Lincoln Benefit Life Company v. Wilmington Trust, N.A.
N17C-08-301 ALR
| Del. Super. Ct. | Mar 21, 2019Background
- Lincoln Benefit issued a life insurance policy on Adele Frankel in 2007; upon her 2016 death Wilmington Trust (as securities intermediary) demanded policy proceeds.
- Lincoln Benefit filed a declaratory judgment action in Delaware (Aug. 23, 2017) seeking a declaration that the policy is void as a STOLI/insurable-interest violation.
- A related action involving the same dispute was pursued in the Northern District of Mississippi; the cases proceeded in parallel with coordinated discovery and competing pretrial motions.
- Delaware initially refused to dismiss on forum non conveniens grounds; the Mississippi federal court later exercised personal jurisdiction and declined to stay its action.
- Trial in Delaware was set for Sept. 2019 and in Mississippi for Dec. 2019; Wilmington Trust moved in Delaware to stay the Delaware action in favor of the Mississippi action.
- The Delaware Superior Court concluded contemporaneous-filing and comity/judicial-economy concerns justified staying the Delaware declaratory action pending final resolution in Mississippi.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Delaware declaratory action is entitled to first-filed deference | Lincoln Benefit: Delaware first-filed; its choice deserves great weight | Wilmington Trust: Delaware filing was anticipatory; parties were naturally aligned in Mississippi | Court: Actions treated as contemporaneous; no special deference to Delaware first-filed |
| Which standard governs stay analysis (McWane preference vs. forum non conveniens) | Lincoln Benefit: McWane first-filed preference applies | Wilmington Trust: Forum non conveniens framework applies because filings were essentially contemporaneous/anticipatory | Court: Forum non conveniens analysis applies; no great deference to first-filed forum |
| Whether stay is warranted under forum non conveniens (hardship, comity, judicial economy) | Lincoln Benefit: Delaware forum appropriate; Delaware can decide Mississippi law; plaintiff's forum choice should carry weight | Wilmington Trust: Parallel litigation risks inconsistent rulings, Mississippi court is better positioned on Mississippi law, schedules are nearly contemporaneous | Court: Stay granted — simultaneous litigation poses risk of inconsistent rulings and creates sufficient hardship; Mississippi capable of prompt, complete justice |
| Effect of Mississippi court’s actions (jurisdiction, trial schedule) | Lincoln Benefit: Delaware should proceed despite Mississippi schedule | Wilmington Trust: Mississippi’s assertion of jurisdiction and trial scheduling support staying Delaware action | Court: Mississippi’s jurisdictional decision and timely trial date weigh in favor of stay; Delaware action stayed pending Mississippi resolution |
Key Cases Cited
- McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281 (Del. 1970) (establishes first-filed preference where appropriate)
- Miller v. Phillips Petroleum Co. Norway, 537 A.2d 190 (Del. 1988) (sets forum non conveniens factors for Delaware courts)
- In re Citigroup Inc. S’holder Derivative Litig., 964 A.2d 106 (Del. Ch. 2009) (discusses heightened showing when stay/dismissal would have effect similar to dismissal)
- Parvin v. Kaufmann, 236 A.2d 425 (Del. 1967) (forum non conveniens considerations)
- General Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681 (Del. 1964) (practical considerations in forum analysis)
- PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Trust, 28 A.3d 1059 (Del. 2011) (federal courts and interpretation of state insurance law)