Blue Hen Mechanical, Inc. v. Christian Brothers Risk Pooling Trust, Del. Supr., No. 589, 2014 (Del. June 15, 2015). This Delaware Supreme Court opinion has practical application for corporate litigators and civil litigators generally, due to the manner in which it addresses: (i) how to deal with suits filed allegedly in bad faith; and (ii) how to deal with a suit that may have been filed in good faith, but is conducted or continued in bad faith. Some highlights:
- Delaware’s high court rejected an effort to expand Delaware law to allow for malicious prosecution claims to extend beyond the current law that (apparently unlike PA and the Restatement (Second) of Torts) bars such a claim if a good faith basis existed when suit was filed.
- The court relied on existing law that allows for fee-shifting if litigation is conducted in bad faith (even if there was a good faith basis for the suit being filed initially). For example, at footnote 42, the court refers to Super. Ct. Civ. R. 37(b) as providing a default so that a prevailing party who seeks a motion to compel “is entitled to its fees and costs in securing that order….” But one reading of that rule would suggest a different result: that fees only become mandatory when a prior order granting a motion to compel is violated–although at least one other recent decision has read the rule the same way as Delaware’s high court in this case, i.e., reading the rule to require fee shifting. But cf. prior Chancery ruling declining to grant fees after second motion to compel.
- This case involved a separate suit for malicious prosecution instead of the self-described aggrieved party seeking fees when the prior suit complained of was finalized, as part of that same concluded suit. The court’s reasoning is eminently quotable: “Put simply, we see no empty compartment in the tool box that trial judges have to address bad faith litigation conduct that would be filled by usefully extending the malicious prosecution tort.”
- The court provides public policy commentary about fee-shifting in general and comparisons of the American Rule and the English Rule on fee-shifting, as well as the impact of those two different rules on “the poor”, and access to the courts for redressing grievances. See, e.g., footnote 46.
- This case was based originally on a breach of contract claim relating to a large air conditioning unit at a nonprofit nursing home called the Jeanne Jugan Residence located in Newark, Delaware, run by a group of Catholic nuns called the Little Sisters of Poor. FULL DISCLOSURE: my youngest brother is a Catholic priest for the Diocese of Wilmington and he is the Chaplain for the Little Sisters of the Poor. I have no involvement in this case. (The photo above shows one of the nuns in one of the nursing homes around the world that they run.)