Free Reply Brief - District Court of Delaware - Delaware

Case 1:07-cv-00751-GMS

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THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

BRENDAN WARD MASONRY, INC., Plaintiff v. WU & ASSOCIATES, INC., Defendant/Counterclaimant. CIVIL NO. 07-cv-00751 (GMS)

______________________________________________________________________________ REPLY BRIEF OF DEFENDANT/COUNTERCLAIMANT IN FURTHER SUPPORT OF ITS MOTION TO AMEND COUNTERCLAIM ______________________________________________________________________________

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DEFENDANT/COUNTERCLAIMANT WU SHOULD BE PERMITTED TO AMEND ITS COUNTERCLAIM BECAUSE THE STIPULATION DISMISSING THE 2004 NEW JERSEY ACTION EXPRESSLY PROVIDED THAT BOTH WU AND BRENDAN WARD WOULD BE ENTITLED TO PURSUE THEIR CLAIMS IN ANOTHER FORUM Plaintiff, Brendan Ward Masonry, Inc. ("Ward"), is still attempting to prevent defendant/counterclaimant, Wu & Associates, Inc. ("Wu"), from asserting its claims in any forum. Ward tried the same tactic recently in New Jersey Superior Court, and on April 25, 2008, Judge Meloni of that court reinstated Wu's Complaint, once he realized that Ward was attempting to dismiss Wu's Counterclaim in this case based upon Judge Meloni's prior ruling dismissing Wu's 2007 New Jersey Complaint. Despite this ruling, Ward now opposes Wu's Motion to Amend its Counterclaim, arguing that, since Wu dismissed its 2004 New Jersey action with prejudice, it cannot now assert any claims against Ward and its bonding company, International Fidelity Insurance Company, in this case. The fundamental flaw in this argument is that the Stipulation of Dismissal that was filed in the 2004 New Jersey case states as follows: 1. All claims and defenses asserted in this action shall be transferred to and included in the arbitration proceeding pending before the American Arbitration Association captioned Brendan Ward Masonry Inc. and Wu & Associates, No. 14Y11001004 (the "Arbitration"); 2. Defendant, International Fidelity Insurance Company, will be joined as Respondent in the Arbitration and shall be bound by all decisions rendered in the Arbitration and by any court in which the Arbitration Decision is confirmed; 3. This case shall be dismissed with prejudice; and 4. In executing this stipulation, neither party is waiving or releasing any claims, defenses or rights it may have with regard to the project or matters at issue in this action. (See copy of Stipulation of Dismissal and cover letter from Ward's counsel at the time, attached to the annexed Affidavit of Sean T. O'Meara, Esquire as Exhibit "A".) Interestingly, in its Brief opposing this motion, Ward makes no mention whatsoever of the fact that the 2004 New Jersey

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case was dismissed with the express understanding that all claims by the parties would be resolved in Arbitration. As noted previously, Judge Meloni from the New Jersey Superior Court recently reversed his prior decision from December 2007 dismissing Wu's Complaint because he concluded that the Stipulation Dismissal, despite being with prejudice, specifically reserved all claims of the parties and anticipated that they would be litigated elsewhere, and he previously thought that Wu's claims were being adjudicated in Delaware. See Transcript attached to the annexed O'Meara Affidavit as Exhibit "B", 3:11-5:3; 10:20-11:3. When Judge Meloni became aware that Ward was attempting to use his decision dismissing the 2007 New Jersey Complaint to prevent Wu from asserting its claims in this court, he reversed his decision, and reinstated Wu's 2007 Complaint. If Judge Meloni had believed that the 2004 Stipulation of Dismissal was an adjudication of the merits of Wu's claims, he obviously would not have reinstated the 2007 Complaint. As Wu explained to Judge Meloni at the April 25, 2008 hearing, it is not Wu's intention to pursue claims in two courts. Rather, once this Court has ruled that Wu may assert its claims against Ward and International Fidelity in this case, Wu will dismiss its New Jersey litigation entirely. It is also noteworthy that, when Ward dismissed the first case it filed in this court, Civil Action No. 04-117(KAJ), the Stipulation of Dismissal it filed with the Court in 2004 contained the identical language to the dismissal of the 2004 New Jersey case. (See cover note from Ward's counsel dated May 25, 2004 with proposed Stipulation of Dismissal, which Wu understands was filed with the Court), a copy of which is attached to the annexed O'Meara Affidavit as Exhibit "C".

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In conclusion, the doctrine of res judicata prevents a party from re-litigating a matter which has already been considered on the merits and finally decided. See e.g., Gregory v. Chehi, 843 F.2d 111, 116 (3d Cir. 1988). In this case, it is abundantly clear that when the parties dismissed the 2004 New Jersey action, they reserved all rights and fully intended to have each of their claims decided in Arbitration. Since Ward was not happy with the arbitrators selected by AAA, it chose to refile its claim to this Court, and Wu is amenable to having all claims decided in this Court. Accordingly, Wu should be entitled to assert its claims against both Ward and its bonding company, and its Motion to Amend the Counterclaim should be granted. As Judge Meloni noted, it would highly unfair for Ward to be able to have its claims decided in this Court, but Wu would not be entitled to have its claims heard here as well. ARCHER & GREINER, P.C. A Professional Corporation Attorneys for Defendant/Counterclaimant By:/s/ Peter L. Frattarelli PETER L. FRATTARELLI OF COUNSEL: Sean T. O'Meara, Esquire ARCHER & GREINER A Professional Corporation One Centennial Square Haddonfield, NJ 08033 856-795-2121 Dated: June 17, 2008
3367188v1

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