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Warner v. Warner Co.

Superior Court of Delaware, New Castle County

April 17, 1962

Charles WARNER, Jr., Plaintiff,
WARNER COMPANY, a Delaware Corporation, Defendant.

James M. Tunnell, Jr., and William S. Megonigal, Jr. (of Morris, Nichols, Arsht & Tunnell), Wilmington, for plaintiff.

John Van Brunt, Jr., and E. Dickinson Griffenberg, Jr. (of Killoran & Van Brunt), Wilmington, and Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., of counsel, for defendant.

LYNCH, Judge.

Plaintiff, who alleged he was a director of defendant corporation, filed his complaint in this action on April 6, 1961, seeking to enforce his rights to purchase common shares of defendant, pursuant to an existent Option Agreement. On May 15, 1961 plaintiff propounded 33 interrogatories to defendant. [54 Del. 480] Defendant filed no written objections to these interrogatories.

Defendant's answer to the complaint was filed on June 1, 1961. The answer included a counterclaim for $2,750,000, allegedly sustained by the defendant because of plaintiff's alleged negligence as an officer and director of defendant, with respect to an investment defendant made in a company called Atlantic Prestressed Concrete Company. On June 2, 1961 plaintiff propounded a second set of 70 additional interrogatories to defendant. Defendant filed no objections to these interrogatories.

When plaintiff made reply to defendant's counterclaim it served notice of Trial by

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Jury. In Delaware jury trials are held at the March, September and December Terms of Court, but not at the June Term of Court. This is significant in this sense. It is evident from the answers which plaintiff sought by his interrogatories that he contemplated further discovery upon receipt of defendant's answers; consequently, had defendant submitted its answers on the scheduled date of January 29, 1962, it is most unlikely that the case would have been set for trial at the March 1962 Term. The next trial term is the September 1962 Term.

Settlement discussions thereafter ensued between the parties and there were several extensions of time granted defendant by which defendant's time for answering the interrogatories was deferred until October 27, 1961.

During this settlement period defendant furnished some of the information sought by plaintiff's interrogatories. These settlement discussions came to an end late in October, 1961.

The counsel for defendant, who was familiar with the entire proceedings and who acted for the defendant, became involved in the final stages of preparation for the trial and the trial of an anti-trust case, pending in the United States [54 Del. 481] District Court for the Eastern District of Pennsylvania; he was sole attorney for the plaintiff in that anti-trust case.

On November 21, 1961, plaintiff's attorneys noticed defendant under Rule 37(a), Del.C.Ann., for entry of an order compelling defendant to answer all interrogatories. On November 30, 1961 the parties stipulated (a) that defendant should have until December 28, 1961 to answer interrogatories and (b) that plaintiff's motion should be stayed 'until such time as defendant may have failed to answer said interrogatories within the time' fixed by the stipulation. A second stipulation further extended defendant's time to answer interrogatories 'to and including January 29, 1962'; this stipulation likewise stayed plaintiff's motion.

Trial of the anti-trust case commenced November 27, 1961 and continued from day to day thereafter, and ended March 29, 1962. The trial required all of counsel's time, even over week ends. It seems clear that plaintiff was aware of defendant's counsel's continued engagement in this anti-trust case.

An examination of the pleadings and of the interrogatories point out clearly that the transactions involved in this action are complex and that the preparation of answers to the interrogatories would require a thorough familiarity with many inter-corporate transactions which transpired over a period of about four years, and involved numerous contracts in which plaintiff had been concerned in their making.

When it became apparent to defendant's counsel, late in January of 1962, that the above mentioned anti-trust case would require further time for its completion, this defendant's counsel who was familiar with the facts necessary to answer plaintiff's interrogatories in this case, requested other members of his firm to proceed to study the case and prepare answers to plaintiff's interrogatories so that plaintiff would not be further delayed in receiving the answers. Seemingly this [54 Del. 482] was not made known to plaintiff. Just why defendant's counsel did nothing to advise plaintiff's counsel is not clear; courtesy, if nothing else, required defendant's counsel to notify plaintiff's counsel of what was transpiring; possibly it would have obviated plaintiff filing its motion, premised on Rule 37(d).

Because of lack of familiarity on the part of these lawyers with the records, as well as the issues of this case, preparation of the answers was not completed until February 8, ...

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