Blue Pointer Gesture, LLC v. Samuel Schrade

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

BLUE POINTER GESTURE, LLC, )
2112 GROUP LLC, and RUSH )
EQUIPMENT II, LLC, )
)
Plaintiffs, ) C.A. No. 2024-0820-DG
)
v. )
)
SAMUEL SCHRADE, )
)
Defendant. )

ORDER STAYING LITIGATION1

WHEREAS:2

A. This action is a contract dispute. Plaintiffs Blue Pointer Gesture,

LLC, 2112 Group, LLC, and Rush Equipment II, LLC seek to remove

defendant Samuel Schrade as a member of 2112 Group under the 2112 Group

Operating Agreement (“Operating Agreement”) for allegedly breaching the

Operating Agreement.3

1
In this order, I cite to docket items as “Dkt.,” Plaintiffs’ exhibits as “PX,” and
Defendant’s exhibits as “DX.”
2
The factual findings are generally drawn from Pls.’ Verified Compl. (“Compl.”),
Dkt. 1, the attached exhibits and documents it incorporates by reference. See, e.g.,
Richardson v. New Residential Mortg. Loan Tr. 2019RPL3, 2025 WL 2491199,
at *4 (Del. Ch. Aug. 29, 2025) (quoting Fitzgerald v. Fitzgerald Home Farm, LLC,
2024 WL 1071970, at *2 (Del. Ch. Mar. 12, 2024)).
3
See generally Compl.; Pls.’ Ans. Br. in Opp’n to Def.’s Mot. to Dismiss (“AB”),
Dkt. 10.
B. Plaintiffs also seek specific performance, compelling Defendant

to transfer certain assets to Plaintiffs pursuant to a separate, but related, Asset

Purchase Agreement (“APA”) the parties executed in connection with the

Operating Agreement.4

C. Plaintiff Blue Pointer Gesture, LLC (“Blue Pointer”) is a

Wyoming limited liability company. 5 Plaintiffs 2112 Group, LLC (“2112

Group”) and Rush Equipment II, LLC (“Rush”) are Delaware limited liability

companies with their principal places of business in Texas.6 Blue Pointer

holds a 60% ownership interest in 2112 Group, which, in turn, wholly owns

Rush.7

D. On September 1, 2023, Blue Pointer and Defendant executed the

Operating Agreement.8 Under the Operating Agreement, Blue Pointer agreed

to contribute $750,000 as an initial capital investment into 2112 Group, and

Defendant agreed to transfer approximately $500,000 of business equipment

to 2112 Group in place of a monetary contribution.9

4
See Compl. ¶ (c) (prayers for relief); AB at 15, 24–26; Def.’s Reply Br. in Supp.
of his Mot. to Dismiss (“RB”), Dkt. 15 at 7–9.
5
Compl. ¶ 12.
6
Compl. ¶¶ 11, 13.
7
Compl. ¶¶ 11, 13.
8
Compl. ¶16; Compl., PX A (“OA”) at *1 (OA cover page, dated Sep. 1, 2023).
9
Compl. ¶¶ 18–20; OA, Ex. A (appendix titled “Members and Unit Ownership”).

–2–
E. Section 15.3 of the Operating Agreement is a forum selection and

governing law provision.10 Section 15.3 requires that

[a]ny Proceeding arising out of or relating to [the
Operating Agreement] or [2112 Group’s] activities
or properties may be brought only in the Delaware
Court of Chancery as provided in [Delaware
Limited Liability Company Act], in the state courts
of the county where [2112 Group’s] principal office
is located, or if it has or can acquire jurisdiction, in
the United States District Court for the district in
which [2112 Group’s] principal office is located.

Each Member . . . irrevocably submits to the
exclusive jurisdiction in any such Proceeding,
waives any objection it may now or hereafter have
to venue or to convenience of forum, agrees that all
claims in respect of the proceeding shall be heard
and determined only in any such court, and agrees
not to bring any such Proceeding in any other
court.11

F. On March 25, 2024, Defendant filed suit against Plaintiffs in

Texas (“Texas Action”).12 Defendant asserted claims for Breach of Contract

(related to the Operating Agreement and APA), Fraudulent Inducement,

10
See OA § 15.3.
11
OA § 15.3 (paragraph break added for readability).
12
See OB, DX 1 (“TX Compl.”) at subheadings A–G. The court may take judicial
notice of documents whose contents are “capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be
questioned.” D.R.E. 201(b). “If the accuracy of the subject document’s contents is
disputed, the Court may take judicial notice to discern . . . what was said therein . . .
but may not take judicial notice to establish the truth of its contents.” Indemnity
Insur. Corp., RRG v. Cohen, 2018 WL 487246, at *1 (Del. Ch. Jan. 18, 2018).

–3–
Breach of Fiduciary Duty, Conversion, Declaratory Judgment, Unjust

Enrichment, and to produce an accounting.13 Plaintiffs appeared and filed

responsive pleadings in the Texas Action.14

G. On August 2, 2024, Plaintiffs brought suit in Delaware. 15

Plaintiffs asserted similar claims, raising two counts for breaches of contract

against Defendant; one for breach of the Operating Agreement and one for

breach of the APA.16

H. Plaintiffs allege Defendant materially breached both agreements

by failing to transfer assets free and clear of liens and to satisfy his capital

contribution obligations. 17 Plaintiffs contend these acts justify Defendant’s

removal as a member of 2112 Group.18 They further argue that, although the

Operating Agreement did not expressly require Defendant to obtain lien

waivers, the obligation arises from the APA and the implied covenant of good

faith and fair dealing.19

13
See generally TX Compl.
14
See generally OB, DX 2 (“TX Ans.”).
15
See generally Compl.
16
See Compl. ¶¶ 64–95.
17
Compl. ¶¶ 21–61.
18
Compl. ¶ (b) (prayer for relief clauses); AB at 15, 22–26.
19
AB at 30–31. The Operating Agreement does not discuss lien waivers. See OA
§§ 3.1, 14.1, Ex. A (capital contribution provisions). See also OB at 30–31; RB at
11–12.

–4–
I. On October 11, Defendant filed his Motion to Dismiss or, in the

alternative, Motion to Stay this Action in lieu of answering under Court of

Chancery Rules 12(b)(1), 12(b)(3) and the first-filed rule, and 12(b)(6). 20

J. Defendant argues that the forum selection clause in the Operating

Agreement permits suit in jurisdictions other than Delaware21 and contends

the Court should dismiss this action in favor of the earlier-filed Texas action.22

Defendant also maintains that dismissal is proper under Court of Chancery

Rule 12(b)(6) because 2112 Group is not a party to the APA, which disclaims

third-party beneficiaries.23

K. On August 5, 2025, the Court held a hearing on Defendant’s

motion and took the motion under advisement. 24

IT IS ORDERED, this 19th day of November, 2025, that:

1. Defendant’s motion is GRANTED IN PART and DENIED IN

PART. This litigation is STAYED pending the final disposition of the Texas

Action.

20
See Dkt. 8; OB at 3.
21
OB at 19–20; RB at 2–4.
22
OB at 3.
23
OB at 28–31; RB at 9–10.
24
See Dkt. 22.

–5–
2. Defendant moved to dismiss the complaint under Court of

Chancery Rules 12(b)(1), 12(b)(3) and 12(b)(6).25 First, Defendant contends

that the Court should dismiss or stay this action under the first-filed rule.26

Next, Defendant asserts that Plaintiffs’ claims are overripe, which precludes

Plaintiffs from bringing their claims here.27 Finally, Defendant argues that

Plaintiffs failed to state a viable claim.28 Because I find that this action should

be stayed under the first-filed rule, I need not address Defendant’s other

contentions.

This action should be stayed under the first-filed doctrine.

3. Defendant argues that I should apply the Supreme Court’s

holding in McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering

Co., 29 and dismiss or stay these proceedings in favor of the Texas Action

under Rule 12(b)(3). 30 Defendant raises this argument because the Texas

Action involves, essentially, the same facts and claims Plaintiff brings here.31

Therefore, Defendant concludes, in the interest of efficiency and to avoid the

25
Def.’s Mot. to Dismiss, Dkt. 8; OB at 4 n.1.
26
OB at 3, 9–24.
27
OB at 3, 24–27.
28
OB at 3, 28–31.
29
263 A.2d 281 (Del. 1970).
30
OB at 9–11.
31
OB at 11–15

–6–
risk of conflicting judgments, the Court should dismiss Plaintiffs’ claims or

pause these proceedings.32

4. Plaintiffs dispute Defendant’s characterization of their claims.

They contend that the Operating Agreement’s forum selection clause requires

this dispute to be heard in Delaware, and that the Texas Action should not

impact this present action. 33 Further, Plaintiffs assert that Delaware has a

special interest in resolving the dispute because it concerns the governance of

and rights of members of a Delaware limited liability company.34 Plaintiffs

maintain that the Court should allow their claims to proceed for those

reasons.35

5. “On a motion to dismiss under Rule 12(b)(3) [and McWane], ‘the

[C]ourt is not shackled by the plaintiff[s’] complaint and is permitted to

consider extrinsic evidence from the outset.’”36 Section 15.3 of the Operating

Agreement is a forum selection clause. Neither party disputes this.37 Because

32
OB at 11–15.
33
AB at 16–24.
34
AB at 21–23.
35
AB at 21–23.
36
Riordan Ltd. v. IVN Consulting, LLC, 2021 WL 2879786, at *3 (Del. Ch. July 9,
2021) (quoting Troy Corp. v. Schoon, 2007 WL 949441, at *2 (Del. Ch. Mar. 26,
2007)) (analyzing a forum selection clause in conjunction with a McWane analysis).
37
See Compl. ¶¶ 9–10; OB at 18–21; AB at 16–24; RB at 2–8.

–7–
an enforceable forum selection clause may preempt application of the

McWane doctrine, I analyze Section 15.3’s applicability first.38

6. “[W]here contracting parties have expressly agreed upon a

legally enforceable forum selection clause, a court should honor the parties’

contract and enforce the clause, even if, absent any forum selection clause, the

McWane principle might otherwise require a different result.” 39 “Such

clauses ‘are presumptively valid and should be specifically enforced unless

the resisting party clearly show[s] that enforcement would be unreasonable

and unjust, or that the clause [is] invalid for such reasons as fraud and

overreaching.’”40

7. In this case, the Operating Agreement’s forum selection clause

does not preempt the first-filed rule. Forum selection clauses fall into three

categories: exclusive, partially exclusive, and nonexclusive.41 In an exclusive

38
See, e.g., Ingres Corp. v. CA, Inc., 8 A.3d 1143, 1145 (Del. 2010); West v. Access
Control Related Enters., LLC, 296 A.3d 378, 387–88 (Del. 2023). The first-filed
rule is also referred to as the “McWane doctrine.” See generally Donald J. Wolfe
and Michael A. Pittenger, Corporate and Commercial Practice in the Delaware
Court of Chancery (“Wolfe & Pittenger”), § 5.01 (2nd ed. 2024).
39
Ingres Corp., 8 A.3d at 1146.
40
Lone Pine Res., LP v. Dickey, 2021 WL 2311954, at *14 (Del. Ch. June 7, 2021)
(quoting Sylebra Cap. P’rs Master Fund, Ltd. v. Perelman, 2020 WL 5989473, at
*10 (Del. Ch. Oct. 9, 2020)).
41
See In re Bay Hills Emerging P’rs I, L.P., 2018 WL 3217650, at *4 (Del. Ch.
July 2, 2018); MICH II Hldgs. LLC v. Schron, 2012 WL 2499507, at *4. See

–8–
forum selection clause, the parties designate one forum as the only jurisdiction

where a suit may be brought.42 By contrast, a nonexclusive clause states the

parties consent to jurisdiction in the forum indicated, but they may bring their

claims elsewhere. 43 A partially exclusive clause either restricts the forum

where parties can raise certain claims (such as claims arising from the

agreement), or permits the parties to select between a limited number of

forums. 44 When a forum selection clause is not fully exclusive, and the

claims raised do not violate it, McWane applies.45

8. Section 15.3 is a partially exclusive forum selection clause

because it permits claims to be brought either in Delaware or in Texas. 2112

Group’s principal place of business is in Harris County, Texas.46 Therefore,

the Operating Agreement permits the parties to bring suit either in Delaware,

generally, e.g., Tina L. Stark, Negotiating and Drafting Contract Boilerplate 129
(Lauren Reiter Brody & Frances Kulka Browne eds., 2003).
42
Tina L. Stark, Negotiating and Drafting Contract Boilerplate 129 (Lauren Reiter
Brody & Frances Kulka Browne eds., 2003).
43
Tina L. Stark, Negotiating and Drafting Contract Boilerplate 129 (Lauren Reiter
Brody & Frances Kulka Browne eds., 2003).
44
See MICH II Hldgs., 2012 WL 2499507, at *4.
45
See id. at *3-4.
46
I note the record does not specify the county in which 2112 Group’s principal
place of business is located. At best, Defendant speculates it is in Collin County,
Texas. AB at 19 n.2. However, by Defendant’s own reasoning, 2112 Group could
just as easily operate where Defendant is located. See Id.; OB, DX B at *102
(Defendant entering an employment contract in Harris County). I infer that 2112
Group’s principal place of business is located in Harris County.

–9–
Harris County, Texas, or the United States District Court for the Southern

District of Texas.47

9. Because Defendant adhered to the forum selection provision, it

does not preempt the first-filed rule.48 The Court must apply the McWane test

to this proceeding.49

10. “Under the first-filed rule, a Delaware court typically will defer

to a first-filed action in another forum if that action involves substantially the

same parties and issues as the litigation pending in Delaware and will stay the

later-filed Delaware action pending adjudication of the issues in the

competing forum.”50

11. When a party invokes the first-filed rule, Delaware courts

conduct a three-part inquiry: (1) is there a prior action pending elsewhere; (2)

47
U.S. Courts, Maps of U.S. Courts of Appeals and District Courts,
Civics Education Project, https://www.lb5.uscourts.gov/CivicsEducation/FederalJ
udiciary/Federal%20Judiciary_Maps%20of%20Federal%20Circuits%20and%20D
istrict%20Courts.pdf (last visited November 4, 2025). The Court may take judicial
notice of facts not subject to reasonable dispute, such as the geographic jurisdiction
of U.S. federal courts. D.R.E. 201(b).
48
MICH II Hldgs., 2012 WL 24996507, at *4 (“[A]lthough there are competing
actions proceeding in Delaware and New York, none of those actions violates or is
inconsistent with the forum selection clauses. Thus, this Court must look to its
default rules under McWane.”).
49
MICH II Hldgs., 2012 WL 24996507, at *4.
50
Wolfe & Pittenger § 5.01[a].

– 10 –
in a court capable of doing prompt and complete justice; (3) involving the

same parties and the same issues?51

12. The Texas action is a prior action because it was filed in March

2024—approximately four months before the Delaware action.52

13. The parties and issues in both actions are substantially the

same.53 In the Texas action, Defendant sued Blue Pointer and its sole owner

Martin, along with Rush II and other Martin-affiliated entities. 54 The

Delaware action was brought by Blue Pointer, Rush II and 2112 Group against

Defendant.55

14. Although 2112 Group is not named in the Texas action, its

majority owner, Blue Pointer, its minority owner, Defendant, and its wholly

owned subsidiary, Rush II, are all parties to that action.56 2112 Group could

be joined if necessary to provide complete relief to Plaintiffs. Plaintiffs also

51
See LG Elec., Inc. v. Interdigital Commc’ns., Inc., 144 A.3d 1246, 1252 (Del.
2015) (citing McWane, 263 A.2d at 281).
52
See, supra, ¶¶ F, G.
53
Plaintiffs did not address this issue in their brief, which amounts to conceding this
point. See, e.g., Emerald P’rs v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (holding
any issues not briefed are waived).
54
TX Compl. at case caption.
55
Compl. at 1.
56
TX Compl. at case caption; Compl. ¶¶ 11–15; OB at 4–9; AB at 3–4, 14; OA at
signature pages.

– 11 –
maintain that the APA is a material piece of the Operating Agreement and that

2112 Group is an intended third-party beneficiary of the APA, so it can be

heard with claims relating to the Operating Agreement.57 Thus, 2112 Group’s

absence is of limited importance.58

15. Both actions arise from a common nucleus of operative facts

because all of the claims stem from the same contracts.59 The Texas action

seeks to rescind the Operating Agreement and the APA, alleging that Martin

and his affiliated entities such as Blue Pointer and Rush II, committed fraud

and theft. 60 Conversely, this Delaware action seeks to enforce the same

agreements, alleging that Defendant failed to make his capital contribution

free and clear of liens, and to compel an asset transfer that Defendant seeks to

rescind in Texas.61 Litigating both actions would be inefficient and pose an

unnecessary risk of conflicting judgments. The Court is satisfied that the

57
AB at 4–7, 27–29.
58
See Vaccaro v. APS Healthcare Bethesda, Inc., 2016 WL 519866, at *3 (Del. Ch.
Feb. 9, 2016) (finding the parties to be functionally identical when one party was
not joined in the first-filed action).
Compare Compl. with TX Compl. and TX Ans. Choice Hotels Intern’l, Inc. v.
59

Columbus-Hunt Park DR. BNK Investors, L.L.C., 2009 WL 3335332, at *7 (Del.
Ch. Oct. 15, 2009).
60
See generally TX Compl. and TX Ans.
61
Compare Compl. with TX Compl. and TX Ans.

– 12 –
parties and issues are “functionally identical[,]” satisfying McWane’s third

inquiry.62

16. Plaintiffs argue that it is unclear whether a Texas court has the

authority to remove a member from 2112 Group.63 Even if the Texas court

could exercise such authority, Plaintiffs argue, Delaware’s substantial interest

in the governance of Delaware entities and the interpretation of Delaware

operating agreements warrants denial of a stay.64 The Court disagrees.

17. Plaintiffs characterize this dispute as one of governance because

Plaintiffs seek to remove a member of the LLC. But the heart of the issue is

whether alleged breaches of the APA and Operating Agreement, if proved,

are sufficient to trigger the Operating Agreement’s removal clause.65 A Texas

court would be engaging in straightforward contract interpretation under

Delaware law.66

62
See, e.g., Lisa, S.A. v. Mayorga, 993 A.2d 1042, 1048 n.17 (Del. 2010) (quoting
Choice Hotels, 2009 WL 3335332, at *7).
63
Draft Tr. of Oral Arg. on Def.’s Mot. to Dismiss at 34:3–38:1 (Aug. 5, 2025).
64
AB at 21.
65
Contrast Compl. ¶¶ 16–63 (alleging only that Defendant breached the
agreements) with AB at 21–23.
66
LLCs are creatures of contracts. New Enter. Assocs. 14, L.P. v. Rich, 295 A.3d
520, 580 (Del. Ch. 2023); 1 Symonds & O'Toole on DE Limited Liability Cos. §
4.01 (2025) (“[A] ‘limited liability company agreement’ is an agreement, which
denotes an undertaking [that is] contractual in nature.”). Because Delaware gives
strong deference to parties’ contractual agreements, and the Texas court will be

– 13 –
18. The Delaware LLC Act67 specifically states that to “[i]t is the

policy of this chapter to give the maximum effect to the principle of freedom

of contract and to the enforceability of limited liability company

agreements.”68 Which includes the “relative rights, powers and duties as the

limited liability company agreement may provide” to its managers. 69 The

statute also permits the parties to an LLC agreement to subject a party “to

specified penalties or specified consequences” including “reducing or

eliminating the defaulting member's proportionate interest in a limited

liability company . . . [and] forfeiture of the defaulting member's limited

liability company interest[.]”70 This Court has enforced provisions permitting

the expulsion of an LLC member.71

applying Delaware law, it seems unlikely that a Texas court could not fully
adjudicate the claims arising from the Operating Agreement. See 295 A.3d at 580.
67
6 Del. C. §§ 18-101–1208.
68
6 Del. C. § 18-1101.
69
6 Del. C. § 18-404.
70
See 6 Del. C. §§ 18-306, 18-502.
71
1 Symonds & O'Toole on DE Limited Liability Cos. § 5.04[E] (2025); Walker v.
Resource Dev. Co. Ltd., L.L.C., 791 A.2d 799, 815 (Del. Ch. 2000). “A limited
liability company agreement may provide that the interest of any member who fails
to make any contribution that the member is obligated to make shall be subject to
specified penalties” including eliminating or forfeiting the defaulting member’s
interest in the LLC. Symonds & O'Toole on DE Limited Liability Cos. § 5.04[E]
(2025) (citing 6 Del. C. § 18-306(1), (2)).

– 14 –
19. In my view, there is no substantial reason that a Delaware court

must weigh in on the removal issue under the circumstances presented here.

The Court therefore finds that the Texas court is a court capable of providing

complete relief to the parties.

20. The Court of Chancery has inherent authority to control its

docket. 72 This includes the power to stay litigation based on comity,

efficiency, or common sense.73 The Court may exercise this discretion freely

when a prior action is pending elsewhere in a court capable of providing

prompt and complete justice involving the same parties and the same issues.74

21. The Court’s discretion in managing its docket is guided by the

substantial progress of the Texas action, in which both parties have appeared,

asserted claims and counterclaims, and continued to litigate.75

22. The Delaware action, on the other hand, presents no compelling

need for immediate adjudication to prevent prejudice to either party. Given

the advanced stage of the Texas action, I find duplicating it in Delaware would

impose unnecessary costs without meaningful benefit.

72
MICH II, 2012 WL 2499507 at *4.
73
Id. at *5 (citing Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and
Commercial Practice in the Delaware Court of Chancery § 5.01 (2010)).
74
MICH II, 2012 WL 2499507 at *5.
75
See generally TX Compl.

– 15 –
23. Because I find that this litigation should be stayed under

McWane, I need not rule on Defendant’s other arguments. This action is

STAYED pending final adjudication of the Texas action.

24. If the Texas Court determines that it does not have the authority

to remove a member of 2112 Group, or declines to rule on that issue, the

parties may return to this Court for adjudication.

25. The parties must submit a joint status report every 90 days to

inform the Court about the state of the Texas Action. The first status report is

due on February 20, 2026. The parties must also provide the Texas Court with

a copy of this order.

26. This Order constitutes a “Report” under Court of Chancery Rule

144.76 Exceptions are stayed pending issuance of my Final Report.77

/s/ Danielle Gibbs
Magistrate in Chancery

76
Ct. Ch. R. 144(b)(1).
77
Ct. Ch. R. 144(b)(2), (c)(2)(A).

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