Eagle Force Holdings v. Campbell
Annotate this CaseThe underlying lawsuit whose appeal was before the Delaware Supreme Court was filed in 2015 by Plaintiffs Eagle Force Holdings, LLC and EF Investments, LLC (collectively, “Plaintiffs”) against Stanley Campbell. In 2013, Richard Kay and Campbell formed a business venture to market medical diagnosis and prescription technology that Campbell had developed. The parties outlined the principal terms of the investment through two letter agreements in November 2013 and April 2014: Kay and Campbell would form a new limited liability company and each would be a fifty-percent member. Kay would contribute cash. Campbell would contribute stock of Eagle Force Associates, Inc. and the membership interest of Eagle Force Health, LLC, along with intellectual property. After April 2014, the parties negotiated several key terms of the transaction documents. Kay contributed cash to Eagle Force Associates. Campbell executed a promissory note for these contributions with the agreement that Kay would cancel the note when they closed the deal on the new venture. After months of negotiations, Kay and Campbell signed versions of two transaction agreements: a Contribution and Assignment Agreement and an Amended and Restated Limited Liability Company Agreement. A question arose as to whether the parties intended to be bound by these signed documents. Plaintiffs asserted that the parties formed binding contracts; Campbell contended that he signed merely to acknowledge receipt of the latest drafts of the agreements but not to manifest his intent to be bound by the agreements. The Court of Chancery determined that neither transaction document was enforceable. Accordingly, it dismissed the case for lack of personal jurisdiction. The Delaware Supreme Court reversed the Court of Chancery, finding that the trial court did not properly apply the test set forth in Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010). On remand, the Court of Chancery issued an opinion holding that Campbell's conduct and communications with Kay before and during the signing of the transaction documents, did not constitute an overt manifestation of assent to be bound by the documents. Because it concluded that Campbell was not bound by the agreements’ forum selection clauses, and because Plaintiffs failed to identify any other applicable basis for personal jurisdiction, the court dismissed the remainder of the claims for lack of personal jurisdiction. Plaintiffs appealed. Finding no reversible error, the Supreme Court affirmed as to plaintiffs' issues raised on appeal. The Court reversed, however, the matter on cross-appeal: if Campbell was not bound by the 2015 trial court order, he could not be held in contempt for violating its terms during the interim appeal period.
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