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T.A.H. First, Inc. v. Clifton Leasing Co., Inc.

Supreme Court of Delaware

April 15, 2014

T.A.H. FIRST, INC., a Delaware corporation, Plaintiff-Below, Appellant
v.
CLIFTON LEASING COMPANY, INC., t/a Delmarva Kenworth, a Delaware corporation, Defendant-Below, Appellee

Submitted April 9, 2014

Motion for Rehearing filed 4/28/14;

Denied 5/1/14.

Case Closed May 6, 2014.

Court Below: Superior Court for the State of Delaware in and for Kent County. C.A. No. 12C-02-039 (THG).

Scott G. Wilcox, Esquire, Whiteford Taylor Preston LLC for Appellant T.A.H. First, Inc.

Nicholas H. Rodriguez, Esquire, Schmittinger & Rodriguez, P.A. for Appellee Clifton Leasing Company, Inc.

Before STRINE, Chief Justice, HOLLAND, and JACOBS, Justices.

OPINION

Page 1094

STRINE, Chief Justice:

The origins of this case can be found in a prior appeal between these same parties that had a confusing procedural context. The appellant, T.A.H. First, Inc. (" T.A.H. First" ) had suffered a default judgment because it failed to answer the complaint of the appellee, Clifton Leasing Company, Inc., t/a Delmarva Kenworth (" Clifton" ), in a timely manner.[1] T.A.H. First moved the Superior Court to vacate the default judgment. The Superior Court denied that motion, and specifically held that not only was T.A.H. First not entitled to defend the claims brought by Clifton against it, but T.A.H. First also was prohibited from pressing counterclaims against Clifton because, like the answer itself, those counterclaims were not filed in a timely manner.[2] The Superior Court agreed to hold an inquisition hearing to quantify the amount of the default judgment against T.A.H. First.

Page 1095

But Clifton eventually concluded that T.A.H. First was likely judgment proof and that it did not want to waste further resources or those of the Superior Court by holding an inquisition hearing. Clifton therefore sought to dismiss the case with prejudice as to all claims that any party to the case was required to have raised in a timely pleading in the case. That is, Clifton sought total peace, including ensuring that the default judgment continued to bar T.A.H. First from bringing counterclaims. The Superior Court granted Clifton's request and dismissed the case.[3] That was a prudential ruling that did not alter the finality of the default judgment or its preclusive effect, which was to preclude claims in a second action that could have been raised as counterclaims in the first action.[4]

T.A.H. First appealed on May 18, 2011, arguing that the Superior Court abused its discretion by denying the motion to vacate the default judgment. This is where things got confusing. Because Clifton had dismissed the case without seeking to quantify the default judgment and impose a duty upon T.A.H. First to pay a sum certain, this Court became concerned that it was addressing a moot point and that there might not be proper grounds for appeal. After receiving supplemental ...


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