Nationwide Inflection v. Ocwen Financial Corp.

Full title: Nationwide Inflection LLC v. Ocwen Financial Corp

Court: Court of Chancery of Delaware

Date published: Jun 12, 2009

C.A. No. 4282-VCL (Del. Ch. Jun. 12, 2009)

Opinion

C.A. No. 4282-VCL.

Submitted: May 20, 2009.

Decided: June 12, 2009.

Samuel A. Nolen, Esquire, Harry Tashjian, Esquire, Richards, Layton Finger, Wilmington, DE.

Lewis H. Lazarus, Esquire, Katherine J. Neikirk, Esquire, Morris James LLP, Wilmington, DE.

STEPHEN P. LAMB, Vice Chancellor

Dear Counsel:

On May 20, 2009, the court heard argument on the parties' cross-motions for judgment on the pleadings regarding the narrow issue of the plaintiff's entitlement, as a matter of contract interpretation, to recover its fees incurred in bringing this litigation. Generally speaking, these motions call for the construction of section 8.3 ("Indemnification of the Shareholders") and section 8.9 ("Payment of the Escrow Fund") of the merger agreement dated as of June 6, 2007 that governs the transactions giving rise to the dispute in this matter. The underlying dispute relates to an assertion of a claim for indemnification made under section 8.3 ("Indemnification of Parent") against the escrow fund established for that purpose in the merger agreement.

At the hearing, as the result of the colloquy between Mr. Carberry and the court, it became clear that the contract interpretation issues presented are ones that may never need to be resolved. The plaintiff does not contend that it is entitled to receive any payment or reimbursement with respect to its fees in this case in advance of a final judgment. Moreover, and more important, National Inflection LLC concedes that any right it may ultimately assert to recover fees as a part of a judgment in its favor will depend on a finding by the court that Ocwen Financial Corporation has acted in bad faith in asserting its claim for indemnification. This is true of any right National Inflection might assert under either section 8.3 or section 8.9 of the merger agreement, as well as any argument it might make based on general equitable principles of fee shifting.

In the circumstances, it appears unwise and a waste of judicial resources to engage in the exercise of resolving the remaining issues presented by pending cross-motions. For that reason, those motions are dismissed without prejudice.

IT IS SO ORDERED.