Summary Procedures for Commercial Disputes

As the State of incorporation of over half of America's "Fortune 500" corporations, Delaware is especially cognizant of the business community's need for swift and predictable judicial action.  To meet that need, with the support of Governor Thomas R. Carper and at the direction of the Supreme Court, the Superior Court of the State of Delaware has adopted rules (Del. Super. Ct. Civ. R. ("Rules") 124-131) for summary procedures for resolving commercial disputes.

To fit within the Rules (amended as of April 1,1998), which should handle litigation from start to finish in less than one year, the dispute must be within the subject matter jurisdiction of the Superior Court (except claims asserting personal, physical or mental injury); the amount in controversy must exceed $100,000 as to at least one party, exclusive of interest and costs(although the parties can ask the court to accept cases with a value less than $100,000); at least one party must be a Delaware citizen, corporation or other business entity; and the parties must have consented to expedited proceedings under the Rules, either by written agreement or stipulation.  In addition, punitive damages, a jury trial, and summary judgment are not available under the Rules. Rules 124, 128.

An action pending in another court which could have been brought initially as a Summary Proceeding maybe transferred to the Superior Court upon consent of the transferor court and the parties.  An action already pending in the Superior Court may be converted to a Summary Proceeding upon consent of the parties. Rule 125(b).

The plaintiff must provide each answering defendant, within seven days of the filing by each defendant of an answer, and each answering defendant must provide all parties, within thirty days of the filing of an answer, lists of their witnesses and documents in their possession that they intend to rely upon at trial.  Within thirty days after the filing of the last answer,any party may serve upon any other party up to ten interrogatories (sub-parts shall be counted as separate interrogatories) (with responses due within twenty days);document requests (with responses due within thirty days); and up to 10 requests for admission (with responses due within twenty days). Rule 127.

A party may notice up to four depositions to begin no sooner than seven days from the service of the deposition notice and subsequent to the filing of all answers.  A party may also take the deposition of any person included in another party's witness list, as well as all persons submitting affidavits.  All depositions are to be completed within 120 days of the filing of the last answer (Rule 127 (d)), and unless otherwise ordered by the Court, all discovery shall be completed within 180 days after the filing of the last answer.  Rule 127(h).

The parties may forego witnesses at trial and submit briefs and appendices in support of their cause.  Unless waived by the parties, oral argument shall be held by the Court within one week of the close of briefing. Rule 129.

If the parties elect to present live witnesses, the trial shall begin within thirty to sixty days after the close of discovery; unless otherwise ordered, the trial shall be limited to five days, to be allocated equitably among the parties.  Rule 130.

Within ten days after trial, each party shall submit a post-trial brief setting forth proposed findings of fact and conclusions of law, and within thirty days of the filing of the final brief or oral argument, the Court will render a decision or provide the parties with an estimate of when a decision shall be rendered.  The time to render a decision shall not be extended beyond thirty days unless the Judge certifies that additional time is needed due to the demands of the case and its complexity,or the number and complexity of pending criminal cases.  Id.

All judgments are appealable to the Delaware Supreme Court, and such appeals shall be expedited in accordance with the existing Rules and practice of the Supreme Court in expedited matters.  Del. Supr. CT Admin. Directive No. 96 (Feb. 28, 1994).

The following is suggested contract language,derived in large part from materials presented at an ABA meeting program on business courts, which can be used as a "choice of summary procedures clause," and which also includes language to submit other related disputes to Delaware courts such as the Court of Chancery:

__. Dispute Resolution.

(a) Any action, suit or proceeding (a "Proceeding") arising out of or relating to this Agreement or the breach, termination or validity thereof, shall be litigated exclusively in the Court of Chancery of the State of Delaware (the "Delaware Chancery Court") or, if the Delaware Chancery Court may not maintain jurisdiction, and the amount in controversy as to at least one party, exclusive of interest and costs exceeds One Million Dollars, then exclusively in the Superior Court of the State of Delaware (the "Delaware Superior Court" and, together with the Delaware Chancery Court the "Delaware Courts") as a summary proceeding pursuant to Civil Rules 124-131 of the Delaware Superior Court, or any successor rules.  Each of the parties hereto hereby irrevocably and unconditionally:

(i) submits to the jurisdiction of the Delaware Courts for any Proceeding;

(ii) agrees not to commence any Proceeding except in the Delaware Courts;

(iii) waives, and agrees not to plead or to make, any objection to the venue of any Proceeding in the Delaware Courts;

(iv) waives, and agrees not to plead or to make, any claim that any Proceeding brought in the Delaware Courts has been brought in an improper or otherwise inconvenient forum;

(v) waives, and agrees not to plead or to make, any claim that the Delaware Courts lacks personal jurisdiction over it;

(vi) waives its right to remove any Proceeding to the federal courts except where such courts are vested with sole and exclusive jurisdiction by statute;

(vii) agrees that any Proceeding arising out of or relating to this Agreement or the breach, termination or validity thereof shall be governed by the substantive law of the State of Delaware; and

(viii) understands and agree that, if a Proceeding is litigated in the Delaware Superior Court, it shall not seek a jury trial or punitive damages in any Proceeding based upon or arising out of or otherwise related to this Agreement and waives any and all rights to any such jury trial or to seek punitive damages.

(b) In the event that the amount in controversy as to at least one party, exclusive of interest and costs, does not exceed One Hundred Thousand Dollars in a Proceeding arising out of or relating to this Agreement or the breach, termination or validity thereof, the parties to such Proceeding agree to make application to the Delaware Superior Court to proceed under the Summary Procedures Rules.  Until such time as such application is rejected, such Proceeding shall be treated as a summary proceeding and all of the foregoing provisions of this Section relating to summary proceedings shall apply to such Proceeding.

(c) Each of the parties hereto hereby irrevocably designates and appoints [Name of Agent] (the "Service Agent") with offices on the date hereof at [Delaware address], as its agent to receive service of process in any Proceeding.  Each of the parties hereto further covenants and agrees that, so long as this Agreement shall be in effect, each such party shall maintain a duly appointed agent for the service of summonses and other legal processes in the State of Delaware and will notify the other parties hereto of the name and address of such agent if it is no longer the Service Agent.

Although only one matter was handled under the summary procedures as originally adopted, it is anticipated that the amended procedures will be used in the near future.  Delaware practitioners and corporate counsel believe that the summary procedures will be used, among others, by parties with ongoing commercial relationships, and which need a quick and final judicial resolution.  This goal cannot be achieved in arbitration or in litigation under traditional court rules.

This article previously appeared in the October, 1994 issue of Committee on Corporate Counsel Newsletter, American Bar Association, Section of Litigation.