Martinez v. Regions Financial Corp., No. 4128-VCP (Del. Ch. Sept. 9, 2009), read letter decision here. Also, an implementing Order accompanying the decision that provides for a procedure to address reasonableness of advanced fees, is available here.
Kevin Brady, a highly regarded Delaware litigator, provides the synopsis of this case.
The Court of Chancery in this September 9 ruling issued a follow-up opinion to its August 6, 2009 decision regarding a dispute between plaintiff, Susan A. Martinez, and defendant, Regions Financial Corporation, wherein plaintiff sought to enforce a change of control agreement. In its August 6 decision, the Court had directed the parties to submit an appropriate form of order reflecting the Court’s rulings. See Martinez v. Regions Fin’l Corp., No. 4128-VCP, 2009 WL 2413858, at *15 (Del. Ch. Aug. 6, 2009), summarized on this blog here. The parties, unfortunately, could not reach agreement so they went back to the Court for guidance on two issues: (i) whether a claim voluntarily withdrawn by plaintiff after defendant moved for summary judgment and filed its opening brief should be dismissed with or without prejudice; and (ii) what procedure should be followed for submission and payment of the plaintiff’s invoices for advancement and to the extent there are disputes about those invoices, how the dispute should be resolved.
Dismissal of Purportedly Withdrawn Claim
After the Complaint was filed, there were cross motions for summary judgment. The
August 6 decision addressed defendants’ summary judgment motion as to the Counts I – IV, but did not discuss Count V, because plaintiff voluntarily withdrew that claim in a footnote in her answering brief. Plaintiff claims that “because [defendant] neither opposed withdrawal of Count V nor suggested that the withdrawal should result in dismissal with prejudice of that claim, [plaintiff] should not be barred from raising Count V in the future.” In response, defendant claims that the plaintiff “cannot voluntarily withdraw a claim in the face of a motion for summary judgment without consequence.”
The Court noted that dismissal of a claim may be treated as an attempt to amend the complaint and that the Court, as a matter of discretion, typically grants such a motion to amend “‘if justice so requires,’ unless the moving party has been guilty of undue delay, bad faith, or dilatory conduct.” The plaintiff neither sought leave of Court nor the consent of defendant before withdrawing the claim after defendant moved for summary judgment on all claims. Moreover, plaintiff failed to explain any reason for withdrawing the claim or show good cause as to why that claim should be dismissed without prejudice. As a result, the Court dismissed Count V with prejudice.
Procedure for Payment of Attorneys’ Fees and Expenses Pursuant to Advancement Ruling
Since the parties could not come to any agreement as to a form of order, the Court determined that the plaintiff must submit copies of invoices for fees and expenses incurred by plaintiff to defendant and file a notice of such submission with the Court. Defendant then has thirty days to make payment. If defendant disputes the reasonableness of any of the submitted invoices, defendant “shall (i) remit the undisputed amount plus prejudgment interest within thirty days of submission of the invoices to [defendant], (ii) advise [plaintiff] in writing with specificity of any and all disputes respecting the reasonableness of the invoices (“Objections”) within twenty days after the date the invoices were submitted to it, and (iii) simultaneously file those Objections with the Court” and the Court will schedule a telephone conference to resolve them