Robert Boyd Fitzgerald v. Fitzgerald Home Farm, LLC, Kirby Fitzgerald, Meghan Fitzgerald, and Jeffrey Semans

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
ROBERT BOYD FITZGERALD, )
)
Plaintiff, )
)
v. ) C.A. No. 2023-1159-BWD
)
FITZGERALD HOME FARM, LLC, )
KIRBY FITZGERALD, MEGHAN )
FITZGERALD, and JEFFREY )
SEMANS, )
)
Defendants. )
ORDER GRANTING MOTION TO DISMISS
WHEREAS:
A. On June 3, 2019, plaintiff Robert Boyd Fitzgerald (“Plaintiff”) initiated
an action before this Court, captioned Fitzgerald v. Fitzgerald Home Farm, LLC,
C.A. No. 2019-0410-PWG (Del. Ch.) (the “First Action”).1 In the First Action,
Plaintiff alleged that he and three other siblings were members of Fitzgerald Home
Farm, LLC (the “Company”). Fitzgerald v. Fitzgerald Home Farm, LLC, 2021 WL
1514385, at *1 (Del. Ch. Apr. 16, 2021), R. & R. adopted, (Del. Ch.). In 2010,
however, Plaintiff sent a letter to his brother Kirby expressing his desire to stop
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The Court takes judicial notice of filings in the First Action. See Stanco v. Rallye Motors
Hldg., LLC, 2019 WL 7161338, at *2 (Del. Ch. Dec. 23, 2019) (“When reviewing a motion
to dismiss, the Court . . . may take judicial notice of relevant public filings.’” (quoting
Fairthorne Maint. Corp. v. Ramunno, 2007 WL 2214318, at *4 (Del. Ch. Jul. 20, 2007)).
Docket entries in the First Action are cited as “First Dkt. __”.
receiving payments from the Company. Id. Plaintiff alleged that his letter was
misinterpreted or misconstrued as a voluntary withdrawal, and thereafter, the
Company improperly refused to recognize him as a member. Id. at *2. As relief,
Plaintiff sought reinstatement as a member of the Company, as well as damages in
the amount of distributions he should have received during the period the Company
improperly refused to recognize him as a member. Id.
B. On March 24, 2021, Magistrate Griffin held a remote trial in the First
Action. Id. at *1. On April 16, 2021, Magistrate Griffin issued her post-trial final
report (the “Final Report”), concluding that Plaintiff’s challenge to his purported
removal as a member of the Company was barred by the equitable doctrine of laches,
as he was on inquiry notice of his claims no later than 2012. Id. at *5. Magistrate
Griffin, therefore, recommended that the Court dismiss the First Action with
prejudice. Id.
C. The parties did not file exceptions to the Final Report, which
Chancellor Bouchard adopted on May 1, 2021. First Dkt. 25.
D. On November 15, 2023, Plaintiff initiated this action through the filing
of a Verified Complaint (the “Complaint”). Compl., Dkt. 1. The Complaint alleges
that Plaintiff’s 2010 letter was not intended as a voluntary withdrawal from the
Company, and that his siblings have engaged in fraudulent conduct. Id. ¶¶ 2-3.
Plaintiff seeks reinstatement as a member of the Company, damages representing
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distributions he should have received during the period the Company refused to
recognize him as a member, and punitive damages. Id. at 2.
E. On December 14, 2023, defendants Kirby Fitzgerald, Meghan
Fitzgerald, Jeffrey Semans, and the Company (“Defendants”) moved to dismiss the
Complaint (the “Motion to Dismiss”). Defs.’ Mot. To Dismiss Verified Compl.,
Dkt. 5. On February 5, 2024, Plaintiff filed a letter with the Court responding to the
Motion to Dismiss. Pl.’s Letter [hereinafter, “AB”], Dkt. 11. On February 13, 2024,
Defendants filed a reply in further support of the Motion to Dismiss. Defs.’ Reply
In Supp. Of Their Mot. To Dismiss Pl.’s Verified Compl., Dkt. 14.
NOW, THEREFORE, IT IS HEREBY ORDERED, this 12th day of March,
2024, as follows:
1. Defendants have moved to dismiss under Court of Chancery Rule
12(b)(6) for failure to state a claim, arguing the claims raised in the Complaint are
barred by res judicata. When reviewing a motion to dismiss under Rule 12(b)(6),
Delaware courts “(1) accept all well pleaded factual allegations as true, (2) accept
even vague allegations as ‘well-pleaded’ if they give the opposing party notice of
the claim; [and] (3) draw all reasonable inferences in favor of the non-moving party
. . . .” Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531,
535 (Del. 2011). “When a defendant asserts an affirmative defense, like res judicata,
as a basis for pleading stage dismissal, that motion to dismiss will be granted only if
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‘the plaintiff can prove no set of facts to avoid it . . . .’” Fortis Advisors LLC v. Shire
US Hldgs., Inc., 2020 WL 748660, at *3 (Del. Ch. Feb. 13, 2020) (ellipsis in original)
(footnote omitted) (quoting Reid v. Spazio, 970 A.2d 176, 183-84 (Del. 2009)).
2. The doctrine of res judicata “is judicially-created and is based on public
policy requiring a definite end to litigation. . . . The doctrine of res judicata exists
for many reasons, but among the most important are to prevent vexatious litigation
and to promote the stability and finality of judicial decrees.” Maldonado v. Flynn,
417 A.2d 378, 381 (Del. Ch. 1980).
Res judicata operates to bar a claim where the following five-part test
is satisfied: (1) the original court had jurisdiction over the subject matter
and the parties; (2) the parties to the original action were the same as
those parties, or in privity, in the case at bar; (3) the original cause of
action or the issues decided was the same as the case at bar; (4) the
issues in the prior action must have been decided adversely to the
appellants in the case at bar; and (5) the decree in the prior action was
a final decree.
Dover Hist. Soc., Inc. v. City of Dover Plan. Comm’n, 902 A.2d 1084, 1092 (Del.
2006). “The bar of res judicata applies to all theories which were or could have
been litigated in the earlier proceeding.” Showalter v. Cnty. Council of Sussex, 1984
WL 159374, at *2 (Del. Ch. Dec. 13, 1984).
3. Here, res judicata bars the claims raised in the Complaint. This Court
had jurisdiction over the First Action. The Complaint raises precisely the same
issues that were raised in the First Action. Those issues were decided adversely to
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Plaintiff in the Final Report. And the Final Report became a final order of the Court
upon its adoption by the Chancellor.
4. The parties in this action and the First Action are not identical. In the
First Action, Plaintiff named only the Company and Kirby as defendants. See
Fitzgerald, 2021 WL 1514385, at *1-2. In this action, Plaintiff has added two other
siblings, Meghan Fitzgerald and Jeffrey Semans, as defendants. But the prior
defendants are in privity with the new defendants, whose interests were closely
aligned with and adequately represented by the prior defendants in the First Action.
See Aveta Inc. v. Cavallieri, 23 A.3d 157, 180 (Del. Ch. 2010) (“Parties are in privity
. . . when their interests are identical or closely aligned such that they were actively
and adequately represented in the first suit.”).
5. In his opposition to the Motion to Dismiss, Plaintiff argues that during
the First Action, (1) he did not know Kirby had shared his withdrawal letter with his
other siblings, (2) he did not understand the implications of the Company’s operating
agreement, and (3) he was “too gentle” on Kirby, which “could have been a lapse of
business judgment.” AB at 2-4. These arguments confirm that Plaintiff’s “past and
present claims arise from the same transaction” and “‘the pleadings framing the
issues in the first action . . . would have permitted the raising of the issue[s] sought
to be raised in [this] action, and if the facts were known, or could have been known
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to the plaintiff in the second action at the time of the first action . . . .’” Fortis, 2020
WL 748660, at *3 (second ellipsis in original).
6. Plaintiff also seeks a “mistrial,” seemingly because the trial in the First
Action was held remotely. Plaintiff should have raised any such procedural
challenges in the First Action; a new action is not the proper vehicle to do so.
7. Because the Complaint is barred by res judicata, the Motion to Dismiss
is GRANTED and this action is DISMISSED.
8. This order is a final report pursuant to Court of Chancery Rules 143 and
144. Exceptions may be filed within eleven days of the date of this order.
/s/ Bonnie W. David
Bonnie W. David
Magistrate in Chancery
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