Weinstein v. Luxeyard, Inc. ( 2022 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
BURTON WEINSTEIN, CAROLE )
NIMEROFF, CEDARVIEW )
OPPORTUNITIES MASTER FUND, ) C.A. No. N18C-04-043 MAA
LP, JEFFREY SCHNAPER, NIGEL )
GREGG, and WILLIAM SHEPPARD )
et al., )
)
Plaintiffs, )
)
v. )
)
LUXEYARD, INC., a Delaware )
corporation, )
)
Defendant. )
Submitted: November 9, 2021
Decided: January 14, 2022
MEMORANDUM OPINION
Julia B. Klein, Esquire (Argued), of KLEIN, LLC, Wilmington, Delaware, Attorney for
Plaintiffs.
Ann M. Kashishian, Esquire, of KASHISHIAN LAW, LLC, Wilmington, Delaware, and
Jack J. Nichols, Esquire (Argued), of JACK J. NICHOLS, P.C., Houston, Texas,
Attorneys for Defendant.
Adams, J.
Defendant issued convertible debentures in varying amounts to Plaintiffs in
April 2012. Plaintiffs allege that the convertible debentures matured on January 31,
2014, and that the principal balance outstanding under each convertible debenture,
plus interest, became due and payable on that date. Defendant, however, has failed
to pay any amount to Plaintiffs.
Plaintiffs’ remaining claim is a single cause of action for breach of contract.
The Court holds that Plaintiffs’ claim fails on statute of limitations grounds.
Namely, Plaintiffs’ claim falls under the three-year statute of limitations for breaches
of contract, rather than the six-year statute of limitations for promissory notes, and
is therefore untimely. Consequently, Plaintiffs are precluded from obtaining the
relief they seek in this action.
I. Factual Background
A. Parties and Relevant Non-Parties
Plaintiffs Burton Weinstein, Carole Nimeroff, Jeffrey Schnapper, Nigel
Gregg, William Sheppard, and Cedarview Opportunities Master Fund, LP
(collectively, “Plaintiffs”) brought this action to recoup investments they made in
Defendant Luxeyard, Inc. (“Luxeyard”) during one of Luxeyard’s initial rounds of
financing.
2
Non-party Amir Mireskandari (“Mireskandari”) is Luxeyard’s co-founder,
board member and interim CEO. Non-party Mark Lev (“Lev”) is Plaintiffs’
representative, who facilitated Plaintiffs’ investments in Luxeyard.
B. Background
In April 2012, Luxeyard, a luxury goods retailer that offers indoor furnishings,
issued convertible debentures (“CDs”) in varying amounts to Plaintiffs.1 The terms
of the CDs are identical and provided for conversion to common stock in two ways:
voluntary conversion and mandatory conversion.2 Each CD that Luxeyard issued to
Plaintiffs referenced a corresponding Debenture Purchase Agreement (DPA).3 The
1
See JXs 13, 16, 18, 21, 24, 27; Trial Tr. (Nov. 24, 2020) at 29:18-21. The
specific principal amount of CDs were as follows: Cedarview Opportunities Master
Fund, LP ($100,000.00); Burton Weinstein ($25,000.00); Carole Nimeroff
($25,000.00); William Sheppard ($50,000.00); Jeffrey Schnapper ($25,000.00); and
Nigel Gregg ($25,000.00).
2
See, e.g., JX 13 at Art. 2(a) and (f). Pursuant to Article 2(a), voluntary
conversion occurs at the option of the holder. Pursuant to Article 2(f), mandatory
conversion occurs if each of the following conditions are met: (a) Luxeyard shares
have to be registered or available for resale under Rule 144 (or similar rule); (b) the
closing bid price for Luxeyard’s common stock remains at or above $1.00 for ten
consecutive trading days; and (c) the daily volume of Luxeyard’s common stock
during such consecutive ten-day period is at least 50,000 shares per day.
3
See JXs 14, 19, 22, 25, 28. In the Joint Pre-Trial Stipulation (“PTS”) and
during trial, Plaintiffs objected to the inclusion of the DPA as an exhibit on the
grounds that “Plaintiffs ha[d] never seen this document and d[id] not know what it
[wa]s or contains.” The Court overrules this objection. Plaintiffs Weinstein,
Cedarview Opportunities Master Fund, Schnapper, and Gregg each signed the DPA
investor signature page. While Luxeyard did not provide a signature page for
Plaintiffs Sheppard and Nimeroff for the DPA, the DPA is referenced in each of the
CDs signed by Plaintiffs. Thus, all Plaintiffs were either on actual or constructive
notice of the DPA.
3
DPA defined terms within the CDs and provided for additional terms, such as
representations and warranties, closing conditions, and other provisions.
The CDs set the maturity date for the investments for January 31, 2014,
provided that the CDs had not converted into shares.4 Luxeyard admitted that it
defaulted under the CDs by failing to repay the amount owed.5
C. Procedural Posture
Plaintiffs commenced this litigation against Luxeyard and Mireskandari on
April 5, 2018.6 On June 25, 2018, Luxeyard answered the complaint and admitted
to the breach of contract claim against it.7 On August 23, 2018, the Court dismissed
Mireskandari from the case for failure to state a claim and lack of personal
jurisdiction.8 After Mireskandari’s dismissal, two sets of Delaware counsel
withdrew their representation of Luxeyard.
On January 30, 2020, after Luxeyard’s current Delaware counsel entered her
appearance, Luxeyard requested leave to amend its answer to the complaint.9 The
4
See, e.g., JX 13.
5
PTS at 3. Although Luxeyard claims that the CDs converted into equity, a
fact which Plaintiffs dispute, the resolution of this issue is not pertinent to this
decision because Plaintiffs failed to file their action within the prescribed three-year
statute of limitations, as described herein.
6
See Dkt. 1.
7
See Dkt. 5. In its Answer, Luxeyard also included an affirmative defense that
“Plaintiffs’ claims are barred by the applicable statute of limitations.”
8
See Dkt. 14.
9
See Dkt. 34.
4
Court denied Luxeyard’s motion to amend its answer on March 23, 2020.10 A two-
day bench trial was held on November 24, 2020 and November 30, 2020. At trial,
the parties introduced forty-one exhibits. The parties completed post-trial briefing
on April 16, 2021. On May 14, 2021, during post-trial argument, the Court ordered
the parties to confer regarding resolving the action without Court action.11 On June
14, 2021, the parties informed the Court that they were unable to reach a resolution.12
Upon recognizing that the CDs and DPA contained conflicting choice of law
provisions, the Court ordered the parties to submit supplemental post-trial briefing
addressing the conflict.13 The parties completed supplemental post-trial briefing on
November 9, 2021.
D. Parties’ Contentions
Plaintiffs’ sole remaining claim for relief is for breach of contract. Plaintiffs
seek all principal amounts due under the CDs, as well as accrued pre-judgment
interest, post-judgment interest, and all attorney’s fees and costs in bringing the
litigation.
Luxeyard contends that Plaintiffs are precluded from obtaining such relief
because they failed to bring their claims within the applicable statute of limitations.
10
See Dkt. 45.
11
See Dkt. 88.
12
See Dkt. 90.
13
See Dkt. 91.
5
Notwithstanding the statute of limitations, Luxeyard argues that Plaintiffs’
investments converted into shares of Luxeyard automatically by operation of the
mandatory conversion provisions in the CDs.14
II. Legal Analysis
The statute of limitations is case-dispositive; therefore, the Court will only
address this issue and need not reach any of the remaining issues in this case.
A. Delaware’s Statute of Limitations Applies
The parties agree in supplemental post-trial briefing that Delaware is the
proper forum for this dispute. Consistent with the principle that the procedural law
of the forum state controls, the general rule is that the forum state’s statute of
limitations applies.15 Therefore, Delaware law governs the applicable statute of
limitations.
14
Luxeyard also claims that the CDs were one of many financing rounds with
express preference rights on the company and, therefore, Luxeyard cannot pay
Plaintiffs without making a pro rata payment to all debenture holders. Luxeyard
also argues that because Plaintiffs fundamentally assert a securities law claim, it
should be brought in Federal Court. Because the Court finds that Plaintiffs’ claim is
ultimately time barred, the Court does not address Luxeyard’s alternative averments.
15
Pivotal Payments Direct Corp. v. Planet Payment, Inc., 2015 WL 11120934,
at *3 (Del. Super. Dec. 29, 2015) (quoting Chaplake Holdings, Ltd. v. Chrysler
Corp., 766 A.2d 1, 5 (Del. 2001) (“As a general rule, the law of the forum governs
procedural matters”); Am. Energy Tech., Inc. v. Colley & McCoy Co., 1999 WL
301648, at *2 (D. Del. Apr. 15, 1999) (“Statutes of limitations are generally
considered to be procedural rather than substantive law”)).
6
The CDs and the DPA contain conflicting choice of law provisions. The CDs
contain a Delaware choice of law provision, while the DPA states that New York
law governs. Under Delaware law, however, choice of law provisions do not apply
to statutes of limitations unless expressly included.16 Where no provision expressly
includes statutes of limitations, the law of the forum applies as it is a procedural
matter.17 Here, neither choice of law provision expressly includes a statute of
limitations. Thus, neither is instructive and the law of the forum state, Delaware,
applies.
The exception to the general principle that the procedural law of the forum
state governs is inapplicable here. The exception occurs when “the procedural law
of the foreign state is so inseparably interwoven with substantive rights as to render
a modification of the foregoing rule necessary, lest a party be thereby deprived of
his legal rights.”18 Plaintiffs, however, have conceded that Delaware substantive law
applies.19 From the inception of this case to post-trial, Plaintiffs cited and relied
upon Delaware substantive law.20 Thus, there is no “foreign state” at play.
16
Pivotal Payments, 2015 WL 11120934, at *3 (citing Am. Energy Tech., 1999
WL 301648, at *2-3).
17
Id.18
MPEG LA, L.L.C. v. Dell Global B.V., 2013 WL 812489, at *3 (Del. Ch. Mar.
6, 2013) (quoting Monsanto Co. v. Aetna Cas. & Sur. Co., 1994 WL 317557, at *4
(Del. Super. Apr. 15, 1994)).
19
See Pls.’ Post-Trial Op. Brief at 5 (“[t]he Debentures are valid and existing
contracts governed by Delaware law”).
20
See generally Complaint; see also Pls.’ Post-Trial Op. Brief.
7
Plaintiffs’ Post-Trial Supplemental Brief only suggests that the Court may apply
New York law.
Even if New York substantive law applied, there is no evidence suggesting
that New York law is so inseparably interwoven with Plaintiffs’ breach of contract
claim thereby necessitating a deviation from the general rule. New York’s six-year
statute of limitations for breaches of contract and promissory notes is a general
procedural limitation. Plaintiffs have not put forth any evidence to suggest that New
York’s statute of limitations has a special connection to the state’s substantive law,
or that the two are inseparably interwoven. This finding is consistent with this
Court’s previous holdings that statutes of limitations are not inseparably interwoven
with substantive rights, even where it consequently bars the claim and deprives a
plaintiff of redress.21
The Court therefore finds that Delaware’s statute of limitations applies.
B. Plaintiffs’ Claim is Barred by Delaware’s Statute of Limitations
Statutes of limitations, by their very nature, are harsh.22 “When a plaintiff
fails to file a timely complaint, a jurisdictional defect is created that cannot be
21
See Pivotal Payments, 2015 WL 11120934, at *3 (“The Court finds that the
parties have not demonstrated that the laws of New York or Canada are so
inseparably interwoven with the substantive rights as to cause a deviation from the
general rule. The Court will apply the statute of limitations of the forum”); see also
TrustCo Bank v. Mathews, 2015 WL 295373, at *5 (Del. Ch. Jan. 22, 2015).
22
Scharf v. Edgcomb Corp., 864 A.2d 909, 920 (Del. 2004) (citing Mary A.O.
v. John J.O., 471 A.2d 993, 995 n.4 (Del. 1983)).
8
excused.”23 Whether Plaintiffs’ action is barred by the statute of limitations depends
on whether the CDs are promissory notes. Plaintiffs contend that the CDs are
promissory notes and thus, the six-year statute of limitations for promissory notes
under Section 8109 applies.24 Luxeyard argues that because the CDs lack the
requisite characteristics of promissory notes, the general three-year statute of
limitations under Section 8106 for breaches of contract applies.25
The Court finds that Plaintiffs’ investments are subject to the three-year
general statute of limitations because the CDs are not promissory notes.
Accordingly, the Court finds by a preponderance of the evidence that Plaintiffs’
claims were not timely filed within the three-year period, and no tolling exception
applies to extend the statute of limitations period.
23
Id. (citing Mary A.O. v. John J O., 471 A.2d at 995; Riggs v. Riggs, 539 A.2d
163 (Del. 1988)).
24
“When a cause of action arises from a promissory note, bill of exchange, or
an acknowledgment under the hand of the party of a subsisting demand, the action
may be commenced at any time within 6 years from the accruing of such cause of
action.” 10 Del. C. § 8109.
25
“No action to recover damages for trespass, no action to regain possession of
personal chattels, no action to recover damages for the detention of personal chattels,
no action to recover a debt not evidenced by a record or by an instrument under seal,
no action based on a detailed statement of the mutual demands in the nature of debit
and credit between parties arising out of contractual or fiduciary relations, no action
based on a promise, no action based on a statute, and no action to recover damages
caused by an injury unaccompanied with force or resulting indirectly from the act of
the defendant shall be brought after the expiration of 3 years from the accruing of
the cause of such action; subject, however, to the provisions of §§ 8108-8110, 8119
and 8127 of this title.” 10 Del. C. § 8106(a).
9
1. The Convertible Debentures are Neither Promissory Notes nor
Negotiable Instruments
Throughout the course of this action, Plaintiffs have confusingly referred to
the CDs at issue as “convertible debentures,” “loans,” and “promissory notes.”26 No
matter the classification, the evidence presented at trial is that Plaintiffs did not
invest in promissory notes. Therefore, Plaintiffs’ breach of contract claim arising
out of their CDs is subject to a three-year statute of limitations.
A promissory note is a form of negotiable instrument defined as “a written
promise by one person to pay another person, absolutely and unconditionally, a sum
certain at a specified time.”27 This definition is fundamentally identical to the
definition of a “negotiable instrument” under the Delaware Uniform Commercial
Code (“DUCC”).28 The DUCC defines a “negotiable instrument” as:
An unconditional promise or order to pay a fixed amount of money,
with or without interest or other charges described in the promise or
order, if it:
(1) Is payable to bearer or to order at the time it is issued or first
comes into possession of a holder;
26
See, e.g., Complaint (referring to CDs as “promissory notes” and “notes,” but
attaching documents titled “Convertible Debenture”); Trial Tr. (Nov. 24, 2020) at
34:18 (referring to the CDs as “my client’s debentures” and recognizing that the CDs
contain conversion features), 110:15-23-111:1-5 (discussing notice of default
regarding “promissory notes”), 28:4-7 (“I think we agreed earlier that this lawsuit
here is about certain 10 percent convertible debentures that were issued to my clients,
but they were not repaid; correct?”).
27
Saunders v. Stella, 1989 WL 89518, at *2 (Del. Super. June 29, 1989). See
also Fineberg v. Credit Intern. Bancshares, Ltd., 857 F. Supp. 338, 351 (D. Del.
1994).
28
See 6 Del. C. § 3-104(a).
10
(2) Is payable on demand or at a definite time; and
(3) Does not state any other undertaking or instruction by the
person promising or ordering payment to do any act in
addition to the payment of money, but the promise or order
may contain (i) an undertaking or power to give, maintain, or
protect collateral to secure payment, (ii) an authorization or
power to the holder to confess judgment or realize on or
dispose of collateral, or (iii) a waiver of the benefit of any law
intended for the advantage or protection of an obligor.29
Thus, to be negotiable, an instrument must: (1) be signed and in writing;30 (2)
contain an unconditional promise to pay a fixed amount in money; (3) be payable to
bearer or order on demand or at a definite time; and (4) contain no other undertaking
or instruction to do any act in addition to the payment of money.31 Money is defined
as “a medium of exchange currently authorized or adopted by a domestic or foreign
government.”32
This Court has previously recognized, citing Professors White and Summers’
treatise on commercial law, that a negotiable instrument “is a peculiar animal and
that many animals calling for the payment of money and others loosely called
29
Id.
30
See 6 Del. C. § 3-104 cmt. 1 (“the term “negotiable instrument” is limited to
a signed writing that orders or promises payment of money”).
31
6 Del. C. § 3-104(a)(1-3); see also 6 Del. C. § 3-104 cmt. 1.
32
6 Del. C. § 1-201(24).
11
‘commercial paper’ are not negotiable instruments and not subject to the rules of
Article 3.”33
Pursuant to the Uniform Commercial Code, which Delaware has adopted,
negotiability is determined at the time of issuance.34 If a purported note is not
negotiable, it should be construed as a contract.35
In determining whether the CDs are negotiable instruments, and thus
promissory notes, it is essential that the promise to pay a fixed amount of money be
unconditional.36 Under the DUCC, a promise is unconditional unless it states: (1)
an express condition to payment; (2) that the promise is subject to or governed by
another writing; or (3) that rights or obligations with respect to the promise are stated
in another writing.37 Therefore, to be unconditional, the promise to pay cannot be
subject to another agreement or the occurrence or nonoccurrence of another event.
Here, the CDs are conditional because they contain an express condition for
payment. The CDs contain a mandatory conversion provision stating that:
If at any time prior to the Maturity Date, (a) the shares of Common
Stock underlying this Debenture are registered in a registration
statement under the Securities Act or the shares of Common Stock
33
Jacob v. Harrison, 2002 WL 31840890, at *4 (Del. Super. Dec. 16, 2002)
(quoting 2 JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM
COMMERCIAL CODE § 16-1, at 70 (4th ed. 1995)).
34
Am. Jur. 2d, Bills and Notes § 36; see also 6 Del. C. § 3-104(a)(1).
35
Gem Global Yield Fund, Ltd. V. Surgilight, Inc., 2006 WL 2389345, at *6
(S.D.N.Y. Aug. 17, 2006).
36
6 Del. C. § 3-104 cmt. 1.
37
6 Del. C. § 3-106(a).
12
underlying this Debenture are available for resale pursuant to Rule 144
or similar rule, without limitation, (b) for a period of ten consecutive
trading days the closing bid price for the Company’s Common Stock
remains at or above $1.00; and (c) the daily volume of the Common
Stock during such consecutive ten day period is at least 50,000 shares
per day, then all outstanding principal and accrued but unpaid interest
under this Debenture shall automatically convert into shares of
Common Stock…38
In short, if the events contemplated in the mandatory conversion provision
occur, then payment is excused and any amount owed is automatically converted
into stock. The promise to pay money is therefore conditioned upon the
nonoccurrence of the events in the mandatory conversion provision of the CDs.
As aforementioned, negotiability is determined at the time of issuance.
Consequently, the negotiability of the CDs remains the same regardless of whether
the mandatory conversion actually occurred. The mere presence of the condition
renders the CDs not negotiable. Thus, because the CDs are conditional, the CDs are
not negotiable nor promissory notes.
2. Plaintiffs Did Not Timely File this Lawsuit
The statute of limitations for a breach of contract is three years.39 A cause of
action begins to accrue “at the time the contract is broken, not at the time when the
38
See, e.g., JX 13 at Art. 2(f).
39
Intermec IP Corp. v. TransCore, LP, 2021 WL 3620435, at *21 (Del. Super.
Aug. 16, 2021) (citing Wedderien v. Collins, 2007 WL 3262148, at *4 (Del. Nov. 6,
2007); 10 Del. C. § 8106).
13
actual damage results or is ascertained.”40 Although draconian in nature, a court
cannot extend the limitations period out of notions of fair play.41 When a claim falls
outside the statute of limitations period, the plaintiff bears the burden of proving that
one of the tolling doctrines adopted by Delaware courts applies.42
The CDs had a maturity date of January 31, 2014. As Plaintiffs alleged in
their complaint and as Lev and Mireskandari testified at trial, on February 25, 2014,
Lev reached out to Mireskandari regarding the status of their investments and
indicated legal action would be forthcoming.43 Therefore, at the latest, Plaintiffs’
cause of action began to accrue on February 25, 2014. Pursuant to Section 8106,
Plaintiffs were required to file their action by February 25, 2017. Because Plaintiffs
did not file their action until April 5, 2018, Plaintiffs’ action is barred by the statute
of limitations unless they can demonstrate a tolling doctrine applies.
Under Delaware law, there are circumstances in which the running of the
statute of limitations can be tolled. “These exceptions include: 1) fraudulent
concealment; 2) inherently unknowable injury; and 3) equitable tolling.” 44 “Each
40
Worrel v. Farmers Bank of Del., 430 A.2d 469, 472 (Del. 1981) (internal
quotations omitted).
41
Intermec IP Corp., 2021 WL 3620435, at *21 (citing Trustwave Holdings,
Inc. v. Beazley Ins. Co., Inc., 2019 WL 4785866, at *4 (Del. Super. Sept. 30, 2019).
42
Winner Acceptance Corp. v. Return on Capital Corp., 2008 WL 5352063, at
*14 (Del. Ch. Dec. 23, 2008).
43
Complaint ¶ 22; Trial Tr. (Nov. 24, 2020) at 102-105; Trial Tr. (Nov. 30,
2020) at 82:7-23-83:1-12.
44
Smith v. Mattia, 2010 WL 412030, at *4 (Del. Ch. Feb. 1, 2010).
14
exception rests on the premise that the statute of limitations should be tolled where
the facts underlying a claim were so hidden that they could not have been discovered
by a reasonable plaintiff. Indeed, if one of these exceptions applies, the statute will
only begin to run upon the discovery of facts constituting the basis of the cause of
action or the existence of facts sufficient to put a person of ordinary intelligence and
prudence on inquiry which if pursued, would lead to the discovery [of the injury].”45
Here, none of these exceptions apply. Plaintiffs have not met their burden to
demonstrate that the statute of limitations period should be tolled, and their claim is
untimely.
Plaintiffs argue in their post-trial brief that the statute of limitations “was
tolled by Mireskandari’s repeated and unequivocal promises to pay Plaintiffs the
amounts due under the Debentures.”46 This statement, with no support from the trial
or evidentiary record in the case, cannot clear the hurdle of establishing tolling of
the statute of limitations under Delaware law.
The only possible doctrine applicable to toll the statute of limitations in this
action is that of fraudulent concealment. “The fraudulent concealment doctrine
presents an exception to the usual rule that ignorance of the facts does
45
Id. (internal quotations and citations omitted).
46
Pls.’ Post-Trial Op. Brief at 18-19.
15
not toll the statute of limitations.”47 “Fraudulent concealment requires an
affirmative act of concealment or ‘actual artifice’ by a defendant that prevents a
plaintiff from gaining knowledge of the facts.”48 “Defendant’s promise to make
repairs or remedy the alleged breach is insufficient to toll the statute of limitations.”49
Here, no fraudulent concealment exists. The trial record contains no evidence
that either Luxeyard or Mireskandari prevented Plaintiffs from gaining knowledge
about the maturity date of the CDs and Luxeyard’s failure to comply with the terms
of the CDs. To the contrary, Lev and Mireskandari’s testimony indicates that they
were in contact about the CDs and Plaintiffs’ attempt to recoup their investments.
The CDs, by their own terms, also indicate that January 31, 2014 was the maturity
date and the time any funds would be owed, if applicable. Plaintiffs did not take any
discovery in this action and failed to present any evidence at trial or otherwise to
suggest fraudulent concealment.50
Even though Plaintiffs failed to present any evidence at trial regarding the
remaining tolling doctrines, the doctrines likewise do not apply for similar reasons.
The inherently unknowable injuries doctrine fails as it applies only when “no
47
Burrell v. Astrazeneca LP, 2010 WL 3706584, at *7 (Del. Super. Sept. 20,
2010) (internal quotation and citation omitted).
48
Id. (quoting Weiss v. Swanson, 948 A.2d 433, 451-52 (Del. Ch. 2008)).
49
Techton Am., Inc. v. GP Chemicals, Inc., 2004 WL 2419129, at *2 (Del.
Super. Oct. 25, 2004).
50
Pls.’ Post-Trial Op. Brief at 18-19.
16
observable or objective factors [] put a party on notice of an injury” and when
plaintiffs can “show that they were blamelessly ignorant” of the injury.51 In essence,
“the running of the statute of limitations is tolled while the discovery of the existence
of a cause of action is a practical impossibility.”52 Here, this is simply not the case.
From the onset of the litigation, Plaintiffs were aware of the maturity date of the
CDs.
Likewise, the doctrine of equitable tolling does not apply. Equitable tolling
applies “for claims of wrongful self-dealing, even in the absence of actual fraudulent
concealment, where a plaintiff reasonably relies on the competence and good faith
of a fiduciary.”53 Although the Court can infer from the record that Mireskandari is
a fiduciary, there is simply no evidence to suggest that Mireskandari engaged in self-
dealing. Based on the evidence at trial, Plaintiffs have failed to establish that a
tolling doctrine applies. Thus, Plaintiffs’ claims are barred by the statute of
limitations.
51
In re Dean Witter P’ship Litig., 1998 WL 442456, at *5 (Del. Ch. July 17,
1998), aff’d, 725 A.2d 441 (Del. 1999).
52
Id. (quoting Ruger v. Funk, 1996 WL 110072 (Del. Super. Jan. 22, 1996)).
53
Id. at 6.
17
III. Conclusion
For the reasons stated in this opinion, judgment is entered for Luxeyard, and
Plaintiffs’ claim will be dismissed as time-barred under 10 Del. C. § 8106. The
parties shall bear their own attorneys’ fees and costs. IT IS SO ORDERED.
18