IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

Triple H Family Limited Partnership,

a Delaware limited partnership,

Plaintiff and 

Counterclaim Defendant,

v.

Jerry Neal,

 Defendant and 

Counterclaim Plaintiff, 

v.

Jeffrey A. Hoops,

Counterclaim Defendant,

and

Omni Insurance Group, LLC, a 

Delaware limited liability company, 

Nominal Defendant and 

Counterclaim Defendant.

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C.A. No. 12294-VCMR

MEMORANDUM OPINION

Date Submitted: April 19, 2018

Date Decided: July 31, 2018

David B. Anthony and Sean A. Meluney, BERGER HARRIS LLP, Wilmington, 

Delaware; Attorneys for Plaintiff and Counterclaim Defendants.

Robert J. Katzenstein and Clarissa R. Chenoweth, SMITH, KATZENSTEN & 

JENKINS LLP, Wilmington, Delaware; Attorneys for Defendant and 

Counterclaim Plaintiff.
MONTGOMERY-REEVES, Vice Chancellor.
1 

In August 2014, two old friends decided to start an insurance agency together. 

They had high hopes of a mutually beneficial relationship, but these hopes were 

quickly dashed. Almost two months to the day from the inception of their 

arrangement, the parties agreed to dissolve their business. The parties differ in their 

opinion on the cause of the failure; one side claiming incompetence and the other 

hubris. In fact, the parties differ in their opinion on pretty much everything 

pertaining to this litigation, much as they differed on pretty much everything during 

their business venture. 

Unfortunately, the failed venture created bad blood between the two friends. 

This litigation was filed after months of fighting over how to unwind their business. 

The plaintiff seeks damages for breach of contract and breach of fiduciary duty as 

well as judicial dissolution of the limited liability company involved. The defendant 

seeks damages for breach of contract, breach of fiduciary duty, and fraud. I find that 

the defendant breached the contract and breached his fiduciary duties, and the

plaintiff did not breach the contract, breach his fiduciary duties, or commit fraud. 

Finally, judicial dissolution is not necessary because the parties already agreed to 

dissolve the limited liability company. Instead, I order that the limited liability 

company be wound up. 
2 

I. BACKGROUND

Below are my findings of fact based on the parties’ stipulations, over 300 trial 

exhibits, and the testimony of six live witnesses during a three-day trial.1

 

A. Parties and Relevant Non-Parties

Plaintiff and Counterclaim Defendant Triple H Family Limited Partnership 

(“Triple H”) is ninety-nine percent owned by Hoops Family Dynasty Trust, which 

is controlled by Jeffrey Hoops’s three adult sons, and one percent owned by its 

general partner, Milton Management.2

 Triple H is a holding company for 

investments made by Milton Management, which is controlled by Jeffrey Hoops.3

Counterclaim Defendant Jeffrey Hoops (“Hoops”) has worked in coal mining 

for more than forty years.4

 Hoops started several coal mining businesses during his 

 

1

 Citations to testimony presented at trial are in the form “Tr. # (X)” with “X” 

representing the surname of the speaker, if not clear from the text. Joint Trial 

Exhibits are cited as “JX #,” and facts drawn from the parties’ Joint Pretrial 

Stipulation and Order are cited as “PTO #.” Unless otherwise indicated, citations 

to the parties’ briefs are to post-trial briefs. After being identified initially, 

individuals are referenced herein by their surnames without honorifics or regard to 

formal titles such as “Doctor.” No disrespect is intended. 

2

 PTO ¶¶ 12, 13. For the sake of efficiency, I refer to Triple H and Hoops collectively 

as “Plaintiff.” 

3

 Id. ¶ 12; Tr. 44 (Hoops). 

4

 See PTO ¶ 6. 
3 

career and currently runs Revelation Energy LLC (“Revelation”), a coal mining 

business he started in 2008.5

 

Defendant and Counterclaim Plaintiff Jerry Neal (“Neal” or “Defendant”) is 

an insurance agent residing in West Virginia. He has worked in the insurance 

business for almost thirty years,6 and in 2011 he formed his own insurance business 

called Neal Insurance.7

Omni Insurance Group, LLC (“Omni”) is a Delaware LLC organized by 

Hoops on August 25, 2014.8

 Triple H and Neal both own fifty percent of Omni.9

B. Credibility

I accord the evidence the weight and credibility I find it deserves. There are 

several conflicts between the contemporaneous documents and the live witness 

testimony given three years after the fact. I tend to give more weight to the 

contemporaneous evidence as it is free from the realities of litigation and closer in 

time to the events that transpired. Additionally, the contemporaneous written 

evidence and live witness testimony in this case show a clear pattern of behavior on 

 

5

 Tr. 17 (Hoops). 

6

 See PTO ¶ 4. 

7 Id. ¶ 5. 

8

 Id. ¶ 1. 

9

 Id. ¶ 2. 
4 

the part of both Hoops and Neal that greatly influenced the credibility of each. On 

the one hand, Hoops is a seasoned businessman who seems to move with breakneck 

speed when it comes to making business decisions. But Hoops also has a strong 

personal code of ethics and believes a man’s word is his bond.10 Neal, on the other 

hand, is the perpetual salesman who will say whatever he needs to, regardless of 

veracity, in order to secure the deal and who continuously tries to renegotiate deals 

to get more favorable terms for himself.11 These characteristics are repeatedly 

 

10 See, e.g., JX 17 (setting up Omni within days of coming up with the idea with Neal); 

JX 57 (refusing to move insurance away from Van Meter, even for a cheaper rate, 

because “they done the right thing when it would have been easy for them to say 

no”); JX 69 (“I sincerely apologize for his actions as I would never want to be in 

business with anyone that conducts themselves in this manner.”); JX 72 (“It is clear 

you do not think much of Heather and I know little about insurance, but she has 

done a great job for us the past 6 years and with all she and Joe are involved in for 

us, I cannot cut her loose.”); JX 72 (agreeing to stick to the terms of his deal with 

Neal even after Neal failed to secure insurance twice in ten days); JX 86 (agreeing 

to pay the ten percent penalty on Neal withdrawing money from 401K to keep Neal 

“whole”). 

11 See, e.g., JX 23 (attempting to renegotiate the terms of Omni to keep Neal Insurance 

bond and consulting income exclusively for himself); JX 54 (telling Hoops less than 

twenty-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 account without 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 Insurance Commissioner) with Tr. 454 

(Neal) (testifying after suing Hoops for breach of fiduciary duty that, “I don’t think 

that as 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]ll coverages are bound, went into effect at midnight on Sunday morning”) with 
5 

reaffirmed by the evidence; thus, when contemporaneous written evidence is lacking 

and Neal’s and Hoops’s testimony conflicts, I tend to give Hoops’s testimony more 

weight. 

C. Facts

Neal and Hoops attended high school together in West Virginia.12 In August 

2014, they both attended their fortieth high school reunion.13 During the course of 

the second night of the reunion, the two men discussed a shared acquaintance in the 

coal industry who had started an insurance agency.14 This idea appealed to Hoops 

as a way of recouping some of the money he spent on insurance premiums each year. 

From Neal’s perspective, Hoops’s business and personal insurance would generate 

very lucrative commissions. Forming an insurance agency together would be a 

mutually beneficial endeavor, and the two men left the reunion excited about the 

prospect.15 

 

JX 310 (emailing an insurance broker minutes after JX 47 was sent asking if the 

policy is bound and saying he is “[v]ery concerned we are exposed”). 

12 PTO ¶ 3. 

13 Id. ¶ 8. 

14 Tr. 27 (Hoops). 

15 JX 7. I make no determination as to the legality of their venture. 
6 

1. Initial conversations about forming Omni: August 18-25, 

2014

On August 18 and 19, 2014, Neal and Hoops exchanged emails discussing the 

preliminary plans for starting an insurance agency together.16 On August 20 at 12:53 

p.m., Hoops sent the following email (the “August 20 Email”) to his long-time 

personal lawyer Edward “Eddie” Cunningham:

Eddie:

Looking to diversify a little as I just completed a meeting 

with Jerry Neal a lifelong friend and business 

acquaintance as we finalized the plans to move forward 

with forming a new Insurance Agency. Would appreciate 

you pullingtogther our normal operating agreement with 

the ownership to be structured as follows:

1) New Entity Name 

a. Omni Insurance Group (if available)

b. Assume we will register in Delaware, 

then get set up to do business in WV, 

KY, TN, VA, and OH.

2) Owner

a. Jerry Neal

b. Triple H Family LP will have a 50% 

Net Profits Interest with an option to 

convert that to 50% of the stock in the 

future. 

i. Will have 50% voting rights on 

decisions.

Jerry has a base of business already that will move into the 

entity and he will be provided a Base Salary plus Benefits 

as President and CEO of the business. Jerry has all of the 

 

16 JX 9-JX 13. 
7 

necessary licenses required to underwrite insurance and if 

there are any nuances to forming an Agency please let me 

know as we were not aware of any.

Sandy:

If you are aware of anything we need to be concerned 

about, please advise. 

Lisa:

Initially there will be minimal back office work, so if you 

can set up a GL for this that would be great. Ultimately 

we will need Alpha to set up a web page and other IT 

things we may need for such a venture. Once Eddie has is 

set up with an Operating Agreement and FEIN, please set 

up a bank account at United Bank for this entity. 

We would like to have everything in place and start rolling 

Jerry’s other business into this entity by October 1 and he 

will go on salary at that point. We can make a loan from 

Triple H to this entity for the initial working capital that 

might be required. Ultimately Jerry will build out an 

office staff, but will run lean initially.

Let us know if you have any questions or need any 

additional information ... Thanks ... Jeff17

 

17 JX 16. Quotes from trial testimony and email exhibits are presented in their original 

form except where indicated. I chose not to include sic because it would make some 

of the testimony and emails unreadable. 
8 

The August 20 Email was cc’d to Neal, Lisa Henson, and Sandy Thomas.18 Lisa 

Henson was the CFO of Revelation,

19 and Sandy Thomas is a tax expert.20 

Neal replied all to the August 20 Email at 7:04 p.m. on August 20, “Thanks 

Jeff. Let me know what you need from me Eddie. I can license the Agency with the 

various State Insurance Departments if you want me to. Thanks.”21 On August 21

at 1:27 p.m., Thomas replied all to the August 20 Email to explain that “if Jerry is 

the only member of the LLC it will be a single member LLC and a disregarded entity 

for tax.”22 Based on this advice, as well as Cunningham’s legal research on who 

could own an insurance agency, Hoops replied all to Thomas at 1:41 p.m. on the 

same day, “Those are good points, so let’s go ahead and make Triple H a member 

and we can pay Jerry from LLC and bill it to Omni so he will not have to deal with 

the Quarterly Tax issue.”23 

 

18 JX 14. 

19 Tr. 59 (Hoops). 

20 Tr. 39 (Hoops). 

21 JX 14. 

22 Id. 

23 Tr. 43 (Hoops); JX 16. 
9 

On August 22 at 9:36 a.m., Neal sent an email to his accountant Bob Toler.24

The email stated: 

Very Confidential.

Need your thoughts about new Insurance Agency that is 

being set up with me as President and Jeff Hoops as 50% 

owner. Please look at below and let’s discuss. Eddie is 

Jeff’s attorney who sets up his business ventures etc. 

Jeff is rolling in all his business plus another three or four 

times that in associated business that he has ties to.25 

The email also included the August 20 Email, Thomas’s response from August 21 

at 1:27 p.m., and Hoops’s response to Thomas at 1:41 p.m.26 Toler replied at 10:29 

a.m. on August 22, “Even if they make the other entity a member you cannot 

received salary or wages from the LLC. You will receive guaranteed payments to a 

partner and pay estimated taxes accordingly. A member of an LLC can’t be an 

employee of the LLC.”27 

On August 22 at 1:41 p.m., Hoops informed Neal via email that “Omni is 

available in Delaware and West Virginia, so Eddie is going to proceed with getting 

us set up in Delaware, then we will register to do business under that name in WV 

 

24 JX 19. 

25 Id. 

26 Id. 

27 Id. 
10

where the main office will be located. Looks like everything is coming together.”28 

On August 25, 2014, Hoops, as organizer, executed the Certificate of Formation for 

Omni creating the Delaware LLC.29

2. The push to get Omni off the ground and Revelation’s 

policies renewed before they lapsed: September 1-30, 2014

In the insurance world, agents make commissions, which are a percentage of 

the premium paid by the customer. Hoops was under the impression that Omni 

would earn $600,000 a year in commissions just from Revelation’s insurance 

policies.30 Triple H would then be entitled to fifty percent of those commissions 

after expenses as a fifty percent owner of Omni. Securing these commissions came 

with a hitch, however. Revelation’s insurance policies were yearlong policies that 

ran from October 5 to October 5.31 All of Revelation’s policies would be renewing 

on October 5, and in order to secure the 2014-2015 commissions, Omni would have 

to be the agent of record and place those policies.32 

 

28 JX 20. 

29 JX 21. 

30 Tr. 35 (Hoops). In actuality, Omni received a little over $300,000 in commissions 

for the 2014-2015 year because the insurance policies were placed using brokers 

rather than directly with the carriers. Tr. 56 (Hoops). 

31 Tr. 28 (Hoops). 

32 See Tr. 111, 118-19 (Hoops) (explaining that the Agent of Record at the time the 

policy is placed is entitled to the commissions for the entire term of that policy 

regardless of any later changes to the Agent of Record). 
11

Normally, an insurance agent would start to look for those renewal policies 

three months in advance, or July for policies renewing in October.33 Hoops had a 

meeting set up with his current insurance broker, Van Meter Insurance Group (“Van 

Meter”) for September 24, 2014.34 Since Omni was created on August 25, it was 

generally understood that having Omni handle the renewal of Revelation’s policies 

would be challenging.35 Hoops’s personal policies, securing $15 million in assets, 

were up for renewal on October 15, which further compounded the amount of work 

required by Neal and Omni in a very short amount of time. 

On September 1, 2014, Neal wrote to Hoops:

I need to focus on getting everything moved by 10-5 or so. 

Best if I do it from here for at least a few weeks.

Thinking of farming out your personal policies to agent 

here who is really good. 50/50 split maybe on 

commission. Hopefully for just this year. You OK with 

that? 

Assuming premiums same or better. Going to get 

appointed with current carriers but might be tough in 30 

days.36 

 

33 Tr. 28 (Hoops); JX 9. 

34 JX 9. 

35 Tr. 56 (Hoops). 

36 JX 25. 
12

On top of all the work required to place Revelation’s and Hoops’s insurance 

policies by the renewal dates, there was significant work required just to set up Omni 

to function as an insurance agency. In the same September 1 email, Neal also wrote:

I hope to have the Errors and Omissions Insurance in place 

tomorrow. Will need about $5000 to pay for the year. 

Next is getting Broker/Agency Appointments. Will need 

W9-FEIN. Hope we can get it tomorrow. Will this be 

Eddie, Lisa, or me?

Need to get Business licensed in WV so I can do same with 

Insurance Commissioner.

E&O carriers will not do business in Delaware. I had to 

change address on applications. I used my address and 

phone number. We can change easily and will.37 

Adding even further strain was the fact that Neal kept attempting to 

renegotiate the structure and operation of Omni. In the same September 1 email 

above, Neal also wrote:

I don’t think I have a single Neal Insurance policy 

renewing between now and 12-31-14. All are done 

already. Nothing really gained by moving them until 

renewal. 

I do have some Consulting fees coming up which do not 

involve any contracts or agreements with any company, 

Brook and SM included. I get paid a fee for getting the 

bonds and keeping the bonds placed. Two customers. 

Ungureans and one small bond in Pa. I would need to 

discuss with them which I really don’t want to do. I don’t 

want to discuss with Brook either although there is no 

 

37 Id. 
13

arrangement with him other thatn fact that he knows that I 

get something on a fee basis. 

I would like to leave these alone for now and also keep 

Neal Insurance operating mainly for reason to place 

something that we might not be able to do with Omni. 

Heather mentioned this in a way.

I am going to need the income from the Consulting this 

year. 

Guessing, but Revelation probably pays quarterly 

installments that are interest free. If so, we might get only 

get a quarter of the commission this year. My half added 

to 3 months of dray might leave me a little short for the 

year. 

Most important thing is that I absolutely will not do any 

new business in Neal Insurance after Oct. 1 unless you and 

I agree before hand and have a good reason. My thinking 

is by first quarter of next year my business will be an 

insignificant portion of my income comparted to Omni 

and I will want to roll it in. We can discuss further if we 

need to. I don’t want this to be an issue with you at all. I 

will show all records for this and past years.38 

But Hoops wanted to maintain their original agreement. He replied several 

hours later:

Thought we had discussed and agreed on many of these 

things as here was my understanding

1) Fine with considering sharing or leasing office space 

with Ron but want to clearly understand and formalize 

the relationship

2) the FEIN can be done on line if it is not done already I 

will make sure it gets done tomorrow

3) I can have Lisa register us on line in WV

 

38 Id. 
14

4) Omni Insurance Group, LLC address is 1051 Main 

Street, Milton, WV 25541

5) as discussed I am not hung up on where you work from

6) had thought we could do personal policies as they are a 

month behind others, but if that is all we can do then 

we have no choice. They are October 25th

7) copy me on request to Heather and I will follow up as 

well.

8) understood we were going to do the following 

- roll all of your current income into Omni

- you would draw salary of $100K, vehicle, and 

health insurance

- 50% ownership

- Commissions on my business along could be as 

much as $600,000

I went into this with the understanding it was all going to 

roll together and we were going to be 100% focused on 

growing Omni. If that does not work for you that is fine 

and need to know now so we can go in another direction.

39

Neal quickly backed off. He replied, in relevant part, the next day, September 

2 at 9:23 a.m.: 

I am 100% committed to growing Omni.

I will roll Neal Insurance beginning in October. Maybe a 

short term perspective on my part. 

I will feel better when it is clear that I have Oct. 5 covered. 

Most of concerns are on my end.

I want to handle your Personal [insurance] and will if I can 

get proper markets. Inside of 60 days which is a minimum 

for some markets to quote.

Total Personal premium for 8 policies is about $18,959.69. 

About $3800 commission.40

 

39 Id. 

40 Id. 
15

Hoops replied:

No issue with you maintaining Neal Insurance entity in the 

even we would need it for separation. My intent is to be a 

silent partner and unless it is an account I can help land, 

everyone else will see it as your company.

Agree the personal is not a big part of what we are doing.

Thought based on your conversation with Jim last week 

you were confident you could get everything done. Agree 

getting business covered is critical and if you see that 

cannot be done, then we pull the plug on everything and 

go back to the way it is right now.41

Throughout September 2014, Neal and Hoops continued to try to place Revelation’s 

and Hoops’s insurance policies, get Omni running, and discuss their business 

relationship. Central to all of this was Heather Hammond. 

Hammond began working in the coal industry nineteen years ago at Jacobs 

Risk Management, helping to prepare mine plans for the Mine Safety and Health 

Administration.42 Jacobs Risk Management assists small and large coal companies 

with regulatory affairs and insurance needs;

43 it had serviced Revelation’s and 

 

41 Id. 

42 Tr. 479 (Hammond). 

43 Tr. 552 (Jacobs). 
16

Hoops’s insurance policies since 2009.44 Jacobs Risk Management was contracted 

to work with Van Meter to place the insurance policies.45 

When Hoops and Neal first decided to form Omni, they met with Hammond 

and Joseph Jacobs,46 the owner of Jacobs Risk Management.47 At that meeting, Neal 

and Hoops asked Hammond and Jacobs to help with the transition into Omni and for 

help with future administrative work.48 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 to the table.”49 Hammond 

continued to work with Neal through September, assisting with renewing 

Revelation’s policies.50 She provided Neal with renewal paperwork to be submitted 

to insurance carriers, helped new carriers conduct site visits with Jacobs, and 

provided additional information to Neal as needed.51 

 

44 Tr. 485 (Hammond); Tr. 553 (Jacobs). 

45 Tr. 485 (Hammond); JX 4. 

46 Tr. 486 (Hammond); JX 26. 

47 Tr. 19 (Hoops). 

48 Tr. 486 (Hammond). 

49 Tr. 487 (Hammond); see also JX 26; Tr. 37 (Hoops); JX 41, at JN00015354. 

50 See JX 26; JX 32. 

51 Tr. 280-81 (Neal); Tr. 491-95 (Hammond). 
17

The relationship between Neal and Hammond was strained almost 

immediately.52 Neal felt that Hammond was not providing him with the type of 

cooperation he was expecting,53 and Hammond felt that Neal treated her like he was 

superior to her or like she was “ lower class.”54 Despite this tension, Hammond and 

Neal continued to work towards renewal of Revelation’s policies, sending out Agent 

of Record letters and getting insurance quotes.55

On September 22, 2014, Cunningham sent a proposed operating agreement 

for Omni, a proposed employment agreement for Neal, and a proposed member 

agreement for Omni to Hoops and Neal. Neal never signed these agreements.56

3. Things fall apart: October 1-31, 2014

On October 1, 2014, Neal emailed Hoops saying, “We did it. I have everything 

done.”57 Neal then walked through the particulars of the different insurance policies, 

including workers’ compensation, director and officer (“D&O”), crime, and excess 

 

52 JX 27; JX 28; Tr. 282-83 (Neal); Tr. 496 (Hammond). 

53 Tr. 283 (Neal). 

54 Tr. 496 (Hammond). 

55 JX 32; JX 34; JX 35. 

56 Tr. 330, 347-48 (Neal). 

57 JX 41. 
18

insurances.58 Hoops replied, “Amazing you got all of this pulled together in such a 

short time, great job.”59 The celebrations continued on October 3,60 but the 

celebrations were short lived. On October 4, a Saturday, 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.”61 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.”62 Neal assured Hoops that everything was likely fine, 

writing, “Most likely someone of authority with Westchester was out Friday 

afternoon and upon return Monday morning will approve and coverage will be in 

effect midnight Sunday morning – 10-05-14 as if nothing happened.”63 Hoops 

replied, “I would have submitted financing without D&O as I would never take the 

chance of not having liability and equipment coverage. Will anything be covered as 

 

58 Id. 

59 Id. 

60 JX 46. 

61 JX 47. 

62 Id. 

63 Id. 
19

of midnight tomorrow night? If not I would shut the operations down until 

something is in place. That cost us about $1.1mm per day.”64 

At 8:18 a.m. on Monday, October 6, Neal assured Hoops again that, “All 

coverages are bound, went into effect at midnight Sunday morning. I have the policy 

numbers for them except the D&O.”65 At 8:20 a.m., Neal emailed 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.”66 The intermediary responded at 10:13 a.m. that the underwriter 

and carrier both had additional questions as of Monday, October 6. At 9:37 a.m. on 

October 6, Neal emailed a different intermediary to see if they could give him a 

quote for D&O insurance.67 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 stalling and have not bound. They offered renewal terms but have 

 

64 Id. 

65 Id. 

66 JX 310. 

67 JX 48. 
20

refused to bind through Crump.”68 At some point after this October 8 email, 

Westchester bound the D&O insurance effective October 5, 2014.69

Less than ten days later, on October 14 at 9:20 a.m., Neal emailed Hoops, 

Henson, and Hammond, “Your [Hoops] personal policies come due tomorrow, so 

we need to bind today. I was not successful in getting all policies policies replaced 

with my agent here as I had hoped to do . . . The best option is to renew with VMI 

unless they refuse.”70 At 10:17 a.m., Hammond replied all, “I have some pretty good 

pricing on your personal lines. I’ll email you some options to look at.”71 

At 4:29 p.m., Hoops emailed Neal and cc’d Henson and Hammond, but the 

email was addressed to Hammond. It read, “Heather Just do whatever it takes to 

make sure I have coverage disappointed only 1 hour notice as that that just does not 

work.”72 At 4:33 p.m., Neal emailed Hoops, Hammond, and Henson, “My 

experience is that companies will bind effective of the day of the instruction to bind 

especially if it is a renewal, so we could bind tomorrow effective 10-15. However 

it might be trouble getting a claim paid in the window of midnight to whenever we 

 

68 JX 60. 

69 Tr. 161 (Hoops); Tr. 275 (Neal). 

70 JX 53. 

71 JX 54. 

72 Id. 
21

send order to bind.”73 At 4:38 p.m., Hoops replied “24 hours of exposure is 

unacceptable this is no way to do business.”74 At 4:57 p.m., Hammond emailed 

Neal, “I’ll be heading out of the office soon. Do I need to do anything to help on 

this?”75 Neal responded at 5:01 p.m., “Yes, Bind all with [Van Meter] before you 

leave. Send clear email that coverage will be effective 10-15-14. A return 

acknowledgment would also be good.”76 Van Meter, from whom Omni had just 

taken all of Revelation’s insurance, ended up placing Hoops’s personal insurance 

with almost no notice.77

The parties did not submit contemporaneous written evidence that illuminates 

the events of October 15-17 as clearly as the other events in this case. 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 the commissions for the next year 50-

50.”78 On October 16 at 1:19 p.m., Neal wrote, in part: 

 

73 Id. 

74 Id. 

75 Id. 

76 Id. 

77 JX 73. 

78 Tr. 78 (Hoops). 
22

Lisa needs to issue check for 25% today. Ok?

I would like to get the carriers aid their portion of the 25% 

today, or as many of the 9 as possible. Ok?

The balance of the 25% down is Omni commission. I 

would like to get a check for half as we agreed. I will see 

if Lisa put any money in a new 401K and I will subtract 

that out. KEMI commission is the most part of the 

commission, about 40%, and is not financed as you know. 

We can use that commission to settle on for whatever 

expenses come out etc. including any monthly if we need 

to. 

I advised Lisa to max my 401K and planned on taking 

money out to live on. Regardless of how or whether we 

change our Omni concept. We are in agreement on a 50/50 

split for this year. Correct?79

Hoops replied, “Lisa has been waiting to give you a check for nearly 2 weeks. 

Believe I want to go direction I laid out yesterday.”80

In the morning on October 17, Neal, Hoops, and Henson met at Hoops’s 

office. Originally, Henson and Neal were meeting to sign the financing agreement 

that would govern the financing for the premiums that Revelation needed to pay.81 

Hoops testified that Henson called him down to her office to address an issue.82 He 

 

79 JX 61. 

80 Id. 

81 See JX 64. 

82 Tr. 81 (Hoops). 
23

further testified that he went down to her office, and she told him that Neal was 

refusing to sign the finance agreement “which is obviously required in order to get 

the additional premiums that are necessary to be paid to the underwriter. So without 

that, we would not have insurance coverage”83 unless Henson wrote “him a check 

for the full commissions at the time, which were $200,000.”84 Hoops testified that 

he told Neal, “‘Jerry, our deal was 50-50. You don’t get all the commissions. It’s 50-

50.’ So eventually we agreed that we would distribute $150,000. And so 75,000 was 

given to Jerry and 75,000 was given to Triple H Family Limited Partnership, leaving 

about $50,000 in Omni at that time.”85 Neal testified:

[Hoops] threw out a 75,000 distribution for each of us. 

Which, when I went in there, I just needed some money. I 

didn’t even know that we had to do a distribution for me 

to get a little bit of money. But in reality, the business 

sense of it was that we probably did both have to take a 

distribution, as he said. And then he said 75 K. I said, 

Okay, fine. It didn’t last a minute, and that was the end of 

that.86

At 8:55 a.m. on October 17, Hoops emailed Hammond, Jacobs, and Henson:

I told him this morning we are done and guess this will 

probably work out for the best as if you guys are 

Interested, then my plan is as follows:

 

83 Id. 

84 Id. 

85 Tr. 82 (Hoops). 

86 Tr. 299 (Neal). 
24

1) Agree to give Jerry 50% of the commission for 

this year on Revelation Energy less expenses 

including the 10% to you.

2) He will sign over his 50% ownership in Omni

3) Then assuming this goes as planned I would 

envision you guys taking 50% ownership in 

Omni and we will work together to grow this 

business.87

At 9:15 a.m., twenty minutes later, Hoops emailed Neal and Henson:

As you know on September 1, 2014 we agreed to the 

following 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 o deals in place of $65,000 

would go to Omni

4) Jacobs will receive 10% of commissions on 

Revelation deal and 33% on any new business 

they bring.

5) Then as cash built up in Omni we would 

periodically distribute the earnings on a 50/50 

basis 

Given the recent turn of events it appears the best path 

forward would be to unwind Omni and I would like for 

you to surrender your 50% interest for the following 

consideration:

1) You keep all income from Neal Insurance

2) 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 salary paid to you to date

 

87 JX 69. 
25

- Any expense incurred to ate for benefits or 

401-K match

- Half of the 10% commission we agreed to 

pay Jacobs

4) This will be paid to you by Omni as the 

commissions flow into the company

Lisa will provide a complete accounting and will make 

those payments wherever you direct. If you are in 

agreement I will have Eddie prepare the documents to take 

you off of Omni, then Lisa can pay you any amounts that 

are available at that time.88

Neither party submitted an email response to this October 17 email into evidence. 

The next email submitted from Neal was on October 22. Henson asked, 

“Where did you and Jeff leave it [on Oct 17] with payroll for you? Not sure if I owe 

you or not and I will be working on payroll tomorrow.”89 Neal responded: 

I can’t say for certain, but I would like for you to pay me 

and put all in 401K as we discussed. We need some 

money in account I know but hopefully a couple of my 

guys will pay on time and we can be in good shape by the 

end of the year. KEMI commission won’t kick in until 

December which will be for month of October and each 

month thereafter as I understand it. You and I need to 

discuss Invoicing Neal Insurance accounts which I need to 

do right now.

90

 

88 JX 65. A little bit of knowledge is a dangerous thing. Hoops and Neal both use 

terms with legally distinct definitions interchangeably. I do not attribute legal 

significance to their layperson use of legal terms. Instead, I attempt to capture the 

spirit of their agreement. 

89 JX 70. 

90 Id. 
26

Henson replied in part, “Need to talk to Jeff about all the moving of account. . . . I 

thought [on Oct 17] he said he was leaving your current accounts with you. We 

really need to get this settled. Need to talk to Jeff about additional $ in account as 

those are his personal funds.”91

On October 27, 2014, Neal emailed Hoops about Omni hiring a person to help 

with administrative work part time. At 11:11 a.m. Hoops responded, in part:

I am really concerned about whether we are going to be 

able to make this work with Lisa and Heather as I spoke 

with 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 our 

deal die when it comes up for renewal. Lisa is involved as 

CFO with all of my entities and she is an integral part of 

everything I am doing. It is clear you do not think much 

of Heather and I know little about insurance but she has 

done a 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 for 

you before. I will eat the remodeling downstairs as I can 

probably use that space sometime in the future. If you are 

in agreement, I will get Eddie to draft up something that 

commits me to get you the 50% of commissions until 

October 5th, 2015 so you will have something in writing.92

 

91 Id. 

92 JX 72. 
27

Hoops and Neal exchanged two other emails and then at 12:14 p.m., Neal wrote: 

“Ok. 50% is fine. Paid through audit which might extend past 10-5-15. Might mean 

I have to return some money but that would be fair. . . . Tell me how I can get out 

of the way. Several questions need to be cleared up.”93 Hoops and Neal continued 

to discuss how they would go about winding up Omni via email on October 27 and 

28.94

The relationship between Hoops and Neal continued to disintegrate. On 

October 30, 2014, Hoops sent Neal a letter on Omni letterhead purporting to 

terminate Neal’s employment with Omni. The letter ends, “As your employment is 

ending today, you are neither eligible for nor entitled to any benefits with your 

previous employment with Omni. You will be paid all wages due you through today, 

October 30, 2014.”95 The evidence submitted at trial showed that Hoops and Neal 

continued to communicate sporadically via email up to and including May 2016.96

On October 30, 2014, Cunningham filed Articles of Incorporation for Black 

Diamond Insurance Group, LLC (“Black Diamond”) in the Commonwealth of 

 

93 Id. 

94 Id. 

95 JX 75. 

96 E.g., JX 110; JX 116; JX 135; JX 136; JX 167; JX 168; JX 170. 
28

Kentucky.97 Triple H is a fifty percent owner of Black Diamond, and Hammond and 

Jacobs are both twenty-five percent owners.98 These members executed a written 

Operating Agreement for Black Diamond on November 10, 2018.99

D. Procedural History

Plaintiff filed its Verified Complaint on May 4, 2016. Defendant answered 

on May 30, 2016. Plaintiff filed its Amended Verified Complaint on October 20, 

2016. Defendant filed his Answer and Counterclaim on November 3, 2016. 

Plaintiff answered the Counterclaim on November 21, 2016. I granted Defendant 

leave to amend his Counterclaim on October 4, 2017, and Defendant filed his 

Amended Counterclaim on October 5, 2017. Plaintiff answered on October 16, 

2017. Trial took place on November 6, 7, and 8, 2017. Post-Trial Argument 

occurred on April 19, 2018.

II. ANALYSIS

“To succeed at trial, ‘Plaintiffs, as well as Counterclaim–Plaintiffs, have the

burden of proving each element . . . of each of their causes of action against each 

Defendant or Counterclaim–Defendant, as the case may be, by a preponderance of 

 

97 JX 82. 

98 JX 83. 

99 JX 84. 
29

the evidence.’”100 “Proof by a preponderance of the evidence means proof that 

something is more likely than not. It means that certain evidence, when compared 

to the evidence opposed to it, has the more convincing force and makes you believe 

that something is more likely true than not.”101 The claims at issue in this case fall 

into three broad categories: (1) breach of contract; (2) breach of fiduciary duty; and 

(3) fraud. Triple H asserts breach of contract claims and breach of fiduciary duty 

claims against Neal and seeks judicial dissolution of Omni. Neal asserts breach of 

contract, breach of fiduciary duty, and fraud claims against Triple H and Hoops. For 

the reasons set forth below, I find that Neal breached some contractual and fiduciary 

duties; neither Triple H nor Hoops breached contractual or fiduciary duties or 

committed fraud; and judicial dissolution is unnecessary because Omni was 

dissolved by agreement of the members, but I order that Omni be wound up under 6 

Del. C. § 18-803.

 

100 S’holder Representative Servs. LLC v. Gilead Scis., Inc., 2017 WL 1015621, at *15 

(Del. Ch. Mar. 15, 2017) (quoting inTEAM Assocs., LLC v. Heartland Payment Sys., 

Inc., 2016 WL 5660282, at *13 (Del. Ch. Sept. 30, 2016)), aff’d, 177 A.3d 610 (Del. 

2017). 

101 Agilent Techs., Inc. v. Kirkland, 2010 WL 610725, at *13 (Del. Ch. Feb. 18, 2010) 

(quoting Del. Express Shuttle, Inc. v. Older, 2002 WL 31458243, at *17 (Del. Ch. 

Oct. 23, 2002)). 
30

A. The Contract Between Hoops and Neal

The parties agree that Omni does not have a written operating agreement.102 

The parties instead entered into an oral agreement (the “Contract”) subject to the 

default provisions of the Delaware Limited Liability Company Act (the “LLC 

Act”).103 The August 20 Email serves as contemporaneous evidence of the terms of 

the Contract. The parties have also stipulated to certain terms that do not appear in 

the August 20 Email.

Based on the stipulations and contemporaneous writings of the parties, the 

terms of the Contract are: (1) Triple H and Neal each own 50% of Omni and have 

equal voting rights;104 (2) Neal would “roll all of Neal’s Insurance’s insurance, 

consulting and bond business into Omni”105 starting on October 1;106 (3) Neal “will 

be provided a Base Salary plus Benefits” starting October 1;107 and (4) Jacobs Risk 

Management would assist in placing Revelation’s insurance policies and receive ten 

 

102 PTO ¶ 16. 

103 Whittington v. Dragon Gp. L.L.C., 2008 WL 4419075, at *2 (Del. Ch. June 6, 2008).

104 PTO ¶¶ 2, 10. 

105 Id. ¶ 11. 

106 JX 17. 

107 Id. 
31

percent of the commissions received for any “existing business” and thirty percent 

of the commissions for “new business.”108

Neal and Hoops also each argue that other terms were included in the 

Contract. Neal seems to contend that in addition to the above terms, the parties also 

agreed that Omni would place Revelation’s insurance policies in perpetuity.109 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. Instead, Neal points to two email strings, one from September 1-2, 2014, 

where Neal and Hoops discuss concerns about placing Revelation’s and Hoops’s 

polices by the required 2014 dates,110 and one from October 17, 2014, where Hoops 

summarizes his understanding of the deal, which does not discuss Revelation or 

Revelation’s policies.111 This evidence does not support the contention that Neal 

and Hoops agreed that Omni would place Revelation’s policies in perpetuity. In 

fact, the evidence directly contradicts this. On September 2, Hoops wrote, “Thought 

 

108 PTO ¶ 18. 

109 Def.’s Opening Br. 34 (“Hoops/Triple H breached their contract by terminating 

Omni’s business and diverting and directing from Omni, to a new insurance agency, 

Black Diamond, the present and future insurance business that Omni had or could 

have had.”). 

110 JX 23. 

111 JX 66. 
32

based on your conversation with Jim last week you were confident you could get 

everything done. Agree getting business covered is critical and if you see that cannot 

be done, then we can pull the plug on everything and go back to the way it is right 

now.”112 Neal responded, “Hopefully separation will be a long time in coming and 

better yet not ever. We can sale it if all goes well.”113 Thus, Neal has not shown by 

a preponderance of the evidence that the parties agreed that Omni would place 

Revelation’s policies in perpetuity.

Hoops argues that in addition to the terms above, the parties agreed that “a 

material condition to forming Omni”114 was that “Neal was to timely procure and 

service Revelation’s and Hoops’s 2014 renewal insurance policies.”115 The evidence 

does not support this contention. Hoops points to no evidence in the record that 

suggests the parties agreed that the placement of Hoops’s and Revelation’s policies

was a condition to the formation of Omni. Instead, both parties knew all along that 

placing Revelation’s and Hoops’s polices by October 5 and October 15 respectively 

would be a challenge.116 In fact, Hoops understood that his personal policies may 

 

112 JX 23. 

113 Id. 

114 Pl.’s Opening Br. 23. 

115 Id. at 41. 

116 Tr. 56 (Hoops). 
33

have to be placed by another agent entirely.117 Regarding the Revelation policies, at 

the beginning of September, Hoops wrote, “Agree getting business covered is 

critical and if you see that cannot be done, then we can pull the plug on everything 

and go back to the way it is right now.”118 While Hoops’s email may evidence his 

subjective understanding of the importance of placing Revelation’s policies, it does 

not show that Neal and Hoops agreed it would be a material condition at the time 

they entered into the Contract. At most, Hoops’s email is an attempt to modify the 

original agreement to which Neal does not assent. Neal responded by cautioning

Hoops that he might not be able to place all the policies, and “[w]orst case, you can 

renew with [Van Meter Insurance].”119 Thus, Hoops has not shown by a 

preponderance of the evidence that a successful renewal of any of Revelation’s or 

Hoops’s personal insurance policies was a material condition to the formation of 

Omni.

 

117 JX 25 (“had thought we could do personal policies as they are a month behind 

others, but if that is all we can do then we have no choice”).

118 JX 23. 

119 Id. 
34

B. Dissolution of Omni by Agreement of the Members

Omni’s life was short. The members of Omni agreed to dissolve under 6 Del. 

C. § 18-801(a) in October 2014.

120 The Contract does not address dissolution; thus 

the LLC Act controls. Under the version of 6 Del. C. § 18-801(a) in effect in October 

2014, “[a] limited liability company is dissolved and its affairs shall be wound up . . . 

[u]nless otherwise provided in a limited liability company agreement, upon the 

affirmative vote or written consent of the members of the limited liability 

company.”121 The members, with Hoops as Triple H’s agent, agreed to dissolve 

Omni on October 15, 2014, and memorlized that agreement in writing on October 

27, 2014. 

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 the 

commissions for the next year 50-50.”122 On October 16 at 1:19 p.m. Neal wrote an 

email that is consistent with this testimony, and with Neal’s pattern of behavior, 

“Regardless of how or whether we change our Omni concept. We are in agreement 

 

120 The parties have requested judicial dissolution under 6 Del. C. § 18-802, but because 

the members of Omni agreed to dissolve under 6 Del. C. § 18-801(a), judicial 

dissolution under Section 18-802 is unnecessary. Spellman v. Katz, 2009 WL 

418302, at *3 n.26 (Del. Ch. Feb. 6, 2009). 

121 6 Del. C. § 18-801(a)(3) (1999). 

122 Tr. 78 (Hoops); Tr. 299 (Neal). 
35

on a 50/50 split for this year. Correct?”123 Hoops replied, “Lisa has been waiting to 

give you a check for nearly 2 weeks. Believe I want to go direction I laid out 

yesterday.”124 Each testified that they met on October 17 and acted in accordance

with their agreement to dissolve Omni by splitting equally the majority of the 

commissions Omni had received at that point.125 At 9:15 a.m. the same day, Hoops 

emailed Neal and Henson, consistent with their pattern of behavior, a summary of 

what Neal and Hoops agreed to:

As you know on September 1, 2014 we agreed to the 

following 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 Omni

4) Jacobs will receive 10% of commissions on 

Revelation deal and 33% on any new business 

they bring.

5) Then as cash built up in Omni we would 

periodically distribute the earnings on a 50/50 

basis 

Given the recent turn of events it appears the best path 

forward would be to unwind Omni and I would like for 

you to surrender your 50% interest for the following 

consideration:

1) You keep all income from Neal Insurance

 

123 JX 61. 

124 Id. 

125 Tr. 81-82 (Hoops); Tr. 299 (Neal). 
36

2) 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 salary paid to you to date

- Any expense incurred to ate for benefits or 401-K 

match

- Half of the 10% commission we agreed to pay 

Jacobs

4) This will be paid to you by Omni as the 

commissions flow into the company

Lisa will provide a complete accounting and will 

make those payments wherever you direct. If you are in 

agreement I will have Eddie prepare the documents to take 

you off of Omni, then Lisa can pay you any amounts that 

are available at that time.126

Neither party submitted an email response to this October 17 email into evidence, 

but Hoops and Neal exchanged emails on October 27, 2014, which constitute written 

consent of the members to dissolve Omni. 

On October 27, Neal emailed Hoops about Omni hiring a person to help with 

part-time administrative work.127 At 11:11 a.m. Hoops responded by laying out the 

terms of the October 15 agreement a third time. Hoops wrote, “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 

 

126 JX 65. 

127 JX 73. 
37

earn from Neal Insurance and just let our deal die when it comes up for renewal.”128 

At 11:59 a.m. Neal responded, in part, “I will agree with what needs to be done but 

it is a real shame.”129 Hoops wrote back at 12:04 p.m., in part, “Hopefully it worked 

out ok for you and you got a nice payday out of it and I guess I got the bottom floor 

remodeled, so it was a win for everyone.”130 Neal responded at 12:14 p.m., “OK. 

50% is fine. Paid through audit which might extend past 10-5-15. Might mean I 

have to return some money but that would be fair. . . . Tell me how I can get out of 

the way. Several questions need to be cleared up.”131 This email exchange 

constitutes the written consent of the members to dissolve Omni. 

After the parties consented to dissolve Omni, they could not agree on the next 

steps that needed to be taken during the winding up process. Neal’s concerns mostly 

centered on how Revelation’s 2014-2015 policies would be serviced because he felt 

he had a legal obligation to continue servicing them.132 Neal also wanted to know 

what Hoops was planning to do for his insurance after October 5, 2015.133 Hoops 

 

128 Id. 

129 Id. 

130 Id. 

131 Id. 

132 Id.; Tr. 302 (Neal). 

133 JX 73. 
38

said he thought he would go back to Van Meter Insurance because “they stepped up 

and done my personal at the last minute.”134 Hoops and Neal never succeeded in 

winding up Omni. 

Under 6 Del. C. § 18-803, “the Court of Chancery, upon cause shown, may 

wind up the limited liability company’s affairs upon application of any member or 

 

134 Id. Neal argues that Hoops made “false representations” in order to induce Neal to 

agree to dissolve Omni by saying he (Hoops) was going “get out of the insurance 

business” and go back to Van Meter Insurance. Def.’s Opening Br. 50-51. This 

argument is not supported by the evidence. No one points to any evidence that 

Hoops’s plans after Omni were discussed at either the October 15 or 17 meetings. 

In his October 27, 2014 email at 11:11 a.m., Hoops wrote, “My gut is to just worth 

this out with you and give you the 50% and let you keep Neal and go back to the 

way it was for you before.” JX 73. After he agrees to dissolve Omni at 12:14 p.m., 

Neal sends Hoops another email, seemingly in response to Hoops’s 11:11 a.m. 

email, asking, “When you say you are going back to how you were, what does that 

mean right now? Back to [Van Meter]? Someone else?” Id. Hoops then responds, 

“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 and done my 

personal at the last minute . . . . If you want to turn it over to lawyers and let them 

deal with it, I am happy to do that as well and in the meantime I will move everything 

back to [Van Meter] and you can keep the $75,000.” Id. Neither these emails, nor 

any other evidence pointed to by Defendant, show that Hoops represented that he 

was “getting out of the insurance business” prior to Neal agreeing to dissolve Omni. 

Defendant also points to Dweck v. Nasser, 2012 WL 161590 (Del. Ch. Jan. 18, 

2012), to argue that Neal did not “consent” to dissolve Omni. This reliance is 

misplaced. In Dweck, Dweck argued that Nasser had given Dweck permission to 

compete with the company at issue in that case. Id. at *14. Dweck then used the 

company’s resources to directly compete with the company. Id. This Court made 

a credibility determination and held that Dweck had never asked for permission. Id.

at *15. Thus, Nasser had never consented to the competition, so Dweck could not 

rely on the consent as a defense to the competition. Id. Dweck is far from on point. 

Here, the parties agreed to dissolve Omni. Hoops did not need Neal’s permission 

or consent to compete because, as discussed, Omni was dissolved when the alleged 

competition took place. 
39

manager, . . . and in connection therewith, may appoint a liquidating trustee.”135 

Despite Neal and Hoops’s agreement in October 2014 to dissolve Omni, they have 

been unable to successfully wind up the affairs of Omni. This is in large part due to 

Neal attempting to renegotiate the terms of the dissolution and winding up, including 

during the course of this litigation.136 I find that due to this pattern of behavior, good 

cause has been shown, and I order that Omni be wound up under Section 18-803. 

Triple H has requested that it be appointed liquidating trustee.137 Neal did not 

respond to this request. Therefore, I appoint Triple H liquidating trustee. Triple H 

will wind up Omni’s affairs in accordance with 6 Del. C. § 18-804 and Hoops and 

Neal’s agreement.

C. Breach of Fiduciary Duty Claims Against Hoops and Triple H 

1. Hoops owed fiduciary duties as a de facto manager of Omni 

Under the LLC Act, a manager of an LLC is defined as “a person who is 

named as a manager of a limited liability company in, or designated as a manager of 

 

135 6 Del. C. § 18-803(a) (2015). 

136 See, e.g., JX 116 (“We will have to play the Omni dissolution date by ear. I would 

say by 12-1-15 we should have everything wrapped up.”); JX 167 (“I agree we need 

to close out Omni. I have problem in being part of the $10000+ payment to Jacobs 

which was n 2014 possibly.”); JX 168 (“I am asking you for $1,000,000 to settle 

versus going forward with $7-10,000,000 in damages . . . I made about $150,000 

and you will make that plus all the additional you stole from me.”); JX 170 (“I would 

need something from Meluney dropping the Complaint”). 

137 Pl.’s Opening Br. 51. 
40

a limited liability company pursuant to, a limited liability company agreement or 

similar instrument under which the limited liability company is formed.”138 But, 

Delaware case law has recognized that a person who is not named or designated a 

manager in the LLC’s governing documents may nonetheless be deemed a de facto 

manager and fiduciary of the LLC.139 In WaveDivision, then-Vice Chancellor, nowChief Justice Strine recognized that a person who “had unfettered access to [the 

LLC’s] confidential information, helped plan [the LLC’s] responses to various 

outside parties on important issues, and co-presented with [the LLC’s CEO] during 

[the LLC’s] updates to its lenders” was a de facto manager, and fiduciary, of the 

LLC.140 The de facto manager in WaveDivision was not an official officer or part of 

the management committee, which on paper was separately managed.141 

Nonetheless, this Court held that his access and actions made him a de facto

manager, and in that context he owed fiduciary duties and could bind the company 

as an agent.142

 

138 6 Del. C. § 18-101(10). 

139 WaveDivision Hldgs., LLC v. Millennium Digital Media Sys., L.L.C., 2010 WL 

3706624, at *3 (Del. Ch. Sept. 17, 2010). 

140 WaveDivision Hldgs., 2010 WL 3706624, at *3. 

141 Id.

142 Id. 
41

Here, Hoops’s actions, taken in their totality, exhibit the same degree of 

control over Omni as the de facto manager in WaveDivision and mandate the same 

result.143 Hoops signed Omni’s Certificate of Formation as organizer;144 retained 

and directed his personally attorney to set up Omni, including drafting Omni’s 

operating agreement;145 directed the CFO of his other business to handle the back 

office work for Omni, including setting up a website, ledger, and back accounts;146

loaned the initial working capital to Omni;147 staffed Omni with Jacobs and 

Hammond;148 managed the relationship between Neal and Hammond;149 approved 

Neal’s hiring decisions and payment of Omni employees;

150 and sent a letter to Neal 

purporting to terminate him as an employee of Omni.151 Hoops was sufficiently 

 

143 Plaintiff does not grapple with the distinction between Hoops and Triple H here. 

Plaintiff only argues that Hoops’s actions were not sufficient to make him a de facto 

manager of Omni. Thus, I do not consider the distinction in my analysis. 

144 JX 21. 

145 JX 17. Neal never signed this agreement. Tr. 48-49 (Hoops); Tr. 248 (Neal). 

146 JX 17. 

147 Id. 

148 JX 10; Tr. 490 (Hammond). 

149 JX 27. 

150 JX 72. 

151 JX 75. 
42

involved in, and had sufficient control over, the management of Omni to consider 

him a de facto manager, which makes him a fiduciary.152 

Plaintiff argues that Hoops is not a de facto manager because the Contract 

designates Neal as “President and CEO.”153 First, an LLC can have more than one 

manager;

154 the fact that Neal was a manager of Omni does not preclude Hoops from 

also being a manager, de facto or otherwise. Second, under WaveDivision, a person 

other than a named officer can act as a de facto manager.155 Third, Plaintiff relies 

on Ensing v. Ensing156 to support their argument that a person cannot serve as a de 

facto manager if there are written agreements to the contrary.157 Ensing is not on 

point. In Ensing, this Court found that a clear, unambiguous, fully integrated 

operating agreement precluded the court from taking notice of the fact that the 

member not designated as a manager was “the financial impetus behind the 

acquisition and operation of the vineyard,” that he has always acted as the “de facto

 

152 Id. 

153 Pl.’s Answering Br. 30. 

154 Child Care of Irvine v. Facchina, 1998 WL 409363, at *4 (Del. Ch. July 15, 1998).

155 WaveDivision Hldgs., 2010 WL 3706624, at *3. 

156 2017 WL 880884, at *8 (Del. Ch. Mar. 6, 2017). 

157 Pl.’s Answering Br. 32. 
43

manager,” or from considering any extrinsic evidence.158 I am not similarly limited 

here, as there is no fully integrated operating agreement.159 Moreover, all the parties 

repeatedly rely on extrinsic evidence to support their arguments when it suites them. 

For example, Plaintiff points to no less than three different emails as evidence that 

Neal was a manager of Omni. Plaintiff offers no explanation for why I can look to 

various different pieces of evidence to determine that Neal was a manager but am 

prevented from looking at the evidence to determine if Hoops acted as a manager. 

When I consider all the evidence of Hoops’s involvement in the management and 

decision-making process of Omni, I find that he acted as a de facto manager and 

fiduciary of Omni. As discussed above, fiduciaries of a LLC owe fiduciary duties 

to the LLC, and I find that Hoops did here as well. 

2. Hoops and Triple H did not usurp Omni’s corporate 

opportunities 

Neal asserts breach of fiduciary duty claims against Hoops and Triple H, 

alleging they used Black Diamond to usurp Omni’s corporate opportunity to place 

Revelation’s insurance policies. The corporate opportunity doctrine in Delaware 

 

158 Id. 

159 Plaintiff argues “even though Omni does not have a formal operating agreement, its 

affairs are governed by the parties’ writings.” Id. at 31. 
44

was elucidated in Guth v. Loft and its progeny.160 The doctrine, on the one hand, 

bars an officer or director from taking a business opportunity for his own if:

(1) the corporation is financially able to exploit the 

opportunity; (2) the opportunity is within the corporation’s 

line of business; (3) the corporation has an interest or 

expectancy in the opportunity; and (4) by taking the 

opportunity for his own, the corporate fiduciary will 

thereby be placed in a position inimicable to his duties to 

the corporation.161 

On the other hand, a director or officer may take a corporate opportunity if:

(1) the opportunity is presented to the director or officer in 

his individual and not his corporate capacity; (2) the 

opportunity is not essential to the corporation; (3) the 

corporation holds no interest or expectancy in the 

opportunity; and (4) the director or officer has not 

wrongfully employed the resources of the corporation in 

pursuing or exploiting the opportunity.162 

Neither Hoops nor Triple H usurped a corporate opportunity from Omni

because Omni was dissolved before the opportunities allegedly usurped arose. 

Neither party addresses how the corporate opportunity doctrine is effected by the 

dissolution of the entity. Under Delaware corporate and limited liability law, 

however, dissolution of an entity causes any new business to cease.163 The parties 

 

160 5 A.2d 503 (Del. 1939). 

161 Broz v. Cellular Info. Sys., Inc., 673 A.2d 148, 154–55 (Del. 1996). 

162 Id. (citing Guth, 5 A.2d at 509). 

163 Under Delaware corporate law there is a statutory three-year winding up period. 

Addy v. Short, 89 A.2d 136, 139 (Del. 1952) (“During the three-year period of 
45

first agreed to the terms of dissolution on October 15, and Omni was dissolved in 

writing on October 27, 2014. At the earliest, Black Diamond was formed on October 

30, 2014.164 If Omni was dissolved and winding up, and thus not doing any new 

business, before Black Diamond was even formed, then it would be impossible for 

Black Diamond to usurp an opportunity that Omni was “financially able to exploit” 

or in which Omni had an interest or expectancy.165 It is unnecessary to continue the 

analysis any further. Neither Hoops nor Triple H usurped any corporate 

opportunities, and thus, neither Hoops nor Triple H violated any fiduciary duties.

 

winding up, the corporation functions exactly as it had functioned before 

dissolution, with the important qualification that its powers are limited to closing its 

affairs and do not extend to carrying on the business for which it was established”). 

The LLC Act does not have a similar mandatory winding up period, but generally 

states that once a LLC has been dissolved it is winding up until the certificate of 

termination has been filed. 6 Del. C. § 18-801; 6 Del. C. § 18-803(b). 

164 Defendant is concerned about how quickly Hoops began making plans to replace 

him in Omni and arranged Black Diamond. Hoops does not discuss replacing Neal 

until after they had agreed to dissolve Omni. JX 69. Black Diamond is not formed 

until after Hoops and Neal confirm their October 15 agreement in writing on 

October 27. Moreover, the timeline on which Black Diamond was established is in 

line with the timeline on which Omni was formed. Compare JX 5 (Omni is first 

discussed on August 17) and JX 17 (Omni solidifies LLC agreement in writing on 

August 20) with JX 69 (Black Diamond is first discussed in some form on October 

17) and JX 84 (Black Diamond solidifies LLC agreement on November 10) 

165 See Broz, 673 A.2d at 156-57 (“CIS was actively engaged in the process of divesting 

its cellular license holdings . . . . Thus, CIS had no interest or expectancy in the 

Michigan–2 opportunity.”). 
46

D. Fraud Claims Against Hoops and Triple H

To prove his fraud claim, Defendant must prove, by a preponderance of the 

evidence, that Hoops (1) “made a false representation”;166 (2) “knew the 

representation was untrue or made the statement with reckless indifference to the 

truth”;167 (3) “intended for [Defendant] to rely on the representation; (4) [Defendant] 

justifiably relied on the representation; and (5) damage occurred to [Defendant] as a 

result of that reliance.”168 Defendant has failed to prove by a preponderance of the 

evidence that Hoops made a false representation. 

Defendant avers that Hoops concocted a scheme to use Neal as an 

intermediary to move his insurance away from Van Meter and then replace Neal 

with Jacobs and Hammond.169 Defendant’s support for this proposition is that the 

contract between Jacobs Risk Management and Van Meter Insurance Group contains 

a non-solicitation provision.170 The non-solicitation provision, in relevant part, 

ensures that “[d]uring the terms of this contract and for a period of 24 months after 

 

166 Paron Capital Mgmt., LLC v. Crombie, 2012 WL 2045857, at *5 (Del. Ch. May 22, 

2012), aff’d, 62 A.3d 1223 (Del. 2013). 

167 Id. 

168 Id. 

169 Def.’s Opening Br. 44. 

170 Id. 
47

termination of this contract, [Jacobs Risk Management] will not directly or indirectly 

solicit VAN METER INSURNCE GROUP clients or prospects.”171 Defendant’s 

theory fails for three reasons.

First, Defendant presented no evidence that Hoops was a client of Van Meter 

rather than Jacobs Risk Management. In fact, the evidence introduced at trial 

supports a finding that Hoops was a client of Jacobs Risk Management rather than 

Van Meter,172 and thus, the non-solicitation provision does not apply to Hoops. 

Second, even if Hoops was a client of Van Meter, the non-solicitation clause does 

not bind Hoops. As the client, Hoops is free to hire whomever he pleases, whenever 

he pleases. Therefore, Neal’s theory that Hoops was forced to use an intermediary 

to circumvent a contract that does not bind him makes no sense.

Third, Plaintiff presented ample evidence at trial that the end of Omni was a 

result of underwhelming job performance on the part of Neal rather than a nefarious 

plot on the part of Hoops. At trial, Hoops showed that Neal failed to secure, in a 

timely manner, D&O coverage for Revelation and insurance for Hoops’s personal 

 

171 JX 4, at 2. 

172 Tr. 20 (Hoops) (“[B]asically all of our contact was with Jacobs, but they used 

another agency. Van Meter Insurance Group out of Lexington, Kentucky, was the 

actual underwriter -- or I guess broker or actually wrote the policies.”); Tr. 485 

(Hammond) (testifying that Jacobs Risk Management had serviced Revelation’s 

insurance policies since its inception). 
48

assets, possibly exposing Hoops to millions of dollars of risk.173 These failures 

happened on October 5 and October 15, respectively. Both exposures were 

ultimately remedied, and neither Revelation nor Hoops suffered any actual harm. 

But Hoops made it clear to Neal that he was extremely unhappy with Neal’s 

performance.174 In light of these potentially catastrophic failures to secure insurance 

for Omni’s only real customers, it is more probable than not that Hoops decided to 

terminate his relationship with Neal due to Neal’s performance as an insurance agent 

as opposed to concocting a months-long scheme that Hoops personally financed to 

the tunes of tens of thousands of dollars to get around a non-solicitation provision 

that does not actually seem to prevent him from accomplishing his supposed aim. 

For these reasons, Defendant has failed to carry his burden at trial and his fraud claim 

fails. 

E. Breach of Contract and Breach of Fiduciary Duty Claims Against 

Neal

Neal breached both his contractual and fiduciary duties. He breached his 

contractual duties by failing to roll Neal Insurance’s business into Omni. He 

breached his fiduciary duties by misrepresenting to Hoops that Revelation had 

 

173 Tr. 70-71 (Hoops); JX 47; JX 54. 

174 JX 54. 
49

insurance when it did not and exposing Omni to serious potential liability and 

reputational harm with the lapse. 

1. Neal breached the Contract 

“To prove a breach of contract claim, a plaintiff must show: “the existence of 

a contract, the breach of an obligation imposed by that contract, and resulting 

damages to the plaintiff.”175 Post-trial, “a claimant asserting a breach of contract 

must prove the elements of its claim by a preponderance of the evidence.”176 As 

discussed above, and as the parties concede, Neal and Hoops entered into a contract. 

As part of the Contract, Neal agreed to “roll all of Neal’s Insurance’s insurance,

consulting and bond business into Omni”177 starting on October 1.178 The parties 

stipulated that “Neal did not roll any of Neal Insurance’s business into Omni.”179 

Therefore, Neal breached the Contract. The only remaining element is damages. 

 

175 In re Mobilactive Media, LLC, 2013 WL 297950, at *14 (Del. Ch. Jan. 25, 2013) 

(quoting Weichert Co. of Pa. v. Young, 2007 WL 4372823, at *2 (Del. Ch. Dec. 7, 

2007)). 

176 Estate of Osborn ex rel. Osborn v. Kemp, 2009 WL 2586783, at *4 (Del. Ch. Aug. 

20, 2009) (citing United Rentals, Inc. v. RAM Hldgs., Inc., 937 A.2d 810, 834 n. 112 

(Del. Ch. 2007)). 

177 PTO ¶ 11. 

178 JX 17. 

179 PTO ¶ 32. 
50

Plaintiff sufficiently proved his damages. Plaintiff’s expert, Stephen Scherf,

“quantified the revenues earned by Neal Insurance over the damages period” by 

using the checks deposited into Neal Insurance’s checking accounts.180 He then 

“quantif[ed] and substract[ed] the costs incurred by Neal Insurance . . . that are 

appropriate” and divided by two “to calculate the amount due to Triple H.”181 Neal 

does not contest Scherf’s methodology or the amount of damages he calculated.182 

While this methodology is acceptable, the expert calculated the damages from 

August 25, 2014 to October 17, 2014.183 The actual damages period is October 1, 

2014 (the date Hoops and Neal agreed Neal would roll over Neal Insurance) to 

October 27, 2014 (the date when Omni was dissolved by written agreement of the 

members). Thus, Plaintiff’s damages are “the benefit that Neal withheld from 

Omni” measured using Scherf’s methodology from October 1, 2014 to October 27, 

2014 only.

Plaintiff is not entitled to recover these damages, however, because the parties 

resolved this particular dispute when they dissolved Omni. Plaintiff represented in 

multiple contemporaneous written documents and throughout this litigation that 

 

180 JX 183, at 6. 

181 Id. 

182 JX 185. 

183 JX 183. 
51

Neal and Hoops agreed that Neal would keep all of his income from Neal Insurance 

when Omni was dissolved.

184 Plaintiff relies on this agreement to dissolve assupport 

for its defense against Neal’s breach of fiduciary duty claim against Plaintiff. I find 

Plaintiff’s testimony and the contemporaneous documents credible on this point, and 

I find they agreed that Neal would keep all of Neal Insurance’s income. In other 

parts of this memorandum opinion, this agreement to dissolve has favorable legal 

consequences for Plaintiff. Plaintiff offers no explanation for why it should not now 

be held to the agreement that it admittedly made with Neal, and I see no reason to 

allow Plaintiff to cherry pick from the agreement it relies upon. 

2. Neal breached his fiduciary duties to Omni

Managers of a Delaware LLC owe default fiduciary duties.185 “[T]he 

traditional duties of loyalty and care . . . are owed by managers of Delaware 

 

184 See, e.g., JX 65; JX 72; Pl.’s Opening Br. 31-32. 

185 Auriga Capital Corp. v. Gatz Props., 40 A.3d 839, 851 (Del. Ch. 2012), aff’d, 59

A.3d 1206 (Del. 2012). Hoops alleges both breach of contract and usurpation of 

corporate opportunity related to the same behavior by Neal: failing to roll Neal 

Insurance into Omni. Hoops also seeks the same remedy for the alleged breach of 

contract and breach of fiduciary duty: disgorgement of half the profits made by Neal 

Insurance before Omni was dissolved. I address only the breach of contract claim 

because the usurpation of corporate opportunities claim is duplicative. Stewart v. 

BF Bolthouse Holdco, LLC, 2013 WL 5210220, at *14 (Del. Ch. Aug. 30, 2013). I 

also do not address additional breach of fiduciary duty claims raised by Hoops only 

in the context of an unclean hands defense. These include allegations that Neal 

breached his fiduciary duties by opening an additional bank account for Omni and 

redirecting KEMI commissions to that account without Neal’s knowledge; 

falsifying the application for that bank account; failing to secure insurance coverage 

for certain assets Revelation purchased in January 2015; and “misleading the Court 
52

LLCs . . . in the absence of a contractual provision waiving or modifying those 

duties.”186 “The duty of loyalty mandates that the best interest of the corporation 

and its shareholders takes precedence over any interest possessed by a director, 

officer or controlling shareholder and not shared by the stockholders generally.”187

The duty of care requires that managers avoid “conduct that constitutes reckless 

indifference or actions that are without the bounds of reason.”188 I find that Neal 

breached these duties by misleading his only customer about a serious lapse in the 

customer’s insurance coverage. Neal did not breach these duties in relation to the 

October 17 distribution. 

a. The October 2014 lapse

Revelation was Omni’s biggest customer.189 On October 1, 2014, Neal 

emailed Hoops, Revelation’s CEO, to report that Omni had successfully renewed all 

 

to secure an unfair tactical advantage.” Pl.’s Answering Br. 19-22. Because I do 

not find for Neal on any of his breach of contract or breach of fiduciary duty claims 

against Plaintiff, I do not address Plaintiff’s unclean hands defense. 

186 Id. at 843. Delaware courts “look to the corporation law when assessing the extent 

to which a managing member owes common law fiduciary duties when those duties 

are not clearly defined in the entity’s operating agreement.” A&J Capital, Inc. v. 

Law Office of Krug, 2018 WL 3471562, at *5 (Del. Ch. July 18, 2018). 

187 Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 361 (Del. 1993) (citing Pogostin v. 

Rice, 480 A.2d 619, 624 (Del. 1984)). 

188 McPadden v. Sidhu, 964 A.2d 1262, 1274 (Del. Ch. 2008). 

189 Tr. 70 (Hoops). 
53

eleven of Revelation’s insurance policies, ahead of the October 5 deadline.190 On 

October 4, however, Neal emailed Hoops and Henson, “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.”191 Hoops replied, 

“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.”192 Neal assured 

Hoops that everything was fine, writing, “Most likely someone of authority with 

Westchester was out Friday afternoon and upon return Monday morning will 

approve and coverage will be in effect midnight Sunday morning – 10-05-14 as if 

nothing happened.”193 Hoops replied, “I would have submitted financing without 

D&O as I would never take the chance of not having liability and equipment 

coverage. Will anything be covered as of midnight tomorrow night? If not I would 

 

190 JX 41. 

191 JX 47. 

192 Id. 

193 Id. 
54

shut the operations down until something is in place. That cost us about $1.1mm 

per day.”194 Revelation’s D&O policy lapsed at midnight on October 5, 2014.195 

October 4 was a Saturday.196 Neal did not respond to Hoops’s last email until 

a little after 8 a.m. on Monday, October 6.197 He told Hoops and Henson, “All 

coverages are bound, went into effect at midnight Sunday morning. I have the policy 

numbers for them except the D&O. The D&O might be bound as well and they tell 

us this morning that they just did not have time to get us the policy number.”198 

Meanwhile, Neal emailed the insurance intermediary asking what is happening with 

the D&O insurance.199 Neal also emailed other insurance providers trying to find 

another D&O policy for Revelation.200 He was still sending these emails on October 

8, three days after the D&O policy lapsed.201 The evidence suggests that from 

October 5 until at least October 8, Revelation did not have D&O insurance. The 

 

194 Id. 

195 JX 48. 

196 Tr. 69 (Hoops). 

197 JX 47. 

198 Id. 

199 JX 310. 

200 JX 48. 

201 JX 60. 
55

parties do not point to any evidence that Neal informed Hoops that he was trying to 

procure replacement insurance. 

 Revelation is a coal mining business.202 If some disaster had occurred during 

the time when the D&O insurance was not in place, it is very unlikely that Revelation 

would have been able to find an insurance provider that would cover the claim.

203 

What is more, Neal did not respond to Hoops after 7:42 p.m. on October 4 and then 

continued to keep him in the dark about the actual status of the D&O insurance. In 

fact, he affirmative assured Hoops on Monday that “all coverages [were] bound and 

went into effect at midnight Sunday morning.”204 Neal knew this was not quite true 

and continued to search for D&O coverage for days.205 The failure to secure 

coverage, and the failure to truthfully and fully inform his client of that failure, 

exposed Omni to a significant risk of monetary and reputational harm. At the very 

least, this behavior was not in the best interest of Omni and constitutes a breach of 

Neal’s fiduciary duties.

 

202 PTO ¶ 14. 

203 See JX 54 (where Neal explains that there could be a problem with getting a claim 

covered in the period between when the prior coverage lapses and the new coverage 

is bound). 

204 JX 47. 

205 JX 48; JX 60; JX 310. 
56

Thankfully no tragedy occurred during the time Revelation was uninsured, 

and Neal eventually procured a D&O policy effective October 5, averting disaster. 

Plaintiff does not request any damages for Neal’s breach of fiduciary duty. It appears 

that Hoops is content not to seek a remedy for this breach but instead to just be done 

with Neal and Omni. Therefore, I award nominal damages for Neal’s breach of his 

fiduciary duty.

b. The distribution

Plaintiff argues that Neal breached his fiduciary duties to Omni by “strongarming” Hoops into making a distribution. On October 17, 2014, Henson and Neal 

met to sign the financing agreement that would govern the financing for the 

premiums that Revelation needed to pay.206 Hoops testified that Henson called him 

down to her office to address an issue.207 He further testified that he went down to 

her office, and she told him that Neal was refusing to sign the finance agreement 

“which is obviously required in order to get the additional premiums that are 

necessary to be paid to the underwriter. So without that, we would not have 

insurance coverage”208 unless Henson wrote “him a check for the full commissions 

 

206 See JX 64. 

207 Tr. 81 (Hoops). 

208 Id. 
57

at the time, which were $200,000.”209 Hoops testified that he told Neal “‘Jerry, our 

deal was 50-50. You don’t get all the commissions. It’s 50-50.’ So eventually we 

agreed that we would distribute $150,000. And so 75,000 was given to Jerry and 

75,000 was given to Triple H Family Limited Partnership, leaving about $50,000 in 

Omni at that time.”210

Neal also testified about the events of October 17. He testified that he “just 

needed some money” but did not know that a distribution was required.211 He further 

testified, “But in reality, the business sense of it was that we probably did both have 

to take a distribution, as [Hoops] said. And then [Hoops] said 75 K. I said, Okay, 

fine. It didn’t last a minute, and that was the end of that.”212 Neal further explained 

that he had discussed this possible payment with Hoops twice over the prior two 

days: “And, you know, we talked about it on the 16th, the evening. We talked about 

it on the 15th. I told him when I came in there I wanted half the commissions, which 

were mine. This was normal policy for agents to do that in agencies. If it would be 

in the agency, I wanted my half.”213 Neal continued:

 

209 Id. 

210 Tr. 82 (Hoops). 

211 Tr. 299 (Neal). 

212 Id. 

213 Tr. 418 (Neal). 
58

And [Hoops] comes down, at some point, and he said we, 

you know, he -- we were talking about getting the other 

monies for the accounts, as well, I mean, getting money in 

there. And there’s an issue, something wrong with the 

checks. We had to go to the bank and do some of this. 

So it was not going to be a quick, easy process, but we had 

to figure out how much to pay the carriers. And I had a 

little net premium summary that we had looked at, and I 

scribbled on the right-hand side what the commissions 

were. It came up to whatever it was, 205-, 212,000, 

something in that neighborhood. 

He said, we should leave something in there. We can’t take 

it all out. I have to take whatever you have to take. I said, 

Oh, okay, 75,000. Let’s take 75. Okay. That’s the end of 

it. It lasted about a minute. You know, and he’s gone.

214

After this testimony, Plaintiff’s counsel confronted Neal with an undated, 

typed document that Neal authenticated as a “synopsis of some points that I was 

putting together for an attorney.”215 The document includes the following paragraph: 

I arranged a Premium Finance agreement for about half of 

the Revelation Premiums which generated 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. We left $50,000 in the account for expenses 

etc.216

In response to being shown this document, Neal testified:

 

214 Tr. 418-19 (Neal).

215 Tr. 420 (Neal). 

216 JX 190. 
59

But my testimony is that I didn’t demand that money. We 

didn’t get to that point. I didn’t have to demand it. He 

pretty much -- there wasn’t any reason to leave the money 

in there. As manager of what I -- I mean, I didn’t see any 

reason. He didn’t -- I made that point to him.

If we left 50,000 in there, as we did, we arrived at that very 

quickly in a discussion. That was enough money. And then 

we were going to get the KEMI monies in there. And then 

if we decided to keep going, then the other insurance 

monies was going to be there.

So there was no reason for me to not -- that I could see for 

leaving that money in there, especially with what had been 

taking place a couple days earlier. He was already talking 

about unwinding it. And I hadn’t won any of these deal 

with any of them.217 

Counsel for Plaintiff then asked, “Mr. Neal, you knew that this demand would work 

because two weeks before this, he told you he would rather shut down his operations 

and lose $1.1 million a day than let him go uninsured. So you knew that this strongarm tactic would work. Isn’t that right?”218 Neal responded:

The policies had been in effect and bound two weeks 

earlier, and he’s been in 10 businesses at this time and 23 

now. He knows what a binder is. We had sent certificates 

of insurance to the states, the Division of Mined Land 

Reclamation in Virginia, and we sent them to the DNR in 

West Virginia with policy numbers on them, evidencing 

coverage. And we had, with HIIG, which wrote I think 

five of eleven policies, we had something like 60 days 

from the get-go on it, to pay them. While they generally 

 

217 Tr. 421 (Neal). 

218 Tr. 422 (Counsel for Plaintiff). 
60

want the finance contract done in 30 days, they would like 

it done earlier.219

While I find Hoops’s testimony that Neal forcefully requested a distribution 

on October 17 credible, I also find Neal’s testimony that insurance coverage was in 

place and would not lapse if the finance agreement was not signed on October 17 

credible. Furthermore, the distribution is consistent with the Hoops and Neal’s 

October 15 agreement to dissolve Omni and split the commissions equally, rather 

than some strong-arm tactic.220 Finally, the distribution did not violate 6 Del. C. § 

18-607. Thus, I do not find that Neal breached his fiduciary duties or that the 

ultimate distribution was contrary to the best interests of Omni at the time it was 

made. 

F. Attorneys’ Fees

Both Plaintiff and Defendant have requested attorneys’ fees and costsincurred 

in connection with this litigation. Under the “American Rule,” “each party is 

normally obliged to pay only his or her own attorneys’ fees, whatever the outcome 

of the litigation.”221 Under my equitable powers, I may shift attorneys’ fees and 

costs in certain limited circumstances, including (1) if there is express statutory 

 

219 Tr. 422 (Neal). 

220 JX 61; Tr. 78 (Hoops); Tr. 323 (Neal). 

221 Johnston v. Arbitrium (Cayman Islands) Handels AG, 720 A.2d 542, 545 (Del. 

1998). 
61

authorization or a contractual fee shifting provision; (2) “the presence of a ‘common 

fund created for the benefit of others;’” (3) “where the judge concludes a litigant 

brought a case in bad faith or through his bad faith conduct increased the litigation’s 

cost; and” (4) “cases in which, although a defendant did not misuse the ‘litigation 

process in any way, ... the action giving rise to the suit involved bad faith, fraud, 

“conduct that was totally unjustified, or the like” and attorney’s fees are considered 

an appropriate part of damages.’”222 I may also “award fees in the limited 

‘circumstances of an individual case [that] mandate that the court, in its discretion, 

assess counsel fees ‘where equity requires.’”223 “To justify an award under the bad 

faith exception, ‘the Court must conclude that the party against whom the fee award 

is sought has acted in subjective bad faith.’”224 None of these circumstances are 

present here. Therefore, all requests for attorneys’ fees are DENIED.

III. CONCLUSION

I award Plaintiff nominal damages for Neal’s breach of fiduciary duty. I also 

order that Omni be wound up pursuant to 6 Del. C. § 18-803 and that its assets be 

 

222 Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate Fund, 

68 A.3d 665, 686-87 (Del. 2013). 

223 Id. (quoting Burge v. Fid. Bond & Mortg. Co., 648 A.2d 414, 421 (Del.1994)). 

224 K&G Concord, LLC v. Charcap, 2018 WL 3199214, at *1 (Del. Ch. June 28, 2018) 

(quoting In re Del Monte Foods Co. S’holders Litig., 2011 WL 2535256, at *6 (Del. 

Ch. June 27, 2011)). 
62

distributed in accordance with 6 Del. C. § 18-804 and Hoops and Neal’s agreement. 

I appoint Triple H liquidating trustee to wind up Omni’s affairs. All other requested 

relief is denied. The parties shall submit an implementing form of order within five 

days of the issuance of this memorandum opinion. 

IT IS SO ORDERED.