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Pontone v. Milso Industries Corp.

Court of Chancery of Delaware, New Castle

September 3, 2014

Harry Pontone
v.
Milso Industries Corporation, et al.

Date Submitted: June 12, 2014

Philip A. Rovner, Esq., Jonathan A. Choa, Esq., Potter Anderson & Corroon LLP.

Brian M. Rostocki, Esq., John C. Cordrey, Esq., Reed Smith LLP.

Donald F. Parsons, Jr., Vice Chancellor.

Dear Counsel:

On May 29, 2014, the Court issued a Memorandum Opinion (the "Opinion") addressing the exceptions of Defendant Milso Industries Corp. ("Milso") to the Second Report of the Special Master relating to corporate advancement of disputed fees and expenses.[1] The Opinion overruled most of Milso's exceptions, but the Court partially agreed with one of Milso's legal interpretations and held that, for fees and expenses relating to counterclaims to be advanceable, the counterclaim must be compulsory. Applying that holding, the Opinion found two counterclaims by Plaintiff, Harry Pontone ("Pontone"), were not compulsory and, thus, were not advanceable. Specifically, the Opinion held that Pontone's counterclaim for misappropriation of name, image, and likeness and his counterclaim for abuse of process were not subject to advancement.

Currently before the Court is Pontone's timely-filed motion for reargument under Court of Chancery Rule 59(f). Pontone's motion requests a rehearing on the Opinion's holding concerning the legal standard applicable to advancement for counterclaims and, regardless, seeks reconsideration of the Opinion's holding that the two above-mentioned counterclaims were not compulsory. In opposition, Milso argues that the Court held correctly on each of these issues. According to Milso, Pontone's motion merely rehashes the same arguments the Court rejected previously and improperly attempts to supplement the record.

For the reasons that follow, the motion for reargument is denied.

I. Legal Standard

To prevail on a motion for reargument under Rule 59(f), the moving party must demonstrate either that the court overlooked a decision or principle of law that would have controlling effect or that the court misapprehended the facts or the law so the outcome of the decision would be different.[2] For the movant to prevail, a misapprehension of the facts or the law must be both material and outcome determinative of the earlier decision.[3] Mere disagreement with the Court's resolution of a matter does not entitle a party to a rehearing, and the Court will deny a motion for reargument that does no more than restate a party's prior arguments.[4]

The Court generally will not consider new evidence on a motion for reargument. Reargument under Rule 59(f) "is only available to re-examine the existing record."[5] In appropriate circumstances, however, a litigant may seek reargument based on newly discovered evidence.[6] "To succeed on such a basis, an applicant must show the newly discovered evidence came to his knowledge since the trial and could not, in the exercise of reasonable diligence, have been discovered for use at the trial."[7]

II. Pontone's Motion for Reargument

Pontone dedicates a significant portion of his motion to critiquing the Opinion's analysis of the Delaware Supreme Court's decision in Citadel Holding Corp. v. Roven.[8] The remainder of the motion argues that the two counterclaims this Court found ...


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