Vaccaro v. APS Healthcare Bethesda, Inc.

• Court: Court of Chancery of Delaware
• Decided: January 9, 2015
• Docket: CA 9637-VCG
• Status: Published

Opinion

COURT OF CHANCERY OF THE SAM GLASSCOCK III STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE VICE CHANCELLOR 34 THE CIRCLE GEORGETOWN, DELAWARE 19947

Date Submitted: December 2, 2014 Date Decided: January 9, 2015

Michael A. Weidinger, Esquire Blake Rohrbacher, Esquire Seton C. Mangine, Esquire Richards Layton & Finger, P.A. Pinckney, Weidinger, Urban & Joyce LLC One Rodney Square 1220 North Market Street, Suite 950 920 North King Street Wilmington, Delaware 19801 Wilmington, Delaware 19801

Re: Vaccaro v. APS Healthcare Bethesda, Inc. and Universal American Corp., Civil Action No. 9637-VCG

Dear Counsel:

This matter involves a dispute over severance obligations in the employment

agreement between Plaintiff Jerome Vaccaro and Defendants APS Healthcare

Bethesda, Inc. (“APS”) and Universal American Corp. (“Universal”). At this stage

in the litigation, the Defendants have moved to dismiss or stay Vaccaro’s action,

arguing both that this Court lacks subject matter jurisdiction to hear the dispute and

that I should use my discretion to defer to a first-filed action in the United States

District Court for the District of Delaware, in which Universal is suing multiple

defendants, including Vaccaro, for allegedly fraudulently inducing the 2012 sale of

APS to Universal (the “Securities Fraud Lawsuit”).1 In a previous letter opinion, I

1 Universal American Corp. v. Partners Healthcare Solutions Holdings, L.P., C.A. No. 13-1741- RGA (D. Del.). addressed the issue of whether this Court properly has jurisdiction over Vaccaro’s

claims, finding that it does.2 Remaining before me is whether I should use my

discretion under the test announced in McWane Cast Iron Pipe Corp. v. McDowell-

Wellman Engineering Co.3 to defer to the Securities Fraud Lawsuit previously filed

in the federal district court.

After considering the additional briefing and letters submitted by the parties

on this issue, and without specifically finding sufficient overlap of issues between

the two cases to invoke McWane, I find that concerns of judicial and litigants’

economy support a continuance of my consideration of the Defendants’ Motion to

Dismiss or Stay in this action. Currently pending in the Securities Fraud Lawsuit

is Vaccaro’s Motion to Dismiss Universal’s First Amended and Supplemental

Complaint, the resolution of which will necessarily clarify disputed issues that I

must consider here. Consequently, I am postponing my consideration of the

Defendants’ Motion to Dismiss or Stay pending resolution of Vaccaro’s Motion to

Dismiss in the Securities Fraud Lawsuit.4 The parties should provide the Court

2 Vaccaro v. APS Healthcare Bethesda, Inc., 2014 WL 5206767, at *2 (Del. Ch. Oct. 15, 2014). 3 263 A.2d 281, 283 (Del. 1970). 4 See Eichenberg v. Salomon, 1983 WL 103257, at *1 (Del. Ch. Feb. 23, 1983) (noting that the Court had previously “ruled that defendants’ motion to stay must be held in abeyance pending a ruling by the United States District Court for the District of Delaware on whether it will accept pendent jurisdiction over State claims” in a first-filed “suit arising out of the same circumstances as gave rise to the suit in this Court”); cf. General Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681, 683 (Del. 1964) (“When similar actions between the same parties involving the same issues are filed in separate jurisdictions the court in which either of said action is filed may in the exercise of its discretion hold that action in abeyance to abide the outcome of the action pending 2 with a status update on the current state of the proceedings in the Securities Fraud

Lawsuit, as well as provide the Court with an additional status update when the

federal district court resolves Vaccaro’s Motion to Dismiss. Further, the parties

should advise the Court as to whether discovery in this action should be stayed

pending the federal district court’s decision. Finally, any party may seek

accelerated consideration of the Defendants’ Motion to Dismiss or Stay as

circumstances warrant.

To the extent the foregoing requires an Order to take effect, IT IS SO

ORDERED.

Sincerely,

/s/ Sam Glasscock III

Sam Glasscock III

in the other court. The power is inherent in every court and flows from its control over the disposition of causes on its docket. The decision is one to be made in the light of all the circumstances in order to determine the best and most economical means of determining the controversy.”). 3