Court Opinion

ID: 2768722
Source: CourtListenerOpinion
Date Created: 2015-01-09 22:02:44.479955+00
Date Added: 2024-06-11T11:27:34.380823
License: Public Domain

COURT OF CHANCERY
                                     OF THE
    SAM GLASSCOCK III          STATE OF DELAWARE                    COURT OF CHANCERY COURTHOUSE
     VICE CHANCELLOR                                                         34 THE CIRCLE
                                                                      GEORGETOWN, DELAWARE 19947

                            Date Submitted: December 2, 2014
                             Date Decided: January 9, 2015

Michael A. Weidinger, Esquire                    Blake Rohrbacher, Esquire
Seton C. Mangine, Esquire                        Richards Layton & Finger, P.A.
Pinckney, Weidinger, Urban & Joyce LLC           One Rodney Square
1220 North Market Street, Suite 950              920 North King Street
Wilmington, Delaware 19801                       Wilmington, Delaware 19801

                 Re:    Vaccaro v. APS Healthcare Bethesda, Inc. and Universal
                        American Corp., Civil Action No. 9637-VCG

Dear Counsel:

         This matter involves a dispute over severance obligations in the employment

agreement between Plaintiff Jerome Vaccaro and Defendants APS Healthcare

Bethesda, Inc. (“APS”) and Universal American Corp. (“Universal”). At this stage

in the litigation, the Defendants have moved to dismiss or stay Vaccaro’s action,

arguing both that this Court lacks subject matter jurisdiction to hear the dispute and

that I should use my discretion to defer to a first-filed action in the United States

District Court for the District of Delaware, in which Universal is suing multiple

defendants, including Vaccaro, for allegedly fraudulently inducing the 2012 sale of

APS to Universal (the “Securities Fraud Lawsuit”).1 In a previous letter opinion, I

1
 Universal American Corp. v. Partners Healthcare Solutions Holdings, L.P., C.A. No. 13-1741-
RGA (D. Del.).
addressed the issue of whether this Court properly has jurisdiction over Vaccaro’s

claims, finding that it does.2 Remaining before me is whether I should use my

discretion under the test announced in McWane Cast Iron Pipe Corp. v. McDowell-

Wellman Engineering Co.3 to defer to the Securities Fraud Lawsuit previously filed

in the federal district court.

       After considering the additional briefing and letters submitted by the parties

on this issue, and without specifically finding sufficient overlap of issues between

the two cases to invoke McWane, I find that concerns of judicial and litigants’

economy support a continuance of my consideration of the Defendants’ Motion to

Dismiss or Stay in this action. Currently pending in the Securities Fraud Lawsuit

is Vaccaro’s Motion to Dismiss Universal’s First Amended and Supplemental

Complaint, the resolution of which will necessarily clarify disputed issues that I

must consider here.         Consequently, I am postponing my consideration of the

Defendants’ Motion to Dismiss or Stay pending resolution of Vaccaro’s Motion to

Dismiss in the Securities Fraud Lawsuit.4 The parties should provide the Court

2
  Vaccaro v. APS Healthcare Bethesda, Inc., 2014 WL 5206767, at *2 (Del. Ch. Oct. 15, 2014).
3
  263 A.2d 281, 283 (Del. 1970).
4
  See Eichenberg v. Salomon, 1983 WL 103257, at *1 (Del. Ch. Feb. 23, 1983) (noting that the
Court had previously “ruled that defendants’ motion to stay must be held in abeyance pending a
ruling by the United States District Court for the District of Delaware on whether it will accept
pendent jurisdiction over State claims” in a first-filed “suit arising out of the same circumstances
as gave rise to the suit in this Court”); cf. General Foods Corp. v. Cryo-Maid, Inc., 198 A.2d
681, 683 (Del. 1964) (“When similar actions between the same parties involving the same issues
are filed in separate jurisdictions the court in which either of said action is filed may in the
exercise of its discretion hold that action in abeyance to abide the outcome of the action pending
                                                 2
with a status update on the current state of the proceedings in the Securities Fraud

Lawsuit, as well as provide the Court with an additional status update when the

federal district court resolves Vaccaro’s Motion to Dismiss. Further, the parties

should advise the Court as to whether discovery in this action should be stayed

pending the federal district court’s decision.              Finally, any party may seek

accelerated consideration of the Defendants’ Motion to Dismiss or Stay as

circumstances warrant.

       To the extent the foregoing requires an Order to take effect, IT IS SO

ORDERED.

                                                    Sincerely,

                                                    /s/ Sam Glasscock III

                                                    Sam Glasscock III

in the other court. The power is inherent in every court and flows from its control over the
disposition of causes on its docket. The decision is one to be made in the light of all the
circumstances in order to determine the best and most economical means of determining the
controversy.”).
                                               3