     IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE




IN THE MATTER OF THE ESTATE               )
OF RICHARD L. DEGROAT,                    )      C. A. No. 12738-MZ
deceased.                                 )

                             MASTER’S REPORT

                     Date Submitted: September 18, 2017
                        Final Report: October 2, 2017


David J. Ferry, Esquire and Brian J. Ferry, Esquire, of FERRY JOSEPH, P.A.,
Wilmington, Delaware; Attorneys for Plaintiff.

Jason C. Powell, Esquire, of THE POWELL FIRM, LLC, Wilmington, Delaware;
Attorney for Defendant.



ZURN, Master
      In this estate matter, a child of the decedent’s first marriage questions the

extent to which the decedent intended to benefit the decedent’s second ex-wife.

The petitioner alleges that in the decedent’s final years, the second ex-wife utilized

a power of attorney to name herself beneficiary of several of the decedent’s

accounts, influenced the decedent to execute a deed to convert co-ownership of

real property with the decedent from tenants in common to joint tenants with the

right of survivorship, and sold the property and retained all the proceeds while the

decedent was still alive.

      Pending in this case are the plaintiff’s July 3, 2017, motion to compel; the

plaintiff’s July 5, 2017, motion to amend the complaint; the defendant’s August 2,

2017, motion to dismiss; and the plaintiff’s August 15, 2017, motion to strike

portions of the defendant’s deposition errata sheet. Each motion has been fully

briefed. This is my final report pursuant to Court of Chancery Rule 144. I

recommend the Court grant the motion to amend in part and deny it in part, grant

the motion to compel, and deny the motion to strike. I view the motion to dismiss

as a motion for summary judgment and defer decision until all parties have

presented material pertinent to a dispositive motion.




                                          1
    I.      Background1

         Richard L. DeGroat (“Decedent”) and Jan DeGroat married in or around

1954 and had five children: Plaintiff R. Michael DeGroat (“Michael”), Thomas S.

DeGroat, Carroll L. Iacovetti, Brian C. DeGroat, and Andrew J. DeGroat. Jan2 and

Decedent divorced, and Decedent married Defendant Lucinda Papa in 1977.

Decedent and Lucinda divorced in 2008. Lucinda is currently married to Michael

Ziatyk (“Ziatyk”).

         In 2001, seven years before Lucinda and Decedent divorced, Lucinda and

Decedent purchased a home at 3 Somerset Lane, Newark, DE 19711 (“the

Property”) for $350,000.00, which they owned as tenants by the entirety. Lucinda

and Decedent’s 2008 divorce converted that ownership into tenancy in common.

They divorced without any written divorce decree or agreement addressing their

property.

         On January 11, 2012, Decedent executed a will that gave a specific gift of

personal property to Decedent’s granddaughter, and divided the remaining estate

among Decedent’s five children. The will states:

         I direct the executor to sell my real estate for such price and upon such
         terms and credits as my Executor deems proper. I further authorize



1
  Unless noted otherwise, the facts recited in this opinion are based on the allegations of the
plaintiff’s proposed Amended Complaint.
2
  In this family dispute, I use first names in pursuit of clarity and intend no disrespect.
                                                 2
         and direct the Executor to institute any partition action necessary to
         sever any interests I have with my ex-wife Lucinda P. DeGroat.3

The will names Michael as Decedent’s executor.

         Michael alleges that Lucinda learned about this will and induced Decedent

to execute a power of attorney naming Lucinda as agent on December 2, 2013.

Michael alleges Lucinda improperly used this power of attorney to designate

herself as beneficiary of several of Decedent’s investment accounts and life

insurance policies. Michael contends Decedent intended for those assets to pass to

his children, grandchild, and first wife Jan. Michael also alleges that Lucinda

moved Decedent out of the Property to an assisted living facility and renovated the

Property using Decedent’s funds, without his consent or authorization. On October

1, 2014, the Property sold for $445,640.00. Michael alleges Lucinda kept all of the

$402,361.72 in proceeds from the sale.

         Lucinda contends that when she and Decedent divorced, they agreed that

Lucinda should receive many of Decedent’s assets, including investment accounts

and life insurance policies, and that Lucinda (who was substantially younger than

Decedent) would assist Decedent as he aged. Lucinda also contends that she and

Decedent agreed she should renovate the Property and keep the proceeds from its

sale.



3
    Am. Compl. Ex. A Art. 3.
                                             3
         Decedent passed away, unmarried, on June 14, 2016. Under the terms of

Decedent’s will, Michael was appointed executor of Decedent’s estate. Michael

approached Lucinda regarding Decedent’s assets, and Lucinda provided an

extensive response stating she and Decedent had agreed Decedent would give

Lucinda his retirement accounts and funds from the sale of the house, and Lucinda

would care for Decedent as needed.4 Lucinda’s response did not satisfy Michael,

and Michael filed a complaint on September 9, 2016.

         Count I of Michael’s complaint asserts Lucinda breached her fiduciary

duties as Decedent’s agent and asks the Court to invalidate Lucinda’s transfers or

retitling of assets. Count II seeks an accounting of Lucinda’s actions under the

power of attorney. Count III seeks a constructive trust over assets Lucinda

allegedly improperly obtained, and Count IV seeks return of those assets under a

theory of unjust enrichment. Michael initiated this action in his personal capacity

and as executor of Decedent’s estate. On November 11, 2016, Lucinda answered

and counterclaimed for the costs she expended in assisting Decedent. Michael

answered the counterclaim on November 18, 2016. The parties engaged in

discovery.




4
    Amended Cplt. Ex. B.
                                          4
         Beginning in July 2017, the parties filed and briefed the pending motion to

compel, motion to amend the complaint, motion to dismiss, and motion to strike.

This is my final report.

   II.      Analysis

            a. I recommend the Court grant Plaintiff’s motion to amend the
               allegations and to add Ziatyk as a defendant, but deny it as to adding
               Jan and Carroll as plaintiffs.

         With the benefit of discovery, Michael seeks to amend his complaint to

specify bank accounts and transactions underlying Lucinda’s alleged wrongful

acts; to add Jan and Carroll as plaintiffs because they were beneficiaries of certain

of Decedent’s accounts and policies before Lucinda named herself as beneficiary;

and to add Ziatyk as a defendant because he allegedly benefitted from Lucinda’s

misappropriation of Decedent’s funds.

         The requested amendment also alters Michael’s allegations regarding the

retitling of the Property. The redline comparing Michael’s proposed amended

complaint to the original complaint highlights this change:

                5. In spite of the fact that they had been divorced for many
         years and that Mr. DeGroat specifically excluded Lucinda from any
         inheritance, upon information and belief, Lucinda influenced Mr.
         DeGroat into executing a new deed to his home on January 29, 2013
         and also executing a Power of Attorney naming Lucinda as Agent on
         December 2, 2013. … .
                …
                11. Mr. DeGroat refused to voluntarily retitle or transfer any of
         his assets to Lucinda. He did not voluntarily allow her to change his
                                            5
         accounts and policies to name herself as the primary beneficiary. He
         did allow her to retitle the ownership of the Property as a joint
         tenancy, but He did not allow her to take 100% of the proceeds when
         the home the Property at 3 Somerset Lane was sold.5

         In opposing Michael’s motion to amend, Lucinda contends Michael’s

attempt to add Jan and Carroll as plaintiffs is designed to rescue his case from

dismissal due to lack of standing, under the theory that none of the disputed assets

ever belonged to Michael or the estate. Lucinda asserts neither Jan nor Carroll has

any knowledge of the allegations in the proposed amended complaint. Lucinda

also claims the proposed amendments are futile, on two grounds: the amendments

do not repair Michael’s lack of standing, and the allegations of undue influence are

insufficient to state a claim and are disproven by the evidence. Lucinda also

argues the proposed amendments are prejudicial because they withdraw Michael’s

concession in the original complaint that Decedent allowed Lucinda to retitle the

Property as a joint tenancy. Finally, Lucinda claims the proposed amendments are

untimely. Lucinda does not explicitly oppose adding Ziatyk as a defendant.

         Court of Chancery Rule 15(a) provides that leave to amend a pleading shall

be freely given when justice so requires.

                This determination is a matter of the court’s discretion. Rule
         15(a) reflects the modern philosophy that cases are to be tried on their
         merits, not on the pleadings. Therefore, courts generally will not test
         the sufficiency of the pleadings in ruling on a motion to amend. A
         motion to amend may be denied, however, if the amendment would be
5
    Mot. to Amend Ex. A.
                                            6
       futile, in the sense that the legal insufficiency of the amendment is
       obvious on its face. In exercising its discretion, the court also
       considers factors such as bad faith, undue delay, dilatory motive,
       repeated failures to cure by prior amendment, undue prejudice, and
       futility of amendment.6

       Rule 15 instructs me to evaluate pleadings on their face: a motion to amend

is not the time to test pleadings against evidence that may have been collected

during discovery. I therefore do not consider Lucinda’s arguments that she can

disprove the allegations of undue influence and incapacity, without prejudice to

Lucinda’s ability to renew these arguments in a dispositive motion or at trial.

       The question remains whether the proposed amended complaint is futile

because of obvious legal insufficiency. The proposed amended complaint alleges

that in 2013, Lucinda influenced Decedent into executing a new deed to the

Property naming Lucinda and Decedent as joint tenants with right of survivorship,

and also a power of attorney naming Lucinda as agent. It also alleges Lucinda

moved Decedent out of the Property, sold it in 2014 by signing Decedent’s name,

and kept all of the proceeds. Lucinda claims the proposed amended complaint fails

to plead undue influence and legal incapacity, and therefore is futile.

       I do not believe Michael’s claims rely on undue influence or legal

incapacity. Even if the power of attorney were valid, Lucinda’s alleged actions



6
  NACCO Indus., Inc. v. Applica Inc., 2008 WL 2082145, at *1 (Del. Ch. May 7, 2008) (internal
citations and quotation omitted).
                                              7
thereunder – including designating herself as beneficiary, signing Decedent’s name

on the deed selling the Property, and retaining the proceeds from the sale – could

still have breached her fiduciary duty. And even if Lucinda and Decedent intended

to jointly own the Property, Lucinda may not have been entitled to keep all of the

proceeds from the sale, which occurred before Decedent passed away. I therefore

conclude that even assuming the proposed amended complaint failed to plead

undue influence or incapacity, the proposed amendment would not be futile.7

       Lucinda also asserts the motion to amend should be denied because the

proposed addition of Jan and Carroll as plaintiffs is an improper attempt to avoid

dismissal due to Michael’s lack of standing. Lucinda contends Michael lacks

standing to contest the beneficiary designations on accounts for which Michael was

never the beneficiary. Lucinda also contends Michael lacks standing to challenge

the retitling and sale of the Property because Michael’s initial complaint conceded

that the retitling was appropriate, and because that retitling permitted Lucinda to

keep all proceeds from the sale. Michael responds that at a minimum, he has

standing as executor and beneficiary of Decedent’s estate, which is seeking half the




7
  I do not resolve here whether the amended complaint adequately pleads undue influence or
incapacity. Lucinda questioned the pleadings in an attempt to show the amended complaint was
futile. I conclude it was not because undue influence or incapacity may not be a necessary part
of Michael’s proof.
                                               8
proceeds from the Property’s sale and funds in some bank accounts that would

have passed to the Estate but for Lucinda naming herself as beneficiary.

          Michael has statutory standing to seek an accounting for Lucinda’s

transactions conducted under a power of attorney and to determine her liability as

agent because he is the child of the principal and personal representative and a

beneficiary of the principal’s estate.8 Michael could still pursue a claim that

Lucinda misappropriated Decedent’s share of the Property proceeds pursuant to the

power of attorney even if Lucinda were a legitimate joint owner. Michael’s

standing does not depend on whether Michael conceded that the Property was

properly jointly titled.

          Lucinda also asserts undue prejudice from Michael’s proposed withdrawal

of his original allegation that Decedent allowed Lucinda to retitle the Property as

joint tenants. Michael responds that the proposed amended claims and relief

sought are identical to those in the original complaint, so the amendment cannot be

prejudicial. While I appreciate that Michael seeks to alter his position with regard

to the retitling of the Property, Lucinda has failed to show how that change would

unduly prejudice her. As the briefing makes clear, she and Michael have already

taken discovery with regard to how the Property was retitled, Decedent’s capacity




8
    12 Del. C. § 49A-116(b)(2), (3); id. § 114(g).
                                                     9
at that time, and the extent to which Michael knew the Property was being retitled. 9

The stipulated scheduling order entered on September 27, 2017, extends fact

discovery based on the outcome of Michael’s motion to amend. With trial not

scheduled until December, Lucinda may rightfully request additional discovery on

the retitling. While the proposed amendment means Lucinda must now prove what

was previously conceded, it appears Lucinda is prepared to do so. Presumably,

Michael feels prepared to prove the opposite.

       I take instruction from NAACO Industries, Inc. v. Applica Inc., in which

defendants opposed a motion to amend on the theory that the plaintiffs “engaged in

strategic posturing” because the proposed amendment “omitt[ed] facts contained in

the first … complaint that contradict their claims.”10 This Court found justice

would be served by amendment, in part because “[n]othing suggest[ed] the

plaintiffs wrongfully omitted facts from their first … complaint that were

obviously important to their claims, or attempted to either delay the litigation or

force the defendants to incur additional costs.”11 I come to the same conclusion in


9
  Def. Obj. to. Mot. to Amend at 25 (citing Michael’s testimony as support for the statement that
Michael was aware Lucinda actively participated in maintaining Decedent’s real estate, and that
her assistance was much appreciated by Decedent and his children); id. at 27 (citing Michael’s
testimony as support for statements that the Property was retitled during a time period when
Decedent was adequately handling his own affairs, that Michael was aware the Property would
be retitled and discussed it with Decedent, and that Michael was invited to attend the deed
signing); id. at 38 (citing testimony by Michael and Carroll as to Decedent’s capacity at the time
the Property was retitled).
10
   2008 WL 2082145, at *2.
11
   Id.
                                                10
this case. Justice requires allowing the now-disputed retitling to be evaluated

based on the evidence, which may include the fact that Michael changed his

position.

       Lucinda also opposes Michael’s proposed amendment to add Jan and Carroll

as plaintiffs. Michael alleges that discovery revealed Jan and Carroll were

beneficiaries of some of Decedent’s accounts before Lucinda made herself the

beneficiary, so it is now necessary to add Jan and Carroll as plaintiffs. Lucinda

contends that Jan and Carroll do not have the requisite personal knowledge of all

the allegations in the proposed amended complaint. Michael’s reply does not

address this objection.

       Court of Chancery Rule 3(aa) requires that all complaints be verified “by

each of the parties filing such pleading” to indicate that the matter contained in the

complaint “so far as relates to the act and deed of any other person, is believed by

the party to be true.”12 A party wishing to demonstrate insufficient verification

must do so by “clear evidence.”13 Jan and Carroll did not sign verifications in

support of the proposed amended complaint; only Michael did.14 The record

indicates the missing verifications may be both technical and meaningful, at least


12
   See Bessenyei v. Vermillion, Inc., 2012 WL 5830214, at *2 (Del. Ch. Nov. 16, 2012) (“All
complaints and comparable pleadings filed in this Court must be accompanied by a notarized
verification for each named plaintiff, attesting to the correctness and truthfulness of the filing.”)
(citing Wolfe & Pittenger, § 4.01, at 4–2) (emphasis added).
13
   Dias v. Purches, 2012 WL 4503174, at *3-4 (Del. Ch. Oct. 1, 2012).
14
   Mot. to Amend Ex. A.
                                                 11
with regards to Jan. On July 13, 2017, after Michael moved for leave to file the

proposed amended complaint, Jan gave deposition testimony that she had been told

her “name was removed from an account and changed to [Lucinda’s] name,” and

that Jan’s only knowledge of Jan’s participation in the lawsuit was as a deponent.15

She also testified that she has no knowledge of the retitling of the Property. 16

Carroll testified in May 2017 that she had no personal knowledge of anyone

unduly influencing Decedent after 2010.17

       Lucinda has met her burden of providing clear evidence that Jan did not and

could not verify the proposed amended complaint. The record regarding Carroll’s

absent verification is sparser, but the verification remains missing. Michael’s reply

brief is silent on this issue. I conclude that Jan and Carroll may not be added as

plaintiffs via the proposed amended complaint because they did not verify it. I

recommend denying the motion to amend as to the proposed addition of Jan and

Carroll as plaintiffs.

       Finally, I turn to Michael’s request to amend his complaint to add Ziatyk as

a defendant. Michael alleges discovery revealed that Lucinda misappropriated

Decedent’s funds, directed those funds to a bank account accessible to Ziatyk, and

used those funds to repair and renovate a property owned jointly by Lucinda and


15
   Def. Obj. to Mot. to Amend D, Deposition of Jan DeGroat, 105:12-107:4.
16
   Id.
17
   Id. Ex. F, Deposition of Carol Iacovetti, 49:3-15.
                                             12
Ziatyk, and to pay off a home equity line of credit secured by that property.

Michael’s proposed amended Count III seeks a constructive trust over assets

obtained by both Lucinda and Ziatyk, and Count IV asserts both Lucinda and

Ziatyk were unjustly enriched. Lucinda did not specifically object to the proposed

addition of Ziatyk as a defendant or claim any prejudice therefrom.

          Court of Chancery Rules 19 and 20 govern the joinder of additional

defendants. Rule 19(a)(2) provides that a party should be joined, if subject to

service of process and if joinder will not deprive the Court of jurisdiction, if

          the person claims an interest relating to the subject of the action and is
          so situated that the disposition of the action in the person’s absence
          may (i) as a practical matter impair or impede the person’s ability to
          protect that interest or (ii) leave any of the persons already parties
          subject to a substantial risk of incurring double, multiple, or otherwise
          inconsistent obligations by reason of the claimed interest.

If the Court determines that a party should be joined, the Court may implicitly

conclude that party was subject to service within the requirement of Rule 19. 18 A

defendant may be joined under Rule 20 if a right to relief is asserted against him

arising out of the same transaction, occurrence or series of transactions or

occurrences and if any question of law or fact common to all defendants will arise

in the action. The provisions for permissive joinder under Rule 20 “are very broad




18
     Hughes Tool Co. v. Fawcett Publ’ns, Inc., 350 A.2d 341, 345 (Del. 1975).
                                                13
and the court is given discretion to decide the scope of the civil action and to make

such orders as will prevent delay or prejudice.”19

         I conclude Ziatyk is a necessary party under Rule 19 and should also be

permissively joined under Rule 20. Michael seeks return of all funds Lucinda

allegedly misappropriated, and alleges that discovery indicates much of those

funds are accessible by or benefitted Ziatyk. Disposing of this action without

Ziatyk may practically impede Ziatyk’s ability to protect his interest in those funds,

under Rule 19. In addition, the relief sought against Ziatyk arises out of the same

series of transactions or occurrences underlying Lucinda’s alleged

misappropriation, supporting permissive joinder under Rule 20.

         In conclusion, I recommend granting Michael’s motion to amend in part and

denying it in part. I conclude Michael’s proposed amended complaint is not futile:

any deficiency in pleading undue influence or incapacity is not fatal to Michael’s

claims, and Michael has statutory standing so the amendments are not a futile

attempt to avoid dismissal due to lack of standing. I also conclude the proposed

amendments do not cause undue prejudice, as Lucinda has already conducted

discovery on the issues Michael seeks to raise and time remains for her to further

build her defense. However, I recommend denying Michael’s request to add Jan

and Carroll as plaintiffs due to the absence of their verifications and evidence that


19
     Quereguan v. New Castle County, 2006 WL 2925411, at *2 (Del. Ch. Sept. 20, 2006).
                                               14
Jan’s verification may be absent because she lacks personal knowledge of the

complaint’s allegations. Finally, I recommend permitting amendment to add

Ziatyk as a defendant.

             b. Lucinda’s motion to dismiss shall be treated as a motion for summary
                judgment and the parties shall be given the opportunity to present all
                pertinent material.

          Lucinda asks the Court to dismiss Michael’s claims for failure to state a

claim via a document titled a motion to dismiss. Lucinda motion relies extensively

on deposition testimony and documents produced during discovery. Michael’s

counsel submitted an affidavit stating he could not fully respond to Lucinda’s

motion because discovery, including depositions, document requests, and motion

practice, was still ongoing. I conclude that because Lucinda’s motion relies on

material outside the pleadings, it must be treated as a motion for summary

judgment and the parties must be given the opportunity to present all material

made pertinent to such a motion.20

          Pursuant to the September 27, 2017, stipulated scheduling order, Michael

must file any dispositive motion within ten days after the Court’s ruling on the

pending motions. The scheduling order is silent as to when Lucinda must file any

dispositive motion. Lucinda shall file any additional pertinent material in support




20
     See Ct. Ch. R. 12(b).
                                            15
of her motion for summary judgment within ten days of this report becoming a

final Court order.21 I trust the parties can agree on a briefing schedule thereafter.

           c. I recommend the Court grant the motion to compel.

       Michael’s proposed Amended Complaint alleges that in 2012, Decedent

executed a new will to specifically disinherit Lucinda, that Lucinda discovered the

terms of that will, and that Lucinda proceeded to appropriate Decedent’s assets,

including by influencing Decedent into executing a new deed to the Property that

named Decedent and Lucinda as joint tenants with rights of survivorship instead of

as tenants in common. Michael alleges Thomas Ferry, Esquire, represented

Lucinda in 2012 and 2013, and assisted Lucinda and Decedent with retitling the

Property via a deed dated January 23, 2013. Michael moved to compel production

of Mr. Ferry’s file, arguing Lucinda placed her communications with Mr. Ferry at

issue by testifying about them, that Mr. Ferry witnessed the deed such that his

communications about it are not privileged pursuant to Delaware Rule of Evidence

502(d)(5), and that Lucinda waived the privilege by sharing communications with

Mr. Ferry in document production and at her deposition.

       Lucinda asserts privilege over Mr. Ferry’s file pertaining to his

representation of Lucinda alone, but states she has permitted the production of all


21
  See Appriva S’holder Litig. Co., LLC v. EV3, Inc., 937 A.2d 1275, 1288 (Del. 2007) (holding
that a trial court that has converted a motion to dismiss to one for summary judgment must give
the parties at least ten days’ notice).
                                               16
documents relating to Mr. Ferry’s representation of both Lucinda and Decedent. In

an affidavit, Mr. Ferry stated he represented Lucinda “on or about December

2012,” that Decedent terminated his attorney-client relationship with a different

attorney “on or about the end of December,” and that “[f]rom that point forward,

[Mr. Ferry] represented Lucinda … and communicated directly with [Decedent] in

connection with the execution of a deed for real property until the conclusion of

my engagement at the end of January, 2013.”22 Michael replies that Lucinda’s

attempt to divide Mr. Ferry’s representation into date periods is imprecise and

arbitrary, and does not defeat the fact that Lucinda put the communications at

issue, that Mr. Ferry witnessed the deed, and that Lucinda waived the privilege.

       The at issue exception is based on principles of waiver and fairness
       intended to ensure the party holding the privilege cannot use it both
       offensively and defensively. A party places her attorney-client
       communications at issue by (1) injecting the attorney-client
       communication into the litigation or (2) injecting an issue into the
       litigation, the truthful resolution of which requires an examination of
       attorney-client communications. 23

The first prong usually applies when a party asserts lawyer-client privilege to

protect a communication and then later seeks to admit that same communication as

evidence.24

       The second prong is whether a party injects an issue into the litigation,
       the truthful resolution of which requires an examination of

22
   Def. Obj. to Mot. to Compel Ex. B, ¶¶ 2-4.
23
   Princeton Ins. Co. v. Vergano, 883 A.2d 44, 59-60 (Del. Ch. 2005).
24
   In re Comverge, Inc. S’holders Litig., 2013 WL 1455827, at *3 (Del. Ch. Apr. 10, 2013).
                                              17
       confidential privileged communications. A party may not make bare
       factual assertions, the veracity of which are central to the resolution of
       the parties’ dispute, and then assert the attorney-client privilege as a
       barrier to prevent a full understanding of the facts disclosed. In other
       words, a party cannot raise an issue that the party can only prove by
       examining confidential communications, and then attempt to shield
       those communications from discovery as privileged.25

       In her deposition, Lucinda defended the 2013 deed by asserting she and

Decedent were following Mr. Ferry’s instructions. Lucinda testified that Mr. Ferry

told her and Decedent that their joint ownership of the house “disappeared” after

their divorce, and that upon learning that, she and Decedent agreed to restore joint

ownership.26 Lucinda said Mr. Ferry also explained to her that half the sale

proceeds of the house would go to Lucinda and half would go to Decedent’s

estate.27 She testified that Mr. Ferry told her that Mr. Ferry could represent both

Lucinda and Decedent in the deed preparation so long as Decedent was not

otherwise represented by counsel.28 Lucinda explained, “Tom Ferry was going to

take two people who wanted to do a very simple thing and take care of it. … There

was nothing nefarious about this.”29 She stated that Decedent obtained a

competency evaluation because Mr. Ferry required it as “a matter of course for

him” for clients “of a certain age.”30 Lucinda testified that after Decedent got the


25
   Id. (internal quotation and citations omitted).
26
   Mot. to Compel Ex. D, Deposition of Lucinda Papa, at 162.
27
   Id. at 187.
28
   Id. at 118, 190.
29
   Id. at 191.
30
   Id. at 93; see also id. at 170, 195-96.
                                              18
competency letter, Lucinda wrote Mr. Ferry and said, “Richard has it now so we

can set an appointment to just correct this issue.”31

       Lucinda’s explanation as to how she learned she no longer had an interest in

the Property, why Decedent obtained a competency evaluation, and the

circumstances under which the January 2013 deed was executed, relies heavily on

Mr. Ferry’s alleged advice to Lucinda. Lucinda injected Mr. Ferry’s representation

into the litigation, and the veracity of Lucinda’s factual assertions may only be

fully understood by examining Mr. Ferry’s file. Under the second prong of the “at

issue” exemption, Lucinda may not assert Mr. Ferry’s advice and direction as an

explanation for her conduct without permitting Michael to inquire into that advice.

This is true for any time period preceding execution of the deed.32 Because

Lucinda placed all her communications about the deed with Mr. Ferry at issue, I

need not determine the applicability of Delaware Rule of Evidence 502(d)(5) or

whether Lucinda waived the privilege by producing some documents. I

recommend the Court grant Michael’s motion to compel.




31
  Id. at 169.
32
  I am not convinced by Lucinda’s attempt to divide Mr. Ferry’s file regarding the deed into
periods of representation. Lucinda offers no specific date when Mr. Ferry began to represent
Decedent, and does not consistently assert privilege according to date. See Mot. to Compel Exs.
C, E (producing and withholding different documents dated December 24, 2012). The parties do
not dispute that Lucinda’s more recent communications with Mr. Ferry on a different subject are
privileged.
                                              19
           d. I recommend the Court deny the motion to strike.

       Michael moved to strike portions of Lucinda’s deposition errata sheets,

claiming “at least” twenty-six of her changes are substantive and material.33

Michael contends Lucinda’s errata sheets are improper under Court of Chancery

Rule 30(e) and the sham affidavit doctrine, which federal courts have used to

evaluate similar disputes.34 Lucinda responds that Michael’s accusations are too

general and vague, and fail to show that Lucinda’s changes are material,

substantive and contradictory to the deposition testimony as would be required

under the sham affidavit doctrine.

       Court of Chancery Rule 30(e) contemplates “[a]ny changes in form or

substance which the witness desires to make.”

       The Delaware Supreme Court has yet to endorse or define the proper
       application of the sham affidavit doctrine. To the extent the doctrine
       may be recognized in Delaware, it would require the Court to find
       certain elements before striking an affidavit or part thereof: (1) prior
       sworn deposition testimony; (2) given in response to unambiguous
       questions; (3) yielding clear answers; (4) later contradicted by sworn
       affidavit statements or sworn errata corrections; (5) without adequate
       explanation; and (6) submitted to the court in order to defeat an
       otherwise properly supported motion for summary judgment.35


33
   Mot. to Strike at 2, 3.
34
   See Donald M. Durkin Contracting, Inc. v. City of Newark, 2006 WL 2724882, at *5 (D. Del.
Sept. 22, 2006).
35
   In re TPC Group Inc. S’holders Litig., 2014 WL 1394369, at *2 (Del. Ch. Apr. 10, 2014)
(citing Cain v. Green Tweed & Co., Inc., 832 A.2d 737, 741 (Del. 2003) (“We need not address
the validity or scope of the [sham affidavit] doctrine, because we find it to be inapplicable in this
case.”)) (internal quotation omitted).
                                                 20
Even if the sham affidavit doctrine applies, Michael has not satisfied each criterion

for each of Lucinda’s changes to which he objects. Michael simply lists changes

without argument as to why each question was ambiguous, why each original

answer was unclear, and how each change is contradictory. Lucinda’s changes

were timely and twenty-two of the listed twenty-six changes were submitted before

Michael filed his dispositive motion. In the face of Rule 30(e)’s permission to

make substantive changes, I recommend the Court deny Michael’s conclusory

motion. Michael may refer to the original testimony and errata sheets on summary

judgment or at trial.36

      III.      Conclusion

             For the foregoing reasons, I recommend this Court grant Michael’s motion

to amend the allegations and to add Ziatyk as a defendant, but deny it as to adding

Jan and Carroll as plaintiffs; grant Michael’s motion to compel; and deny

Michael’s motion to strike. I defer decision on Lucinda’s dispositive motion until

all parties have had the opportunity to present all pertinent material.

                                                   Respectfully,

                                                   /s/ Morgan T. Zurn

                                                   Master in Chancery




36
     See id. at *3 n.19.
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