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1
.
LETTER OPINION
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EXTRACTED KEY WORDS
COURT FACTS MERGER FACTUAL FINDINGS COLLATERAL ESTOPPEL APPRAISAL ACTION ESQUIRE PETITIONER AUDIT LETTERS MMC PARTY DENT ARTHUR OPINIONS DELAWARE DOCTRINE CTCA JENKINS PRINCIPLES POST-MERGER LITIGATE PRECLUSION JUDGEMENT OBJECTIONS FINANCIAL REPORTS PRIOR BANCORPORATION OKLAHOMA DECISION RESPONDENT |
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
4 17 s.
JOHN W. Nom DOVER,
WC.! CHANCELLOR July 3,2002 TELEFWONE (302)
FACSIMILE
Arthur L. Dent, Esquire Stephen E. Jenkins, Esquire
POTTER, ANDERSON ASHBY & GEDDES
& CORROON 222 Delaware Avenue, 17'h Fl.
13 13 North Market Street P.O. Box 1150
P.O. Box 95 1 Wilmington, DE 19899- 1150
Wilmington, DE 19899-095 1
Re: Lane v. Cancer Treatment Centers of America, Inc.
C.A. No. 12207-NC
Submitted: May 17,2002
Dear Counsel:
I write to address two related evidentiary matters from the trial of this action
to appraise the value of Petitioner Lane's shares in Cancer Treatment Centers of
America, Inc. ("CTCA") as of its merger in 199 1.
The first question involves the admissibility of the audit letters
accompanying various corporate financial reports which were issued after the
merger. ' The parties agree that the financial reports are properly before the Court,
but Petitioner objects to the Court's consideration of these audit letters which may
be read as casting doubt on CTCA's continued business relationship with a related
entity, Memorial Medical Center and Cancer Institute, Inc. ("MMC"), and the
likelihood that a substantial receivable from MMC would be paid.
The second issue is spawned by Respondent's invocation of the principles of
collateral estoppel to bring before the Court certain factual findings of an
' Respondent's Exhibits 57-59.
Arthur L. Dent, Esquire
Stephen E. Jenkins, Esquire
July 3,2002
SNIPPETS:
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2
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LETTER OPINION
|
EXTRACTED KEY WORDS
LANE VALUATION CTCA CANCER TREATMENT AMERICA EXCHANGE PARTIES SCHEDULE DEL ESQUIRE COMMITMENT PREPARATION SUBMITTING SAMPLE ORDERS RISK REASONS FACTS PROSECUTE ARGUES EXPENSE CONTENDS STEELE ARTHUR DENT JENKINS PRACTICE PARTY BURDENS CHANCERY |
COURT OF CHANCERY
OF THE
STATE OF DELAWARE ,_
JOHN W. NOBLE DOVER,
"CE CHANCELLOR
Date Submitted: April 12, 2001 kXMlLE
Date Decided: April 27,200 1
Arthur L. Dent, Esquire Stephen E. Jenkins, Esquire-
POTTER, ANDERSON & CORROON ASHBY &GEDDES
Hercules Plaza 222 Delaware Avenue, 17'h Fl.
P.O. Box 95 1 P.O. Box 1150
Wilmington, DE 19899-095 1 Wilmington, DE 19899-1;150
`_
Re: Lan'e v. Cancer Treatment Centers of America, Inc.
C.A. No. 12207-NC
Dear Counsel:
The parties in this appraisal action cannot agree on a relative schedule for
exchange of reports by their valuation experts. Plaintiff Robert Michael Lane
("Lane") has suggested the simultaneous filing of expert reports. Defendant
Cancer Treatment Centers of America, Inc. ("CTCA") wants Lane to file his report
first. For the reasons that follow, I conclude that, under the unique facts of this
action, Lane should submit the report of his valuation expert first, with the report
of CTCA's valuation expert to be filed 30 days thereafter.
This case is old: it was filed on July 18, 1991. Lane has narrowly avoided
dismissal for failure to prosecute on more than one occasion.'
CTCA argues that Lane's level of commitment to pursuing his claim raises a
reasonable concern that he might not even produce a valuation expert's report and
that CTCA should not be put to the expense of preparation of a valuation expert's
report under these circumstances. CTCA also contends that a staggered exchange
`See Lane v. Cancer Treatment Centers of America, Inc., Del. Ch., C.A. No. 12207, Noble,
(April 11, 2001); L;me v. Cancer Treatment Centers of America,&, Del. Ch., C.A. No.
Steele, V.C. (November 17, 1999); Lane v. Cancer Treatment Centers of America. Inc., Del.
-\. CA. No. 12207, Steele, V.C. (March 16,200O).
SNIPPETS:
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3
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LETTER OPINION
|
EXTRACTED KEY WORDS
COUNSEL FAILURE MOTION PROSECUTE LANE CHANCERY RULE DEL CANCER TREATMENT AMERICA ESQUIRE VALUATION DELAY REARGUMENT SCHEDULING MATTER CTCA ARTHUR DENT REASON SELECTING RESPONDENT CANCER TREATMENT COURT PENDING STEELE JENKINS APPEARANCE REPORTS FIRM PURSUING |
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
417 s.
JOHN W. N~BE DOVER
VlCECH4NCElLOR TELEPHONE
FACSIMILE
Date Submitted: April 2,200l
Dated Decided: April 11,200l
Arthur L. Dent, Esquire Stephen E. Jenkins, Esquire
POTTER, ANDERSON & CORROON ASHBY & GEDDES
Hercules Plaza 222 Delaware Avenue, 17* Fl.
P.O. Box 951 P.O. Box 1150
Wilmington, DE 19899-095 1 Wilmington, DE 19899- 1150
Re: Lane v. Cancer Treatment Centers of America, Inc.
CA. No. 12207-NC
Dear Counsel:
Respondent Cancer Treatment Centers of America, Inc. ("CTCA") has again
moved, pursuant to Court of Chancery Rules 41 (b) & (e), to dismiss this appraisal
action for the failure of Petitioner Robert Michael Lane ("Lane") to prosecute.'
This action has now been pending for more than ten years. Except for some
intermittent discovery, very little has been done to move this case forward. Some
of the delay may have been attributable to Lane's efforts in a related matter in
Oklahoma. Nevertheless, there is little to justify the pace of these proceedings.
On June 15, 1999, CTCA moved to dismiss for failure to prosecute; that
motion was granted on November 17, 1999.' Lane moved for reargument; the
' Respondent Cancer Treatment Centers of America, Inc.`s Second Motion to Dismiss for Failure
to Prosecute. -
' Lane v. Cancer Treatment Centers of America. Inc., Del. Ch., C.A. No. 12207, Steele, V.C.
(November 17,1999).
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4
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MEMORANDUM OF PETITIONER IN OPPOSITION TO SECOND MOTION TO DISMISS FOR FAILURE TO PROSECUTE
|
EXTRACTED KEY WORDS
RESPONDENT COURT MOTION COUNSEL DISMISS PROCEEDING APPRAISE PROSECUTE SCHEDULING STATUTORY DEL INACTIVITY VALUATION PURSUANT FAILURE OKLAHOMA DETERMINATION REPORT SCHEDULING CONFERENCE MATTER MERGER SHARES DISCOVERY FIRM REQUESTS BURDENS EXHIBIT HERETO PRECLUDE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ROBERT MICHAEL LANE,
Plaintiff,
;
V. ) C.A. No. 12207 NC
>
CANCER TREATMENT CENTERS OF )
AMERICA, INC., formerly known as
RSJ INC., ;
Defendant.
MEMORANDUM OF PETITIONER ROBERT M. LANE
IN OPPOSITION TO RESPONDENT'S SECOND
&[OTION TO DISMISS FOR FAILURE TO PROSECUTE
- -
POTTER ANDERSON & CORROON LLP
Arthur L. Dent
13 13 N. Market Street
Hercules Plaza
Wilmington, DE 19899
(302) 9846000
Attorneys for Petitioner
Dated: March 28,200l
462521
2 0
PRELIMINARY STATEMENT OsJ -I
-__ z.* i, a zx
:
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5
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RESPONDENTS SECOND MOTION TO DISMISS FOR FAILURE TO PROSECUTE
|
EXTRACTED KEY WORDS
MOTION CTCA PROSECUTE DISMISS COURT RESPONDENT REQUESTS DEL EXHIBIT CHANCERY CANCER TREATMENT AMERICA FAILURE COUNSEL DISCOVERY INACTION REARGUMENT SUBSTITUTION MICHAELS DEPOSITIONS PITTMAN PARTIES WITNESSES PRIOR MOTION PENDENCY INTERROGATORIES VALID EXCUSE DELAY STEELE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ROBERT MICHAEL LANE,
Petitioner
V.
CANCER TREATMENT CENTERS OF
AMERICA, INC.,
Respondent.
RESPONDENT CANCER TREATMENT CENTERS OF AMERICA, INC.3
SECOND MOTION TO DISMISS FOR FAILURE TO PROSECUTE
Respondent Cancer Treatment Centers of America, Inc. ("CTCA"), pursuant to Chancery
Rules 41(b) and (e), respectfully moves the Court to dismiss this action with prejudice for lack of
prosecution. In support of its motion, CTCA states as follows:
1. Robert Lane filed this appraisal action in March 1991.' In nearly ten years, Lane
has done virtually nothing to prosecute his claim. In 1992, Lane served `written discovery
requests on CTCA, to which CTCA responded. In 1993, Lane sought deposition testimony and
documents from third parties. The Court limited the scope of Lane's requests on CTCA's
motion for a protective order, and Lane never took the depositions. In 1996, Lane served limited
additional discovery requests, to which CTCA responded. In 1997, Lane asked CTCA to
supplement its previous discovery responses, and CTCA did so in 1998. Lane has not deposed
any witnesses, has not submitted any motion directed to the merits of his claim, and has not
produced an expert report.
' Initially, Lane was joined by petitioner Randall Pittman. Pittman settled in 1999.
SNIPPETS:
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6
.
LETTER OPINION
|
EXTRACTED KEY WORDS
DISMISS MOTION COURT CANCER TREATMENT REASON FACTS COUNSEL RESPONSE PROSECUTE CTCA DELAY LAW INACTION DOCKET REQUEST REARGUMENT MISAPPREHEND DELAWARE ACTION OKLAHOMA FAILURE LITIGATION DISCRETION PARTY DISCOVERY REPORTS CONTROLLING ASSERTS FILING SETTLEMENT |
C O U R T O F C H A N C E R Y `,
OF THE
S T A T E O F D E L A W A R E
`/
10
DOVER . C>E 19901
Stephen E. Jenkins
Ashby & Geddes
P.O. Box 1150
Wilmington, DE 19899
Henry E. Gallagher, Jr.
Connolly, Bove, Lodge & Hutz
P.O. Box 2207
Wilmington, DE 19899
Re: Lane v. Cancer Treatment Centers qf America, Inc.
C.A. No. 12207-NC
Submitted: December 13, 199!3
Decided: March 16, 2000
Counsel:
I have reviewed Lane's request for reargument of this Court's letter
opinion dated November 17, 1999 in which I granted Defendant Cancer
Treatment Centers of America, Inc.`s ("CTCA") motion to dismiss.' While
Lane fails to demonstrate that I have misapprehended lthe law, I conclude that I
' Lane v. Cancer Treatment Centers of America, Inc., Del. Ch., C.A. No. 12207-NC, Steele,
V.C (Nov. 17, 1999).
SNIPPETS:
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7
.
RESPONSE TO PLAINTIFFS MOTION FOR REARGUMENT
|
EXTRACTED KEY WORDS
MOTION COURT DISMISS REARGUMENT DEL RESPONSE PROSECUTION CONTROLLING ASSERTS LAW COURT RULE CIR DELAWARE PLAINTIFF OPINION COMPLAINT CITED LANE MOTION CHANCERY COURT RULE FINANCE DEFENDANT DELAY REASON CTCA DISCOVERY AMERICA ROBERT PRINCIPLE CORN CITES |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ROBERT MICHAEL LANE >>
Petitioner, >>
V. > C.A. No. 12207 NC 2
> fy- `1:: t
21. !
CANCER TREATMENT CENTERS
> ;;- ,.
:.:..
OF AMERICA, INC., formerly > ' ., ,'
:;p
known as RSJ, INC., > -, b
\
Respondent.
i ., ^
_
7,'
:,*>r:
_. `_ "7`
4.b:
--I-`:
RESPONSE OF CANCER TREATMENT CENTERS OF AMERICA, Ik. "'
TO PLAINTIFF ROBERT LANE'S MOTION FOR REARGUMENT
On November 24, 1999, petitioner Robert Lane moved for reargument of this Court's
November 17, 1999 opinion dismissing his complaint for failure to prosecute pursuant to
Chancery Court Rules 41(b) and (e). Lane's motion does not point to any controlling legal
principle or fact that the Court has overlooked or misapprehended, and therefore the motion
should be denied.
Introduction
1. As Lane states in his motion, to prevail'he must demonstrate that the Court has
overlooked a decision or principle of law that would have controlling effect on the Court's
decision to dismiss the case, or demonstrate that the Court misapprehended the law or the facts
in such a way as to affect the outcome of the decision. Mainiero v. Microbvx Corn., Del. Ch.,
C.A. No. 14228 NC, 1996 Del. Ch. LEXIS 120, Steele, V.C. (Sept. 18, 1996) (Ex. A); Miles,
Inc. v. Cookson America, Inc., Del. Ch., C.A. No. 123 lo-NC, Hartnett, V.C. (March 7, 1995)
SNIPPETS:
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8
.
PLAINTIFFS MOTION FOR REARGUMENT
|
EXTRACTED KEY WORDS
PLAINTIFF LANE SANCTION MOTION DELAWARE LETTER OPINION MERITS LAW DEFENDANT SHARES LANE RESPECTFULLY REQUESTS DRASTIC SANCTIONS REASONS ROBERT LANE REARGUMENT FACTS OKLAHOMA PROSECUTION CHANCERY PREJUDICE CASTLE COUNTY ROBERT LANE HEREBY RULING DIRECTS COURT RECONSIDER PRINCIPLE SETTLEMENT MERGER CONSIDERATION MAJORITY STOCKHOLDER EXPERT WITNESS |
ORIGINAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ROBERT MICHAEL LANE, )1
Plaintiff, 1)
v. ) CANo. 1220'7NC
II 7; L7
7,
at., 2.3
CANCER TREATMENT CENTERS OF ) - *..
p <.t'
AMERICA, INC., formerly known as 3: _
1
SI ,.,,
. . ,I
RSJ INC.,
) r, i
.-,>.
-. .,
> m..,.::
Defendant. ) :>!.
t-
2. .
___.,
PLAINTIFF RCBBERT LANE'S >-LP
- _
MOTION FOR REARGUMENT
Plaintiff Robert Lane hereby moves for reargument of this Court's letter opinion dated
November 17,1999. The Court imposed the most drastic sanction available: dismissal of a litigant's
case without reaching the merits. In effect, the Court's ruling directs that plaintiff Lane must
the fair vahie of his shares, and interest thereon, to which he is legally entitled. See 8 De1.C.
$262(h). CertainPy, there are other, less draconian measures by which the Court can move the case
forward. Plaintiff Lane respectfully requests that the Court reconsider its ruling, for the
reasons:
I. To prevail ou a motion for reargument, the movant must demonstrate that the Court
SNIPPETS:
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9
.
LETTER OPINION
|
EXTRACTED KEY WORDS
DELAWARE ACTION DISMISS PLAINTIFFS COURT DEFENDANT OKLAHOMA REASON DELAY MOTION PITTMAN PROSECUTE CHANCERY COURT RULE ACT REQUEST DISCOVERY SETTLEMENT CANCER TREATMENT DEL MATTER INACTION DEPOSITION RESPONSES ARGUES PREJUDICE PENDING EXCUSE PURSUING PRODUCTION AVOID |
COURT OF CHANCERY
O F T H E
STATE OF DELAWARE
M Y R O N T . S T E E L E
I/iC,c CHANC#-:`LOR D O V E R ,
Stephen E. Jenkins
Ashby & Geddes
P.O. box 1150
Wilmington, DE 19899
Henry E. Gallagher, Jr.
Connolly, Bove, Lodge & Hutz
P.O. B'ox 2207
Wilmington, DE 19899
Re: Lane v. Cancer Treatment
C.A. No. 12207-NC
Submitted: August 3 1, 1999
Decided: November 17, 1999
Counsel:
Plaintiffs ("Lane" and "Pittman") filed this appraisal action in March, 199 1.
Defendants move to dismiss Lane's remaining Complaint for failure to prosecute
pursuant to Chancery Court Rules 41(b) and (e). As Lane failed to act for more
than one year without good reason for the delay, I grant defendant's motion.
In 1993, plaintiffs requested deposition testimony from third parties, but
never proceeded with the depositions. In 1997, plaintiffs asked defendant to
supplement previous discovery responses; defendant complied in 1998. In July of
1999, Pittman settled this action, leaving Lane as the only plaintiff. Lane
Lane v. Cancer Treatment (#12207-NC)
SNIPPETS:
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10
.
REPLY TO ROBERT LANES RESPONSE TO MOTION TO DISMISS FOR FAILURE TO PROSECUTE
|
EXTRACTED KEY WORDS
DISMISS LANE PROSECUTE OKLAHOMA MOTION COURT CTCA PROCEEDING MATTER DELAWARE ROBERT FAILURE PETITIONER TEXAS PARTIES PURSUING CERTIFICATE RESPONDENT CANCER TREATMENT AMERICA PURSUANT CHANCERY PREJUDICE PITTMAN DISCOVERY REQUEST RESOLUTION REPORTS DISPUTE COMITY |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ROBERT MICHAEL LANE and >
RANDALL LEE PITTMAN, >
>
Petitioners, >
>
V. > Civil Action No. 12207
>
CANCER TREATMENT CENTERS OF >
AMERICA, INC., >
>
Respondent. >
REPLY TO ROBERT LANE'S RESPONSE
TO MOTION TO DISMISS FOR FAILURE TO PROSECUTE
Respondent Cancer Treatment Centers of America, Inc. ("CTCA"), pursuant to Chancery
Rules 41(b) and (e), has moved the Court to dismiss this action with prejudice for lack of
prosecution. CTCA and petitioner Randall Pittman have reached a settlement and filed a Joint
Motion to Dismiss Pittman's claims. On July 1, 1999, petitioner Robert Lane ("Lane") filed a
response to CTCA's motion to dismiss. In reply to Lane's response, CTCA states as follows:
1. Since tiling this action in 1991, Lane has done nothing to prosecute his claim
other than to conduct sporadic, limited discovery. Lane's last action - which occurred in 1997 -
was only to request that CTCA supplement its previous discovery responses.
2. Lane does not contest this. Instead, he argues that the pendency of the Oklahoma
proceeding constitutes good cause for his failure to prosecute this action. (Response, 7 2).
3. As CTCA pointed out in its motion, the Oklahoma case was itself dismissed for lack
of prosecution in 1993, and then was re-filed and ultimately tried in January, 1998. Since February,
1998, when the Oklahoma court issued an opinion finding that the petitioners' stock in the
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11
.
RESPONSE OF PLAINTIFF ROBERT LANE TO DEFENDANTS MOTION TO DISMISS
|
EXTRACTED KEY WORDS
DELAWARE PROCEEDING OKLAHOMA LANE ROBERT LANE DEFENDANT GETTY COURT DISMISS COUNSEL PROSECUTE DELAWARE CORPORATION APPEALS PARTIES PITTMAN MOTION APPRAISAL PROCEEDING INACTION ATTORNEYS DEL RANDALL RESPONSE REPRESENTING GETTY OIL DELAY COUNTY CANCER TREATMENT HEREBY FAILURE |
IN THE COURT OF CHA.NCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE: COUNTY
ROBERT MICHA,EL LANE and
RANDALL LEE PITTMAN,
Plaintiffs,
v,
CANCER TREATMENT CENTERS OF
AMERICA, INC., formerly kniown as
RSJ INC.,
Defendant.
RESPONSE OF BLAINTlIFF ROBERT LANE
TO DEFENDANT'S MOTIO-ET0 DISMISS
PlaintiffRobert Lane' hereby responds as follows in, opposition to the Motion to Dismiss for
Failure to Prosecute filed by the (defendant on June 1.5, I 999:
1. This is a statutory appraisal proceeding commenced pursuant to 8 De1.C. 8 262. This
proceeding has been active since it was filed, with the exception of a brief period of inactivity
the past year, occasioned in part by the circumstances described below.
2. While this appraisal proceeding has been pending, the plaintiffs in this proceeding
have also been prosecuting an appraisal case against an Oklahoma corporation controlled by the
same majority stockholder -- Richard Stephenson -- who controlled the Delaware corporation that
if; the subject of this Delaware appraisal proceeding. The Oklahoma case, captioned Robert Michael
l,ane and Randau,ee Pittman v. Memorial Medical C&~er and Cancer Institute, Inc., No. C.I 93
IThe un(dersigned counsel is the attorney of record for both of the plaintiffs, Randall
Pittman and Robert Lane, in this action. The undersigned counsel understands, however, that
new counsel of record will be entering an appearance for plaintiff Randall Pittman. This
response is being filed on behalf of plaintiff Robert Lane only.
1630 (Dist. Ct. of Tulsa County), was tried over four days in January 1998, and was decided by the
SNIPPETS:
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12
.
MOTION TO DISMISS
|
EXTRACTED KEY WORDS
CTCA COURT DISMISS PROSECUTE MMC MOTION RESPONDENT OKLAHOMA CHANCERY PREJUDICE REQUESTS STOCKHOLDERS DEL REASON CASTLE COUNTY FAILURE RESPONDENT CANCER TREATMENT APPRAISAL ACTION MERGER WRITTEN DISCOVERY MMC STOCK INACTION AMERICA DEPOSITION MINORITY MAJORITY STOCKHOLDER APPEALS NEGLECT DEVOTE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ROBERT MICHAEL LANE and >
RANDALL LEE PITTMAN, >>
Petitioners, >>
V. > C.A. No. 12207
>
CANCER TREATMENT CENTERS OF 1
AMERICA, INC., >>
Respondent. >
MOTION TO DISMISS FOR FAILURE TO PROSECUTE
Respondent Cancer Treatment Centers of America, Inc. ("CTCA"), pursuant to Chancery
Rules 41(b) and (e), respectfully moves the Court to dismiss this action with prejudice for lack of
prosecution. In support of its motion, CTCA states as follows:
1. This appraisal action relates to a merger that took place more than eight years ago,
in March, 1991. Since filing the action, the petitioners have done virtually nothing to prosecute
their claims. The petitioners served written discovery in 1991, to which CTCA responded. In
1993, the petitioners sought deposition testimony and documents from third parties. The Court
limited the scope of those requests following motions for protective orders filed by CTCA, but
the petitioners never proceeded with the depositions, The petitioners served limited additional
written discovery in 1996, to which CTCA responded. In 1997, the petitioners requested
supplementation of CTCA's previous discovery responses, which CTCA provided in 1998.
Other than that, the petitioners have taken no action in this litigation. They have not deposed
any witnesses, have not submitted any motions, and have not produced an expert's report.
2. In addition to being minority stockholders in CTCA, the petitioners were minority
stockholders in an Oklahoma corporation, Memorial Medical Center and Cancer Institute, Inc.
("MMC"). The majority stockholder of CTCA also was the majority stockholder of MMC, and
the petitioners' stock in MMC also was cancelled in a 1991 merger.
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