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Superior Court: Equitable Counterclaim Does Not Equal Ticket to Chancery

Posted In Jurisdiction

Rembrandt Technologies, LP v. Harris Corp., 2007 WL 4237752 (Del. Super. Nov. 30, 2007). 

This decision demonstrates the willingness of Delaware courts to uphold the plaintiff’s choice of forum (between the Superior Court and the Court of Chancery), despite an argument by the defendant that transferring courts would allow the hearing of all claims and thus promote judicial economy. 

Here, the plaintiff filed an action in Superior Court, seeking a declaratory judgment that it was not contractually bound to offer a license to the defendant. The defendant answered and brought a counterclaim, seeking specific performance of the disputed obligation. The defendant then moved to have the entire action transferred to Chancery, under 10 Del. C. § 1902, so that one court could hear the declaratory judgment claims, as well as its equitable counterclaim for specific performance, which was beyond the Superior Court's jurisdiction. 

The Superior Court denied the motion to transfer, noting that “[t]he fact, if it is a fact, that the Court of Chancery might be able to provide relief on both the direct claims and counterclaims at once is not sufficient to deprive the plaintiff of its chosen forum.” Judge Joseph R. Slights, III, observed that the parties could pursue that litigation (specific performance) down the road in the appropriate court, after being “armed with the factual and legal determinations made here.”