In a recent decision by Vice Chancellor Glasscock, Hermelin v. K-V Pharm. Co., C.A. No. 6936-VCG, the Court of Chancery examined whether to grant Plaintiff’s motion for judgment on the pleadings with respect to counts IV and VI of his Verified Amended Complaint, and a partial judgment in connection with count I.
This case involves Plaintiff’s claim for advancement and indemnification regarding lawsuits arising out of his tenure of employment with Defendant K-V Pharm. Co. Count I of the Complaint seeks advancement of fees for these lawsuits, and Counts IV and VI of the Complaint seek indemnification with respect to two of the suits. Plaintiff sought a declaratory judgment in connection with entitlement to advancement and indemnification.
The Court noted that Defendant represented to the Court and has changed its pleadings to reflect that although it does not concede that the Plaintiff was entitled to indemnification, it has nonetheless paid the fees incurred by the Plaintiff for those actions and has indicated that it will not seek to claw back those amounts
Despite this representation, Plaintiff still sought a declaratory judgment, on the theory that only a judgment from the Court will estop Defendant or its assigns from attempting to claw back the fees advanced with respect to these underlying litigations in the future. In the alternative, Plaintiff sought a full litigation and determination of these issues, despite the concessions of the Defendant.
The Court ruled that the relief sought in Counts IV and VI, and the partial relief sought in Count I, are now moot, because those claims no longer state an actual controversy between the parties. The Court based its determination upon Defendant’s agreement to provide advancement and indemnification, and the Court found such representation to be binding. Accordingly, the Court denied Plaintiff’s motion for judgment on the pleadings with respect to these Counts.