Farsura v. QC Terme US Corp

Background

Stefano Farsura and SF Capital Partners LLC sued QC Terme US Corp. and other defendants. The complaint included a breach-of-contract claim and a breach-of-fiduciary-duty claim concerning Farsura’s exclusion from the parties’ spa business. In an earlier order, the court granted the defendants’ motion to dismiss all claims except the breach-of-contract claim against QC Terme US Corp. The earlier order also dismissed the claims against three other defendants for lack of personal jurisdiction.

Plaintiffs moved for clarification of the earlier order or, alternatively, for reconsideration of the dismissal of their fiduciary-duty claim. They argued that the contract and fiduciary-duty claims were pleaded in the alternative. Under this type of pleading, a party may present different legal theories that apply depending on which facts are ultimately established.

Court’s analysis

The court denied clarification because it found that the earlier order was unambiguous. Plaintiffs had argued that QC Terme US Corp. should not be allowed both to dispute whether the Operating Agreement was binding for purposes of the contract claim and to rely on that agreement’s fiduciary-duty waiver. The court did not resolve that issue through clarification.

The court reconsidered its dismissal of the fiduciary-duty claim in part. It explained that the complaint’s paragraphs 153 and 154 did not, by themselves, clearly plead the fiduciary-duty claim as an alternative to the contract claim. Those paragraphs stated that the duties arose from both law and equity, including the Delaware Limited Liability Company Act, and provisions of the Operating Agreement. The court had previously concluded that the Operating Agreement specifically disclaimed fiduciary duties and that the fiduciary-duty allegations were duplicative of the contract claim.

After reviewing the complaint and record, however, the court relied on paragraph 114, which alleged that the fiduciary duties applied whether or not the Operating Agreement was in force. Reading paragraph 114 together with paragraph 153, the court found that Plaintiffs had sufficiently pleaded a fiduciary-duty claim in the alternative. The court concluded that Plaintiffs had adequately alleged, if the Operating Agreement was not binding, that QC Terme US Corp. owed duties under the Delaware Limited Liability Company Act and breached them.

Disposition

The court held that Plaintiffs’ motion for clarification was DENIED. Plaintiffs’ motion for reconsideration was GRANTED in part and DENIED in part. QC Terme US Corp.’s motion to dismiss the fiduciary-duty claim was GRANTED in part and DENIED in part, and the fiduciary-duty claim was REINSTATED as limited in the order. The court stated that its other findings concerning duplicative allegations were not modified.

The court also DENIED Plaintiffs’ request to seal materials because QC Terme US Corp. did not move within three days of filing to keep its materials under seal. The Clerk was directed to terminate the relevant motions and make specified filings public.