Dale Riker v. Teucrium Trading, LLC

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

Date Submitted: July 3, 2023
Date Decided: July 7, 2023

Joseph B. Cicero, Esquire T. Brad Davey, Esquire
Paul D. Brown, Esquire Mathew A. Golden, Esquire
Chipman Brown Cicero & Cole, LLP Potter Anderson & Corroon LLP
1313 North Market Street, Suite 5400 1313 North Market Street, 6th Floor
Wilmington, Delaware 19801 Wilmington, Delaware 19801

RE: Dale Riker et al. v. Teucrium Trading, LLC,
C.A. No. 2022-1030-LWW

Dear Counsel:

This letter resolves defendant Teucrium Trading, LLC’s Application for

Certification of an Interlocutory Appeal (the “Application”). 1 The Application

concerns my June 13, 2023 bench ruling on the parties’ cross-motions for summary

judgment (the “Ruling”) and implementing order. 2 In the Ruling, I granted the

plaintiffs’ cross-motion for summary judgment on their entitlement to advancement

1
Def.’s Appl. for Certification of an Interlocutory Appeal (Dkt. 50) (“Appl.”).
2
See Tr. of June 13, 2023 Telephonic Rulings of the Ct. on Pls.’ Cross-Mot. for Summ. J.
on Entitlement to Advancement and Def.’s Cross-Motion for Summ. J. (Dkt. 55) (“Ruling
Tr.”); see also Minute Order (Dkt. 46).
C.A. No. 2022-1030-LWW
July 7, 2023
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and denied the defendant’s cross-motion. For the following reasons, the Application

for an interlocutory appeal of that Ruling is refused.

I. BACKGROUND

This advancement action was filed by plaintiffs Dale Riker and Barbara Riker

on November 15, 2022. Dale Riker is the former Chief Executive Officer of

defendant Teucrium Trading, LLC. Barbara Riker is the company’s former Chief

Financial Officer. The plaintiffs sought advancement of certain fees and expenses

incurred in connection with a plenary action captioned Gilbertie v. Riker, C.A. No.

2020-1018-LWW, as well as fees on fees. Advancement was sought pursuant to the

October 26, 2009 Amended and Restated Limited Liability Company Agreement of

Teucrium Trading, LLC (the “LLC Agreement”).

In the Ruling, I concluded that the plaintiffs had demonstrated their

entitlement to mandatory advancement under the LLC Agreement as a matter of

law.3 I also determined that the plaintiffs were entitled to fees on fees.4 In terms of

next steps, I “aske[d] that the parties meet and confer on any remaining allocation

disputes or specific disputes about time entries” in light of my guidance on each

3
Ruling Tr. 27-28.
4
Id. at 27.
C.A. No. 2022-1030-LWW
July 7, 2023
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claim and counterclaim at issue.5 Any outstanding disputes were to be resolved

“under the Fitracks process.”6

Teucrium filed the Application on June 23, 2023. On July 3, 2023, the

plaintiffs filed an opposition to the Application.

II. ANALYSIS

Delaware Supreme Court Rule 42 governs interlocutory appeals.

Rule 42(b)(i) provides that “[n]o interlocutory appeal will be certified by the trial

court or accepted by this Court unless the order of the trial court decides a substantial

issue of material importance that merits appellate review before a final judgment.”7

Instances where the trial court certifies an interlocutory appeal “should be

exceptional, not routine, because [interlocutory appeals] disrupt the normal

procession of litigation, cause delay, and can threaten to exhaust scarce party and

judicial resources.”8 For this reason, “parties should only ask for the right to seek

interlocutory review if they believe in good faith that there are substantial benefits

that will outweigh the certain costs that accompany an interlocutory appeal.”9

5
Id. at 28.
6
Id.
7
Supr. Ct. R. 42(b)(i).
8
Supr. Ct. R. 42(b)(ii).
9
Id.
C.A. No. 2022-1030-LWW
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When determining whether to certify an interlocutory appeal, the trial court

should consider the eight factors set out in Rule 42(b)(iii). The court is to “identify

whether and why the likely benefits of interlocutory review outweigh the probable

costs, such that interlocutory review is in the interests of justice. If the balance is

uncertain, the trial court should refuse to certify the interlocutory appeal.”10 After

balancing these factors and weighing the costs and benefits, I conclude that

interlocutory review should be denied.

Teucrium asserts that the Ruling “decided a ‘substantial issue of material

importance’ because it resolve[d] all underlying questions of liability for

advancement on each claim for which the Rikers have sought advancement.”11 In

some advancement cases, the substantial issue criterion has been met.12 But even if

it were met here, any benefit from permitting an interlocutory appeal of the Ruling

would be uncertain at best and outweighed by the considerable costs.

Teucrium insists that an interlocutory appeal would carry a “modest price”

compared to the “substantial burden” it bears from the plaintiffs’ ongoing

10
Supr. Ct. R. 42(b)(iii)(H).
11
Appl. ¶ 5.
12
See Pontone v. Milso Indus. Corp., 2014 WL 4967228, at *2 (Del. Ch. Oct. 6, 2014)
(holding that an order granting partial advancement determined a “substantial issue” for
purposes of an interlocutory appeal request).
C.A. No. 2022-1030-LWW
July 7, 2023
Page 5 of 7

advancement requests.13 The court considered and rejected a similar argument in

Sider v. Hertz Global Holdings, Inc.14 In Sider, the defendant was ordered to make

advancement payments and sought an interlocutory appeal before the payments

commenced. The court explained that the defendant’s approach would upend the

normal course of advancement proceedings and the “dynamic favoring advancement

claimants.”15 The court observed: “‘[t]he policy of Delaware favors advancement

when it is provided for, with the Company’s remedy for improperly advanced fees

being recoupment at the indemnification stage,’ or on appeal after issues of

reasonableness have been finally resolved.” 16 Here, Teucrium’s argument is

similarly problematic.

Moreover, none of the Rule 42(b)(iii) factors cited by Teucrium—specifically,

(A), (B), (G), and (H)—support interlocutory review.17 First, the Ruling did not

present an issue of first impression; it considered a factual situation that has some

differences from applicable precedent.18 The court also applied straightforward and

13
Appl. ¶ 5.
14
2019 WL 2501481, at *3 (Del. Ch. June 17, 2019) (ORDER).
15
Id. (“[I]t should be easier to turn the ‘advancement spigot’ on than to turn it off.”)
(citation omitted).
16
Id. at *3 (quoting Mooney v. Echo Therapeutics, Inc., 2015 WL 3413272, at *6 (Del. Ch.
May 28, 2015)).
17
Appl. ¶¶ 6-11.
18
Ruling Tr. 17-20.
C.A. No. 2022-1030-LWW
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well-settled principles of contract interpretation.19 Second, Teucrium does not cite

any decision squarely conflicting with the Ruling. Third, an appellate ruling on

advancement entitlement will not dispose of the action entirely. Even if the appeal

were successful, Teucrium will be responsible for advancement on certain claims

and the Fitracks procedure will continue.20 Finally, an interlocutory appeal would

not serve considerations of justice. As discussed above, Delaware public policy

favors advancement. This policy interest “suggest[s] that interlocutory appeals in

advancement cases should be reserved for particularly exceptional cases.”21

There is nothing exceptional about this case or the Ruling. The LLC

Agreement grants advancement rights. The court interpreted the LLC Agreement

on a paper record and determined that the plaintiffs were entitled to advancement.

19
Id. at 20-21; see West Willow-Bay Ct., LLC v. Robino-Bay Ct. Plaza, LLC, 2007 WL
4357667, at *3 (Del. Ch. Dec. 6, 2007) (denying certification where “[n]o novel or
unsettled law . . . informed the Court’s reading of the Agreement. That a trial court may
have been (or was) wrong is not the standard for interlocutory review.”).
20
In its cross-motion, Teucrium did not challenge whether the plaintiffs were named
defendants or respondents with respect to Counts V through VII in the plenary action.
Thus, a successful appeal would not affect the Ruling on those counts. Further, the Ruling
did not address Teucrium’s “by reason of the fact” arguments because that requirement
only pertains to indemnification under the plain text of the LLC Agreement. If a similar
requirement were read into the advancement provision of the LLC Agreement, this court
would need to revisit the issue.
21
Salomon v. Kroenke Sports & Ent., LLC, 2020 WL 3963937, at *3 (Del. Ch. July 8,
2020) (declining to certify an interlocutory appeal of an advancement decision).
C.A. No. 2022-1030-LWW
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And a procedure was set to resolve disputes over the reasonableness of the plaintiffs’

requested fees and expenses.

III. CONCLUSION

Under these circumstances, I cannot certify the Ruling for an interlocutory

appeal. The costs of certification, including the drain on judicial resources from

adjudicating piecemeal appeals, would outweigh any benefit.22 Accordingly, the

Application is refused.23

To the extent necessary for this decision to take effect, IT IS SO ORDERED.

Sincerely yours,

/s/ Lori W. Will
Lori W. Will
Vice Chancellor

22
See Sup. Ct. R. 42(b)(ii); see, e.g., Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Axiall
Corp., 2019 WL 4795508, at *2 (Del. Oct. 1, 2019) (TABLE) (refusing an interlocutory
appeal because the ruling was “not exceptional” and “the potential benefits of interlocutory
review do not outweigh the inefficiency, disruption, and probable costs caused by an
interlocutory appeal”).
23
See Supr. Ct. R. 42(d)(iv)(D) (directing that the notice of appeal to the Supreme Court
attach “[t]he order, if any, of the trial court certifying or refusing to certify the interlocutory
appeal”).