Lorene Murphy v. Alexa Spinoso

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

LORENE MURPHY,                       )
                                     )
           Plaintiff/Petitioner,     )
                                     )
     v.                              )
                                     )
ALEXA SPINOSO, STEVEN                )
SPINOSO, LISA MORRA, and             )     C.A. No. 2025-0075-CDW
AUSTIN MURPHY,                       )
                                     )
           Defendants/Respondents,   )
                                     )
     and                             )
                                     )
MARYLILL LLC,                        )
                                     )
           Nominal Respondent.       )

           REPORT GRANTING MOTIONS TO DISMISS

                   Date Submitted: December 4, 2025
                    Date Decided: March 19, 2026

Joesph L. Christensen, CHRISTENSEN LAW LLC, Wilmington, Delaware;
Maurice W. Heller, FOSTER GARVEY PC, New York, New York; Julia
Doherty, FOSTER GARVEY PC, Seattle, Washington; Maggie Sholian,
FOSTER GARVEY PC, Portland, Oregon; Counsel for Plaintiff/Petitioner
Lorene Murphy

Todd A. Flubacher, Matthew R. Clark, MORRIS, NICHOLS, ARSHT &
TUNNELL LLP, Wilmington, Delaware; Counsel for Defendants/Respondents
Alexa Spinoso and Steven Spinoso and Nominal Respondent Marylill LLC

Richard L. Renck, DUANE MORRIS LLP, Wilmington, Delaware; Counsel
for Defendant/Respondent Austin Murphy

WRIGHT, M.
      Several years ago, four heirs to a $100 million estate being probated in

Florida could not agree on how to handle the estate’s assets. Most of the

estate’s value was tied up in a Delaware limited liability company holding stock

in three publicly traded companies. There would be significant tax liabilities if

the LLC was immediately dissolved and its assets (the stock) distributed to the

heirs before June 2026.

      But the estate needed to borrow money to pay estate taxes in the short

term and the heirs wanted to use some of the inherited assets during that

holding period. So the heirs, assisted by counsel, negotiated a settlement that

contemplated the LLC remaining in existence through at least June 2026,

holding the member interests in four newly created subsidiary limited liability

companies, each of which would hold one-fourth of the LLC’s assets. The

LLC and the subsidiary LLCs would remain under the control of the estate’s

personal representatives, but each heir would have some ability to direct the

personal representatives’ management of the assets. The parties agreed that

Florida law would govern their agreement and that the Florida probate court

would be the exclusive forum to adjudicate any disputes relating to the

agreement. They also stipulated to and obtained an order from the Florida

probate court signing off on key terms of the settlement.
      After that, things did not go the way one heir expected. The estate’s

personal representatives denied her efforts to give them directions and refused

to allow her to borrow from the subsidiary LLC’s margin loan for her personal

use. She asked the Florida probate court to make them do it, but the court

denied the request. She then asked the Florida court to vacate the settlement

agreement for lack of subject matter jurisdiction.

      The heir also set her sights on Delaware. She advances several claims

here, all of them designed to undo the settlement she negotiated and presented

to the Florida probate court. First, she now contends that the LLC she agreed

would continue until at least June 2026 actually dissolved as a matter of law in

2021 when the LLC’s then-sole member died. Second, she seeks reformation

of the subsidiary LLC’s operating agreement, contending that by either

unilateral or mutual mistake the agreement omits material terms the parties

agreed to in their settlement. Third, she asserts a claim against the personal

representatives for breaching their fiduciary duties as managers of the

subsidiary LLC. The responding parties all moved to dismiss.

      This report recommends that the motions to dismiss be granted. The

heir’s dissolution claim fails because she lacks standing to seek dissolution

under Section 18-802 of the Delaware Limited Liability Company Act and she

has failed to plead facts suggesting this is an exceptionally rare situation where



                                      –2–
equity should intervene to aid a non-member and non-manager’s request to

have this court order the dissolution and winding up of a Delaware limited

liability company. The heir’s reformation claim fails because she has not come

close to pleading the circumstances constituting the alleged mistake with the

particularity Delaware law requires. Finally, the heir’s fiduciary duty claim

fails because personal representatives in their capacity as the managers of the

subsidiary LLC do not owe fiduciary duties to the heir.

                            I.    BACKGROUND

         The facts necessary to my rulings are drawn from the Verified Amended

Complaint for Declaratory Judgment and Injunctive Relief (“Amended

Complaint”)1 and documents attached to or incorporated by reference in the

Amended Complaint.2 I also draw some facts from the Verified Petition for

Dissolution (“Petition”)3 solely for purposes of explaining the parties’

relationships to each other. Finally, I draw some facts from documents filed in




1
    Dkt. 17.
2
 Windsor I, LLC v. CWCapital Asset Mgmt. LLC, 238 A.3d 863, 874–75 (Del. 2020)
(citing In re General Motors (Hughes) S’holder Litig., 897 A.2d 162, 169 (Del.
2006)).
3
    Dkt. 1.


                                     –3–
Florida litigation involving the parties for background purposes, but do not rely

on the facts in those documents for the substance of my rulings.4

A.        The Parties

          This litigation primarily concerns the administration of nominal

respondent Marylill, LLC and one of its subsidiaries. Marylill is a Delaware

limited liability company, formed by Edward Peter Zanchetta on June 3, 2021.5

Marylill was formed for the purpose of holding and administering Zanchetta’s

assets late in his life.6

          Plaintiff and petitioner Lorene Murphy (“Plaintiff”) is Zanchetta’s niece.7

Near the end of Zanchetta’s life, the Eleventh Judicial Circuit Court in Miami-

Dade County, Florida (“Florida Court”) appointed Plaintiff as the plenary

guardian of Zanchetta’s person and property.8 In this capacity Plaintiff served

dual roles as the manager of Marylill and acting on behalf of its sole member:

Zanchetta.9


4
 See generally NVR, Inc. v. Carter Farm, LLC, 2026 WL 297226, at *7–9 (Del. Ch.
Feb. 4, 2026) (discussing when and for what purposes the court may take judicial
notice of other court filings and records when considering a motion to dismiss)
(collecting authorities).
5
    Am. Compl. ¶¶ 2–3, 9; 16–20; Am. Compl. Ex. 1 § 2.1.
6
 See Am. Compl. ¶¶ 16–25 (stating Marylill did not conduct business in Florida but
held Zanchetta’s funds).
7
    Id. ¶ 16; Pet. ¶ 3.
8
    Am. Compl. ¶¶ 18–20.
9
    Id. ¶¶ 18–25; see Am. Compl. Ex. 1 Scheds. A, C.


                                         –4–
         Defendant and respondent Alexa Spinoso is Plaintiff’s sister, Zanchetta’s

niece, a co-personal representative of the Estate of Edward Peter Zanchetta

(“Estate”), and a beneficiary of the Estate.10 Defendant and respondent Steven

Spinoso is Plaintiff’s brother, Zanchetta’s nephew, a co-personal representative

of the Estate, and a beneficiary of the Estate.11 Respondent Lisa Morra

(“Morra”) is Plaintiff’s sister, Zanchetta’s niece, and a beneficiary of the

Estate.12      Defendant Austin Murphy is Plaintiff’s son, Zanchetta’s

grandnephew, and a co-personal representative of the Estate.13 In this report I

refer to Alexa Spinoso, Steven Spinoso, and Morra as “Respondents,” to Alexa

Spinoso and Steven Spinoso as “Moving Respondents,”14 and to Alexa

Spinoso, Steven Spinoso, and Austin Murphy as the “Co-PRs.”




10
     Am. Compl. ¶ 12; Pet. ¶ 4.
11
     Am. Compl. ¶ 13; Pet. ¶ 5.
12
  Am. Compl. ¶ 14; Pet. ¶ 6; Tr. of 12-4-2025 Oral Arg. on Defs.’/Resp’ts’ Mot. to
Dismiss (“Tr.”) at 5, Dkt. 49.
13
     Am. Compl. ¶¶ 15, 72.
14
  I distinguish between Respondents and Moving Respondents because Morra has
not appeared or otherwise participated in this case. Plaintiff purports to have served
the petition and summons on Morra on February 7, 2025 by serving non-party
Zanchetta Investments, LLC through its registered agent Corporate Creations
Networks Inc. See Dkt. 6. The docket does not reflect any response from Morra to
the Petition, nor does it reflect Plaintiff seeking to default her or serving the Amended
Complaint on her. Despite Morra’s lack of participation, she ultimately benefits from
Moving Respondents’ efforts.


                                         –5–
          LAEC Investments, LLC (“LAEC”) is a Delaware LLC and subsidiary of

Marylill that holds 25% of Marylill’s assets.15 The Co-PRs are the managers of

LAEC.16

B.        Plaintiff Forms Marylill on Zanchetta’s Behalf

          Zanchetta was the owner of Virda Netco Establishment, an entity formed

under the laws of Liechtenstein.17 Virda Netco held shares of three publicly

traded companies.18 On August 2, 2018, the Florida Court appointed Plaintiff

as Zanchetta’s plenary guardian of his person and property.19

          On June 3, 2021, shortly before Zanchetta’s passing, Plaintiff formed

Marylill on his behalf.20 In conjunction with Marylill’s formation, Plaintiff

executed the Marylill’s Limited Liability Company Agreement (“Marylill

Agreement”).21 Under the Marylill Agreement, Zanchetta was Marylill’s sole

member and Plaintiff was the sole manager.22 On June 8, Plaintiff transferred




15
     Am. Compl. ¶ 10.
16
     Id. ¶¶ 10, 12–13, 15.
17
     Id. ¶ 16.
18
     Id. ¶ 17.
19
     Id. ¶ 18.
20
     Id. ¶ 19.
21
     Id. ¶ 21; Am. Compl. Ex. 1. (dated June 3, 2021).
22
     Am. Compl. ¶ 21; Am. Compl. Ex. 1 § 1.1(e).


                                         –6–
Virda Netco’s assets to Marylill as Zanchetta’s initial capital contribution.23 At

this time, Marylill held approximately $93 million in assets.24

          Zanchetta died intestate on June 21.25 Zanchetta had no spouse or

children, and his brother and parents predeceased him.26 His only heirs are

Plaintiff and Respondents.27 Under Florida intestacy law, each of the four heirs

is entitled to an equal share of the Estate.28

B.        The Co-PRs Begin Administering the Estate

          On September 9, the Co-PRs filed a petition for administration in the

Florida Court.29        The Florida Court appointed the Co-PRs co-personal

representatives of the Estate on November 15.30 On December 17, Plaintiff

filed a petition with the Florida Court to approve her final accounting of

Zanchetta’s assets, authorize her to distribute the assets to Zanchetta’s heirs and




23
     Am. Compl. ¶ 20.
24
     See id. ¶ 20.
25
     Id. ¶¶ 24, 29.
26
     Id. ¶ 29.
27
     Id. ¶ 29.
28
   See Fla. Stat. Ann. § 732.104 (West) (stating intestate estates are distributed per
stirpes); Per Stirpes, BLACK’S LAW DICTIONARY (12th ed. 2024).
29
     Am. Compl. ¶ 30.
30
     Id. ¶ 33.


                                        –7–
creditors, and discharge her as Zanchetta’s guardian.31 On January 18, 2022,

the Co-PRs filed an inventory of the Estate with the Florida Court.32 The

Estate’s assets listed in the inventory totaled $104,315,936.67, and included

assets held by Marylill.33 Plaintiff alleges that the inventory simply listed

Marylill’s assets as those of the Estate and “was devoid of any mention of

Marylill or Zanchetta’s ownership interest in Marylill.34

C.         The Parties Dispute How to Distribute the Estate’s Assets

           On February 17, the Florida Court entered an Order Approving

Distribution, which directed Plaintiff to deliver and distribute Zanchetta’s assets

to the Co-PRs.35 Around this time, the four heirs began to debate how the

Estate should be administered—the estate taxes being a significant subject.36

At some point before March 21, the Co-PRs determined that the Estate did not

have enough cash to pay its federal taxes which were soon due.37 The Co-PRs


31
 See Opening Br. of Defs./Resp’ts Alexa Spinoso and Steven Spinoso, and Nominal
Defendant Marylill LLC in Supp. of Their Mot. to Dismiss, Dkt. 36 (“Opening Br.”),
Exs. B–C.
32
     Am. Compl. ¶ 34.
33
     Id.
34
     Id.
35
     Opening Br. Ex. C.
36
     Am. Compl. ¶ 35.
37
   See Agreed Order on Emergency Pet. for Order Authorizing Personal
Representatives to Sell Assets or Borrow Funds For Payment of Fed. Estate Taxes
(“Agreed Order”), Am. Compl. Ex. 2 at 1.


                                      –8–
filed an emergency petition in the Florida Court for an order allowing them to

either sell the Estate’s assets or borrow funds to pay the federal estate tax.38

Morra filed a counterpetition.39

           On March 21, the Florida Court held a hearing on the emergency

petition. At the hearing, the parties came to an agreement to resolve the tax

issue.40 The Florida Court entered an order in line with the agreed terms.41 The

Co-PRs were directed borrow funds to pay the estate taxes.42 The Co-PRs were

also ordered to form four limited liability companies as subsidiaries of Marylill

(“Sub LLCs”), each of them to be funded with one-fourth of Marylill’s assets.43

Each Sub LLC was allocated to one of Zanchetta’s four heirs, but the member

interest in each Sub LLC remained with Marylill.44 Lastly, the Florida Court

appointed the Co-PRs as the managers of the Sub LLCs, and granted each of

the beneficiaries authority to direct the Co-PRs to engage in transactions

“concerning the assets in the beneficiary’s respective” Sub LLC.45



38
     See Agreed Order at 1.
39
     Id.
40
     Id.
41
     Id.
42
     Id. ¶ 2.
43
     Id. ¶ 4.
44
     Id. ¶ 5.
45
     Id. ¶¶ 3, 6.


                                     –9–
D.        The Co-PRs Form the Sub LLCs and Assume Control of
          Marylill

          On March 24, the Co-PRs formed the Sub LLCs: (1) ASJ Marylill

Investments, LLC for Alexa Spinoso; (2) Fix-It Rite! Holdings, LLC for Steven

Spinoso; (3) Zanchetta Investments, LLC for Morra; and (4) LAEC for

Plaintiff.46 That same day, Plaintiff and the Co-PRs executed the Limited

Liability Company Agreement of LAE Investments, LLC (“LAEC

Agreement”).47 The LAEC Agreement listed Marylill as its sole member48 and

vested the Co-PRs with joint management duties and powers.49 The LAEC

Agreement directed the Co-PRs “to conduct the affairs of [LAEC] in the best

interests of [LAEC] and of the Member[:]” Marylill.50

          On April 4, the Co-PRs and Plaintiff executed a Written Consent of

Manager and Sole Member of Marylill (“Written Consent”) to formally name

the Estate as the sole member and appoint the Co-PRs as the managers of



46
   Am. Compl. ¶ 39. The pleadings do not identify when the Co-PRs filed the
certificates of formation for the Sub LLCs, but publicly available information from
the Delaware Division of Corporations indicates they did so on March 24, 2022. See
https://icis.corp.delaware.gov/ecorp/entitysearch/NameSearch.aspx. Cf. D.R.E. 201.
47
   See LAEC Agreement at Recitals. LAEC was initially formed as LAE
Investments, LLC but later changed its name to LAEC Investments, LLC. See Am.
Compl. ¶ 7.
48
     LAEC Agreement § 1.10; id. Exs. A–B (listing Marylill as the sole member).
49
     Id. §§ 5.1–5.3.
50
     Id. § 5.3.c.


                                       – 10 –
Marylill.51 Plaintiff signed as the “Resigning Manager.”52 After executing the

Written Consent, the Co-PRs amended the Marylill Agreement to reflect the

changes outlined in the Written Consent.53

         On April 6, the Florida Court entered an order discharging Plaintiff as

Zanchetta’s plenary guardian.54 In doing so, the Florida Court found that

Plaintiff “delivered [Zanchetta]’s assets to the person(s)/entity entitled” to

receive them.55

E.       The Parties Execute a Settlement Agreement Memorializing
         the In-Court Agreement

         On May 16, all of the parties in this action executed a settlement

agreement (“Settlement Agreement”)56 resolving their respective claims in the

Florida Court probate proceedings and memorializing the terms of the Florida

Court’s March order.57




51
  Am. Compl. ¶ 45; Opening Br. Ex. E. Plaintiff signed two days later, but the
consent is backdated to April 4. See Opening Br. Ex. E at *2.
52
     Opening Br. Ex. E at *2.
53
     See Opening Br. Ex. F.
54
     Opening Br. Ex. G.
55
     Opening Br. Ex. G.
56
     Am. Compl. Ex. 4.
57
  Am. Compl. ¶ 48; see Settlement Agreement at 19–23. Plaintiff executed the
Settlement Agreement on May 16, but the Settlement Agreement is dated and signed
by the Co-PRs and Mora on May 6.


                                      – 11 –
           The Settlement Agreement laid out how the Sub LLCs would be

governed and each beneficiary’s rights and authority related to their respective

Sub LLC.58 The Settlement Agreement gave each beneficiary the title of

“Investment Director” with the power to “direct [the Co-PRs], as the managers

of the [Sub] LLC assigned to the Investment Director . . . to sell, borrow

against, or enter into a securities backed line of credit[,]” among other

transactions concerning that Sub LLC’s assets.59 In addition, the Settlement

Agreement required the Co-PRs to “otherwise administer such [Sub]

LLC . . . without the need for further direction from the Investment

Director[].”60

           The Settlement Agreement also laid out how Marylill and the Sub LLCs

would be liquidated and their assets distributed to the beneficiaries.61 The Co-

PRs were barred from closing the Estate before June 3, 2026, without the four

heirs’ consent.62 Once the Estate was set to be closed, the Co-PRs would




58
     See Settlement Agreement ¶¶ 3–5.
59
     Id. ¶ 5.
60
     Id.
61
     Id. ¶¶ 10–13, 19.
62
     Id. ¶ 10.


                                        – 12 –
distribute each Sub LLC’s assets as outlined in Section 1163 and each

beneficiary’s share of the Estate’s taxes would be calculated under Section 12.64

          Each of the parties to the Settlement Agreement acknowledged being

represented by, or having the opportunity to consult with, independent legal

counsel and tax advisors in connection with negotiating and executing the

Settlement Agreement, and to making their “own economic analysis of [the

Settlement] Agreement and [their] obligations thereunder, free of any advice or

representations” of another settling party.65 The parties also agreed the Florida

Court would have exclusive jurisdiction “to enforce [the Settlement]

Agreement and to determine any and all disputes arising under or related in any

way to this Agreement,” and that Florida law would govern any interpretation

of the Settlement Agreement.66




63
     Id. See id. ¶ 11.
64
     Id. ¶ 12.
65
   Id. The parties were all represented by counsel. See id. ¶ 33. The parties also
“acknowledge[d], represent[ed], and warrant[ed]” that they were not acting under
“any duress or undue influence,” that they had “read [the Settlement] Agreement and
understood its terms,” and that they “underst[ood] the consequences and legal effects
of [the Settlement] Agreement[.]” Id. ¶ 31.
66
     Id. ¶¶ 22, 25.


                                       – 13 –
           After the parties executed the Settlement Agreement, they presented it to

the Florida Court, which approved it on May 20, 2022, and entered it as an

order of the Florida Court on May 21.67

F.         Plaintiff Re-Initiates Probate Proceedings to Revoke or
           Modify the Settlement Agreement

           Things quieted down for a few months, but the underlying conflict

between the parties reemerged. Plaintiff alleges that the Co-PRs—two of her

siblings and her son—“abused their legally invalid positions as purported

managers of Marylill and LAEC.”68 Plaintiff claims that the Co-PRs “deprived

[her] of her ability to access and control the assets” in LAEC which she

maintains “rightfully belong to her[.]”69

           On August 23, 2023, Plaintiff filed a motion with the Florida Court to

compel the Co-PRs “to follow [her] directions . . . as Investment Director and

allow her to borrow from the margin loan for personal use.”70 The Florida

Court denied Plaintiff’s motion.71




67
     Opening Br. Exs. H–I; see Am. Compl. ¶ 54.
68
     Am. Compl. ¶ 54.
69
     Id.
70
     Id. ¶ 58.
71
     Id.


                                        – 14 –
          On May 24, 2024, Plaintiff filed a Motion to Vacate the Settlement

Agreement (“Motion to Vacate”) in the Florida Court.72 In the Motion to

Vacate, Plaintiff argued that the Florida Court lacked personal and subject

matter jurisdiction over Marylill, and thus the Settlement Agreement was

improper.73 Plaintiff withdrew the Motion to Vacate sometime before briefing

began on the motions to dismiss.74

          Plaintiff maintains that the Co-PRs “have taken funds from Marylill’s

assets . . . but have deprived [her] from doing so.”75 Plaintiff asserts that the

Co-PRs have each received over $400,000 from Marylill’s assets, including to

pay their personal attorneys’ fees in the Florida probate proceedings.76

Concurrently, Plaintiff alleges, the Co-PRs have blocked any distribution to her

and declined to enter into a loan secured by LAEC assets, leaving her in a “dire

financial situation . . . with barely enough [cash] to support herself.”77 Plaintiff




72
     Id. ¶ 61.
73
     Id. ¶¶ 60–61.
74
  See Opening Br. 14; Tr. 9, 52. Moving Respondents also say Plaintiff has filed
“several requests with the” Florida Court “seeking early distributions of income
generated by LAEC[.]” Opening Br. 14.
75
     Am. Compl. ¶ 67.
76
     Id. ¶¶ 67–68.
77
     Id. ¶¶ 69–70.

                                      – 15 –
contends that this left her facing the threat of insolvency and prevented her

from reentering the job market.78

F.       Plaintiff Files this Action

         On January 23, 2025, Plaintiff filed the Petition.79 Plaintiff asserted two

claims in the Petition. Count I was a claim asking the court to declare that

Marylill was dissolved 90 days after Zanchetta’s death as a matter of law under

Section 18-801 of the Delaware Limited Liability Company Act (“LLC Act”)80

and the Marylill Agreement, and order Marylill’s winding up.81 Count II was a

claim asking the court to dissolve Marylill under Section 18-802 of the LLC

Act and appoint her liquidating trustee under Section 18-805.82

         Moving Respondents moved to dismiss with an accompanying opening

brief on February 6.83 On April 30, Plaintiff amended the Petition by filing her

Verified Amended Complaint for Declaratory Judgment and Injunctive Relief,

or in the Alternative, Petition for Dissolution. She added Austin Murphy as a

defendant and added claims for reformation of the LAEC Agreement under the


78
     Id. ¶¶ 72–73.
79
     See Pet.
80
     6 Del. C. §§ 18-101–18-1208.
81
     Pet. ¶ 46; see also Am. Compl. ¶¶ 75–85 (Count I).
82
     Pet. ¶ 54; see also Am. Compl. ¶¶ 96–102 (Count III).
83
 Dkt. 8. Austin Murphy was not a party to these proceedings until Plaintiff filed the
Amended Complaint. See Dkt. 23.


                                        – 16 –
doctrines of unilateral and mutual mistake and for breaches of fiduciary duty

against the Co-PRs.84 The Co-PRs moved to dismiss the Complaint under

Court of Chancery Rule 12(b)(6).85

         On May 22, Plaintiff filed a Motion for a Temporary Restraining Order

(“TRO Motion”) together with an opening brief and a Motion for Expedited

Proceedings.86 The TRO Motion largely recycled Plaintiff’s allegations about

her financial situation.87 After filing the TRO Motion, Plaintiff took no action

on it, leading the court to issue a minute order on July 1.88          Moving

Respondents opposed the TRO Motion on July 18 and Austin Murphy filed a

joinder the next day.89 Plaintiff filed her reply on August 1.90

         On August 7, Moving Respondents filed their Opening Brief in Support

of the Motion to Dismiss and Austin Murphy filed his joinder.91 On September

4, the court denied the TRO Motion and the motion to expedite.92 Plaintiff filed


84
     Am. Compl. ¶¶ 86–95 (Count II), 103–110 (Count IV).
85
  Resp’ts’ Mot. to Dismiss, Dkt 18; Def.-Resp’t Austin Murphy’s Mot. to Dismiss,
Dkt. 26. Austin Murphy joined Respondents’ Opening Brief and Reply Brief. Dkts.
37, 45.
86
     Dkts. 21–22.
87
     Dkt. 22 at 11–14. Compare id., with Am. Compl. ¶¶ 49–74.
88
     Dkt. 24.
89
     Dkts. 27, 29.
90
     See Opening Br.
91
     Dkts. 36–37.
92
     Dkts. 39–40.

                                      – 17 –
her Brief in Opposition to Defendants’/Respondents’ Motion to Dismiss.93

Moving Respondents filed their Reply Brief in Further Support of the Motion to

Dismiss on September 23.94 On December 5, the court heard argument on the

Motion to Dismiss and took the matter under advisement.95

                                   II.    ANALYSIS

         Moving Respondents, joined by Austin Murphy, seek dismissal of the

Amended Complaint under Court of Chancery Rule 12(b)(6).96 First, they

attack Counts I and III of the Amended Complaint by arguing that those claims

must be dismissed because Plaintiff lacks standing to seek an order directing

the dissolution of Marylill.97           Second, they attack Counts II and IV,

respectively, by arguing that Plaintiff has failed to adequately plead claims for

reformation and breach of fiduciary duty.98 Third, they argue Plaintiff’s claims

are barred by the doctrines of acquiescence, estoppel, and laches.99 Fourth,


93
  Br. in Opp’n to Defs.’/Resp’ts’ Mots. to Dismiss the Verified Am. Compl., Dkt. 41
(“Answering Br.”).
94
  Reply Br. in Further Support of the Mot. to Dismiss of Defs.-Resp’ts Alexa
Spinoso and Steven Spinoso, and Nominal Resp’t Marylill LLC, Dkt. 43 (“Reply
Br.”). Austin Murphy filed his joinder the next day. Dkt. 45.
95
     Dkt. 48.
96
 Resp’ts’ Mot. to Dismiss, Dkt 18; Def.-Resp’t Austin Murphy’s Mot. to Dismiss,
Dkt. 26.
97
     Opening Br. 19–30 (Argument I).
98
     Id. at 31–37 (Arguments II–III), 46–48 (Arguments VI–VII).
99
     Id. at 38–44 (Argument IV).


                                          – 18 –
they argue dismissal is appropriate because the Florida probate court has

jurisdiction over the Estate’s interest in Marylill because the interest is personal

property subject to probate in Florida, the state where Zanchetta died.100

Finally, they argue Plaintiff has not established grounds to appoint a trustee and

does not have a right to an accounting.101

         When reviewing a motion to dismiss under Rule 12(b)(6), Delaware

courts “(1) accept all well pleaded factual allegations as true[;] (2) accept even

vague allegations as ‘well-pleaded’ if they give the opposing party notice of the

claim; [and] (3) draw all reasonable inferences in favor of the non-moving

party . . . .” Fitzgerald v. Fitzgerald Home Farm, LLC, 2024 WL 1071970, at

*2 (Del. Ch. Mar. 12, 2024).102 The court need not accept conclusory

allegations unsupported by specific facts, nor draw unreasonable inferences in a

plaintiff’s favor. E.g., Garfield ex rel. ODP Corp. v. Allen, 277 A.3d 296, 319

(Del. Ch. 2022).103 “[T]he governing pleading standard in Delaware to survive

a motion to dismiss is reasonable ‘conceivability.’” Cent. Mortg. Co., 27 A.3d

at 537. Delaware courts must “deny the motion unless the plaintiff[(s)] could

not recover under any reasonably conceivable set of circumstances.” Id. at 536.

100
      Id. at 45 (Argument V).
101
      Id. at 46–48 (Arguments VI–VII).
102
  Citing Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531,
535 (Del. 2011).
103
      Citing Clinton v. Enter. Rent-A-Car Co., 977 A.2d 892, 895 (Del. 2009).


                                         – 19 –
      The rest of this section analyzes arguments raised by Moving

Respondents in support of dismissal. First, the court addresses the argument

that Plaintiff lacks standing to seek judicial dissolution (Counts I and III).

Second, the court addresses the argument that Plaintiff failed to plead proper

claims for reformation and breach of fiduciary duty. Because my resolution of

these arguments is sufficient to dispose of all claims asserted in the Amended

Complaint, this report does not consider Moving Respondents’ other arguments

for dismissal.

A.    Counts I and III Should Be Dismissed Because Plaintiff
      Lacks Standing to Seek Dissolution Under Section 18-802
      and Has Not Stated a Claim for Equitable Dissolution

      Moving Respondents offer five reasons why the court should dismiss

Counts I and III: (1) Plaintiff lacks standing to seek judicial dissolution of

Marylill because she is neither a member nor a manager of Marylill;

(2) Marylill did not suffer a dissolution event because Zanchetta’s death did not

leave Marylill without a member; (3) even if Zanchetta’s death was a

dissolution event, the Co-PRs properly continued Marylill’s existence for

purposes of settling Zanchetta’s estate; (4) alternatively, even if Zanchetta’s

death was a dissolution event, the Co-PRs properly revoked the dissolution; and




                                     – 20 –
(5) Plaintiff has failed to allege viable grounds for dissolution as a matter of

law.104

         Moving Respondents contend that because Plaintiff is not a member or a

manager of Marylill, she lacks standing to petition for judicial dissolution under

Section 18-802 of the LLC Act.105 Plaintiff counters that Moving Respondents

apply the wrong standard. She says that she is not seeking to dissolve Marylill

under Section 18-802, but is instead asking the court to declare Marylill was

dissolved as a matter of law under Section 18-801 after Zanchetta’s death in

2021.106 Plaintiff says she only needs to show she has standing to seek a

declaratory judgment, instead of standing to seek judicial dissolution, and that

she has standing because she has a “protectible interest[:]” “her unquestioned

right to 25% of Marylill if her position that Marylill dissolved is correct.”107

Moving Respondents insist this distinction is immaterial because Delaware’s




104
      See Opening Br. 19–30; Reply Br. 8–16.
105
      Opening Br. 20–21.
106
      Answering Br. 23–26.
107
   Id. 23–24. This statement is false. Without the Settlement Agreement and Agreed
Order, each heir is only entitled to 25% of the Estate. See Am. Compl. ¶ 29. With
the Settlement Agreement and Agreed Order, each heir will receive—through the
Estate—the member interest in a Sub LLC and 25% of any other assets of the Estate.
See Settlement Agreement ¶ 11. Plaintiff even “agree[d] and acknowledge[d]” that
the value of what she receives may “differ significantly” from what her siblings will
receive. Id. Far from having an “unquestioned right,” Plaintiff has never been
entitled to “25% of Marylill.”

                                       – 21 –
declaratory judgment statute108 cannot be “an end-run around Section 18-802”

of the LLC Act, and, therefore, Plaintiff must still establish standing under

Section 18-802.109 Moving Respondents are correct Counts I and III should be

dismissed, but not only because of Section 18-802.

         “‘Standing’ refers to the right of a party to invoke the jurisdiction of a

court to enforce a claim or redress a grievance.” Albence v. Higgen, 295 A.3d

1065, 1085 (Del. 2022).110 “‘Standing is a threshold question that must be

answered by a court affirmatively to ensure that the litigation before the

tribunal is a ‘case or controversy’ that is appropriate for the exercise of the

court’s judicial powers.’” Riverfront Hotel LLC v. Bd. of Adjustment of City of

Wilm., 2019 WL 3884031, at * 1 (Del. July 11, 2019).111 This issue is confined

solely to “the question of who is entitled to mount a legal challenge and not

with the merits of the subject matter in controversy.” Dover Hist. Soc., 838

A.2d at 1110.112 “The party invoking the jurisdiction of a court bears the

burden of establishing the elements of standing.” Id. at 1110.




108
      10 Del. C. §§ 6501–6513 (“Declaratory Judgment Act”).
109
      Tr. 21.
110
   Citing Dover Hist. Soc. v. City of Dover Plan. Comm’n, 838 A.2d 1103, 1110
(Del. 2003).
111
      Quoting Dover Hist. Soc., 838 A.2d at 1111.
112
      Quoting Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1382 (Del. 1991).


                                        – 22 –
         Standing may be established by statutory language. See Albence,

295 A.3d at 1086. Under Section 18-802 the court may declare an LLC

dissolved “[o]n application by a member or manager . . . of a limited liability

company[.]” 6 Del. C. § 18-802. “By its terms, this language limits the right to

seek statutory dissolution under Section 18–802 to members and managers of

an LLC.” In re Carlisle Etcetera LLC, 114 A.3d 592, 597 (Del. Ch. 2015).

Both sides agree Plaintiff is neither a member nor manager of Marylill,113 so

Plaintiff does not have statutory standing. Id.

         But Section 18-802 is not the only method through which someone might

have standing to seek a judicial declaration that an LLC has been or should be

dissolved. As this court explained in In re Carlisle, equitable dissolution

remains an available remedy even after the adoption of the LLC Act: “[T]his

Court, as a court of equity, has the power to order the dissolution of a solvent

company and appoint a receiver to administer the winding up of [its] assets.”

114 A.3d at 601.114 But this power is rarely deployed, and when someone who

is not a member or manager of a Delaware limited liability company asks this

court to use its equitable power to compel the dissolution and winding up of the

entity, they must plead “a set of reasonably conceivable facts ‘where it appears

113
  Am. Compl. ¶¶ 45, 50, 54, 58, 63, 95 (alleging Plaintiff “was manager of
Marylill”)
114
      Quoting Weir v. JMACK, Inc., 2008 WL 4379592, at *2 (Del. Ch. Sept. 23, 2008).


                                        – 23 –
manifest’ that equity must intervene[.]” SolarReserve CSP Hldgs., LLC v.

Tonopah Solar Energy, LLC, 2020 WL 1291638, at *6 (Del. Ch. Mar. 18,

2020).115 As the SolarReserve court explained:

              Where, as here, a petitioner seeks equitable
              dissolution outside of the grounds enumerated in the
              Act, such as where a non-member/non-manager
              seeks dissolution, that petitioner must “explain” in a
              “convincing manner” why this court should “invoke
              equitable principles to override the plain language”
              of the Act and the relevant LLC agreement.

Id. at *5. See also Trusa v. Nepo, 2017 WL 1379594, at *8 (Del. Ch. Apr. 13,

2017) (“Given its extreme nature . . . equitable dissolution is a remedy that

should be granted sparingly.”).116



115
    This opinion was vacated after the defendant filed for bankruptcy and the parties
stipulated to a plan of reorganization. See 2021 WL 3739128 (Del. Ch. Aug. 20,
2021). The court recently quoted SolarReserve to describe the high burden needed to
state a claim for equitable dissolution. See Keynetics Inc. v. Keynetics S’holder Tr.,
331 A.3d 202, 217 (Del. Ch. 2025).
116
   Plaintiff did not plead a cause of action for equitable dissolution in her Amended
Complaint, but that does not foreclose me from considering if the Amended
Complaint states a claim for equitable dissolution because this court has held that
equitable dissolution is a remedy, not a cause of action. See In re Shaw & Elting
LLC, 2015 WL 4874733, at *33 (Del. Ch. Aug. 13, 2015) (“[A] petitioner must prove
an underlying claim to obtain the remedy of equitable dissolution.”) (citing VTB Bank
v. Navitron Projects Corp., 2014 WL 1691250, at *5–6 (Del. Ch. Apr. 28, 2014)).
Some of the relief sought in the Amended Complaint relating to Marylill’s dissolution
would require the court to act in equity because Plaintiff lacks standing under the
LLC Act to seek that relief. Compare Am. Compl. Prayer for Relief ¶ 6 (requesting
an order directing the winding up and liquidation of Marylill), with 6 Del. C. § 18-
803(a) (stating, “the Court of Chancery, upon cause shown, may wind up the limited
liability company’s affairs upon application of any member or manager, or the
member’s personal representative or assignee”).


                                       – 24 –
         The court has been unable to find any case in which the court has held

that someone who stands in relation to a Delaware limited liability company the

way that Plaintiff does to Marylill has made the required “manifest” showing

even on a motion to dismiss. Plaintiff’s relationships to Marylill are indirect.

She is Marylill’s former manager;117 a beneficiary of the Estate, which holds

the member interest in Marylill and is subject to probate in the Florida;118 and

she has a future interest in one of Marylill’s assets, its member interest in

LAEC, which is expected to be distributed to her in connection with the closing

of the Estate.119 She also, importantly, stands in relation to Marylill as someone

who, through counsel, negotiated, signed, and presented to the Florida Court a

settlement that explicitly contemplates Marylill’s continued existence through

at least June 2026 and until further order of that Florida Court.120 These facts

do not create a reasonably conceivable set of circumstances where equity




117
      Am. Compl. ¶ 21.
118
      See Am. Compl. ¶ 29; Settlement Agreement ¶ B(6).
119
      See Settlement Agreement ¶¶ 10–11.
120
   See id. ¶ 10 (“Between June 4, 2026, and July 2, 2026, or within 30 days of
obtaining the consent to close the Estate . . . the Personal Representatives shall
petition the Court for authorization to liquidate Marylill and distribute the interests of
the Sub LLCs to the Estate and then distribute the interests in the Sub LLCs[.]”);
Agreed Order ¶ 5 (“[A]ll Subsidiary Accounts shall remain a subsidiary of Marylill,
LLC until further order of this Court.”).


                                         – 25 –
should intervene to let Plaintiff seek a judgment from this court that would

undo everything that she, her siblings, and her son carefully negotiated.121

         Given the availability of equitable dissolution, when properly asserted in

a pleading, to provide standing to a proper party who is neither a member nor a

manager of an LLC and thus cannot seek dissolution under Section 18-802, I do

not believe that the Declaratory Judgment Act122 offers a third method by which

someone can seek such relief from this court. The Declaratory Judgment Act

“‘merely provides a procedural means for securing judicial relief in an

expeditious and comprehensive manner’ before traditional justiciability

principles might permit.” DBMP LLC v. Delaware Claims Processing Facility,

LLC, 349 A.3d 663, 679 (Del. Ch. 2025).123 It pulls forward in time an existing

cause of action before a court might otherwise be able to hear it. It does not

create a cause of action where one does not already exist. Jordan v. Mirra,

2017 WL 4070646, at *19 (D. Del. Sept. 14, 2017).124 So the Declaratory


121
    See SolarReserve, 2020 WL 1291638, at *7 (“[B]y virtue of its own choices, and
as recognized by all of the entity’s constituents, SolarReserve’s ‘real relationship’ to
Tonopah is that of a remote, indirect investor, not a member . . . . If I were to allow
SolarReserve to seek Tonopah’s dissolution, I would not be ‘upholding’ rights, I
would be creating new ones SolarReserve did not bargain for or reasonably expect.”).
122
      6 Del. C. §§ 6501–6513.
123
  Citing Hoechst Celanese Corp. v. Nat’l Union Fire Ins. Co., 623 A.2d 1133, 1136
(Del. Super. 1992).
124
   As the Jordan court explained, “[l]ike a preliminary injunction, a declaratory
judgment relies on a valid legal predicate. The [Declaratory Judgment Act] is
procedural only, and does not create an independent cause of action.” 2017 WL

                                        – 26 –
Judgment Act, by itself, cannot confer standing on Plaintiff here to seek the

remedy of equitable dissolution.

                             *          *          *

      Having concluded that Plaintiff’s dissolution claims (Counts I and III)

should be dismissed because she lacks standing to seek dissolution under

Section 18-802 of the LLC Act and she failed to state a claim for equitable

dissolution, I do not reach Moving Respondents’ alternative arguments that

(1) Marylill did not suffer a dissolution event because Zanchetta’s death did not

leave Marylill without a member and (2) even if Zanchetta’s death was a

dissolution event, the Co-PRs properly continued Marylill’s existence for

purposes of settling the Estate or properly revoked the dissolution. I also do not

reach Moving Respondents’ arguments that Plaintiff’s dissolution claims are

also barred by the doctrines of acquiescence, estoppel, and laches.

B.    Count II Should Be Dismissed Because Plaintiff Has Failed
      to Plead Her Reformation Claim With the Requisite
      Particularity

      In Count II, Plaintiff asserts a claim for reformation of the LAEC

Agreement.     Plaintiff alleges that when the Co-PRs drafted the LAEC

Agreement, she believed that “her role as Investment Director would be



4070646, at *19 (construing the federal Declaratory Judgment Act and quoting
Chevron Corp. v. Naranjo, 667 F.3d 232, 244–45 (2d Cir. 2012)).


                                     – 27 –
included” in the contract.125 She maintains that excluding this language “did

not reflect the mutual agreement” between her and the Co-PRs and “deviates

materially from the [Settlement Agreement’s]. . . negotiated terms[.]”126

Plaintiff concludes that reformation is necessary to correct the error.127

          Moving Respondents contend that these allegations are insufficient to

plead a claim for reformation.128 Alternatively, even if the claim is well-

pleaded, Moving Respondents maintain that Plaintiff could not succeed on her

claim if allowed to proceed.129 Plaintiff insists the opposite is true.130 Moving

Respondents are correct.

          “The Court of Chancery has the power ‘to reform a contract in order to

express the ‘real agreement’ of the parties involved.’” ASB Allegiance Real Est.

Fund v. Scion Breckenridge Managing Member, LLC, 2012 WL 1869416, at

*12 (Del. Ch. May 16, 2012).131 “‘In all averments of fraud or mistake, the

circumstances constituting fraud or mistake shall be stated with particularity.’”



125
      Am. Compl. ¶ 90.
126
      Id. ¶¶ 91, 93.
127
      Id. ¶ 94.
128
      Opening Br. 32–34; Reply Br. 19–21.
129
      Opening Br. 31–32.
130
      Answering Br. 33–37.
131
   Quoting Cerberus Int’l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1151 (Del.
2002).


                                      – 28 –
AECOM v. SCCI Nat’l Hldgs., Inc., 2023 WL 6294985, at *6 (Del. Ch. Sep. 27,

2023).132

                To survive a motion to dismiss under Rule 12(b)(6),
                the party seeking reformation based on mistake must
                allege with particularity: (i) that the parties reached a
                definite agreement before executing the final
                contract; (ii) that the final contract failed to
                incorporate the terms of the agreement; (iii) that the
                parties were similarly mistaken or that one knew of
                another’s mistake and remained silent; and (iv) the
                precise mistake the parties made.
Id. (internal quotations and citations omitted). Each element must be pleaded

with particularity; “failure to [plead] one requirement is fatal to the claim.”

Id.133

         “In order for a court of equity to reform a contract in writing,” a plaintiff

must allege that the parties had “a complete mutual understanding of all the

essential terms of their bargain, for otherwise there would be no standard by

which the writing could be reformed.” Colvocoresses v. W.S. Wasserman Co.,

4 A.2d 800, 803 (Del. Ch. 1939). “[T]he requirement to plead the actual

agreement between the parties elucidates the specific correction the [c]ourt

must make to their written agreement.” AECOM, 2023 WL 6294985, at *6.


132
   Quoting JJS, Ltd. v. Steelpoint CP Hldgs., 2019 WL 5092896, at *9 (Del. Ch. Oct.
11, 2019). See also Ct. Ch. R. 9(b).
133
   Citing Cerberus Int’l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1153 (Del. 2002)
and Interim Healthcare v. Sherion Corp., 2003 WL 22902879, at *8 (Del. Ch. Nov.
19, 2003).


                                         – 29 –
“Regardless of whether a party pleads reformation for mutual mistake or

unilateral mistake plus knowing silence, the party must establish ‘that the

parties came to a specific prior understanding.’” Id.134 “Allegations about a

party’s ‘general understanding’ [are] insufficient.” Cf. In re Jeremey Paradise

Dynasty Tr., 2023 WL 1241903, at *11 (Del. Ch. Jan. 31, 2023) (citation

omitted) (articulating the standard after a trial on the merits).

      For a claim to be pleaded with “particularity” it must “allege the

circumstances [of the mistake] with detail sufficient to apprise the defendant of

the basis for the claim.” Elburn ex rel. Invs. Bancorp, Inc. v. Albanese, 2020

WL 1929169, at *3 (Del. Ch. Apr. 21, 2020).135 This court has held that

alleging “(1) the time, place, and contents of the [mistake]; (2) the identity of

the person [with the mistaken belief]; and (3) what the [other party] intended to

gain by” staying silent will satisfy this test. Id. at *8. A plaintiff need not

allege evidentiary details. Bamford v. Penfold, L.P., 2020 WL 967942, at *12

(Del. Ch. Feb. 28, 2020).136




134
  Quoting ASB Allegiance Real Est. Fund v. Scion Breckenridge Managing Member,
LLC, 2012 WL 1869416, at *13 (Del. Ch. May 16, 2012).
135
  Quoting LVI Gp. Invs., LLC v. NCM Gp. Hldgs. LLC, 2017 WL 1174438, at *4
(Del. Ch. Mar. 29, 2017).
136
  Quoting Cont’l Illinois Nat. Bank & Tr. Co. of Chicago v. Hunt Int’l Res. Corp.,
1987 WL 55826, at *6 (Del. Ch. Feb. 27, 1987).


                                     – 30 –
         The Amended Complaint does not meet this standard. There are no

allegations that the Co-PRs knew or had reason to know that Plaintiff,

represented by counsel, held a mistaken belief and stayed silent. There are no

claims that the Co-PRs believed the Investment Director position would be in

the LAEC Agreement when they negotiated the settlement or executed the

LAEC Agreement. The exhibits Plaintiff presents to support her assertions do

not require the “Investment Director” position to be included in any of the Sub

LLC’s operating agreements.           In fact, they do not mention any LLC

agreement.137 Plaintiff only states, in conclusory fashion, that the LAEC

agreement was “intended to be” what she says it is.138 That is insufficient. I

recommend that Count II be dismissed.139




137
    See generally Am. Compl. Exs. 2, 4. Plaintiff alleges that the Co-PRs “agreed to”
the terms that Plaintiff “was the beneficiary of LAEC and is supposed to be
authorized to direct how its funds are managed.” Am. Compl. ¶ 88. Those terms are
in the settlement. It is unclear to the court why it must incorporate terms the Co-PRs
are already bound by into a separate contract.
138
      E.g., Am. Compl. ¶ 51.
139
   As with Counts I and III, I do not reach Moving Respondents’ argument that
Plaintiff’s reformation claim is also barred by the doctrines of acquiescence, estoppel,
and laches.


                                        – 31 –
C.       Court IV Should Be Dismissed Because the Co-PRs Do Not
         Owe Fiduciary Duties to Plaintiff as LAEC’s Managers

         Count IV is a claim against the Co-PRs for breaches of fiduciary duty in

their capacities as managers of LAEC.140 Plaintiff alleges that the Co-PRs

breached their fiduciary duties by (1) failing to operate LAEC for its purpose;

(2) failing to amend the LAEC Agreement to include her Investment Director

position; (3) expending LAEC’s assets for the Co-PRs’ legal fees; and (4) for

“ignoring [Plaintiff’s] direction as Investment Director.”141

         To succeed on a claim for breach of fiduciary duty, Plaintiff must prove

by a preponderance of the evidence that “(i) a fiduciary duty exists; and (ii) that

a fiduciary breached that duty.” E.g., Gunderson v. Trade Desk, Inc., 326 A.3d

1264, 1272 n.25 (Del. Ch. 2024). The Co-PRs maintain that Count IV fails

because they do not owe Plaintiff fiduciary duties as managers of LAEC. The

Co-PRs reach this conclusion for two reasons. First, they assert that the

managers of LAEC only owe fiduciary duties to LAEC itself, its members and

other managers, and persons bound by the LAEC Agreement.142 Plaintiff is

none of these, thus, the Co-PRs reason no fiduciary relationship exists.143


140
  Am. Compl. ¶ 104 (“As managers of LAEC, the [the Co-PRs] owed LAEC and
Ms. Murphy as its sole beneficiary and Investment Director, fiduciary duties.”)
141
      Id. ¶¶ 105–09.
142
      Opening Br. 35; Reply Br. 22.
143
      Opening Br. 35.


                                      – 32 –
Second, the Co-PRs contend that Plaintiff’s role of Investment Director stems

from a contractual relationship—not a fiduciary one—and is a superfluous

recasting of Count II.144

         “As a general proposition under Delaware law, only certain legal

relationships will give rise to fiduciary duties among the parties involved.”

Total Care Physicians, P.A. v. O’Hara, 798 A.2d 1043, 1058 (Del. Super.

2001). “‘Fiduciary duties [traditionally] arise from the separation of ownership

and control. The essential quality of a fiduciary is that [they] control[]

something [they] do[] not own.’” Witmer v. Armistice Cap., LLC, 344 A.3d

632, 655 (Del. Ch. 2025).145 “Duties of a fiduciary character will only be

imposed where the relationship or trust can be characterized as special;

fiduciary duties will not be imposed in the midst of typical arms-length

business relationships.” Total Care Physicians, 798 A.2d at 1058.146 Thus

“[f]iduciary relationships usu[ally] arise in one of four situations: (1) when one

person places trust in the faithful integrity of another, who as a result gains

superiority or influence over the first[;] (2) when one person assumes control

and responsibility over another[;] (3) when one person has a duty to act for or


144
      Id. at 35–36; Reply Br. 24–25.
145
  Quoting In re Pattern Energy Gp. Inc. S’holders Litig., 2021 WL 1812674, at *40
(Del. Ch. May 6, 2021).
146
      Citing McMahon v. New Castle Assocs., 532 A.2d 601, 604–05 (Del. Ch. 1987).


                                       – 33 –
give advice to another on matters falling within the scope of the relationship[;]

or (4) when there is a specific relationship that has traditionally been

recognized as involving fiduciary duties, as with a lawyer and a client or a

stockbroker and a customer.” Witmer, 344 A.3d at 656 n.181.147 Fiduciary

duties may also be imposed by contract. See, e.g., Cantor Fitzgerald, L.P. v.

Cantor, 2000 WL 307370, at *22 (Del. Ch. Mar. 13, 2000).148

         1.    The Co-PRs as LAEC’s Managers Do Not Have
               Fiduciary Duties to the Estate’s Beneficiaries

         “The LLC Act provides that the fiduciary duties of a member, manager,

or other person that is a party to or bound by a limited liability company

agreement ‘may be expanded or restricted or eliminated by provisions in the

limited liability company agreement.’” Zimmerman, 62 A.3d at 702 (quoting 6

Del. C. § 18-1101(c)). “To determine what fiduciary duties are owed in the

limited liability company context, the Court must review the company’s

operating agreement.” Ross Hldg. & Mgmt. Co. v. Advance Realty Gp., 2014

WL 4374261, at *12 (Del. Ch. Sep. 4, 2014).




147
      Quoting Fiduciary Relationship, BLACK’S LAW DICTIONARY (12th ed. 2024).
148
   See also Gotham P’rs, L.P. v. Hallwood Realty P’rs, L.P., 817 A.2d 160 (Del.
2002) (limited partnership agreements); Zimmerman v. Crothall, 62 A.3d 676 (Del.
Ch. 2013) (LLC agreements).


                                      – 34 –
          Section 5 outlines the Co-PR’s duties as managers.149 The Co-PR’s,

collectively as a committee operating by majority vote, act as the “Manager” of

LAEC.150 Subsection 3 states:

                  The Manager shall be under a fiduciary duty to
                  conduct the affairs of [LAEC] in the best interest of
                  [LAEC] and of the Member(s), including the
                  safekeeping and use of all of the Property and the
                  use thereof for the exclusive benefit of [LAEC].151

                  The Manager shall have the fiduciary responsibility
                  for the safekeeping and use of all funds and assets of
                  [LAEC], whether or not in its immediate possession
                  or control. The funds of [LAEC] shall not be
                  comingled with the funds of any other person, and
                  the Manager shall not employ, or permit any other
                  person to utilize such funds in any manner, except
                  for the benefit of [LAEC]. The bank accounts of
                  [LAEC] shall be maintained at such bank and
                  institutions as determined by the Manager, and
                  withdrawals shall be made only in the regular course
                  of LAEC’s business, unless otherwise authorized by
                  [the LAEC] Agreement and under such signature or
                  signatures as the Manager may determine.152

Plaintiff argues the “existence of a fiduciary relationship in the LLC context

does not depend on a [sic] contact.”153 She maintains that her status as “the



149
      See Am. Compl. Ex. 3 § 5.
150
      Id. § 5.1
151
   Id. § 5.3.c. The “Property” is any real and personal property held by LAEC. Id.
§ 1.10.
152
      Id. § 5.3.d.
153
      Answering Br. 37–38.


                                         – 35 –
undisputed sole beneficiary of LAEC” establishes such a relationship.154

Plaintiff’s contentions arise solely from conclusory allegations.

          The sole “Member” of LAEC is Marylill.155 The plain language of the

LAEC Agreement is unambiguous. The Co-PRs, as the “Manager,” owe

fiduciary duties to LAEC and Marylill—not to Plaintiff nor any other

beneficiary of the Estate. Further, the term “beneficiary” appears nowhere in

the LAEC Agreement and it does not direct the Co-PRs to manage LAEC for

Plaintiff’s benefit.156

           Plaintiff’s reliance on the language in Section 18-1101(c) of the LLC

Act does not salvage her claim. She asserts that the Co-PR’s argument

“contravenes the plain text of the LLC Act”157 and a fiduciary relationship can

be inferred from the nature of LAEC.158 Tellingly, Plaintiff omits the key

statutory language. A member or manager may owe fiduciary duties “to

another person that is a party to or is otherwise bound by a limited liability


154
      Id. 38.
155
  See Am. Compl. Ex. 3 § 2.1 (listing Marylill as the holder of 100% of LAEC’s
membership interest).
156
   The word “beneficiary” is used in paragraph 4 of the Settlement Agreement, but
the Settlement Agreement, like the LAEC Agreement, does not direct the Co-PRs to
manage LAEC for Plaintiff’s benefit, nor is there anything in the text of the
Settlement Agreement suggesting that the use of “beneficiary” in paragraph 4 was
intended to create a separate fiduciary relationship between Plaintiff and the Co-PRs.
157
      Answering Br. 39.
158
      Id. at 37.


                                       – 36 –
company agreement.”159 Plaintiff is neither a party to nor bound by the LAEC

Agreement. The Co-PRs do not owe Plaintiff fiduciary duties as managers of

LAEC.

         2.     The Settlement Agreement Does Not Create Any
                Fiduciary Relationships

         Next, Plaintiff alleges that the Settlement Agreement requiring LAEC’s

formation “established both a special trust and reliance” between Plaintiff and

the Co-PRs.160 Plaintiff intuits this “special trust” exists because the LAEC

Agreement states that LAEC’s purpose “is to engage in the business of

investment management” which encompasses “the fiduciary duties mandated

by the” Settlement Agreement.161 She infers that the “best interests of” LAEC

are stated in the Settlement Agreement, so the Settlement Agreement confers

fiduciary duties on the Co-PRs. The Co-PRs contend that Plaintiff’s right to

direct investments is governed by the Settlement Agreement—a contract that is

wholly independent of the LAEC Agreement—which did not impose any

fiduciary duties. The Co-PRs are correct.

         Delaware courts interpret clear and unambiguous terms according to their

ordinary meaning and “do not consider extrinsic evidence unless [they] find

159
      6 Del. C. § 18-1101(c) (emphasis added).
160
      Answering Br. 38.
161
  Answering Br. 41. Plaintiff also cites the Agreed Order, but the Settlement
Agreement is incorporated into that order.


                                       – 37 –
that the text is ambiguous.” Cox Commc’ns, 273 A.3d 273 A.3d 752, 760 (Del.

2022). The Settlement Agreement’s terms are clear and unambiguous. The

Settlement Agreement requires the Co-PRs to form the Sub LLCs.162 The

Settlement Agreement appoints the Co-PRs as managers of the Sub LLCs.163

The Settlement Agreement creates a position of “Investment Director” and

outlines the powers of the role.164 The Settlement Agreement does not “set

forth specific fiduciary duties,” nor does it “require those duties to be

implemented through LAEC.”165 There is no language in the Settlement

Agreement that “spells out” what are LAEC’s “best interests.”166 The phrase

does not appear anywhere in the Settlement Agreement.

            I conclude that the plain language of the LAEC Agreement and

Settlement Agreement do not impose any fiduciary obligations on the Co-PRs

to Plaintiff. Therefore, it is not reasonably conceivable Plaintiff will succeed

on her claim because the Amended Complaint does adequately demonstrate the

existence of a fiduciary relationship. I recommend Count IV be dismissed.167


162
      Am. Compl. Ex. 4 § 4.
163
      Id.
164
      Id. §§ 4–5.
165
      Answering Br. 40.
166
      Id.
167
    As with Counts I–III, I do not reach Moving Respondents’ argument that
Plaintiff’s fiduciary duty claim is also barred by the doctrines of acquiescence,
estoppel, and laches.

                                     – 38 –
                            IV    CONCLUSION
      For the reasons explained above, I recommend that the court dismiss the

Amended Complaint in its entirety. This is a Final Report under Court of

Chancery Rule 144(b)(2). Under Court of Chancery Rule 144(d)(2), any party

who wishes to file exceptions to this report must file their notice of exceptions

by March 30, 2026.




                                     – 39 –