Opinion
Civil Action No. 094-N.
March 29, 2004.
Joseph H. Huston, Jr. Stevens Lee, P.C. Wilmington, DE.
William M. Kelleher Ballard, Spahr, Andrews Ingersoll, L.L.P. Wilmington, DE.
Dear Counsel:
This letter addresses Franklin C. Brown's motion to expedite advancement proceedings brought under 8 Del. C. § 145(k). For the reasons detailed below, I deny the motion.
Background. Mr. Brown moves for expedited treatment of his claim for advancement against Rite Aid Corporation. Specifically, he requests that Rite Aid plead in response to the complaint within ten days and that this Court order expedited discovery and set an expedited trial date. In response, Rite Aid argues that Mr. Brown has no imminent need for advancement of expenses and that he has already incurred the vast majority of the expenses at issue in this action.
Analysis. It has become standard practice in this Court for plaintiffs in actions brought under § 145(k) to file an accompanying "motion to expedite." It also has become standard practice for this Court to grant such motions. In my opinion, this practice results in an unnecessary expenditure of resources. A motion to expedite is a truncated determination of the merits of the underlying claims alleged and an examination of the necessity for prompt adjudication sufficient to impose the increased burdens that an expedited proceeding entails. This procedure often entails substantial briefing by the parties and an opinion issued by this Court in short order.
See Bergonzi v. Rite Aid Corp., 2003 Del. Ch. LEXIS 117, at *13 (Del.Ch. Oct. 20, 2003) ; Fuisz v. Biovail Techs., Ltd., 2000 Del. Ch. LEXIS 121, at *9 (Del.Ch. Sept. 6, 2000); Lipson v. Supercuts, Inc., 1996 Del. Ch. LEXIS 108, at *6-*7 (Del.Ch. Sept. 10, 1996). But see Chamison v. Health Trust, Inc., 1997 Del. Ch. LEXIS 154, at *8-*9 (Del.Ch. Oct. 29, 1997) (denying plaintiff's request to expedite ruling on summary judgment by foregoing further discovery).
In advancement cases, the only ground typically provided for expedition is that § 145(k) reflects a "policy determination by the General Assembly that the Court of Chancery should be receptive to and accord expedited treatment to claims for advancement of expenses raised by putative corporate indemnitees." I do not question this policy. And, in fact, it is my opinion that this policy determination eliminates the need, in almost all but the most unique of cases, to file a motion to expedite.
Fuisz, 2000 Del. Ch. LEXIS 121, at *9.
A "motion to expedite" proceedings under § 145(k) is superfluous. The text of § 145(k) dictates that a proceeding under that provision is "summary." In order to receive summary adjudication of a claim for advancement it is not necessary to file a motion to expedite. If a plaintiff files a motion to expedite it is, in effect, a request to expedite a summary proceeding. Only when unique circumstances are present, e.g., insolvency of the putative indemnitee or inability to retain counsel without advancement, will I entertain a request to "expedite" a proceeding that is already summary in nature. In my opinion, this reasoning extends to other summary proceedings, such as those brought under 8 Del. C. § 220 and 225.
Most requests for "advancement" are actually requests for payment of expenses already incurred. In my experience, putative indemnitees have general success in securing able legal representation without any advancement.
Conclusion. Mr. Brown has not alleged any facts that would warrant a more than summary determination of his entitlement to advancement. Consequently, I deny the motion to expedite. But, in accord with the policy underlying § 145(k), I encourage the parties to cooperate in bringing this matter to a prompt resolution. Mr. Brown's motion to dismiss the counterclaims should be fully briefed as soon as practicable. After briefing on the motion to dismiss is completed, I will inform counsel if oral argument is necessary.