Cochran v. Stifel Financial
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IN THE COURT OF Ct[ANCERY OF THE STATES OF DELAWARE IN AND ! ;OR NEW CASTLE COUNTY ROBERT M. COCHRAN; Plaintiff, V. > Civil Action No. 17350 STIFEL FINANCIAL CC~RPORATION, Defendant. > > M EI\IIORANDIJ M OPINION Date SL.bmitted: November 30, 2000 Date Ikcided: December 13, 2000 Judith Nichols Renzulli, Esquire, of DUANE, MORRIS & HECKSCHER, Wilmington, Delaware; Of Co,Lmsel: Matthew A. Taylx, Esquire, of DUANE, MORRIS & HECKSCHER, Plniladelpl~ia, Pennsylvania; R.obert J. Valihura, Jr., Esquire, Wilmington, Delaware, Attorneys for Plaintiff. Edward P. Welch, Esquire, of SKADDEN, ARPS, SL,ATE, MEAGHER & FLOM, Wilmington, Delaware; Of Counsel: Dennis M. Kelleher, Esquire, of SKADDEN, ARPS, SLATE, MEAGHER ,& FLOM, Boston, Massachusetts, Attorneys for Defendant. !STRINE, Vice ClhancelXou SC This opinion resole 1 L (cross-motions for summary judgment brought in . a complicated indemni fication case. In a previous opiri~1, the court resolved a panoply of difficult issues, some of which the parties now seek to revi sit. In this opinion, the court concludes that plaintiff Robert M.. Cochran is entitled to summary judgment as to certain claims against him that he successfully d.efended Defendant Stife el Financial Corporation agreed to indemnify Co&ran to the f i~ll extent permitted by Delaware law if he was sued by reason of the fact that he served as a director, officer, and employee of Stifel Financial s wholly.-owned subsidiary, Stifel Nicolaus & Company, Inc. Because 8 I3el. C. S; 145(c) would reqhm Stifel Financial to indemnify onle of its own directors and officers if he was successful in identical circumstances to Oochran s, I conclude that :Z8tif el Financial is pe~nzitted by 8 Del. C, 5 14:i,(f) to indemnify Cochran mder Delaware law and thus required to illdenT-lify him as a matter of contract. But I grant summary ,!iudgment for Stifel Financial as to others of Cochran s claims. These claims seek to have Stifel Financial indemnifJ[ C ocimrn 1 . S r$d t~i~7mcio/ Coy., Del. Ch., ( .A. No. 17350, mem. op , Sine, V.C. (Mar. 8. 2000) [hcremafter Cochvu~~ I]. In large measure, I already dectded the issue that determmes this a:;sIect of the motion in C ocl7ra~r mem. op. at 38-46, and Irely upon that opinion s reasonmg in support of my I, conclusion. Cochran for a judgment ancl other costs he suffered in liti;:ation with Stifel Nicolaus based on his breach of his employment contrxt and a related promissory note. As to these claims, this court concludes that Co&ran s contractual claims against ,Stifel Nicolaus were not brought by reason of his service in indenxnfication-eligible positions at Stifel Nicolaus at the request of Stifel Financial. By reason of claims, are essentially claims that challenge conduct by the party seeking indemnity n his official corporate capacities. By ccntrast, St-ifel Nicolaus s claims alleged that Cochran breached his personal contractual obligations to Stifel Nicolaus. Holding that Stifel Financial must indemnify Cochran for the costs he incurred in living up to his #and of his employment agreements with Stifel Nicolaus would rewrite those agreements and render rr any of Cochran s purported duties thereunder illusory. Rational contracting parties could not have believed that Sti fel Financial would request Co&an s service at its wholly-owned Stifel Nicolaus subsidiary and yet agree to pick up any liability Cochran incurred as a result of his breach of his employment contracts. 11. Factual- Background --Plaintiff Robert M. Cxhran was a director, officer, and employee of Stifel, Nicolaus & Co., Inc. (( Stifel Nicolaus ), who concluded his career 2 with Stifel Nicolaus as Executive Vice President in Stifel Nicolaus s Oklahoma City Munic.ipal Hand Underwriting Department (the Municipal Bond Department ). Stifel Nicolaus is a wholly-owned subsidiary of defendant Stifel Financial Corporation ( Sti ti::l Financial ). In his a.me:r ded complaint, Cochran seeks indemrlification from Stifel Finan& pllrsuant to 8 Del. C. 3 145(a) and (c) and Stifel Financial s indemnification bylaw (the Indemnification Bylaw ). The Indemnification Bylaw states: The Covporatio,r [.%:tiJt?l Financial/ shall inderm ij$ to the full extent authorized by IOW arz),person made or threatened to be made a party to any action, suit or proceeding, whether criminal, civil, administrative cr inw&igative, bJ> reasolz ofthe2fkt that he . . . is or was a director, officer or employee of the Corpo:-ation or any predecessor oft he Corporation or serves or served any other enterprise as a mdirecior, officer or employee at tlie request of the Car-poration or any predecessor of the Corporation.3 Therefore, in all respec:ts relevant to this motion, the Indemnification Bylaw covers the sarne actions that would be covered by subs xtions (a), (b), and (c) of 5 115 of Title 8; that is, actions brought against Cochran by reason of the fact that he servetl Stiti:l Nicolaus at the request o-T Stifel Financial. Cochran left the: employ of Stifel Nicolaus involuntarily in August of 1994. Since that time, Co&ran has ken named as a clzfendant in a criminal Stlfcl Fmancial s Amended And Restated By-JAWS 5 6.4 (Compl. I+. A) (emphasis added) [hcremafter Indemnification Bylaw]. 3 proceeding brought by the United States Attorney s ofiice in Oklahoma (the Criminal Proceeding ), a defendant in a civil enforcement suit brought by the Securities and Exchange Commission (the SEC Case ), and a defen.dant in an arbitration action brought against him by Stifel Nicolaus (the Arbitration ). Becausle this motion ttlrns on the substance and current status of the Criminal Proceeding and the Arbitration,4 I turn to a bzic description of each of them. A. ::jYhe Crimj.ml Proceedi= The Criminal Proceeding involved numerous co~jn?.s of criminal fi-aud asserted against Cochran by the United States govemrr ent. The alleged fraud involved certain third-.lparty conlracts that Cochran 4caused Stifel Nicolaus to enter into in co-me&ion wit h bond issues in which Stifel Nicolaus reprlesented the is:;uer. The:se third-party con:racts allegedly were not disclosed to the issuers. The SEC Case involves allegatio!l;; that Cochran vlolated various pr,,vi;ions of the federal securities laws while acting in his official capacities at Stlfcl Nicolauz Cochran has already paid a $100,000 civil penalty and agl-eed to a belts-:lnd-suspenders permanent injunction prolnb~img him from commiiting violat ons of !he federal sccurlties laws in the future. Several of the SEC s claims against him remain to bc tried. Earlier m the case, Cochran so&t indemnification of a portlon of the costs of the SK s investigation orhim, on the theory .that the SEC s investigation was related to the Criminal 1 roceed:ng. At this stage, Co&ran does not contend that this claim can be resolved by a summary judgment motion. 4 Cochran was co.:lvicted on numerous counts of ii.aud at trial. But his conviction was overturned on appeal by the United Stales Court of Appeals 5 for the Tenth Circuit and the dismissal of the charges against him has now become final. Cochram now seeks summary judgment against StiYel Financial requiring it to indemni fy hi:n for costs and expenses in the Criminal Proceeding. He bases his current motion solely on the: Indemnification Bylaw and not on the .:)rovisions of the version of i$ 145(c) that applies to this case. The prior version of $ 145(c) that applies to this action requires a corporation to indemnify its agent if the agent is succe:;sful on the merits or otherwise of an action falling under 5 145(a) or (b).6 Because Cochran admits that he cannot, on the current record, demonstrate that he acted as Stifel Financial s agent, Cochran s current _..-.-. Urrited States v. Codwan, 109 F.3d 660 (10 (1ir. 1997). 6 Because of the timing of the conduct at issue, Co&ran can relv upo I the version of 8 Del. C. -4 145(c) that exlsted before July 1, 1997 to supper-t his clams. s ee Gch,-un Z, mem. op. at 39 & Section145(c)thens,.ated: 11.60, To the extent that a director, officer, employee or agent of a ,:or ,oration has been successfiJI on the merits or otherwise in defense of any actic#Il, wit or proceeding referred to in subsections (a) and (bj of this section, or in defense of any claim, Issue or mattet therein, he shall be Indcrnmfied against expenses (Including attcmeys fees) actually and reasonably incur& by hi:11 in connection therewith. 2 II. F. BALOl 1 1 Xc J. A. I INKEISTEIN. THE DELAWARE LAW OF CORPORATIONS AND BCJSINESS ORGANI%ATIO~NS 4 145, at IV-44 (3d cd. 1998) [hereinafter BALOTTI & FINKEISTEIN] (quofing & QeL.l.2: 3 145(c), effective July 1, 1994) (emphasis added), The statute has since been amended to, iamong other things, remove the rcqulrement for mandatory mdemmty of agents. Ilf. 5 motion is based solely on the Indemnification Bylaw. 1Jnder his reading of that Bylaw, Cochran argues t.hat so long as Stifel Financial could lawfully indemnify him for success in defending the Criminal Proceeding, it has contractually obligated itself to do so. B. The Arbitration I_-.-_ Stifel Nicolaus brought the Arbitration pursuant to 5 9(c) of Co&ran s employment contract with the company ( the Employment Contract ). In the Arbitration, Sti-fel Nicolaus made four claims: (1) that Co&ran had breached the Employment Contract by refusing to repay Stifel Nicolaus portions of the monl; rly draws he had received in 1994- that exceeded the annual compensation to which he was ultimately entitled under the formula contained in S; 3 of the Contract (the Excess Compensation Cla m ); (2) that Cochran had breached the Employm.ent Contract by refusing to repay an incentive note (the Promissory Note ) which under the Contract became payable .when Co&ran s employment was terminated for cause in conformity with 5 7( ii) of the Employment Contract (th: Promissory Note Claim ); (3) that Cochran had breached his fiduciary dukes to Stifel Nicolaus and was required to indemnify Stifel Nicolaus lor any harm it suffered as a resul, t of his misconduct (the Ereach of Duty Claim ); and (4) that Cochran had breached [he non-compete provisions of the Employment Contract (the Non-Compete Claim ). A five-day arbitration hearing was held in September 1996. In early October, the .4rbitrati<)n panel issued its decision (the Arbitration Award ). Stifel Nicolaus prevailed on its Excess Compensation and Promissory Note Claims and was awarded in excess of $1 .25 million. The Arbitration panel, however, rejelcted Sti fi:l Nicolaus s Breach of Duty Clkn. Stifel Nicolaus voluntarily withdrew l.he Non-Compete Claim, allegedly because Cochran s refusal to respond to discovery requests left Stifel Nicclaus without the evidence needed to support ihis Claim. Stifel Nicolaus i.hen iTled an action in federal court to confirm the arbitration award. Cochran objected to confirmation CO several grounds. 01 May 6, 1997, the federal diskict court: (1) rejected Cochran s objections because he had not filed a motion to vacate, modify, or correct the Arbitration Award wiihin 90 days of its issuance; (2) confirmed the Arbitration Award; and (3) entered a judgment for Stifkl Yicolaus at the level of the Award (tk Juclgment ). 7 Cochran did not ??peal the Judgrnent and the Judgment is theref o1.e final in every sense. The Judgment is therefore also entitled to force and effect for all purposes, e.g., collate:ral es,ioppel, resjudicntn, or full -Tai-lh and credit. As Stifel Nicolaus points out without rebuttal from Cochran, the Arbitration Sr~$!i, h icolaus & Co., Irrc. v. Cal-bun, No. 4:97-MC-0007, mem. 21 1-2, Jackson, J. (E.D. MO. May 7, 199 7) (bring 9 rJ.S;!L; $ 12 2%~ Dotnino G,-ozq JIIC. v. Charlie Parker Mewor-ial t ozrnr/ution, 985 F.2d 417, 419 (8 Cir. 1993)). .%rc11 v. Stute I;;zrvz Mut. AU/O. IILS. co., Del. Supr., 672 A.2d 17, 21 (1095). 7 Award necessarily depended on certain subsidiary tind!ngs, which Cochran may not now dispute. They lmclude the facts that: * Cochran was properly terminated for caulse under 5 7(a) of the Ernploymenl. Contract. e Because Cochran was properly terminated for cause, he was required to repay the outstanding balance of the Promissory Note, or $550,000. * Under a proper calculation of his compensation for 1994 under the formula contained in the Employment Contract, Co&ran received excess compensation of $552,000 which he was obligated to repay by the terms of 9 3(b) of the Employment Contract. Stifel Financial seeks ,summary judgment against Co&an s indemnification claims as to the Excessive Compensation, Promissory Kate, and Non-Compete Claims. Its primary argument in support of this motion is that those claims were not brought against Cochran by reason of his service in indemnification-eligible positions at Stifel Nicolaus; instead, those claims are alleged to 1:ave been brought solely to enforce contractual commitments Cochran ma&: in his personal capacity. Stifel Financial does not seek summary judgment on its Breach of Duty Claim, which was unsluccessful, because it acknowledges that the Breach of Duty Claim was brought against Cochran by reason of his his The court has reviewed those part:., of the volummous fk bitratlon Rkcord cited by the parties and agrees with Stifel Fmancial s a!.,sertion that these and other issue: were necessarily decided by the hrbitrator:i. See Stll el Fmancial S.J. Hr. at 13-14, 45-46. 8 service in his official Icapaciiies at Stifel Nicolaus. Because he prevailed on that Claim, Cochran does, however, seek summary judgment for himself as to the Breach of Duty Claim under the Indemnification Bylaw, but not under $ 145(a) or (c) O II. The Parties Kly Arguments And The Rele:var,r Procedural Standard _~_The parties have filed numerous briefs and have raised many arguments. At bottom, however, the motions can be distilled into two important contentions: (I) that Stifel Financial is entit ed to summary judgment as to the Exc:essivc Compensation, Promissory Note, and NonCompete Claims because thcose Claims were not brougnt against Co&ran by reason of his service in his indemnifiable capacities: and (2) that Co&ran must be grarxed summary judgment as to the Criminal Proceeding and the Breach of Duty Claim under the Indemnification Bylaw because of his success in defending those matters. In addrlessing these contentions, I apply the familiar standard under Court of Chancery Court Rule 56. Under that standard, summary judgement should be granted where there are no genuine issues of material fact and the As can be seen from these approaches, the parties have both tzken the l)osition that where separate claims brought in one action can be sensibly segregated for purposes of analyzing \vhether indemnity IS owed, the court may do so See, e.g., ~4~iel-~it/-C,iapm1N,7 & Scott Corp. v. I+hlJ~on, Del. Super., 32 1 A..2d 138, 141 (1974) (taking this approach). 9 movant is entitled to Ljudgmt:nt as a matter of law. The .facts must be vie,wed in the light most favorable to the non-moving party and the moving party has the burden of demonstrating that no material question of fact exists. I2 Whe:n a moving party has properly supported its motion, however, the non-moving party must submit admissible evidence sufficient to generate a factual issue for trial or suffer an ad,verse judgment. tlere, virtually none of the parties arguments turn on disputed facts. Instead, the parties compe,ting motions hinge on their divergent views of the governing legal principles. III. Leza+l Analvsis A. Is Stifel Financial__-.--.. To Sumrmnarv Judgment 0-l Cochran s Cl& Entitled For Indemnilication Iyor The Excessi& Comnensatio::i, Incentive Note, And &Jon-Conglgte Claims?, In Coc/zran 1, the court concluded that Cochran sould press his claim for indemnifkation under EC Del. C. 5 145(a) as to the Judgment against him on Stifel Nicolaus s Excessive Compensation and Incentive Note claims even though, if Cochran uliimately succeeded, that might result Stifel Financial indemnifying Cochran for judgments he owed LO Stifel Financial s --____ ~_--.-. I See, e.g.. M illin/,~.s v. Geiw, Del. :Supr., 671 A.2d 1368, 1375 (1990). 7 i2mer- 11. Izt I Gcr~ Indu.t., IHC,., Del. Ch., 402 h.2d 382, 385 (197: ) (diugJuda/z v. Delnware Tmst Co., Del. Sup., 378 A2d 624, 632 (1977)). I3 Id.; Ch. Ct. R. 56(e). 10 wholly-owned subsidiary Stifel Nicolaus. With discernible reluctance, I concluded that the Excessive Compensation and Inceniv: Note claims asserted by Stifel Nicolaus could not be considered an action by or in the right of Stifel Financial irsclf within the meaning of 8 Del. C. 5 145(b).15 In so concluding, however, I also noted: In rejecting Stifel Financial s argument, I, of course, in no way imply that Co&ran will ultimately be entitled to inderrnity for the Compensation and Promissory Note judgments. For example, if Cochran knowingly took excessive or unearned compensation or failed tie repay sums he clearly owed on a promissory note, then his conduct would not have been in good faith or in thlz best interests of Stifel Financial. Cochran could not simultaneously act in bad faith toward Stifel N..colaus while acting in good faith towards Stifel Financial when he bases his claim to indemniticati~on on Stifel Financial s alleged request that he serve Stifel Nicolaus as a director, employee, and lofficer. In this respect, 1 also have grave doubt that a per son can sign a binding agreement .uith a wholly-owned subsidiary, commit himself to abide by the Icontract, and then refuse as a matter of economic reality (by seeking indemnity from the subsidiary s parent) to repay sums that the relevant decisionrnaker under the contract had ruled were owed to the subsidiary. In such a situation, the key purpose of 5 145 (and its predecessor) - to permit corporate executives to be indemnified in situations where tlhe propriety of their actions as corporate officials is brought under attack -~ is not implicated. I Id. I decline Srifel Financial s be!,ated invitation to revisit thiz, conclusion. The fact that Cochran acknowledges that a dolhrr gained by Stifcl Nicolaus ir. litigation is a benefit to its singular owner, Stifel Financial, dots not thereby convert any lawsuit by Stifcl Nicolaus into one by or in the right of Stifel Financral. This conflation of parem and substdiaty is hotly contested by Stifel Fmancial when such a conflation injures it, but is advocated wl-en conflation serves Stifcl Fmancial s goal of denying C ochran indetnnification. For exampI,:, if Stifel Nicolaus and Stifel Fmancial are one and the same entity as a matter of law, that would also appear to nullify Srifel Fmancial s objection to Cochran s claim for indemnification under, 5 145(c). 11 Here, for example, it appears that Co&ran bound himself to an employment contra<:\. and a promissory Itote with Sitifel Nicolaus that contained arbitration clauses. Although $ 145(a) contains expansive language governing actions against a person b:y reason of the fact that the person was serving another corporation at the request of the parent, the obvious intent of the statute is to govern actions against such a person as a result of his actions in his off cial capacity. W:hen a person signs an empioyment agreement or promissory note with the corporation he serves, he is, one would think, acting as an individual. To the extent that a dispute about his compliant: with such an agreement later arises, it would appear to be by reason of the fact that the person allegedly breached hi-s individual obligation to the corporation, and not by reason of the fact that the person incidentally was serving the corporation in a position at the request of another corporation. Rut because this precise argument was not made by Stifel Financial and therefore 1 have not had the benefit of briefing on this question and because its resolution may turn on the substance of the underlying contracts, I cannot dkmiss the complaint on this basis. Stifel Financial has therefore understandably based its current summary judgment n-lotion on an argument that the E.x cessive Compensation, Promissory Note, and Non-Compete Claims did not involve claims that arose by reason of the fact that Co&ran was serving Stifel Nicolaus as a director, officer, employee, or agent at the request of Stifel Financial. 7 Rather, Stifel Nicolaus contends t.hat the 13xS:essive Compensation, Promissory Note, and Non-Compete Claims are quintessential examples of a dispute between an employer, Stifel Nicolaus, ( COC/TMT~ I, mem. op. at 35-38 (c~?at~ons omitted). 8 Del. c . 5 145(a), (b); sc c u/so hdemnitication 13ylaw (same prin:lp e) and an employee, Cockan, who was acting entirely in his personal capacity. If Stifel Financial is correct, then Cochran is not digib:e Ibr indemnification for these Claims under 9 145(a) or (c) olr the Inde.rnnifization Bylaw. Cochran responds .to Stifel Financial s argument with a recourse to plain language. Because Ccchran s status as a director, officer, and employee of Stifel Nicolau:; was essential to the I3:tces;;ive Compensation, Promissory Note Claims, and Non-Compete CI.aims, Co&ran wonders how Stifel Financial can contend that those Claims ~were no: a:;serted against him by reason of the fact that lie held those capacities at Stifel Nicolaus. Although Cochran s argument has some linguistic plausibility, that is its only virtue. When a corporate officer signs an Iemp [oyment contract committing to fill an office, he is acting in a personal (capacity in an adversarial, arms-length transaction. IO the extent: that he binds himself to certain obligations under that contract, he owes a personal obligation to the corporation. When the corp oration brings a claim andi proves its entitlement to relief because the officer lhas breached his individual obligations, it is problematic tlo conclude that the suit has been rendered an official capacity suit sub.ject to indelnniiicatiorl under 5 145 and implerr enting bylaws. Such a conclusion would render the officer s duty to perform his side of the contract in many respects illusory. 13 In contracting u ith S nfel Nicolaus, Co&ran bound himself to important personal obligations. Those obligations incl.lded a commitment to: (1) repay any excessive compensation he received ,;vil:hin ten days after he was provided proper notice by Stifel Nicolaus; (2) rl:pay the balance of <vent that he was termkra ted for cause in the Promissory Note in the Lr accordance with the Agreement; (3) not to compete wi..h ,itifel Nicolaus for one year after his contract was terminated; and (4) arbi k-ate any disputes arising out of the Agreement. As a matter of law., Sti fel Financial s decision to elect Co&ran as a member of the Stifel Nicola~us board of directors -is deemed a request by Stifel Financi,al to have Co&ran serve Stifel Nicoliaus -n ;a11 his capacities as a director, Iofficer, and employee. But it is inc~on~ceivable that Stifel Financial requested Cachran to serve Stifel Financial under employment contracts that., by operation cof the Indemnification Bylaw, implicitly Tlus request is deemed to exist under lavtr under the teaching of the Supreme Court s de&ion in Van Feldt because Cochrnn was ckcted to the Stifel Nrcolaus bo.ard by virtue of Stifel I;mancial s votes. VW Fellr \ . SX/tl Financial Corp., Del. Surlr , 7 14 A.td 79, 84-85 (1998). For purposes of simplicity, the I on Fe/(/t court refused to distitlguish amcag a subsidiary officer s I-olcs and held that the electron of the subsrdrary officer to the subsrdi:rry s board was sufficient cvrdencc that the parent requested tire service of the subsidrary officer in all his capacities at the subsidiary. Irl. Therefore, this court ought to be cautious to hold that the implications of that r-equest are greater than is necessar y to serve the clear statutory purposes of 3 145, as articulated rn Vo~r F clrlt. To hold that the pat-cm corporatron is (1) subject to a finding that it requested the subsidtary officer s ser\?ce and (2) must indemnify the sub:sidrary office]- when he fails to live up to hrs personal contractual cbligatlons to the subsidiary turns a relaticnshrp of mutual obligation between the parent and sub::idra.ry officer into an imbalanccd one unfkly tilted in favor of the subsidiary officer-. 14 required Stifel Financial to indemnify Co&ran for any good faith breaches of those contracts that he c:~~l~nmitted. Rather, the on1.y plausible conclusion is that Stifel Financial expected that the terms of Coc.hran s employment contracts with Stifel Nicolaus would be paramount and exclusive as to any claims for breach of those contracts, absent a pro-vision in those contracts to the contrary. That is, if Stikl Financial is deerne d by law to have requested Cochran :; ser\?ce at Stifel Nicolarls in all of his capacities, so too should it be deemed to be an implied beneiiciary of his employment contract-a beneficiary entitled to have Cochran live up to his bargain with Stifel Nicolaus without assistance from Stifel Financial i1self.2 Had the parties intended Cochran to be held har.nl:ss for excessive compensation he had been paid by Stifkl Nicolaus thrcugh indemnification by Stifel Financial, surely it would have been clearer to simply state that in the Employment Conkact. Similarly, had the Iparties ktended that Co&ran be permitted #(by virtu.e of indemnification frorn Stifel Financial) not to repay the Promissory Note in the event of his contractually rroper termination for cause, the Note could have said this. In this regard. I note that Cochrarl specifically pleads thar StiL el Fir aIlc:ial reviewed and approved his Employment .$greemcnt. See .suprc~ note 18. 15 Rut the acceptarnce orCochran s argument rewrites his employment contracts in just this manner. Requiring Stifel I?inanckl to indemnify Cochran for judgments he owes to Sti-fel Nicolauus based on his breach of his contractual duties subverts the contractual arrangemeni between Cochran and Stifel Nicolaus. It leaves Stifel Nicolaus without a genuine remedy against Cochran2 Such a result could not have been reasonably contemplated by Cochran when he entered illto the Employmenr Agreeclent and signed the Promissory Note. Cochran .is a sophisticated businessrxrn and cannot have rationally believed that Stifet Financial would indemnify him if he breached It can, of course, be argued that i.he good faith requirement of8 ,Del. C:. 3 145(a) provides Stifel Nicolaus with some protection But the good faith test fits poorly with Cockran s Employment Contract. For example, Co&ran was to receive healthy advances that were subject to repayment if hts office s end-of-the-year results did not reach a sufficient level ofprofitabihty, regard&s of whether hc pei formed admirably otherwise. Does the good faith test apply to Cochran s decision to accept the advances in the first place? Or 10 his decision not to repay them? If it is the former. it makes little sen:se because the Employment Conhact contemplated that advancements might well exceed the ultimate salat-y due. If it is the latter, Stifel Financial s alternative argument entitles. them to summary j udgment. Because th : dispute resolution mechanism under the contract has produced a final judgment requiring Cochran to repay the Excess Compensation, what IS his good faith reason for asking Stifel ?nmcial to pay his judgment for him? Since Slifel Fin:-mcial wholly owns Stifel N~olau~, Cochran surely knows that this allows him to keep his excess compensation at the expense of Slifel Nicolaus - a r-es& that is clearly opposed to the best interests ofthe coiporauon. 8 &I& $ 145(a). And if Cochran contends that the good faith test should be applied to (Zochran s decision to contest liability, lhat argument supports the conclusion that permitting indemnification would rewrite the contract. Rather than being responsible for any breach, Cochran would only be responsible for breaches that he could not contest in good faith. If ihe parties intended such an unusual standard to apply, that stanldard would have found expressior in the language of Cochran s contracts with St ifcl Nicolaus. 16 his own contr,actual obligati80ns to Stifel Financial s corporate child, Stifel Nicolaus. Thus, I hold that the Efi,xcessive Compensation, Promissory Note, and Non-Compete Claims were not brought against Cc1chrz.n by reason of the fact that he was serving in :indemnilication-eligible positions at Stifel Nicolaus, but by reason of lthe fact that he had allegedly breached a personal contractual obligaiion he owed to Stitel Nic olaus. As such, Cochran is not entitled to indemnification for these Claims under 9 145 or the Indemnification Bylaw. This conclusion does not undermine the purpose o F 5 145 in any discernible manner. S ecrion 145 serves to encourage: capable persons to serve in important corporate capacities by guaranteeing that they will receive reimbursement for expenses they incur in defending ,sL.its that challenge their conduct as corporate ofticials2 This central purpose is not endangered by a determination that corporaic officials are bound to live up to the personal undertakings they make in their employment contracts with the corporations they servc.23 Corporate oflicers and the corporaticms8 who employ them have Van Feldt, 7 14 A.2d at 8~; E.rseri iul E~~tq~ri,res Ch,p. 1 . .4utorirat~c Steel Products. Inc., Del. C-h., 164 A.2d 437, 441 (19150). 1:. Supp, 354, 358-59 (D.Del. 1956) (where former director and officer had successfully defended a shareholder suit atlacking his personal conduct in negotiating his employment contract and options, (he c0~u-t held that 10 ndemnification was owed him because the challenged transactlons had been entered mto .n the officer s individual 23 cf Sol-emm v. Overlat~a Cq~.. 142 17 a great deal of flexibihty in allocating the economic risks that arise out elf their employment relationships. This opinion simply recognizes that corporate officers whc accept a particular emp.loyment arrangement must accept the obligations tha.t go along with the benefits of that arrangementZ4 Nor has Cochra-n persuaded me that the Judgment attributable to the Excessive Colmpensation and Promissory Note Cl.aims is indemnifiable because of the unique nature of those Claims. I address each of these Claims in turn. According to Cochran, the primary reason he had to repay compensation to Stifel Nicolaus is because Stifel Nicolaus charged ---_____ --.-.--.---- capacity in an arm s length transaction with the corporation), uB d, 212 I .2d 70 (3d.Cir. 1957); Grove 1 . L>uniel I&VE Co., 874 S.W.2d 150, 155 (Tex. App. 1994) (dictum stating an employment contract is indeed a personal benefit, much like the sale of cne s own stock in a company, and does not coincide with the employee s substantive war< ftirthering the corporation s business activ.ties. ); Be~rsen v Ai,ze/-icurz U//ra~~czr L& ., No. 92CIV4420, 1996 LF L 435039, at *3, M.J. (S.1D.N.Y. Aug. 2, 1996) (holding that a plan tifl was not entitled to indemnification under corporate pr-ovisions similar to 9 145 where th<: ckrims at issue involved pension payments he had received because those payments involved pers,onal conduct the plaintiff had undertaken as an individual contracting with the corporasion; in so ruling, the court stated that 8 Del. C. 9 145 does not cover transactions that are purei), personal. ); Mnami .hf 1 Coup. 1:. Chk, No. 8SCIV2135, 1002 WI, 58838, at *I, Walker, J. (S.D.N.Y. Mar. 16, 1992) (Under New York indemnification statute similar to $ 145, holding that the statute was not designed to provide indemnification for officers of the corporation wrho are sued for breach of their contractual obligations to the corporation. ); Tilde/l oflv e~v Jmwy, Inc. v. Regency Lea.cing SJS., ~T?c., 237 A.D.2d 431 (N.Y. App. Div. 1997) ( I nasmuc 1 as the action against the defendant is based upon a personal guaranty, the action is broughi against him by reason of the fact that he was a director or officer of the corporation within the meaning of that phrase as employed in [the New York inclennitication statute]. ). In so ruling, I m no way rdle out tthe possibility i hat indeinnlficat.on would be appropriate in a situation where a corpoi-ate officer was required to defend the validity. of his employment contract from an attack by third-part es. Such a situation is very dif fercnt thar requiring a corporate officer to pay any damages to his employing corporation resulting ficm his own breaches of a contract that he entered into his per:,onal capacity. 18 Cochran s Municipal Bond Department with expenses related to investigations and litigation inspired by Co&ran s conduct as an officer and employee of Stifel Nicolaus. As a result, Co&ran contends that the Excess Compensation Claim in fact was brought by reason o E Cochran s performance of his o Eilcial duties. 1 am unpersuaded by Ithis argument. In his Employment Agreement, Cochran bound himself to a formula for determining his compensation. That formula was tied to the performance of the Municipal 3ond Department, and involved a calculation based on the profitability of thai. Dmepartment. That calculation necessarily involved the expenses of the Department, including non-operating charges, sul, h as charges and reserves for pending or threatened claims and other proceedings. 25 Having contracted in this manner and having re zeived a determination by the co ltractual decisionmakers (the Arbitrators) that the contractual formula dictated the conclusion that he had been overpaid, Cochran is now bound to live up to his contractual duty to repay tlie excess compensation he received. The fact that the contractual fox-mu a involved factors that depend to some extent on Cochran s own behavior does not thereby transmogrify a dispute over his I~mploymenl Agreement 3 3(e). 19 personal contractual obligxions into an official capacity suit indemnifiable under 8 145 and Stifel Financial s Indemnitica~tion Byla\+,. Likewiise, the Promissory Note Claim is not indemnifiable because it is also grounded wholly on ICochran s breach of his contractual duties. The Arbitrators found that Co&ran had been properly terminated for cause. Cochran signed a Proinissory Note that obligated him lo repay the Note if he was terminated for cause. It was Coc hran s relusal to :iv8z up to his personal contractual commitment to repay the Promissory Note that led to the Judgment aga.inst him. This, refusal did not involve an,y official act by Cochran in his capacities ai Stifel Nicolaus.27 For these various reasons, I grant Stifel Financizl s. motion for summary judgment as to these Claims.* 13. Is Co&ran Entitled I !;) Indemnification I3Q irtL e -Of His SuccessIn .Defendi&re Crin-nnal Pr:oceedine: And Stifcl Financial s Breach Of I)uty Claim? Cochram bases his summary judgment motion as to the Criminal Proceeding and the Breach of Duty Claim on the Kndemnification Bylaw, As noted prcwously, Stifel Fmancial does nor al-gue that the Ilreacll of Duty Claim was not brought agamst Cochran by reason of his scrvicc in mdelnmfiable capacities at Stifel Nicolaus. The Non-Compete Claim obviously involves allegations aboilt Cochrzn s post-employment conduct that do not plausibly rclate to conducl taken in his former statuses at Stifcl Nicolaus. Is Because I have resolved the motion m favor of St&l Financial on lhe grounds stated, I do not reach IIS other arguments a>. to Lvhy summary judement is ;tppl-opriatc:, except to the extent noted m note 2 1. szrpr-a. which requires Stifel Financial to indemnify him to the full extent authorized by law. ILike: the: Delaware Supreme Couri d: d in analyzing this provision in the Van F eldt case, I construe the plain larlguage of this provision as requiring Stifel Financial to indemnif;l Cochran if such indemnity would be permissible under the Delaware General Corporation Law ( DGCL ).2 That is, i-f the DGCL does not fbrbid such indemnification, such inderrlnity is authori.zed, or in other words, permissible.30 In accordance with t1li.s court s earlier opinic)n in Cochran 1, Cochran argues that two subsections of 5 145 support his contention. The first is 5 145(f), which provides that the indermlification right:; provided by, or granted pursuant to other c,ubsections of $ 145 %a11 not be deemed exclusive of any other rights to which those seeking intlemnificalion . . . may be entitled unlder any bylaM,, agreement, . or otherwise . . . . In Cochrarz Van Veldt, 714 h.2d at 81, In fair-ness to Stifel Financial, the: ISupreme Court, in dictum, read this breadth as mandating indemnit!; in circumstances where 0 145(a) and (b) provided for permlssi\re indemnity. Id. The Supreme Court, however, was lot car fronted with a situation where the party claiming inclemmty satisfied the crltcria of 3 145(c) bllt was not withm the class of persons to which that subjection [required the provision of mandatory indemmfication. Nor did the Court consider the &cccl of 4 145(t). As such, Vorl does not address the issue this case Fe/d prese11rs. 3oSee BLACK S LAW DIC I ION~~.:RY 122 (5 ed. 1979) (defining autllorize as meaning, among others things, giving a right or authorily to act and pelmitl tin&j a thing to be done in the future, and noting that .authori;;ed 1s sometimes construcxl as equivalent to permitted ); BLACK S 1,AW DICTIONARY 129 (7 ed. 1999) (defining authorsze as [t]o give legal authority: to empower or 1 t]o formally approve; to sanction ) I, this court noted that learned commentators have construed 5 145(f) as suggesting that a corporation s decision to provide broader indemnification rights should not be disturbed unless those broader rights are contrary to the limitation or prohibitions set. forth in the other section 145 subsections, other statutes, court decisions, or public policy . . . . 31 The other relevant subsection that Cochran relies upon is 5 145(c). That subsection mandates that corporations indemnify present or former directors and officers who have been successful on the merits or otherwise in the defense of any action lcovered by 5 145(a) or (b) Co&ran notes that the statute therefore requires that a corporation indemnify its chief executive officer if he is acquitted of a crime on a technicality in a proceeding within the scope of 21 145(a), regardless of whether the CEO acted in good faith. The same would be true if an action for breach of fiduciary duty brought against the CEO were dismissed on non-merits grounds. Because a corporation must indemnify even its (ZEIO in these circumstances based on his mere attainment of success in conformity with 5 1L.5(c), Cochran argues that 5 145(f) rsurely permits Stifel Financial to indemnify Co&ran when he meets that same statutory success standard. And if it is permissible for :Stifel 3 Cocl~ra~z I, mem. op. at 47 (quoiiug G. Norman Veasey et al.: Lkla MIYZ Supports Directors li.ifl~ a Three-Legged 3001 oj Linzitc,d LiabilitJ~, IIlfl~lnll~~ficcltion rrnd hrsurancc, 42 BUS. LAW. 399, 4 15 (1987)) [hereinaftu I m.uey ]. 2% Financial to do so, Cochran contends that it has bound itself to do so, by the clear operation of the Indemnification Bylaw. In examining Cochrarr s argument, i.t is essential to recognize that Co&ran has established, as a matter of law, that vvere he a director or officer of Stifel Financial, his right to indemnification as to the Criminal Proceeding and the Breaclh of Duty Claim would be mandatory. A party eligible for mandatory indemnification under 5 145(c) must demorstrate two key elements: (1) that the mat te:r at issue was covered 13~ 8 145(a) or (b); and (2) that the party was successful on the merits or othe:rwise,. Here, Cochran has made both showings. First, the Criminal Proceeding and the Breach of Duty Claim both fall wit bin the scope of $ 145(a). Stifel Financial does not contest that the Criminal Proceeding tits within the reach of Q 145(a) And unlike the other Claims in the Arbitration Case, the Breach of Duty Claim rested on allegations that Co&ran had breached tiduciary duties he owed to Stifel Nicolaus. As a result, the Breach of Duty Claim was brought by reason of Co&ran s service in his various capacities at Stifel Nicolaus. Second, Cochran s aliainment of the success e;tandmd is also undisputed. Although Cochran may not have emerged from the Criminal Proceeding with his reputation intact, he did ernerge fif,rn that proceeding with an acquittal on all COWIS against him. That outcome is sufficient to satisfy the success standard c-)f 8 Del. C. $ 145(c), which simply requires success[] on the merits or otherwise. 3 Likewise, the Arbitrators found for Cochran on the merits of Stile1 Financial s Breach of Duty Claim, which was asserted against h..m in the Arbitration. 33 Thus, Cochran has proven that If he were a director or officer of Stifel Financial, 5 145(c) would require Stifel Financial to indemnify him. Because Delaware Ial?, would 1 eqzlire Stifel Financial to indemnify even its own CEO in circumstances identical to {Gochran s, Cochran contends that indemnification of him is pemissible by virtue of $ 145(j) since indemnifying him would no2 offend any Delaware pub lit policy. And because Stifel Financial s Indemnification Bylaw requ-res it to indemnify Cochran if it can lawfidly do so, it is therefore bound to do so. In responding to this argument, Stifel Financial repeats the same argument that was rejected 1x1~ this court in its earlier o;%nion in Cochrarz I. Put simply, Stifel Financial argues that ~Cochran cannot be indemnified for n/fo-rirt-Chuprll~2rl & Scoti, lkl. Super., 321 h.2d at 141 3x As noted previously, because of the timing of the conduct at l!jsUe , Zochran s 4 145(c) claim is based on the version of the statute that existed before July I, 1 3!L . S S C~chr-CZH f, mem. op. at 39. The statute has since been amsnded to remove the requirement for mandatory indemnity of agents. Id. 24 his successful defense of these claims unless he first satisfies the good falith standard contained in &sections (a) and (b) of 5 145. Stifel Financial makes this argument irrespective of the fact that in Co&-an 1, the court fi.llly explained the reasons why it did not accept Stlfel Financial s argument. 1 do not intend to burden the reader with a repetition of all of the court s earlier reasoning, which I incorporate by reference herein3 Although I r ecognize that the issue presented is a difficult one, about which reasonable minds can differ, I continue to adhere to my prior reasoning. Suffice it lo say that the court concludes that because Delaware law would require Stifel Financial to imdemnifi~ its CEl3 if he were to have achieved the same reslllt as ICochran did as a defe.n.dan:. in the Criminal Proceeding and Breach of I:lluty action without an Iexamiration of the CEO s good faith, 8 145(f) of the Delaware General Corporation Law permits Stifel Financial to indemnif;f Co&ran in the identical circunstances. Because: Delaware permits such indemnification, Stifel Financial is contractually bound to provide it.36 It is useful to set forih this reasoning in a more illustrative way. Imagine the following scenario. Suppose Cochran hat1 told Stifel Financial < Id. at 45-53 I1 Id it Id. 25 that he would not continue t l Stifel Wicolaus unless he was given the sarne right to indemnity that he ,u,ould have as a director and officer of Stifel Financial itself. Why, Cochran reasoned, should he continue to be afforded second-class indemnification rights simply because he worked at Stifel Fmancial s wlholly-owned subsidiary, which was very important to Stifel Financial s overall success? Hence, assume Co&ran cemanded and received a contract with the following key provisions: (1) Co&ran would serve as a director, officer, and emplo:yee of Stifel Nicolaus, a wholly-owned subsidiary whlose perfbrmance is important to StiM Financial; and (2) in partial exchange for his service at Stifel Nicolaus, S tifel Financial would indemnify Co&ran if he met the success standard of $ 14 5(c) in an action brought against him by reason of his service at Stifel Nicolaus. That is, assume the contract would give Cochtan the same indemllitication rights as if he were a director and ofl icer of Stifel Financial itself. Given the exislcnce tof Q 145(c) and (f), the court fails to see how such a contract would violate Delaware public policy. If such an explicit contract would be valid becaul;;e the indemnification it Iprovided w as not inconsistent with Delaware public po1icy,37 and thus authorized by $ 145(f), the provision i ST 8 Del. c. 5 145(c) 26 of-the identical indemnification pursuant to a maximally expansive bylaw is not contrary to Delaware law, either. By contrast, if adopte~d, Stifel Financial s approach means that Delaware law requive,~ Delaware corporations to indemnify its most important officers (e.g;.7 CEO s) in circumstances where Delaware law simultaneously OZ&WS the provision of indemnity to persons who merely serve another corporation at the request of the indemnifying corporation. As in the previous motion practice, Stifel Financial fails to explain why this distinction is logical and vh:y the judicial adoption of this distinction does not intrude on the opportunity for private ordering legislatively granted by tj 145(f).38 As a fall back, Stifel Financial also pleads that the Indemnification Bylaw, although writtsen maximally, had a less expansively intended scope. Stifel Financial contends (without citation to reliable evidence) that my prior ruling is inconsistent ,with the legitimate expectations of hundreds of corporations llike it, which all had assumed (it confidently asserts) that a X8 Stifcl Financial argues that the G.:neral Assembly s recent dcclsion to restrict the scope of legislatively-dictated mandatory irtdemnification thereby consrifuted In Implicit decision to I-estrict the degre : of contractual flexibility afforded 10 corporations hy 5 145(f). As noted in Cochr-U/I I, mem. op. at 46.-5 1, the court does not read the Iegislatlve .Gstory the same way. As important, the court believes that judicial restramt requires the court to refrain Corn imposing a Judicial ban on prwate orde-ing thal the General Assembly, by virtue of s 145(c) and (f), cannot bc deemed to have clearly impose j itself. 27 good faith requirement was; -implicit in their maximally broad indemnification bylaws.39 That is, Stifel Financial and these other (unidentified) corporations believed that only the pern-issive indemnification provided for in § 145(a) and (b) would fall within the ambit of a bylaw providing indemnity to re-krence to the full extent aulhorized by law. The answer to any problem Stifel Financial contends is posed by .this court s plain meaning interpretation of i ts maximally bro.ad Bylaw is simple: the affected corporations can redraft their indemnification bylaws to be more precise. Lf they wish lo extend indemnification only tc the extent consistent Mith the standard permitted 'by 5 145(a) and (b) of7 itll: 8, they should redraft their blylaws in that more narrow fashion.40 When a parent corporation has not done so and has promised to provide indemnification to the fullest extent permitted by Delaware law, it h,ars no basis to feel aggrieved when a court requires it to provide indemnification when: (i) a party serving another corporation at the parent csrporatic n s request, (ii) who is covered by the: parent corporation s indemnification provision, (iii) -- -- _.--. Stlfel Financial Reply Rr. In Opp. To l laintifl s Summar-y Jludgmcnt h4otion at 28. Although the maximal na iure of the Bylaw is plain, arguably I.he doctrine of cor&a pvejkerrfenz would mandate that any amxiguity be resolved against the exclusive dralier, StifeFel Financial, and in fitvo~- of Cochran s reasonable construction of the Bylaw. I1 does r.ot Appear that the Bylaw was a negotiated instrument. Because the Bylaw is so expansivizly drafted and because Co&ran fallcd lo raise this point, however, I riced not address the applicabktq of this Interpretative doctrine. 28 shows that the corporation would have been relquired under Q 145(c) to indemnify its own CEO in the identical circumstances for the claims at issue. 41 Stifel Financial points to two cases that it contends are incc nsisterlt with my reasoning in Coch,-a~ I. In my view, nenher cast adopts reasoning irreconcilable with mine. The fix-st case is AdvanctdMimq Systems, Inc. v. Fricke, TM Ch , 623 A.2d 82 (1992). In that case, Chancellor Allen held thai. a bylaw m all relevant respects itlentical to Stifel Financial s Indemnification Bylaw did not mandate the advancement of litigation expenses. The Chancellor s holding was premised upon his beliefthat indemrification rights and rights to advancement of possibly indcmnifiable expenses [were] legalby quite distinct types of legal rights. Id. at 84. As such, he did riot believe that a reasonable perso? could read the bylaw at issue requiring indemnification to the full extent permitted by the DGCL as also requiring the corporation to accord the plaintiff the legally distinct right of advancement. Zd, at 85. The second action is MaJ, er v. Ib:ecutive T&curd, Ltd, Del. Ch., 705 A.2d 220 (1997). In that case, Vice Chancellor Jacobs held that a bylaw similar to Stifeel !Finanzia s bylaw (except in one critical respect mentioned below) dd not obligate the company 10 pay the attorneys fees and costs the plaintiff incurred in successfully pressing his mdemnification claim. The opinion does reason that to determine wh ether so--called fees for fees were permitted by the DGCL, one had to look to $ 145(a) and 3 145(a) did not contemplate awards of fees for f,:es. Id. at 224. But the opinion also rests on another tw ictstdted rationale. That ratiomale is ihat an action for mdemnification is not an action that falls under 4 145(a) or (b) in the first instance. Becausce the bylaw at issue required that the underlying action he one within the scope of 9 145(a) or (b), that rationale meant that the plamtiff s claim did not fall within the iscope of the bylaw at issue. Id. at 221, 224. Thus, ,there is an alternative rationale for the court s ruling that is consistent with the reasomng of Coclzr-ulr I. But the most important reason why Mayer is not inconsistent with Cochvun Iwas the fact that the bylaw at issue in M~zyev only extended indemnity to the furthest exte rt permitted by subsections (a) through (e) of the DGCL. Id. at 225 n.7. Because Jicc Chancellor Jacobs held that none of those subsections authorized fees for fees, the plaintiff lost. In so ruling, Vice Chancellor- Jacobs was careful to irote that 3 145(f) might support a bylaw providmg for fees for fees. Id. Therefore, I believe that both Ariva~~ce~l Mining a,ld Mc<yer can be distinguished. Both cases deal with claims for forms ofrelief (advancement and fees for fees) that, to a large degree, were different in kind, rather than degree, from traditional indeninity. Tha is not the case here. More fundamentally, neither case addresses the force of 5 145(f), whi~:h ha; been interpreted by distinguished commentators as expi-essly authorizing private ordering absent a violation of some expt-ess public policy otherwise reflected in 4 145. See Veilsejj, 42 BlJS. LAW. at 415. I remain unable to see the damage to a legisl;lti~~ely-articulated public policy that occurs if a corporation mdemnitics a person in at the rcqu.est of position if that person meets the success standard of $ 145(c). If good faith is a ftindamcntal public policy requirement fo- all indemnification, why does the statute not apply that requirement to tlic most important fiducia ies who serve corporations when they are successfu1 on the merits or othcrwls s? For all these reasons, I therefore grant Co&an s motion for summary judgment on his claim for indemnity as to the Criminal Proceeding and the Breach of Duty Claim A resolution of the amount of such indemnity must await either an agreerrent of the parties or further prorzedings. IV. Conclusion ---_l__ Stifel Financial s motion for summary judgment as to the Excessive Compensation, Promissory Note, and Non-Compete C aims is GRANTED. Cochran s motion for surnmsry judgme:nt as to the Criminal Proceeding and the Breach of Duty Claim:; is GRAN I ED. Stil el Financial s motion to dismiss Cochran s claim for indemnity as to the Criminal Proceeding and the Breach of Duty Claim under 8 Del. C. 9 145(c) is deferred because there is no need to decide it.4 To the extent that Stifel Financial otherwise sought summary judgment or dismissal on other grounds that were already decided in Co&an 1, its moti on is denied. Likewise, Co&ran admits that his claim Although the court migh: well pl efer an invariable good faith requirement, it cannot impose that requirement when the statute It:;elf contemplates the provision of indemnity beyond that mandated or set forth by the provisi~ons of 5 145, see 8 Del. C. B 145(f), and when § 145(c) espressly chctate:; mdemniflcation to directors and officers withixt a jhowmg of good faith In SO holding, the court recognizes that reasonable minds can disagxe about this outcome and that dictum in other cases, including ,Vi!):er itself, 705 A.2d at 224 11.6, suggests a dlffcrent approach. I he basx for that mohon is that C:ochran s amended complaint again fjils to state facts that, if true, support an inference tlat he acted as Stifel Financial s agent in his capacities at Stifel Nlcolaus. 30 for fees for fees was dismissed in Cochvarz I and thal h: s reiteration of that claim in his amended complaint must also be dismissed. The parties shall confer and submit an agre:ed-upon order that implements this ruling. Moreover, because the court hopes that this decision has focussed the remaining issues in the case, the coun: requests that the parties schedule an o-fiice conference xwithin two nreek;; to determine the manner in which the txt of this litigation shall proceed. 31
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