Lidya Holdings Inc. v. Ercin Eksin ( 2022 )

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
417 S. State Street
JOSEPH R. SLIGHTS III Dover, Delaware 19901
VICE CHANCELLOR Telephone: (302) 739-4397
Facsimile: (302) 739-6179
Date Submitted: November 22, 2021
Date Decided: January 31, 2022
Blake Rohrbacher, Esquire Mr. Ercin Eksin
Kevin M. Gallagher, Esquire Mennica Legacy Tower
Alexander M. Krischik, Esquire Prosta 20
Christian C.F. Roberts, Esquire Warszawa, 00-850
Richards, Layton & Finger, P.A. Poland
920 North King Street ercineksin@gmail.com
Wilmington, DE 19801
Re: Lidya Holdings Inc., et al. v. Ercin Eksin
C.A. No. 2021-0110-JRS
Dear Counsel and Mr. Eksin:
This Letter Opinion addresses a motion to dismiss counterclaims brought by
Ercin Eksin against Lidya Holdings Inc. (“Lidya” or the “Company”), Accion
International, Omidyar Network Fund LLC, Flourish Ventures and Bamboo Capital
(together, excluding Lidya, the “Investor Defendants” and, with Lidya,
“Counterclaim Defendants”). For the reasons stated below, all counterclaims
against the Investor Defendants must be dismissed. Counts 1, 2, 3, 4 and 6 of the
counterclaims against Lidya must also be dismissed. With respect to the motion to
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dismiss Count 5 against Lidya, the Court requires supplemental submissions before
addressing that claim.
“In deciding a motion to dismiss under Rule 12(b)(6), a trial court must
accept as true all of the well-pleaded allegations of fact and draw reasonable
inferences in the plaintiff’s favor.”1 The complaint—and only the complaint—
“generally defines the universe of facts that the trial court may consider in ruling on
a Rule 12(b)(6) motion to dismiss.”2 As discussed below, Eksin has strayed well
beyond the pleadings in his bid to avoid dismissal of the counterclaims.3 Even after
allowing him more liberty to deviate from settled pleading standards to account for
1
In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006).
2
Id.3
In his response to the motion to dismiss, Eksin alleged new facts and attached several
new exhibits. See Pls./Counter-Defs.’ Reply Br. in Further Supp. of Their Mot. to Dismiss
Countercls. (“CDRB”) (D.I. 62) at 6–7 (detailing additional facts and exhibits added in
Eksin’s response). As Counterclaim Defendants point out, “it is impermissible to attempt
to amend one’s pleading through a brief.” Standard Gen. L.P. v. Charney,
2017 WL 6498063, at *25 (Del. Ch. Dec. 19, 2017), aff’d, 195 A.3d 16 (Del. 2018)
(TABLE); CDRB at 5 (quoting Charney). Because Eksin chose to respond to the motion
to dismiss instead of amending his claims under Court of Chancery Rule 15(aaa), I may
consider only the allegations in the Verified Counterclaims. See Ct. Ch. R. 15(aaa).
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his status as a pro se litigant, as discussed below, I cannot conclude that he has
stated viable claims. My reasoning follows.
I. BACKGROUND
I take the facts from Eksin’s counterclaims, accept all well-pled allegations
as true, and draw all reasonable inferences in Eksin’s favor.4
A. The Parties
Eksin is a co-founder, shareholder, director and former co-CEO of Lidya.5
Lidya is a fintech company that provides loans to small and medium-sized
businesses to finance their working capital needs, particularly in emerging
economies where traditional financing opportunities are limited and costly.6 It has
grown rapidly and now operates in several countries.7
4
See In re Gen. Motors (Hughes), 897 A.2d at 168 (citing Savor, Inc. v. FMR Corp.,
812 A.2d 894, 896–97 (Del. 2002)).
5
Verified Countercls. Against Counter-Defs. (“Counterclaim”) (D.I. 49) ¶ 1.
6
Counterclaim ¶¶ 21, 25.
7
Counterclaim ¶¶ 31–33.
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In 2017 and 2018, Lidya conducted several private placements of its stock to
outside investors.8 The Investor Defendants acquired their Lidya shares in one of
these financing rounds and, in doing so, gained control of three of the five board
seats on Lidya’s Board of Directors (the “Board”).9 The then-co-CEOs, Eksin and
Tunde Kehinde, controlled the other two Board seats.10
B. Eksin Removed as Co-CEO
Disagreements with an employee and with the Board led to Eksin’s removal
as co-CEO on January 21, 2021.11 Specifically, Eksin clashed with an employee
“who was connected with and previously worked at Accion,” one of the Investor
Defendants represented on the Board, over her “demand for unearned incentives.”12
8
Counterclaim ¶ 43.
9
Counterclaim ¶¶ 44, 48.
10
Counterclaim ¶¶ 45, 48.
11
Counterclaim ¶¶ 96–102.
12
Counterclaim ¶ 74. Eksin alleges that “this employee continues to have close
connections with Accion and one of the Board Director [sic] of Lidya, Ms. Lewis.”
Counterclaim ¶ 75.
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This employee later accused Eksin of harassment.13 The Board formed a special
committee to investigate the claim, “during which Eksin was not [] provided a
meaningful opportunity to respond.”14
Concerned about the Board’s apparent sabotage of his attempts to make
additional investments in Lidya, Eksin contacted the Board and questioned its
support, hoping to engage in a dialogue about the future of the Company.15 This
contact was met with a month of silence, after which the Board asked Eksin to step
down as co-CEO.16 When Eksin and the Board could not agree on a mutually
acceptable buy-out arrangement, the Board voted to remove Eksin as co-CEO “for
cause,” relying on the harassment claim and a determination that Eksin’s behavior
was “unprofessional” and “bullying.”17
13
Counterclaim ¶¶ 72, 74.
14
Counterclaim ¶¶ 78–79.
15
Counterclaim ¶¶ 84–85.
16
Counterclaim ¶ 85.
17
Counterclaim ¶¶ 99–102. Eksin surmises that these characterizations referred to
“Eksin’s engagement of counsel to represent Eksin’s interest against the Investor
Defendants’ attacks.” Counterclaim ¶ 101.
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Eksin alleges that the employee with whom he had clashed “collaborated
with Investor Defendants and Directors of Lidya appointed by the Investor
Defendants to create the means for Investor Defendants to gain control over the
Company.”18 In other words, the harassment claim was part of a contrived scheme
to remove him as co-CEO after he questioned the Board’s commitment to Lidya.19
C. Procedural History
This action began when Plaintiffs, Lidya, Accion Gateway Fund L.L.C.,
Accion Venture Lab LP, Flourish Venture Fund LLC, Bamboo Financial Inclusion
Fund II, S.A., Sicav-Sif, Ashley Lewis, Ameya Upadhyay and Christian Ruehmer,
moved for a preliminary injunction to prevent Eksin from pursuing an emergency
arbitration against them.20 Eksin removed the action to federal court, but the federal
court remanded the case back to this Court.21 After briefing and argument, I granted
18
Counterclaim ¶ 76.
19
Counterclaim ¶¶ 80, 104–05.
20
Verified Compl. for Injunctive Relief (“Compl.”) (D.I. 1) ¶ 1.
21
D.I. 36.
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the motion for a preliminary injunction in part and denied it in part.22 Eksin’s
counsel withdrew, and Eksin, proceeding pro se, filed a Verified Counterclaim
against the Counter-Defendants that draws heavily from his enjoined demand for
arbitration.23 Importantly, except for Lidya, the Counter-Defendants are not
Plaintiffs in this action.24
Counter-Defendants move to dismiss the Verified Counterclaim under
Chancery Rules 12(b)(2), (4), (5) and (6).25 For the reasons stated below, that
motion must be granted with prejudice as to all counts against the Investor
Defendants.26 Counts 1, 2, 3, 4 and 6 against Lidya are also dismissed with
22
D.I. 40.
23
The Court’s preliminary injunction prevented Eksin from pursuing in arbitration each
of the claims he now brings in his Counterclaim. D.I. 40.
24
Compare Compl. (listing plaintiffs as “Lidya Holdings Inc.; Accion Gateway Fund
L.L.C.; Accion Venture Lab LP; Flourish Venture Funds LLC; Bamboo Financial
Inclusion Fund II S.A., SICAV-SIF; Ashley Lewis; Ameya Upadhyay; and Christian
Ruehmer”) with Counterclaim (bringing claims against Lidya Holdings Inc.; Accion
International; Flourish Ventures; Bamboo Capital; and Omidyar Network Fund LLC).
25
Pls. and Counter-Defs.’ Mot. to Dismiss Countercls. (D.I. 53).
26
Eksin chose to file a response to the Motion to Dismiss instead of amending his
pleading. Rule 15(aaa) demands that any dismissal be with prejudice.
See Ct. Ch. R. 15(aaa) (“In the event a party fails to timely file an amended complaint or
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prejudice. As explained below, the Court requires supplemental briefing before it
can decide the motion to dismiss Count 5.27
II. ANALYSIS
Most of the counterclaims brought by Eksin fail both as a matter of process
and as a matter of law. I address the grounds for dismissal in turn below.
A. Improper Service and Lack of Personal Jurisdiction
Under Delaware law, “[a]lthough pro se litigants are afforded some leniency
in presenting their cases, . . . pro se litigants must abide by the same rules that apply
to all other litigants.”28 One of those fundamental rules requires that a party seeking
motion to amend under this subsection (aaa) and the Court thereafter concludes that the
complaint should be dismissed under Rule 12(b)(6) . . . , such dismissal shall be with
prejudice . . . .”).
27
I note that, just before oral argument, the emergency arbitrator held that (1) Eksin was
to be reinstated as a director, (2) the implied covenant of good faith and fair dealing in an
Amended and Restated Voting Agreement guaranteed Eksin all concomitant rights to his
directorship, (3) Eksin was not entitled to emergency relief regarding his claim of breach
of an Investors’ Rights Agreement against Lidya for not purchasing D&O insurance
because the harm was remediable through money damages and therefore not irreparable–
irreparable harm being a prerequisite for “emergency” arbitration. D.I. 66.
28
Hayward v. King, 127 A.3d 1171, 2015 WL 6941599, at *4 (Del. 2015) (TABLE);
see also Draper v. Med. Ctr. of Del., 767 A.2d 796, 799 (Del. 2001) (“There is no different
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to pursue claims in this court must properly effect service of process on his
adversary.29 Indeed, this court lacks personal jurisdiction over any defendant
(or counterclaim defendant) not properly served with process.30
In this case, Eksin has failed to demonstrate that he properly served the
Investor Defendants with process.31 This alone is fatal to his claims against them.
set of rules for pro se plaintiffs, and the trial court should not sacrifice the orderly and
efficient administration of justice to accommodate an unrepresented plaintiff.”).
29
See Slawik v. State, 480 A.2d 636, 645 (Del. 1984) (“A rudiment of procedural due
process is the right to receive notice [through service of process]. . . .”).
30
Thomas v. Nationstar Mortg., Inc., 2015 WL 5766775, at *2 (Del. Ch. Sept. 18, 2015)
adopted, 2015 WL 5786135 (Del. Ch. Oct. 1, 2015) (“Court of Chancery Rule 12(b)(5)
requires dismissal of a complaint for improper service of process. It is fundamental that
the Court only may exercise personal jurisdiction over a defendant when service of process
is properly effected, regardless of whether or not actual notice is achieved. Personal
jurisdiction must be effected through proper service of process, and actual notice by a
defendant does not satisfy this constitutional requirement. When service is defective, it is
no excuse that the plaintiff has acted in good faith to perfect service. The plaintiff bears
the burden of demonstrating that service of process was effective.”) (internal quotation
marks and footnotes omitted).
31
See Pls./Counter-Defs.’ Opening Br. in Supp. of Their Mot. to Dismiss Countercls.
(D.I. 58) at 15 (“No summons instructions appear on the docket. No summonses have
been issued by the Court. No returns of service have been filed. Accordingly, Eksin has
failed to make these entities part of this action.”). It appears Eksin has operated on the
assumptions that several of the named counterclaim defendants are plaintiffs in the action
and that he need not serve them with process. Those assumptions are both flawed.
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To avoid dismissal, Eksin argues that he gave actual notice of his Counterclaim to
the counsel of Counter-Defendants’ respective institutions. But actual notice to
counsel is not enough,32 nor can Eksin ignore the corporate separateness of Counter-
Defendants and their institutions.33
While this Court affords Eksin leniency as a pro se litigant, it cannot override
the constitutional requirements of proper service of process and of personal
jurisdiction. For this reason alone, all claims against the Investor Defendants must
be dismissed.
B. Eksin’s Claims Fail on the Merits
Eksin brings six counts: (1) shareholder oppression against the Investor
Defendants, (2) unjust enrichment against the Investor Defendants, (3) breach of
fiduciary duty against the Investor Defendants, (4) breach of the implied covenant
of good faith and fair dealing against all Counter-Defendants, (5) wrongful
32
Nationstar Mortg., Inc., 2015 WL 5766775, at *2 (“[T]he Court only may exercise
personal jurisdiction over a defendant when service of process is properly effected,
regardless of whether or not actual notice is achieved.”)
33
See, e.g., Culverhouse v. Paulson & Co., 133 A.3d 195, 199 (Del. 2016) (“Delaware
courts take the corporate form and corporate formalities very seriously.”).
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termination against Lidya, and (6) injunctive relief against all Counter-Defendants.
I address each in turn.
1. Count 1—Shareholder Oppression
Eksin’s first count is for shareholder oppression. He alleges the “Investor
Defendants set on a quest to freeze Counterclaimant out of the Company without
any fair compensation.”34 But “[t]here is no standalone remedy for stockholder
oppression in Delaware.”35 As a standalone claim, it must be dismissed. To the
extent Count 1 overlaps with Eksin’s breach of fiduciary duty claim (Count 3),
I address it below.
34
Counterclaim ¶ 117.
35
Verdantus Advisors, LLC v. Parker Infrastructure P’rs, LLC, 2020 WL 5951368, at *5
(Del. Ch. Oct. 8, 2020); see also Nixon v. Blackwell, 626 A.2d 1366, 1380–81 (Del. 1993)
(“It would run counter to the spirit of the doctrine of independent legal significance, and
would be inappropriate judicial legislation for this Court to fashion a special judicially-
created rule for minority investors when the entity does not fall within those [close-
corporation] statutes, or when there are no negotiated special provisions in the certificate
of incorporation, by-laws, or stockholder agreements.” (citations omitted)).
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2. Count 2—Unjust Enrichment
In his unjust enrichment claim, Eksin alleges that, “[b]y freezing
Counterclaimant out of the Company and summarily demanding that he step down
without fair compensation, Investor Defendants have been enriched at
Counterclaimant’s expense, including by depriving Counterclaimant of the value of
his shares and other compensation . . . and diverting such value to themselves.”36
“Unjust enrichment is ‘the unjust retention of a benefit to the loss of another, or the
retention of money or property of another against the fundamental principles of
justice or equity and good conscience.’”37 As explained by our Supreme Court,
“[t]he elements of unjust enrichment are: ‘(1) an enrichment, (2) an
impoverishment, (3) a relation between the enrichment and the impoverishment,
(4) the absence of justification, and (5) the absence of a remedy provided by law.’”38
36
Counterclaim ¶ 121.
37
Nemec v. Shrader, 991 A.2d 1120, 1130 (Del. 2010) (quoting Fleer Corp. v. Topps
Chewing Gum, Inc., 539 A.2d 1060, 1062 (Del. 1988)).
38
Windsor I, LLC v. CWCapital Asset Mgmt. LLC, 238 A.3d 863, 875 (Del. 2020) (quoting
Nemec, 991 A.2d at 1130).
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Eksin does not even attempt to plead the basics of an unjust enrichment claim.
He fails to allege how the Counter-Defendants were enriched or how he was
impoverished. He does not allege that the Counter-Defendants received money or
property that belonged to him. His termination did not “depriv[e] [him] of the value
of his shares”;39 indeed, Eksin still owns his shares. Nor is his loss of salary an
impoverishment that relates to the Investor Defendants’ enrichment.40 Count 2
must be dismissed.
3. Count 3—Breach of Fiduciary Duty
Eksin next alleges breach of fiduciary duty, claiming that “Investor
Defendants . . . wrongfully ousted Counterclaimant from the Company” and
“retailat[ed] against Counterclaimant.”41 The breach of fiduciary claim fails.
39
Counterclaim ¶ 121.
40
To the extent Eksin is attempting to plead that the Investor Defendants were indirectly
enriched by their stock ownership in a company that no longer was obliged to pay Eksin’s
salary, that claim is derivative. Such a derivative claim cannot succeed here because
demand futility has not been pled under Chancery Rule 23.1. Moreover, derivative claims
cannot be asserted by pro se litigants. E.g., Kelly v. Fuqi Int’l, Inc., 2013 WL 135666,
at *7 (Del. Ch. Jan. 2, 2013) (“A derivative action may not be brought pro se . . . .”).
41
Counterclaim ¶ 126.
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First, Eksin has not established that the Investor Defendants owed him
fiduciary duties. They are not directors,42 nor are they majority stockholders.43
Minority stockholders do not owe fiduciary duties “[a]bsent special
circumstances,”44 such as when their control over the business affairs of the
corporation is such that they may be deemed to be controlling stockholders
notwithstanding their minority stake.45 Eksin alleges that, together, the Investor
Defendants control a majority of the Board,46 but his pleading fails to reveal any
more than a “mere concurrence of self-interest.”47 The facts as pled do not allow a
42
The Investor Defendants are entities, and a director of a Delaware corporation must
“be a natural person.” 8 Del. C. § 141(b).
43
Counterclaim ¶ 16.
44
In re Dell Techs. Inc. Class V S’holders Litig., 2020 WL 3096748, at *18 (Del. Ch.
June 11, 2020).
45
See Superior Vision Servs., Inc. v. ReliaStar Life Ins. Co., 2006 WL 2521426, at *4
(Del. Ch. Aug. 25, 2006) (“A shareholder owes fiduciary duties in two instances: (1) when
it is a majority shareholder, owning more than 50 percent of the shares, or (2) when it
exercises control over the business affairs of the corporation.” (internal quotation marks
omitted)).
46
Resp. to Mot. to Dismiss (“MTD Resp.”) (D.I. 61) at 22.
47
In re Crimson Expl. Inc. S’holder Litig., 2014 WL 5449419, at *15 (Del. Ch. Oct. 24,
2014).
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reasonable inference that the Investor Defendants are “connected in some legally
significant way—e.g., by contract, common ownership, agreement, or other
arrangement.”48
Second, even assuming the Investor Defendants owed fiduciary duties, Eksin
does not allege a breach of those duties. It was the Board, not the Investor
Defendants as stockholders, who terminated Eksin. Moreover, Eksin does not claim
that he was harmed as a stockholder; he alleges, instead, that he suffered harm as
an employee. Such a claim is not redressable through a breach of fiduciary duty
claim.49 If anything, the termination of Eksin as CEO may give rise to a wrongful
termination claim, as pled in Count 5.
4. Counts 4 and 5—Breach of the Implied Covenant of Good Faith and
Fair Dealing and Wrongful Termination
Eksin alleges that Counter-Defendants breached the implied covenant of
good faith and fair dealing by “freezing Counterclaimant out of the Company . . .
48
Dubroff v. Wren Hldgs., LLC, 2009 WL 1478697, at *3 (Del. Ch. May 22, 2009).
49
See Riblet Prods. Corp. v. Nagy, 683 A.2d 37, 37 (Del. 1996) (holding that fiduciary
duties “are not implicated when the issue involves the rights of the minority stockholder
qua employee”).
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without fair compensation, cooperation, or assistance” and “[b]y ousting
Counterclaimant out of the Company that he built and had full expectations to grow
and manage.”50 He also brings a claim for wrongful termination against Lidya,
alleging that his termination “was in bad faith and was in retaliation for voicing his
concerns about Investor Defendants’ wrongful actions.”51
“The implied covenant, inherent in all agreements, ensures that the parties
deal honestly and fairly with each other when addressing gaps in their agreement.”52
Our Supreme Court has admonished that invoking the implied covenant is a
“cautious enterprise,”53 and has emphasized that the implied covenant is “a limited
and extraordinary legal remedy.”54 The purpose of the implied covenant in
50
Counterclaim ¶¶ 130–31.
51
Counterclaim ¶ 135.
52
Glaxo Gp. Ltd. v. DRIT LP, 248 A.3d 911, 919 (Del. 2021).
53
Cincinnati SMSA LP v. Cincinnati Bell Cellular Sys. Co., 708 A.2d 989, 992
(Del. 1998).
54
Oxbow Carbon & Mins. Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d 482, 507
(Del. 2019) (quoting Nemec, 991 A.2d at 1128).
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Delaware is to serve as a contractual gap-filler.55 But it should not be deployed
when “[t]here [is] no gap to fill in the Agreement.”56
To the extent Eksin attempts to bring an implied covenant claim based on
some unspecified contract, it fails because he does not identify a contractual gap for
the covenant to fill.57 And Eksin cannot bring a breach of the implied covenant
claim regarding his director status under the Amended and Restated Voting
Agreement because that issue was already adjudicated by the emergency
arbitrator.58 Count 4, therefore, must be dismissed.
While the implied covenant claim fails as pled in Count 4, there may be a
place for the implied covenant within Eksin's wrongful termination claim as pled in
55
See Glaxo Gp. Ltd., 248 A.3d at 919 (“[T]he court has in its toolbox the implied
covenant of good faith and fair dealing to fill in the spaces between the written words.”).
56
Id. at 920.
57
See, e.g., Reardon v. CANarchy Holdco Corp., 2021 WL 2287468, at *3 (Del. Super. Ct.
June 4, 2021) (“Plaintiff’s implied covenant claim falters for several reasons. First,
Plaintiff fails to plead any contractual gap . . . that the implied covenant would operate
to fill.”).
58
D.I. 66.
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Count 5. Eksin admits—as he must—that he was an at-will employee.59 Lidya’s
bylaws provide that officers serve “at the pleasure of the Board of Directors” and
“may be removed by the Board of Directors with or without cause.”60 Delaware
generally does not recognize the claim of wrongful termination when the
employment relationship is at-will.61
As with most general rules, there are narrow exceptions to the general rule
that an at-will employee may not sue for wrongful termination.62 Relevant here, in
Pressman, the Court held that “the [implied] [c]ovenant permits a cause of action
against an employer for the deceitful acts of its agent in manufacturing materially
false grounds to cause an employee’s dismissal.”63 As I understand the pled facts,
59
MTD Resp. at 6, 44, 49.
60
Compl. Ex. E (Lidya Bylaws), Art. III.
61
See Torres v. Sussex Cty. Council, 2014 WL 7149179, at *2 (Del. Super. Ct. Dec. 8,
2014); see also E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 437
(Del. 1996) (holding that the at-will doctrine “generally permits the dismissal of
employees without cause and regardless of motive”).
62
See Pressman, 679 A.2d at 441–42 (setting forth several recognized exceptions).
63
Id. at 437.
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Eksin alleges that the Board and a Lidya employee fabricated a harassment claim
so that the Board could fire him “for cause” after he criticized the Board’s
commitment to Lidya.64 That scenario may implicate Pressman and its progeny.65
64
See Counterclaim ¶ 135 (“Counterclaimant’s termination was in bad faith and was in
retaliation for voicing his concerns about Investor Defendants’ wrongful actions.”);
Counterclaim ¶ 82 (“It is evident that Investor Defendants attempted to use this contrived
harassment claim to push their own agenda through whatever means possible and gain
control of the Company even asking the Company’s counsel in the beginning of the
investigation whether they can fire Eksin.”); Counterclaim ¶¶ 76–77 (“Upon information
and belief, this employee [who brought the harassment claim] collaborated with Investor
Defendants and Directors of Lidya appointed by the Investor Defendants to create the
means for Investor Defendants to gain control over the Company. In fact, Accion and
other Investor Defendants used this disagreement to push Eksin out of the
Company . . . .”); Counterclaim ¶¶ 72–73 (“Investor Defendants’ improper ‘freeze-out’
actions have been undertaken as part of the improper investigation, done contrary to the
rights of Eksin, in dealing with the situation that arose involving claimed harassment by a
former employee connected to one of the Investor Defendants and one of [sic] board
directors of Lidya—all of which were found to be unfounded as to Eksin. These actions
were untaken after Eksin voiced his concerns about the Investor Defendants’ questionable
actions during the failed Series B fundraising process.”) (emphasis added);
Counterclaim ¶ 80 (“Instead of engaging with Eksin and performing a complete and
thorough investigation, Counter-Defendants engaged in secret negotiations without
Eksin’s involvement or input, all to his severe detriment, as part of what appears to have
been a larger plan to cut Eksin out of the Company.”). In my view, Eksin has done enough
to satisfy notice pleading under Rule 8 with respect to the factual bases of his wrongful
termination claim, especially considering his pro se status. See, e.g., Johnson v. State,
442 A.2d 1362, 1364 (Del. 1982) (“[W]e adopt the view that a pro se pleading is judged
by a less stringent standard than a pleading or document filed by an attorney.”) (internal
quotation marks omitted); Thornton v. Bernard Techs., Inc., 2009 WL 426179, at *1
(Del. Ch. Feb. 20, 2009) (“Because this is a pro se pleading, it may be judged by a ‘less
stringent standard’ than one filed by an attorney. However, proceeding pro se will not
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Neither party referred to Pressman in their briefs or discussed the role that
the implied covenant could play in Eksin’s wrongful termination claim against
Lidya. For reasons explained above, the Court requires supplemental submissions
on whether, and to what extent, Pressman and its progeny might apply to this case.
Of course, the Investor Defendants were not themselves Eksin’s employers,
nor were they properly served with process, as explained above. Therefore, Count 4
relieve the Plaintiffs of their responsibility to present and support cogent arguments
warranting the relief sought.”); Kelly v. Fuqi Int’l, Inc., 2013 WL 135666, at *6 (Del. Ch.
Jan. 2, 2013) (explaining in detail how this court evaluates pro se pleadings). Whether
vel non the claim is legally viable remains to be seen.
65
Pressman, 679 A.2d at 443–44 (holding that the implied covenant applies to at-will
employment where “acts of the employer manifesting bad faith or unfair dealing [are]
achieved by deceit or misrepresentation in falsifying or manipulating a record to create
fictitious grounds to terminate employment”); see also Sheehan v. AssuredPartners, Inc.,
2020 WL 2838575, at *11 (Del. Ch. May 29, 2020) (same); Smith v. Scott, 2021
WL 1592463, at *7 (Del. Ch. Apr. 23, 2021) (same); SerVaas v. Ford Smart Mobility LLC,
2021 WL 3779559, at *9–10 (Del. Ch. Aug. 25, 2021) (citing Pressman, Sheehan and
Smith in denying a motion to dismiss where the complaint presents factual allegations that
the “cause” offered for termination was pretextual).
Lidya Holdings Inc., et al. v. Ercin Eksin
C.A. No. 2021-0110-JRS
January 31, 2022
Page 21
must be dismissed against the Investor Defendants both as a matter of process and
on the merits.66
5. Count 6—Injunctive Relief
Finally, Eksin’s claim for injunctive relief must be dismissed because it is a
remedy dressed up as a cause of action. As this court has explained, “[i]njunctions
are a form or relief, not a cause of action.”67 Eksin has not pled any future act for
the Court to enjoin, much less a cause of action to which his prayer for injunctive
relief would attach. Count 6 fails.
III. CONCLUSION
For the foregoing reasons, the motion to dismiss all counts asserted against
the Investor Defendants is GRANTED. The motion to dismiss Counts 1, 2, 3, 4
and 6 against Lidya is also GRANTED.
66
Count 5 is brought only against Lidya. See Counterclaim at 32. To the extent Eksin
has attempted in his briefing to sweep the Investor Defendants into Count 5, that effort
fails for the reasons stated above.
67
Quadrant Structured Prods. Co. v. Vertin, 102 A.3d 155, 203 (Del. Ch. 2014); see id.(dismissing two counts “because they seek remedies rather than assert claims”).
Lidya Holdings Inc., et al. v. Ercin Eksin
C.A. No. 2021-0110-JRS
January 31, 2022
Page 22
The Court requests supplemental briefing regarding the applicability of the
implied covenant of good faith and fair dealing to Eksin’s claim for wrongful
termination against Lidya, as alleged in Count 5. Lidya shall file an opening letter
memorandum on this issue, limited to 2500 words, within thirty (30) days of the
filing of this Letter Opinion. Eksin shall file an answering letter memorandum,
limited to 2500 words, within thirty (30) days of the filing of Lidya’s opening letter
memorandum. Lidya shall then file a reply letter memorandum, limited to 1500
words, within fifteen (15) days thereafter.
IT IS SO ORDERED.
Very truly yours,
/s/ Joseph R. Slights III