Court Opinion

ID: 9532423
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:21:09.066356+00
Date Added: 2024-06-11T13:28:45.711210
License: Public Domain

QUILLEN, Justice,
with whom McNEILLY, Justice, joins, dissenting:
I respectfully dissent. Since my view has not persuaded by colleagues, and therefore is of no effect, I will state it as briefly as I can.
It should be noted that in this litigation there never has been any judicial disagreement over the “complete candor” test. See the Chancellor’s initial 1976 opinion. Lynch v. Vickers Energy Corporation, Del.Ch., 351 A.2d 570, 573 (1976).1 There can be and is none now. Moreover, as to the two particular facts cited as violations of fiduciary duty in this Court’s initial opinion, Lynch v. Vickers Energy Corp., Del.Supr., 383 A.2d 278 (1977), reh. denied (1978), the application of the legal test to the facts is the law of the case and not open to review again. Compare Massey-Ferguson, Inc. v. Wells, Del.Supr., 421 A.2d 1320 (1980).
It should also be noted that this Court in its 1977 reversal of the Chancellor’s 1976 opinion “remanded [the case] for proceedings consistent herewith.” 383 A.2d at 282. Nothing in the Chancellor’s latest effort, Lynch v. Vickers Corp., Del.Ch., 402 A.2d 5 (1979), violated that mandate as no guidance was given as to damages, let alone any suggestion that a single rule of damages mandatorily governed.
While I find the opinion of the majority to be well-stated, I am primarily concerned about the implications of the decision on the discretionary power of the Chancellor and the consequent implications on the corollary role of this Court in the evaluation of evidence and choice of relief.
Insofar as today’s majority suggests that the Chancellor as a matter of law did not have discretion to apply an out-of-pocket, appraisal damage remedy, it seems to me the opinion is in error. 1 Pomeroy’s Equity Jurisprudence (5th ed. 1941) § 109. See also Wilmont Homes, Inc. v. Weiler, Del.Supr., 202 A.2d 576, 580 (1964); Tenney v. Jacobs, Del.Supr., 43 Del.Ch. 526, 240 A.2d 138, 140 (1968); Wilmington Trust Company v. Barry, Del.Supr. 397 A.2d 135, 138 (1979). “Equity adapts its decrees to fit the nature and gravity of the breach and the consequences to the beneficiaries and trustee.” Bogert, Trust & Trustees (2d ed. rev. 1978) § 543(V), p. 387. It is one thing to analogize to the disloyal trustee of an express *508trust who uses trust property for personal benefit but it is quite another to be absolutely bound by that analogy to the exclusion of all others. To say there is a fiduciary duty “only begins analysis” and “gives direction to further inquiry.” Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80, 86, 63 S.Ct. 454, 458, 87 L.Ed. 626, 632 (1943). Given the Chancellor’s emphasis on the situation before him, I find no legal error in his giving by analogy discretionary consideration to the methodology used in Poole v. N. V. Deli Maatschappij, Del.Supr., 43 Del.Ch. 283, 224 A.2d 260 (1966). Compare Blackie v. Barrack, 9th Cir., 524 F.2d 891, 909 (1975).
The real question is whether the Chancellor abused his discretion in choosing the remedy he did. His choice appears to have been motivated by at least three factors.
First, he relied on the evidence before him after ten trial days over a three-month period in the second trial after remand. 402 A.2d at 10, 12-13. In choosing the remedy', he took the case as he found the evidence warranted. I cannot say his view of the evidence, insofar as choice of remedy is concerned, was wrong.
Second, and more particularly, he properly and carefully made an assessment of the nature of the particular fiduciary duty involved in the factual context and found it “not as compelling” as some others. 402 A.2d at 11. Insofar as the opinion of the majority may suggest that the two particular nonfraudulent breaches of fiduciary duty found in this Court’s first opinion were ones of major culpability and may take issue with the Chancellor on that account, not only are the Chancellor’s views entitled to the usual deference given those of the fact-finder, but, in my judgment, he clearly has the better of the argument.
Third, the Chancellor in passing viewed the issue of mitigation of damages differently than the majority. 402 A.2d at 8-9. Since the omissions creating the two breaches were publicly disclosed not later than the first trial in 1975 and the price of Trans-Ocean stock remained below twelve dollars a share in the limited market, it is difficult for me to say from the appellate perch that it was legally improper to consider that “no genuine effort to replace tendered shares appears to have been made”. 402 A.2d 9.
There was, in my judgment, no abuse of discretion in the remedy chosen. I recognize the legal forest involves an important principle of accountability, but I fear the Court has lost track of the factual trees and the prime responsibility of equity to focus on the determined circumstances of the case at hand. Courts of equity in particular decide eases.
Were the thoughtful opinion of the majority an opinion of the Trial Court, it would be entitled to deference. But it is not. This is emphasized by the particularly distressing chronology of this case. The complaint was filed on October 18,1974. A multi-week trial was held in May and June of 1975. After this Court’s initial opinion, a second trial was held in May, June and July of 1978. The decision today will require yet a third trial, on a mandated damage theory, presumably in 1981. Given the history, surely we must question whether we have our appellate role in perspective. Application of Delaware Racing Ass’n, Del.Supr., 213 A.2d 203, 207 (1965).
The luxury of dissent makes it unnecessary for me to determine whether or not the Chancellor’s application of the appraisal remedy to these facts as of September 1974 reached a clearly erroneous result. Rather than face that difficult question to no effect, I will merely refer any overzealous, surviving reader to the general comments of my concurrence in Bell v. Kirby Lumber Corp., Del.Supr., 413 A.2d 137, 150-51 (1980).

. Indeed, if anything, the Chancellor’s 1976 statement of the law seems stronger than others uttered by Delaware courts. See Resource Document on Delaware Corporation Law, 3 Del.J.Corp.L. 20, 26-29, particularly n. 38 (1977); In re TransOcean Tender Offer Securities Litigation, N.D. Ill., 427 F.Supp. 1211, 1220-1221 (1977). Compare Lynch v. Vickers Energy Corp., Del.Supr., 383 A.2d 278, 281 (1977) incorporating federal standards in the definition of “germane”. Compare TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 450, 96 S.Ct. 2126, 2133, 48 L.Ed.2d 757, 766 (1976). I note this not to disagree with such incorporation, which makes good sense, but rather to emphasize the Chancellor’s contribution to and empathy for the legal standard of liability.