Walsh v. Hotel Corp. of America
| Decision Date | 06 March 1967 |
| Citation | 231 A.2d 458 |
| Parties | Grace L. WALSH and Robert Walsh, Plaintiffs Below, Appellants, v. HOTEL CORPORATION OF AMERICA, Defendant Below, Appellee. |
| Court | Supreme Court of Delaware |
Appeal from the Superior Court in and for New Castle County.
Andrew B. Kirkpatrick, Jr. and Walter K. Stapleton, of Morris, Nichols, Arsht & Tunnell, Wilmington, for appellants.
Harold Leshem and Stephen Hamilton, Wilmington, for appellee.
We have before us a motion to dismiss this appeal. The action below was instituted by foreign attachment. Two orders are appealed from, the first denying a motion by the plaintiffs that their attachment bond be vacated or reduced in amount, and second, denying a motion by plaintiffs for leave to amend the complaint.
The action is one for personal injuries suffered at a motel in Waltham, Massachusetts. The defendant, Hotel Corporation of America, a New York corporation, was sued as the owner of the motel occupying and operating it under the name of Charter House. The defendant moved to dismiss the complaint on the basis that the plaintiffs had sued the wrong party. Attached to this motion was an affidavit to the effect that the motel in question was occupied and operated exclusively by Charter House of Massachusetts, Inc., a Masachusetts corporation, a subsidiary of Hotel Corporation of America. The motion to dismiss the complaint has not been decided and is still pending before the Superior Court.
Ultimately, the plaintiffs moved to amend their complaint to allege that the motel in question was either operated by Hotel Corporation of America or by Charter House of Massachusetts, Inc., the Alter ego of Hotel Corporation of America, and that in contemplation of law these two corporations had no separate corporate existence. This motion to amend was denied by the Superior Court without opinion.
Subsequently, plaintiffs moved to either vacate or reduce the amount of the attachment bond required under the statute and offered to release from attachment the property seized. This motion was denied by the Superior Court without opinion.
The motion to dismiss the appeal is founded upon the contention that the two orders appealed from are interlocutory and settled no substantial issues in the cause nor established any legal rights.
The jurisdiction of this court to receive appeals from interlocutory orders from the Superior Court is established by Article IV, § 11(1)(a) of the Constitution, Del.C.Ann. The scope of review of interlocutory orders of the Superior Court is precisely the same as our long-standing jurisdiction to review interlocutory orders of the Court of Chancery. Del.Const., Art. IV, § 11(4). The test of appealability of such an order is always whether or not it determined a substantial issue or issues, or established legal rights. duPont v. duPont, 32 Del.Ch. 405, 82 A.2d 376.
In the determination, therefore, of this motion to dismiss the appeal the sole question before us is whether or not the orders appealed from determined substantial issues or established legal rights.
With respect to the order denying, without opinion, the motion to vacate or reduce the amount of the attachment bond, it is apparent that the order was entered on the theory that the attachment bond could be looked to by the defendant for reimbursement of its attorneys' fees and expenses occasioned by the attachment. We assume that this is the fact since this was the only question briefed and argued below, and the court ruled in favor of the defendant. 1
In our opinion, the denial of this motion constitutes an adjudication of a substantial legal right, viz., that the defendant may look to the bond for reimbursement of certain of its attorneys' fees. This is the question of law the plaintiffs seek to have reviewed in this proceeding. We think they are entitled to do so and, consequently, we refuse to dismiss the appeal from the order denying the reduction of the bond.
The order refusing leave to amend the complaint was argued to the court below on the theory that an amendment of this kind was improper because the plaintiffs at the time the amendment was offered lacked evidence to sustain the allegations. This was the only point briefed and argued below, and since the trial court held in favor of the defendant, we assume that the motion was denied on this ground.
The result is that the plaintiffs have had a right adversely determined to them, viz., their right to bring an alternate theory of recovery into the cause and to have discovery on it. We think this is an adverse determination of a substantial right and is reviewable by this court as an interlocutory order.
These conclusions make it unnecessary for us to pass upon the plaintiffs' contention that any interlocutory order, discretionary in nature, is appealable for an abuse of discretion.
By reason of the foregoing, the motion to dismiss the appeal is denied. The defendant in accordance with Rule 8 shall file and serve its brief on the merits within 20 days after the filing of this opinion.
The appellants, Grace L. Walsh and Robert Walsh, her husband, sued appellee, Hotel Corporation of America (Hotel), a New York corporation, in the Superior Court seeking damages for injuries sustained by Mrs. Walsh at a motel in Massachusetts and allegedly caused by defendant's negligence. Jurisdiction was obtained by foreign attachment. They have appealed from an interlocutory order which denied two motions, one for leave to amend the complaint, the other to vacate or reduce the amount of their attachment bond. We previously denied an application to dismiss the appeal. To understand the issues now presented, it is necessary to know the history of the proceedings which took place in the Court below. They will be described in the two subdivisions which follow.
The original complaint charged that Hotel was the operator of the motel where Mrs. Walsh sustained her injuries. The defendant moved to dismiss under Superior Court Rule 12(b)(6) on the ground that the complaint failed to state a claim against defendant upon which relief could be granted. The basis for this application was contained in an attached affidavit of a corporate officer stating that the motel was not operated by the defendant, but by its wholly owned subsidiary, Charterhouse of Massachusetts, Inc., a Massachusetts corporation. To that affidavit was attached a copy of a lease of the premises wherein defendant was the lessee, and an assignment of that lease by the defendant to its subsidiary. The plaintiffs filed interrogatories seeking information concerning, inter alia, the relationship between the defendant and its subsidiary and concerning the actual operation of the motel. The defendant then moved for a protective order against these interrogatories. In support of their opposition to that protective order, plaintiffs filed the affidavit of Mr. Walsh. In it he alleged an inability to refute, on the basis of personal knowledge, the allegations of defendant's affidavit because the facts were solely within the knowledge and control of the two corporations and could be made available only by discovery. The Court below held that plaintiffs' complaint was not broad enough to authorize the discovery requested and granted defendant's application.
The plaintiffs then moved to amend their complaint so as to set forth an alternative theory, namely, that Charterhouse of Massachusetts, Inc. was nothing more than the alter ego and instrumentality of Hotel and has for present purposes, in contemplation of law, no separate existence. Defendant opposed this motion on the ground that plaintiffs have no knowledge or trustworthy information to support the allegations of the proposed amendment but have nothing more than a mere hope that they might possibly discover some facts to justify a recovery. The Court below refused to allow the amendment. Its reason for doing so does not appear in the...
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...law, the general rule is also that a prevailing party may not recover attorneys' fees as part of costs. See, e. g., Walsh v. Hotel Corp. of America, 231 A.2d 458 (Del.1967); Mencher v. Sachs, 39 Del.Ch. 366, 164 A.2d 320 (Del.1960); Maurer v. International Re-Insurance Corp., 33 Del.Ch. 456......
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