COURT OF CHANCERY

OF THE

S AM G LASS C OCK III

V ICE C HANCELLOR STATE OF DELAWARE C OURT OF C HANCERY C OURTHOUSE

34 T HE C IRCLE
G EORGETOWN

, D ELAWARE 19947

Date Submitted: November 11, 2016

Date Decided: January 9, 2017

Enrique Santos

P.O. Box 971 Rockville, MD 20848 Allan S. Kullen

7723 Groton Road Bethesda, MD 20817

Re: Enrique Santos v. Allen S. Kullen

, C.A. No. 9960

- MZ

Dear Litigants:

Before me are Mr. Santos’ Exceptions to the Final Report and Order of Master

Zurn together with a brief in support of those exceptions and a response by an

interested party named as a Defendant in the Complaint but apparently never served,

Allan S. Kullen. The parties are pro se , but I note that Mr. Santos is an attorney

licensed to practice in several jurisdictions. The backgroun d of this matter is as

follows:

T he case was filed in July 2014 seeking equitable reli ef with respect to legal

fees that Mr. S antos alleged he was entitled to from named

, but unserved

, Defendants

Kullen and Todd Allan Pr inting Company

, Inc. (“TAPCO”).

According to Santos ’ brief, he seeks “imposition of a constructive trust ( a) on

assets previously held by TAPCO which were transferre d [fraudulently] to [another

entity] KCP [Communications, Inc.] and (b) [on] promissory notes and security2

interests arising from these transfers

. ” 1 Since the Summer of 2014, no meaningful

progress has been made in this matter. On Jun e 15, 2016, Master Zurn wrote to Mr.

Santos:

This matter has been open for almost two years with

substa ntially no activity since the original filing in July

, 201 4. No proof of service on the d efendants has been filed with the Court. The Court has twice requested you advance this matter. Please file a status update within 30 days of the d ate of this lette r. For those d efendants who

are not debtors in pending bankruptcy actions, please also file a proof of service and a stipulated case scheduling order showing how this matter will be moving forward. 2

On July 7, Mr. Santos replied:

The Court has requested a status update in this matter. In my previous status report I informed the Court that an involuntary bankruptcy petition was file d on November 13, 2015 against d efendant KCP Communications

, Inc.

— whereupon the automatic stay in bankruptcy cases went

into ef fe ct.

. . . T he petitioning creditors who placed the debtor into Chapter 11 proceedings were Allan S. Kullen and Diane K. Kullen Revocable Trust, both also

defendants in this matter.

. . . T he Court has further requested Plaintiff to file proof of service and a stipulated case scheduling order. I am unable to do so bec ause service has not been made. 3

On July 13, Master Zurn again wrote to Mr. Santos:

On June 15, 2016

, I directed you to file proof of service and a stipulated case scheduling order showing how this

matter will be moving forward with regard to d efendants

1 Pl ’ s Opening Br. 5.

2 Dkt. No. 13.

3 Dkt. No. 15.3 who are not debtors in pending bankruptcy actions. You responded on July 7, 2016

, that you could not do so

be cause you had not served those d efe ndants. Allow me to clarify: y ou are to advan ce this matter by serving those defendants and filing proof of that service and a joint scheduling order within 30 days. Failure to do so will be considered failure to prosecut e and failure to comply with

a court o rder

, and will subject this case to dismissal under Rule 41(e). 4

The record does not reflect that Mr. Santos made a response to this Court’s

letter order of July 13, 2016 (the “ Letter Order ” ) . On August 19, 2016, Master Zurn

issued an order dismissing for failure to prosecute under Rule 41(e) (the “ Master ’ s

Order ”) . Santos takes exception to this Order.

In his brief in support of his Exceptions, Santos mistakenly argues that the

Master abused her discretion in this matter. Unfortunately , in light of judicial

efficiency, that sta ndard does not apply. Under our Supreme Court ’ s decision in

DiGiacobbe v. Sestak 5 a Vice Chancellor or Chancellor of this Court must review

decisions of the Master de novo

. 6 I have undertaken such a review in this matter.

In his brief and Exceptions, Santo s argues that the Letter Order, together with

the Master ’ s June 15, 2016 letter, constitute an abuse of discretion. The Letter Order

directed Santos to provide service of process on the non

- bankruptcy defendants

within thirty days, and to file a form of case scheduling order. Santos argues that

4 Dkt. No. 14.

5 743 A.2d 180 (Del. 1999).

6 Id. at 184.4

“ [ t ] o serve six non

- debtor defendants could not be accomplished in 30 days, even in

the best of circumstan ces. . . . B ut to then expect that a joint scheduling order from

all parties could be produced within th e same 30 days was very highly improbable,

if not an impossibility. ” 7 He calls the directive in the Letter Order a “hyper

accelerated time table ” and suggests that it is abusive to him. 8

I find Santos’ argum ent non sensical

, and note that he failed to attempt to

comply with the Letter Order ; therefore, his argument as to “abuse” by the Master

rings hollow.

More substantively, Santos points out that he filed brief status reports in this

matter together with suggestions of ban kruptcy , indicating some prosecution took

place; he also argues that, in his view, b ankrupt c y law precluded him from

complying with the Letter O r der . I need not address these concerns, however.

According to Santos, at the time this matter was dismissed, a mirror image action

was pending in Maryland s tate c ourt

. The only relief Santos seeks on exception is

that the Master ’ s Order dis missing his action here be made without prejudice, so that

he can pros ecute his case in the Maryland s tate c ourt. The record does not indicate

that Santos made the Master aware of the pendency of this Maryland a ction. In

consideration of the Master’s tim e and busy schedule , and in light of the requirement

7 Pl ’ s Opening Br. 18

– 19.

8 Id

. at 19.5

of DiGiacobbe that I conduct a de novo review here, I decline to return this matter

to the Master for her consideration of the pendency of the Maryland a ction.

As Santos now acknowledges, this action should be dismissed. A dismissal

with prejudice remov es the ability of the Maryland c ourt to apply its own standards

of case management to this glacially

- paced litigation . It seems to me , under the

peculiar facts here, including the Plaintiff ’ s belated representation that an identical

action was pending in Maryland at the time this Court considered a dismissal for

failure to prosecute, that interests of comity require a dismissal without pr ejudice, to

allow the Maryland c ourt to apply whatever notions of case management it finds

appr opriate. Therefore, the Exceptions are denied, but the Master ’ s Order is

modified to provide that the dismissal is without prejudice to the pending Maryland

action. Nothing in this Letter Opinion should be read as a finding that Santos has

appropriately l itigated in Maryland; that is a matter purely for the Maryland c ourts.

An appropriate order accompanies this Letter Opinion.

Sincerely,

/s/ Sam Glasscock III

Vice Chancellor6

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ENRIQUE SANTOS, :

: Plaintiff, :

:

v. : C.A. No. 9960

- MZ

: ALLAN S. KULLEN, et al., :

: Defendants. :

DISMISSAL FOR FAILURE TO PROSECUTE

WHEREAS, Master Zurn dismissed this matter in a Final Report and Order und er Rule

41(e) of the Rules of the Court of Chancery, on August 19, 2016 and,

WHEREAS, the Plaintiff has taken exception to that Report and Order; and

WHEREAS, upon de novo review, the Exceptions are DENIED but;

WHEREAS, the Plaintiff alleges that a pending action exists and existed in Maryland state

court at the time of the Court’s August 19, 2016 Order; and

WHEREAS, the interests of comity under the particular facts here make i t appropriate for

the Maryland c ourts to apply t heir own case management standards to that pending Maryland

action ;

NOW, THEREFORE, this matter is dismissed, without prejudice to the Plaintiff’s right to

prosecute any pending litigation

.

DATED:________________________

/s/ Sam Glassco ck III

Vice Chancellor