Background
David Namdar invested $100,000 in Immutable Holdings Inc., a Delaware blockchain company, and served as its president. Namdar claims he had an oral agreement to receive 6.5% equity as compensation. In February 2021, Namdar and Immutable’s founder worked to purchase the NFT.com domain, with Namdar contributing $1 million ($200,000 personal funds plus $800,000 fundraised). Namdar alleges he was subsequently excluded from business meetings and omitted from Immutable’s share register as the company prepared for a public offering.
On August 2, 2021, the parties executed an Employment Agreement providing Namdar a 12-month term as President/CEO with a $15,000 monthly salary and equity grants of 0.5% upon reverse take-over completion and another 0.5% one year later. Namdar claims he was fraudulently induced to accept this arrangement, having been promised 6.5% equity but receiving only 1% plus monthly compensation.
Namdar initially sued for breach of contract, promissory estoppel, unjust enrichment, and fraud. The court dismissed his original complaint in March 2025, finding the Employment Agreement was a valid settlement agreement. Namdar then asserted a counter-counterclaim for breach of the Employment Agreement, alleging non-payment of salary and failure to grant promised equity compensation. Immutable moved to dismiss the counter-counterclaim.
The Court’s Holding
The court’s Special Master recommended denying Immutable’s motion to dismiss on three independent grounds. First, the court held that Delaware Court of Chancery Rules 7 and 13 permit counter-counterclaims—counterclaims asserted in reply to a defendant’s counterclaim. Applying plain language interpretation, the court found that Rule 13 permits counterclaims to be asserted in “a pleading,” and Rule 7(a) defines an answer to a counterclaim as a permissible “pleading.” Therefore, counter-counterclaims are procedurally proper, contrary to some federal courts that have rejected them as not enumerated in the rules. The court noted that the substantive rules have permitted this since 1938 without creating the “procedural nightmare” that Immutable feared.
Second, the court rejected Immutable’s res judicata defense, holding that res judicata applies only to successive separate litigations, not to claims asserted within the same case. Since there is no prior action litigated to finality here, res judicata cannot bar Namdar’s counter-counterclaim. The court declined to adopt Immutable’s broader argument that Rule 15, the law-of-the-case doctrine, or claim-splitting principles should bar the counterclaim, noting that Immutable waived these arguments by not raising them in its opening brief.
Third, the court held that the amended counter-counterclaim is not time-barred. Breach of contract claims are subject to a three-year statute of limitations. The amended counter-counterclaim relates back to the timely-filed original counter-counterclaim, so it is not barred by laches or the statute of limitations.
Key Takeaways
- Counter-counterclaims (counterclaims asserted in reply to a defendant’s counterclaim) are permissible under Delaware Court of Chancery Rules when filed as part of an answer to a counterclaim.
- Res judicata doctrine is limited to successive separate actions and does not apply to claims asserted within a single ongoing litigation.
- The relation-back doctrine can protect amended counter-counterclaims from statute of limitations challenges when the original pleading was timely filed.
- Plain language interpretation of procedural rules controls, even when a particular pleading category is not explicitly named in the rules.
Why It Matters
This decision resolves a significant procedural ambiguity in Delaware civil practice. While federal courts have been divided on whether counter-counterclaims are permissible, the Delaware Court of Chancery now clearly permits them when asserted as part of an answer to a counterclaim. This enhances procedural efficiency by allowing more complete resolution of disputes within a single action rather than requiring parties to fragment claims across multiple proceedings.
The decision also clarifies important limitations on res judicata doctrine. By holding that res judicata applies only to successive separate cases—not to responsive claims within ongoing litigation—the court preserves parties’ procedural options to assert counterclaims in reply without running afoul of claim-preclusion doctrine. This distinction prevents res judicata from being weaponized to artificially restrict the scope of litigation that could be resolved together.