IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
BRP HOLD OX, LLC, and TDBBS, ) LLC, ) ) Plaintiffs/Counterclaim Defendants, ) ) v. ) C.A. No. N18C-04-116 CLS ) WILLIAM CHILIAN, ) ) Defendant/Counterclaim Plaintiff. ) ) )
Date Submitted: January 4, 2019 Date Decided: January 14, 2019
On Defendant’s Application for Certification of Interlocutory Appeal Pursuant to Supreme Court Rule 42. DENIED.
K. Tyler O’Connell, Esquire, Morris James LLP, 500 Delaware Avenue, Suite 1500, Wilmington, Delaware, 19801. Attorneys for Plaintiffs/Counterclaim Defendants BRP Hold Ox, LLC and TDBBS, LLC.
David P. Primack, Esquire, & David W. Giattino, Esquire, McElroy Deutsch Mulvaney & Carpenter, LLP, 300 Delaware Avenue, Suite 770, Wilmington, Delaware, 19801. Attorneys for Defendant/Counterclaim Plaintiff William Chilian.
Scott, J. Background
On October 31, 2018, this Court entered an Order granting BRP HOLD OX,
LLC, and TDBBS, LLC’s, (hereinafter “BRP”) Motion to Dismiss Defendant
William Chilian’s Counterclaims. Chilian filed a Motion for Reargument and for
Leave to File an Amended Pleading on November 8, 2018. By Order dated
December 6, 2018, those Motions were denied. Chilian filed an Application for
Certification of an Interlocutory Appeal on December 17, 2018, and BRP responded
on January 4, 2019. Chilian’s Motion for Reargument and this Application address
only the Counterclaim for Tortious Interference.
Parties’ Contentions
Chilian contends certification of his appeal is appropriate because this Court’s
decision conflicts with the Court of Chancery’s decision in Soterion Corp v. Soteria
Mezzanine Corp.1 Chilian argues the Court impermissibly expanded the doctrine of
Absolute Privilege.
Chilian further argues that because he has suffered “severe emotional,
physical, and financial harm” the interests of justice require providing him an
opportunity to present his Tortious Interference claim.2
BRP contends the Court’s decision does not constitute a disagreement about
applicable legal standards, necessary for certification. BRP further argues there is no
1 Soterion Corp v. Soteria Mezzanine Corp., 2012 WL 5378251 (Del. Ch. 2012). 2 Def. Mot. at 6. 2 disagreement between the Courts as the Court of Chancery was not called upon to
determine the applicability of the Absolute Privilege Doctrine.
Discussion
Delaware Supreme Court Rule 42 sets forth the criteria for certifying an
interlocutory appeal.3 The rule states that “[n]o interlocutory appeal will be certified
by the trial court or accepted by this Court unless the order of the trial court decides
a substantial issue of material importance that merits appellate review before a final
judgment.”4 Further, “[i]nterlocutory appeals should be exceptional, not routine,
because they disrupt the normal procession of litigation, cause delay, and can
threaten to exhaust scarce party and judicial resource.”5 The trial court considers the
following factors when deciding whether to certify an interlocutory appeal:
(A) The interlocutory order involves a question of law resolved for the first time in this State; (B) The decisions of the trial courts are conflicting upon the question of law; (C) The question of law relates to the constitutionality, construction, or application of a statute of this State, which has not been, but should be, settled by this Court in advance of an appeal from a final order; (D) The interlocutory order has sustained the controverted jurisdiction of the trial court; (E) The interlocutory order has reversed or set aside a prior decision of the trial court, a jury, or a administrative agency from which an appeal was taken to the trial court which has decided a significant issue and a review of the interlocutory
3 See Supr. Ct. R. 42. 4 Supr. Ct. R. 42 (b)(i). 5 Supr. Ct. R. 42 (b)(ii). 3 order may terminate the litigation, substantially reduce further litigation, or otherwise serve considerations of justice; (F) The interlocutory order has vacated or opened a judgment of the trial court; (G) Review of the interlocutory order may terminate the litigation; or (H) Review of the interlocutory order may serve considerations of justice.6
Only after the Court considers these factors “and its own assessment of the
most efficient and just schedule to resolve the case, the trial court should identify
whether and why the likely benefits of the interlocutory review outweigh the
probable costs, such that interlocutory review is in the interests of justice. If the
balance is uncertain, the trial court should refuse to certify the interlocutory appeal.”7
Chilian argues that this Court’s October 31, 2018, decision dismissing his
counterclaims, is in conflict with the Court of Chancery’s decision in Soterion Corp.
v. Soteria Mezzanine Corp., wherein the Court held that a threat of litigation, and
initiating litigation in bad faith may constitute Tortious Interference.8 In this action
Chilian attempts to distinguish between the actions of sending the demand letter and
filing the Federal Action, and the substantive claim that Chilian was in violation of
his restrictive covenant. However, the focus of Chilian’s claim is that BRP falsely
6 Supr. Ct. R. 42 (b)(iii). 7 Id. 8 Soterion Corp. v. Soteria Mezzanine Corp., 2012 WL 5378251 (Del. Ch. 2012). 4 accused him of violating his agreement, resulting in his unwarranted departure from
his employer. Chilian’s Counterclaim never expressly made an allegation of
defamation, however the substantive basis for his Tortious Interference claim is the
functional equivalent.
In Plastic Coatings Corp. v. Haining, the Supreme Court adopted the two
prong test of Nix v. Sawyer,9 wherein absolute privilege attaches to statements made
in the course of judicial proceedings upon a showing that: (a) the statements were
issued as part of a judicial proceeding; and (b) the alleged defamation is relevant to
a matter at issue in the case.10 In Nix, the communication giving rise to the
defamation claim was a Court of Chancery filing for a temporary restraining order.11
In Barker v. Huang,12 the Supreme Court repeated the importance of the privilege,
quoting Nix, “the interest in encouraging a litigant's unqualified candor as it
facilitates the search for truth is deemed so compelling that the privilege attaches
even where the statements are offered maliciously or with knowledge of their
falsity.”13 The Court’s October 31, 2018, decision is consistent with the
jurisprudence of this State in which Absolute Privilege has been asserted.
9 Nix v. Sawyer, 526 A.2d 930 (Del. Super. Ct. 1987). 10 Plastic Coatings Corp. v. Haining, 526 A.2d 930 (Del. 1987). 11 Nix, at 410. 12 Barker v. Huang, 610 A.2d 1341 (Del. 1992). 13 Barker, at 1345. 5 The facts in Soterion Corp. v. Soteria Mezzanine Corp. are distinguishable
from this case.14 The Court in Soterion did determine that the threat of litigation, and
filed litigation could constitute Tortious Interference, however the Court was not
called upon to determine if the doctrine of Absolute Privilege applied to facts of the
case. Chilian argues Soterion permits a Tortious Interference claim when the claims
asserted in threatened litigation are known to be false. In that case however, the
falsity of the claims was the product of firsthand knowledge. In this case however,
the truth about whether or not Chilian was in breach of contract was not.15 This
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
BRP HOLD OX, LLC, and TDBBS, ) LLC, ) ) Plaintiffs/Counterclaim Defendants, ) ) v. ) C.A. No. N18C-04-116 CLS ) WILLIAM CHILIAN, ) ) Defendant/Counterclaim Plaintiff. ) ) )
Date Submitted: January 4, 2019 Date Decided: January 14, 2019
On Defendant’s Application for Certification of Interlocutory Appeal Pursuant to Supreme Court Rule 42. DENIED.
K. Tyler O’Connell, Esquire, Morris James LLP, 500 Delaware Avenue, Suite 1500, Wilmington, Delaware, 19801. Attorneys for Plaintiffs/Counterclaim Defendants BRP Hold Ox, LLC and TDBBS, LLC.
David P. Primack, Esquire, & David W. Giattino, Esquire, McElroy Deutsch Mulvaney & Carpenter, LLP, 300 Delaware Avenue, Suite 770, Wilmington, Delaware, 19801. Attorneys for Defendant/Counterclaim Plaintiff William Chilian.
Scott, J. Background
On October 31, 2018, this Court entered an Order granting BRP HOLD OX,
LLC, and TDBBS, LLC’s, (hereinafter “BRP”) Motion to Dismiss Defendant
William Chilian’s Counterclaims. Chilian filed a Motion for Reargument and for
Leave to File an Amended Pleading on November 8, 2018. By Order dated
December 6, 2018, those Motions were denied. Chilian filed an Application for
Certification of an Interlocutory Appeal on December 17, 2018, and BRP responded
on January 4, 2019. Chilian’s Motion for Reargument and this Application address
only the Counterclaim for Tortious Interference.
Parties’ Contentions
Chilian contends certification of his appeal is appropriate because this Court’s
decision conflicts with the Court of Chancery’s decision in Soterion Corp v. Soteria
Mezzanine Corp.1 Chilian argues the Court impermissibly expanded the doctrine of
Absolute Privilege.
Chilian further argues that because he has suffered “severe emotional,
physical, and financial harm” the interests of justice require providing him an
opportunity to present his Tortious Interference claim.2
BRP contends the Court’s decision does not constitute a disagreement about
applicable legal standards, necessary for certification. BRP further argues there is no
1 Soterion Corp v. Soteria Mezzanine Corp., 2012 WL 5378251 (Del. Ch. 2012). 2 Def. Mot. at 6. 2 disagreement between the Courts as the Court of Chancery was not called upon to
determine the applicability of the Absolute Privilege Doctrine.
Discussion
Delaware Supreme Court Rule 42 sets forth the criteria for certifying an
interlocutory appeal.3 The rule states that “[n]o interlocutory appeal will be certified
by the trial court or accepted by this Court unless the order of the trial court decides
a substantial issue of material importance that merits appellate review before a final
judgment.”4 Further, “[i]nterlocutory appeals should be exceptional, not routine,
because they disrupt the normal procession of litigation, cause delay, and can
threaten to exhaust scarce party and judicial resource.”5 The trial court considers the
following factors when deciding whether to certify an interlocutory appeal:
(A) The interlocutory order involves a question of law resolved for the first time in this State; (B) The decisions of the trial courts are conflicting upon the question of law; (C) The question of law relates to the constitutionality, construction, or application of a statute of this State, which has not been, but should be, settled by this Court in advance of an appeal from a final order; (D) The interlocutory order has sustained the controverted jurisdiction of the trial court; (E) The interlocutory order has reversed or set aside a prior decision of the trial court, a jury, or a administrative agency from which an appeal was taken to the trial court which has decided a significant issue and a review of the interlocutory
3 See Supr. Ct. R. 42. 4 Supr. Ct. R. 42 (b)(i). 5 Supr. Ct. R. 42 (b)(ii). 3 order may terminate the litigation, substantially reduce further litigation, or otherwise serve considerations of justice; (F) The interlocutory order has vacated or opened a judgment of the trial court; (G) Review of the interlocutory order may terminate the litigation; or (H) Review of the interlocutory order may serve considerations of justice.6
Only after the Court considers these factors “and its own assessment of the
most efficient and just schedule to resolve the case, the trial court should identify
whether and why the likely benefits of the interlocutory review outweigh the
probable costs, such that interlocutory review is in the interests of justice. If the
balance is uncertain, the trial court should refuse to certify the interlocutory appeal.”7
Chilian argues that this Court’s October 31, 2018, decision dismissing his
counterclaims, is in conflict with the Court of Chancery’s decision in Soterion Corp.
v. Soteria Mezzanine Corp., wherein the Court held that a threat of litigation, and
initiating litigation in bad faith may constitute Tortious Interference.8 In this action
Chilian attempts to distinguish between the actions of sending the demand letter and
filing the Federal Action, and the substantive claim that Chilian was in violation of
his restrictive covenant. However, the focus of Chilian’s claim is that BRP falsely
6 Supr. Ct. R. 42 (b)(iii). 7 Id. 8 Soterion Corp. v. Soteria Mezzanine Corp., 2012 WL 5378251 (Del. Ch. 2012). 4 accused him of violating his agreement, resulting in his unwarranted departure from
his employer. Chilian’s Counterclaim never expressly made an allegation of
defamation, however the substantive basis for his Tortious Interference claim is the
functional equivalent.
In Plastic Coatings Corp. v. Haining, the Supreme Court adopted the two
prong test of Nix v. Sawyer,9 wherein absolute privilege attaches to statements made
in the course of judicial proceedings upon a showing that: (a) the statements were
issued as part of a judicial proceeding; and (b) the alleged defamation is relevant to
a matter at issue in the case.10 In Nix, the communication giving rise to the
defamation claim was a Court of Chancery filing for a temporary restraining order.11
In Barker v. Huang,12 the Supreme Court repeated the importance of the privilege,
quoting Nix, “the interest in encouraging a litigant's unqualified candor as it
facilitates the search for truth is deemed so compelling that the privilege attaches
even where the statements are offered maliciously or with knowledge of their
falsity.”13 The Court’s October 31, 2018, decision is consistent with the
jurisprudence of this State in which Absolute Privilege has been asserted.
9 Nix v. Sawyer, 526 A.2d 930 (Del. Super. Ct. 1987). 10 Plastic Coatings Corp. v. Haining, 526 A.2d 930 (Del. 1987). 11 Nix, at 410. 12 Barker v. Huang, 610 A.2d 1341 (Del. 1992). 13 Barker, at 1345. 5 The facts in Soterion Corp. v. Soteria Mezzanine Corp. are distinguishable
from this case.14 The Court in Soterion did determine that the threat of litigation, and
filed litigation could constitute Tortious Interference, however the Court was not
called upon to determine if the doctrine of Absolute Privilege applied to facts of the
case. Chilian argues Soterion permits a Tortious Interference claim when the claims
asserted in threatened litigation are known to be false. In that case however, the
falsity of the claims was the product of firsthand knowledge. In this case however,
the truth about whether or not Chilian was in breach of contract was not.15 This
Court’s October 31, 2018, decision is not in conflict with the Court of Chancery’s
decision in Soterion. Under Rule 42(b)(iii)(B), the Courts are not conflicting upon a
question of law.
After considering the all of the factors under Rule 42(b)(iii), only (H) remains
at issue. Chilian argues the interests of justice under Rule 42(b)(iii)(H), requires
appellate review so that he may have his day in court on his claim. BRP’s claims
remain before the Court, and Chilian has the opportunity to defend against those
claims. It is not clear that the benefits of interlocutory review outweigh the probable
costs the parties will incur if the Court were to grant certification. Furthermore,
Chilian has not presented any “exceptional” issues for the Court to consider, and
14 Soterion Corp. v. Soteria Mezzanine Corp., 2012 WL 5378251 (Del. Ch. 2012). 15 Answ. at 36. 6 therefore fails to demonstrate the interests of justice are served by granting this
interlocutory appeal.
The Court’s October 31, 2018, decision is not in conflict on a question of law,
nor are the considerations of justice best served by granting certification.
Therefore, this 14th day of January, 2019, William Chilian having made
application under Rule 42 of the Supreme Court for an order certifying an appeal
from the interlocutory order of this Court, dated October 31, 2018; and the Court
having found that none of the strict criteria of Supreme Court Rule 42(b)(iii) apply;
IT IS ORDERED that certification to the Supreme Court of the State of
Delaware for disposition in accordance with Rule 42 of that Court is hereby
DENIED, the Court declines to certify the interlocutory appeal.
/s/ Calvin L. Scott The Honorable Calvin L. Scott, Jr.