Julie Gibson v. David Konick

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734

August 5, 2024

Frank E. Noyes, II, Esquire David L, Konick, Esquire, pro se
Offit Kurman, P.A. P.O. Box 57
222 Delaware Ave., Suite 1105 Washington, Virginia 22747
Wilmington, Delaware 19801

RE: Gibson v. Konick, et al., C.A. No. 2022-1036-LWW

Dear Counsel:

I write regarding defendant David L. Konick’s motion for reargument under

Court of Chancery Rule 59(f).1 Konick’s motion concerns my July 10, 2024 post-

trial memorandum opinion (the “Opinion”).2 In the Opinion, I granted dissolution

of 23 West Bayard Street, LLC, ordered the sale of a Fenwick Island property, and

appointed a liquidating trustee to oversee the winding up process.

“The manifest purpose of all Rule 59 motions is to afford the Trial Court an

opportunity to correct errors prior to appeal.”3 “To succeed and obtain reargument,

1
Def.’s Rule 59(f) Mot. for Reargument (Dkt. 128) (“Mot.”).
2
Post-trial Mem. Op. (Dkt. 127) (“Mem. Op.”).
3
Ramon v. Ramon, 963 A.2d 128, 136 (Del. 2008) (quoting Hessler, Inc. v. Farrell, 260 A.2d 701,
702 (Del. 1969)); see Ct. Ch. R. 59(f).
C.A. No. 2022-1036-LWW
August 5, 2024
Page 2 of 6

the moving party must demonstrate that the Court’s decision was predicated upon a

misunderstanding of a material fact or a misapplication of the law.”4 “[A] motion

for reargument is ‘not a mechanism for litigants to relitigate claims already

considered by the court[.]’”5

Konick’s Rule 59(f) motion includes five arguments. None meet his “heavy

burden” for reargument.6 One justifies a minor clarification to the Opinion.

First, Konick argues that I “failed to rule on the admissibility” of two joint

exhibits and his “pending objections thereto.”7 Not so. Konick raised objections to

the introduction of these exhibits in a February 9, 2024 motion in limine, which I

denied in a February 26 order.8 I also allowed the exhibits to be introduced at trial

and explained that the joint exhibits were deemed admitted into evidence.9

4
Fisk Ventures, LLC v. Segal, 2008 WL 2721743, at *1 (Del. Ch. July 3, 2008) (citation omitted),
aff’d, 984 A.2d 124 (Del. 2009) (TABLE).
5
Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 975581, at *1 (Del. Ch. Mar.
4, 2010) (citation omitted), aff’d, 7 A.3d 485 (Del. 2010); see Brace Indus. Contr., Inc. v. Peterson
Enters., Inc., 2018 WL 3360584, at *1 (Del. Ch. July 10, 2018) (quoting In re ML/EQ Real Est.
P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000)).
6
ITG Brands, LLC v. Reynolds Am., Inc., 2022 WL 16825874, at *1 (Del. Ch. Nov. 7, 2022)
(quoting ML/EQ Real Est., 2000 WL 364188, at *1); see also Manti Hldgs., LLC v. Authentix
Acquisition Co., Inc., 2019 WL 3814453, at *1 (Del. Ch. Aug. 14, 2019) (observing that motions
for reargument are “rarely fruitful”).
7
Mot. ¶ 1.
8
Dkts. 97, 117.
9
Trial Tr. of Feb. 28, 2024 (Dkt. 120) at 43-52.
C.A. No. 2022-1036-LWW
August 5, 2024
Page 3 of 6

Second, Konick contends that I improperly “punted” the question of whether

certain expenses are reimbursable to a liquidating trustee.10 In the Opinion, I

provided guidance on expenses for which the parties could be reimbursed out of the

property sale proceeds.11 Consistent with the remedial powers of this court, I

delegated the task of reimbursing specific expenses—“consistent with [the Opinion]

and the LLC Agreement”—to a liquidating trustee.12 Konick cites nothing factually

or legally erroneous with that approach. He complains that it creates an “unfair”

expense and burden for the parties because the court could technically provide the

same service for free. But he overlooks the Opinion’s discussion of the burdens this

task would place on the court.13

Third, Konick asserts that it was error for the court to find deadlock between

the parties after concluding that their ownerships were 60.51% (Konick) and 39.49%

(Gibson).14 The Opinion explained that the adjusted ownership percentages “would

have no effect on the present deadlock insofar as 2/3 or unanimous member consent

10
Mot. ¶ 1.
11
Mem. Op. 24-26.
12
Id. at 30.
13
Id. at 29-30.
14
Mot. ¶ 2.
C.A. No. 2022-1036-LWW
August 5, 2024
Page 4 of 6

is required.”15 Thus, Konick rehashes arguments that were previously made and

rejected by the court, which is not grounds for reargument.16

Konick points out that the court’s holding could be read to support an “absurd

result” where minority members can “force a dissolution of a company anytime [sic]

they disagree with what the majority wants to do.”17 Given the unusual facts of this

case, it is difficult to imagine that it will be instructive in future dissolution disputes.

The matter exists at the unmapped intersection of entity and family law. The

company at issue had no operations or business and just one asset: a beach house,

purchased at a time when the parties were a couple. The governing agreement was

drafted by Konick—an attorney—who told his former romantic partner that it was

standard despite adding “zingers” that would financially devastate her.18 He refused

to buy her out, to let her access the property, or even to speak to her civilly. The

parties’ ugly breakup meant that they could no longer share a vacation home—the

intended purpose of the entity. Equity provides a means to exit.

15
Mem. Op. 16.
16
Nguyen v. View, Inc., 2017 WL 3169051, at *1 (Del. Ch. July 26, 2017) (“Where a motion for
reargument ‘merely rehashes arguments already made by the parties and considered by the Court
when reaching the decision from which reargument is sought, the motion must be denied.’”
(quoting Wong v. USES Hldg. Corp., 2016 WL 1436594, at *1 (Del. Ch. Apr. 5, 2016))).
17
Mot. ¶ 2.
18
Mem. Op. 10.
C.A. No. 2022-1036-LWW
August 5, 2024
Page 5 of 6

Fourth, Konick asks that the court clarify whether Gibson can seek payment

for services she contributed to the company.19 In the Opinion, I explained that the

LLC Agreement lacks support for Konick’s request “to recover for personal or

renovation-related services.”20 I did not specify that Gibson also cannot obtain

payment for services to the entity. If there is any doubt, let me clarify: the LLC

Agreement does not permit Konick or Gibson to be paid for “sweat equity,” personal

services, or legal advice.

Fifth, Konick argues that I “failed to rule” on the request in his post-trial

brief “for a stay pending appeal.”21 He has neither pursued an interlocutory appeal

nor made a motion for such relief. That may be because no order implementing the

Opinion has been filed. Having resolved the motion for reargument, I ask that the

parties and liquidating trustee to confer on a proposed form of order to implement

the Opinion. This is needed in addition to the proposed order of appointment filed

by the liquidating trustee. The court will take up any request for a stay pending

appeal when ripe.

19
Mot. ¶ 3.
20
Mem. Op. 26-28.
21
Mot. ¶ 4.
C.A. No. 2022-1036-LWW
August 5, 2024
Page 6 of 6

Gibson asks that I shift fees because Konick’s motion is baseless—“a

recurring pattern for Konick in this case.”22 Konick has repeatedly peppered Gibson

(and the court) with needless—and even frivolous—motions. This is not one of

them. Konick timely sought reargument of a post-trial decision, as he is permitted

to do under Court of Chancery rules. His arguments are meritless but lack any

suggestion of bad faith. As I have warned in the past, though, the court stands willing

to shift fees if Konick’s conduct crosses the line into vexatiousness. He is quite

close.

III. CONCLUSION

Konick’s motion for reargument is denied, except for the narrow clarification

made above. Each party will bear their own fees in connection with the motion. A

proposed order implementing the Opinion must be filed within five business days.

IT IS SO ORDERED.

Sincerely yours,

/s/ Lori W. Will

Lori W. Will
Vice Chancellor

cc: Seth L. Thompson, Esquire

22
Pl.’s Opp’n to Def.’s Rule 59(f) Mot. for Reargument (Dkt. 131) ¶ 13.