Court Opinion

ID: 4394861
Source: CourtListenerOpinion
Date Created: 2019-05-08 16:02:39.439204+00
Date Added: 2024-06-11T14:34:55.908885
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: April 26, 2019
                                Date Decided: May 8, 2019

    Dean A. Campbell, Esquire                           Stephen A. Spence, Esquire
    The Law Office of Dean A. Campbell, P.A.            Baird Mandalas Brockstedt, LLC
    20175 Office Circle                                 1413 Savannah Road, Ste. 1
    P.O. Box 568                                        Lewes, DE 19958
    Georgetown, DE 19947

                 RE: Friends of Sandbar Village v. Sandcap, LLC, et al.,
                    C.A. No. 2018-0133-SG

Dear Counsel:

         This matter purports to bring direct and derivative claims, on behalf of

condominium property owners and a corporation that is the condominium owners’

association, against the developer of a condominium complex near Nassau, in

eastern Sussex County. Upon review, it is apparent that the sole Plaintiff, Friends

of Sandbar Village, is not a member of the corporation at issue, nor is it a property

owner, nor has it pled organizational standing. Therefore, the Plaintiff does not have

standing to proceed as the sole party plaintiff.1 I note that the Plaintiff’s members,

1
  Standing is a threshold question that is jurisdictional in nature, and may be raised sua sponte.
See, e.g., Mills v. Trans Caribbean Airways, Inc., 272 A.2d 702, 704 (Del. 1970); Thornton v.
Bernard Techs., Inc., 2009 WL 426179, at *4 (Del. Ch. Feb. 20, 2009). In order to have standing,
a plaintiff must (among other attributes) have suffered an injury-in-fact, which, per the Complaint,
per the Complaint, would have standing.2 Accordingly, the Plaintiff may wish to

amend the Complaint. Although cross case-dispositive motions are pending, none

raise this standing issue, and I find that Court of Chancery Rule 15(aaa) is not

implicated; in the alternative, I find good cause, under Rule 15(aaa), to allow an

amendment. Unless a motion to amend is filed within 10 days, however, I will

dismiss this case without prejudice.

       If a motion to amend is granted, the parties may refile the case-dispositive

motions as they find appropriate. Given the current state of the litigation, it appears

that the litigants are content proceed with the parties as currently before me.3 I have

no wish to cause undue expense and effort in this case. To paraphrase Mr. Franklin,

however, experience keeps a dear school, but judges will learn in no other. Hard

experience in the conduct of litigation, particularly derivative litigation, has taught

me that allowing defective pleadings to go forward in the name of efficiency is a

fool’s practice, and is usually self-defeating.

the Plaintiff (as opposed to its members) has not. In particular, in derivative actions under Rule
23.1, stockholders and members of entities may have standing to sue on the corporate behalf; here,
that would be members of the condominium owners’ association.
2
  With proper pleading, the Plaintiff, an unincorporated association, may be able to establish
organizational standing to prosecute direct claims against the developer. See Oceanport Indus.,
Inc. v. Wilm. Stevedores, Inc., 636 A.2d 892, 902 (Del. 1994) (citing Hunt v. Wash. State Apple
Advert. Comm’n, 432 U.S. 333 (1977)).
3
  Because, on review of the Complaint, I found the Plaintiff’s standing problematic, I asked the
parties to address, among other issues, whether this was in fact a derivative action, and, if so, on
behalf of what entity. The parties responded by letters of April 26, 2019, which I have reviewed
in addressing the matters in this Letter Order.
                                                 2
    To the extent the foregoing requires an order to take effect, IT IS SO

ORDERED.

                                       Sincerely,

                                       /s/ Sam Glasscock III
                                       Vice Chancellor

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