Gutierrez de Cos, Esq. Daniel A. Griffith, Esq.
RICHARD F. STOKES, JUDGE
August 17, 2011, Plaintiffs, Wagih Hanna and Bothina Hanna
("Plaintiffs"), obtained a judgment from the
Massachusetts Superior Court of Worchester County against
Defendant, Dieter A. Baier ("Defendant"), in the
amount of $521, 610.31. As a result, on June 6, 2012, a
Charging Order was issued against Defendant by the Maryland
Circuit Court for Talbot County. This created a lien against
Defendant's interest in Cabinetry Unlimited, Inc. On
December 18, 2013, the United States Bankruptcy Court for the
District of Maryland issued a Discharge Order for the
Defendant in his personal capacity; Plaintiffs Charging Order
survived. The Charging Order was domesticated in the Delaware
Superior Court on March 9, 2012.
2017, Plaintiffs issued discovery, pursuant to Civil Rule 69,
to ascertain whether the Charging Order had been violated.
Defendant responded by filing a Motion for Protective Order,
arguing that the Superior Court did not have jurisdiction
over the Charging Order due to the amendment of 6 Del.
C. § 18-703(f). The statute states in pertinent
part, "The Court of Chancery shall have jurisdiction to
hear and determine any matter relating to such charging
order." On December 19, 2017, the Court granted
Defendant's Motion on the basis that the Court of
Chancery had exclusive jurisdiction to hear matters
"relating to orders charging a member's interest in
a limited liability company."
March 26, 2018, the Superior Court issued a second decision
on this question in the case of Bridev One, LLC, et al.
v. Regency Centers, LP. The Court held that the statute
at issue neither specifically divested the Superior Court of
its jurisdiction to enter charging orders nor granted the
Court of Chancery exclusive jurisdiction. In short,
according to Bridev One, the Superior Court and the
Court of Chancery have concurrent jurisdiction over the
execution of charging orders.
Plaintiffs move for Relief from the December 19, 2017 Order
pursuant to Civil Rule 60(b)(5), which provides that relief
may be given if "the judgment has been satisfied,
released, or discharged, or a prior judgment upon which it is
based has been reversed or otherwise vacated, or it is no
longer equitable that the judgment should have prospective
application." In Plaintiffs' view, the previous
Order misinterpreted the applicable statute to hold that the
Court of Chancery had exclusive jurisdiction over this
matter; therefore, the Court should now continue to operate
in the fashion it has in the past and allow execution of the
Charging Order in this Court. Additionally, Plaintiffs argue
that Defendant will suffer no prejudice if forced to continue
in the Superior Court. Thus, Plaintiffs argue the Court
should vacate the December 19, 2017 Order.
first contends that the Commissioner's Report and
Recommendation on which the Bridev One case was
based did not overrule the December 19, 2017 Order. Defendant
does not acknowledge that the Report and Recommendation was
later adopted by the Superior Court on March 26, 2018.
Moreover, Defendant draws a distinction between the two cases
in that this case concerns the execution of a
charging order while Bridev One concerned the
issuance of a charging order. He claims that the
Bridev One holding should be limited to vest
concurrent jurisdiction in both Courts only for the purpose
of issuing a charging order. Finally, Defendant
notes that the Superior Court is not required to follow a
prior Superior Court decision if it finds alternative
authority to be more persuasive. Therefore, Defendant argues
that the December 19, 2017 Order should stand.
Court is persuaded by the holding in Bridev One. In
Bridev, the Court upheld the traditional idea that
the Superior Court and the Court of Chancery have concurrent
jurisdiction over charging orders based upon the doctrine of
stare decisis. Judge Streett explained:
Stare decisis "compels adherence to
precedent" and "means that when a point has been
once settled it forms a precedent which is not afterwards to
be departed from or lightly overruled or set aside." It
is "the preferred course because it promotes the even
handed, predictable, and consistent development of legal
principles, fosters reliance on judicial decisions, and
contributes to the actual and perceived integrity of the
the Court considered previous cases that highlight the
importance of upholding longstanding statutory
interpretations. It is essential that litigants have the
ability "to know what the law is and to conform their
conduct accordingly." Therefore, there is no reason to
disturb the longstanding practice of issuing and executing
charging orders under § 18-703.
this holding squares with previous case law concerning
statutes with more than one plausible interpretation.
Importantly, in Vesgo v. Board of Trustees, the
Court wrote: "It is firmly established that a
longstanding, practical and plausible administrative
interpretation of a statute of doubtful meaning is to be
accepted by the Court as indicative of legislative
intent."Moreover, the Court of Chancery has stated
that it would be uncommon for a practical construction of a
statute, which had been relied upon for many years, be based
on an erroneous statutory interpretation. Thus,
considering that the Superior Court has long issued and
executed charging order under this statute and that it seems
unlikely that the General Assembly intended to vest power
with the Superior Court to issue, but not execute, charging
orders, it is permissible for the Plaintiffs to seek
discovery in this Court. Upon reflection, the Court has
concluded that the holding expressed in Bridev One
is the better reasoned view.
that the previous Order in this case was based upon a
mistaken application of law, Plaintiffs are entitled to
relief under Civil Rule 60(b)(5). The December 19, 2017 Order
is vacated. Plaintiffs may proceed with discovery to execute
the charging order in the Superior Court.