Judge Davis Applies Cryo-Maid Factors and Denies Motion to Dismiss, or in the Alternative, Stay

March 30, 2021

Publication| Commercial Litigation

In Estate of Martha Barotz v. Martha Barotz 2006-1 Insurance Tr. et al., C.A. No. N20C-04-126 EMD CCLD, Judge Davis denied the defendant’s motion to dismiss or, in the alternative, for a stay.  The dispute began when plaintiff Estate of Martha Bartoz (the “Estate”) sought to recover life insurance proceeds from the defendants, including Martha Barotz 2006-1 Insurance Trust (the “Trust”).  The Estate argued that the defendants procured a life insurance policy for Martha Barotz without an insurable interest, and brought claims for recovery of those funds, or, in the alternative, unjust enrichment.

In response, the Trust filed a motion to dismiss or, in the alternative, for a stay.  In its motion, the Trust asked the Court to stay the case in favor of a pending action in the New York Supreme Court.  The parties disagreed as to whether the New York or Delaware action was first-filed, and therefore, whether the action should be dismissed or stayed.  After the Court heard oral argument, the New York Supreme Court independently dismissed the New York action, finding that the action was not justiciable under New York law and the interests of Delaware predominated.

In his analysis, Judge Davis found that the McWane factors did not apply because the parallel action was no longer pending in the New York Supreme Court.  Judge Davis then applied the factors set out in General-Foods Corp v. Cryo-Maid, Inc., which include (i) the relative ease of access to proof; (ii) the availability of compulsory process for witnesses; (iii) the possibility of the view of the premises; (iv) all other practical issues that would make the trial of the case easy, expeditious and inexpensive; and (v) whether or not the controversy is dependent upon the application of Delaware law.  Based on a Cryo-Maid analysis, Judge Davis held that Delaware was not an inconvenient forum for the parties under the facts of the case and denied the motion.

Analysis: This case serves as a reminder that when causes of action are filed simultaneously or close in time, the CCLD will apply the Cryo-Maid factors rather than a simple McWane factor test. Notably, the Court denied the motion not only because the parallel proceeding was dismissed, but also because Delaware was not considered an inconvenient forum under the facts of the case.  Simply put, it is not enough to show that a parallel action is pending in a different forum, but one must also show that litigating the action in Delaware is not convenient.

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