Opinion ID: 2197807
Heading Depth: 3
Heading Rank: 2

Heading: AT & T's Admissions

Text: We also are constrained to comment on the great weight that the Vice Chancellor afforded to AT & T's supposed admissions. The Vice Chancellor found (1) AT & T's admissions in its answer and (2) the letter sent from AT & T's counsel to plaintiffs-appellees' counsel to be persuasive evidence that AT & T, in fact, believed that it needed to preserve the time value of plaintiffs-appellees' options under the 1994 plan. [42] We find, however, that AT & T's letter to plaintiffs-appellees admitted nothing relating to the parties' intended meaning of the phrase economic position in Section XVIII.A. Moreover, AT & T consistently denied plaintiffs-appellees' interpretation of Section XVIII.A. Having reviewed AT & T's alleged admission in its letter, we conclude that that letter does not refer to the 1994 plan at all. [43] Rather, the letter refers to the Employee Benefit Agreement and the Adjustment Plan  separate documents that were created when AT & T spun off Wireless. [44] AT & T's spin off of Wireless preserved all AT & T's options holders' rights by issuing options to acquire the new Wireless stock. To protect all of these options in the future, AT & T obligated Wireless under the Employee Benefits Agreement and the Wireless Adjustment Plan. When it wrote plaintiffs-appellees' counsel, AT & T explained that it, too, was concerned that Wireless had cashed out all options holders at $15 per share minus the exercise price. AT & T asserted that the Employee Benefits Agreement and the Wireless Adjustment Plan prevented Wireless from cashing out any options. AT & T spoke in order to protect the interests of all Wireless options created by the spin off, which of course included  but was not limited to  options held by plaintiffs-appellees. Because AT & T was attempting to protect all former AT & T (and now Wireless) options holders, AT & T did not refer to the 1994 plan or to Section XVIII.A, because that plan and provision governed only plaintiffs-appellees' options. Thus, in its letter, AT & T never admitted that Section XVIII.A proscribed Wireless from cashing out plaintiffs-appellees' options or that Section XVIII.A required Wireless to compensate plaintiffs-appellees for the lost time value of their options following a cash out merger. Nor did AT & T ever admit in its answer that Section XVIII.A preserved the time value of plaintiffs-appellees' options. In paragraph 17 of their complaint, plaintiffs-appellees specifically alleged an interpretation of Section XVIII.A that an equivalent option must be granted in any merger. AT & T denied that allegation. AT & T initially made certain admissions that the options maintained value. However, these admissions are consistent with AT & T's theory that all options holders were protected under the Employee Benefits Agreement and the Wireless Adjustment Plan. Thus, any admissions that AT & T made about the value of the options did not relate to an interpretation of Section XVIII.A, but, rather, related to the Employee Benefits Agreement and the Wireless Adjustment Plan. Further, the Vice Chancellor correctly ruled that AT & T made no judicial admissions in its answer. When AT & T moved to amend its pleadings, plaintiffs-appellees countered that AT & T's admissions represented binding judicial admissions. [45] The Vice Chancellor allowed AT & T to amend its answer, noting that AT & T was amending its answer to change conclusions of law, and not of fact. In his opinion, he wrote that, judicial admissions apply only to admissions of fact, not to theories of law, such as contract interpretation. Moreover, AT & T is not barred from changing its position under the doctrine of judicial estoppel because this court did not rely on AT & T's argument in a decision. [46] The Vice Chancellor correctly stated the law when he concluded that AT & T's conclusions of law were not judicial admissions: The scope of a judicial admission by counsel is restricted to unequivocal statements as to matters of fact which otherwise would not require evidentiary proof; it does not extend to counsel's statement of his conception of the legal theory of a case, i.e., legal opinion or conclusion. [47] Plaintiffs-appellees, on appeal, claim that AT & T's withdrawn answer may still be considered as evidence. Plaintiffs-appellees quote Bruce E.M. v. Dorothea A.M. for the proposition that a party's withdrawn legal conclusion may be considered evidence, the averments of a party in one action, as well as pleadings which have been superseded by amendment, withdrawn, or dismissed, may be taken as admissions against the interest of the pleading party with respect to the facts alleged therein. [48] Trial judges may consider amended pleadings as evidence in certain circumstances: Under some circumstances, a party may offer earlier versions of its opponent's pleadings as evidence of the facts therein, but they are not judicial admissions, and the amending party may offer evidence to rebut its superseded allegations. [49] But here, the Vice Chancellor correctly decided that AT & T's admissions were conclusions of law and as such not binding. More importantly AT & T's factual admissions, if any, related only to the Employee Benefits Agreement and the Wireless Adjustment Plan, but not to the 1994 MediaOne plan. Therefore, the Vice Chancellor should afford no weight to AT & T's supposed admissions when interpreting Section XVIII.A on remand.