Court Opinion

ID: 4527483
Source: CourtListenerOpinion
Date Created: 2020-04-21 18:07:27.446069+00
Date Added: 2024-06-11T09:26:32.602281
License: Public Domain

COURT OF CHANCERY
                                        OF THE
                                  STATE OF DELAWARE
MORGAN T. ZURN                                                        LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR                                                           500 N. KING STREET, SUITE 11400
                                                                         WILMINGTON, DELAWARE 19801-3734

                                         April 20, 2020

Thomas W. Briggs, Esquire                                  Steven L. Caponi, Esquire
Barnaby Grzaslewicz, Esquire                               Matthew B. Goeller, Esquire
Morris Nichols Arsht & Tunnell LLP                         K&L Gates, LLP
1201 North Market Street, Suite 1800                       600 North King Street, Suite 901
Wilmington, DE 19801                                       Wilmington, DE 19801

         RE: Kratos Defense & Security Solutions, Inc., v. Securitas Electronic Security, Inc.,
             Civil Action No. 2018-0910-MTZ

Dear Counsel,

         I write to address the motion for reargument filed by plaintiff Kratos

Defense & Security Solutions, Inc. (“Kratos”). You will recall that the motion is in

response to my order granting Kratos leave to amend its complaint, conditioned on

paying the reasonable fees and costs that defendant Securitas Electronic Security,

Inc. (“Securitas”) incurred in its reply brief and at argument on Securitas’ motion

under Court of Chancery Rule 12(c).1 Under Rule 59(f), reargument will be

granted only where the Court “overlooked a decision or principle of law that would

have controlling effect or ... misapprehended the facts or the law so the outcome of

1
    Docket Item (“D.I.”) 56 (citing Lillis v. AT&T Corp., 896 A.2d 871, 879 (Del. Ch.
2005)).
Kratos Defense & Security Solutions, Inc., v. Securitas Electronic Security, Inc.,
Civil Action No. 2018-0910-MTZ
April 20, 2020
Page 2 of 4

the decision would be different.”2 A motion for reargument is not a mechanism “to

relitigate claims already considered by the Court.”3

          Kratos presented its reargument assertions in connection with its motion to

amend.       I remain convinced that Kratos had notice of Securitas’ theory that

occasioned Kratos’ amendment before oral argument, and sought leave to amend

only upon discussing that theory with the Court.4                                Kratos also addressed

conditional allowance under Lillis v. AT&T Corp.5 Kratos’ relitigation of these

issues fails to support reargument.

          Nor did I overlook a controlling principle of law. I agree with Kratos that its

actions are distinguishable from the plaintiff’s “volte-face” in Lillis.6                       But at

bottom, Lillis points out that leave to amend and a conditional allowance are both

discretionary.

2
    Pontone v. Milso Indus. Corp., 2014 WL 4352341, at *1 (Del. Ch. Sept. 13, 2014).
3
    In re ML/EQ Real Estate P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22,
2000).
4
  D.I. 56 (“The Court’s concern at the hearing (‘that Kratos did not explain why it could
not understand the specific adjustments to the closing statement’) was simply a more
focused version of Securitas’ concern in its motion (‘that Kratos’s complaint failed to
include the basic allegation that it could not understand that closing statement’). Reply at
4.”).
5
896 A.2d at 879.
6
Id.
Kratos Defense & Security Solutions, Inc., v. Securitas Electronic Security, Inc.,
Civil Action No. 2018-0910-MTZ
April 20, 2020
Page 3 of 4

        “A conditional allowance is within the court’s discretion under Rule
        15” for a reason. That option permits the court to balance the interest
        in deciding a case on its merits with the costs incurred when parties do
        not timely comply with pleading requirements.7

        Under that balancing, this Court has declined to condition amendment on fees

when “the plaintiffs’ amendments represent good faith attempts to cure alleged

pleading defects the defendants identified,” as distinguished from Lillis, “in which

the plaintiffs sought leave to amend only after defending their pleading with full

briefing and oral argument.”8 The Court has awarded a defendant’s fees upon

amendment where the plaintiffs were “glib” and their actions “resulted in at least

some unnecessary briefing and argument by Defendants, to say nothing of the toll

on the Court’s time and resources.”9                     And it has awarded fees where, upon

receiving the adversary’s argument for judgment on the pleadings, the party with

the pleading burden “chose not to seek leave to amend … and instead stood on its

defective pleading, making a series of meritless arguments, only to beg for leave to

7
    Cypress Assocs., LLC v. Sunnyside Cogeneration Assocs. Project, 2007 WL 148754, at
*19 (Del. Ch. Jan 17, 2007) (quoting Lillis, 896 A.2d at 879).
8
    NACCO Indus., Inc. v. Applica Inc., 2008 WL 2082145, at *2-3 (Del. Ch. May 7, 2008).
9
    Franklin Balance Sheet Inv. Fund v. Crowley, 2006 WL 3095952, at *6 (Del. Ch. Oct.
19, 2006).
Kratos Defense & Security Solutions, Inc., v. Securitas Electronic Security, Inc.,
Civil Action No. 2018-0910-MTZ
April 20, 2020
Page 4 of 4

amend at oral argument. As a result, [the adversary] incurred substantial expense in

briefing and arguing its motion. That expense is wasted by my decision granting

. . . belated leave to amend.”10

        Here, the procedural posture, and balance between a decision on the merits

and costs, more resembles Lillis, Franklin Balance Sheet, and Cypress Associates

than NACCO. I conclude I did not overlook any controlling principle of law in

exercising my discretion to grant a conditional allowance of leave to amend.

Kratos’ motion for reargument is DENIED.

                                                             Sincerely,

                                                             /s/ Morgan T. Zurn

                                                             Vice Chancellor

MTZ/ms

Cc: All Counsel of Record, via File & ServeXpress

10
     Cypress Assocs., 2007 WL 148754, at *19.