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Reid v. Spazio et al., No. 199, 2008 (Del., Apr. 9, 2009)

April 9, 2009

In a matter of first of impression, the Delaware Supreme Court held that discretionary appeals suspend the statute of limitations under the Delaware Savings Statute. The Savings Statute, codified in Title 10, section 8118(a) of the Delaware Code, provides a one-year grace period to commence a new action in Delaware after prior litigation ends without a resolution on the merits. The Savings Statute states, among other things, that “if a judgment for the plaintiff is reversed on appeal or a writ of error; a new action may be commenced, for the same cause of action, at any time within one year . . . after the reversal of the judgment therein.” It is well established that an “appeal” includes an appeal of right, that is, an appeal that an appellate court must consider. The Delaware Supreme Court held that for purposes of preservation by the Savings Statute, an “appeal” also includes discretionary appeals. In this case, the discretionary appeal at issue was a writ of certiorari to the United States Supreme Court from litigation in a Texas state court.

The Delaware Supreme Court described three reasons it held that the Savings Statute suspends the running of the grace period during the pendency of discretionary appeals. First, the Savings Statute has a remedial purpose and is to be liberally construed. Second, allowing a plaintiff to bring his case to a full resolution in one forum before starting the clock on his time to file in Delaware will encourage judicial economy and discourage simultaneous litigation in multiple jurisdictions. Third, the prejudice to defendants is slight because in most cases, a defendant will be on notice that the plaintiff intends to press his claims.

The Court also examined whether the equitable doctrine of laches barred the Delaware action. The Court recited the rule that absent unusual conditions or extraordinary circumstances, “a suit in equity will not be stayed for laches before, and will be stayed after, the time fixed by the analogous statute of limitations at law.” Having already held that the Savings Statute applied at law, the Court concluded that in equity, the complaint itself did not show unusual conditions or extraordinary circumstances that made it inequitable to allow prosecution of the claim, and therefore laches did not bar the complaint.

The full opinion is available here