Background
The plaintiffs brought a books-and-records action under 6 Del. C. § 17-305. After trial, the assigned Magistrate in Chancery issued a final report on May 28, 2026, directing the parties to file any exceptions within three days. Neither side did so, and the Chancellor later approved the final report and adopted its factual findings.
The parties then submitted competing proposed implementing orders. On July 8, the Magistrate entered an implementing order based on the plaintiffs’ proposed form, with modifications and an explanation of her reasoning. HIR timely filed exceptions to that order. The plaintiffs moved to strike them, arguing that Court of Chancery Rule 144 permits exceptions only to a final report or prior report, not to a later implementing order.
The Court’s Holding
Vice Chancellor Bonnie W. David denied the motion to strike. Rule 144 permits exceptions to any “Report” issued by a Magistrate in Chancery after entry of a final report. The rule defines a report broadly to include any ruling, order, or decision by a Magistrate; its timing provision generally requires parties to wait until the action concludes before taking exceptions.
The court explained that the rule promotes efficient staging of proceedings rather than foreclosing review of a Magistrate’s decisions. Under Delaware law, a Magistrate’s legal and factual rulings remain subject to de novo review by the Chancellor or a Vice Chancellor. HIR may not use its exceptions to relitigate matters decided in the post-trial final report, but its exceptions are procedurally proper insofar as the implementing order resolved issues not addressed in that report.
Key Takeaways
- Rule 144 allows exceptions to an implementing order issued by a Magistrate in Chancery after a final report.
- Exceptions to an implementing order cannot revive or relitigate the merits of an unchallenged final report.
- A Magistrate’s rulings, factual findings, legal conclusions, and recommended disposition remain subject to judicial review.
Why It Matters
The decision clarifies that parties need not treat an implementing order as immune from exceptions merely because a final report has already been approved. The relevant limit is substantive: exceptions may address newly resolved issues in the implementing order, not issues that should have been raised against the final report.