   IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                                       )
CHARLES F. DOLAN, HELEN A.             )
DOLAN, JAMES L. DOLAN,                 )
PATRICK F. DOLAN,                      )
COLLEEN McVEY, and                     )
DANIELLE CAMPBELL,                     )
                                       )
      Plaintiffs,                      )
                                       )
             v.                        )    C.A. No. 2018-0651-JRS
                                       )
ALTICE USA, INC., and                  )
ALTICE EUROPE N.V.,                    )
                                       )
      Defendants,                      )
                                       )
             and                       )
                                       )
CABLEVISION SYSTEMS                    )
CORPORATION and NEWS 12                )
NETWORKS, LLC,                         )
                                       )
      Nominal Defendants.              )
                                       )

                        MEMORANDUM OPINION

                       Date Submitted: April 22, 2019
                        Date Decided: June 27, 2019
                      Cover Page Corrected: July 3, 2019


John L. Reed, Esquire, Matthew Denn, Esquire, and Peter H. Kyle, Esquire of DLA
Piper LLP (US), Wilmington, Delaware and Robert M. Hoffman, Esquire and
James C. Bookhout, Esquire of DLA Piper LLP (US), Dallas, Texas, Attorneys for
Plaintiffs.
Daniel A. Mason, Esquire and Brendan W. Sullivan, Esquire of Paul, Weiss,
Rifkind, Wharton & Garrison LLP, Wilmington, Delaware; Kevin G. Abrams,
Esquire and J. Peter Shindel, Jr., Esquire of Abrams & Bayliss LLP, Wilmington,
Delaware; and Jay Cohen, Esquire and Daniel H. Levi, Esquire of Paul, Weiss,
Rifkind, Wharton & Garrison LLP, New York, New York, Attorneys for
Defendants.




SLIGHTS, Vice Chancellor
      Plaintiffs, Charles F. Dolan, Helen A. Dolan, James L. Dolan and Patrick F.

Dolan (together, the “Dolan family”), are the founders of Cablevision Systems

Corp., a publically traded Delaware corporation and one of the largest cable

operators in the United States. On September 16, 2015, Cablevision, Altice N.V.

and Neptune Merger Sub Corp. entered into an Agreement and Plan of Merger

(the “Merger Agreement”) whereby Altice agreed to pay $34.90 per share of

Cablevision stock, resulting in total merger consideration of $17.7 billion

(the “Merger”).

      Among the assets within the Cablevision family acquired in the Merger were

a cohesive group of regional cable news television channels, known collectively as

News12 Networks LLC (“News12”), which serve approximately three million

households in New Jersey, Connecticut and New York, including two boroughs of

New York City and most of Long Island. News12 provides hyper-local, 24-hour

news coverage in a manner that is unique in the United States. The Dolan family

were particularly fond of News12 and protective of its legacy. They initially sought

to carve out News12 from the Merger but eventually relented to pressure from Altice

to include the stations in the transaction. In exchange for doing so, the Dolan family

bargained for a commitment from Altice, memorialized in the Merger Agreement at

Section 6.4, that Altice would operate News12 “substantially in accordance with the

existing News12 business plan . . . through at least the end of plan year 2020[.]”

                                          1
      Shortly after the Merger closed, the Dolan family discovered that Altice had

laid off several News12 employees and planned to lay off more, allegedly in

violation of the News12 business plan as incorporated in the Merger Agreement.

When Altice declined to rescind the layoffs or commit to honor the News12 business

plan, the Dolan family, along with two News12 employees, initiated this action to

obtain specific performance of the Merger Agreement.

      Altice has moved to dismiss. Pointing to the survival clause in the Merger

Agreement, Altice contends that the commitment to honor the News12 business plan

was expressly not among the covenants that survived the closing of the Merger.

It also argues the Dolan family are not parties to, or third-party beneficiaries of, the

Merger Agreement and, thus, lack standing to seek specific performance of that

contract. The Dolan family counter that, notwithstanding the Merger Agreement’s

survival clause, the covenant at issue, by its terms, extends beyond closing to

“at least the end of plan year 2020[.]” They also maintain they are either parties to

the Merger Agreement, even though not identified as such, or third-party

beneficiaries, even though the Merger Agreement expressly disclaims the existence

of third-party beneficiaries. According to the Dolan family, if they are not deemed

parties to or third-party beneficiaries of the Merger Agreement, then there will be no

one to enforce Section 6.4, a provision included in the Merger Agreement expressly

for their benefit. In reply, Altice acknowledges that its construction of the Merger

                                           2
Agreement would reduce Section 6.4 to an aspirational, albeit unenforceable,

expression of then-present intent. To the extent the Dolan family thought they had

obtained more, they negotiated a “bad deal.”

        In this Memorandum Opinion, I find that the contested clauses of the Merger

Agreement, when read together, are ambiguous.            On the one hand, there are

provisions within the Merger Agreement that, by operation, would render

Section 6.4 unenforceable. The survival clause does not reference Section 6.4,

which suggests the clause did not survive the closing of the Merger. The Merger

Agreement also states that there are no third-party beneficiaries. On the other hand,

Section 6.4 expressly contemplates that Altice will have performance obligations

that extend well beyond closing. And, by its terms, Section 6.4 is clear that the

beneficiaries of Altice’s commitment to operate News12 according to the News12

business plan are not parties to the Merger Agreement and, therefore, could only

enforce that commitment as third-party beneficiaries. Before determining that

Section 6.4 is, as Altice maintains, nothing more than nugatory placation, it is, in my

view, appropriate to receive parol evidence to discern if that was the parties’ intent.1




1
 Vanderbilt Income & Growth Assocs., L.L.C. v. Arvida/JMB Managers, Inc., 691 A.2d
609, 613 (Del. 1996) (“On a motion to dismiss for failure to state a claim, a trial court
cannot choose between two differing reasonable interpretations of ambiguous
documents.”).

                                           3
      For the reasons explained below, the motion to dismiss the Dolan family’s

breach of contract and related declaratory relief claims is denied.2 The motion to

dismiss several of the claims pled as alternatives to breach of contract––breach of

the implied covenant of good faith, fraudulent inducement and equitable fraud––is

granted. All of these claims are supplanted by the breach of contract claim. In other

words, if there is an enforceable contract upon which Plaintiffs may rest their claims,

then there is no gap to fill with the implied covenant, there is no need to bootstrap

fraud and contract claims, and there is no special relationship to support equitable

fraud. The claim for promissory estoppel survives, however, on the theory that if

there is no contract between the Dolan family and Altice, as Defendants argue, then

the Dolan family has adequately pled there was an extra-contractual promise made

by Altice with the reasonable expectation that it would induce action, reasonable and

detrimental reliance upon the promise by the Dolan family, and a risk of injustice if

the promise is avoided.

                          I. FACTUAL BACKGROUND

      I draw the facts from the allegations in the Complaint, documents

incorporated by reference or integral to the Complaint and judicially noticeable facts




2
  As explained below, I do find that Plaintiffs McVey and Campbell lack standing to
enforce the Merger Agreement as either parties or third-party beneficiaries. Their breach
of contract claims, therefore, must be dismissed.

                                           4
available in public Securities and Exchange Commission filings. 3 For purposes of

this motion to dismiss, I accept as true the Complaint’s well-pled factual allegations

and draw all reasonable inferences in Plaintiffs’ favor.4

      A. The Parties

          Plaintiff, Charles F. Dolan, is the founder and former CEO of Cablevision

Systems Corp.5 Prior to the Merger, he held a 14.1% interest in Cablevision.6

His wife, Helen A. Dolan, also held a 14.1% interest.7 One of their sons, James L.

Dolan, held a 3.3% interest and is a former CEO of Cablevision.8 Another son,

Patrick F. Dolan, held a 1.8% interest and was President of News12 at the time of

and after the Merger.9




3
  Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004) (noting that on
a motion to dismiss, the Court may consider documents that are “incorporated by
reference” or “integral” to the complaint); In re Gen. Motors (Hughes) S’holder Litig.,
897 A.2d 162, 170 (Del. 2006) (noting that trial courts may take judicial notice of facts in
SEC filings that are “not subject to reasonable dispute”) (emphasis in original).
4
    Gen. Motors (Hughes) S’holder Litig., 897 A.2d at 169.
5
    Pls.’ Verified Second Am. Compl. (“SAC”) ¶ 11.
6
    Id.
7
    Id. ¶ 12.
8
    Id. ¶ 13.
9
    Id. ¶¶ 14, 53.

                                             5
          Plaintiffs, Colleen McVey and Danielle Campbell, are current employees of

News12, but both are slated to be terminated.10 McVey, an Emmy award-winning

news anchor, has worked at News12 for over 30 years.11 She regularly appears on

air at News12’s leading network, News12 Long Island.12 Campbell, also an Emmy

and Edward R. Murrow award-winning news anchor, has worked at News12 for

almost 30 years.13 Viewers rate Campbell above average as compared to other Long

Island reporters and she earns a high awareness score among the viewing public.14

          Defendants,   Altice   USA   and    Altice   Europe,   are   cable,   fiber,

telecommunications, content and media companies.          Altice USA, a Delaware

corporation, operates in the United States.15 Altice Europe, a Dutch naamloze

vennootschap (i.e., a Netherlands public limited liability company), is the parent of

communications companies that operate in Europe, Israel and the Dominican




10
     Id. ¶¶ 15–16.
11
     Id. ¶ 25.
12
     Id. ¶ 9.
13
     Id. ¶ 26.
14
     Id. ¶ 27.
15
     Id. ¶ 17.

                                          6
Republic.16 Both Altice USA and Altice Europe are successors in interest to

Altice N.V.17

          Nominal Defendant, Cablevision, a Delaware corporation, is wholly-owned

and operated by Altice.18 The Dolan family founded and led Cablevision until Altice

acquired Cablevision in 2015.19

          Nominal Defendant, News12, a Delaware limited liability company, is a local

television network that provides 24-hour “hyper-local” news coverage concentrating

on distinct geographic areas including New Jersey, Connecticut and New York

City.20 Altice acquired News12 as part of the Merger.21

      B. The Merger

          In 2015, Altice and the Dolan family began discussing Altice’s possible

acquisition of Cablevision.22 Initially, the Dolan family declined to include News12

in the transaction, proposing instead to spin off the asset to an entity they



16
     Id. ¶ 18.
17
     Id. ¶¶ 17–18.
18
     Id. ¶ 19.
19
     Id. ¶ 24.
20
     Id. ¶¶ 20, 38.
21
     Id. ¶¶ 4, 24.
22
     See id. ¶ 30.

                                           7
controlled.23 After intense negotiations with Altice, the Dolan family relented and

agreed to include News12 in the Merger in exchange for assurances in the Merger

Agreement that Altice would operate News12 in a manner that preserved its

employee base, quality reporting and programming.24

         The Dolan family, all of whom were members of Cablevision’s “controlling

stockholder group,” were not named as parties to the Merger Agreement, but were

represented by Debevoise & Plimpton LLP in the transaction negotiations.25

As negotiations continued, Altice determined that it would be useful to lock up the

Dolan family’s shares in favor of the Merger. Here again, comforted that Altice had

committed to preserve the News12 asset, the Dolan family relented and committed

by Written Consent to vote their substantial Class B shares “in favor of adoption of

the Merger Agreement.”26

         Cablevision, Altice N.V. and Neptune Merger Sub Corp. entered into the

Merger Agreement on September 16, 2015.27 The Merger consideration totaled




23
     Id. ¶¶ 29–30, Ex. C at 16.
24
     SAC ¶ 30.
25
  Id. Ex. C at 19. Cablevision was represented separately by Sullivan & Cromwell. Id.
Ex. C at 17.
26
     See SAC ¶ 30, Ex. C at 16, 19, 20, 71.
27
     SAC ¶¶ 5, 31.

                                              8
$17.7 billion.28 Of that amount, the Dolan family received over $2.2 billion, or

approximately 20% of the cash component of the Merger consideration.29

The transaction closed on June 21, 2016.30

      C. The Merger Agreement

          As noted, in exchange for the Dolan family’s agreement to include News12

in the Merger, Altice agreed to include a covenant in the Merger Agreement

(Section 6.4(f)) that it would operate News12 in accordance with the station’s then-

existing business plan:31

          (i) Parent will operate News12 Networks LLC (“News12”) from and
          after [June 21, 2016] [(“]the Closing[”)] substantially in accordance
          with the existing News12 business plan (the “News12 Business Plan”),
          a true and complete copy of which is included in Schedule 6.4(f) of the
          Company Disclosure Letter, as the same may be adjusted as provided
          in Scheduled 6.4(f), through at least the end of plan year 2020 within
          the current News12 footprint as of the date of this Agreement.
          (ii) The Company will operate News12 in accordance with the existing
          News12 Business Plan through the Closing.
          (iii) Either party may make reference to Section 6.4(f) and to
          Schedule 6.4(f) of the Company Disclosure Letter in connection with
          securing franchise and other regulatory approvals.32



28
     Id. ¶ 23, Ex. C at 2.
29
     See SAC Ex. C at 77.
30
     SAC ¶ 31.
31
     See id. ¶¶ 33–34.
32
     Id. ¶¶ 34–35, Ex. A § 6.4(f) (emphasis omitted).

                                              9
           As referenced in Section 6.4(f), the Merger Agreement incorporated the

News12 Business Plan in Schedule 6.4(f).33 Among other things, that plan provides

for News12 to employ a full-time equivalent headcount of 462 employees for a five-

year period––plan years 2016 through 2020.34 The Business Plan also confirms that

Altice will not materially modify News12’s content or decrease any of the budgeted

expenses, unless News12 should sustain a loss of $60 million or more, in which case

Altice would be free to modify the plan as needed.35

           Although, as a practical matter, the Dolan family and News12 employees are

the beneficiaries of Section 6.4(f), the Merger Agreement, at Section 9.8, disclaims

the existence of third-party beneficiaries:

           Except (i) as provided in Section 6.10 (Director and Officer Liability)
           or Section 9.15 (Financing Sources) and (ii) for the right of holders of
           Shares as of the Effective Time, after the Effective Time, to receive the
           aggregate consideration payable pursuant to Article IV of this
           Agreement, which rights set forth in clauses (i) and (ii) of this
           Section 9.8 are hereby expressly acknowledged and agreed by Parent
           and Merger Sub, Parent and the Company hereby agree that their
           respective representations, warranties and covenants set forth in
           this Agreement are solely for the benefit of the other party hereto,
           in accordance with and subject to the terms of this Agreement, and
           this Agreement is not intended to, and does not, confer upon any
           Person other than the parties hereto any rights or remedies
           hereunder, including the right to rely upon the representations and

33
     Id.
34
     SAC ¶ 36, Ex. B.
35
     SAC ¶ 37, Ex. A, Schedule 6.4(f).

                                              10
         warranties set forth herein . . . . The representations and warranties in
         this Agreement are the product of negotiations among the parties hereto
         and are for the sole benefit of the parties hereto.36
The Merger Agreement also contains a survival provision at Section 9.1:
         This Article IX and the agreements of the Company, Parent and Merger
         Sub contained in Article IV and Sections 6.8 (Employee Benefits), 6.9
         (Expenses) and 6.10 (Director and Officer Liability) shall survive the
         consummation of the Merger and the Transactions. This Article IX and
         the agreements of the Company, Parent and Merger Sub contained in
         Section 6.9 (Expenses), Section 6.11 (Financing), Section 6.12
         (Indemnification Relating to Financing) and Section 8.5 (Effect of
         Termination and Abandonment) and the Confidentiality Agreement
         shall survive the termination of this Agreement.           All other
         representations, warranties, covenants and agreements in this
         Agreement shall not survive the consummation of the Merger and
         the Transactions or the termination of this Agreement.37

As the provision clearly reflects, the Parties agreed that only certain covenants,

representations, warranties and agreements would survive the consummation or

termination of the Merger. Section 6.4(f) was not among them.

         Finally, the parties agreed in Section 6.8(e), entitled “Employee Benefits,”

that:

         Nothing contained in this Agreement is intended to (1) be treated as
         an amendment of any particular Company Plan, (2) prevent Parent, the
         Surviving Corporation or any of their Affiliates from amending or
         terminating any of their benefit plans or, after the Effective Time, any
         Company Plan in accordance with their terms, (3) prevent Parent, the
         Surviving Corporation or any of their Affiliates, after the Effective

36
     SAC Ex. A § 9.8 (bold emphasis supplied).
37
     Id. § 9.1 (bold emphasis supplied).

                                            11
          Time, from terminating the employment of any Continuing
          Employee, or (4) create any third-party beneficiary rights in any
          employee of the Company or any of its Subsidiaries, any beneficiary
          or dependent thereof, or any collective bargaining representative
          thereof.38

      D. News12 after the Merger

          In the spring of 2017, after the Merger closed, Altice terminated

approximately 70 employees, allegedly “in direct violation of Section 6.4(f).”39

At the time, Patrick Dolan was President of News12 and opposed the layoffs to no

avail.40 The layoffs decreased News12’s salary spend by about $7 million––

dropping Operating Expenses to levels under the allocations in Section 6.4(f).41

          After the 2017 layoffs, Altice developed a plan to lay off 10% of News12

employees each year.42 On August 21, 2018, Altice’s controlling stockholder,

Patrick Drahi, wrote to Patrick Dolan to confirm the planned layoffs.43

The downsizing plan contemplates that McVey and Campbell will be among the first




38
     Id. § 6.8(e) (emphasis supplied).
39
     SAC ¶¶ 44–45.
40
     Id. ¶¶ 14, 53.
41
     Id. ¶ 45.
42
     Id. ¶ 46.
43
  Id. Altice intended to initiate the layoffs on September 6, 2018, but the planned layoffs
have been suspended pending the outcome of this litigation.

                                            12
of the News12 employees to lose their jobs.44 Michael Schreibner, President of

Altice USA News, explained that the layoffs were necessary to give News12 a “fresh

look.”45        According to Plaintiffs, the termination of long-time, beloved news

anchors, coupled with the planned structural changes, will negatively affect

News12’s ability to maintain its historic level of quality and hyperlocal news

content.46

      E. Procedural Posture

           On September 4, 2018, Plaintiffs initiated this action specifically to enforce

Section 6.4(f) and to enjoin Altice from terminating any News12 employee other

than “for obvious cause” or otherwise operating News12 in deviation of the News12

Business Plan as incorporated in the Merger Agreement.47 Plaintiffs amended their

Complaint to add Danielle Campbell as a plaintiff on October 1, 2018.48 Defendants

then moved to dismiss. By stipulation of the parties, Plaintiffs filed the now-

operative Verified Second Amended Complaint (the “Complaint”) on March 12,

2019, to include a request that the Court appoint a monitor to enforce Altice’s



44
     Id. ¶¶ 48–49.
45
     Id.
46
     Id. ¶¶ 45, 49.
47
     D.I. 1 at 32 (Prayer for Relief).
48
     D.I. 17.

                                             13
specific performance of Section 6.4(f) and to enhance the allegations in support of

their breach of the implied covenant of good faith and fair dealing claim.49

           In the Complaint, Plaintiffs assert six causes of action: breach of contract,50

breach of the implied covenant of good faith and fair dealing,51 equitable fraud,52

promissory estoppel,53 negligent misrepresentation,54 and declaratory relief.55

Plaintiffs seek specific performance, injunctive relief, monetary damages,

recoverable costs, attorneys’ fees and pre-judgment and post-judgment interest.56

           Plaintiffs filed a Motion for a Temporary Restraining Order on October 9,

2018, along with their initial complaint. After several hearings to consider that

motion were adjourned, the parties submitted a proposed status quo order.57 The

Court entered that order on February 13, 2019, prohibiting Altice from terminating




49
     D.I. 52, Ex. A.
50
     SAC ¶¶ 51–69.
51
     Id. ¶¶ 70–77.
52
     Id. ¶¶ 78–85.
53
     Id.
54
     Id. ¶¶ 86–90.
55
     Id. ¶¶ 91–92.
56
     Id. at 40–41 (Prayer for Relief).
57
     Id.

                                              14
any News12 employee during the pendency of this litigation, except for actual, bona

fide cause or upon approval of the Court.58

                                      II. ANALYSIS

         In considering a motion to dismiss, “(i) all well-pleaded factual allegations are

accepted as true; (ii) even vague allegations are ‘well-pleaded’ if they give the

opposing party notice of the claim; [and] (iii) the Court must draw all reasonable

inferences in favor of the non-moving party[.]”59 This is to say, “Delaware follows

a simple notice pleading standard.”60             “To meet this standard and survive a

Rule 12(b)(6) motion to dismiss, a plaintiff must make allegations in its complaint

which provide the defendant with sufficient notice of the basis for the plaintiff’s

claim.”61 The court may grant a motion to dismiss only if the “plaintiff would not

be entitled to recover under any reasonably conceivable set of circumstances

susceptible of proof.”62




58
     D.I. 46.
59
     Gen. Motors (Hughes) S’holder Litig., 897 A.2d at 168.
60
  O’Reilly v. Transworld Healthcare, Inc., 745 A.2d 902, 912 (Del. Ch. 1999) (citing
Byrne v. Lord, 1996 WL 361503, at *3 (Del. Ch. June 11, 1996)).
61
     Id. (citing Byrne, 1996 WL 361503, at *3).
62
     Savor, Inc. v. FMR Corp., 812 A.2d 894, 897 (Del. 2002).

                                             15
         Questions of contractual interpretation generally are questions of law well

suited for a motion to dismiss.63 With that said, the Court cannot select one

reasonable interpretation of a contract provision over another as a basis for

dismissal.64 Rather, “[d]ismissal, pursuant to Rule 12(b)(6), is proper only if the

defendants’ interpretation is the only reasonable construction as a matter of law.”65

      A. Have Plaintiffs Adequately Pled A Breach of Section 6.4(f)?

         Not surprisingly, as with most contracts, the Merger Agreement features some

boilerplate, some bespoke provisions and some bespoke boilerplate. The question

presented here is whether the boilerplate and bespoke boilerplate should be

construed, as a matter of law, to render a bespoke provision superfluous. I consider

that question, in parts, below.




63
     Allied Capital Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1030 (Del. Ch. 2006).
64
     VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 615 (Del. 2003).
65
   Id. See also VLIW Tech., 840 A.2d at 615 (holding that where the contract provisions at
issue, either separately or when read together, are subject to more than one reasonable
interpretation, for purposes of deciding a motion to dismiss, the meaning of the provisions
must be interpreted in the light most favorable to the non-moving party).

                                             16
       1. The Dolan Family Have Adequately Pled They Are Third-Party
          Beneficiaries; McVey and Campbell Have Not

       As a threshold matter, the parties dispute Plaintiffs’ standing to bring

contractual claims as third-party beneficiaries to the Merger Agreement. Since

Plaintiffs were not parties to the Merger Agreement,66 they must demonstrate they

have standing to enforce the contract as third-party beneficiaries.67 To do so at this

stage, Plaintiffs must plead facts that allow a reasonable inference that:

       (i) the contracting parties [] intended that the third party beneficiary
       benefit from the contract, (ii) the benefit [was] intended as a gift or in
       satisfaction of a pre-existing obligation to that person, and (iii) the
       intent to benefit the third party [was] a material part of the parties’
       purpose in entering into the contract.68


66
   SAC ¶¶ 31, 52, Ex. A (The title of the Agreement is “Agreement and Plan of Merger
Among Cablevision Systems Corporation, Altice N.V. and Neptune Merger Sub Corp” and
it was signed by these entities.), Ex. C at 15 (Cablevision’s Information Statement defines
“the parties to the merger agreement” as Cablevision, Altice, and Merger Sub.). See Orban
v. Field, 1993 WL 547187, at *9 (Del. Ch. Dec. 30, 1993) (finding that “[o]bviously the
shareholders are not parties to [the merger agreement],” despite the agreement being
conditioned on the approval of 90% of shares). I reject Plaintiffs’ argument that, as former
stockholders who received consideration, and as the controlling stockholders who
participated in the negotiations and voted their shares to approve the Merger, they should
be deemed de jure parties to the Merger Agreement. See Orban, 1993 WL 547187, at *9;
McKesson HBOC, Inc. v. N.Y. State Common Ret. Fund, Inc., 339 F.3d 1087, 1091–92
(9th Cir. 2003) (applying well settled Delaware law in finding stockholders are not parties
to merger agreements).
67
  Insituform of N. Am., Inc. v. Chandler, 534 A.2d 257, 268 (Del. Ch. 1987) (“Analysis of
the standing issue begins with recognition of the general rule that strangers to a contract
ordinarily acquire no rights under it unless it is the intention of the promisee to confer a
benefit upon such third party.”).
68
  Madison Realty P’rs 7, LLC v. Ag ISA, LLC, 2001 WL 406268, at *5 (Del. Ch. Apr. 17,
2001).

                                            17
           For the first element, Plaintiffs have adequately pled the parties intended that

Plaintiffs benefit from Section 6.4(f) of the Merger Agreement. As for the Dolan

family, they allege they would not have agreed to include News12 in the transaction

if Altice had not agreed to operate the stations in accordance with the News12

business plan, as promised in Section 6.4(f).69 As for McVey and Campbell, they

allege the News12 business plan contains expenditures for newsgathering and

production—the bulk of which goes to employee salaries.70 The News12 business

plan protects these salaries with particular line items by department and an

incorporated estimate of $60 million in losses over five years.71

           The Dolan family also adequately allege that Section 6.4(f) was intended to

meet a preexisting commitment made to them and that Altice intended “to give

the[m] (as beneficiar[ies]) the benefit of the promised performance.”72 Here again,

the Dolan family alleges they agreed to sell News12 only because Altice made the

commitment that it would operate News12 within clearly expressed parameters.




69
     SAC ¶¶ 4, 30.
70
     Id. Ex. B.
71
     Id.
72
   RESTATEMENT (SECOND) CONTRACTS § 302 (1981). See Madison Realty, 2001
WL 406268, at *5; Insituform of N. Am., 534 A.2d at 268. In this regard, the Restatement
clarifies that performance need not be “rendered directly to” the third-party beneficiary.
RESTATEMENT (SECOND) CONTRACTS § 302 cmt c.

                                              18
They then agreed by Written Consent to vote their Class B shares “in favor of

adoption of the Merger Agreement” in reliance upon that commitment.73

         McVey and Campbell part ways with the Dolan family in the third-party

beneficiary analysis on this second element. The Complaint contains no well-pled

facts that Altice made any commitment or owed any “pre-existing obligation” to

either McVey or Campbell prior to the Merger Agreement from which they could

claim third-party beneficiary status with respect to Section 6.4(f). This would

explain why Section 6.8(e) of the Merger Agreement makes clear that Altice is not

“prevent[ed] . . . from terminating the employment of any Continuing Employee

(by definition including McVey and Campbell).”74 While the Dolan family may be

able to advance an argument that the termination of McVey and Campbell’s

employment with News12 would constitute a breach of Section 6.4(f) as to them,

McVey and Campbell have no standing to assert that claim of breach either as parties

to, or third-party beneficiaries of, the Merger Agreement.

         Lastly, it is alleged that Section 6.4(f) was included in the Merger Agreement

to induce the Dolan family to sell their Cablevision stock, merge Cablevision and

News12 into Altice and sign the Written Consent in favor of the Merger




73
     See SAC ¶ 30, Ex. C at 16, 19, 20, 71.
74
     SAC Ex. A § 6.8(e).

                                              19
Agreement.75 Under the circumstances, it is reasonably conceivable that “the intent

to benefit the third party [was] a material part of the parties’ purpose in entering into

the contract.”76

         The Dolan family has well pled each of the three requisite elements to

establish third-party beneficiary status. But, of course, the inquiry cannot end there.

Section 9.8 of the Merger Agreement states, in part, that the parties “agree that their

respective representations, warranties and covenants set forth in this Agreement are

solely for the benefit of the other party hereto, in accordance with and subject to the

terms of this Agreement, and this Agreement is not intended to, and does not, confer

upon any Person other than the parties hereto any rights or remedies hereunder.”77

While Section 9.8 is not absolute, it clearly does not identify the Dolan family as

third-party beneficiaries. Recognizing this, the Dolan family invoke the canon that

a specific provision of a contract trumps a general one in order to argue that

Section 6.4(f) trumps Section 9.8.78 That canon does not fit here, however, because

both sections are specific. Section 6.4(f) is specific in providing detailed rights that

expressly benefit non-parties to the contract; Section 9.8 is specific in identifying


75
     SAC ¶¶ 4, 10, 56, 74, 81, 84, 87.
76
     Madison Realty P’rs 7, LLC, 2001 WL 406268, at *5.
77
     SAC Ex. A § 9.8.
78
     DCV Hldgs., Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005).

                                             20
who is and who is not intended to be a third-party beneficiary of the contract. Canons

of contract construction, alone, cannot render unambiguous two specific and yet

conflicting contractual provisions.

       The goal of contract construction in instances like this is to “harmonize”

related contractual provisions.79 That simply cannot be done here by looking only

within the four corners of the Merger Agreement. Extrinsic evidence will be needed

to determine what Section 6.4(f) was intended to mean and how, if at all, it is to be

enforced.

       2. Plaintiffs Adequately Allege Section 6.4(f) Survived the Closing of the
          Merger

       For the Dolan family’s claims under the Merger Agreement to survive

Defendants’ motion, it must be reasonably conceivable that Section 6.4(f) survived

the Closing. Specifically, it must be reasonably conceivable that Section 9.1, the

survival provision, did not apply to Section 6.4(f). Defendants assert that, even if

the Dolan family has standing, Section 6.4(f) did not survive Closing because it was

not one of the sections designated for survival in Section 9.1.

       The parties offer conflicting interpretations of Section 6.4(f). The Dolan

family reads Section 6.4(f) as clearly surviving Closing––why else would such a


79
   See Hampton v. Turner, 2015 WL 1947067, at *3 (Del. Ch. Apr. 29, 2015) (noting that
in construing contracts this court is obliged to attempt to “reconcile or harmonize all of the
contract’s provisions”).

                                             21
detailed, heavily negotiated provision with an accompanying schedule and five-year

life span be included in the Merger Agreement?80              Defendants counter that

Section 6.4(f) was simply a goodwill gesture and was in no way meant to bind Altice

before or after the Merger closed.81 In reply, the Dolan family point out that

Section 6.4(f) is not drafted as an expression of good will. Instead, it is drafted to

state an obligation––“Parent will operate News12 in accordance with the existing

News12 business plan . . . .”82

         For Defendants to prevail on their motion to dismiss, theirs must be the only

reasonable constructions of Section 6.4(f) and Section 9.1 as a matter of law.83 That

definitive construction is not possible here. Defendants’ construction fairly tracks

the plain language of Section 9.1, but their construction of the interaction between



80
  Pls.’ Answering Br. in Opp’n to Defs.’ Mot. to Dismiss (“PAB”) at 14–20. In this regard,
Plaintiffs cite Sunline, where a contract contained conflicting terms that could not be
definitively married, prompting the Supreme Court to hold that the contract was ambiguous
and that a trial would be needed to sort through conflicting parol evidence. Sunline
Commercial Carriers, Inc. v. CITGO Petroleum Corp., 206 A.3d 836, 851–52 (Del. 2019).
81
   Tr. 9:21–11:21. To support this argument, Defendants point to Section 6.8(a) of the
Agreement as another place in the Agreement where a forward-looking covenant is not
enforceable post-Closing. Tr. 9:8–21. “Section 6.8(a) states that compensation and certain
benefits for continuing employees will not be reduced in the first year after closing. But
Sections 6.8(e) and 9.8 make plain that employees are not third-party beneficiaries with
standing to enforce the promises of Section 6.8(a).” Defs.’ Reply Br. in Further Support
of their Mot. to Dismiss at 4.
82
     SAC Ex. A § 6.4(f)(i) (emphasis supplied).
83
     VLIW Tech., 840 A.2d at 615.

                                             22
Section 9.1 and Section 6.4(f) renders Section 6.4(f) superfluous in the sense that it

is entirely unenforceable––by anyone.84          That result is inconsistent with the

contractual cannon that discourages the court from construing a contract in a way

that results in “mere surplusage.”85 It also creates an arguably “absurd result” by

rendering meaningless the protections the Dolan family allege they bargained for

with respect to News12. 86

                                            ******

      The Merger Agreement is ambiguous with respect to whether Section 6.4(f)

is: (a) enforceable by the Dolan family as third-party beneficiaries, and

(b) enforceable as a covenant that survived the Closing of the Merger. Accordingly,

the motion to dismiss Counts I and VI must be denied as to the Dolan family.




84
  Tr. 10:22–11:1 (Mr. Cohen: As to 6.4(f), it is an obligation that we took on which is not
enforceable. The Court: By anybody. Mr. Cohen: By anybody, Your Honor.”).
85
   Kuhn Const., Inc. v. Diamond State Port Corp., 990 A.2d 393, 396–97 (Del. 2010)
(“We will read a contract as a whole and we will give each provision and term effect, so as
not to render any part of the contract mere surplusage.”); see also RESTATEMENT (SECOND)
OF CONTRACTS § 203 (“In the interpretation of a promise or agreement or a term thereof,
the following standards of preference are generally applicable: (a) an interpretation which
gives a reasonable, lawful, and effective meaning to all the terms is preferred to an
interpretation which leaves a part unreasonable, unlawful, or of no effect.”); id. cmt. b
(“Since an agreement is interpreted as a whole, it is assumed in the first instance that no
part of it is superfluous.”).
86
  Osborn v. Kemp, 991 A.2d 1153, 1160 (Del. 2010) (“An unreasonable interpretation [of
a contract is one that] produces an absurd result or one that no reasonable person would
have accepted when entering the contract.”).

                                            23
As neither McVey nor Campbell have standing to enforce the Merger Agreement,

however, Counts I and VI must be dismissed as to them.

      B. Plaintiffs Have Not Stated A Claim for Breach of the Implied Covenant
         of Good Faith and Fair Dealing

        Plaintiffs allege that Altice breached the Merger Agreement’s implied

covenant of good faith and fair dealing by promising pre-Closing to perform

obligations to Cablevision and its stockholders while attempting to avoid this

obligation after obtaining control of Cablevision, thereby “frustrating the essential

purpose of Section 6.4(f).”87 The implied covenant is a “limited and extraordinary”

legal remedy.88 It adheres only when “the contract is truly silent with respect to the

matter at hand, and only when the court finds that the expectations of the parties

were so fundamental that it is clear that they did not feel a need to negotiate about

them.”89




87
     SAC ¶¶ 70–77.
88
  Oxbow Carbon & Minerals Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d 482,
507 (Del. 2019). Implied covenant claims are “rarely invoked successfully” and are
routinely dismissed in these circumstances. MHS Capital LLC v. Goggin, 2018
WL 2149718, at *11 (Del. Ch. May 10, 2018) (internal quotations & citation omitted); see
Fortis Advisors LLC v. Dialog Semiconductor PLC, 2015 WL 401371, at *3 (Del. Ch.
Jan. 30, 2015).
89
  Allied Capital Corp., 910 A.2d at 1032–33. See Oxbow Carbon & Minerals Hldgs., Inc.,
202 A.3d at 507 (“Even where the contract is silent . . . [a court] ‘should be most chary
about implying a contractual protection when the contract could easily have been drafted
to expressly provide for it.’”).

                                           24
         Plaintiffs have not adequately identified any “gap” in the Merger Agreement

that the Parties failed to anticipate and address. According to Plaintiffs, the alleged

“gap” is revealed in the Merger Agreement’s failure to identify who has standing to

enforce Section 6.4(f) in the event of breach.90 I reject this argument as a matter of

law.      Section 9.8 clearly addresses standing under the Merger Agreement.

This Court “will not rewrite contractual language covering particular topics [under

the guise of the implied covenant] just because one party failed to extract as complete

a range of protections as it, after the fact, claims to have desired during the

negotiation process.”91 Thus, Count II must be dismissed because it is duplicative

of Plaintiffs’ breach of contract claim.92 If the Dolan family is to have a right to

enforce Section 6.4(f), that right will have to flow from parol evidence that allows

the Merger Agreement reasonably to be construed to provide for that right.



90
     PAB at 41–42.
91
     Allied Capital Corp., 910 A.2d at 1033 (citation omitted).
92
  Narrowstep, Inc. v. Onstream Media Corp., 2010 WL 5422405, at *10 (Del. Ch. Dec. 22,
2010) (finding implied covenant claim not available when “the subject at issue is expressly
covered by the contract”) (internal quotations & citation omitted); Fortis Advisors, 2015
WL 401371, at *3 (“Where the contract speaks directly regarding the issue in dispute,
existing contract terms control . . . such that implied good faith cannot be used to
circumvent the parties’ bargain[.]”) (internal quotations & citation omitted); Edinburgh
Hldgs., Inc. v. Educ. Affiliates, Inc., 2018 WL 2727542, at *9 (Del. Ch. June 6, 2018)
(dismissing implied covenant claim as “improperly duplicative of [plaintiff’s] contract
claims”); Feldman v. Soon-Shiong, 2018 WL 2124063, at *3 (Del. Ch. May 8, 2018)
(dismissing implied covenant claim where claim was premised on alleged violation of
express contractual term).

                                              25
     C. The Dolan Plaintiffs Have Not Stated A Claim For Equitable Fraud Or
        Negligent Misrepresentation

       The claims for equitable fraud and negligent misrepresentation are not well

pled both because they are bootstrapped improperly to the breach of contract claim

and they rest on a flawed premise—that there was some sort of legally cognizable

special relationship between Altice and the Dolan family.

       Conclusory allegations that a party to a contract did not intend to perform at

the time of the contract’s making do not state a claim for equitable fraud and

negligent misrepresentation. These types of allegations, instead, reflect nothing

more than a plaintiff’s improper attempt to “bootstrap” breach of contract claims

with fraud-based claims.93

       Moreover, the Dolan family’s equitable fraud/negligent misrepresentation

claims fail as a matter of law because, in the context of a commercial arm’s-length

transaction, there is no “special relationship” between Altice and the Dolan family

as required by Delaware law.94         “[A] plaintiff claiming equitable fraud must



93
   See BAE Sys. N. Am. Inc. v. Lockheed Martin Corp., 2004 WL 1739522, at *8 (Del. Ch.
Aug. 3, 2004) (“One cannot ‘bootstrap’ a claim of breach of contract into a claim of fraud
merely by alleging that a contracting party never intended to perform its obligations.”)
(internal quotations & citation omitted); Zutrau v. Jansing, 2014 WL 3772859, at *14–15
(Del. Ch. July 31, 2014), aff’d, 123 A.3d 938 (Del. 2015) (TABLE) (same); Iotex
Commc’ns, Inc. v. Defries, 1998 WL 914265, at *5–6 (Del. Ch. Dec. 21, 1998) (same).
94
  A claim for “negligent misrepresentation is often referred to interchangeably as equitable
fraud.” See Fortis Advisors, 2015 WL 401371, at *9 (collecting cases).

                                            26
sufficiently plead a special relationship between the parties or other special equities,

such as some form of fiduciary relationship or other similar circumstances.”95

Cablevision and the Dolan family are sophisticated parties represented by

sophisticated counsel.96 They bargained with Altice at arm’s-length. There is no

special relationship here.97 Therefore, Counts III and V must be dismissed.

      D. The Dolan Plaintiffs Have Stated A Claim For Promissory Estoppel

         The Dolan family allege that Altice promised to operate News12 in

accordance with the News12 Business Plan and, in doing so, induced Cablevision to

include News12 in the Merger.98 Under the so-called “Lord test,” promissory

estoppel requires clear and convincing evidence that: “(1) a promise was made; (2) it

was the reasonable expectation of the promisor to induce action or forbearance on

the part of the promise; (3) the promisee reasonably relied on the promise and took



95
   LVI Gp. Invs., LLC v. NCM Gp. Hldgs., LLC, 2018 WL 1559936, at *18 (Del. Ch.
Mar. 28, 2018) (internal quotation marks & citation omitted) (dismissing equitable fraud
and negligent misrepresentation claims where the agreement was “negotiated at arms’
length” and was “carefully drafted” by “two of the largest demolition companies in the
United States” who were “represented by competent counsel”) (internal quotations &
citation omitted).
96
     SAC Ex. C at 19.
97
   Sophisticated entities represented by sophisticated counsel engaged in arm’s-length
negotiations “generally do not qualify for the kind of equitable protection that the negligent
misrepresentation doctrine envisions.” LVI Gp. Invs., 2018 WL 1559936, at *18 (alteration
in original).
98
     SAC ¶¶ 80–85.

                                             27
action to his detriment; and (4) such promise is binding because injustice can be

avoided only by enforcement of the promise.”99

      Typically, “[p]romissory estoppel does not apply . . . where a fully integrated,

enforceable contract governs the promise at issue;” rather, the Court “must look to

the contract as the source of a remedy[.]” 100 But where a defendant denies that she

is contractually bound to the plaintiff, or asserts that the contract is unenforceable,

the plaintiff may plead promissory estoppel as an alternative to breach of contract.101

Here, if the Merger Agreement does not bind Altice to the Dolan family, then the

Dolan family have adequately pled: (1) a definitive extra-contractual promise (to run

News12 in accordance with its business plan); (2) intended to induce action (the sale

of News12 and support for the Merger Agreement); (3) reasonable and detrimental

reliance (the agreement to sell News12 and support the Merger Agreement); and

(4) that injustice will result (the gross deviation from the News12 business plan) if

the promise is not enforced. “Determining whether the elements for promissory


99
  Chrysler Corp. v. Chaplake Hldgs., Ltd., 822 A.2d 1024, 1032 (Del. 2003) (citing Lord v.
Souder, 748 A.2d 393, 399 (Del. 1999)).
100
    SIGA Techs., Inc. v. PharmAthene, Inc., 67 A.3d 330, 348 (Del. 2013) (reversing denial
of summary judgment and dismissing promissory estoppel claim); see also TrueBlue, Inc.
v. Leeds Equity P’rs IV, LP, 2015 WL 5968726, at *5, *10 (Del. Super. Ct. Sept. 25, 2015)
(dismissing promissory estoppel claim and noting “the Court is not the forum to rewrite
the contract or to add provisions that, in hindsight, a party wishes it had included”).
101
  See James v. United Medical Care, LLC, 2017 WL 1224513, at *7–8 (Del. Super. Ct.
Mar. 31, 2017)

                                           28
estoppel are met will require a fact intensive inquiry into the details of the parties’

dealings.”102 Defendants’ motion to dismiss Count IV as to the Dolan family is

denied.103

                                 III.   CONCLUSION

         For the foregoing reasons, Defendants’ motions to dismiss must be DENIED

with respect to Counts I, IV and VI as to the Dolan family, and GRANTED with

respect to Counts I, IV and VI as to McVey and Campbell and Counts II, III and V

as to all Plaintiffs. Counsel shall contact chambers to arrange for a scheduling

conference with the Court.

         IT IS SO ORDERED.




102
      Addy v. Piedmonte, 2009 WL 707641, at *22–23 (Del. Ch. Mar. 18, 2009).
103
   Since McVey and Campbell were not parties to the Merger negotiations and, therefore,
received no promises from Altice with respect to News12, they have no claim for
promissory estoppel and Count IV, as to them, must be dismissed.

                                            29
