Collegey, Inc. v. Jamal - Motion for Reargument Granted

IN THE SUPERIO R COUR T OF THE ST A TE OF DELA W ARE COLLEG EY, INC., Plaintif f, v. SYED K HALID JAMAL, Defendant.)))))) C.A. No. N 25C- 02 -359 CLS))) Date Submitte d: November 17, 2025 Date Decided: Febr uary 27, 2026 Upon the Defen dant’ s M otion for Rear gument. GRANTED. ORDER Joe Yeager, Esq uire of M ARGO LIS E DELSTEIN, Attor ney for Plaintiff. Margaret M. D iBianca, Esquire of D I B IANCA L AW, LLC, Attorney for Defen dant. SCOTT, J.

1 Having considered Defendant’ s Motion for Reargument 1 and Plaintiff’s Opposition, 2 it appears t o the Court tha t: 1. Collegey, Inc. (“Collegey”), is a Delaware corporation that creates an d consolidates collab orative intellectua l property. 3 Suchita Ohri Aggarwal is Collegey’s Chief Financ ial O fficer a nd a 50% shareho lder. 4 Defendan t Syed Khalid Jamal holds the other 50% o f Collegey shares and serves as the Chief Executive Officer. Ms. Aggar wal and Mr. Jamal also compr ise C ollegey’ s board of direct ors. 5 2. This matter arise s from a cont ract between Collegey an d Mr. Jamal. Col legey and Mr. Jamal entered i nto a Confidential In formation and Invention Assignment Agreement (the “Agreement”). 6 Under the Agreement, Mr. Jamal “agreed not to use [Collegey’s] confi dential information for personal gain or outside purposes witho ut written author ization nor... assign... int ellectual property rights created during the relation ship” with Colle gey. 7 1 See generally Defendant’ s Motion for Regarument, D.I. 20 (“MFR”). 2 See generally Plaintif f ’ s Opposition to Defendant’ s Motion for Reargument, D.I. 21 (“Resp. to MFR”). 3 The facts are drawn from the allegations in the Amended Complaint. See Amended Complaint, at ¶¶ 5, 7, D.I. 9 (“Amended Compl.”). 4 Id. ¶ 7. 5 Id. 6 Id. ¶ 13. 7 Id. ¶ 15.

2 3. In 2023, Mr. Jamal allegedly breached the terms of the Agreement by assigning Collegey- owned inven tions t o, a nd usin g Colle gey’s domain name f or, a n unrelated c ompany. 8 4. On Februar y 13, 2025, Collegey filed a complaint alleging claims for breach of contract, breach o f the implied covenant of g ood faith and fair dealing, and breach of the fiduciar y duty of lo yalty. 9 5. On May 1, 2025, Mr. Jamal filed a motion to dismiss the case or transfer, arguing that the Court lacked sub ject matter jurisdicti on under Superior Court Civil Rule 12(b)(1). 10 6. Plaintiff the n filed an Amen ded Com plaint on May 28, 2025, which rem oved the breach of the fiduciar y duty of loya lty claim. Accordingly, the Amended Complaint asserts one count for breach of contract and one count for the breach of the implied c ovenant of good faith a nd fair dealing. 11 7. On June 10, 2 025, Mr. Jamal filed a Motion to Dismiss the Amended Complaint, arguing th at C ollegey fail ed to state a clai m u nder Rule 12(b)(6) because Ms. Aggarwal, as a director, lacks standing to bring the action on behalf of Collegey, 8 Amended Compl. ¶¶ 32–33. 9 See generally Complaint, D.I. 1 (“Compl.”). 10 See generally Defendant’ s Motion to Dismiss or T ransfer, D.I. 7. 11 Amended Compl. ¶¶ 29–44.

3 and asked the Court for attorney’s fees and costs as a result of filing duplicative motions to dismiss. 8. The Court issue d its initial Order denying Mr. Jama l’s Motion to Dismiss t he Amended Complaint on November 6, 2025. 12 On November 12, 2025, Mr. Jamal filed the instant Motion for Reargument. Collegey filed a response on November 17, 2025. 9. On a moti on for rea rgument under S uperior Court Rule of Civil Procedure 59(e), the Court wi ll determine from the motion and answer whether reargument wil l be granted. The only is sue is whether the Court overlooked something that would have changed the outcome of the underlying decision. 13 Thus, the motion will be granted only if “the Court has overlooked a co ntrolling precedent or legal principles, or the Court has misapprehended the l aw or facts such as would have changed the outcome of the underlying decision.” 14 A motion for reargument is not an opportunity for a party to rehash the arguments already decided by the Court or to present new arguments n ot previously raised. 15 A party s eeking to have the Court reconsider the earlier ruling mu st, “demonstrat e newly discovered evide nce, a 12 Collegey, Inc. v. Jamal, 2025 WL 3124443, at *1 (Del. Super. Nov. 6, 2025). 13 Br enne r v. V ill. Gre en, Inc., 2000 WL 972649, at *1 (Del. Super. May 23, 2000), aff'd, 763 A.2d 90 (Del. 2000). 14 BRP Hold Ox, LLC v. Chilian, 2018 WL 6432978, at *1 (Del. Super. Dec. 6, 2018) (quoting Kennedy v. In vacar e, Inc., 2006 WL 488590, at *1 (Del. Super. Jan. 31, 200 6)). 15 Kennedy, 2006 WL 488 590, at * 1.

4 change in the law, or man ifest injustice.” 16 “Delaware law pla ces a heavy burden on a [party] seeking re lief purs uant to Rule 5 9.” 17 10. In the Order on Mr. J amal’s Motion to Dismi ss the Amended Com plaint, t he Court held t hat c onsiderati on of Ms. Aggarwal’s standing to sue was not re levant because s he wa s not named as a party and Collegey, as a corporation, has the capacity to en ter into contra cts and sue t o enforce th ose contract ual rights. 18 11. Mr. Jamal argues that the Court incorrectly framed the issue as one of Collegey’s standing a s oppose d to determi ning whet her Colleg ey, on its own beha lf, was “author ized to b ring [the clai ms] under the circu mstances. ” 19 Plaintiff conten ds that Mr. Jamal rehashes t he arguments considered by this Court on the Motion to Dismiss. 20 The Court find s that Mr. Jamal has met his burden under R ule 59(e). 12. “‘A cardinal precept’ of Delaware law is ‘that directors, rath er than shareholders, manage the business and affairs of t he corporation. ’” 21 “The board’s authority to govern corporate affairs extends to decisions about what remedial actions a corporation should take after being harmed, including whether the 16 Br enne r, 2000 WL 972649, at *1. 17 Newborn v. Christiana Psych. Serv., P.A., 2017 WL 394096, at *2 (Del. Super. Jan. 25, 2017) 18 Collegey, Inc., 2025 WL 3124443, at *2. 19 MFR at 1. 20 See generally Resp. to MFR. 21 United Food and Com. W orkers Union and Participating Food Indus. Emps. T ri-State Pension Fund v. Zucke rber g, 262 A.3d 1034, 1047 (quoting Ar onson v. L ewis, 473 A.2d 805, 81 1 (De l. 1984), overruled on other gr ounds, 746 A.2d 244 (Del. 2000)); 8 Del. C. § 141(a).

5 corporation should file a lawsuit against i ts directors[.]” 22 An a ction by a corporation’s director s is v alidly auth orized “by a majo rity of a quorum of direct ors at a duly c alled and conve ned board meeting[, ]” or where there i s unanimous written consent by the directors. 23 13. In the Court’s initial Order on Mr. Jamal’ s issue, the Court misap prehende d the issue, and therefore the controlling law, which changes the underlying outcome of the decision. Consequently, for Collegey to bring this lawsuit on its own behalf, it needs valid authorization from its board of directors — Ms. Aggarwhal and Mr. Jamal. 14. The Amended Complai nt does not allege that there was a majority of a quorum of dire ctors at a duly called and co nvened board meet ing authorizing Collegey to file a lawsuit against Mr. Jamal. There are also no allegations that Ms. Aggarwhal an d Mr. Jamal unan imously agreed in writing to file the la wsuit. 15. The Co urt notes, however, t hat the cir cumstances here make it impossible for Collegey to file a lawsuit against one o f its directors even though it has a valid cause of action. W here t here are only two direct ors on the board, an d one of the directors is alleged to h ave harmed the c orporation, th a t director will never author ize a lawsuit against himse lf. Complicating matters further, Mr. J amal and Ms. 22 Id. 23 Foley v. Session Corp., 345 A.3d 537, 553 (Del. Ch. Sept. 9, 2025) (citing 8 Del. C. § 141(b), (f)).

6 Aggarwhal are also Collegey’s only shareholder s, each owning equal shares. Such a corporate structure will always create a deadlock when there i s a d isagreeme nt amongst the b oard and encourage directors t o act without the b est interests of the corporation in mind. 16. Nevertheless, the Court concludes that Delaware precedent requi res v alid board aut horization before a corporation may file a lawsuit on its o wn beha lf again st one of its d irectors, and the Amen ded C omplaint does not allege that there was valid board authoriza tion before Colle gey filed the l awsuit against Mr. Jamal. 17. Finally, despite c hanging the outcome of Mr. Jamal’s Motion to Dismiss, the Court will not award Mr. J amal attorney’s fees. “Delaware follows the ‘American Rule’ in awardi ng attorne y’s fees, which prov ides tha t ‘a litigant must, himself, defray the cost of being represe nted by counsel.’” 24 A party may, however, be awarded attor ney’s fees if: (1) authorize d by law; (2) they are c ontractually provided for; (3) a party acted in bad faith; (4) a party disregards a court order or is held i n contempt; or (5) under the comm on benefit d octrine. 25 18. Mr. Jamal argues that Collegey should be required to p ay the fees and costs incurred for h aving to fi le a second motion to d ismiss that aver s the same ar guments as it s firs t mot ion to dismiss. Given that none of t he exceptions to the American 24 In r e D el. Pub. Sch. Litig., 312 A.3d 703, 715 (Del. 2024) (internal citations omitted) (internal quotation marks omitted). 25 Id.

7 Rule applies to the facts here, the Court rejects Mr. J amal’s argument and will not require Collegey to pay Mr. J amal’s attorn ey’s fees and c osts. 19. In conclusion, for the foreg oing reasons, Defendan t’s Motion for Reargument is GRANTE D. Accord ingly, Defendant ’s Motion to D ismiss the Amended Com plaint is GRANTED in p art, DENIE D in part. IT IS SO ORDE RED. /s/ Calvin Sc ott Judge Calvin L. Scott, Jr.