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Stifel Financial Corp. v. Cochran6/13/2002
§ 145(a) rather than § 145(b) applied to the arbitration action because it was not brought "by or in the right of" Stifel, the corporation from whom indemnification was sought. This issue is moot, however, because the Court of Chancery granted summary judgment in Stifel's favor as to the arbitration action judgment on other grounds. Although Cochran appeals that summary judgment decision, as will be explained later, we affirm the Court of Chancery's decision granting Stifel summary judgment. This Court will not decide an issue that has become moot, unless the question posed is of public importance and its resolution will have a continuing and significant impact on the development of the law. McDermott Inc. v. Lewis, 531 A.2d 206, 211 (Del. 1987); Morris v. State, 746 A.2d 277 (Del. 2000).
IV.
Stifel asserts that Cochran's indemnification claims should have been dismissed for his failure to make a demand on the board prior to filing suit. Cochran responds that neither the Indemnification Bylaw nor § 145(d) requires such a prior demand. The Court of Chancery held that, though Stifel's argument was persuasive from a policy standpoint, there is no language in § 145 that imposes a pre-suit demand requirement. On the contrary, the court noted, § 145(k) vests exclusive jurisdiction in the Court of Chancery "to hear and determine all actions for . . . indemnification brought under this section or under any bylaw . . .." This authority is not dependant upon a pre-suit demand, as in 8 Del. C. § 220.
Stifel bases its argument on 8 Del. C. § 145(d), which provides that a corporation may not offer indemnification without first making a determination that indemnification is proper under the circumstances and that the prospective indemnitee has met the applicable standard of conduct set forth in §§ 145 (a) and (b). Section 145(d) then describes the procedures a corporation must apply in reviewing a demand for indemnification. For this detailed procedure to be pursued, Stifel argues, the corporation must be advised of the indemnification request before any suit is brought.
Specifically, § 145(d) provides that " ny indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case . . .." Although Stifel argues that "unless ordered by a court" should not be read to "swallow" the rest of the subsection, this language clearly allows for the possibility that the Court of Chancery will order indemnification, thus negating the responsibility of the corporation to determine the propriety of the request in the first instance. Further, when read in conjunction with § 145(k)'s grant of plenary authority, the meaning is even more clear.
Stifel's policy arguments, based on respecting the authority of the board, are not persuasive. The General Assembly has spoken on the issue and, in the absence of a specific legislative restriction, we cannot engraft a requirement that creates a further bar to a statutorily created remedy. Any attempt to read into the clear language of a statute will be rejected. See HMG/Courtland Properties, Inc. v. Gray, 729 A.2d 300, 306 (Del. Ch. 1999) (stating " his court should be chary about reading words into a statute that the General Assembly could have easily added itself"). Finally, we note that Stifel was free to write a demand requirement into its bylaws, but did not.
V.
In his cross-appeal, Cochran argues that the Court of Chancery erred in dismissing his claim for indemnification of the expenses he incurred in bringing the indemnification suit. Cochran contends that, because the Indemnification Bylaw permits indemnification to
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