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Chancery Denies Request for Interlocutory Appeal of Summary Judgment Denial

By Francis G.X. Pileggi

Grunstein v. Silva, C. A. No. 3932-VCN (Del. Ch. Mar. 2, 2011), read letter ruling here. Reviews of the four prior decisions by the Court of Chancery in this matter are available here. At least in part, the genesis of this case is the attempt by the plaintiff to enforce a billion dollar oral agreement.

The Delaware Court of Chancery explains in this letter decision why it rejected the effort to seek certification of an interlocutory appeal of the Court's recent denial of defendants' motion for summary judgment on all of the plaintiff's claims as barred by res judicata or, more precisely, that doctrine's application to "claim splitting".

This six-page opinion is a useful tool for the toolbox of most litigators for two reasons:

1) It provides a practical overview of Supreme Court Rule 42(b) regarding certification by the trial court of an interlocutory appeal to the Delaware Supreme Court. [N.B. Even when the trial court denies the request, the applicant can still try their luck with a direct application to  Delaware's High Court.]

2) It summarized the much lengthier explanation in the opinion linked above, regarding the proper application of the transactional view of the res judicata doctrine. The privity aspect of that doctrine was addressed in footnotes 9 and 10 in a manner that may have broad applicability.  For example, Section 59 of the Restatement (Second) of Judgments was cited, among other cases, in connection with the Court's explication that something more than mere ownership in a closely held entity, such as day-to-day control, needs to be demonstrated before it will be deemed fair for claim preclusion to apply. It was also noted that because the word privity is "so amorphous, it often operates as a conclusion instead of an explanation."

In sum, after describing some of the finer points of res judicata, the Court concludes that the prerequisites for an interlocutory appeal were not satisfied.

Full post as published by Delaware Corporate and Commercial Litigation Blog on March 13, 2011 (boomark / email).