Court Opinion

ID: 9838144
Source: CourtListenerOpinion
Date Created: 2023-09-05 14:07:14.922066+00
Date Added: 2024-06-11T15:34:24.882159
License: Public Domain

COURT OF CHANCERY
                                  OF THE
                            STATE OF DELAWARE
  LORI W. WILL                                             LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR                                              500 N. KING STREET, SUITE 11400
                                                            WILMINGTON, DELAWARE 19801-3734

                                 September 5, 2023

 T. Brad Davey, Esquire                         Paul D. Brown, Esquire
 Mathew A. Golden, Esquire                      Joseph B. Cicero, Esquire
 Potter Anderson & Corroon, LLP                 Chipman Brown Cicero & Cole LLP
 1313 North Market Street, 6th Floor            1313 North Market Street, Suite 5400
 Wilmington, Delaware 19801                     Wilmington, Delaware 19801

 Stephen B. Brauerman, Esquire
 Bayard, P.A.
 600 North King Street, Suite 400
 Wilmington, Delaware 19801

      RE:   Sal Gilbertie, et al. v. Dale Riker, et al.,
            C.A. No. 2020-1018-LWW

Dear Counsel:

      I have reviewed the plaintiffs’ Motion for Voluntary Dismissal of Claims

With Prejudice (the “Motion”). The Motion presents the latest twist in a long-

running dispute involving current and former officers of Teucrium Trading, LLC.

The legal saga began in 2019 when defendant Dale Riker—Teucrium’s former

CEO—filed a books and records action in this court.           It proceeded through

threatened litigation in New York, the present action brought by Teucrium and

certain of its officers against Riker and his spouse (Teucrium’s former CFO), a
C.A. No. 2020-1018-LWW
September 5, 2023
Page 2 of 5

separate derivative action filed by Riker (that is now consolidated with this action),

and an advancement action.1

         In this plenary suit, I have issued rulings on a motion to dismiss the

complaint,2 a motion to dismiss counterclaims,3 a motion for reconsideration,4 and a

motion to dismiss amended counterclaims.5 A subset of claims against Riker and

certain counterclaims remain. In the advancement action, I recently resolved cross-

motions for summary judgment in favor of the Rikers.6 That decision led the

plaintiffs to have a change of heart. They now seek to “dismiss their claims with

prejudice, without conditions, and without impacting Mr. Riker’s remaining two

counterclaims.”7

1
 See C.A. No. 2019-0314-AGB (Del. Ch.); C.A. No. 2021-0561-LWW (Del. Ch.); C.A.
No. 2022-1030-LWW (Del. Ch.). For clarity, I refer to Dale Riker as “Riker” and to Dale
and Barbara Riker together as the “Rikers.”
2
    Dkts. 71, 74.
3
    Dkts. 115, 116.
4
    Dkt. 123.
5
    Dkts. 137, 146, 147.
6
 C.A. No. 2022-1030-LWW (Del. Ch. June 13, 2023) (TRANSCRIPT). An interlocutory
appeal of that ruling was refused. See C.A. No. 2022-1030-LWW, Dkts. 56, 59.
7
    Pls.’ Mot. for Voluntary Dismissal with Prejudice (Dkt. 156) ¶ 7.
C.A. No. 2020-1018-LWW
September 5, 2023
Page 3 of 5

      The Rikers, however, oppose the Motion unless I impose a series of conditions

that largely relate to the advancement action.8 They ask that any order granting the

Motion also: (1) order Teucrium to advance the Rikers’ fees; (2) order the plaintiffs,

jointly and severally, to pay fees incurred from any re-do of discovery necessitated

by the dismissal; and (3) hold that the Rikers are “deemed wholly successful on the

merits or otherwise with respect to the claims asserted against them in this action.”9

      Court of Chancery Rule 41(a)(2) provides for voluntary dismissal with court

approval:

             [A]n action shall not be dismissed at the plaintiff’s instance save
             upon order of the Court and upon such terms and conditions as
             the Court deems proper. If a counterclaim has been pleaded by
             a defendant prior to the service upon defendant of the plaintiff’s
             motion to dismiss, the action shall not be dismissed against the
             defendants’ objection unless the counterclaim can remain
             pending for independent adjudication by the Court. Unless
             otherwise specified in the order, a dismissal under this paragraph
             is without prejudice.10

None of the conditions proposed by the Rikers are proper.

8
 Rikers’ Resp. to Pls.’ Mot. for Voluntary Dismissal with Prejudice (Dkt. 158) (“Rikers’
Resp.”) ¶ 9.
9
 Id. ¶¶ 10, 17, 20; [Proposed] Order Conditionally Granting Pls.’ Mot. for Voluntary
Dismissal of Claims with Prejudice (Dkt. 158).
 Ct. Ch. R. 41(a)(2) (emphasis added); see also In re Marriott Hotel Props. II Ltd. P’ship
10

Unitholders Litig., 1997 WL 589028, at *6 (Del. Ch. Sept. 17, 1997) (explaining that a
motion under Rule 41(a)(2) is “directed to the sound discretion of the Court”).
C.A. No. 2020-1018-LWW
September 5, 2023
Page 4 of 5

          First, the advancement action is (obviously) a separate matter. If Teucrium is

in violation of my summary judgment ruling, then the Rikers can seek appropriate

relief in that proceeding. They have not done so.

          Second, I decline to order the plaintiffs to bear joint and several liability for

Riker’s discovery costs as a condition to dismissal. One would expect that the scope

of discovery would narrow with the dismissal of the plaintiffs’ remaining claims.

Riker asserts that granting the Motion shortly before the deadline to substantially

complete document production is prejudicial because he will need to proceed by

filing subpoenas rather than under previously served document requests.11 But

Teucrium’s advancement obligations and the Fitracks procedure I imposed in the

advancement action can resolve the payment of any such discovery costs.

          Third, it would be inappropriate to provide an advisory opinion on whether

the Rikers have been successful in this action. The Rikers admittedly seek to

“streamline [their] eventual indemnification request.”12 But they must raise whether

they are entitled to indemnification at the appropriate time, in the appropriate action.

          Indeed, none of the Rikers’ arguments amount to “plain legal prejudice.”13 In

assessing whether a defendant faces such prejudice, the court considers “(1) the

11
     Rikers’ Resp. ¶ 18.
12
     Id. ¶ 10.
13
     Draper v. Gardner Defined Plan Tr., 625 A.2d 859, 863 (Del. 1993).
C.A. No. 2020-1018-LWW
September 5, 2023
Page 5 of 5

defendant[’s] effort and expense in preparation for trial; (2) excessive delay and lack

of diligence on the part of the plaintiff in prosecuting the action; (3) insufficient

explanation for the need to take a dismissal; and (4) [if] a motion for summary

judgment has been filed by the defendant.”14 The Rikers have not meaningfully

argued that they can establish any of these factors.

          Nor could they. The plaintiffs have committed not to refile their claims

elsewhere.15 There is no effort by the plaintiffs to dismiss this action in favor of a

different action. And Riker’s counterclaims remain pending for adjudication by this

court, with all defenses preserved. As to matters concerning advancement, the

Rikers’ separate action remains pending.

          Accordingly, the Motion will be granted without condition, pursuant to a

separate order.

                                                  Sincerely yours,

                                                  /s/ Lori W. Will

                                                  Lori W. Will
                                                  Vice Chancellor

14
     Id. at 864.
15
   Cf. West v. Access Control Related Enters., LLC, 296 A.3d 378, 386-87 (Del. 2023)
(affirming the denial of a motion for voluntary dismissal where substantial trial preparation
had occurred in Delaware and claims would be dismissed with prejudice and potentially
refiled elsewhere).