Julian Karpoff v. Atlantic Concrete C., Inc.

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
MORGAN T. ZURN LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734
August 25, 2023
Julian Karpoff David C. Hutt, Esquire
33026 W. Falling Creek Street Morris James, LLP
Lewes, Delaware 19958 107 W. Market Street
captainkarpoff@outlook.com Georgetown, Delaware 19947
Vincent G. Robertson, Esquire
Parkowski, Guerke & Swayze, P.A.
19354C Miller Road
Rehoboth Beach, Delaware 19971
RE: Julian Karpoff v. Atlantic Concrete Co., Inc. and Sussex County,
Civil Action No. 2022-0621-SEM
Dear counsel and Mr. Karpoff,
I write to address plaintiff Julian Karpoff (“Plaintiff”)’s exceptions to
Magistrate Molina’s February 28, 2023 Final Report.1 The Final Report dismissed
Plaintiff’s claims in favor of a first-filed Sussex County Board of Adjustment
proceeding. Plaintiff’s exceptions are limited to the decision to issue that report
notwithstanding Plaintiff’s pending motion for leave to file an amended complaint,
which he filed after the motion to dismiss was taken under advisement.2 Plaintiff
1
Karpoff v. Atlantic Concrete Co., Inc., 2023 WL 2260588 (Del. Ch. Feb. 28, 2023)
[hereinafter “Final Report”]. The Final Report is also available at Docket Item (“D.I.”)
63.
2
Final Report at *1 n.1.
Karpoff v. Atlantic Concrete Co., Inc.,
Civil Action No. 2022-0621-SEM
August 28, 2023
Page 2 of 7
then filed a second motion to amend. For the reasons that follow, I remand
consideration of Plaintiff’s motions to amend to the Magistrate for her
consideration. On this procedural matter, I rely on the parties’ familiarity with the
underlying dispute.
I. Background
On November 7, 2022, the Magistrate heard oral argument on defendant
Atlantic Concrete Co., Inc.’s motion to dismiss, as well as a motion by defendant
Sussex County to compel election of a single forum, and took the motions under
advisement.3 After those motions were fully briefed, argued, and taken under
advisement, Plaintiff filed a motion for leave to amend (the “First Motion”) that
was docketed on February 6, 2023.4 The First Motion seeks leave to add a new
defendant, the Department of Natural Resources and Environmental Control
(“DNREC”), and two new counts pled against DNREC and Atlantic Concrete for
abatement and for a declaratory judgment based on violations of the Coastal Zone
Act and lack of proper permits.5
On February 28, the Magistrate issued her Final Report with the following
footnoted language:
3
D.I. 58, D.I. 56, D.I. 57.
4
D.I. 59, D.I. 62.
5
D.I. 62.
Karpoff v. Atlantic Concrete Co., Inc.,
Civil Action No. 2022-0621-SEM
August 28, 2023
Page 3 of 7
On February 6, 2023, the Plaintiff moved for leave to file an amended
complaint to add (1) the Department of Natural Resources and
Environmental Control as a defendant and (2) two additional counts.
D.I. 59-62. The motion is not fully briefed but I decline to delay
issuing this report under the rationale of Hillblom v. Wilmington Tr.
Co., 2022 WL 17428978, at *1 (Del. Ch. Dec. 6, 2022) (denying a
motion to amend without prejudice because “Court of Chancery Rule
15 does not permit a plaintiff to amend his complaint after he filed his
answering brief but before the motion to dismiss is decided”).6
The next day, March 1, Plaintiff’s motion to fix a briefing schedule on the First
Motion was docketed.7 As Atlantic Concrete noted in opposition, “Based upon the
timestamp, it appears that Mr. Karpoff filed his request before learning that the
Court had issued its February 28, 2023 Final Report.”8
Plaintiff’s notice of exceptions was filed on March 7, and the matter was
reassigned to me “for the limited purpose of resolving Plaintiff’s exceptions to the
Master’s Final Report.”9 On March 16, Plaintiff renewed his request to establish a
briefing schedule and filed another motion for leave to file an amended complaint
(the “Second Motion”), which he stated was “without prejudice” to the First
Motion.10 From there, the parties briefed Plaintiff’s exceptions; they also briefed
6
Final Report at *1 n.1.
7
D.I. 64.
8
D.I. 65 at 1.
9
D.I. 67, D.I. 68.
10
D.I. 71 ¶ 1.
Karpoff v. Atlantic Concrete Co., Inc.,
Civil Action No. 2022-0621-SEM
August 28, 2023
Page 4 of 7
the propriety of the Second Motion.11 Plaintiff has requested oral argument, but I
do not find it necessary.
II. Analysis
I consider the issues presented by Plaintiff’s exceptions de novo. 12 Court of
Chancery Rule 15 governs amendments to pleadings. Rule 15(a) states:
A party may amend the party’s pleading once as a matter of course at
any time before a responsive pleading is served or, if the pleading is
one to which no responsive pleading is permitted and the action has
not been set for trial, the party may so amend it any time within 20
days after it is served. Otherwise a party may amend the party’s
pleading only by leave of Court or by written consent of the adverse
party; and leave shall be freely given when justice so requires.13
Rule 15(aaa) governs “[w]hen a party seeks to amend its pleading in response to a
motion to dismiss.”14 It states: “Notwithstanding subsection (a) of this Rule, a
party that wishes to respond to a motion to dismiss under Rules 12(b)(6) or 23.1 by
amending its pleading must file an amended complaint, or a motion to amend in
conformity with this Rule, no later than the time such party’s answering brief in
response to either of the foregoing motions is due to be filed.”15 “Rule 15(aaa) is
not applicable to an amendment that states a new claim not addressed in a motion
11
D.I. 75, D.I. 76, D.I. 80.
12
DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999).
13
Ct. Ch. R. 15(a).
14
TVI Corp. v. Gallagher, 2013 WL 5809271, at *20 (Del. Ch. Oct. 28, 2013).
15
Ct. Ch. R. 15(aaa).
Karpoff v. Atlantic Concrete Co., Inc.,
Civil Action No. 2022-0621-SEM
August 28, 2023
Page 5 of 7
to dismiss.”16 That is so even where such an amendment was sought while the
motion to dismiss was pending.17 The addition of new claims that would not have
informed the Court’s decision on a pending motion to dismiss is assessed under
Rule 15(a).18
If Plaintiff’s First Motion had proposed amendments to his allegations and
pending claims subject to the motion to dismiss he had already opposed, Rule
15(aaa) would have governed, and it would have been appropriate to stay
consideration of the First Motion.19 But the First Motion seeks to add DNREC as a
party and to plead additional claims against DNREC, together with Atlantic
Concrete, based on violations of the Coastal Zone Act—claims that were not
within the purview of the motion to dismiss.20 Based on my review of the docket, I
do not believe Plaintiff “wish[ed] to respond to a motion to dismiss . . . by
amending [his] pleading”—he wished to add a party and a new legal theory
16
In re USG Corp. S’holder Litig., 2021 WL 930620, at *2 (Del. Ch. Mar. 11, 2021).
17
TVI Corp., 2013 WL 5809271, at *21.
18
Id.19
See Hillblom v. Wilmington Tr. Co., 2022 WL 17428978, at *4–6 (Del. Ch. Dec. 6,
2022); Kablaoui v. Gerar Place Condo. Ass’n, 2022 WL 17827089, at *1, *4 (Del. Ch.
Dec. 21, 2022) (where plaintiff sought “to supplement an insufficient complaint after
answering a motion to dismiss, attempting thereby to include facts and allegations known
to that plaintiff before he filed the answer to the motion, and tailored to defeat the
motion,” that motion was clearly “responsive to the pending motion to dismiss,” and Rule
15(aaa) was instructive).
20
D.I. 62.
Karpoff v. Atlantic Concrete Co., Inc.,
Civil Action No. 2022-0621-SEM
August 28, 2023
Page 6 of 7
independent from the motion to dismiss other claims against existing parties.21
Plaintiff has indicated that the timing of the First Motion is based on the timing of
his factual investigation, not the timing of the motion to dismiss.22 Plaintiff stood
on his complaint against the moving defendants and opposed their motion to
dismiss, as Rule 15(aaa) intends, and he has not taken exception to the Final
Report granting that motion.23 The First Motion does not squarely fall within Rule
15(aaa). I conclude the First Motion is generally governed by Rule 15(a)’s liberal
standard, not Rule 15(aaa)’s good cause standard. Any additional allegations
regarding the claims subject to dismissal are subject to Rule 15(aaa).24
That conclusion begs the question of what to do next. Plaintiff has not taken
exception to the Magistrate’s conclusion that his original claims, against Atlantic
Concrete Company and Sussex County, should be dismissed in favor of the first-
filed Board of Adjustment proceeding. For what it is worth, I believe the
Magistrate’s reasoning and conclusion on that point are sound, and that the Final
21
See Ct. Ch. R. 15(aaa); TVI Corp., 2013 WL 5809271, at *21.
22
D.I. 59 ¶ 4; D.I. 80 at 5 (“[T]he motions to amend do not ask that the Master revisit the
deferral of the zoning claims to the BOA, but only to amend the complaint.”).
23
D.I. 75, D.I. 80; see Lillis v. AT&T Corp., 896 A.2d 871, 878 (Del. Ch. 2005).
24
TVI Corp., 2013 WL 5809271, at *21.
Karpoff v. Atlantic Concrete Co., Inc.,
Civil Action No. 2022-0621-SEM
August 28, 2023
Page 7 of 7
Report should be adopted.25 With Counts I and II against Atlantic Concrete
Company and Sussex County dismissed, the question remains whether the First
Motion to plead the new counts against DNREC and Atlantic Concrete under the
Coastal Zone Act should be granted under Rule 15(a). I remand this question for
the Magistrate’s review.
Briefing on Plaintiff’s exceptions also addressed the Second Motion. I do
not have authority to decide the Second Motion: that should be heard by the
Magistrate in the first instance. I leave it to the Magistrate to decide if the parties’
briefing submitted on exception adequately addresses the Second Motion, and
leave this matter to her capable jurisdiction.
III. Conclusion
This matter is remanded to the Magistrate for consideration of the First
Motion under Rules 15(a) and 15(aaa) as set forth above, and for consideration of
the Second Motion in the first instance.
Sincerely,
/s/ Morgan T. Zurn
Vice Chancellor
cc: All Counsel of Record, via File & ServeXpress
25
Because I have been assigned this matter only to consider Plaintiff’s exceptions, and he
did not take exception to that reasoning or conclusion, my belief may be worth nothing;
adopting the Final Report may still be a task for the Chancellor, as it is in cases in which
no exceptions were taken.