Capella Holdings, Inc. v. Anderson

Opinion

EFiled: Aug 04 2015 12:21PM EDT Transaction ID 57649527 Case No. 9809-VCN COURT OF CHANCERY OF THE STATE OF DELAWARE

JOHN W. NOBLE 417 SOUTH STATE STREET VICE CHANCELLOR DOVER, DELAWARE 19901 TELEPHONE: (302) 739-4397 FACSIMILE: (302) 739-6179

August 4, 2015

A. Thompson Bayliss, Esquire Johnna M. Darby, Esquire Sarah E. Hickie, Esquire Hiller & Arban, LLC Abrams & Bayliss LLP 1500 North French Street, 2nd Floor 20 Montchanin Road, Suite 200 Wilmington, DE 19801 Wilmington, DE 19807

Re: Capella Holdings, Inc. v. Anderson C.A. No. 9809-VCN Date Submitted: July 30, 2015

Dear Counsel:

In April of this year, the Supreme Court amended its Rule 42 governing

interlocutory appeals. The Court emphasized that interlocutory appeals are rare.

“Interlocutory 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 resources.”1

1 Supr. Ct. R. 42(b)(ii). Capella Holdings, Inc. v. Anderson C.A. No. 9809-VCN August 4, 2015 Page 2

Counterclaim and Third-Party Plaintiff James Thomas Anderson

(“Anderson”) tests this policy with his effort to take an interlocutory appeal from

the Court’s Letter Opinion and Order of July 8, 2015,2 which granted in part and

denied in part Counterclaim and Third-Party Defendants’ (collectively, “Capella”)

Motion to Dismiss Anderson’s claims.3

Anderson raises two issues for appeal: a procedural one—the notice

pleading standard of Central Mortgage;4—and a substantive one—the unfair price

and process standard of Weinberger.5 No novel or unsettled issue of Delaware law

is involved. Anderson does not challenge the law which the Court applied; instead,

he contends that the Court was wrong in how the law was applied.

Rule 42(b)(iii) identifies eight factors that should guide the trial court “in

deciding whether to certify an interlocutory appeal.” Anderson relies upon the last

one: an interlocutory appeal “may serve considerations of justice.” 6 He argues that

2 Capella Hldgs., Inc. v. Anderson, 2015 WL 4238080 (Del. Ch. July 8, 2015). 3 In addition to Anderson’s claims which were not dismissed, claims of Plaintiff also remain for resolution. 4 Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs., LLC, 27 A.3d 531 (Del. 2011). 5 Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983). 6 Supr. Ct. R. 42(b)(iii)(H). Capella Holdings, Inc. v. Anderson C.A. No. 9809-VCN August 4, 2015 Page 3

an interlocutory appeal would be beneficial to judicial economy by avoiding

unnecessary or duplicative discovery and by avoiding disputes over the scope of

discovery. In addition, he contends that settlement might be facilitated.

Interlocutory appeals always carry the potential of allowing the judicial

process to work more effectively and efficiently. If, to borrow Capella’s words

describing Anderson’s position, “the Court got it wrong,”7 going forward sooner

with claims that might be revived through an appeal could be beneficial.

That, however, is true about any appeal from a partial granting of a motion

to dismiss. Because Anderson’s analysis would capture so many comparable

decisions, it fails to satisfy the principle that interlocutory appeals should be

exceptional. Also, no balancing of the real costs of an interlocutory appeal,

ranging from delay of proceedings in the trial court to the burden on the Supreme

Court of piecemeal review, has been attempted.

In short, the Court can find no issue or reason, consistent with the policies of

Rule 42, that would support “appellate review before a final judgment.”8

7 Countercl. and Third-Party Defs.’ Br. in Opp’n to Mot. for Certification of Interlocutory Appeal 17. 8 Supr. Ct. R. 42(b)(i). Capella Holdings, Inc. v. Anderson C.A. No. 9809-VCN August 4, 2015 Page 4

An order refusing to certify Anderson’s proposed interlocutory appeal will

be entered.

Very truly yours,

/s/ John W. Noble

JWN/cap cc: Register in Chancery-K