Scion Breckenridge Managing Member, LLC, et al. v. ASB Allegiance Real Estate Fund, et al.
In a reformation action concerning cash flow distributions in three real estate joint venture agreements, the Supreme Court held that the Vice Chancellor properly reformed the agreements on the basis of unilateral mistake and knowing silence by the other party. "Negligence in discovering an alleged mistake does not bar a reformation claim unless the negligence is so significant that it amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing. Ratifying a contract does not create an equitable bar to reformation unless the ratifying party had actual knowledge of the mistake giving rise to the reformation claim." In this matter, the Court reversed the Vice Chancellor's fee award because a contractual fee-shifting provision incorporating the words "incurred" and "reimburse" did not apply where counsel for the party seeking fees represented the party free of charge to avoid a malpractice claim. View "Scion Breckenridge Managing Member, LLC, et al. v. ASB Allegiance Real Estate Fund, et al." on Justia Law