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Chancery Court Addresses Limited Scope of Its Subject Matter Jurisdiction

By Francis G. X. Pileggi, Esq.

In Medek v. Medek, 2008 WL 4261017 (Del. Ch., Sept. 10, 2008), the Delaware Chancery Court described in great detail the limited scope of its subject matter jurisdiction, based in the distinction between the courts of  equity as they were separated in "merry old England" compared to what were described as the "law courts". Still today, the Chancery Court in Delaware is a separate court of equity as compared to the Delaware Superior Court which is a "law court" (and the trial court of general jurisdiction, i.e., basically everything that is not within Chancery's jurisdiction).

 This case describes the circumscribed prerequisites for invoking Chancery Court's jurisdiction as well as the "clean-up doctrine" which allows a court of equity to retain jurisdiction over matters that would otherwise be in the "law  court's" jurisdiction. See footnotes 25 to 40 and related text. Chancery will  retain that part of  the case that seeks only damages (as opposed to equitable relief) in order to "do complete justice" and to avoid "piecemeal litigation" involving the same basic dispute.

( Cf.  Recent Chancery Court decision within the last few days, summarized here, which allowed a case in Superior Court to go forward while the Chancery Court case between the same parties was stayed, in large part because the Chancery Court could not provide a jury trial on damages which is what the plaintiff in the related case had requested.)

The Court in this case noted that the claim based on the Uniform Fraudulent Transfer Act was one in which there might be concurrent  jurisdiction with the Superior Court but that it was well-settled that the Chancery Court had jurisdiction over such  claims and that under the "clean-up doctrine" it would also  retain jurisdiction for a related breach of contract claim.

 Also, procedurally, there was an instructive ruling that granted partial summary judgment for the plaintiff rejecting the affirmative defenses of laches and waiver that the defendant had asserted.

Full post as published by Delaware Corporate and Commercial Litigation Blog on September 21, 2008 (boomark / email).