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CLARK v KELLY Click to find out why . . .



Keywords & Phrases
CaseNo: C.A. No. 16,780, CourtCode: CC, CourtName: IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE, Plaintiff: CLARK, State: DE Delaware, UniqueCaseRef: DE>CC>00016780, Empresa, California, Danis, Stock, Delaware, California Law, Equity Owner, Riviera, Clark, Community Property, Del, Summary Judgment, California Corporation, Operating Agreement, Spouse, Support, Disregard California Law, Empresa Shares, Fees, Lawful Managers, Ownership, Limited Liability, United California, Motion, Chancery, Marriage, Amendment, Extrinsic Evidence, Trustees, Provision, Partnership, Third Sentence, Cross-motion, Authorities, Beneficial Owner, Assignment, Costs, Request , ContentID: 120239753

Case Documents
1 1999-11-19 PLAINTIFFS OPPOSTION TO DEFENDANTS APPLICATION FOR ATTORNEYS FEES AND COSTS
[ see first page and extracted highlights below  ] ItemID: 103037
7 pages
PDF
2 1999-06-24 MEMORANDUM OPINION
[ see first page and extracted highlights below  ] ItemID: 100326
22 pages
PDF
3 1999-02-05 MOTION
[ see first page and extracted highlights below  ] ItemID: 103535
6 pages
PDF
4 1999-02-05 REPLY BRIEF
[ see first page and extracted highlights below  ] ItemID: 103038
17 pages
PDF
Total Documents: 4 documents , 52 pages
Price: $ 34.95


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1 . PLAINTIFFS OPPOSTION TO DEFENDANTS APPLICATION FOR ATTORNEYS FEES AND COSTS

EXTRACTED KEY WORDS
FEES
COURT
ATTORNEYS
PLAINTIFFS
DEL
DELAWARE
EMPRESA
COSTS
SUMMARY JUDGMENT
OPERATING AGREEMENT
MOTION
REQUEST
PURSUANT
CONTRACT
SUPREME COURT
CLARK
CALIFORNIA
PROPER
BASIS
MERITS
HERETO
JURISDICTION
TRIAL COURT
SUPR
REASONABLENESS
RIVIERA FINANCE
UCDC
SEEKING SUMMARY JUDGMENT
MANAGER
             IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                              IN AND FOR NEW CASTLE COUNTY


DAVID B. CLARK and UNITED
CALIFORNIA DISCOUNT CORPORATION,
a California corporation,

                        Plaintiffs,

               V.                                               CA. No. 16780

PHILLIP KELLY and LA EMPRESA DE LA
MAR D'ORO, INC., a California corporation,

                        Defendants,



RIVIERA FINANCE LLC, a Delaware limited
1-[ability company,

                        Nominal Defendant.

                       P L A I N T I F F S '   O P P O S I T I O N   T O   D E F E N D A N T S ' 
                     APPLICATION FOR ATTORNEYS' FEES AND COSTS -" L'

               Plaintiffs David B. Clark ("Clark") and United California Discount Corporation

("UCDC") hereby respond to Defendants' Application For Attorneys' Fees And Costs and in

opposition thereto state as follows:

                1. On November 12, 1998, plaintiffs Clark and UCDC filed this action

zgainst defendants  Phillip Kelly ("Kelly") and La Empresa De La Mar  D'Oro, Inc.

("La Empresa") seeking an order pursuant to 6 Del. C.  6 18-110 declaring that Clark has been

duly-appointed by UCDC as the sole manager of Riviera Finance, LLC ("Riviera"), and that

defendants Kelly and La Empresa have no right to participate either directly or indirectly in

Riviera's management.



               2.      Following expedited discovery, on January 11, 1999, plaintiffs served and
SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • CALIFORNIA DISCOUNT CORPORATION,
  • PHILLIP KELLY and LA EMPRESA DE LA
  • RIVIERA FINANCE LLC, a Delaware limited 1-[ability company,
  • APPLICATION FOR ATTORNEYS' FEES AND COSTS -" L'
  • Plaintiffs David B. Clark and United California Discount Corporation
  • hereby respond to Defendants' Application For Attorneys' Fees And Costs and in
  • On November 12, 1998, plaintiffs Clark and UCDC filed this action
  • seeking an order pursuant to 6 Del.
  • duly-appointed by UCDC as the sole manager of Riviera Finance, LLC, and that
  • filed a motion pursuant to Court of Chancery Rule 56 seeking summary judgment on their claim
  • meaning of the Operating Agreement.
  • was sought in that motion or in the extensive briefing that followed.
  • cefendants tardily filed a contract claim pursuant to Section 12.14 of the Operating Agreement
  • premise that "the appeal of this Court's decision to the Delaware Supreme Court does not
  • deprive this Court of jurisdiction to hear a collateral matter such as an application for
  • general rule that a properly perfected appeal normally divests the trial court of
  • Radulski v. Delaware State HOSP.,
  • Supr., 541 A.2d 562, 567.
  • h.eld that a claim for attorneys' fees is not part of the merits of the action and does not,
  • A hereto); Wilmington
  • request is integral - and not collateral - to the court's merit-based decision concerning the
  • there is no basis upon which to assess the reasonableness of defendants' application

  • 2 . MEMORANDUM OPINION

    EXTRACTED KEY WORDS
    CALIFORNIA
    LAW
    STOCK
    RIVIERA
    COURT
    PLAINTIFFS
    COMMUNITY PROPERTY
    DEL
    DANIS
    DELAWARE
    CLARK
    CALIFORNIA CORPORATION
    DEFENDANTS
    EQUITY OWNER
    SPOUSE
    OPERATING AGREEMENT
    SUMMARY JUDGMENT
    EMPRESA SHARES
    LAWFUL MANAGERS
    LIMITED LIABILITY
    OWNERSHIP
    MARRIAGE
    TRUSTEES
    PROVISION
    PARTNERSHIP
    UNITED CALIFORNIA
    BENEFICIAL OWNER
    BUSINESS
    ASSIGNMENT
    
                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                              IN AND FOR NEW CASTLE COUNTY
    
          DAVID B. CLARK, and UNITED CALIFORNIA :
          DISCOUNT CORPORATION, a California                :
          corporation,                                      ..
                             Plaintiffs,                    ..
    
                                                            .
                V.                                          .            C.A. No. 16780
    
          PHILLIP KELLY and LA EMPRESA DE
          LA MAR D'ORO, INC., a California
          corporation,
    
                             Defendants,
                 and
    
          RIVIERA FINANCE LLC, a Delaware
          limited liability company,
                             Nominal Defendant.             .                        -- ___
    
    
                                            MEMORANDUM OPINION
    
                                      Date Submitted:       March 11, 1'999
                                      Date Decided:               June 24, 1999
    
          Michael D. Goldman, Stephen C. Norman and Gregory M. Johnson, Esquires, of
          POTTER, ANDERSON & CORROON, LLP, Wilmington, Delaware; Attorneys
          for Plaintiffs
    
          R. Franklin Balotti, Daniel A. Dreisbach, Srinivas M. Raju and Peter B. Ladig,
          Esquires, of RICHARDS, LAYTON & FINGER, Wilmington, Delaware,
          Attorneys for Defendants
    
    
    
          JACOBS, VICE CHANCELLOR
    
    3L
    
    
    
          Pending are cross-motions for summary judgment in this action, brought
    
    under 6 Del. C. 8 18- 110, to determine who are the lawful managers of Riviera
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • PHILLIP KELLY and LA EMPRESA DE
  • LA MAR D'ORO, INC., a California corporation,
  • Defendants,
  • Pending are cross-motions for summary judgment in this action,
  • to determine who are the lawful managers of Riviera
  • Finance, LLC, a Delaware limited liability corporation.
  • turns upon two issues of California law: whether a 100% stock interest in a
  • husband and wife were the trustees.
  • The plaintiffs are Mr. David B. Clark,
  • sole manager, and Clark's wholly-owned firm, United California Discount
  • vehicle for the joint business efforts of Clark and his friend and business partner,
  • the late John B. Danis.
  • property under California law.
  • Court of Chancery Rule 15; Bokat v. Getty Oil Co., Del.
  • Empresa shares into the Danis Living Trust,
  • Essentially, that provision
  • Section 8.1of the Operating Agreement pertinently states:
  • "Transfer" means, with respect to any Member, the transfer of any portion of such Member's
  • Empresa's sole "equity owner" at the time it became a "Member" of Riviera --owned less than
  • community property, as a result of which Mr. and Mrs. Danis were equal "equity
  • Danis and Clark intended that the term "equity owners" would refer only to Danis and Clark,
  • at 11, Jacobs, V.C. (using Georgia law to determine effect of the merger of two Georgia
  • l7 See In re Marriage of Johnston,
  • Ch., 698 A.2d 375,379 (finding New York law governed residents' dispute over stock ownership
  • Code $800 and holding that beneficial owner may maintain derivative suit); Rosenthal v.

  • 3 . MOTION

    EXTRACTED KEY WORDS
    COURT
    PLAINTIFFS
    CHANCERY
    DELAWARE
    UNITED CALIFORNIA
    MOTION
    EMPRESA
    DANIS
    DEL
    CHANCERY RULE
    SHARES
    JUDICIAL ADMISSION
    PARAGRAPH
    AMEND
    AMENDMENT
    PERMIT
    DAVID
    CLARK
    OWNER
    UTZ
    STEELE
    DISCOUNT CORPORATION
    CLARIFY
    COMMUNITY
    EQUITY OWNER
    SOLE OWNER
    ASSERTION
    PLEADING
    FACTS
    
                     IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                                     IN AND FOR NEW CASTLE COUNTY
    
    DAVID B. CLARK and UNITED CALIFORNIA )
    DISCOUNT CORPORATION, a California                    >                                            
    corporation,                                                                                 c-:   
                                                          >                                      I.- . 
                                                          >                                      L     
                               Plaintiffs,                >                                            
                                                          >                                            
                       V.                                 ) C.A. No. 16780                             
                                                                                                       
                                                                                           1.          
                                                          >                                      !:'   
    PHILLIP KELLY and LA EMPRESA DE LA                    )                                c  :,  ~ ".;
                                                                                           - ,.,
                                                                                           -7, r\ 1
    MAR D'ORO, INC., a California corporation,            )                                           -
                                                          >
                               Defendants,                1>
                      -and-                               >
                                                          >
    RIVIERA FINANCE LLC, a Delaware limited               )
    liability company,                                    >>
                               Nominal Defendant.         >
    
                       MOTION FOR LEAVE TO FILE AN AMENDED ANSWER
    
             Phillip Kelly ("Kelly") and La Empresa De La Mar  D'Oro,  Inc. ("La Empresa") (collectively
    
    "Defendants") hereby move this Court, pursuant to Court of Chancery Rule 15(a), for an Order in
    
    the form attached hereto granting leave to file an amended Answer. Defendants have attached as
    
    Exhibit A hereto the Amended Answer Defendants seek to file and as Exhibit B the Amended
    
    Answer, which indicates plainly in what respect it differs from the Answer in compliance with Court
    
    of Chancery Rule 15(aa). The grounds for the within motion are as follows:
    
             1.       Plaintiffs instituted this action in November 1998, to challenge Kelly and/or La
    
    Empresa's right to co-manage Riviera Finance LLC ("Riviera") with Plaintiffs David B. Clark
    
    ("Clark") and United California Discount Corporation  ("UCDC")  . Central to the dispute is the
    
    determination whether a "Transfer" occurred under the terms of the Operating Agreement. In order
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • MOTION FOR LEAVE TO FILE AN AMENDED ANSWER
  • Phillip Kelly and La Empresa De La Mar D'Oro,
  • Defendants have attached as
  • of Chancery Rule 15.
  • Plaintiffs instituted this action in November 1998,
  • Empresa's right to co-manage Riviera Finance LLC with Plaintiffs David B. Clark
  • and United California Discount Corporation.
  • to make this determination, the Court must resolve the issue of whether, under California
  • Mrs. Danis is an equity owner of shares of La Empresa registered in Mr. Danis' name.
  • Plaintiffs repeatedly have incorrectly interpreted this assertion
  • as a judicial admission by Defendants, despite Defendants' efforts to clarify this
  • this statement in their pleading is a
  • In another paragraph of the Answer, Defendants specifically denied that Mr. Danis was
  • the sole owner of the La Empresa shares.
  • which is the correct state of facts as plaintiffs are fully aware.
  • Defendants seek to amend the answer solely to add this clarification of fact -- known at all
  • Del.
  • amendment of pleadings and permit such amendment when no circumstances are present that
  • No. 16179, Steele, V.C.
  • ; Utz v. Utz, Del.
  • Delaware courts freely permit the amendment of an Answer.

  • 4 . REPLY BRIEF

    EXTRACTED KEY WORDS
    CALIFORNIA LAW
    DANIS
    DEFENDANTS
    EQUITY OWNER
    COURT
    DELAWARE
    PLAINTIFFS
    CLARK
    SUPPORT
    DISREGARD CALIFORNIA LAW
    EMPRESA
    SUMMARY JUDGMENT
    OPERATING AGREEMENT
    COMMUNITY PROPERTY
    DEL
    EMPRESA SHARES
    EXTRINSIC EVIDENCE
    THIRD SENTENCE
    CROSS-MOTION
    AUTHORITIES
    INTERNAL AFFAIRS DOCTRINE
    AMENDMENT
    CHANCERY
    PLAINTIFFS ARGUE
    SEPARATE
    LAW PROVISION
    INCONSISTENT INTERPRETATIONS
    OWNERSHIP
    RESPONSE
    
                     IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                                     IN AND FOR NEW CASTLE COUNTY
    
    DAVID B. CLARK and UNITED CALIFORNIA )
    DISCOUNT CORPORATION, a California
    corporation,                                     ;                                        ._    ,.
                                                                                       ._,
                                                     >
                               Plaintiffs,           >>
                       V.                            ) C.A. No. 16780
    
    PHILLIP KELLY and LA EMPRESA DE LA               )
    MAR D'ORO, INC., a California corporation,       >
    
                               Defendants,
    
                      -and-
    
    RIVIERA FINANCE LLC, a Delaware limited
    liability company,                               >>
                               Nominal Defendant.    >
    
    
                               DEFENDANTS' REPLY  BRTEF IN SUPPORT OF
                        THEIR CROSS-MOTION FOR SUMMARY JUDGMENT
    
    
                                                     R. Franklin Balotti
                                                     Daniel A. Dreisbach
                                                     Srinivas M. Raju
                                                     Peter B. Ladig
                                                     Richards, Layton & Finger
                                                     One Rodney Square
                                                     P.O. Box 551
                                                     Wilmington, Delaware 19899
                                                     (302) 658-6541
                                                           Attorneys for Defendants
    
    
    Dated: February 5, 1999
    
    
    
    
    RLFI-203663-1
    
    
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • DAVID B. CLARK and UNITED CALIFORNIA)
  • DEFENDANTS' REPLY BRTEF IN SUPPORT OF
  • THEIR CROSS-MOTION FOR SUMMARY JUDGMENT
  • TABLE OF AUTHORITIES.
  • Determining Whether Mrs. Danis Was An Equity Owner.
  • NO TRANSFER OCCURRED UNDER THE THIRD SENTENCE
  • Del.
  • Plaintiffs' reply brief is strong on invective yet noticeably weak on factual or legal
  • forth in defendants' opening brief supporting their motion for summary judgment.
  • of the La Empresa shares prior to their placement in trust.
  • California community property laws are inapplicable since the Operating Agreement
  • provides for the application of Delaware law.
  • and, more specifically, the internal affairs doctrine of Delaware, provides that California
  • 90% of the La Empresa shares, a Transfer under the second sentence has not occurred.
  • defined terms have the same meaning as in Defendants' Answering Brief in Opposition to
  • lightly ignore separate corporate existence.
  • Because of the force of the Amendment, plaintiffs' failure to address it is telling.
  • Plaintiffs argue that a transfer has occurred under the second sentence because:
  • this Court should not look to California law to determine who was an "equity owner";
  • Mrs. Danis was not an "equity owner" under California law; and extrinsic evidence
  • The Court Should Not Disregard California Law In Determining
  • Relying on the choice of law provision in the Agreement,
  • Plaintiffs reiterate their fear of inconsistent interpretations of the Operating
  • Clark could do in making representations to each other that could alter the ownership
  • defendants have not received a correction or a verification to the responses to the
  • Knowing the response was in error, defendants have not and will not seek to use plaintiffs'
  •    |