| Page 281 263 A.2d 281  McWANE CAST IRON PIPE CORPORATION, a
corporation, Defendant
Below, Appellant,
v.
McDOWELL-WELLMAN ENGINEERING COMPANY, a
corporation,
Plaintiff Below, Appellee. Supreme Court of Delaware.
Feb. 13, 1970. E. Norman Veasey, Richard J.
Abrams and David T. Dana, III, of Richards,
Layton & Finger, Wilmington, for defendant
below, appellant.
John P. Sinclair of Potter,
Anderson & Corroon, Wilmington, for
plaintiff below, appellee.
Page 282
WOLCOTT, C.J., and CAREY and
HERRMANN, JJ., sitting.
HERRMANN, Justice.
The question we decide on this
appeal is whether the Delaware Superior
Court action here involved should be stayed
in view of the prior action now pending in
another State between the same parties and
involving the same issues.
I.
On June 9, 1969, McWane Cast Iron
Pipe Corporation (hereinafter 'McWane')
commenced an action in the United States
District Court for the Northern District of
Alabama against McDowell-Wellman Engineering
Company (hereinafter 'McDowell'). The action
involved the rights and obligations of the
parties arising out of McDowell's work in
the construction of a new iron production
plant for McWane in Alabama. The plaint was
to cost in excess of thirteen million
dollars under a 'cost plus' contract. The
contract was made in Alabama and was to be
performed in, and governed by the laws of,
that State. In the Alabama action, McWane
claimed damages against McDowell of five
million dollars for alleged unjustifiable
delays and excessive costs improperly
charged. The excessive costs were asserted
to be the result of McDowell's various
breaches of contract, including its failure
to exercise the skill and competence
required of it under the contract. McWane
also alleged false and misleading
representations and reports regarding
construction costs.
On August 25, 1969, McDowell
filed its answer and compulsory counterclaim
in the Alabama action. It denied the
material allegations of McWane's complaint
and asserted a claim for $2,791,048.98 for
work and materials performed and provided
under the contract, or alternatively, for
$4,020,000. on a Quantum meruit basis.
On July 9, 1969, in the interim
between the filing of McWane's complaint and
McDowell's answer and counterclaim in the
Alabama action, McDowell filed the instant
suit against McWane in the Superior Court of
Delaware, asserting McWane's indebtedness
under the contract in the amount of
$2,791,048.98. Thus, in the Delaware action,
McDowell claimed the identical sum and the
same basis of liability as was set forth in
its counterclaim in the Alabama action.
On July 23, 1969, McDowell filed
a second action against McWane in
Delaware--this time in the Court of Chancery
seeking a mandatory injunction against
McWane which would require it to permit
McDowell employees to enter the plant and
observe the start-up and operation process.
In this action, McDowell also sought to
recover from McWane the same amounts claimed
by it in the Alabama and Superior Court
actions.
McWane filed identical motions to
dismiss or stay in both the Chancery Court
and Superior Court actions. The Chancery
Court denied injunctive relief and granted a
stay of McDowell's action in that Court on
principles of comity. The Superior Court
denied dismissal or stay of the McDowell
action pending in that Court. McWane appeals
from that denial.
II.
The Superior Court's denial of
stay or dismissal was based upon the
conclusion that McWane had failed to sustain
its burden of proving the various elements
prerequisite to an invocation of the
doctrine of Forum non conveniens under our
cases. See Parvin v. Kaufmann, Del.Supr.,
236 A.2d 425 (1967); Kolber v. Holyoke
Shares, Inc., Del.Supr., 213 A.2d 444
(1965); General Foods Corporation v.
Cryo-Maid, Inc., Del.Supr., 41 Del.Ch. 474,
198 A.2d 681 (1964). We think that the
Superior Court abused its discretion in
denying a stay on that ground, without due
regard for comity and for the orderly and
efficient administration of justice in the
two Courts.
Page 283
In view of the prior action
pending in Alabama, the question before us
is not so much within the realm of our the
persuasion of Chadwick v. Gill, Del.Ch., 141
A. 618 (1928); Lanova Corporation Ch., 141
A. 618 (1928);
Lanova Corporation v. Atlas Imperial Diesel
Engine Co., 5 Del.Super. 593, 64 A.2d 419
(1949);
Connecticut Mut. Life Ins. Co. v.
Merritt-Chapman & Scott Corp., 19 Del.Ch.
103, 163 A. 646 (1932); and Research
Corporation v. Radio Corporation of America
(D.C.Del.), 181 F.Supp. 709 (1960). The
latter line of cases stands for the
propositions that a Delaware action will not
be stayed as a matter of right by reason of
a prior action pending in another
jurisdiction involving the same parties and
the same issues; that such stay may be
warranted, however, by facts and
circumstances sufficient to move the
discretion of the Court; that such
discretion should be exercised freely in
favor of the stay when there is a prior
action pending elsewhere, in a court capable
of doing prompt and complete justice,
involving the same parties and the same
issues; that, as a general rule, litigation
should be confined to the forum in which it
is first commenced, and a defendant should
not be permitted to defeat the plaintiff's
choice of forum in a pending suit by
commencing litigation involving the same
cause of action in another jurisdiction of
its own choosing; that these concepts are
impelled by considerations of comity and the
necessities of an orderly and efficient
administration of justice.
1
See generally 21 C.J.S. Courts § 548;
compare 20 Am.Jur. (2d) 'Courts' § 128;
Annotation, 19 A.L.R. (2d) 301; compare
Annotation, 56 A.L.R. (2d) 335.
We endorse the above
propositions. By their application, there is
avoided the wasteful duplication of time,
effort, and expense that occurs when judges,
lawyers, parties, and witnesses are
simultaneously engaged in the adjudication
of the same cause of action in two courts.
Also to be avoided is the possibility of
inconsistent and conflicting rulings and
judgments and an unseemly race by each party
to trial and judgment in the forum of its
choice. Public regard for busy courts is not
increased by the unbusinesslike and
inefficient administration of justice such
situation produces.
In the instant case, therefore,
the question is whether there are facts and
circumstances sufficient to move the
Superior Court to grant the stay within the
range of the Court's discretion. As we have
noted, in a case such as this, discretion
should be freely exercised in favor of the
stay;
2 and in the
determination of facts and circumstances
sufficient to warrant such stay, each case
must be considered on its own merits.
In the case before us, we hold
these circumstances sufficient to impel a
stay: the contract was executed in Alabama;
the construction project is in Alabama; the
law of Alabama governs; there is no contact
with Delaware except that McWane is
incorporated here; and the parties have
available in the Alabama action all the
discovery, pretrial, and trial advantages
they would have in the Superior Court of
Delaware for a speedy, just, and complete
disposition of the claims of both parties to
the controversy.
This result and its rationale are
not in conflict with the Forum non
conveniens
Page 284 decisions of this Court. In neither Parvin
nor Kolber was there another action pending
elsewhere between the parties when, by
application of the rules of the doctrine of
Forum non conveniens, the stay was denied.
In Cryo-Maid, in which the rules of Forum
non conveniens were applied to produce a
stay of the Delaware action, the action
between the parties pending elsewhere was
filed After the Delaware action. We reaffirm
our holdings in those cases and the
application of the established rules of
Forum non conveniens where (1) no other
action is pending elsewhere between the same
parties involving the same issues, or (2)
such other pending action was filed
subsequently to the Delaware action.
Accordingly, the order below is
reversed and the cause remanded to the
Superior Court with directions to stay
further proceedings in that Court pending
the development and outcome of the
litigation between the parties in the United
States District Court for the Northern
District of Alabama; the stay to be granted
under such conditions, however, as the
Superior Court may deem necessary and proper
for the continuing control of the cause on
its docket.
1 Lanova Corporation v. Atlas Imperial Diesel
Engine Co., 5 Del.Super. 593, 64 A.2d 419
(1949), these considerations resulted in
a stay of a Superior Court action in favor
of another action, pending in the United
States District Court for the District of
Delaware, which did not involve the same
parties but which was expected to render
moot the controlling issues in the Superior
Court case.
2 This is to be contrasted with the rule
that such discretion is to be sparingly
exercised in a Forum non conveniens case
where there is no prior action pending
elsewhere. See Parvin v. Kaufmann,
Del.Supr., 236 A.2d 425 (1967); Kolber v.
Holyoke Shares, Inc., Del.Supr., 213 A.2d
444 (1965); General Foods Corporation v.
Cryo-Maid, Inc., Del.Supr., 41 Del.Ch. 474,
198 A.2d 681 (1964). |