In Citizens Bank v. Design-A-Drape, Inc.,  Del. Super., (July 30, 2008), read opinion here, the Delaware Superior Court imposed attorneys’ fees as a penalty for naming a co-defendant as a party for whom there was no (apparent) good faith basis to join as a defendant in the suit. ( I am up to date with summaries of the key decisions on business law of the Delaware Chancery Court and Delaware Supreme Court, so I am covering a decision of practical importance to business litigators from the trial court of general jurisdiction in Delaware, known as the Superior Court).

The Court provided the basis for its authority to make an exception to the "American Rule" that each party pays its own attorney’s fees, including Rule 11. The Court also noted that Section 3904 of Title 10 of the Delaware Code, referred to as the "common name" statute, allows one to sue an unincorporated association of persons by their "common trade name" without the need to sue each of the members of that group. It was not availing for the plaintiff to argue that because the corporation also sued was defunct and not in good standing, he should have been entitled to sue the wife of the other defendant who had (alone) personally guaranteed the unpaid debt on which the suit was based.