Justia Tax Law Opinion SummariesArticles Posted in Delaware Court of Chancery
In re Delaware Public Schools Litigation
The Supreme Court held that Sussex County, Kent County, and New Castle County use assessment methodologies when preparing their assessment rolls used by school districts in levying local taxes that fail to comply with three legal requirements. Plaintiffs were the NAACP Delaware State Conference of Branches (the NAACP-DE), the Delawareans for Educational Opportunity (the DEO) and the City of Wilmington. The NAACP-DE and the DEO argued that Delaware's public schools failed to provide an adequate education for students from low-income households, students whose first language is not English, and students with disabilities. When school districts levy local taxes, they are required to use the assessment rolls prepared by Delaware's three counties. The NAACP-DE and the DEO argued that when preparing their assessment rolls, the counties failed to comply with 9 Del. C. 8306(a) (the True Value Statute) and Del. Const. art. VIII, 1 (the Uniformity Clause). The City of Wilmington argued that New Castle County also violated its obligations under 22 Del. C. 1101-1104 (the Assessment Roll Statutes). The Supreme Court held (1) Plaintiffs had standing to assert their claims; and (2) all three counties used assessment methodologies that violate the True Value Statute and the Uniformity Clause and that New Castle County violated its obligations under the Assessment Roll Statutes. View "In re Delaware Public Schools Litigation" on Justia Law
Shahin v. City of Dover
Plaintiffs allege Defendants discriminated against them on the basis of their national origin when assessing property taxes due on Plaintiffs’ home in Dover, Delaware and asked the court to “appoint an attorney to file a formal [c]omplaint on their behalf” under the Delaware Fair Housing Act (DFHA), 6 Del. C. 4613(a) and (b). According to Plaintiffs, they have made extensive, unsuccessful, efforts to find counsel during the past year. Plaintiffs do not claim to be unable to pay for counsel. The Chancery Court denied the motion, noting that, counting only their formal assessment appeals, this is Plaintiffs’ third suit. Even disregarding that Plaintiffs are not indigent, they have ably presented their claims thus far and made court filings while appearing pro se; their claims do not appear to be so legally or factually complex as to necessitate the assistance of counsel; Plaintiffs are not met with significant barriers or an inability to conduct a factual investigation; they have not alleged the need for expert discovery; and the case is unlikely to turn on credibility determinations. Plaintiffs do not suffer from a lack of capacity to seek counsel, as evidenced by their substantial efforts to obtain counsel to date. View "Shahin v. City of Dover" on Justia Law
LSVC Holdings, LLC v. Vestcom Parent Holdings, Inc.
In a memorandum opinion, the Delaware Court of Chancery held that the Stock Purchase Agreement allowed Vestcom to claim the full amount of the transaction tax deductions (TTDs) pre-closing. The TTDs in this case arose from the sale of a manufacturer of retail shelving labels between sophisticated financial actors. After reviewing the evidence presented at trial, the court held that the Agreement allowed only one objectively reasonable meaning, namely that Vestcom was free to claim 100% of the TTDs to reduce pre-closing taxable income, but VPH would have to remit 50% of the value of any post-closing refunds or reductions in taxable income to LSVC. View "LSVC Holdings, LLC v. Vestcom Parent Holdings, Inc." on Justia Law
Gibraltar Private Bank & Trust Co. v. Boston Private Financial Holdings, Inc.
Gibraltar brought this action against Boston Private for specific performance of Boston Private's obligations under the tax allocation provision of the stock purchase agreement between the parties. Both parties moved for judgment on the pleadings under Court of Chancery Rule 12(c) on the question of how the tax payment provided for in the Stock Purchase Agreement should be calculated. In support of their respective motions, both parties argue that Section 5.5(d) of the Stock Purchase Agreement was unambiguous and that their respective interpretation was the only reasonable interpretation. The court held that the relevant portion of Section 5.5(d) was ambiguous. Since each party had advanced a reading of Section 5.5(d) that was reasonable, neither party had met its burden of demonstrating that its interpretation was the only reasonable interpretation. Accordingly, judgment on the pleadings was denied.
Korn v. State of Delaware Auditor of Accounts R. Thomas Wagner, Jr.
Plaintiff, a Delaware taxpayer, asserted claims against defendant, the State of Delaware Auditor of Accounts, for claims related to defendant's alleged noncompliance with 29 Del. C. 2906(f), which stated, in part, that the "Auditor of Accounts shall conduct postaudits of local school district tax funds budget and expenditures annually" and for claims related to defendant's alleged violation of Delaware's Freedom of Information Act (FOIA), 29 Del. C. ch. 100., by failing to provide plaintiff with copies of certain employee time sheets which he duly requested. The court held that it lacked subject matter jurisdiction over the audit claims and the FOIA claims must be dismissed because of plaintiff's failure to exhaust administrative remedies.