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Chancery Court Applies 20-year Statute of Limitations for Contracts "Under Seal"; Rejects Laches Defense. Defines "Inquiry Notice"

By Francis G.X. Pileggi

Whittington v. Dragon Group L.L.C., No. 2291-VCP (Feb. 15, 2010), read opinion here.

Previous decisions of the Delaware courts in the long line of cases involving this internecine warfare among family members fighting over their interests in various business entities, have been summarized on this blog and can be found here.

This latest iteration by the Delaware courts in this matter comes to us after remand by the Delaware Supreme Court involving an important High Court ruling that the applicable statute of limitations for claims on a contract 'under seal' is 20-years. See summary of Delaware Supreme Court decision here.

In addition to defining laches and applying its elements such as 'unreasonable delay,' the Court of Chancery in this decision concluded that laches would not bar a claim that was brought a little after 3-years from the date that 'inquiry notice' was imputed, in light of the statute of limitations that was 20-years long.

Also helpful for litigators is the definition by the Court of Chancery of 'inquiry notice' at page 11 of the slip opinion.

Also of practical use for future reference is the definition by the Court of Chancery of the doctrine called 'law of the case' and how that compares and differs from the obligation of the trial court after remand by the Supreme Court to apply new rulings of law. See Slip Op. at 8 to 10.
 

Full post as published by Delaware Corporate and Commercial Litigation Blog on February 16, 2010 (boomark / email).