By: Oderah C. Nwaeze & Mackenzie M. Wrobel
Once a complaint has been filed, defendants have a finite period of time to decide what to do next. Among the list of options are: (a) ignore it (the U.S. is overly litigious anyways); (b) answer the allegations; (c) move to dismiss; or (d) cower in fear and settle immediately. More often than not, defendants choose option (c).
The reality of moving to dismiss, however, is that the moving party often lacks a credible basis for dismissing the entire complaint. As a result, defendants frequently file a partial motion to dismiss on the day that a responsive pleading is due under the court’s rules (or some other date that the parties have agreed to file and serve a response). In circumstances where a plaintiff has filed a partial motion to dismiss, the parties usually — without formal agreement — focus their efforts on the partial motion, ignoring the fact that as of the deadline to file a responsive pleading, the defendant has not answered those allegations that are beyond the scope of the partial motion to dismiss. According to a recent decision from the Delaware Court of Chancery, that approach is a mistake. While the rules of civil procedure excuse a defendant from answering allegations that are subject to a partial motion to dismiss, nothing in the rules shields the defendant from failing to answer those allegations unrelated to the motion to dismiss in a timely manner.
The harsh reality of the procedural rules is played out in Bayer-Highland Family P’Ship, LTD, et al. v. RF Capital Holdings, LLC, et al., C.A. No. 2018-0206-JTL (Del. Ch. June 25, 2018) (ORDER). In that case, the plaintiffs/counterclaim-defendants cited pending pleadings-stage motions as a basis for declining to answer allegations in the defendant/counterclaim-plaintiff’s pleading, which were not subject to the motions to dismiss. Vice Chancellor Laster rejected the plaintiffs/counterclaim-defendants’ approach, describing it as “counterproductive and obfuscatory.” The Court of Chancery then instructed the plaintiffs/counterclaim-defendants to file answers in response to the allegations that were not subject to the motion to dismiss. The Court warned that further refusal to substantively respond to those allegations would “result in the allegations being deemed admitted.”
The obvious takeaway is that defendant’s counsel must be prepared to answer any claims or allegations that are not subject to the defendant’s partial motion to dismiss. If that approach is impractical or unreasonable, the defendant should pursue a stipulation that allows the defendant to delay filing an answer to all allegations until after the court’s ruling on the partial motion to dismiss. If not, the unanswered allegations will be deemed admitted, severely disadvantaging the defendant’s case.