CRE Niagara Holdings, LLC v. Resorts Group, Inc. ( 2021 )

SUPERIOR COURT
OF THE
STATE OF DELAWARE
PAUL R. WALLACE NEW CASTLE COUNTY
JUDGE COURTHOUSE
500 N. KING STREET, SUITE
10400
WILMINGTON, DELAWARE 19801
(302) 255-0660
Date Submitted: April 23, 2021
Date Decided: May 25, 2021
Richard P. Rollo, Esquire Garvan McDaniel, Esquire
Travis S. Hunter, Esquire HOGAN MCDANIEL
Dorronda R. Bordley, Esquire 1311 Delaware Avenue
RICHARDS, LAYTON & FINGER, P.A. Wilmington, Delaware 19806
920 North King Street
Wilmington, Delaware 19801 David S. Rosner, Esquire
Paul J. Burgo, Esquire
J. David Washburn, Esquire KASOWITZ BENSON TORRES LLP
Charles L. Perry, Esquire 1633 Broadway
Michael J. Chiusano, Esquire New York, New York 10019
Katten Muchin Rosenman LLP
2121 North Pearl Street, Suite 1100
Dallas, Texas 75201
David A. Crichlow, Esquire
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, New York 10022
Re: CRE Niagara Holdings, LLC, et al v. Resorts Group, Inc.
C.A. No. N20C-05-157 PRW CCLD
Dear Counsel:
Last month, the Court issued its Memorandum Opinion (the “Opinion”)
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resolving Resorts Group, Inc.’s (“RGI”) Motion to Dismiss.1 This Letter Order now
addresses RGI’s ensuing Motion for Reargument of that decision2 and its separate
Motion for Stay or Enlargement of Time.3 For the reasons that follow, both motions
are DENIED.
I. THE UNDERLYING DISPUTE4
This dispute arises from RGI’s 2017 sale of a resort and timeshare business to
Cerberus Capital Management, LP—the non-party equity fund that owns the
plaintiff entities. CRE Niagara Holdings, LLC, and its co-plaintiffs (collectively
“CRE”) bring this action charging RGI with fraud and breach of contract for alleged
false representations made in an effort to induce CRE to execute the contested
agreements.
In May 2017, RGI and CRE entered into a Unit Asset Purchase Agreement
(“UAPA”), through which CRE Niagara Holdings, LLC, acquired certain timeshare
1
CRE Niagara Holdings, LLC v. Resorts Grp., Inc., 2021 WL 1292792 (Del. Super. Ct. Apr. 7,
2021).
2
Def.’s Mot. for Reargument, Apr. 16, 2021 (D.I. 76).
3
Def.’s Mot. for Stay or Enlargement of Time, Apr. 19, 2021 (D.I. 77).
4
For a fuller recitation of the facts underlying the dispute in this litigation, refer to Section I
of the Opinion: CRE Niagara, 2021 WL 1292792, at *1-3.
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resort assets and ownership of certain entities, including CRE Bushkill, LLC.5 CRE
Niagara purchased the timeshare business and existing contracts with the timeshare
members and RGI retained the majority right to the payment stream on those existing
contracts.6 This transaction was effectuated via multiple written agreements. The
agreements relevant here are:7 (1) the UAPA, through which CRE purchased the
assets of the timeshare resorts and acquired ownership of certain entities including
the CRE Bushkill Group, LLC;8 (2) the Servicing Agreement that addressed the
servicing of receivables from sales by RGI;9 and (3) the Participation Agreement
that provided CRE an interest in the receivables collected by RGI from the Servicing
Agreement. 10 The Servicing Agreement and Participation Agreement are hereafter
referred to as the “Ancillary Agreements.”11
5
First Am. Compl. ¶ 2, Sept. 15, 2020 (D.I. 40).
6
Id. ¶¶ 23-25.
7
The Court fully recognizes that there are other operative agreements between the parties,
namely the First Supplemental and Second Supplemental Agreements. But the Court did not
include these other agreements in the Opinion’s factual recitation because they bear little weight
on the specific claims now before the Court.
8
First Am. Compl. ¶ 16.
9
Id. ¶ 25.
10
Id. ¶ 23.
11
Id. ¶ 17.
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At the crux of the dispute now before this Court are the representations and
warranties made in section 4.11 of the UAPA, entitled “Absence of Certain
Changes.”12 According to CRE, prior to closing, RGI began selling timeshare
interests to purchasers who were markedly less creditworthy than the pool of past
buyers.13 Further, CRE learned that RGI had, pre-closing, “dramatically relaxed its
underwriting standards and intentionally entered into Timeshare Contracts with
obligors with extremely low or non-existent FICO Credit scores . . .”14 These
practices, according to CRE, were directly contrary to the representations and
warranties made by RGI in the UAPA.15
CRE filed this action on May 18, 2020, setting forth claims of fraudulent
inducement and breach of contract, as well as, a request for declaratory judgment.16
That same day, RGI filed its complaint in the United States District Court for the
Southern District of New York asserting claims for breach of contract,
12
See First Am. Compl., Ex. A § 4.11 (UAPA).
13
First Am. Compl. ¶ 28.
14
Id. ¶ 30.
15
Id. ¶ 28.
16
Compl., May 18, 2020 (D.I. 1).
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indemnification, fraudulent inducement, and tortious interference relating to the
Ancillary Agreements.17 The next day, RGI filed a separate action in the United
States District Court for the District of Delaware.18 In August 2020, both federal
actions were dismissed for lack of diversity jurisdiction.19 As a result, RGI refiled
its claims in New York state court on August 12, 2020 (the “New York Action”). 20
RGI then sought to dismiss this action on the grounds that the claims were
time-barred by contractual provisions and, alternatively, failed to allege fraud with
Superior Court Civil Rule 9(b) particularity.21 RGI also moved for dismissal under
Superior Court Civil Rule 12(b)(3), insisting this Court was not the correct forum
for this suit.22 And lastly, RGI contended that the action should be dismissed or
stayed under the doctrine of forum non conveniens.23 After considering the record
17
Def.’s Mot. to Dismiss at 10, Oct. 15, 2020 (D.I. 47).
18
Id.; First Am. Compl. ¶ 10.
19
Pls.’ Opp’n Br. at 5, Nov. 5, 2020 (D.I. 56).
20
Def.’s Mot. to Dismiss at 10-11.
21
Def.’s Mot. to Dismiss at 12-15, 19-28.
22
Id. at 28-29.
23
Id. at 31-33.
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and the parties’ arguments, the Court denied RGI’s motion, concluding that CRE
filed its action in the proper venue, and properly pled its fraudulent inducement claim
and the notice requirements so as to survive RGI’s motion to dismiss and its
time-bar argument.24 Additionally, the Court declined to address the overripeness
argument RGI raised for the first time (for this specific motion to dismiss) at oral
argument.25 Further, the Court found that both parties waived their rights to claim
Delaware an inconvenient forum in the operative agreements.26 Now before the
Court is RGI’s Motion for Reargument filed under Superior Court Civil Rule 59, as
well as, what RGI generously terms a separate Motion for Stay or Enlargement of
Time.
II. THE PARTIES’ CONTENTIONS NOW
A. RGI’S MOTION FOR REARGUMENT
RGI posits three reasons for reargument. First, RGI contends that when the
Court found that the UAPA’s Delaware forum selection clause applies to this action
24
CRE Niagara, 2021 WL 1292792, at *5-7, *8-11.
25
Id. at *4 n. 52. RGI raised this argument in its first motion to dismiss, filed in May 2020, and
CRE thereafter amended its complaint. RGI then buried the argument when briefing its second
dismissal motion, only to strategically resurrect it at argument with the rather unreasonable
expectation that the Court would then entertain it.
26
Id. at *7-8.
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–because the UAPA was the later-executed document—the Court overlooked the
two Supplemental Agreements the parties entered into a year and a half after they
entered into the UAPA and Ancillary Agreements.27 The Supplemental Agreements
are relevant here, in RGI’s view, as those documents relate to CRE’s fraudulent
inducement claim (Count II) and its declaratory judgment claim (Count III).28 So,
RGI says, either Supplemental Agreement may pertain to CRE’s fraudulent
inducement claim “inasmuch as it relates to the UAPA and ‘related documents.’”29
With regard to CRE’s declaratory judgment claim, RGI insists that the Supplemental
Agreements are critical to its claims (pending in the New York Action) and, in turn,
for resolving CRE’s requested declaration that it has not breached the agreements
between the parties.30 RGI contends that the First Supplemental Agreement
mandates New York as the exclusive jurisdiction for disputes arising out of that
agreement and because it incorporates the Ancillary Agreements (collectively the
“Performance Agreements”), it can only mean that the parties intended to include
27
Def.’s Mot. for Reargument at 1-3.
28
Id. at 2.
29
Id.
30
Id.
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disputes regarding these agreements within the Supplemental Agreement’s forum
selection clause.31 Thus, as the “jurisdiction is exclusive in New York for [CRE]’s
Performance Agreements claims, or at the very least, their Supplemental
Agreements claims, RGI seeks clarification as to whether the [Opinion] applies to
them.”32
CRE responds to this first argument by maintaining that the UAPA’s forum
selection clause controls here and that RGI is just rehashing its prior arguments.33
CRE contends that RGI’s Supplemental Agreements argument fails to recognize that
CRE Niagara Holdings, LLC, is not a party to either of the Supplemental
Agreements.34 CRE argues that RGI ignores the fact that the Court properly
disposed of its arguments when it found that the UAPA’s forum selection clause
applies here since CRE’s affirmative claims are based on an alleged breach of the
UAPA.35 Moreover, says CRE, the forum selection clause in the First Supplemental
31
Id. at 2-3.
32
Id. at 3.
33
Pls.’ Opp’n to Mot. for Reargument ¶ 4, Apr. 22, 2021 (D.I. 78).
34
Id. ¶ 6.
35
Id. ¶ 7.
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Agreement is limited to claims arising out of that agreement alone, just like the
forum selection clauses in the Ancillary Agreements. Similarly, CRE asserts that
the Court’s analysis that the UAPA encompasses a broader scope applies with regard
to any analysis of the Supplemental Agreements as well.36 CRE contends that RGI
missed the fact that “Transactions” is specifically defined in the UAPA to mean the
purchase and sale of specified assets “and the other transactions contemplated by
this Agreement and the Ancillary Agreements.”37 Thus, as RGI predicted, CRE
insists that the Supplemental Agreements are incorporated into the Ancillary
Agreements and are subject to the UAPA’s forum selection clause.38
RGI’s second argument on reargument is that the UAPA’s forum selection
clause is far from “crystalline,” so either Delaware or New York is a proper forum
36
Id. ¶ 8; see CRE Niagara, 2021 WL 1292792, at *7 (“Second, the UAPA is the later-executed
document, and its forum selection clause delimits a broader scope than the Participation and
Servicing Agreements. Indeed, Section 9.6 of the UAPA provides that the claims “arising out of
this Agreement, any Ancillary Agreement or the Transactions” belong in Delaware. In contrast,
the Ancillary Agreements restrict New York jurisdiction to their terms alone. Even more, UAPA
Section 9.6’s plain language itself includes the Ancillary Agreements within its forum selection
clause. And the UAPA plainly defines the Ancillary Agreements to include the Servicing and
Participation Agreements. This can only mean the parties intended to include disputes regarding
these two (or too) within the UAPA's forum selection clause.” (citations omitted)).
37
Pls.’ Opp’n to Mot. for Reargument ¶ 9; First Am. Compl., Ex. A at 11 (UAPA).
38
Pls.’ Opp’n to Mot. for Reargument ¶ 9; Def.’s Mot. for Reargument at 3 n.3.
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and the UAPA’s waiver-of-venue objections shouldn’t bar its forum non conveniens
arguments.39 RGI contends that while it did not challenge that Delaware was a
permitted forum for CRE’s UAPA claims, the UAPA is “less than crystalline” in
regard to the Performance Agreement claims and that no one agreement supersedes
the other.40 Further, RGI claims that a motion challenging venue in light of a parallel
action is not strictly a forum non conveniens motion subject to the UAPA’s waiver
provision.41 Rather, RGI says that the forum non conveniens factors are merely
considered by the Court to determine whether to stay in the interests of comity and
that its filing of UAPA claims in the New York Action further militates in its favor.42
In response, CRE insists that RGI simply is attempting to recycle old
arguments made below.43
In its last argument on its motion, RGI seeks leave to reargue (or actually, to
now brief) its overripeness contention suggesting now that overripeness is a
39
Id. at 3-4.
40
Id. at 4.
41
Id. at 5.
42
Id.
43
Pls.’ Opp’n to Mot. for Reargument ¶ 11.
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threshold jurisdictional issue the Court might have a “positive duty” to raise.44 RGI
contends that because this action was filed for tactical advantage—in apparent
anticipation of other pending proceedings—and CRE may assert its claims in the
New York Action without prejudice, it is overripe to proceed here.45
In response, CRE points out that RGI raised this issue in a previous motion to
dismiss and made a tactical decision to abandon this argument when it had the
opportunity to raise it in its amended motion to dismiss the original complaint and
its ultimately unsuccessful motion to dismiss.46 Moreover, CRE contends that
overripeness is not a question of subject matter jurisdiction but rather a discretionary
doctrine that permits the Court to evaluate whether it is desirable to decline
exercising existing jurisdiction.47 CRE argues that, as the Court noted in the
Opinion, an overripeness determination is made after the consideration of various
factors, an examination that did not occur because RGI chose not to advance the
overripeness argument in its briefing.48 Thus, CRE insists that RGI should not get a
44
Def.’s Mot. for Reargument at 5.
45
Id. at 6.
46
Pls.’ Opp’n to Mot. for Reargument ¶ 13.
47
Id. ¶ 14.
48
Id.
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do over of this tactical decision. 49
B. RGI’S MOTION FOR STAY OR ENLARGEMENT OF TIME
In addition to reargument, RGI also seeks to stay this action or for an
enlargement of time to answer CRE’s amended complaint until the New York court
rules on a pending motion to dismiss in the New York Action—that is, a stay with a
enlargement-of-time label.50 RGI reports that in February 2021, it amended its
complaint in the New York Action out of necessity to assert additional claims, and
to include UAPA claims in order to avail itself of New York’s saving statute.51 CRE
has moved to dismiss the amended complaint and the issue has been fully briefed
and is awaiting the New York court’s decision.52
RGI claims that a stay or an enlargement of time to file its answer will assist
in providing clarity as to which of its counterclaims are compulsory, as the New
York court is currently undergoing a first-to-file analysis.53 RGI insists that its
49
Id.
50
Def.’s Mot. for Stay or Enlargement of Time at 1.
51
Id. at 2.
52
Id. at 2-3.
53
Id. at 3.
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claims should be deemed simultaneously commenced with CRE’s claims because:
(i) the two parties claims were filed close in time together; (ii) CRE’s action was
“anticipatory and defensive”; and, (iii) the convenience factors and interests of the
state strongly favor the New York Action.54 RGI contends that until the New York
court rules on the first-filed issue, it lacks guidance and is presented with a
“Hobson’s choice” of risking the waiver of over $35 million in claims or abdicating
its choice of forum before any court decides whether it is required to do so.55
Additionally, RGI says that either this Court’s ruling on this reargument
motion or the New York court’s ruling on CRE’s motion to dismiss will determine
whether New York has exclusive jurisdiction over its claims or whether it would
need to assert its claims in this Court as counterclaims.56 And, according to RGI,
the resolution of the pending motions to dismiss in the New York Action will provide
guidance as to the interpretation of relevant contracts and inform it of whether it has
adequately pled its torts claims and that the Cerberus defendants are alter egos.57
54
Id. at 4.
55
Id. at 4-5.
56
Id. at 5.
57
Id.
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RGI suggests that this stay, or “enlargement of time” won’t prejudice CRE
and will only streamline issues concerning the validity and necessity of its potential
counterclaims.58
In response, CRE insists that this motion is just an additional (and untimely)
motion for reargument as the Court has already denied RGI’s previous motion to
dismiss or stay in favor of the New York Action.59 CRE argues that RGI has failed
to demonstrate that litigating in Delaware would cause overwhelming hardship;60
which, CRE says, RGI must do because this action is the first-filed and longest
standing action, the parties agreed to litigate in Delaware, and the Ancillary
Agreements New York forum provisions do not address all the claims raised in this
case.61
Finally, CRE contends that RGI’s argument that it will be precluded from
pursuing relief in Delaware absent a stay is meritless and a direct result of its own
58
Id.
59
Pls.’ Opp’n to Mot. for Stay or Enlargement of Time ¶ 7, Apr. 23, 2021 (D.I. 79).
60
CRE invokes the factors applied in LG Elecs. Inc. v. InterDigital Commc’ns, Inc., 114 A.3d
1246, 1252 (Del. 2015).
61
Pls.’ Opp’n to Mot. for Stay or Enlargement of Time ¶¶ 9-10.
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actions.62 Specifically, says CRE, RGI’s contention that it would not be able to raise
its veil-piercing claims in Delaware is of no moment because judges of this Court
have presided over equitable claims in Chancery via temporary appointment.63
Further, CRE argues that RGI’s “Hobson’s choice” argument lacks merit as well
because RGI could file its claims right now in this Court. Or alternatively, should
the New York court dismiss RGI’s claims there, CRE suggests that RGI might then
add those claims here.64
III. DISCUSSION
A motion for reargument permits a trial court an opportunity to reconsider its
findings of fact, conclusions of law, or judgment.65 Still “Delaware law places a
heavy burden on a [party] seeking relief pursuant to Rule 59.”66 The moving party
has the burden to demonstrate that the Court must correct an error of law or prevent
62
Id. ¶ 12.
63
Id.
64
Id.
65
See Ramon v. Ramon, 963 A.2d 128, 136 (Del. 2008) (“A motion for reargument is the proper
device for seeking reconsideration by the Trial Court of its findings of fact, conclusion of law, or
judgment.” (internal quotation marks and citations omitted)).
66
Kostyshyn v. Comm’rs of Town of Bellefonte, 2007 WL 1241875, at *1 (Del. Super. Ct. Apr.
27, 2007) (citations omitted).
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manifest injustice occasioned by its judgment.67 But “[a] Rule 59(e) application is
not an avenue for the moving party to raise new arguments or to rehash arguments
already decided by the Court.”68 And such motion will be denied unless the Court
has “overlooked a controlling precedent or legal principles,” or “has
misapprehended the law or facts such as would affect the outcome of the decision”
challenged.69 Upon a Rule 59(e) reargument motion, the Court “will determine from
the motion and answer whether reargument will be granted.”70
A. RGI’S MOTION FOR REARGUMENT
1. The UAPA Controls.
A Rule 59 reargument motion isn’t an appropriate vehicle for rehashing
arguments the Court already considered and rejected when deciding the preceding
substantive motion. Nor is such a motion a stall device to avoid the consequences
of an adverse ruling or, even worse, to obtain the relief—here time—sought, but
67
See Hessler, Inc. v. Farrell, 260 A.2d 701, 702 (Del. 1969) (“The manifest purpose of all Rule
59 motions is to afford the Trial Court an opportunity to correct errors. . . .”).
68
Maravilla-Diego v. MBM Constr. II, LLC, 2015 WL 5055955, at *1 (Del. Super. Ct. Aug. 27,
2015) (citations omitted); see id. at *1 n.4 (collecting authority).
69
Cummings v. Jimmy’s Grille, Inc., 2000 WL 1211167, at *2 (Del. Super. Ct. Aug. 9, 2000)
(citation omitted).
70
Del. Super. Ct. Civ. R. 59(e).
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denied, in the first round. No, the proper purpose of a Rule 59 motion is to allow
the Court to correct overlooked controlling precedent, legal principles, or facts. Not
one of those was missed here.
RGI argues that the Court’s Opinion overlooked the existence of the
Supplemental Agreements entered into by the parties long after the execution of the
UAPA and Ancillary Agreements.71 RGI contends that CRE is partially to blame
for this as its Amended Complaint does not mention the Supplemental Agreements
aside from its prayer for relief where it requests the Court to declare that it is not in
default of breach of the UAPA, Ancillary Agreements, or any supplement thereto.72
The Court was well aware of the Supplemental Agreements’ existence. They
were discussed throughout RGI’s dismissal briefings and oral argument.73 The First
Supplemental Agreement was attached as an exhibit to CRE’s Amended
Complaint.74 And despite RGI’s view, the Court didn’t overlook—or, in reading
between the lines of RGI’s motion—ignore the Supplemental Agreements. When
71
Def.’s Mot. for Reargument at 1.
72
First Am. Compl. at 26.
73
Arg. Tr. at 23-25, 29-30, 54, Jan. 7, 2021 (D.I. 67).
74
First Am. Compl., Ex. J (Supplemental Agreement).
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selection clause. And the Court found that in addition to the UAPA being the
contract at issue here, the UAPA’s forum selection clause also contains broader,
more encompassing language. Under UAPA Section 9.6 claims “arising out of this
agreement, any Ancillary Agreements or the Transactions” belong in Delaware;78
the language of the forum selection clauses in the Ancillary Agreements restrict New
York jurisdiction to their terms alone.79 And the forum selection clause of the First
Supplemental Agreement contains the same limiting language as the Ancillary
Agreements: “Each Party hereto hereby irrevocably and unconditionally submits,
itself and its property, to the exclusive jurisdiction of the Supreme Court of New
York sitting in New York County and of the United States District Court for the
Southern District of New York, . . . in any action or proceeding arising out of or
relating to this Supplemental Agreement . . .”80 So no matter which other agreement
is compared thereto, the UAPA contains the broader, more encompassing forum
selection clause.
78
First Am. Compl., Ex. A § 9.6 (UAPA); CRE Niagara, 2021 WL 1292792, at *7.
79
Id.; First Am. Compl., Ex. B § 8.6 (Participation Agreement); Ex. C § 6.6 (Servicing
Agreement).
80
First Am. Compl., Ex. J § 10 (Supplemental Agreement).
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As CRE’s claims in this action directly pertain to the to the representations
and warranties made in the UAPA and the UAPA is the contract at issue here,
reargument on this point is not warranted.
2. The Parties Waived Forum Non Conveniens.
In contending that the Court may consider forum non conveniens factors here,
RGI rehashes its “less than crystalline” argument raised in briefing and at oral
argument.81 But the Court still detects no ambiguity in the UAPA’s controlling
forum selection clause or its plain waiver of forum non conveniens challenges.82
And where the UAPA’s forum selection clause applies, the entirety of the clause
applies—including the clause’s waiver of inconvenient forum challenges.83
3. RGI Can’t Revive the Overripeness Argument it Waived.
In contesting the Court’s decision to eschew its overripeness claim, RGI
seems to forget the rules for litigating a claim in this Court (or any court). It usually
81
Def.’s Mot. to Dismiss Reply at 19-20, Nov. 19, 2020 (D.I. 58); Arg. Tr. at 32-33.
82
CRE Niagara, 2021 WL 1292792, at *7-8.
83
RGI insists that its February 2021 filing of UAPA claims in the New York Action further
supports its contention that New York is in more convenient forum. See Def.’s Mot. for
Reargument at 4-5 & n.6. But RGI’s unilateral decision to file its UAPA claims elsewhere in
explicit derogation of the UAPA’s forum selection clause neither adds weight to its argument nor
alters any forum non conveniens analysis the Court might engage in this instance.
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goes like this: a party authors a pleading complete with all its arguments; the parties
fully brief the issues raised in that pleading; they then present oral argument on those
briefed issues; and then, the Court either rules from the bench or takes the matter
under advisement to issue a written decision.
Here, during the December 2020 oral argument, RGI raised an issue it once
abandoned. RGI says it raised the “overripeness” issue in its July 8, 2020 motion to
dismiss.84 But that motion was directed at a complaint that was later amended. And
after amendment, RGI filed two more motions to dismiss that excluded
(intentionally, one must assume) the very overripeness argument it seeks to press
now.85 RGI cannot now revive an argument it strategically chose not to champion
when twice before given the opportunity.86
84
Def.’s Mot. for Reargument at 5 n.9.
85
Pls.’ Opp’n to Mot. for Reargument ¶ 13.
86
Saunders v. Preholdings Hampstead, LLC, 2012 WL 1995838, at *3 (Del. Super. Ct. May 23,
2012) (“[I]ssues not addressed in briefing, and raised for the first time during oral argument, are
deemed waived.” (citing King Constr., Inc. v. Plaza Four Realty, Inc., 976 A.2d 145, 155 (Del.
2009))). And RGI’s call for the Court to honor a “positive duty” to engage and adopt its peculiar
view on jurisdiction despite its own failure will go unanswered.
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B. RGI’S MOTION TO STAY IS JUST A MISLABELED MOTION FOR
REARGUMENT.
In its unsuccessful motion to dismiss, RGI asked that, in lieu of dismissal, the
Court stay this action until the resolution of the New York Action on the basis of
forum non conveniens.87 In analyzing the forum non conveniens factors from
Schmidt v. Washington Newspaper Publishing Company, LLC,88 RGI argued that
“most importantly, where, as here, there are similar actions pending in other
jurisdictions, including actions whose outcome might affect the outcome in this case,
the sixth [Schmidt] factor mandates a dismissal or stay.”89 The Court denied the stay
request.
Now, RGI is back again seeking a stay (or an enlargement of its time to
answer—which are just more words describing a stay), until the New York court
resolves CRE’s motion to dismiss in the New York Action.90 While adding some
new facts and arguments to its motion, RGI again essentially argues that a stay or
87
Def.’s Mot. to Dismiss at 29.
88
2019 WL 4785560, at *6 (Del. Super. Ct. Sept. 30, 2019).
89
Def.’s Mot. to Dismiss at 33 (internal quotation marks omitted) (quoting Hurst v. Gen.
Dynamics Corp., 583 A.2d 1334, 1339-40 (Del. Ch. 1990)).
90
Def.’s Mot. for Stay or Enlargement of Time at 3.
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enlargement of time might assist in determining the outcome of this case. RGI says
the delay is appropriate because it will: (1) help RGI determine which claims it will
need to eventually bring in this Court; (2) settle which court has exclusive
jurisdiction over these claims; and, (3) resolve which action is deemed to be
“first-filed.”91 And once again, RGI argues that the convenience factors and interests
of the two states strongly favor the New York Action.92 No matter RGI’s label on
this separate filing, the Court will treat it as precisely what it is: a motion for
reargument of its earlier stay request.
The only issue on a motion for reargument under Rule 59(e) “is whether the
Court overlooked something that would have changed its earlier decision.”93
A motion for reargument is not an instrument through which the disappointed party
raises new arguments. 94 Nor is it a tool for rehashing previously-made arguments.95
91
Id. at 3-4, 5.
92
Id. at 4 (citing to its pleadings from the underlying motion to dismiss).
93
Long v. Johnson & Johnson Servs., Inc., 2020 WL 2850205, at *1 (Del. Super. Ct. June 2,
2020) (jnternal quotation marks omitted) (quoting Ferko v. McLaughlin, 1999 WL 167827, at *1
(Del. Super. Ct. Feb. 19, 1999)).
94
Maravilla-Diego, 2015 WL 5055955, at *1.
95
Id.CRE Niagara Holdings, LLC, et al v. Resorts Group, Inc.
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And beyond doubt, a prayer for reargument should never be used as a device to
extract the relief—here, delay—a party failed to wrest through its substantive
predecessor.
Here, RGI repeats its earlier arguments as to why the New York Action is the
more-favored action and once again characterizes CRE’s claims here as merely
anticipatory and defensive.96 But RGI adds now a “comity” and “interests of justice”
gloss to suggest a couple more reasons it should get its stay.97
The Court’s already denied RGI’s motion to stay. And no deep exploration
of RGI’s reconstituted arguments is required.
The UAPA’s forum selection clause still applies to this action.98 And under
the plain language of the UAPA’s forum selection clause, the parties waived their
rights to contest their chosen forum.99 Having engaged in this second look, there
was no misapprehension of law or fact, nor any failure to recognize controlling
precedent or legal principles that misled the Court to so decide.
96
Def.’s Mot. for Stay or Enlargement of Time at 4.
97
Id. at 2.
98
CRE Niagara, 2021 WL 1292792, at *6-7.
99
Id. at *7-8.
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RGI’s decision to take its UAPA claims to New York with the risk of those
claims being eventually dismissed on improper venue grounds is RGI’s own tactical
choice. Too, whatever counterclaims RGI decides to bring in to or exclude from its
answer in this action, again, is RGI’s own tactical choice. The Court will not rescue
a party from its own strategy calls, nor will it give that party any advice on how to
avoid its own litigation peril.
IV. CONCLUSION
Given that RGI failed to shoulder Rule 59’s heavy burden, and that the Court
did not misinterpret or overlook any facts or law when deciding RGI’s dismissal
motion, RGI’s Motion for Reargument thereof is DENIED. Further, given that
RGI’s Motion for Stay or Enlargement of Time is just another motion for reargument
and RGI has failed to meet that same Rule 59 burden, the Motion for Stay is
DENIED. RGI shall, in accordance with Superior Court Civil Rule 12(a)(1), file its
answer to CRE’s amended complaint within ten (10) days of this Order.
IT IS SO ORDERED.
_______________________
Paul R. Wallace, Judge
cc: All Counsel via File and Serve