Opinion ID: 4564559
Heading Depth: 2
Heading Rank: 1

Heading: The General Release and the Dueling Affidavits

Text: Although we rule on alternative grounds, we first address the procedural issue which has been the main focus of this appeal, namely, whether the General Release bars Windsor’s claim because its representative, Stella, averred that he did not recall assenting to the General Release, and that this issue raises a question of fact necessitating reversal. In most cases, when the Superior Court considers a 12(b)(6) motion, it limits analysis to 15 the “universe of facts” within the complaint and any attached documents. 42 This rule protects parties from the harm that may be caused by a lack of notice.43 The court, however, may consider documents outside the pleadings when “the document is integral to a plaintiff’s claim and incorporated into the complaint,” or “when the document is not being relied upon to prove the truth of its contents.”44 Additionally, “[t]he trial court may also take judicial notice of matters that are not subject to reasonable dispute.”45 In this case, Defendants introduced the Auction T & C and the Shevlin Affidavit with its opening brief in support of its motion to dismiss, and they cited Geier v. Mozido for the proposition that “the Court may consider the terms of the release under Rule 12(b)(6).”46 Defendants attached the Gutierrez Affidavit to their reply brief. Windsor, 42 In re General Motors, 897 A.2d at 168 (citing Malpiede v. Townson, 780 A.2d 1075, 1082 (Del. 2001), In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59, 69 (Del. 1995), and In re Tri-Star Pictures, Inc., 634 A.2d 319, 326 (Del. 1993)). 43 In re Gardner Denver, Inc., 2014 WL 715705, at  (Del. Ch. Feb. 21, 2014) (citing In re Morton’s Rest. Grp., Inc. S’holders Litig., 74 A.3d 656, 658 n.3 (Del. Ch. 2013) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)), and State ex rel. Brady v. Pettinaro Enters., 870 A.2d 513, 523 (Del. Ch. 2005)); 5C Fed. Prac. & Proc. Civ. § 1366 (3d ed.) (In the federal context: “Generally, the harm to the plaintiff when a court considers material extraneous to a complaint on a Rule 12(b)(6) motion is the lack of notice that the material may be considered. Accordingly, when the plaintiff has actual notice of all the information in the movant's papers and has relied upon these documents in framing the complaint, the necessity of converting a Rule 12(b)(6) motion into one under Rule 56 is largely dissipated.”). 44 Vanderbilt Income & Growth Assoc., L.L.C. v. Arvida/JMB Managers, Inc., 691 A.2d 609, 613 (Del. 1996) (citing In re Santa Fe, 669 A.2d at 69–70). 45 In re General Motors, 897 A.2d at 169 (citing D.R.E. 201(b)); see In re Gardner Denver, Inc., 2014 WL 715705, at  (Noting that this Court has recognized three occasions where a court may consider documents extraneous to a complaint: “(i) when the document is integral to a plaintiff’s claim and incorporated into the complaint; (ii) when the document is not being relied upon to prove the truth of its contents; and (iii) when the document, or a portion thereof, is an adjudicative fact subject to judicial notice.” (citations and internal quotation marks omitted)). 46 App. to Answering Br. at B145 (Defs.’ Opening Br. in Supp. of Mot. to Dismiss) (citing Geier v. Mozido, LLC, 2016 WL 5462437, at  (Del. Ch. Sept. 29, 2016)). 16 instead of objecting to the consideration of the documents, filed its own affidavit challenging factual assertions in those documents. During the hearing, Defendants argued that the Auction T & C document was integral to the suit.47 When a trial court considers a document outside the complaint, the motion to dismiss usually is converted into one for summary judgment, which allows the parties to expand the record.48 The Superior Court did not do that here. Although the court questioned both sides about the “dueling affidavits” and questioned the usefulness of the affidavits, the Opinion cites none of them. Notwithstanding a lack of any explicit reference to the affidavits in the Opinion, certain key facts, which form the basis for the court’s holding on the General Release, are only found in the Shevlin and Gutierrez Affidavits. There was no dispute about this at oral argument. Thus, the relevant question presented to this Court is whether the Superior Court’s apparent reliance on facts contained only in the 47 See App. to Opening Br. at A97–A98 (Mot. to Dismiss H’rg Tr.): MR. PROCIDA: Yes. And my view on it, Your Honor—I fully acknowledge that this is an unusual situation, and there [are] arguments both ways. But my view of it was that it is—there is no distance, there is no daylight, there is no way to understand the auction and the allegations pled and their relationship to the allegations of bad faith and arbitrariness in this case without considering the terms under which the auction took place. So, in that way, the allegation of the auction is very much an allegation of some part of those terms and conditions. They don’t mention them directly, but the auction has no existence separate and apart from the terms and conditions. And, in that sense, I thought it was appropriate to include them and plead them in a 12(b) context, understanding that they will still be there. See also App. to Answering Br. at B145 (Defs.’ Opening Br. in Supp. of Mot. to Dismiss) (arguing that, “the Court may consider documents outside the pleadings which are integral to the plaintiff’s claim and incorporated in the complaint.”). 48 In re General Motors, 897 A.2d at 168 (“When the trial court considers matters outside of the complaint, a motion to dismiss is usually converted into a motion for summary judgment and the parties are permitted to expand the record.”) (citing Townson, 780 A.2d at 1090); Super. R. Civ. P. 12(b)(6). 17 Defendants’ affidavits, and its apparent decision to not consider the Stella Affidavit (which attempted to rebut them), resulted in a procedural error requiring reversal.49 In In re General Motors (Hughes) Shareholder Litigation, this Court reviewed the Court of Chancery’s dismissal of a complaint based, in part, on a document extrinsic to the complaint.50 We held that the Court of Chancery’s dismissal was proper because, “[w]ithout the ability to consider the document at issue in its entirety, complaints that quoted only selected and misleading portions of such documents could not be dismissed under Rule 12(b)(6) even though they would be doomed to failure.”51 In addition to the complaint’s direct reference to, and characterizations of, the document at issue, the court’s decision turned on both the complaint’s insufficient allegations and numerous facts subject to judicial notice.52 49 Defendants contend that Windsor waived this argument because it was not included in the Opening Brief. Appellees’ Answering Br. at 25 n.19. 50 In re General Motors, 897 A.2d at 169 (considering a consent solicitation document in an action challenging the adequacy of the disclosures in that solicitation document). 51 Id. at 169–70 (quoting In re Santa Fe, 669 A.2d at 70) (internal quotation marks omitted). 52 Id. at 169; see also Morrison v. Berry, 191 A.3d 268, 275 n.20 (Del. 2018) (reviewing Schedule 14D-9 and Schedule TO in the Rule 12(b)(6) context because the complaint expressly refers to and relies heavily upon these two key disclosure documents); Winshall v. Viacom Int’l, Inc., 76 A.3d 808, 818 (Del. 2013) (this Court held that the Court of Chancery was permitted to consider the extrinsic licensing agreement in the motion to dismiss when it was submitted with defendants’ reply brief because it was integral to plaintiff’s claim and was incorporated by reference in the complaint); In re Santa Fe, 669 A.2d at 69 (holding that the Court of Chancery could consider a proxy statement for plaintiffs’ deficient disclosure claim “because the operative facts relating to such a claim perforce depend upon the language” of the proxy statement). Moreover, in Geier v. Mozido, LLC, the release appears to have been introduced by the plaintiff as an exhibit to the complaint. 2016 WL 5462437, at  n.23. 18 Unlike General Motors, Windsor’s Amended Complaint did not refer to, quote, or characterize the Auction T & C document at all.53 The Superior Court, nonetheless, considered the Auction T & C in dismissing the claims based upon the General Release. Given Windsor’s lack of objection to the Auction T & C (containing the General Release), the Shevlin Affidavit, and the Gutierrez Affidavit, we understand the trial court’s willingness to address the arguments based upon those documents. And given the weakness of the Stella Affidavit, we would not fault the court for declining to give it any weight. But we decline to affirm on the basis of the General Release mainly because we do not wish to create a precedent which could be viewed as relaxing the rules regarding considering matters extrinsic to the complaint in a Rule 12(b)(6) context. Instead, we address the substance of the promissory estoppel and unjust enrichment claims below, and affirm the Superior Court’s dismissal on those grounds.