Superior Court Refuses to Dismiss Delaware Action, But Stays Delaware Action in Favor of Michigan Action

Posted on July 26, 2005 by Jason C. Jowers
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Royal Indem. Co. v. General Motors Corp., C.A. No. 05C-01-223 RRC, 2005 WL 1952933 (Del. Super. Ct. July 26, 2005).

Royal Indemnity Company ("Royal") sought a declaratory judgment to determine whether it had an obligation to General Motors ("GM") in relation to insurance purchased by GM over the course of several decades from Royal. GM filed a motion to dismiss on forum non conveniens grounds, and the Court denied the motion to dismiss.

The parties entered into a standstill agreement that expired on January 25, 2005. On January 26, 2005, at 12:01 a.m., Royal filed the Delaware action. At 8:01 a.m. of the same day, one minute after the court's manual filing system permitted filing, GM filed a similar action in Michigan. GM moved to dismiss the Delaware action on forum non conveniens grounds. The parties agreed that the actions should be deemed "contemporaneously filed" and the "first filed" deference should not be an issue. To obtain a dismissal, the court found that GM must show that it would suffer overwhelming hardship if forced to litigate in Delaware. Applying the Cryo-Maid factors, the court found that GM had not met its burden of proof, and the court denied the motion to dismiss. However, the Court did find that the forum non conveniens factors warranted a stay in the Delaware action.

Authored by:
Jason C. Jowers
302-888-6860
jjowers@morrisjames.com
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