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