on res judicata (as well as failure to state a claim). I asked for 

10 Williams v. Lester, 2023 WL 587943, at *1 (Del. Super. Ct. Jan. 25, 2023) (the “Super. Ct. 

Decision”).

11 Id.

12 Opening Br. at 5. 

13 Id., Ex. 4 ¶ 12.

14 See Super. Ct. Decision. 

15 Id.

16 See Opening Br. at 6 (pointing out that the period to file an appeal has run); see also Pls.’ 

Answering Br. to Defs.’ Opening Br. in Supp. of their Mot. to Dismiss (the “Answering Br.”), 

Dkt. No. 8 (failing to address this issue); Emerald Partners v. Berlin, 726 A.2d 1215, 1224 (Del. 

1999) (“Issues not briefed are deemed waived”) (citation omitted).
4

supplemental briefing on whether Chancery jurisdiction exists here, which the 

parties have helpfully provided.17 The res judicata defense appears compelling on 

the facts stated above; however, I do not, and should not, reach it if subject matter 

jurisdiction is lacking. Accordingly, I address that jurisdictional issue here.

II. ANALYSIS

In impressively octopoid fashion, the Plaintiffs have argued that what 

appears to be a simple action for breach of a contract between homeowner and 

contractor is really a matter in the core of equity jurisdiction.18 They argue that the 

contract in question is “unusual,” even “bizarre,” apparently thus requiring 

equitable intervention.19 They argue that the relationship between contractor and 

homeowner is necessarily one of special trust, or that the particular contract in 

issue creates such a special relationship, making the contractor a classic fiduciary 

for his counterparty.20 They point out that amounts held by contractors are, by 

statute, held for the benefit of subcontractors who “furnish labor or material” for 

construction,21 and allege that the homeowners here must be considered 

subcontractors.22

17 See Pls.’ Suppl. Br., Dkt. No. 14; Defs.’ Suppl. Br., Dkt. No. 15. 

18 See Answering Br.; Pls.’ Suppl. Br.

19 Answering Br. at 7, 14. 

20 Pls.’ Suppl. Br. at 2-3. 

21 See 6 Del. C. § 3503.

22 Answering Br. at 13-14.
5

Plaintiffs further allege that, because the Contract called for the contractor to 

keep a separate account for their project, they are entitled to an equitable 

accounting.23 Finally, Plaintiffs argue that the entity with whom they contracted, 

John Lester d/b/a Banner Custom Builders, is really Banner Custom Builders and 

Designers, LLC, a defunct entity, and thus equity must piece the corporate veil.24

These sinuous recharacterizations of a straightforward contract action for 

damages are, in a sense, a fine example of the pleader’s art. I examine them below 

and conclude, however, that fervid pleading does not an equitable action make.

A. Breach of Fiduciary Duty (Count I)

It is axiomatic that where a relationship is established and cabined by a 

contract, a damages action for its breach sounds in contract.25 The parties here 

were arms-length counterparties in a contract for services. Nonetheless, Plaintiffs’

first cause of action is for breach of a fiduciary duty created by the Contract.26 But 

nothing in the Contract provides that the Plaintiffs were able to rely on the 

contractor as a fiduciary.27 There was no special relationship of trust between 

these parties, nor did they share a common goal that could imply reliance in 

23 Compl. ¶¶ 22-26. 

24 Id. ¶¶ 27-33.

25 Nemec v. Shrader, 991 A.2d 1120, 1129 (Del. 2010).

26 Compl. ¶¶ 14-21. 

27 Id., Ex. A at 2-4. 
6

equity.28 The Defendants’ goal was to earn a contractual fee, $75,000, by 

managing the construction efforts of subcontractors; the Plaintiffs’ goal was the

erection of a home. According to the Plaintiffs, the Defendants overran the 

estimated cost of the home, presumably by taking funds to which Defendants were 

not entitled and comingling funds or costs required by contract to be kept 

separate.29 If so, the remedy is straightforward and available at law in an action for 

contract damages. While an action for breach of fiduciary duty is inherently 

equitable and, if well-pled, conveys jurisdiction on this Court, the Plaintiffs’

breach-of-fiduciary-duty count is nothing more than an artful repleading of a 

contract claim, for which damages, if merited, are fully available at law.

B. Equitable Accounting (Count II)

The Plaintiffs allege that they are entitled to an accounting. Despite the fact 

that “accounting” comprises the entirety of Plaintiffs’ second count,30 an

accounting is not a cause of action sounding in equity.31 It is an equitable remedy 

28 A threshold requirement of a special, fiduciary-like, relationship is an alignment of interests. 

See, e.g., Tr. Robin, Inc. v. Tissue Analytics, Inc., 2022 WL 4545174, at *3 (Del. Ch. Sept. 29, 

2022) (assessing the existence of a special relationship in the equitable fraud context). In a true 

fiduciary relationship, this mere alignment is replaced by the fiduciary’s duty to protect the 

beneficiary’s interests. See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 901 A.2d 106, 113 (Del. 

2006). The “common goal” of building a house, argued for by Plaintiffs, falls short of either 

requirement. Answering Br. at 14. 

29 Compl. ¶¶ 17-21. 

30 Id. ¶¶ 22-26. 

31 See Rhodes v. Silkroad Equity, LLC, 2007 WL 2058736, at *11 (Del. Ch. July 11, 2007); 

Albert v. Alex. Brown Mgmt. Servs., Inc., 2005 WL 2130607, at *11 (Del. Ch. Aug. 26, 2005).
7

by which a fiduciary may be caused to account for property subject to trust.32 But 

here, as stated above, the relationship between Plaintiffs and Defendants is that of

contractual counterparties, not beneficiary and fiduciary. There is no basis in the 

facts pled to require an equitable accounting.

Plaintiffs’ argument appears to be that the Defendants were bound by 

contract to keep a separate account for funds from draws, but did not, causing the 

Plaintiffs to suffer damages.33 But, if so, these are contractual claims, and do not 

implicate the equitable remedy of accounting. Plaintiffs, at law,34 are entitled to 

plenary discovery of Defendants’ accounts and to show damages for diverted or 

overbilled amounts. Plaintiffs conflate the breach of a contractual promise to 

maintain a separate account and the equitable remedy of an accounting. Relief 

here does not require an equitable accounting.

C. Piercing the Corporate Veil (Count III).

I confess that I do not entirely understand this claim. Where a corporate 

entity exists only as a vehicle for fraud, equity, if required, can pierce the 

metaphorical veil of limited liability, and, where appropriate, find the principals 

liable for obligations of the entity.35 Here, Plaintiffs allege that they entered a 

32 See McMahon v. New Castle Associates, 532 A.2d 601, 605 (Del. Ch. 1987).

33 Compl. ¶¶ 14-21.

34 Supposing, of course, that they have pled a claim on which relief in damages may be had.

35 See, e.g., Manichaean Capital, LLC v. Exela Techs., Inc., 251 A.3d 694, 706 (Del. Ch. 2021)

(discussing the factors considered in a veil piercing analysis). 
8

contract with John Lester d/b/a Banner Custom Builders (“Banner”).36 They allege 

that Banner was not a registered business or a Delaware entity.37 The substantive 

counts of the complaint, discussed above, seek to impose liability on Lester d/b/a 

Banner. 

The Plaintiffs allege that a similar-sounding LLC, Banner Custom Builders 

and Designers (the “LLC”), was formerly used by Lester as a business entity, but 

was defunct at the time the Contract was formed.38 There is no allegation that the 

Plaintiffs about the LLC when entering the Contract, let alone relied on the fact in 

contracting. They have alleged no fraud here based on the lapsed existence of the 

LLC. They have not even argued that veil-piercing of the LLC (or the fictitious 

entity Banner, to the extent its principal claims that he is somehow entitled to 

limited liability) are necessary for them to recover contract damages. Thus, the 

veil-piercing count does not state an equitable claim.

III. CONCLUSION

The Plaintiffs try to repackage an obvious contract claim as equitable, 

presumably to prize the doors of equity and avoid the results of the Superior Court 

decision at law. Despite the Defendants’ request, I cannot apply res judicata here, 

because the parties have identified no non-pretextual equitable claim and have 

36 Compl. ¶¶ 2, 5. 

37 Id. ¶ 2. 

38 Id. ¶ 3. 
9

failed to allege the need for an equitable remedy. Therefore, and because no 

statutory basis for jurisdiction is alleged, this Court of limited jurisdiction lacks 

puissance to apply res judicata, or otherwise act. Accordingly, this action is 

dismissed with leave to refile in Superior Court pursuant to 10 Del. C. § 1902. 

That court, of course, may apply res judicata as it finds appropriate.

A suitable Order is attached.

Sincerely,

/s/ Sam Glasscock III

Vice Chancellor
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CANDY WILLIAMS, and JACKIE 

FERRIS,

Plaintiffs,

v.

JOHN M. LESTER, Jr. d/b/a BANNER 

CUSTOM BUILDERS, and BANNER 

CUSTOM DESIGNERS,

Defendants.

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C.A. No. 2023-0042-SG

ORDER DISMISSING THE COMPLAINT WITH LEAVE TO TRANSFER

WHEREAS, on January 17, 2023, Plaintiffs Candy Williams and Jackie Ferris 

filed a Verified Complaint (the “Complaint”);

WHEREAS, on June 13, 2023, the Court raised the issue of equitable 

jurisdiction;

WHEREAS, on June 28, 2023, the parties submitted supplemental briefing on 

subject matter jurisdiction; 

AND NOW, this Tuesday, August 1, 2023, upon review of the Complaint 

together with the parties supplemental briefing, IT IS HEREBY ORDERED for the 

reasons described in the accompanying letter opinion that the Complaint is 

DISMISSED in its entirety with leave to transfer subject to 10 Del. C. § 1902.

/s/ Sam Glasscock III

Vice Chancellor