IN THE SUPREME COURT OF THE STATE OF DELAWARE
INSIGHT EQUITY A.P. X §
COMPANY, LLC; INSIGHT §
EQUITY VISION PARTNERS, LP; §
INSIGHT EQUITY §
MANAGEMENT COMPANY, §
LLC; ROSEWOOD VISION §
CORPORATION; and ROSEWOOD §
PRIVATE INVESTMENTS, INC., §
§ No. 284, 2020
Defendants Below, §
Appellants, § Court Below–Superior Court
§ of the State of Delaware
v. §
§ C.A. No. N19C-08-260
WIND POINT PARTNERS VII-A, §
L.P., §
§
Plaintiff Below, §
Appellee. §
Submitted: September 16, 2020
Decided: September 25, 2020
Before SEITZ, Chief Justice; VALIHURA and VAUGHN, Justices.
ORDER
After careful consideration of the notice of interlocutory appeal, the
supplemental notice of appeal, their exhibits, and the Superior Court’s order denying
the application for certification of an interlocutory appeal, it appears to the Court
that:
(1) This appeal arises from a Superior Court decision that granted in part
and denied in part the motion to dismiss filed by Insight Equity A.P. X Company,
LLC (“Insight LLC”); Insight Equity Vision Partners, LP (“Insight LP”); Insight
Equity Management Company, LLC (“Insight Equity Management”); Rosewood
Vision Corporation (“Rosewood Vision”); and Rosewood Private Investments, Inc.
(“Rosewood Private Investments”) (collectively, the “Defendants”). The following
background is relevant to the Superior Court’s ruling and the Defendants’ request
for interlocutory review.
(2) On September 17, 2014, Wind Point Partners VII-A, L.P. (“Wind
Point”) purchased a global manufacturer of branded corrective ophthalmic lenses,
Vision Ease, LP (d/b/a Vision-Ease Lens) (“Vision Ease”), from the Defendants.
The transaction was governed by a securities purchase agreement (“SPA”) that
identifies the “Sellers” as Insight LP and Rosewood Vision.1 On August 27, 2019,
Wind Point filed suit in Delaware2 against the Defendants, alleging that the
Defendants intentionally misled and induced Wind Point to purchase Vision Ease
1
Wind Point’s complaint alleges that Rosewood Vision is either a wholly-owned subsidiary or
vehicle of Rosewood Private Investments and that Insight LLC and Insight LP are vehicles formed
by Insight Equity Management.
2
Although the SPA includes a forum-selection clause providing that any claim or cause of action
relating to or arising out of the SPA be brought in Delaware federal court, Wind Point initially
filed suit in Texas state court claiming that federal jurisdiction could not be invoked because the
parties lacked citizenship diversity. The Defendants moved to dismiss on the basis of the forum-
selection clause, arguing that the SPA’s severability clause required that the Defendants file suit
in Delaware state court in the absence of federal diversity. After the trial court denied the motion
to dismiss, the Defendants filed a petition for writ of mandamus in the Court of Appeals of Texas.
The Court of Appeals agreed with the Defendants’ interpretation of the SPA forum-selection
clause and directed the trial court to vacate its denial of the Defendants’ motion to dismiss and
dismiss Wind Point’s claims without prejudice. In re: Rosewood Private Invs., Inc., 2018 WL
4403749 (Tex. App. Sept. 17, 2018). The trial court did as directed and the present suit followed.
2
through the Defendants’ preparation and presentation of Vision Ease’s financial
statements. The complaint asserts claims for (i) fraud, (ii) violation of the Texas
Securities Act (“TSA”), and (iii) breach of the SPA/indemnification.
(3) On November 14, 2019, the Defendants filed a motion to dismiss under
Superior Court Civil Rule 12(b)(6). On August 17, 2020, the Superior Court issued
a written decision granting the motion to dismiss in part and denying it in part (the
“Opinion”).3 The Superior Court dismissed Wind Point’s breach of the
SPA/indemnification claim as untimely. However, the Superior Court found that
Wind Point had properly pled its fraud and TSA claims. With respect to the fraud
claim, the Superior Court rejected the Defendants’ argument that the SPA’s anti-
reliance provision applied to the fraud claim against Rosewood Private Investments
and Insight Equity Management as non-parties to the SPA. In doing so, Superior
Court held that, because Wind Point’s fraud claim is based upon conduct that is
separate and distinct from the conduct that constitutes a breach of the SPA, it is not
subject to the contractual limitations of remedies contained in the SPA.
Alternatively, the Superior Court concluded that the SPA’s anti-reliance provision
would not bar the fraud claim from proceeding at this pleading stage in light of the
alleged omissions and acts of fraudulent concealment.
3
Wind Point Partners VII-A, L.P. v. Insight Equity A.P. X Co., 2020 WL 5054791 (Del. Super. Ct.
Aug. 17, 2020).
3
(4) On August 27, 2020, the Defendants asked the Superior Court to certify
an interlocutory appeal from the Opinion under Rule 42. The Defendants maintained
that the Opinion decided a substantial issue of material importance.4 The Defendants
also argued that the following Rule 42(b)(iii) factors weighed in favor of granting
interlocutory review: the Opinion conflicts with other trial court decisions;5 review
of the interlocutory order may terminate the litigation as to Insight Equity
Management and Rosewood Private Investments;6 and review of the interlocutory
order would serve considerations of justice.7 Finally, the Defendants argued that the
benefits of interlocutory review would outweigh the probable costs. 8 Wind Point
opposed the application.
(5) On September 15, 2020, the Superior Court denied the Defendants’
application for certification of an interlocutory appeal. The Superior Court found
that the Opinion did not involve a substantial issue of material importance—a
threshold consideration under Rule 42(b)(i)—because it involved an issue of
contract interpretation. Although the Superior Court would have denied the
Defendants’ application on that basis, it nevertheless reviewed the Rule 42(b)(iii)
4
Del. Supr. Ct. R. 42(b)(i).
5
Del. Supr. Ct. R. 42(b)(iii)(B).
6
Del. Supr. Ct. R. 42(b)(iii)(G).
7
Del. Supr. Ct. R. 42(b)(iii)(H).
8
Del. Supr. Ct. R. 42(b)(iii).
4
factors. The Superior Court first found that, contrary to the Defendants’ contention,
the Opinion did not conflict with other Delaware trial court decisions. Second, the
Superior Court concluded that interlocutory review of its interpretation of the SPA’s
anti-reliance provision would not terminate the litigation against Insight Equity
Management and Rosewood Private Investments because the Opinion determined
that Wind Point’s fraud claim is based upon conduct that is separate and distinct
from conduct that constitutes a breach of the SPA and, in any event, the TSA claim
remains pending. Accordingly, the Superior Court found that the likely benefits of
interlocutory review would not outweigh the probable costs such that interlocutory
review is in the interests of justice. We agree with the Superior Court’s well-
reasoned conclusion.
(6) Applications for interlocutory review are addressed to the sound
discretion of the Court.9 Giving due weight to the Superior Court’s analysis and in
the exercise of our discretion, this Court has concluded that the application for
interlocutory review does not meet the strict standards for certification under
Supreme Court Rule 42(b). Exceptional circumstances that would merit
interlocutory review of the Superior Court’s decision do not exist in this case,10 and
9
Del. Supr. Ct. R. 42(d)(v).
10
Del. Supr. Ct. R. 42(b)(ii).
5
the potential benefits of interlocutory review do not outweigh the inefficiency,
disruption, and probable costs caused by an interlocutory appeal.11
NOW, THEREFORE, IT IS ORDERED that the interlocutory appeal is
REFUSED.
BY THE COURT:
/s/ Karen L. Valihura
Justice
11
Del. Supr. Ct. R. 42(b)(iii).
6