IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

UTILIPATH, LLC

Plaintiff,

v.

BAXTER MCLINDON HAYES, JR.,

BAXTER MCLINDON HAYES, III,

JARROD TYSON HAYES, AND

UTILIPATH HOLDINGS, INC.

Defendants.

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C.A. No. 9922-VCP

MEMORANDUM OPINION

Date Submitted: January 20, 2015

Date Decided: April 15, 2015

Edmond D. Johnson, Esq., James G. McMillan, Esq., James H.S. Levine, Esq.,

PEPPER HAMILTON LLP, Wilmington, Delaware; Matthew V. DelDuca, Esq., 

Angelo A. Stio, III, Esq., PEPPER HAMILTON LLP, Princeton, New Jersey; 

Attorneys for Plaintiff.

Timothy M. Holly, Esq., Ryan P. Newell, Esq., CONNOLLY GALLAGHER LLP, 

Wilmington, Delaware; Oliver D. Griffin, Esq., Peter N. Kessler, Esq., Julie B. 

Negovan, Esq., KUTAK ROCK LLP, Philadelphia, Pennsylvania; Edward T. Kang, 

Esq., Gregory H. Mathews, Esq., KANG HAGGERTY & FETBROYT LLC, 

Philadelphia, Pennsylvania; Attorneys for Defendants.

PARSONS, Vice Chancellor.
1

The plaintiff in this action is a Delaware limited liability company (“LLC”) that 

purchased certain of its own membership units from the defendants, pursuant to a 

“redemption agreement.” The redemption agreement provided that the purchase price 

could be adjusted after the transaction closed depending on the calculation of the plaintiff 

LLC‟s net working capital. The redemption agreement correctly anticipated that the 

parties might dispute that calculation, and provided for an alternative dispute resolution 

process to adjudicate such a disagreement. The plaintiff‟s complaint seeks to compel the 

defendants to comply with that alternative dispute resolution process.

The defendants have moved to dismiss the complaint, contending that this action 

should be dismissed or stayed in favor of a case pending in federal court in Pennsylvania

that involves similar parties and the same overall set of transactions. The defendants also 

contend that the filing of this action was in violation of Court of Chancery Rule 15(aaa). 

Lastly, they argue that the complaint should be dismissed because it seeks enforcement of 

an unenforceable “agreement to agree.” For the following reasons, I reject each of those 

contentions, and deny the motion to dismiss.

I. BACKGROUND1

A. Facts and Procedural History

Plaintiff is Utilipath, LLC (“Utilipath” or “Plaintiff”), a Delaware LLC. 

Defendants in this action are: (1) Utilipath Holdings, Inc. (“Holdings”), a North Carolina 

corporation; (2) Baxter McLindon Hayes, Jr.; (3) Baxter McLindon Hayes, III; and (4) 

 

1 Unless otherwise noted, all facts are drawn from the well-pled allegations in 

Plaintiff‟s Verified Complaint (the “Complaint”). 
2

Jarrod Tyson Hayes (the latter three being the “Hayes Defendants,” and together with 

Holdings, “Defendants”).

This case concerns a transaction between Utilipath and Defendants that closed on 

August 19, 2013. Until that date, the Hayes Defendants were the sole members of a 

North Carolina LLC named Utilipath, LLC (“Old Utilipath”). Defendants transferred all 

of their membership interests in Old Utilipath to Defendant Holdings. Old Utilipath then 

merged with Utilipath, making the latter a wholly owned subsidiary of Holdings. 

Through the agreement relevant to this action, the “Redemption Agreement,”2

Defendants caused Holdings to sell all of its Class A membership units to Utilipath. 

Defendants, through Holdings, apparently continued to hold all of Utilipath‟s Class B 

membership units. Utilipath paid $15,750,000 for the Class A units. As relevant to this 

case, however, that purchase price could be adjusted post-closing according to the 

Redemption Agreement if Utilipath‟s actual net working capital as of the closing date 

turned out to be below $6 million. 

In November 2013, Utilipath provided Defendants with its calculation of the 

Closing Net Working Capital amount3for purposes of this price adjustment mechanism. 

Thereafter, Defendants served a Dispute Notice pursuant to Section 1.3.1 of the 

Redemption Agreement, in which it objected to Utilipath‟s calculations. Notwithstanding 

 

2 Compl. Ex. A [hereinafter “Redemption Agreement”].

3 Capitalized terms not otherwise defined herein are used as defined in the 

Redemption Agreement.
3

several months of back-and-forth attempting to resolve their dispute over the net working 

capital adjustment, the parties failed to agree on this issue. 

Section 1.3.4 of the Redemption Agreement provides for an alternative dispute 

resolution process whereby, if the parties could not agree about whether a net working 

capital adjustment payment was due, or the proper amount of such a payment, an 

Independent Accounting Firm would be chosen to settle the issue. On April 18, 2014, 

Utilipath invoked Section 1.3.4 and demanded that the parties submit their dispute to 

such an independent accounting firm. Defendants refused to comply. Utilipath, by this 

action, seeks to compel enforcement of the alternative dispute resolution (“ADR”) 

provision of the Redemption Agreement as it relates to the adjustment of Net Working 

Capital.4

This action is not the first litigation involving these parties and concerning the 

August 2013 transaction of which the Redemption Agreement was a part. On December 

31, 2013, Utilipath filed suit in this Court against the same parties that are Defendants in 

this action. That first Delaware complaint, however, was dismissed voluntarily on June 

23, 2014.5

On March 21, 2014, an action was filed in the United States District Court for the 

Eastern District of Pennsylvania that involves similar parties (the “Pennsylvania 

 

4 Compl. ¶ 5.

5 Notice of Dismissal Without Prejudice, Utilipath, LLC v. Hayes, C.A. No. 9214-

VCN (Del. Ch. June 23, 2014).
4

Action”).6 In the Pennsylvania Action, which still is pending, the plaintiff is NewSpring 

Mezzanine Capital, LP (“NewSpring”), a Delaware limited partnership that appears to be 

an investor in and member of Utilipath. The defendants in the Pennsylvania Action 

consist of all of the Defendants in this case, plus Utilipath. The Pennsylvania Action 

arises from the same overall transaction as this case, but, in addition to the Redemption 

Agreement, it also involves a “Loan Agreement” and a “Stock Purchase Agreement.” 

In the Pennsylvania Action, NewSpring asserts various causes of action based on 

allegations of fraud and alleged breaches of the transaction agreements. In particular, it 

alleges that the Individual Defendants misrepresented Utilipath‟s compliance with its tax 

obligations, its profit projections, and its financial and accounting practices. New 

Spring‟s complaint in the Pennsylvania Action contains some eighteen Counts, including 

claims for: violations of the United States and Pennsylvania securities laws; unjust 

enrichment; fraudulent transfer; common law fraud; negligent misrepresentation; 

indemnification under all three of the agreements; breach of contract and rescission under 

the Loan Agreement; and breach of contract and rescission under the Stock Purchase 

Agreement.7 Utilipath brought cross-claims in the Pennsylvania Action against all of the 

Hayes Defendants and Holdings for fraud, negligent misrepresentation, and breaches of 

 

6 NewSpring Mezzanine Capital II, L.P. v. Hayes, C.A. No. 14-1706 (E.D. Pa. Mar. 

12, 2014) [hereinafter “NewSpring Litigation”].

7 Complaint, NewSpring Litig., 2014 WL 1102437 (E.D. Pa. Mar. 21, 2014).
5

contract arising out of the Redemption Agreement, among other claims.8 Holdings and 

Baxter Hayes, Jr. filed counterclaims against NewSpring, as well as cross-claims against 

Utilipath for fraud, securities violations, and breach of contract.9 

As relevant here, Utilipath moved to dismiss the cross-claims filed by Baxter 

Hayes Jr. and Holdings in the Pennsylvania Action. In so doing, Utilipath contended in 

part that one of those cross-claims that asserts a breach of contract claim related to the 

Net Working Capital dispute should be dismissed or stayed in favor of arbitration 

pursuant to the Redemption Agreement. On November 12, 2014, the Honorable Gerald 

A. McHugh denied Utilipath‟s motion.10 The Court‟s Memorandum Opinion of the same 

date articulated its reasons for denying the motion as it pertained to the Redemption 

Agreement. Judge McHugh ruled that a dismissal or stay in favor of arbitration was not 

warranted on the record before him, but also refrained from deciding, at that time, “the 

broader question of precisely what aspects of this dispute, if any, should be submitted to 

arbitration.”11

 

8 Amended Cross-claims of Utilipath, LLC, NewSpring Litig., 2014 WL 4826110 

(E.D. Pa. Aug. 22, 2014).

9 Amended Counterclaim and Cross-claim of Baxter McLindon Hayes, Jr. and 

Utilipath Holdings, Inc., NewSpring Litig., 2014 WL 4385320 (E.D. Pa. Aug. 11, 

2014).

10 NewSpring Litig., 2014 WL 5843598, at *1 (E.D. Pa. Nov. 12, 2014).

11 Id. at *2.
6

B. Parties’ Contentions

As noted above, Utilipath brought suit in this Court to compel Defendants‟ 

compliance with the ADR provision in the Redemption Agreement as it relates to the 

dispute over the Closing Net Working Capital. By the pending motion, Defendants seek 

dismissal of Utilipath‟s Complaint on three separate grounds: (1) that the McWane firstfiled doctrine applies and militates in favor of a stay or dismissal; (2) that Utilipath‟s 

Complaint was filed in violation of Court of Chancery Rule 15(aaa); and (3) that the 

ADR provision in Section 1.3.4 is an unenforceable “agreement to agree.” For the 

following reasons, I conclude that all of those arguments are unavailing and deny the 

motion to dismiss.

II. ANALYSIS

A. Legal Standard

This Court should deny a motion to dismiss under Rule 12(b)(6) “unless the 

plaintiff could not recover under any reasonably conceivable set of circumstances 

susceptible to proof.”12 In determining whether the Complaint meets this pleading 

standard, this Court will draw all reasonable inferences in favor of Plaintiffs, “accept all 

well-pleaded factual allegations in the Complaint as true,” and “accept even vague 

allegations in the Complaint as „well-pleaded‟ if they provide the defendant notice of the 

 

12 Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC, 27 A.3d 531, 536 

(Del. 2011).
7

claim.”13 The Court, however, need not “accept conclusory allegations unsupported by 

specific facts or . . . draw unreasonable inferences in favor of the non-moving party.”14

B. The McWane Issue

Defendants first contend that because the Redemption Agreement currently is 

being litigated in a first-filed action in the Eastern District of Pennsylvania, under the 

McWane doctrine, this Action should be dismissed or stayed in favor of the Pennsylvania 

Action.15 

1. Applicable legal principles

In assessing which of multiple actions challenging the same conduct should 

proceed, this Court often applies the McWane doctrine.16 That doctrine reflects the 

general rule that “„litigation should be confined to the forum in which it is first 

commenced, and a defendant should not be permitted to defeat the plaintiff‟s choice of 

forum in a pending suit by commencing litigation involving the same cause of action in 

another jurisdiction of its own choosing.‟”17 Thus, “[u]nder the [McWane] first-filed 

rule, this Court freely exercises its broad discretion to grant a stay „when there is a prior 

 

13 Id. 

14 Price v. E.I. duPont de Nemours & Co., Inc., 26 A.3d 162, 166 (Del. 2011).

15 I note that Defendants‟ motion requests only dismissal of the Complaint, but at 

various points in their briefing Defendants stated that they seek dismissal or a stay.

16 McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281 

(Del. 1970).

17 Transamerica Corp. v. Reliance Ins. Co. of Ill., 1995 WL 1312656, at *4 (Del. 

Super. Aug. 30, 1995) (quoting McWane, 263 A.2d at 283).
8

action pending elsewhere, in a court capable of doing prompt and complete justice, 

involving the same parties and the same issues.‟”18 

In cases like Ingres Corp. v. CA, Inc., however, the Delaware Supreme Court has 

held that where contracting parties have expressly agreed upon a legally enforceable 

forum selection clause, this Court must honor the parties‟ contract and enforce the clause, 

“even if, absent any forum selection clause, the McWane principle might otherwise 

require a different result.”19 The McWane doctrine is “a default rule of common law, 

which the parties to the litigation are free to displace by a valid contractual agreement.”20

2. Neither dismissal nor a stay are warranted under McWane.

Guided by the principles set forth in cases like Ingres, I conclude that this action 

should not be dismissed or stayed on McWane grounds in favor of the prior-pending 

Pennsylvania Action, based on the plain language of the Redemption Agreement. 

Section 7.8 of the Redemption Agreement states that: 

THE PARTIES AGREE THAT JURISDICTION AND 

VENUE IN ANY ACTION BROUGHT BY ANY PARTY 

PURSUANT TO THIS AGREEMENT SHALL PROPERLY 

(BUT NOT EXCLUSIVELY) LIE IN ANY STATE COURT 

OF THE STATE OF DELAWARE LOCATED IN NEW 

CASTLE COUNTY OR THE UNITED STATES DISTRICT 

COURT FOR THE DISTRICT OF DELAWARE. BY 

EXECUTION AND DELIVERY OF THIS AGREEMENT, 

EACH PARTY IRREVOCABLY SUBMITS TO THE 

 

18 In re the Bear Stearns Cos. S’holder Litig., 2008 WL 959992, at *5 (Del. Ch. Apr. 

9, 2008) (quoting McWane, 263 A.2d at 283).

19 Ingres Corp. v. CA, Inc., 8 A.3d 1143, 1145 (Del. 2010).

20 Id. at 1146.
9

JURISDICTION OF SUCH COURTS FOR ITSELF AND IN 

RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH 

ACTION. THE PARTIES IRREVOCABLY AGREE THAT 

VENUE WOULD BE PROPER IN SUCH COURT, AND 

HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS 

AN IMPROPER OR INCONVENIENT FORUM FOR THE 

RESOLUTION OF SUCH ACTION.

21

Courts applying Delaware contract law “will not read a contract to render a 

provision or term „meaningless or illusory.‟”22 “When the contract is clear and 

unambiguous, we will give effect to the plain-meaning of the contract‟s terms and 

provisions.”23 Section 7.8 clearly and unambiguously reflects the parties‟ agreement that, 

if a lawsuit were to arise out of the Redemption Agreement, jurisdiction and venue 

properly would lie in this Court. Underscoring that point, the parties further agreed to 

submit “irrevocably” to jurisdiction in this Court for an action such as this, and they 

“waive[d] any objection that such court is an improper or inconvenient forum for the 

resolution of such action.” The subject of Plaintiff‟s Complaint in this action—

compelling arbitration under Section 1.3.4—constitutes an “action pursuant to this 

Agreement” for purposes of Section 7.8. The parties‟ irrevocable consent to this Court‟s 

jurisdiction in Section 7.8 therefore applies, and precludes me from dismissing this action 

on McWane grounds.

 

21 Redemption Agreement § 7.8 (italics added).

22 Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010).

23 Id. at 1160.
10

Defendants attempt to avoid the impact of Section 7.8 by arguing that Ingres is 

inapposite because that case involved an exclusive forum selection clause, while Section 

7.8 contains only a non-exclusive provision.24 Nothing in the Supreme Court‟s opinion 

in Ingres, however, limited its reach to forum selection clauses that are exclusive in 

nature. The Court stated that, “the McWane principle is a default rule of common law, 

which the parties to the litigation are free to displace by a valid contractual agreement.”25 

Here, the parties bargained for a valid contractual agreement prohibiting either side from 

objecting to jurisdiction or venue in this Court for a lawsuit arising out of the Redemption 

Agreement. The fact that jurisdiction and venue for suits related to the Redemption 

Agreement also may be proper in other courts does not detract from the plain language of 

Section 7.8, which definitively provides that jurisdiction and venue are proper here, 

making dismissal inappropriate. Furthermore, in light of the non-exclusive nature of 

Section 7.8, this Court conceivably could exercise its broad discretion to stay this action 

if the relevant considerations militated in favor of a stay. But, in the circumstances here, 

including the relatively early stage of this litigation, I am not persuaded that they do. 

Nevertheless, I recognize that the McWane rule “was „impelled by considerations 

of comity and the necessities of an orderly and efficient administration of justice.‟”26 In 

that regard, I note that the Pennsylvania Action does appear to involve similar parties 

litigating claims that relate to some of the same underlying facts involved in this action. 

 

24 Defs.‟ Reply Br. 4-6.

25 Ingres, 8 A.3d at 1146.

26 Id. at 1145 (quoting McWane, 263 A.2d at 283).
11

It also appears, however, that the claims in the Pennsylvania Action are significantly 

broader than the claims in this action. The narrow dispute in this action, relating to a Net 

Working Capital adjustment under the Redemption Agreement, may or may not be 

arbitrable. That issue is not before this Court at this time. 

I also note that, in his November 12, 2014 Memorandum Opinion, Judge McHugh 

questioned the wisdom of the suggestion of the Baxter Parties that the ADR process with 

respect to the Net Working Capital dispute effectively be stayed until after the validity of 

their claims for fraud and breach of contract are resolved in the Pennsylvania Action.27 

Likewise, I question the wisdom of that suggestion, especially in light of Section 7.8 of 

the Redemption Agreement, in which the parties bargained for the right to bring suit in 

this Court, and mutually promised to “waive any objection” that this Court is an improper 

or inconvenient forum.28 So while I am not today deciding the issue of whether this 

dispute is arbitrable or conclusively precluding the possibility of a stay at some point in 

 

27 NewSpring Mezzanine Capital II, L.P., 2014 WL 5843598, at *2 (“Assuming for

the sake of discussion that at least this one discrete issue is subject to arbitration, 

the suggestion of the Baxter Parties that I entertain a declaratory judgment action 

and declare the arbitration provision unenforceable based on breaches by Utilipath 

is equally unsatisfying. It would suggest that until the validity of the claim on its 

merits is known, the method by which to address the dispute cannot be 

determined.”).

28 Ingres, 8 A.3d at 1146; see also Capital Gp. Cos. v. Armour, 2004 WL 2521295, 

at *3 (Del. Ch. Nov. 3, 2004) (“Forum selection/consent to jurisdiction clauses are 

„presumptively valid‟ and should be „specifically‟ enforced unless the resisting 

party „could clearly show that enforcement would be unreasonable and unjust, or 

that the clause was invalid for such reasons as fraud and overreaching.‟”) (quoting 

M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)).
12

the future, I deny Defendants‟ motion to dismiss or stay Utilipath‟s Complaint on 

McWane grounds.29

C. The Rule 15(aaa) and Rule 41(a) Issue

The second basis for Defendants‟ motion to dismiss is that Plaintiff has violated 

Court of Chancery Rule 15(aaa). As support for this argument, Defendants point to 

Utilipath‟s prior Delaware action and the Pennsylvania Action, both of which, they 

contend, are against “the same Defendants, raising claims predicated on the same 

underlying transaction and the same Redemption Agreement,” as this case.30 Because the 

prior Delaware action was dismissed, Defendants contend that this Complaint was filed 

in violation of Rule 15(aaa). This argument is unpersuasive. 

Even if the previous Delaware action had asserted the same claims against the 

same defendants as this action does, Rule 15(aaa) would not have been violated. Rule 

15(aaa) states: 

Notwithstanding subsection (a) of this Rule, a party that 

wishes to respond to a motion to dismiss under Rules 12(b)(6) 

or 23.1 by amending its pleading must file an amended 

complaint, or a motion to amend in conformity with this Rule, 

no later than the time such party‟s answering brief in response 

to either of the foregoing motions is due to be filed. In the 

event a party fails to timely file an amended complaint or 

 

29 I also do not mean to foreclose the possibility that, on a more developed record in 

this action, I might revisit the question of a stay. I note further that I have 

conferred with Judge McHugh, and we agree that, if the parties need some degree 

of coordination of aspects of these two cases or the circumstances warrant 

consideration of such coordination, our respective courts are willing to explore 

that possibility. In my view, it is premature to do so now.

30 Defs.‟ Opening Br. 20.
13

motion to amend under this subsection (aaa) and the Court 

thereafter concludes that the complaint should be dismissed 

under Rule 12(b)(6) or 23.1, such dismissal shall be with 

prejudice (and in the case of complaints brought pursuant to 

Rules 23 or 23.1 with prejudice to the named plaintiffs only) 

unless the Court, for good cause shown, shall find that 

dismissal with prejudice would not be just under all the 

circumstances. Rules 41(a), 23(e) and 23.1 shall be construed 

so as to give effect to this subsection (aaa).31 

Utilipath filed its complaint in the first Delaware action on December 31, 2013, and 

amended that complaint on April 11, 2014. On June 2, 2014, Defendants moved to 

dismiss the amended complaint. Rather than amend the complaint or answer the motion, 

Utilipath filed a voluntary dismissal under Rule 41(a)(1) on June 23. Because there is no 

indication from the record or from Defendants that I should infer otherwise, I infer that 

Utilipath‟s voluntary dismissal in the earlier Delaware action was filed before its 

answering brief in response to the motion to dismiss would have been due.32 In such a 

 

31 Ct. Ch. R. 15(aaa). See also Ct. Ch. R. 41(a)(1) (“[A]n action may be dismissed 

by the plaintiff without order of court (i) by filing a notice of dismissal at any time 

before service by the adverse party of an answer or of a motion for summary 

judgment, whichever first occurs . . . . However, no such dismissal pursuant to 

subpart (i) above shall be effective where the complaint is subject to a motion to 

dismiss and the plaintiff has chosen to file an answering brief rather than seeking 

to amend. See Rule 15(aaa).”).

32 There does not appear to be a scheduling order for the briefing in connection with 

the motion to dismiss in that first Delaware action. The usual practice in the Court 

of Chancery, however, is that the opening brief in support of a merits-based 

motion (such as a motion under Rule 12(b)(6)) is due 30 days after the motion is 

filed, the non-moving party‟s answering brief is due 30 days later, and then a reply 

brief 15 days after that. Defendants offer no reason why the briefing in the earlier 

Delaware action would have been different, such that Utilipath‟s voluntary 

dismissal in that action would have been untimely.
14

circumstance, absent some reason to conclude otherwise, this Court will not bar a later 

complaint by the same plaintiff on Rule 15(aaa) grounds.33 I therefore conclude that 

nothing in Rules 15(aaa) or 41(a) requires dismissal of the Complaint in these 

circumstances.

D. The “Agreement to Agree” Issue

Finally, Defendants assert that the ADR provision in Section 1.3.4 of the 

Redemption Agreement is an unenforceable “agreement to agree,” because it “fails to 

provide an adequate means of selecting an arbitrator.”34 That argument is flawed as a 

matter of law. The legal principle underlying Defendants‟ argument is that an agreement

to enter into a contract in the future will not be enforceable unless it specifies all the 

material and essential terms of the future contract.35 While that principle is valid, it does 

not apply in this case. The Redemption Agreement does not lack an essential term in this 

 

33 See, e.g., E. Sussex Assocs., LLC v. W. Sussex Assocs., LLC, 2013 WL 2389868, at 

*2 (Del. Ch. June 3, 2013) (“[Rule 41(a)] plainly countenances the possibility that 

a motion for voluntary dismissal is a proper response to a motion to dismiss, so 

long as the Rule 41(a) motion is filed before an answering brief on the motion to 

dismiss is due.”); Stern v. LF Capital P’rs, LLC, 820 A.2d 1143, 1146-47 (Del. 

Ch. 2003). The cases cited by Defendants in this regard do not hold differently. 

See Defs.‟ Opening Br. 22 (“As mentioned above, Rule 15(aaa) is designed to 

limit a plaintiffs [sic] ability to re-plead once the time to file a responsive brief has 

passed.”) (quoting Taubenfeld v. Marriott Int’l, Inc., 2003 WL 22682323, at *4 

(Del. Ch. Oct. 28, 2003)). 

34 Defs.‟ Opening Br. 26. 

35 See, e.g., PharmAthene, Inc. v. SIGA Techs., Inc., 2008 WL 151855, at *13 (Del. 

Ch. Jan. 16, 2008).
15

regard. Section 1.3.4 would be governed by the Federal Arbitration Act (the “FAA”). 36 

The FAA provides that:

If in the agreement provision be made for a method of naming 

or appointing an arbitrator or arbitrators or an umpire, such 

method shall be followed; but if no method be provided 

therein, or if a method be provided and any party thereto shall 

fail to avail himself of such method, or if for any other reason 

there shall be a lapse in the naming of an arbitrator or 

arbitrators or umpire, or in filling a vacancy, then upon the 

application of either party to the controversy the court shall 

designate and appoint an arbitrator or arbitrators or umpire, as 

the case may require, who shall act under the said agreement 

with the same force and effect as if he or they had been 

specifically named therein; and unless otherwise provided in 

the agreement the arbitration shall be by a single arbitrator.37

Thus, if this Court were to decide that one or more disputes identified in the 

Complaint are arbitrable under Section 1.3.4, and the parties cannot agree as to which 

“independent nationally recognized accounting firm”38 should determine the matter, the 

path forward would be clear. Under the FAA, I could designate such a firm for the 

parties, probably after inviting each side to submit two or three candidates acceptable to 

 

36 10 Del. C. § 5702(c) (“Unless an arbitration agreement complies with the standard 

set forth in subsection (a) of this section for the applicability of the Delaware 

Uniform Arbitration Act [“DUAA”], any application to the Court of Chancery to 

enjoin or stay an arbitration . . . shall be decided by the Court of Chancery in 

conformity with the Federal Arbitration Act, and such general principles of law 

and equity as are not inconsistent with that Act.”). No such reference to the 

DUAA is made in the Redemption Agreement, and Defendants do not contest that 

the FAA applies in this regard.

37 9 U.S.C.A. § 5 (West 2014).

38 Redemption Agreement § 1.3.4.
16

them. I therefore reject Defendants‟ argument that the Complaint must be dismissed 

because Plaintiff seeks to enforce an unenforceable agreement to agree.

III. CONCLUSION

For the foregoing reasons, Defendants‟ motion to dismiss or stay Plaintiff‟s 

Complaint is denied. 

IT IS SO ORDERED.