Opinion ID: 1435833
Heading Depth: 2
Heading Rank: 2

Heading: Review of Master's Report

Text: There is no limitation on the range of matters a master may consider; the limitation is on the master's power to decide those matters. The Delaware Constitution restricts the exercise of judicial authority to those who are appointed by the Governor and confirmed by the Senate. [8] Since masters in the Court of Chancery are appointed by the Chancellor, they may not exercise judicial authority: Simply stated, a master has no independent power of adjudication. In this respect a master's authority is comparable to that of a court-appointed referee whose limited role has been authoritatively described: Without confirmation and adoption by the court, the acts of the referee have no force or validity whatever, and nothing can originate before him and nothing can terminate with or by his decision, the entire proceeding being an exercise of judicial power by the court. [9] In short, the master's rulings, findings of fact, conclusions of law, and recommended disposition have no effect until they are adopted by a judge after a meaningful review. [10] The Court of Chancery Rules relating to masters recognize the limitations on a master's authority and the consequent requirement of meaningful judicial review. Rule 136, for example, enumerates the master's wide range of powers, including the power to administer oaths, summon witnesses, require the production of documents, and generally to do all other acts ... which may be deemed necessary and proper, subject at all times to the revision and control of the Court.  [11] With respect to evidentiary rulings, Rule 139 authorizes the master to decide the admissibility of evidence and competence of witnesses, but allows a party aggrieved by the master's ruling to present his or her objection to a judge before the master makes a report on the proceedings. Most importantly, Rule 144 allows the parties to object to the master's report and provides for judicial review before the report is adopted: As soon as the Master is ready to file a report, the Master shall ... submit a draft thereof to each party for its inspection and any party may except thereto in writing within the time set therefor by the Master. Such exceptions shall first be heard by the Master who shall be at liberty to amend the draft report. A final report shall then be filed by the Master consisting of the draft report as amended. The only exceptions which may be filed to the final report are those exceptions which were filed to the draft report and disallowed, plus exceptions to any change from the draft report made in the final report. . . . . In all instances in which the Master's report is based upon testimony taken on the record before the Master, proceedings on any exception filed to the final report shall be on such record, unless for good cause shown the Court elects to take additional testimony. If no exceptions are filed to the final report, the Court may thereafter confirm such report on its own motion or may set the matter down for further proceeding in its discretion. [12] Although the Court of Chancery Rules are helpful in defining the role of the master, they do not identify the standard by which the master's rulings and report should be reviewed. In recent decisions, the Court of Chancery seems to have settled on the following articulation of its standard of review: In reviewing a report of the Master in Chancery, this Court employs a de novo standard in reviewing questions of law. The Master's factual findings are, however, entitled to a certain degree of deference. Where such findings are supported by the record and are the product of an orderly and logical deductive process, this Court will accept them, even if the Court may independently have reached the opposite conclusion. [13] This is the standard of review applied by the Supreme Court in reviewing decisions of a trial judge sitting without a jury, [14] and it accords deference to the factual findings of another judge as a matter of respect and judicial restraint. Masters are not judges and their different status requires a slightly different level of review. We appreciate the important assistance that masters provide and we do not mean to suggest that their decisions are less thoughtful or worthy than those of a trial judge. But masters are constitutionally prohibited from exercising judicial power. If their factual findings were accepted even if the Court may independently have reached the opposite conclusion, then masters would be exercising judicial power. To avoid that result, we conclude that the standard of review for a master's findings  both factual and legal  is de novo. As a practical matter, this holding may not significantly change master practice. De novo review generally means a new trial or hearing on questions of fact. That may be required in some cases. It is possible, however, to conduct a review de novo on the record. [15] If the parties do not except to any of the master's factual findings, they are deemed to have consented, and the trial judge may review the record de novo accepting the master's facts in the same way that the judge would resolve a dispute presented on a stipulated set of facts. Even where the parties except to one or more of the master's factual findings, a new hearing may not be required. If the parties object to the conclusions that the master drew from the evidence, the court may read the portion of the record relevant to the exception raised and draw its own factual conclusions. Only where exceptions raise a bona fide issue as to dispositive credibility determinations will a new hearing be inevitable. In those cases the new hearing can be limited to the witness or witnesses whose credibility is at issue. In this case, we do not know whether the trial court will have to conduct a new hearing as part of its de novo review because no transcript of the proceedings before the master was prepared. Chancery Court Rule 138 requires that the oral testimony before a master be taken by a stenographer and reproduce[d] in manuscript, or typewriting.... [16] It appears that the proceedings were recorded but not transcribed because no one paid the costs of transcription. The Rules do not state which party must bear that cost, and we urge the Court of Chancery to address this omission promptly. In the interest of justice, in this case only, we instruct the Court of Chancery to order the necessary transcript at its own expense.