Court Opinion

ID: 2704885
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:01:14.174559+00
Date Added: 2024-06-11T12:55:00.977220
License: Public Domain

COURT OF CHANCERY
                                   OF THE
 SAM GLASSCOCK III           STATE OF DELAWARE                COURT OF CHANCERY COURTHOUSE
  VICE CHANCELLOR                                                      34 THE CIRCLE
                                                                GEORGETOWN, DELAWARE 19947

                           Date Submitted: June 26, 2014
                            Date Decided: July 21, 2014

David A. Dorey                                Elena C. Norman
Elizabeth Sloan                               Timothy Jay Houseal
Blank Rome LLP                                Kathaleen St. J. McCormick
1201 N. Market Street, Suite 800              Elizabeth S. Bradley
Wilmington, Delaware 19801                    Lakshmi A. Muthu
                                              Young Conaway Stargatt & Taylor LLP
                                              1000 North King Street
                                              Wilmington, Delaware 19801

              Re:    Bishop Macram Max Gassis, et al. v. Neil Corkery, et al.
                     Civil Action No. 8868-VCG

Dear Counsel:

      This is the latest installment of unfortunate litigation over control of a

charitable corporation created to help the suffering people of Sudan. The Plaintiff

is the former Chairman of the Board of Directors, and was removed as a director

and member of the corporation effective September 21, 2013.            The principal

remaining issues involve allegations that the corporation used the Plaintiff’s

trademarked property—his name and likeness—to raise funds for its charitable

purposes, after the Plaintiff was removed as Chairman and member of the

corporation. According to the Plaintiff, that removal terminated the corporation’s

license to use his name and likeness. The Plaintiff, however, has not sued the
corporation, but only certain board members as individuals.           There are no

allegations in the Amended Complaint which, if true, could sustain a claim that

these individuals expropriated property of the Plaintiff for their own purposes, or

that they took actions to cause the corporation to improperly exploit the Plaintiff’s

name and likeness. For that reason, the Plaintiff’s various claims based on use of

his trademarks must be dismissed.

                                    I. Background

      On May 28, 2014, I issued a Memorandum Opinion in this action resolving

claims pursued by the Plaintiff, Bishop Macram Max Gassis, under 8 Del. C.

§ 225. In that proceeding, the Plaintiff disputed the validity of an action by the

board of directors of Sudan Relief Fund, Inc. (the “Fund,” or the “Corporation”),

formerly known as Bishop Gassis Sudan Relief Fund, Inc., purporting to remove

him as a director of the Fund. Specifically, the Plaintiff contended that his removal

violated certain provisions of the Fund’s bylaws or was the product of breaches of

fiduciary duty on the part of the board, and should be voided as a result. In my

May 28 Memorandum Opinion, I rejected those arguments, finding that the board’s

business decision to remove the Plaintiff as a director neither violated the Fund’s

bylaws nor constituted a breach of fiduciary duty.

      On April 21, 2014, the Defendants moved to dismiss all fourteen counts of

the Plaintiff’s First Amended Complaint. On May 7, 2014, at the conclusion of

                                         2
trial on the Plaintiff’s Section 225 counts, I heard oral argument on that Motion.

Upon resolving the Section 225 counts in my May 28 Memorandum Opinion, I

requested that the parties inform me what remained of the Defendants’ Motion to

Dismiss. The parties submitted supplemental memoranda on June 25 and 26,

2014.     The remainder of this Letter Opinion addresses the merits of the

Defendants’ Motion to Dismiss.

                                     II. Analysis

        In evaluating a motion to dismiss for failure to state a claim pursuant to

Court of Chancery Rule 12(b)(6), this Court must “accept all well-pleaded factual

allegations in the Complaint as true, accept even vague allegations in the

Complaint as ‘well-pleaded’ if they provide the defendant notice of the claim, draw

all reasonable inferences in favor of the plaintiff, and deny the motion unless the

plaintiff could not recover under any reasonably conceivable set of circumstances

susceptible of proof.”1 The Plaintiff’s First Amended Complaint alleges fourteen

counts against the individual Defendants:2 Count II for breach of fiduciary duty;

Count III for entitlement to books and records under 8 Del. C. § 220; Count IV

brought pursuant to 8 Del. C. § 225; Count V for misappropriation of the

Plaintiff’s name and likeness; Count VI for common law trademark infringement;

1
  Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 27 A.3d 531, 536 (Del.
2011).
2
  The Amended Complaint does not assert a “Count I.”

                                           3
Count VII for violation of the Delaware Deceptive Trade Practices Act; Count VIII

for waste of corporate assets; Count IX for civil conspiracy; Count X for a

declaration that the Plaintiff remains on the board of the Fund; Count XI for

appointment of a receiver or custodian; Count XII for imposition of a constructive

trust; Count XIII for appointment of a master to oversee an annual meeting; Count

XIV for an injunction requiring the board to acknowledge the invalidity of the

Plaintiff’s removal; and Count XV for an injunction preventing the Fund from

continuing to use the Plaintiff’s name and likeness. The Defendants have moved

to dismiss all fourteen counts of the Amended Complaint. The Plaintiff concedes

that my May 28 Memorandum Opinion resolved Counts IV, IX, X, XIII, and XIV.3

I address the remaining counts below.

                           1. Derivative and Section 220 Claims

       The Defendants move to dismiss Count II for breach of fiduciary duty4 and

Count VIII for waste of corporate assets on the basis that the Plaintiff lacks

standing to pursue derivative litigation on behalf of the Fund. As I determined in

my May 28 Memorandum Opinion resolving the Section 225 claims, the Plaintiff

3
  Pl.’s Br. on Impact of 225 Decision at 7-8.
4
  I acknowledge that Count II includes both direct and derivative claims for breach of fiduciary
duty; however, as the Plaintiff rightly explains in his supplemental memorandum, my decision in
the 225 proceeding that the board did not owe fiduciary duties to the Plaintiff resolved the direct
claim. See id. at 8-9 (“That portion of Count II, subject to de novo review at the Supreme Court
level, is therefore subject to dismissal as a result of that finding.”).

                                                4
is no longer a director—and consequently, no longer a member—of the Fund.5 On

August 24, 2013, the board validly adopted a resolution removing the Plaintiff as a

director, effective September 21, 2013; on September 6, 2013, the Plaintiff

initiated this action; and on September 21, he ceased to be a director and member.

As our Supreme Court has explained, “[a] plaintiff who brings a derivative action

on behalf of a corporation must remain a shareholder or member throughout the

litigation,” and “[o]nce a plaintiff ceases to be a member or shareholder, he or she

loses standing to maintain the lawsuit.”6 Because the Plaintiff is no longer a

member of the Fund, he lacks standing to pursue Counts II and VIII on behalf of

the Fund.7

       For similar reasons, Count III, seeking access to books and records under

8 Del. C. § 220, must likewise be dismissed.                    The Plaintiff’s 220 demand,

5
   See Gassis v. Corkery, 2014 WL 2200319, at *16 (Del. Ch. May 28, 2014) (“I have already
determined that Bishop Gassis no longer holds a director seat on the Fund’s board of directors, as
he was validly removed by a two-thirds vote of directors either de jure or de facto, and that he
ceased to be an officer as a result of that same board vote. As a result, pursuant to Section 2.01
of the Fund’s Bylaws, he ceased to be a member of the corporation on September 21, 2013.”).
6
  Brooks-McCollum v. Emerald Ridge Bd. of Directors, 2011 WL 4609900, at *2 (Del. Oct. 5,
2011) (TABLE). To the extent the Plaintiff contends that application of this rule here “create[s]
an incentive for bad actors to remove any potential challengers to their fiduciary breaches,” Pl.’s
Answering Br. in Opp’n to Mot. to Dismiss at 22, that argument must be rejected, as I have
already determined that the Plaintiff’s removal from the board was proper.
7
  The Plaintiff contends that “the Court must still decide whether [Counts II, III, and VIII] fail to
pass muster under the [motion to dismiss] standard, and not decide based on factual findings
made on an incomplete . . . record.” Pl.’s Br. on Impact of 225 Decision at 10. That argument
must fail, however, because under no state of reasonably conceivable facts could the Plaintiff
recover for these Counts; I have already determined that the Plaintiff has ceased to be a member
and director of the Fund, and, as a matter of law, he therefore lacks standing to pursue derivative
litigation on behalf of the Fund.

                                                 5
appended to his Amended Complaint, sought documents for the purpose of

“[i]nvestigating board misconduct and possible breaches of fiduciary duties;”

“[d]etermining who the appropriate directors of the Corporation are;”

“[i]nvestigating Director independence;” evaluating “[p]otential conflicts of

interest;” and investigating certain other alleged wrongdoing committed by

directors and officers of the Fund.8 To the extent the Plaintiff’s 220 action was

viable when filed,9 it has ceased to be so. Section 220 permits stockholders (or in

the case of nonstock corporations, members) access to the books and records of a

corporation for any “proper purpose;” Section 220 permits directors access to

books and records “for a purpose reasonably related to the director’s position as a

director.”10 As noted above, the Plaintiff is no longer a member or director of the

Fund, and as a result, lacks standing to pursue derivative litigation on behalf of the

Fund.     Further, as this Court has made clear, “only current directors have

inspection rights” under the statutory language of Section 220.11 At any rate, it is

difficult to see how—given the fact that the Plaintiff is not a member or director of

the Fund—he could have any proper purpose in seeking books and records.

8
  Am. Compl. Ex. C at 4-5.
9
  See Cent. Laborers Pension Fund v. News Corp., 2011 WL 6224538, at *2 (Del. Ch. Nov. 30,
2011), aff’d on other grounds, 45 A.3d 139 (Del. 2012) (“In short, once the derivative action is
filed, and until the judicial processing of the dismissal motion reaches the point where a recasting
of the allegations has been authorized, the stockholder may not, as a general matter, demonstrate
a proper purpose for invoking Section 220.”).
10
   8 Del. C. § 220(d).
11
   See King v. DAG SPE Managing Member, Inc., 2013 WL 6870348, at *6 (Del. Ch. Dec. 23,
2013).

                                                 6
Accordingly, to the extent he seeks books and records not already obtained in

discovery, Count III is dismissed.

                              2. Name and Likeness Claims

       The Defendants also move to dismiss Count V for misappropriation of the

Plaintiff’s name and likeness, Count VI for common law trademark infringement,

and Count VII for violation of the Deceptive Trade Practices Act. The Amended

Complaint purports to bring each of these claims against the individual director

Defendants, but not against the Fund itself.12

       As I explained in my May 28, 2014 Memorandum Opinion, on August 24,

2013, a majority of the Fund’s board voted to approve five resolutions: Resolution

1, removing the Plaintiff from the Fund’s board of directors effective September

21, 2013; Resolution 2, striking Section 3.04 of the Fund’s bylaws; Resolution 3,

clarifying the officer positions that existed within the Fund; Resolution 4, setting

out allegations against the Plaintiff relevant to his removal; and Resolution 5,

resolving to “advise counsel to Bishop Gassis of the Board’s willingness to enter

into an agreement whereby the Bishop, his name, likeness and goodwill are

12
   I note that the individual Defendants now contend that this Court lacks personal jurisdiction
over them with respect to these tort claims. Although the Defendants’ initial Motion to Dismiss
included Court of Chancery Rule 12(b)(2) as a basis for dismissal, the individual Defendants did
not raise that argument in briefing their initial Motion to Dismiss. Because I resolve the tort
claims on other grounds, I need not determine whether this argument has been waived.

                                               7
allowed to play a continuing role with and for the Corporation.”13 Prior to the

adoption of those Resolutions, Section 3.04 of the Fund’s bylaws provided:

       The Chairman of the Board shall be His Excellency, Bishop Macram
       Max Gassis, Bishop of El Obeid Diocese, Sudan. He shall serve in
       this position until his retirement or resignation. The Chairman of the
       Board shall serve as the chief public representative of the
       organization, and shall determine policy in cooperation with the Board
       of Directors, its Officers and Executive Director.14

In his Amended Complaint, the Plaintiff contends that Section 3.04 reflected a

license Bishop Gassis granted to the Fund for the use of his name and likeness.

According to the Plaintiff,

       Bishop Gassis gave permission for the [Fund’s] use of his name,
       service mark and likeness based on his close identity with the Bishop
       Gassis Fund, his causes that he championed, and the confidence,
       through the proper use and implementation of his name and service
       mark to know that the causes he spoke of with donors would be
       benefitted.15

The Plaintiff contends, however, that when the board resolved to strike Section

3.04 on August 24, 2013, that action automatically revoked the Fund’s license to

use his name and likeness. He alleges that the Corporation nevertheless continued,

without authorization, to use his name:

              From August 24, 2013 until at least October 1, 2013,
       Defendants continued to use Bishop Gassis’s name, image, and
       likeness in the name of the Bishop Gassis Fund, in its representations
       to the public, and in its fundraising letters and efforts.

13
   Gassis v. Corkery, 2014 WL 2200319, at *9 (Del. Ch. May 28, 2014).
14
   Bylaws § 3.04; Am. Compl. ¶ 42.
15
   Am. Compl. ¶ 282.

                                             8
             From August 24, 2013 until sometime in the first two months of
       2014, and at varying degrees, Defendants continued to use Bishop
       Gassis’s name, image, and likeness by, at various times continuing to
       use the domain name containing Bishop Gassis’s name, by linking to
       pages discussing Bishop Gassis from the Corporation’s website, using
       a substantially similar name to the previous name likely to create
       confusion among donors and the public, continuing to use Bishop
       Gassis’s name on the new website, continuing to post [pictures] of
       Bishop Gassis on the new website, and failing to comply with a Court
       order that specifically required removal of all references to Bishop
       Gassis from the Corporation’s new website.16

In other words, the Plaintiff challenges the Fund’s use of his name and likeness in

its fundraising efforts from August 24, 2013—the day on which the board resolved

to remove Section 3.04 from the Fund’s bylaws—until mid-October of that year,

when the Fund ceased to use the Plaintiff’s name.17 In addition, the Plaintiff

challenges references made to the Plaintiff on the Fund’s website. I assume for

purposes of this Motion to Dismiss only that the Corporation had a license from

the Plaintiff to use his name and likeness, which the Plaintiff revoked effective

August 24, 2013.

       Count III asserts a claim for misappropriation of the Plaintiff’s name and

likeness. To assert a claim for misappropriation, a plaintiff must plead that the

defendant “appropriate[d] to his own use or benefit the name or likeness” of the

16
  Id. at ¶¶ 289-290
17
   See Pl.’s Answering Br. in Opp’n to Mot. to Dismiss at 47 (“As of August 24, 2013, the Fund
had, and continues to have, no valid license to use the Bishop’s name and likeness.”); id. at 51
(“[T]he [trademarks] became protected while the Fund had the legal right to use them, and then
continued after it lost such right.”).

                                               9
plaintiff.18 The Defendants here include individual directors of the Fund, but not

the Corporation itself.         As the Defendants correctly explain, the Plaintiff’s

allegations of misappropriation identify only actions of the Corporation, not of the

individual Defendants.          Specifically, the Plaintiff alleges in his Amended

Complaint that “[t]he Bishop Gassis Fund’s continued use of Bishop Gassis’s

name, likeness and service mark under these circumstances constitutes

infringement and misappropriation of such intellectual property,”19 and that,

“[f]rom August 24, 2013 until at least October 1, 2013, Defendants continued to

use Bishop Gassis’s name, image, and likeness in the name of the Bishop Gassis

Fund, in its representations to the public, and in its fundraising letters and

efforts.”20 The Amended Complaint is devoid, however, of allegations indicating

that the individual director Defendants personally misappropriated the Plaintiff’s

name to their own use. Rather, the Amended Complaint alleges only that the Fund

continued to use the Plaintiff’s name for its own use in its fundraising efforts.21

18
   Restatement (Second) of Torts § 652c (emphasis added).
19
   Am. Compl. ¶ 286 (emphasis added).
20
   Id. at ¶ 289; see also Pl.’s Br. on Impact of 225 Decision at 9 (“The theories underlying these
claims include without limitation: (a) the Company’s improper use of Plaintiff’s name, image,
likeness, etc. . . . .”) (emphasis added).
21
   The Plaintiff suggests in briefing that the Amended Complaint does sufficiently allege that the
individual Defendants misappropriated the Plaintiff’s name for their own use, citing to
allegations that the individual Defendants were “motivated by a desire to employ the funds for
purposes that enhanced their own reputations and [stature] in various political and religious
circles at the expense of the Bishop Gassis Fund’s charitable mission, donors, and targeted
beneficiaries.” Am. Compl. ¶ 51. Allegations that indicate the individual Defendants had a
reputational interest in the success of the Fund for which they serve as directors do not provide a

                                                10
Importantly, any disgorgement of assets22 acquired by the Fund throughout its

fundraising efforts based upon unauthorized use of trademarked property would of

necessity come from the Fund itself, and not from the individual Defendants, who

did not personally gain from the alleged misappropriation.

       If the Defendants are to be held liable here, it must be for acts of their own,

and not merely for acts or omissions of the Corporation. Under agency principles,

a corporation is liable for the acts of its officers and directors,23 but acts taken by

the corporate principal are not automatically imputed to its agents.                        Many

jurisdictions therefore employ the “personal participation doctrine” to allegations

of liability for tortious acts taken by corporate officers on behalf of a corporation.24

Under that doctrine, a corporate officer may be held liable in tort only where she is

“actively involved [in the commission of the tort] in that [she] directed, ordered,

sufficient basis to infer that the individual Defendants personally misappropriated the Plaintiff’s
name, by virtue of the Fund’s alleged misappropriation.
22
   I note that the Plaintiff has generally requested that the Court “award[] Bishop Gassis damages
for the unlicensed use of his name, image, and likeness,” and seeks my imposition of a
constructive trust over funds raised. Am. Compl. at 120.
23
    See, e.g., In re Am. Int’l Grp., Inc., 965 A.2d 763, 823 (Del. Ch. 2009), aff’d sub nom.
Teachers’ Ret. Sys. of Louisiana v. PricewaterhouseCoopers LLP, 11 A.3d 228 (Del. 2011)
(“Under that traditional principle, a corporation can be held liable for wrongful acts of its
directors and officers on behalf of the corporation that injure third parties.”).
24
   See 3A William Meade Fletcher, Cyclopedia of the Law of Corporations § 1135 (“It is the
general rule that an individual is personally liable for all torts the individual committed,
notwithstanding the person may have acted as an agent or under directions of another. This rule
applies to torts committed by those acting in their official capacities as officers or agents of a
corporation. It is immaterial that the corporation may also be liable.”).

                                                11
ratified, approved or consented to the tort.”25 Mere “knowledge of the [tortious]

act is not enough,” and “[a]n officer can only be held liable for misfeasance or

active negligence and not for nonfeasance or the omission of an act.”26 Neither

may a complaint rely exclusively on “actions taken by the corporate [entity], only;”

rather, to state a claim against an individual, a complaint must, at a minimum,

describe affirmative actions taken by that individual directing, ordering, ratifying,

approving or consenting to the tort.27 Requiring that such actions be specifically

identified in the pleadings plays an important role in preserving limited corporate

liability.28

25
   Heronemus v. Ulrick, 1997 WL 524127, at *2 (Del. Super. July 9, 1997); see also St. James
Recreation, LLC v. Rieger Opportunity Partners, LLC, 2003 WL 22659875, at *8 n.40 (Del. Ch.
Nov. 5, 2003) (citing to Donsco, Inc. v. Casper Corp., 587 F.2d 602 (3d Cir. 1978) for the
proposition that “actual participation in wrongful acts is [a] ‘crucial predicate’ to imposition of
individual liability”); Stonington Partners, Inc. v. Lernout & Hauspie Speech Products, N.V.,
2002 WL 31439767, at *8 n.27 (Del. Ch. Oct. 23, 2002) (“A corporate officer can be held
personally liable for the torts he commits and cannot shield himself behind a corporation when
he is a participant.”).
26
   Ayers v. Quillen, 2004 WL 1965866, at *3 (Del. Super. June 30, 2004); see also 3A William
Meade Fletcher, Cyclopedia of the Law of Corporations § 1135 (“Corporate officers are liable
for their torts, although committed when acting officially, even though the acts were performed
for the benefit of the corporation and without profit to the officer personally. . . . [M]ore than
mere knowledge may be required in order to hold an officer liable. The plaintiff must show
some form of participation by the officer in the tort, or at least show that the officer directed,
controlled, approved, or ratified the decision that led to the plaintiff’s injury.”); id. (“[T]here is
authority that a corporate officer cannot be held personally liable for nonfeasance.”).
27
   Howell v. Persans, 2012 WL 1414296, at *2 (Del. Super. Feb. 8, 2012).
28
   See Ayers, 2004 WL 1965866, at *3 (“[C]onsidering the purpose of limited liability, a
principle central to corporate law, an injured party must prove the officer, director or agent
participated in the tort.”).

                                                 12
       I note that, even assuming the doctrine of personal participation applies to

the Plaintiff’s allegations of misappropriation of his name and likeness,29

affirmative acts of misappropriation have not been alleged against the individual

Defendants here.            As described above, the Plaintiff’s allegations of

misappropriation against the individual directors indicate only that the “Defendants

continued to use Bishop Gassis’s name, image, and likeness in the name of the

Bishop Gassis Fund, in its representations to the public, and in its fundraising

letters and efforts,”30 and that the “Defendants continued to use Bishop Gassis’s

name, image, and likeness by, at various times continuing to use the domain name

containing Bishop Gassis’s name, by linking to pages discussing Bishop Gassis

from the Corporation’s website, using a substantially similar name to the previous

name . . ., continuing to use Bishop Gassis’s name on the new website, and failing

29
   As noted above, our lower courts, as well as other jurisdictions, have applied the personal
participation doctrine. See Bay Ctr. Apartments Owner, LLC v. Emery Bay PKI, LLC, 2009 WL
1124451, at *12 (Del. Ch. Apr. 20, 2009) (“Under settled Delaware law, [a] corporate officer can
be held personally liable for the torts he commits and cannot shield himself behind a corporation
when he is a participant.”) (internal quotation marks omitted); see also Brandywine Mushroom
Co. v. Hockessin Mushroom Products, Inc., 682 F. Supp. 1307, 1311-12 (D. Del. 1988) (holding
that a corporate officer may be held liable for trademark infringement in which she actively
participated). However, the Delaware Supreme Court has not directly ruled on the applicability
of the active participation doctrine to corporate directors in Delaware. But see T.V. Spano Bldg.
Corp. v. Dep’t of Natural Res. & Envtl. Control, 628 A.2d 53, 61 (Del. 1993) (finding that, in
accordance with the statutory intent underlying 7 Del. C. § 6308, “[i]t is not enough that the
officer knew of [a violation of the statute]. Simple knowledge is not sufficient for the imposition
of personal liability. Rather, the officer must be shown to have been ‘actively involved in the
alleged violative activity’”); State ex rel. Brady v. Preferred Florist Network, Inc., 791 A.2d 8,
21 (Del. Ch. 2001) (“[T]he Delaware Supreme Court has stated that a corporate officer who is
shown to have been ‘actively involved in the allegedly violative’ conduct, can be held liable for a
violation of the environmental statutes.”).
30
   Am. Compl. ¶ 289.

                                                13
to comply with a Court order that specifically required removal of all references to

Bishop Gassis from the Corporation’s new website.”31 Those pleadings do not

identify any specific actions taken by an individual Defendant that would amount

to directing, ordering, ratifying, approving or consenting to the alleged

misappropriation.32 Rather, the Plaintiff alleges that the Fund held a license to use

his name and likeness; that the license was revoked in August 2013; and that for

some time, the Fund continued to use the Plaintiff’s name and likeness.

Essentially, the Amended Complaint alleges that the Fund failed to act with

sufficient alacrity in removing the Plaintiff’s name from its website or from the

name of the Corporation, once the license was revoked. Had the Plaintiff chosen

to sue the Fund, such an allegation presumably would survive for trial, and proof

of damages, if any. Directors, however, if they are to be held responsible in tort,

must themselves have taken some action advancing the tort, beyond presiding over

a corporate tortfeasor.33

       The Amended Complaint does not allege that any individual Defendant took

any positive action on behalf of the Fund involving use of the Plaintiff’s name after

August 24, 2013. Because the Amended Complaint does not allege facts sufficient

31
   Id. at ¶ 290.
32
   Heronemus, 1997 WL 524127, at *2.
33
   Because I find that the pleadings do not state a claim against the individual Defendants, I need
not reach the question of whether, as the Defendants contend, the directors are protected from
liability by federal and state volunteer protection statutes. Nor do I need to consider the
Defendants’ contention that, even if they had been pled against the Fund, the likeness counts
would each fail to state a viable claim for relief.

                                                14
to infer that the individual Defendants directed or ordered the Fund to continue use

of the Plaintiff’s name, but only that the directors failed to take action within a

short period of time to prevent the Fund’s use of his name, those Defendants may

not be held personally liable in tort.

       The Plaintiff requests that, “[s]hould the Court refuse to construe the

Likeness Claims [against the individual Defendants], it should allow Plaintiff to

amend to name the Fund as a Defendant under Rule 15(aaa).”34 Court of Chancery

Rule 15(aaa) states:

       Notwithstanding subsection (a) of this Rule, a party that wishes to
       respond to a motion to dismiss under Rules 12(b)(6) or 23.1 by
       amending its pleading must file an amended complaint, or a motion to
       amend in conformity with this Rule, no later than the time such
       party’s answering brief in response to either of the foregoing motions
       is due to be filed. In the event a party fails to timely file an amended
       complaint or motion to amend under this subsection (aaa) and the
       Court thereafter concludes that the complaint should be dismissed
       under Rule 12(b)(6) or 23.1, such dismissal shall be with prejudice
       (and in the case of complaints brought pursuant to Rules 23 or 23.1
       with prejudice to the named plaintiffs only) unless the Court, for good
       cause shown, shall find that dismissal with prejudice would not be just
       under all the circumstances. Rules 41(a), 23(e) and 23.1 shall be
       construed so as to give effect to this subsection (aaa).35

The Plaintiff contends that, because “the parties have engaged in expedited

briefing due to Plaintiff’s § 225 summary claim,”36 good cause exists to permit the

34
   Pl.’s Answering Br. in Opp’n to Mot. to Dismiss at 41 n.11.
35
   Ct. Ch. R. 15(aaa) (emphasis added).
36
   Pl.’s Answering Br. in Opp’n to Mot. to Dismiss at 40 n.10.

                                               15
Plaintiff to amend his Amended Complaint after the Court’s resolution of this

Motion to Dismiss.

          The initial Complaint in this action was filed on September 6, 2014. On

September 13, at the conclusion of oral argument on the Plaintiff’s Motion to

Expedite, I determined that the Plaintiff’s Section 225 claims and claims relating to

the Corporation’s use of the Plaintiff’s name and likeness should be expedited, and

scheduled a preliminary injunction hearing on the Plaintiff’s likeness claims.

Shortly thereafter, on October 1, 2013, Defendants’ counsel submitted a letter to

the Court indicating that the Fund no longer intended to use the Plaintiff’s name,

image, or likeness in the name of the Corporation or in its fundraising efforts. The

next day, the Plaintiff filed a New and Renewed Motion to Expedite. I heard

argument on that Motion on October 4, at the conclusion of which I determined

that the only issue remaining to be decided at a preliminary injunction hearing was

“whether the funds that were solicited before the ouster of Bishop Gassis [could]

be distributed by the board in its discretion or whether some other control or

limitation has to be placed on the use of those funds;”37 the Plaintiff’s request for

preliminary relief based on his likeness claims were otherwise mooted.

Subsequently, the parties entered into a Status Quo Order constraining the board’s

ability to expend funds, obviating the need for a preliminary relief hearing. The

37
     Oct. 4, 2013 Oral Arg. Tr. 27:14-18 (emphasis added).

                                                16
parties subsequently mediated and the action was stayed; when mediation proved

unsuccessful, the parties requested, in February 2014, that the stay be lifted and a

briefing schedule be entered. At that point, the only claims remaining to be

decided on an expedited schedule were those brought under Section 225.

Accordingly, at the conclusion of a February 17, 2014 teleconference, I permitted

discovery on the Section 225 claims only, indicating that those issues would be

tried prior to resolution of the Defendants’ Motion to Dismiss. I also indicated at

that time that I was “happy to have [the parties] move forward with the briefing on

the motion to dismiss,”38 but I did not expedite that Motion, and nothing prevented

the Plaintiff from filing a timely second amended complaint in response to the

Motion to Dismiss, pursuant to Rule 15(aaa), if he felt it appropriate to do so.

          Further, the Defendants point out that “[t]he Amended Complaint’s

allegations relating to the Likeness Claims all assert that it was the Fund, not the

Director Defendants, that engaged in purportedly actionable conduct,” and that

even though the “Defendants’ initial dismissal brief pointed out [that]

inconsistency” in the Plaintiff’s initial Complaint, the Plaintiff nevertheless

“inexplicably failed to correct this deficiency in [crafting] the Amended

Complaint.”39 I accordingly find that good cause does not exist to permit the

Plaintiff to amend his Amended Complaint after full briefing and argument on the

38
     Feb. 17, 2014 Oral Arg. Tr. 55:24-56:2.
39
     Def.’s Op. Br. in Supp. of Mot. to Dismiss at 41.

                                                  17
Defendant’s Motion to Dismiss. As a result, Count III of the Amended Complaint

must be dismissed.

       For similar reasons, Count VI, alleging trademark infringement, and Count

VII, alleging a violation of the Deceptive Trade Practices Act, must be dismissed

as to the individual Defendants. With respect to Count VI, the Plaintiff alleges that

“[t]he Bishop Gassis Fund’s past and continued unauthorized use . . . of his name,

likeness and service mark by the Corporation is likely to cause confusion to the

public, misappropriates Bishop Gassis’ name, likeness and service mark,

unlawfully trades on Bishop Gassis’ goodwill in his name and mark,”40 and that,

“[a]s a result of Bishop Gassis Fund’s conduct, Bishop Gassis has suffered and

continues to suffer irreparable damage.”41        As noted above, the Amended

Complaint does not, however, allege that the individual Defendants themselves

misappropriated the Plaintiff’s name, such that their misappropriation could

constitute trademark infringement, or that they otherwise directed the Corporation

to do so. Further, with respect to Count VII, the Plaintiff alleges that “the conduct

set forth herein . . . violates the Delaware Deceptive Trade Practices Act insofar as

the Corporation continues to represent that its operations . . . have the express

approval of Bishop Gassis . . . .”42 Again, those allegations do not provide a

40
   Am. Compl. ¶ 293.
41
   Id. at ¶ 302 (emphasis added).
42
   Id. at ¶ 306 (emphasis added).

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sufficient basis to infer that the individual Defendants personally violated, or

directed the Corporation to violate, any provision of the Deceptive Trade Practices

Act. Since the Plaintiff has chosen to sue the individual Defendants only, and not

the Fund, Counts VI and VII must be dismissed.

      Finally, Counts XI, XII, and XV do not state a cause of action, but seek

particular forms of relief. Because no underlying claims survive, those Counts

must also be dismissed.

                                 III. Conclusion

      For the reasons described above, the Defendants’ Motion to Dismiss is

granted as to all counts. An appropriate Order accompanies this Letter Opinion.

                                             Sincerely,

                                             /s/ Sam Glasscock III

                                             Sam Glasscock III

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