Delaware Chancery Court Explains Statute of Limitations Law for First Time

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By Michael Greene

Jan. 14 — A recent amendment to Delaware's statute of limitation, which allows parties to agree to extend the limitation period for certain claims, can be applied retrospectively to ongoing claims even if they arose before the law was enacted, according to a Jan. 12 Delaware Chancery Court ruling.

Vice Chancellor J. Travis Laster opined that “Section 8106(c) was intended to allow parties to contract around Delaware's otherwise applicable statute of limitations for certain actions based on a written contract, agreement or undertaking.” He added that “Section 8106(c) created a flexible framework for defining the time in which suit can be brought.”

“[I]f the General Assembly chooses to alter the statute of limitations, then the change applies not only to future claims, but also presumptively governs existing claims,” he wrote.

According to Morris James LLP, this decision represents the first time the chancery court has interpreted this amended statute.

Motion for Reargument

In the underlying case, the plaintiff trustee filed a 10-count complaint against defendant EMC Mortgage LLC, which included claims of breaches of loan representations.

Two years after the action was filed, EMC moved to dismiss the complaint on the grounds that it was untimely filed under Delaware's three-year statute of limitations period. After the court granted the motion to dismiss on all but one count, the plaintiff's moved for re-argument.

The plaintiff claimed, among other things, that the court did not consider a recent amendment to the Delaware General Corporation Law—§8106(c)—which allows the parties to contract around Delaware's otherwise applicable statute of limitations for certain actions based on a written contract, agreement or undertaking.

Because the amendment became effective Aug. 1, less than a month before the court's ruling to dismiss, the plaintiff argued that made its complaint was timely.


The defendant claimed that §8106(c) should not apply to the trustee's claim because it was enacted after the securitization closed.

Vice Chancellor Laster, however, disagreed.

“Delaware precedent explains that a modification of a limitations period is a procedural matter affecting remedies rather than a change in substantive law,” he wrote. “Ordinary presumptions against retroactivity do not apply, and the modification applies to ongoing suits absent a showing of manifest injustice.”

The court found that applying §8106(c) to the plaintiff's claims would not be unjust because: the claims were timely under the law of the jurisdiction governing the claims; the defendant asserted its timeliness defense two years after the dispute arose; and the case was still pending when the General Assembly enacted the amendment and when the statute became effective, meaning that it addressed live claims.

Application of Section 8106(c)

The court next addressed whether the agreement between the parties contained provisions designed to modify the statute of limitations for the purpose of claims for breaches of representations and warranties.

Vice Chancellor Laster noted that before §8106(c) went into effect, parties could contract for representations to survive closing for a maximum of three years, “[b]ut with the effectiveness of Section 8106(c), parties can now extend the statute of limitations up to a maximum of twenty years.”

The court found that the provisions the parties agreed upon “established a ‘period specified' in which EMCs representations remained operative following closing, and the three-year statute of limitations for the Trustee's cause of action for breach was extended so that it would not begin to run until … after both discovery of the breach by EMC and EMCs failure to take remedial action, occurred.”

Because an outside date for bringing claims was not specified, the court held that under §8106(c), any claim brought by the plaintiff “must be brought prior to the expiration of twenty years after the closing of the securitization or June 28, 2026.”

After granting the plaintiff's motion for re-argument, the court granted the defendant's motion to dismiss on two counts of the complaint on other grounds.

To contact the reporter on this story: Michael Greene in Washington at

To contact the editor responsible for this story: Ryan Tuck at

The opinion is available at


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