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Vaccaro v. APS Healthcare Bethesda, Inc.

Court of Chancery of Delaware

January 9, 2015

Vaccaro
v.
APS Healthcare Bethesda, Inc. and Universal American Corp.

Submitted: December 2, 2014

Dear Counsel:

This matter involves a dispute over severance obligations in the employment agreement between Plaintiff Jerome Vaccaro and Defendants APS Healthcare Bethesda, Inc. ("APS") and Universal American Corp. ("Universal"). At this stage in the litigation, the Defendants have moved to dismiss or stay Vaccaro's action, arguing both that this Court lacks subject matter jurisdiction to hear the dispute and that I should use my discretion to defer to a first-filed action in the United States District Court for the District of Delaware, in which Universal is suing multiple defendants, including Vaccaro, for allegedly fraudulently inducing the 2012 sale of APS to Universal (the "Securities Fraud Lawsuit").[1] In a previous letter opinion, I addressed the issue of whether this Court properly has jurisdiction over Vaccaro's claims, finding that it does.[2] Remaining before me is whether I should use my discretion under the test announced in McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co.[3] to defer to the Securities Fraud Lawsuit previously filed in the federal district court.

After considering the additional briefing and letters submitted by the parties on this issue, and without specifically finding sufficient overlap of issues between the two cases to invoke McWane, I find that concerns of judicial and litigants' economy support a continuance of my consideration of the Defendants' Motion to Dismiss or Stay in this action. Currently pending in the Securities Fraud Lawsuit is Vaccaro's Motion to Dismiss Universal's First Amended and Supplemental Complaint, the resolution of which will necessarily clarify disputed issues that I must consider here. Consequently, I am postponing my consideration of the Defendants' Motion to Dismiss or Stay pending resolution of Vaccaro's Motion to Dismiss in the Securities Fraud Lawsuit.[4] The parties should provide the Court with a status update on the current state of the proceedings in the Securities Fraud Lawsuit, as well as provide the Court with an additional status update when the federal district court resolves Vaccaro's Motion to Dismiss. Further, the parties should advise the Court as to whether discovery in this action should be stayed pending the federal district court's decision. Finally, any party may seek accelerated consideration of the Defendants' Motion to Dismiss or Stay as circumstances warrant.

To the extent the foregoing requires an Order to take effect, IT IS SO ORDERED.

Sincerely,

SAM GLASSCOCK III VICE CHANCELLOR


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