William Maldonado v. William H. Flynn

HARTNETT, Vice Chancellor I Defendant Zapata Corporation (Zapata), asserting the doctrine of res judicata (the matter is settled by a judgment), moved to dismiss this action, claiming that a final judgment of the U.S. District Court for the Southern District of New York (U.S. District Court) dismissing a companion action, Maldonado v. Flynn, 485 F. Supp. 274, (S.D.N.Y. 1980) is binding as to all issues pending in this Court, even though the U.S. District Court did not consider the merits of the issues pending in this Court. Zapata urges that plaintiff (Maldonado) should have presented the issues in the present case to the U.S. District Court pursuant to the District Court's pendent jurisdiction, and because he did not, he is precluded from asserting them here. For the reasons set forth, I hold that the failure of Maldonado to present all of his theories of recovery in the prior District Court case, which arose out of the same transaction which is the subject of this litigation, precludes his assertion of these theories in this case, if the District Court judgment dismissing his claims is not overturned on appeal. The action in this Court is a stockholder's derivative suit brought by Maldonado against Zapata and certain of its officers and directors in 1975 alleging wrongs to the corporation which occurred in 1974 because of transactions between the corporation and some of its directors. Maldonado asserts, in the present action, a breach of fiduciary duty arising from the common law. A more detailed statement of fact appears in Maldonado v. Flynn, Del. Ch., 413 A.2d 1251 (1980).