Protech Minerals, Inc. v. Dugout Team, LLC

IN THE SUPREME COURT OF THE STATE OF DELAWARE PROTECH MINERALS, INC. and CHUL § LIM CHOE, § § No. 288, 2021 Defendant Below, § Appellants, § Court Below – Superior Court § of the State of Delaware v. § § C.A. No. N21J-02846 DUGOUT TEAM, LLC, § § Plaintiff Below, § Appellee. § Submitted: June 8, 2022 Decided: September 2, 2022 Before SEITZ, Chief Justice; VALIHURA and MONTGOMERY-REEVES, Justices. Upon appeal from the Superior Court of the State of Delaware. AFFIRMED. Sidney S. Liebesman, Esquire, Beth B. Miller, Esquire, Kasey H. DeSantis Esquire, FOX ROTHSCHILD LLP, Wilmington, Delaware; for Appellants Protech Minerals, Inc. and Chul Lim Choe. Andrea S. Brooks, Esquire, WILKS LAW, LLC, Wilmington, Delaware; for Appellee Dugout Team, LLC. 1 MONTGOMERY-REEVES, Justice: In this appeal, the Court must determine whether distributions from a Delaware statutory trust to beneficial owners are subject to garnishment by a creditor. The beneficial owners argue that Delaware law prohibits garnishment of the distributions because they are trust property. They also argue that Delaware law prohibits garnishment of the distributions because the trust is a spendthrift trust. The creditor responds that the appeal is moot because the trust has converted to a partnership. As to the merits, the creditor responds that the distributions are personal property subject to garnishment, not trust property. They further argue that the beneficial owners failed to argue below that the trust is a spendthrift trust; thus, they are barred from raising that argument on appeal. Having reviewed the parties’ briefs and the record on appeal, the Court holds that the appeal is not moot; the trust distributions are personal property subject to garnishment; and the appellants waived the argument that the trust at issue is a spendthrift trust. Thus, the judgment of the Superior Court is affirmed. I. RELEVANT FACTS AND PROCEDURAL BACKGROUND In August 2016, Texas Healthcare Portfolio DST (the “Trust”), was formed as a Delaware statutory trust pursuant to 12 Del. C. § 3801 et. seq., the Delaware Statutory Trust Act.1 The Trust owns healthcare-related real estate and improvements in Texas.2 The Trust 1 App. to Opening Br. 29 (hereinafter, “A__”); Opening Br. 5. 2 A0029 2 is governed by the Delaware Statutory Trust Agreement (the “Trust Agreement”),3 which contains the following relevant provisions: • Section 3.01 – “[n]o Interest, or any portion thereof, may be assigned, pledged, encumbered or transferred (each a “Proposed Interest Transfer”) without the prior consent of the Signatory Trustee.”4 • Section 11.01 – “[n]othing in this Trust Agreement, whether express or implied, shall give to any Person other than the Trustees and the Investors any legal or equitable right, remedy, or claim hereunder.”5 • Section 11.10 – “[n]one of the provisions of this Trust Agreement shall be for the benefit of or enforceable by . . . any creditor of any Investor.”6 On July 28, 2016, Protech Minerals, Inc. (“Protech,” collectively with Chul Lim Choe, the “Appellants”) became the beneficial owners of 8.3333% of the Trust, entitling it to monthly distributions …

Original document
Source: All recent Immigration Decisions In All the U.S. Courts of Appeals