Abercrombie v. Davies

125 A.2d 588, 36 Del. Ch. 102, 1956 Del. Ch. LEXIS 117
Court of Chancery of Delaware·Decided September 28, 1956·Published·Cited by 1 cases

Opinion

Seitz, Chancellor:

The parties are in characteristically vigorous disagreement as to the form of order or judgment which should be entered on the three opinions filed in connection with plaintiffs’ motion for summary judgment. See Abercrombie v. Davies, 35 Del.Ch. 599, 123 A.2d 893. This is the decision thereon.

[105]*105Plaintiffs’ complaint asserts only one claim — the invalidity of the Agents’ Agreement. Three independent grounds for such invalidity are set forth in their complaint:

1. The Agreement unlawfully infringed on director discretion.
2. It violated the voting trust statute.
3. It violated the organization agreement and the fiduciary relations between the parties to that agreement.

When plaintiffs filed their motion for summary judgment they advanced therein only the first two of the three grounds asserted in their complaint. They say that the “third ground” was not advanced in the motion because they believed that it would require a consideration of facts which were in dispute, and thus could not be resolved on a motion for summary judgment.

The Court, in deciding plaintiffs’ motion for summary judgment, declared part of the Agreement invalid. However, the Court declared the balance of the Agreement severable on the present record and not invalid for any reason asserted by plaintiffs. See 35 Del.Ch. 599, 123 A.2d 893.

Plaintiffs say they should have a “judgment” declaring the invalidity of the provisions of the Agreement found by the Court to be invalid (director provisions). They say that their motion seeking to have the other provisions (stockholder) declared non-severable and to have them declared invalid in any event should be denied in accordance with the Court’s decision. In this way they say they can appeal the decision and, if unsuccessful, can later try the so-called third and disputed-factual-issue ground for the invalidity of the Agreement, as well as other disputed matters.

Defendants contend that since only one claim is involved and since it has not been fully resolved by the decision on plaintiffs’ motion for summary judgment, no judgment should be entered at this time. They urge that if anything is entered now it should only be an order under Chancery Court Rule 56(d), Del.C.Ann. In this way, say defendants, the Court will have formalized the matters decided on [106]*106plaintiffs’ motion for summary judgment and yet will have left the case open for the entry of a single final judgment on plaintiffs’ single claim when all issues concerning the validity of the Agreement are finally, determined.

Are plaintiffs now entitled, as they contend, to what amounts to a partial summary judgment? Had plaintiffs advanced in their motion for summary judgment all three of the grounds for invalidity set forth in their complaint (thus including the one raising disputed questions of fact), this Court, on the assumed premise, would have denied the motion for summary judgment even though it reached the same decision as has been reached on the two grounds which did not involve a factual dispute. Compare Gottlieb v. Heyden Chemical Corp., 32 Del.Ch. 231, 83 A.2d 595. This is so because plaintiffs assert only one claim which calls for one final judgment.

But plaintiffs, argue that because of the Court’s severability decision two claims are now involved, vis., the validity of the director provisions and the validity of the stockholder provisions. However, as indicated, I believe there is but one claim and that involves the validity of the entire Agreement. It may be noted that the third ground for invalidity (involving a factual dispute), if upheld after trial, would result in the striking down of the entire Agreement. And this would be so even if this Court was in error in declaring the director provisions invalid on plaintiffs’ motion for summary judgment. These circumstances tend to point to the fact that ultimately there will be only one judgment and it will deal with the validity of the Agreement.

Plaintiffs say that even if only one claim is involved, a partial summary judgment under Rule 56 should be entered. In Biggins v. Oltmer Iron Works, 7 Cir., 154 F.2d 214, 216, the Circuit Court of Appeals said:

“* * * this rule [Rule 56], in our opinion, does not contemplate a summary judgment for a portion of a single claim in suit. * * * A partial summary judgment, as the instant one is termed, under the circumstances before us is a misnomer.”

[107]*107Plaintiffs rely on the wording of Rule 56(a) that a claimant may move for summary judgment upon “all or any part” of a claim. This is true. But it does not follow that a judgment as such will be entered when it appears that plaintiffs assert only one claim and, while entitled to partial relief on the motion, still reserve the right to press for relief, presumably after trial, with respect to the balance of their single claim. I do not believe a partial final judgment on one claim is contemplated by the Rule where other contentions are unresolved.

We next consider defendants’ contention that an order should be entered under Rule 56(d) which provides:

“(d) Case Not Fully Adjudicated on Motion. If on motion under this [summary judgment] rule, judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and evidence before it and by interrogating counsel, shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed established, and the trial shall be conducted accordingly.”

Plaintiffs say the quoted rule does not contemplate an order containing legal conclusions. While the rule appears to be more directly concerned with an order narrating facts, disputed and otherwise, for purposes of future trial, it seems implicit in the rule that the court will in the order “salvage” what has been decided on the motion and thus isolate the issues to be tried. This view seems to have authoritative support. Compare Coffman v. Federal Laboratories, 3 Cir., 171 F.2d 94; 6 Moore’s Fed.Prac. (2nd ed.) p. 2309.

I conclude that all that may now be entered is an “order” under Rule 56(d) by which the Court gives interlocutory legal effect [108]*108to its decisions. I see no prejudice to plaintiffs by following this procedure.

Plaintiffs assume that no appeal could be taken from an order under Rule 56(d), and they therefore seek a judgment so that they may promptly appeal the decision without waiting to try the disputed matters. It is this Court’s duty to adopt what it considers to be the proper procedure. Once that is done, it is for the Supreme Court on appeal to determine the propriety of the procedure adopted as well as the appealability of the order entered.

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Abercrombie v. Davies, 125 A.2d 588, 36 Del. Ch. 102, 1956 Del. Ch. LEXIS 117 (Del. Ct. App. 1956).

125 A.2d 588 (Abercrombie v. Davies) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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Abercrombie v. Davies
125 A.2d 588 (Court of Chancery of Delaware, 1956)