McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co.
| Decision Date | 13 February 1970 |
| Docket Number | DOWELL-WELLMAN |
| Parties | McWANE CAST IRON PIPE CORPORATION, a corporation, Defendant Below, Appellant, v. McENGINEERING COMPANY, a corporation, Plaintiff Below, Appellee. |
| Court | United States State Supreme Court of Delaware |
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.
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.
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.
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.
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...
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