Court Opinion

ID: 4271531
Source: CourtListenerOpinion
Date Created: 2018-05-01 19:05:58.500429+00
Date Added: 2024-06-11T14:32:58.010026
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

JASON SPENCER,                       )
                                     )
           Plaintiff,                )
                                     )
           v.                        ) C.A. No. N17C-11-044 JAP
                                     )
DEXTRAL CAPITAL LP, et. al,          )
                                     )
           Defendants.               )
                                     )

          Upon Defendants’ Motion to Dismiss: GRANTED

                                ORDER

     On this 1st day of May 2018, having considered Defendants’

motion to dismiss the Complaint, and Plaintiff’s opposition thereto,

it appears to the Court that:

     1.    In this suit Plaintiff Jason Spencer, a resident of Dallas,

Texas, claims that the defendants, Dextral Capital LP and Dextral

Capital Management Fund LP, owe him over one million dollars in

unpaid wages, bonuses, health care insurance, and the like.

Dextral has moved to dismiss the Complaint on the basis that

Spencer’s suit is barred by the doctrine of res judicata.    Because

this matter comes before the court on a motion to dismiss, the
court will treat each well-pled factual allegation as true and will give

Plaintiff the benefit of all reasonable inferences arising from those

facts.1

       2.    Spencer alleges he became a managing director of Dextral

in June of 2009. His duties included, among other things, “being

responsible for the day to day operations of both Dextral Capital LP

and Dextral Capital Management Fund LP, raising capital, fund

investment        management         and     monitoring,       ensuring      SEC

compliance, reporting to the investors, and handling investor

questions, concerns, tax reporting, statements, and distribution

requests as needed.”2

       3.    By 2011, the         relationship     had apparently soured.

According to the Complaint, “one of Defendants’ officers, Ken

Talbert, attempted to terminate Plaintiff’s employment on the [sic]

November 11, 2011 by providing written notice of that intention.”3

Spencer contends that he was contractually entitled to continue his

position with Dextral until such time as Dextral and its parent LLC

were dissolved, and therefore, his termination was ineffective.

1   See In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006).
2   Complaint ¶5.
3   Id. at ¶9.
                                         2
     4.     Not    long    after   “attempting   to   terminate     Plaintiff’s

employment” Dextral filed suit against him in Texas alleging

multiple counts of defalcations by Spencer.            The Texas District

Court conducted a bench trial and found in favor of Dextral.                 It

concluded Spencer stole large amounts of money from Dextral.

According     to     the     Texas     court,    “Spencer’s       conversion,

misappropriation, and theft of partnership monies of Dextral . . .

constituted theft of fiduciary property under the Texas Penal

Code.”4

     5.     Res judicata is a familiar doctrine in American law. “The

doctrine of res judicata is venerable and well-established in our

legal history, having been traced back to Roman law and

implemented in English law in the twelfth century.”5 Under the

doctrine, “a party is foreclosed from bringing a second suit based on

the same cause of action after a judgment has been entered in a

prior suit involving the same parties.”6

     6.     Spencer argues that the doctrine does not apply because

the issue of his employment agreement was never litigated in the
4  Ex. B to Defendants’ Motion to Dismiss (District Court’s “Findings of Fact
and Conclusions of Law”).
5 LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 191 (Del. 2009).
6 Betts v. Townsends, Inc., 765 A.2d 531, 534 (Del. 2000).

                                      3
Texas case, and the Texas court lacked jurisdiction over the case.

He is wrong on both counts.          His first objection—the contention

that his employment agreement was never litigated—is premised on

the questionable assumption that the Texas court never considered

his employment agreement and that the Texas dispute was only

about     Spencer’s   rights   and    obligations    under    the   Limited

Partnership Agreement.         Contrary to Spencer’s contention, the

Texas court alluded to his employment status on several occasions.

For example, it wrote that “as an employee, manager and/or agent

Jason Spencer owed fiduciary duties to Dextral.”7                   It then

concluded Defendants had “properly terminated Jason Spencer

from all authority to act on behalf of Dextral.”8

     7.     Assuming that Spencer is correct that the Texas court

never considered the employment relationship, his case is still

barred because the employment contract issues could have been

presented in the Texas matter. Spencer’s argument is predicated

upon the proposition that a party claiming the benefits of res

judicata must show that the issues in the earlier case “were the

7  Ex. B to Defendants’ Motion to Dismiss (District Court’s “Findings of Fact
and Conclusions of Law”) (emphasis added).
8 Id.

                                     4
same as the case at bar.” But, the Delaware Courts have held that

“[t]he res judicata doctrine operates to bar only later claims that

could have been brought at the time of an earlier asserted claim.”9

In LaPoint v. AmerisourceBergen Corp.,10 the Supreme Court wrote:

      Res judicata exists to provide a definite end to litigation, prevent
      vexatious litigation, and promote judicial economy. “The
      procedural ‘bar of res judicata extends to all issues which might
      have been raised and decided in the first suit as well as to all
      issues that actually were decided.’” “In essence, the doctrine of res
      judicata serves to prevent a multiplicity of needless litigation of
      issues by limiting parties to one fair trial of an issue or cause of
      action which has been raised or should have been raised in a court
      of competent jurisdiction.”11

In LaPoint, the Supreme Court quoted with approval a Second

Circuit opinion applying Delaware law, in which the Court of

Appeals held:

      [I]f the pleadings framing the issues in the first action would have
      permitted the raising of the issue sought to be raised in the second
      action, and if the facts were known, or could have been known to
      the plaintiff in the second action at the time of the first action, then
      the claims in the second action are precluded.12

      8.    The allegations in the Complaint leave no doubt that at

the time of the filing of the Texas case Spencer knew, or should

have known, of his employment contract claims.                        The Texas

9  RBC Capital Markets, LLC v. Educ. Loan Tr. IV, 87 A.3d 632, 646 (Del. 2014)
(emphasis added).
10 970 A.2d 185 (Del. 2009).
11 Id. at 191-92 (internal citations omitted).
12  Id. at 193 (quoting Ambase Corp. v. City Investing Co. Liquidating Trust, 326
F.3d 63, 73 (2d Cir. 2003)) (emphasis in original).
                                         5
Complaint was filed in December of 2011. By that time, Spencer

knew that “[h]e had never been paid since his employment began

during the previous two years of his employment,”13 and that

Defendants had “attempted to terminate” him.14 Spencer points to

nothing that he learned after the Texas case which gave rise to an

employment claim where none had previously existed.

      Therefore, Defendant’s motion to dismiss with prejudice is

GRANTED, and the Complaint is hereby DISMISSED.15

      IT IS SO ORDERED.

                                           _____________________________
                                              John A. Parkins, Jr.
                                              Superior Court Judge

oc:   Prothonotary

cc:   Adam Hiller, Esquire, Hiller Law, LLC, Wilmington, Delaware
      Daniel C. Herr, Esquire, Law Office of Daniel C. Herr LLC,
      Wilmington, Delaware

13  Complaint ¶8.
14  Complaint ¶9.
15   Defendant has asserted other affirmative defenses such as the statute of
limitations. The court expresses no opinion about these at this time.
                                     6