Title: Whittington v. Dragon Group, L.L.C., et al.
Citation: N/A
Docket Number: 392, 2009
State: Delaware
Issuer: Delaware Supreme Court
Date: December 18, 2009

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
FRANK C. WHITTINGTON, II, 
§  
 
 
 
 
 
 
§   No. 392, 2009 
 
Plaintiff Below, 
 
 
§  
 
Appellant,  
 
 
§   Court Below – Court of Chancery 
 
 
 
 
 
 
§   of the State of Delaware 
 
v. 
 
 
 
 
§   C.A. No. 2291 
 
 
 
 
 
 
§  
DRAGON GROUP, L.L.C., 
 
§  
THOMAS D. WHITTINGTON, JR., §  
RICHARD WHITTINGTON,  
§  
L. FAITH WHITTINGTON, and 
§  
DOROTHY W. MINOTTI, MARNA §  
A. McDERMOTT, SARAH I.  
§  
WHITTINGTON, RUTH A. 
 
§  
WHITTINGTON, MATTHEW D. 
§  
MINOTTI, DOROTHY A. MINOTTI,§  
 
 
 
 
 
 
§  
 
Defendants Below, 
 
 
§  
 
Appellees.  
 
 
§  
 
 
 
 
 
   Submitted:  November 3, 2009 
 
 
 
 
      Decided:  December 18, 2009 
 
Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS and 
RIDGELY, Justices, constituting the Court en Banc.   
 
 
Upon appeal from the Court of Chancery.  REMANDED. 
 
 
Richard H. Cross, Jr., Esquire (argued) and Amy Evans, Esquire, 
Cross & Simon, Wilmington, Delaware, for appellant. 
 
 
John G. Harris, Esquire, Berger Harris, LLC, Wilmington, Delaware, 
for appellees, Dragon Group, L.L.C., Thomas D. Whittington, Jr., Richard 
Whittington, L. Faith Whittington and Dorothy W. Minotti. 
 
 
 
 
2
Richard I. G. Jones, Jr., Esquire (argued) and Andrew D. Cordo, 
Esquire, Ashby & Geddes, Wilmington, Delaware, for appellees, Marna A. 
McDermott, Sarah I. Whittington, Ruth A. Whittington, Matthew D. Minotti 
and Dorothy A. Minotti. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HOLLAND, Justice, for the majority: 
 
 
3
 
The plaintiff-appellant, Frank C. Whittington, II (“Frank”), brought 
this action to enforce his rights as an alleged member of Dragon Group, 
L.L.C. (“Dragon Group”), a Delaware limited liability company.  The 
defendants-appellees include Frank’s four siblings, all of whom are 
members of Dragon Group:  Thomas D. Whittington, Jr. (“Tom”), Richard 
Whittington (“Richard”), L. Faith Whittington (“Faith”) and Dorothy W. 
Minotti (“Dorothy”) (collectively, the “Sibling Defendants”).  The 
remaining defendants are Dragon Group and certain other members of the 
Whittington family, who are not of the same generation as Frank.  The 
defendants Tom and Richard are also managers of Dragon Group.   
 
The Court of Chancery held that Frank’s action was barred by the 
doctrine of laches.  In reaching that decision, it determined that the 
analogous statute of limitations is three years.  We have concluded the 
applicable analogous statute of limitations is twenty years.  Therefore, this 
matter will be remanded to the Court of Chancery for further consideration 
in accordance with our holding in this opinion. 
Facts1 
 
 
In 2001, Frank and the Sibling Defendants entered into an Agreement 
in Principle (the “AIP”), which constituted a global settlement of the case 
                                          
 
1 These facts are taken from the Court of Chancery’s opinion dated June 11, 2009.   
 
4
styled Whittington v. The Farm Corp., and various other disputes.  In the 
Farm Corp. case, Frank sought recognition of his proportionate ownership 
interest in various business entities owned and operated by the Sibling 
Defendants, including Whittington Ltd. (“Ltd.”).  On June 14, 2001, each of 
the parties to that litigation signed the AIP following three days of trial 
before the Court of Chancery. 
 
The AIP is a single-page document containing eleven numbered 
paragraphs.  It provides in relevant part: 
3. 
Frank gets 10 shares of Ltd. Stock upon payment of 
$10,000 (without interest).  Frank’s proportionate interest 
in Ltd. will be carried forward into Dragon Group LLC 
with same rights as all other members. 
 
*   *    * 
 
5. 
In full repayment of a $190,000 loan from Dorothy B. 
Whittington, Frank pays Estate $90,000 and waives his 
interest in his Generation Skipping Trust in favor of his 
four siblings; Estate releases to Trust and Trust releases 
to Frank 55 Ltd. shares upon payment. 
 
*   *    * 
 
10. 
Frank, and other members, will receive periodic financial 
and operating information for Ltd., Frog Hollow and 
Dragon Group as outlined in items 22 and 23 of the 
March 21, 2001, letter of Todd C. Schiltz. 
 
11. 
All payments set forth herein above shall be made by 
June 30, 2001, and appropriate documentation acceptable 
to all parties to accomplish same including without 
 
5
limitation the Certificate of Formation and Operating 
Agreement for Dragon Group, L.L.C. 
 
Claiming Frank failed to perform under the AIP, the Sibling Defendants 
filed a motion with the Court of Chancery to enforce that agreement.  The 
Court of Chancery heard the motion on October 11, 2001, and held that the 
AIP should be enforced as a contract.  Among other things, the Court of 
Chancery expressly held that the parties’ inability to agree upon the form of 
certain documents contemplated in the AIP (e.g., releases, a new note, and 
new governing documents for certain related entities) did not make the AIP 
unenforceable. 
 
Despite the Court of Chancery’s ruling, the parties continued their 
pattern of delay, waiting nearly a year before purporting to comply fully 
with the express terms of the AIP.  Unable to work together cooperatively or 
effectively, the parties never completed certain of the secondary 
documentation referred to in the Court of Chancery’s ruling.  The parties 
could not agree, for example, on a proposed form of operating agreement for 
Dragon Group prepared by the Sibling Defendants to reflect Frank’s 
membership in that entity.   
On September 23, 2002, Tom distributed that document (the 
“Offering Memorandum”) to all prospective members of Dragon Group.  
The Offering Memorandum provided that each member must pledge his 
 
6
shares of Ltd. stock as a prerequisite for membership in Dragon Group.  The 
Offering Memorandum also stated that “[a]ny shareholder [of Ltd.] not 
returning all documents fully executed on or before the close of business on 
October 15, 2002, will be deemed not to have accepted the offer and thus not 
be able to participate.”   
Frank submitted an executed copy of the Offering Memorandum by 
the deadline on October 15.  In that copy, however, he changed his Dragon 
Group ownership interest from 17.77% to 24%.  On October 15, 2002, at 
4:10 p.m., Frank also paid the aggregate $100,000 referenced in paragraphs 
3 and 5 of the AIP and the Sibling Defendants delivered to him the stock 
certificates for the 65 total shares of Ltd stock. 
 
By letter dated November 1, 2002, Tom, Dragon Group’s sole 
managing member at the time, informed Frank’s counsel that Frank’s altered 
version of the Offering Memorandum constituted a counteroffer that had 
been rejected.  In response, on December 9, 2002, Frank, acting pro se, filed 
a Motion for Order Compelling Defendants’ Compliance with Court Order 
and Directing Performance by Substitute (the “2002 Motion”).  That motion 
essentially asked the Court of Chancery to resolve the differences among the 
parties as to the form of the ancillary documentation for Dragon Group, and 
to permit relitigation of certain issues resolved by the AIP.   
 
7
 
In a letter opinion dated March 4, 2003, the Court of Chancery denied 
Frank’s 2002 Motion.  With respect to Dragon Group’s operating agreement, 
which also is at issue in this action, the Court of Chancery ruled that the 
“terms of the [Dragon Group] LLC operating agreement will be those that 
were established at its inception, adjusted to reflect Frank Whittington’s 
percentage ownership therein.”  Seizing upon the fact that the Court of 
Chancery had denied Frank’s 2002 Motion, the Defendants apparently 
claimed victory and proceeded as if nothing had changed.  Frank, on the 
other hand, believed his position had been vindicated and mistakenly 
assumed he would be included as a member of Dragon Group with a 23.65% 
ownership stake.  In fact, however, after the March 4, 2003, letter opinion, 
the Defendants never took any action to include Frank as a member of 
Dragon Group.   
 
Frank’s sister, Dorothy, testified at trial but did not reveal during the 
discovery period, that she had spoken to Frank by telephone only days after 
the March 4, 2003, ruling.  According to Dorothy, she informed Frank that 
she and the other Sibling Defendants believed they had prevailed in the 2002 
Motion and, consequently, Frank was not a member of Dragon Group.  
Frank denied that this conversation occurred. 
 
8
 
In April 2003, Frank initiated discussions concerning his rights under 
the AIP with two attorneys, Jay Katz and Jeffrey Boyer, before engaging 
them formally as his legal counsel on May 23, 2003.  Katz and Boyer had 
detailed discussions with Frank about the AIP.  According to Katz, “[Frank] 
was adamant that [the Sibling Defendants] were not treating him as a 
member [of Dragon Group].  He was being excluded.  He was not getting 
information on Dragon Group and he was very upset about that.”  At the 
time, the Dragon Group matter was only one of several disputes Frank had 
with his siblings. 
 
After their engagement, Katz and Boyer sent a global settlement offer 
on behalf of Frank to Jeffrey Weiner, counsel for the Sibling Defendants.  
The offer proposed “a buy-out by the [Sibling Defendants] of all of Frank’s 
interests (including notes) in all of the entities for fair market value.”  The 
Sibling Defendants rejected Frank’s settlement offer on July 7, 2003.  About 
a day or two later, Katz called Weiner to inquire about the rejection and the 
Sibling Defendants’ refusal to negotiate.  At trial, Katz described that 
conversation as follows: 
I pointed out to the fact that Frank had complained that he 
wasn’t getting the Dragon Group financial statements.   
 
And [Weiner] said, “Why should he get them?  He’s not a 
member. 
 
 
9
So I asked [Weiner] why [Frank]’s not a member.  And isn’t 
that what the [AIP] says.  And he gave me his explanation of 
why he didn’t think Frank was a member.” 
 
[Weiner] said two different things.  One was that in the creation 
of Dragon Group or at some point all of the Whittington family 
members who were supposed to be members of Dragon Group 
were supposed to do something.  In that case I think it was, as I 
remember, to turn over certain certificates.  Frank had refused.  
This was part of the deal.  And when Frank . . . had refused, 
they took that as his saying “Well, I don’t want to really be a 
member.”  And there might have been some other things he did 
about marking up some documents.  I can’t specifically 
remember what that was, but some back-and-fourth which, in 
his mind, was Frank’s rejection of membership in Dragon 
Group and, therefore, he wasn’t entitled to the financial 
statements. 
 
Shortly after this conversation and before July 20, 2003, Katz informed 
Frank of the Sibling Defendants’ position that he was not a member of 
Dragon Group, and, therefore, had no right to receive any financial 
information from that company.   
 
In August 2003, the entities owned by the Sibling Defendants 
collectively convened an annual stockholders’ meeting.  Frank attended with 
Boyer, but they were excluded from the meeting when the discussion turned 
to Dragon Group.  According to Katz, Boyer “was told that since Frank 
didn’t have an interest in Dragon Group, that he wasn’t invited to the 
meeting or he couldn’t stay for the meeting.”   
 
10
 
The next communication regarding Frank’s status vis-à-vis Dragon 
Group occurred when Tom sent a letter to Frank, dated April 14, 2004, 
stating that Frank had been sent a K-1 for Dragon Group in error.  The letter 
stated: 
The Dragon Group LLC K-1 was sent to you in error . . . .  You 
are not a member of Dragon Group LLC.  I looked at your file 
on this matter and there is correspondence to your attorney 
regarding the fact that you did not return an appropriately 
signed Agreement nor did you send Maura your [Ltd.] shares to 
be used as security for loans that Dragon Group might need. 
 
Frank admits that this letter provided notice of the Sibling Defendants’ 
position that he was not a member of Dragon Group. 
 
In late 2004, Dragon Group called upon its members to make a capital 
contribution.  In connection with that call, Dragon Group received $36,152 
on January 12, 2005.  The funds contributed by the Sibling Defendants were 
taken from a dividend approved by the Ltd. board.  Dragon Group did not 
call upon Frank to make a capital contribution, presumably because the 
Defendants did not consider him a member of that entity. 
 
In December 2003, Dragon Group entered into a $4 million mortgage 
with Ltd. for a property in New Castle County, Delaware.  Dragon Group 
made timely payments on the mortgage at a nine percent interest rate from 
December 2003 until September 2006, when it satisfied the mortgage.  Frank 
 
11
admits that he generally was aware of the mortgage payments from Dragon 
Group to Ltd.  
Procedural History 
 
 
Frank commenced this litigation by filing a Verified Complaint for 
Declaratory and Injunctive Relief (the “Complaint”) against Dragon Group, 
Tom, Richard, Faith and Dorothy on July 20, 2006.  On October 25, 2006, 
Frank moved for summary judgment.  The Court of Chancery heard 
argument on that motion and denied it in an oral ruling on May 8, 2007.  
Frank then filed a Verified Amended Complaint (the “Amended 
Complaint”) on June 22, 2007, which added the other individual Defendants.  
Later in 2007, Frank dismissed Defendant Marna C. Whittington without 
prejudice.  On February 19, 2008, the remaining Defendants filed a joint 
motion for summary judgment on their defense of laches.  The Court of 
Chancery issued an opinion denying that motion on June 6, 2008.  A four-
day trial was held from June 10 to 13, 2008, and the Court of Chancery 
heard post-trial argument on January 30, 2009. 
 
Frank asked for three different but related types of relief in the Court 
of Chancery.  First, he asked the Court of Chancery to enforce the Dragon 
Group operating agreement and find that his membership interest under that 
agreement is 23.65%.  Second, commensurate with that membership interest, 
 
12
Frank asked for an order compelling the Defendants to turn over his 
proportionate share of all profits from Dragon Group, including any 
distributions.  Third, Frank requested an accounting of Dragon Group to 
determine the extent of his share of its profits. 
 
In the Court of Chancery, the Defendants contended that Frank was 
precluded from obtaining such relief because he failed to bring his claims 
within the applicable statute of limitations.  The Defendants also argued that, 
notwithstanding the statute of limitations, the doctrine of laches bars Frank’s 
claims.  In addition, the Defendants disputed the merits of Frank’s claims.  
They asserted that Frank is not a member of Dragon Group because he failed 
to comply with specific admission requirements.  Alternatively, the 
Defendants submitted that, even if Frank is a member of Dragon Group, his 
membership interest is far less than 23.65%.  In reply, Frank asserted that 
these defenses are barred by the doctrines of res judicata, collateral estoppel, 
and judicial estoppel based on the outcomes of two prior rulings by the 
Court of Chancery dated October 21, 2001, and March 4, 2003.  Frank also 
asserted that the doctrine of unclean hands prohibits the Defendants from 
raising any defense to his claims.  
 
The Court of Chancery concluded that this action should be dismissed 
on the ground of laches.  Therefore, it did not address the merits of Frank’s 
 
13
claims.  It noted, however, that Frank has stated a plausible claim that he 
was to be a member of Dragon Group under the AIP with an ownership 
interest possibly as high as 23.65% and that the Defendants breached the 
AIP.  For purposes of its opinion, the Court of Chancery assumed, without 
deciding, that but for the laches defense, Frank would prevail on those 
aspects of his claims.  Nevertheless, and despite having made that 
assumption, the Court of Chancery decided it was unnecessary to reach 
Frank’s counter-arguments based on res judicata, collateral estoppel, and 
judicial estoppel. 
Doctrine of Laches 
 
 
Both the doctrine of laches and statutes of limitations function as time 
bars to lawsuits.  Unlike a statute of limitations, the equitable doctrine of 
laches does not prescribe a specific time period as unreasonable.2  Laches is 
an unreasonable delay by a party, without any specific reference to duration, 
in the enforcement of a right, and resulting in prejudice to the adverse party.3  
An unreasonable delay can range from as long as several years4 to as little as 
                                          
 
2 Reid v. Spazio, 970 A.2d 176, 183 (Del. 2009).  
3 Id.  
4 See Cooch v. Grier, 59 A.2d 282, 287-88 (Del. Ch. 1948). 
 
14
one month.5  The temporal aspect of the delay is less critical than the reasons 
for it.  In some circumstances even a long delay might be excused.6 
 
Although statutes of limitations always operate as a time-bar to 
actions at law, they are not controlling in equity.7  As this Court recently 
held in Reid v. Spazio: 
A court of equity moves upon considerations of conscience, 
good faith, and reasonable diligence.  Thus, although a statute 
of limitations defense is premised solely on the passage of time, 
the lapse of time between the challenged conduct and the filing 
of a suit to prevent or correct the wrong is not, in itself, 
determinative of laches.  Instead, the laches inquiry is 
principally whether it is inequitable to permit a claim to be 
enforced, the touchstone of which is inexcusable delay leading 
to an adverse change in the condition or relations of the 
property or the parties.  Under ordinary circumstances, a suit in 
equity will not be stayed for laches before, and will be stayed 
after, the time fixed by the analogous statute of limitations at 
law; but, if unusual conditions or extraordinary circumstances 
make it inequitable to allow the prosecution of a suit after a 
briefer, or to forbid its maintenance after a longer period than 
that fixed by the statute, the [court] will not be bound by the 
statute, but will determine the extraordinary case in accordance 
with the equities which condition it.8 
 
Accordingly, the “doctrine of laches also permits [the Court of Chancery] to 
hold a plaintiff to a shorter period if, in terms of equity, the plaintiff should 
                                          
 
5 See Stengel v. Rotman, 2001 WL 221512, at *7 (Del. Ch. Feb. 26, 2001). 
6 Cooch v. Grier, 59 A.2d at 286-87. 
7 Reid v. Spazio, 970 A.2d at 183.   
8 Id. (citations and internal quotation marks omitted). 
 
15
have acted with greater alacrity, and when the plaintiff’s failure to seek 
equitable relief with alacrity threatens prejudice to the other party.”9 
 
Laches bars an action in equity if:  “[t]he plaintiff waited an 
unreasonable length of time before bringing the suit and . . . the delay 
unfairly prejudices the defendant.”10   Therefore, laches generally requires 
proof of three elements:  ‘“first, knowledge by the claimant; second, 
unreasonable delay in bringing the claim; and third, resulting prejudice to 
the defendant.’”11   This doctrine “is rooted in the maxim that equity aids the 
vigilant, not those who slumber on their rights.”12  As explained by this 
Court in Federal United Corp. v. Havender:13 
A court of equity moves upon considerations of conscience, 
good faith and reasonable diligence.  Knowledge and 
unreasonable delay are essential elements of the defense of 
laches.  The precise time that may elapse between the act 
complained of as wrongful and the bringing of suit to prevent or 
correct the wrong does not, in itself, determine the question of 
laches.  What constitutes unreasonable delay is a question of 
fact dependent largely upon the particular circumstances.14 
 
                                          
 
9 Territory of U.S. V.I. v. Goldman, Sachs & Co., 937 A.2d 760, 808 (Del. Ch. 2007) 
(citing CertainTeed Corp. v. Celotex Corp., 2005 WL 217032, at *6 (Del. Ch. Jan. 24, 
2005)); see also U.S. Cellular Inv. Co. of Allentown v. Bell Atl. Mobile Sys., Inc., 677 
A.2d 497, 503 n.7 (Del. 1996) (“[W]hatever is notice calling for inquiry is notice of 
everything to which such inquiry might have led.”) (quotation omitted).   
10 Hudak v. Procek, 806 A.2d 140, 153 (Del. 2002).   
11 Reid v. Spazio, 970 A.2d at 182-83 (quoting Homestore, Inc. v. Tafeen, 888 A.2d 204, 
210 (Del. 2005)).   
12 Adams v. Jankouskas, 452 A.2d 148, 157 (Del. 1982); Reid v. Spazio, 970 A.2d at 182. 
13 Fed. United Corp. v. Havender, 11 A.2d 331 (Del. 1940). 
14 Id. at 343. 
 
16
 
“A statute of limitations period at law does not automatically bar an 
action in equity because actions in equity are time-barred only by the 
equitable doctrine of laches.”15  Where the plaintiff seeks equitable relief, 
however, the Court of Chancery applies the statute of limitations by 
analogy.16  Absent a tolling of the limitations period, a party’s failure to file 
within the analogous period of limitations will be given great weight in 
deciding whether the claims are barred by laches.17  
Analogous Statute of Limitations 
 
 
The general rule for determining which statute of limitations should 
apply by analogy to a suit in equity is that “‘the applicable statute of 
limitations should be applied as a bar in those cases which fall within that 
field of equity jurisdiction which is concurrent with analogous suits at 
law.’”18  Delaware courts use the following test for determining whether a 
legal claim is analogous to the equitable claim at issue: 
[W]here the statute bars the legal remedy, it shall bar the 
equitable remedy in analogous cases, or in reference to the 
same subject matter, and where the legal and equitable claim so 
far correspond, that the only difference is, that the one remedy 
                                          
 
15 Albert v. Alex. Brown Mgmt. Servs., 2005 WL 1594085, at *12 (June 29, 2005); see 
also Adams v. Jankouskas, 452 A.2d at 157. 
16 See Weiss v. Swanson, 948 A.2d 433, 451 (Del. Ch. 2008). 
17 Adams v. Jankouskas, 452 A.2d at 157.   
18 Ohrstrom v. Harris Trust Co., 1998 WL 44983, at *2 (Jan. 28, 1998) (quoting Artesian 
Water Co. v. Lynch, 283 A.2d 690, 692 (Del. Ch. 1971)). 
 
17
may be enforced in a court of law, and the other in a court of 
equity.19 
 
 
The Court of Chancery concluded that “Frank’s claims ultimately are 
predicated upon the AIP and that this action is ‘based upon a promise’ 
within the meaning of section 8106:” 
Frank’s claims unquestionably relate to the same subject matter 
as would a legal claim for damages based on an alleged breach 
of the AIP.20  As a practical matter, there is not likely to be 
much difference between the prosecution of Frank’s claim here 
for an accounting and a claim for damages in a court of law.  
Thus, Frank’s claims for declaratory relief and an accounting 
are analogous to a legal claim for the same relief.  In the case of 
his request for injunctive relief, it is simply a remedy that may 
be enforced in a court of equity, as opposed to a claim for 
damages, which may be pursued at law. 
 
Therefore, the Court of Chancery held that the three-year statute of 
limitations in title 10, section 8106 of the Delaware Code was the analogous 
statute of limitations for purposes of its laches analysis.   
Exception For Contract Under Seal 
 
 
The Court of Chancery noted, however, that “one exception to the 
three-year statute of limitations for contract actions specified in title 10, 
section 8106 is for contracts under seal, for which the common law twenty-
                                          
 
19 Artesian Water Co. v. Lynch, 283 A.2d at 692 (quoting Perkins v. Cartmell’s Adm’r, 4 
Del. 270, 274 (4 Harr.) (Del. 1845)) (punctuation omitted).   
20 Delaware allows claims for declaratory relief to be brought both in equity and at law.  
See Del. Code Ann. tit. 10, § 6501 (1999). 
 
18
year period applies.”21  In the Court of Chancery, Frank argued that the AIP 
is a contract under seal.  In support of his argument, Frank noted that the 
word “seal” appears in typed letters beside the signature line for each 
signatory of the AIP. 
 
The Court of Chancery ruled that while “documents of debt, such as 
mortgages or promissory notes, escape the three-year limitation if they 
contain the most minimal reference to a seal, actions arising from other types 
of contracts must show a clearer intent to enter into a contract under seal.”  
In support of that ruling, it relied upon the case of American Telephone & 
Telegraph Co. v. Harris Corp.,22  where the Superior Court held: 
In Delaware, for an instrument other than a mortgage to be 
under seal . . . “it must contain language in the body of the 
contract, a recital affixing the seal, and extrinsic evidence 
showing the parties’ intent to conclude a sealed contract. . . .  
The mere existence of the corporate seal and the use of the 
word “seal” in a contract do not make the document a 
specialty.”23 
 
Because the AIP is neither a mortgage nor a promissory note, the Court of 
Chancery concluded that a number of the cases Frank relied upon were 
inapposite. 
                                          
 
21 See State v Regency Group, Inc., 598 A.2d 1123, 1129 (Del. Super. 1991) (citing Leiter 
v. Carpenter, 22 A.2d 393 (Del. Ch. 1941); Garber v. Whittaker, 2 A.2d 85 (Del. Ch. 
1938)).   
22 Am. Tel. & Tel. Co. v. Harris Corp., 1993 WL 401864 (Del. Super. Sept. 9, 1993). 
23 Id. at *7 (quoting Aronow Roofing Co. v. Gilbane Bldg. Co., 902 F.2d 1127, 1129 (3d 
Cir. 1990)). 
 
19
 
The record reflects that the AIP contains no reference to a seal other 
than the printed word “seal” next to each signature.  The Court of Chancery 
held “that evidence is insufficient to demonstrate an intent of the parties to 
enter into a sealed contract.”  Accordingly, it reiterated its holding that “the 
three-year statute of limitation for contracts applies by analogy in this case.”   
Contract Under Seal 
 
In this appeal, as a matter of first impression for this Court, we must 
decide what evidence is necessary to establish a specialty contract under 
Delaware law.  The term “specialty contract” refers to a contract under seal 
and is used to distinguish a sealed contract from an ordinary, unsealed 
contract.24  Under Delaware law, a contract under seal is subject to a twenty-
year statute of limitations.25  However, exactly what constitutes a sealed 
instrument (that is not a mortgage or deed) under Delaware law is not clear 
because there is a conflict in the trial courts’ decisions, in particular, 
                                          
 
24See Morgan v. Sharon Pa. Bd. of Educ., 472 F. Supp. 1157, 1159 (W.D. Pa. 1979) 
(“Pennsylvania law…has no statute of limitations for specialty contracts under seal such 
as plaintiff’s teaching contract.”); Paige v. Jurgensen, 419 S.E.2d 722, 724 (Ga. Ct. App. 
1992) (“The agreement for the sale of the stock was a contract under seal, or specialty 
contract as defined by [Georgia statute]. . . .”); Alexander v. Capitol Lumber Co., 105 
N.E. 45, 48 (Ind. 1914) (discussing the case where “the common-law sanctity of specialty 
contracts, or those under seal, [was] abolished”); see also Halverson v. Blue Mountain 
Prune Growers Co-op., 214 P.2d 986, 990 (Or. 1950) (“The fact is, however, that the 
unsealed contract herein was in no sense a specialty.  It was, rather, an informal, simple, 
or parole contract in writing.”). 
25 Aronow Roofing Co. v. Gilbane Bldg. Co., 902 F.2d 1127, 1127-28 (3d Cir. 1990).    
 
20
between In re Beyea’s Estate26 and American Telephone & Telegraph Co. v. 
Harris.27   
Conflicting Delaware Cases 
 
In Beyea’s Estate, Judge Speakman of the Orphan’s Court held that a 
promissory note with the word “Seal” printed to the right of in line with the 
signature on the note was an instrument under seal.28  The note did not 
contain a testimonium clause and there was no reference to the parties’ 
intention to render the note a sealed instrument in the body.29  In holding the 
note a sealed instrument, Judge Speakman reiterated Delaware’s common 
law doctrine of sealed instruments: 
[I]t has been a matter of general and common knowledge in this 
State for many years past that usage and custom has sanctioned 
the use of printed forms of notes and other contracts with the 
word “Seal” printed on the form immediately to the right of the 
place intended for the signature, and that when such a printed 
form is used for the purpose for which it was intended, and is 
signed to the left of and in line with the printed word “Seal”, 
upon the delivery of the executed obligation for or on behalf of 
the maker to the person for whom it was intended, or to his 
authorized agent, the character of the obligation of the maker is 
that of an obligation or contract under seal, irrespective of 
whether there is any indication in the body of the obligation 
itself that it was intended to be a sealed instrument. 30 
                                          
 
26 In re Beyea’s Estate, 15 A.2d 177, 180 (Orphan’s Ct. 1940). 
27 Am. Tel. & Tel. Co. v. Harris Corp., 1993 WL 401864 (Del. Super. Sept. 9, 1993). 
28 In re Beyea’s Estate, 15 A.2d 177, 180 (Orphan’s Ct. 1940). 
29 Id. at 178. 
30 Id. at 180 (emphasis added); see also 1 Sugden on Powers 300 (“If the seal, stick, or 
other instrument used be impressed by the party on the plain parchment or paper with an 
intent to seal, it is clearly sufficient.”). 
 
21
 
Accordingly, in Beyea’s Estate, the court held that bank-held promissory 
notes were under seal, based solely on the placement of the word “seal” to 
the right of the signatures.31   
In American Telephone & Telegraph Co. v. Harris Corp.,32 the 
Superior Court held that “for an instrument other than a mortgage to be 
under seal, ‘. . . it must contain language in the body of the contract, a recital 
affixing the seal, and extrinsic evidence showing the parties’ intent to 
conclude a sealed contract. . . .’”33  The only evidence of the parties’ intent 
to create a contract under seal in Harris – the presence of corporate seals and 
the word “seal” on the signature page of the license agreement at issue – was 
insufficient as a matter of law to show that the agreement was a specialty 
contract.34 
                                          
 
31Id. at 178.  “Neither note contained any testimonium or attestation clause, nor was there 
any mention of the word ‘Seal’ or ‘Sealed,’ or other word of similar import, in the body 
of either note.”  Id. 
32 Am. Tel. & Tel. Co. v. Harris Corp., 1993 WL 401864, at *7 (Del. Super. Sept. 
9,1993).  
33Id. (quoting Aronow Roofing Co. v. Gilbane Bldg. Co., 902 F.2d 1127, 1129 (3d Cir. 
1990)). 
34Id. (granting summary judgment). 
 
22
Other Delaware Cases 
 
In a case that predated Harris, Peninsula Methodist Homes and 
Hospitals, Inc. v. Architect’s Studio, Inc.,35 the Superior Court found a 
contract to waterproof a balcony to be under seal in reliance on Beyea’s 
Estate’s rule that “the word ‘seal’ printed to the right of the parties’ 
signatures is effective as a seal.”36  Although the contract there had the word 
“seal” below rather than beside each signature, the court’s conclusion was 
buttressed by the presence of a testimonium clause “immediately above the 
signatures,” further evidencing the parties’ intent to create a contract under 
seal.37   
 
Conversely, Kirkwood Kin Corp. v. Dunkin’ Donuts, Inc.38 
exemplifies 
where 
applying 
the 
Harris 
rule 
rather 
than 
the 
Peninsula/Beyea’s Estate rule controls the outcome.  The court there 
examined a franchise contract and a lease, each bearing only a corporate seal 
after the parties’ signatures and a testimonium clause identical to the one in 
Peninsula.39  The contracts were held not under seal because the “the mere 
                                          
 
35 Peninsula Methodist Homes & Hosps., Inc. v. Architect’s Stuidio, Inc., 1985 WL 
634831 (Del. Super. Aug. 28, 1985). 
36Id. at *1-2. 
37Id.  The testimonium reads: “In witness whereof, the parties hereto have hereunto set 
their hands and seals, the day and year first above written.”  Id. at *2. 
38 Kirwood Kin Corp. v. Dunkin’ Donuts, Inc., 1995 WL 411319 (Del. Super. June 30, 
1995).   
39Id. at *5. 
 
23
presence of a seal and a testimonium clause are not enough to create a sealed 
instrument;” the court “allow[ed] discovery to develop extrinsic evidence of 
the parties’ intent with respect to sealing the agreements.”40   
More recently, Consolidated Rail Corp. v. Liberty Mutual Insurance 
Co.41 applied the Harris rule in the context of a construction contract and 
found that although “[t]he signature clauses do make reference to the words 
‘seal’ and/or ‘sealed,’…the significance of those references are unclear.”42  
In the absence of any extrinsic evidence of intent or evidence of intent 
within the body of the contract, the Superior Court held the contract could 
not be considered a specialty.  The court acknowledged Peninsula and 
distinguished it on policy – rather than factual – grounds, stating that to the 
extent that Peninsula “represents a contrary holding in circumstances similar 
to those present herein, this court respectfully declines to follow it.”43  The 
court reasoned that “no purpose would be served by according the same 
archaic presumptions applicable to mortgages as sealed instruments to 
                                          
 
40Id. at *6. 
41 Consol. Rail Corp. v. Liberty Mut. Ins., 2002 WL 32080503 (Del. Super. Sept. 6, 
2002). 
42 Id. at *5. 
43Id. at *7.  Similar to the contract in Peninsula, the contract in Consolidated Rail bore 
only the phrase “Signed, Sealed and Delivered” to the left of one party’s signature and 
the phrase “Seal Attest” beside the other party’s signature.  The Consolidated Rail court 
did note, however, that there was no evidence of intent to create a specialty contract in 
the body of the contract, arguably distinguishing it from Peninsula’s testimonium.  But 
the failure of the court to draw out this distinction also suggests that it understood 
Peninsula to stand for the proposition that a “seal” is sufficient.  Id. at *6. 
 
24
documents other than mortgages absent clear evidence of the parties [sic] 
intent to do so.”44 
Other States 
 
Most states have enacted statutes that address the issue of what 
constitutes an instrument under “seal.”  The treatise Williston on Contracts 
contains a chart with each state’s position and statutory provisions regarding 
sealed instruments.45  Some states find sufficient evidence of an intent to 
create a contract under seal in the affixation of a “seal” to the right of the 
signatures, together with a testimonium or other clause in the body of the 
contract indicating an intent to create a sealed document.46  Delaware has not 
modified the common law by statute.   
Several courts follow the common law rule that was summarized in 
Beyea’s Estate and find sufficient evidence to create a specialty contract 
merely from affixing the word “seal” next to the parties’ signatures.  For 
example, in an action to recover on a promissory note, the Supreme Court of 
South Dakota rejected the argument that “because there is no language in the 
                                          
 
44Id. at *7. 
45 1 Williston on Contracts §  2:17 (4th ed.) (2009). 
46See, e.g., Crane v. Pringle, 378 So. 2d 721, 723 (Ala. 1979); Beach v. Beach, 107 A.2d 
629, 634 (Conn. 1954); Rouse-Teachers Props., Inc. v. Md. Cas. Co., 750 A.2d 1281, 
1287 (Md. 2000); Fid. Union Trust Co. v. Fitzpatrick, 46 A.2d 837, 839 (N.J. 1946); In 
re Pirie, 91 N.E. 587, 589 (N.Y. 1910); Square D Co. v. C.J. Kern Contractors, Inc., 334 
S.E.2d 63, 66 (N.C. 1985). 
 
25
body of the note indicating that it was intended to be a sealed instrument, it 
is not. . . .”47 Rather, the court held that: 
[a]t least until the contrary is shown the seal itself evidences an 
intention to make a sealed instrument.  A recital of the intention 
in the body of the instrument would undoubtedly be additional 
evidence of the intention, but it adds nothing in our opinion to 
the legal effect of the seal.48 
 
Similarly, the District of Columbia Court of Appeals has held that the word 
“seal” next to an individual’s signature is sufficient to create a sealed 
document:  “[I]n the case of an individual, in contrast to a corporation…the 
presence of the word “seal” next to an individual’s signature is, standing 
alone, sufficient to create a sealed instrument.”49 
Beyea’s Holding Adopted 
 
In Whittington, the Court of Chancery relied on Harris, rather than 
Beyea’s Estate.  In assessing the strength of Harris as describing the rule 
regarding “sealed” instruments in Delaware, several points must be 
considered.  First, New York law governed the “sealed” document at issue in 
Harris.  Second, the discussion in Harris regarding the evidence needed to 
                                          
 
47Commercial Serv. Corp. v. Stratton, 6 N.W.2d 441, 441 (S.D. 1942). 
48Id.  Cf. Peninsula Methodist Homes & Hosps., Inc. v. Architect’s Studio, Inc., 1985 WL 
634831, at *1-2 (Del. Super. Aug. 28, 1985) (describing the testimonium as “additional” 
evidence of an intent to create a sealed contract). 
49Burgess v. Square 3324 Hampshire Gardens Apartments, Inc., 691 A.2d 1153, 1156-57 
(D.C. 1997) (lease); see also McNulty v. Med. Serv. of D.C., Inc., 176 A.2d 783, 783 
(D.C. 1962) (finding a sealed contract for services based solely on the seal of the 
individual). 
 
26
establish a “sealed” instrument in New York concluded that the result in 
Delaware would be the same and distinguished Beyea’s Estate in a footnote. 
That footnote in Harris, however, inadvertently referred to the document in 
Beyea’s Estate as a mortgage when in fact it was a promissory note.  Third, 
in reaching its conclusion, the Harris opinion relied on the Third Circuit’s 
decision in Aronow Roofing Co. v. Gilbane Building Co.50 for its 
interpretation of Delaware’s law on sealed instruments.  The Aronow 
opinion, in turn, interpreted a construction contract under Delaware law, but 
cited to a District of Maryland case and Corbin on Contracts for the 
proposition that more than the word “seal” is required to demonstrate an 
intent to create a non-mortgage specialty contract.51 
In the absence of legislative guidance, we are persuaded by the 
decision in Beyea’s Estate and adopt that common law holding as the law of 
Delaware.  The opinion in Beyea’s Estate provides a bright line standard that 
is easily applied.  Accordingly, we hold that in Delaware, in the case of an 
individual, in contrast to a corporation, the presence of the word “seal” next 
to an individual’s signature is all that is necessary to create a sealed 
                                          
 
50 Aronow Roofing Co. v. Gilbane Bldg. Co., 902 F.2d 1127 (3d Cir. 1990). 
51See id. at 1129 (citing President and Dirs. of Georgetown Coll. v. Madden, 505 F. 
Supp. 557, 585 (D. Md. 1980)).   
 
27
instrument, “irrespective of whether there is any indication in the body of the 
obligation itself that it was intended to be a sealed instrument.”52 
Conclusion 
 
This matter is remanded to the Court of Chancery for reconsideration 
of its laches holding by applying a twenty-year statute of limitations for 
purposes of analogy.  Within sixty days, the Court of Chancery should report 
to this Court with its findings of facts and conclusions of law.  Jurisdiction is 
retained.53 
 
JACOBS, Justice, dissenting: 
 
The majority opinion commendably and quite accurately highlights 
the confusion in our case law on the question of what constitutes an 
instrument under seal (sometimes referred to as a “specialty contract”).  That 
question would ordinarily be of interest mostly to antiquarians, but for the 
unique (and, in my view, unfortunate) consequence of being deemed a 
“specialty contract.”  For ordinary (i.e., non-specialty) contracts, the 
applicable statute of limitations is three years.54  But, for a contract under 
                                          
 
52 In re Beyeas Estate, 15 A.2d 177, 180 (Orphan’s Ct. 1940).  Accord Burgess v. Square 
3324 Hampshire Gardens Apartments, Inc., 691 A.2d 1153, 1156-57 (D.C. 1997) (lease); 
see also McNulty v. Med. Serv. of D.C., Inc., 176 A.2d 783, 783 (D.C. 1962) (finding a 
sealed contract for services based solely on the seal of the individual). 
53 Supr. Ct. R. 19(c).   
54 10 Del. C. § 8106. 
 
28
seal, there is no statute of limitations; instead, a twenty-year limitations 
period has traditionally been imposed as a matter of common law.55  That is 
why the issue of what precisely must be shown for an instrument to be 
considered “under seal” matters significantly.  
In this case, the only evidence that the contracting parties intended to 
create a sealed instrument is that the word “seal” appears next to the 
signature line.  The question is whether that, without more, (such as, for 
example, a testimonium or similar express recital that the parties intend for 
the contract to be under seal) is sufficient evidence of intent to create a 
specialty instrument.  The Court of Chancery held it is not.  The majority 
holds that it is.  In my opinion, the majority’s rule represents an inadvisable 
policy choice that would frustrate the reasonable expectations of parties to 
many commercial contracts.  I must therefore dissent. 
 
Sealed instruments are an artifact of a period of history that has, by 
and large, long passed into obscurity.  During that earlier period, a seal was a 
symbol well-understood in commerce as intended to confer solemnity upon 
a contract involving contractual transactions historically thought to be of 
significance and tending to be of long duration.  The original, paradigmatic 
“specialty” instruments―deeds and mortgages―were of this character.  
                                                                                                                             
 
 
55 See cases cited at n. 21, supra. 
 
29
Given their nature, there was a rough congruence between the duration of 
those instruments and the twenty-year limitations period governing their 
enforcement. 
 
Had the category of “specialty instruments” been restricted to deeds, 
mortgages, and similar instruments memorializing transactions in land, the 
issue of what evidence suffices to constitute a “sealed instrument” would 
likely be of little moment.  What gave life to the issue were efforts to 
broaden this category to include conventional commercial instruments 
involving non-land related transactions with far shorter time horizons, such 
as (for example) promissory notes,56 construction contracts,57 and franchise 
contracts58 wherein the word “seal” was  printed next to the parties’ 
signature line.  In today’s modern commercial environment, it becomes 
more difficult in such cases to presume that the placement of the (often pre-
printed) word “seal” next to the contracting parties’ signature line 
conclusively evidences that the parties intend to subject themselves to 
contract-based litigation for twenty years, rather than the normal three year 
period.  Understandably, for that reason there developed conflicting Superior 
                                          
 
56 In re Beyea’s Estate, 15 A.2d 177 (Del. Orphan’s Ct. 1940). 
57 Peninsula Methodist Homes and Hosp. Inc. v. Architect’s Studio, Inc., 1985 WL 
634831 (Del. Super. Ct. Aug. 28, 1985) (involving a contract to waterproof a balcony); 
Consol. Rail Corp. v. Liberty Mutual Ins. Co., 2002 WL 32080503 (Del. Super. Ct. June 
6, 2002). 
58 Kirkwood Kin Corp. v. Dunkin’ Donuts, Inc. 1995 WL 411319 (Del. Super. Ct. June 
30, 1995). 
 
30
Court authority requiring additional evidence that parties to conventional 
commercial agreements actually intended that result, before imposing upon 
them the dramatic consequence of according their contract “specialty” 
status.59 
 
As the majority correctly notes, the legislatures of several states have 
resolved this problem, either by abolishing the seal entirely, or by 
prescribing what kind of evidence will suffice for a contract to be an 
instrument under seal.  Unfortunately, in Delaware the General Assembly 
has not provided guidance in this area. 
 
The majority acknowledges the conflict in our case law, but has 
resolved that conflict in favor of a rule that  “the word ‘seal’ next to a 
signature is all that is necessary to create a ‘sealed’ instrument, ‘irrespective 
of whether there is any indication in the body of the obligation itself that it 
was intended to be a sealed instrument.’”  The majority favors this rule 
because it “provides a bright line standard that is easily applied.”  
                                          
 
59 Am. Tel. & Telegraph Co. v. Harris Corp., 1993 WL 401864 (Del. Super. Ct. Sept. 9, 
1993) (holding that the presence of corporate seals and the word “seal” on the signature 
page of license agreement were legally insufficient to render the agreement a specialty 
contract);  Peninsula Methodist Homes and Hosp., Inc. v. Architect’s Studio, Inc., 1985 
WL 634831, at *1-2 (holding that the testimonium reciting that “In witness whereof, the 
parties have hereunto set their hands and seals, the day and year first above written” was 
sufficient additional evidence that the parties intended to create a contract under seal); 
contra Kirkwood Kin Corp. v. Dunkin’ Donuts, Inc., 1995 WL 411319 (holding that the 
mere presence of a seal and a testimonium clause not sufficient to create a sealed 
instrument); Consol. Rail Corp. v. Liberty Mutual Ins. Co., 2002 WL 32080503 (same). 
 
31
Concededly, their rule does that.  My difficulty, however, is that ease of 
application is not the only policy at stake here.  Also at stake is the policy 
that underlies all statutes of limitations: creating a period of repose from 
litigation after a prescribed period of time.  That policy, in my view, 
deserves greater weight where the dispute involves contracts other than the 
historic, paradigmatic instruments (deeds and mortgages) to which the 
common law twenty-year limitations period originally was applied.   
 
To state it more plainly, in today’s modern commercial environment, 
it is unreasonable and (I submit) an inadvisable policy to subject parties to 
commercial contracts to the risk of litigation for twenty years without 
requiring at least minimally persuasive evidence that the parties intended 
that result.  In my view, the common law rule should be that the use of the 
boilerplate term “seal,” without more, should be insufficient to visit twenty 
years of exposure to litigation upon contracting parties.  I therefore would 
affirm the judgment of the Court of Chancery, and respectfully dissent.