Corporate – Civil Practice – Statute of Limitations – Delaware Law – Breach of Fiduciary Duties

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Menezes v. WL Ross & Co. (Lawyers Weekly No. 010-058-13, 26 pp.) (Jean Hoefer Toal, Ch.J.) Appealed from Greenville County Circuit Court (Edward W. Miller, J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.

Holding: Under Delaware law, plaintiff’s breach of fiduciary duty claim arose when the terms of a merger between his former employer and another company were approved by the employer’s board of directors, not when the merger was officially closed by vote of the shareholders. After the merger approval, plaintiff settled his employment claim against his former employer, releasing all claims against the employer. Since his breach of fiduciary duty claim related to the merger had already accrued by then, he released it.

We reverse the Court of Appeals’ holding that plaintiff’s claim merely “could” have arisen prior to the closing of the merger. Instead, we find that plaintiff held a valid claim at the time he signed the release; therefore, his suit cannot be sustained and is dismissed with prejudice. The Court of Appeals correctly held that the trial court erred in dismissing defendant’s defenses and counterclaim relating to the release.