Hi Sundar,
This snippet works properly in my application.
Maybe you update the layout in some way in work code .

Can You send me more detailed snippet?

Thanks!

Mihail

<navigation:Page xmlns:controlsToolkit="clr-namespace:System.Windows.Controls;assembly=System.Windows.Controls.Toolkit"  xmlns:igTileView="clr-namespace:Infragistics.Silverlight.Controls;assembly=Infragistics.Silverlight.XamWebTileView.v9.1"  x:Class="Test.Home"
    xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"
    xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
    xmlns:d="http://schemas.microsoft.com/expression/blend/2008" xmlns:mc="http://schemas.openxmlformats.org/markup-compatibility/2006"
    xmlns:navigation="clr-namespace:System.Windows.Controls;assembly=System.Windows.Controls.Navigation"
    mc:Ignorable="d" d:DesignWidth="640" d:DesignHeight="480"
    Title="Home"
    Style="{StaticResource PageStyle}" >

    <Grid x:Name="LayoutRoot">
    <controlsToolkit:DockPanel LastChildFill="True">
        <StackPanel Orientation="Horizontal" controlsToolkit:DockPanel.Dock="Bottom" Background="Gray" HorizontalAlignment="Stretch" VerticalAlignment="Stretch">
            <TextBlock Text="Bottom"></TextBlock>
        </StackPanel>
        <StackPanel Orientation="Horizontal" controlsToolkit:DockPanel.Dock="Top" HorizontalAlignment="Stretch" x:Name="testStackPanel"  Background="AliceBlue" MouseLeftButtonDown="test_MouseLeftButtonDown">
            <TextBlock Text="Top"></TextBlock>
        </StackPanel>
    </controlsToolkit:DockPanel>
    </Grid>

</navigation:Page>

//////////////////////C# Code//////////////////////////

        private void test_MouseLeftButtonDown(object sender, MouseButtonEventArgs e)
        {
            XamWebDialogWindow myDialogWindow = new XamWebDialogWindow() { Width = 100, Height = 100, StartupPosition = StartupPosition.Center, WindowState = WindowState.Maximized};
            myDialogWindow.RestrictInContainer = true;

            testStackPanel.Children.Add(myDialogWindow);
        }

When I click on the alice blue area, I get the error.

Thanks, Sundar.