In The Renco Group v. MacAndrews AMG Holdings LLC (Del. Ch. Apr. 20, 2015), the Delaware Court of Chancery denied a motion for interlocutory appeal of a decision dismissing the plaintiff’s breach of fiduciary duty, aiding and abetting breach of fiduciary duty and business tort claims and limiting the plaintiff to its contract-based claims. In its underlying decision, the court dismissed the claims for breach of fiduciary duty and business torts because “they could not proceed in parallel with Renco’s breach of contract claims based on the complex and sophisticated contractual relationship documented by the limited liability company agreement.” On the plaintiff’s motion for interlocutory appeal, the court applied the familiar standard under Supreme Court Rule 42, but also noted that the present action proceeded “in parallel with another action involving the same parties and their controllers.” According to the court, the main plaintiff in the case before it (Renco) had successfully “moved to dismiss claims asserted by Holdco [the nominal defendant] for virtually the same reasons that the defendants in this case asserted and prevailed upon.” Accordingly, the court denied certification of an interlocutory appeal.
Analysis
In this matter, Renco asserted claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, tortious interference and fraudulent transfer. On the defendants’ motion to dismiss, the court found that, based on the “complex and sophisticated contractual relationship” between the parties, “there was no ‘independent basis for the fiduciary duty claims apart from the contractual claims.’” The court, however, did not hold that fiduciary duties had been eliminated under the terms of the contract. Instead, the court found that, “for purposes of this litigation, the … contractual obligations came ahead of, and encompassed the scope of, traditional fiduciary duties, and it is to the parties’ contract that the court should turn for resolution of the dispute.”
