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In A Delaware First, Standard When Lawsuit Threat Can Be Tortious Interference With Potential Business Relationships Addressed

Soterion Corp. v. Soteria Mezzanine Corp., C.A. No. 6158-VCN (Del. Ch. Oct. 31, 2012).

Why This Case is Noteworthy: This decision addresses for the first time in Delaware the applicable standard to determine when the threat of a lawsuit can be tortious interference with prospective business relationships. This opinion also features the rare instance when attorneys' fees are assessed based on an exception to the American Rule (as compared with Rule 37 for motions to compel).

Brief Background

The core background facts of this case involve the sale of two imaging centers which, it was argued, were not consummated because of the threat of litigation that was sent in a letter to the prospective buyers with a copy of a draft complaint. That draft complaint was not filed until three months later. Moreover, several days prior to the eventual trial on that complaint, the plaintiff stipulated to a judgment dismissing the claims. The defendants counterclaimed based on an argument that the threat of litigation constituted a tortious interference with prospective business relationships and was the cause of the two deals not closing.

The claims in the complaint that were dismissed, in essence, argued that the sale of the two imaging centers was not properly authorized. As indicated, the plaintiffs stipulated to a dismissal of those claims a few days before trial. The court found that the plaintiffs knew that their claims were false and unjustified at the time they filed them, and, as a result, this case is a rare example of the court awarding fees incurred to defend those frivolous claims based on an exception to the American Rule.

However, the court also found after a thorough analysis that the counterclaims for tortious interference did not satisfy the necessary elements of that cause of action.

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Read more Delaware business litigation case summaries and commentary on Delaware Corporate and Commercial Litigation Blog, a blog hosted by Francis G.X. Pileggi, of Eckert Seamans.

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