Opinion ID: 2180498
Heading Depth: 1
Heading Rank: 9

Heading: The Superior Court's Grant of Summary Judgment

Text: We now turn to AeroGlobal's direct appeal. AeroGlobal first argues that the Superior Court erred in granting summary judgment because a genuine issue of material fact existed as to whether: (1) Cirrus waived strict compliance for immediate payment of the entire $15 million bridge loan upon execution of the AeroGlobal LOI; (2) Cirrus was estopped by its conduct in the Court of Chancery action from asserting in this case that it did not waive its aforementioned contractual right; and (3) AeroGlobal materially breached the AeroGlobal LOI thereby rendering Cirrus' termination thereof unjustified. AeroGlobal further contends that the Superior Court erred in determining that it repudiated the AeroGlobal LOI. AeroGlobal finally challenges the Superior Court's dismissal of its claim asserting a breach of the implied covenant of good faith and fair dealing. We discuss only the waiver issue raised by AeroGlobal because it is dispositive of the appeal. In doing so, we conclude that the Superior Court erred, as a matter of law, by granting summary judgment in favor of the defendants because there was a triable issue of fact as to whether Cirrus waived compliance with the contract terms for the immediate payment of the entire $15 million bridge loan upon execution of the AeroGlobal LOI. We therefore reverse the Superior Court's grant of summary judgment as to AeroGlobal's claims for breach of contract and breach of the implied covenant of good faith and fair dealing. We further hold that the Superior Court prematurely determined that the defendants had not wrongfully interfered with or terminated the AeroGlobal LOI. We therefore reverse the Superior Court's grant of summary judgment as to AeroGlobal's tortious interference and civil conspiracy claims.
The purpose of Superior Court Civil Rule 56 is to provide a method by which issues of law involved in a litigation may be speedily brought before a trial court and disposed of without unnecessary delay. [48] The disposition of litigation by motion for summary judgment should, when possible, be encouraged for it should result in a prompt, expeditious and economical ending of lawsuits. [49] Although summary judgment is encouraged when possible, there is no absolute right to summary judgment. [50] Summary judgment should be granted only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. [51] A trial court's decision on a motion for summary judgment is subject to a de novo standard of review on appeal. [52] In evaluating the summary judgment record, a trial court shall not weigh the evidence or resolve conflicts presented by pretrial discovery. [53] The trial court shall examine the factual record and make reasonable inferences therefrom in the light most favorable to the nonmoving party to determine if there is any dispute of material fact. [54] The trier of fact may weigh the evidence and resolve disputes only after hearing all the evidence, including live witness testimony. [55] Thus, if from the evidence produced there is a reasonable indication that a material fact is in dispute or if it appears desirable to inquire more thoroughly into the facts in order to clarify application of the law, summary judgment is not appropriate. [56] This is an axiom of the judicial process and applies unless the parties have stipulated that the paper record shall constitute the trial record. [57] We consider it an exercise of good judicial administration [for a trial court] to withhold decision ... until [the record] present[s] a more solid basis of findings based on litigation or on a comprehensive statement of agreed facts. [58]
It is well settled in Delaware that contractual requirements or conditions may be waived. [59] However, the standards for proving waiver under Delaware law are quite exacting. [60] Waiver is the voluntary and intentional relinquishment of a known right. [61] It implies knowledge of all material facts and an intent to waive, together with a willingness to refrain from enforcing those contractual rights. [62] The facts relied upon to prove waiver must be unequivocal. [63] Based on these fundamental principles, we reiterate the three elements which must be satisfied before a conclusion of waiver may be reached. A contractual requirement or condition may be waived where (1) there is a requirement or condition to be waived, (2) the waiving party must know of the requirement or condition, and (3) the waiving party must intend to waive that requirement or condition. [64] Although we have held that this standard is quite exacting, we nonetheless find that summary judgment was inappropriate in the present case as to AeroGlobal's claim of waiver.
At the heart of AeroGlobal's case is its claim that the defendants breached Section 4.d of the AeroGlobal LOI (the Exclusive Negotiations Provision) by negotiating the Cirrus-Crescent stock acquisition while at the same time Cirrus purported to honor the AeroGlobal LOI. [65] Cirrus responded that it was not required to comply with the Exclusive Negotiations Provision because AeroGlobal breached Section 1.a of the AeroGlobal LOI (the Timing Requirement) by failing to immediately pay the full $15 million bridge loan. [66] In essence, Cirrus is claiming that the Timing Requirement was an exception to the applicability of the Exclusive Negotiations Provision. The Superior Court agreed, and granted summary judgment in favor of the defendants. It held that the Exclusive Negotiations Provision was not binding on the parties because AeroGlobal failed to fulfill its obligations under the AeroGlobal LOI by withholding the remaining $3 million installment on the bridge loan. The Superior Court concluded that Cirrus was therefore free to negotiate for the needed financing with any party it deemed appropriate. Intention forms the foundation of the doctrine of waiver, and an intention to waive must appear clear from the record evidence before summary judgment is granted on this issue. [67] The dispute in this case centers on whether Cirrus intended to waive the Timing Requirement. The question of Cirrus's intent in the instant case depends on a consideration of the facts surrounding Cirrus and AeroGlobal's dealings after CHCL initiated the Court of Chancery action. The record shows that Cirrus accepted the $12 million portion of the bridge loan for its benefit without demanding payment of the remaining $3 million. Cirrus promptly used that amount to repay a $4 million loan that Crescent had extended. Cirrus also attempted to use this amount to pay the $5 million break up fee under the CHCL SPA, but this payment was refused by Crescent. Cirrus used the remaining funds as working capital. In deciding CHCL's action seeking injunctive relief, the Court of Chancery found that AeroGlobal's deferral of the remaining $3 million bridge loan payment was due entirely to the pendency of this [preliminary injunction] motion and a resultant understanding between Cirrus and AeroGlobal that the completion of the funding [of the bridge loan] should be delayed pending its outcome. [68] The Court of Chancery made this finding on a record similar to what was before the Superior Court in this case. The record also shows that Alan Klapmeier explicitly acknowledged that the agreement with AeroGlobal remained in full force and effect. When Cirrus began to consider other financing options after AeroGlobal deferred payment of the remaining $3 million of the bridge loan, Alan Klapmeier told the Cirrus board that the Exclusive Negotiations Provision remained in effect and prohibited such conduct regardless of AeroGlobal's deferral. We conclude that it was for the trier of fact to decide whether Cirrus's conduct under the circumstances of this case evidenced an intentional, conscious and voluntary abandonment of its claim or right. [69] Where the inference or ultimate fact to be established concerns intent or other subjective reaction, summary judgment is ordinarily inappropriate. [70] On the record before us we hold that a waiver was a permissible inference that could reasonably be drawn from the evidence. It was error to grant summary judgment in the face of this material dispute of fact.