IN THE SUPREME COURT OF THE STATE OF DELAWARE

TAVISTOCK CIVIC ASSOCIATION, INC.

Defendant Below, Appellant,

v. JAMES W. OWEN JR. and JANA OWEN,

Plaintiffs Below , Appellee. § No. 222 , 2019 § § § § Court Below

— Court of § Chancery of the State of § Delaware § § § C.A. No. 2017

- 0571

- MTZ § § §

Submitted: Oct ober 23 , 2019 Decided: December 3 , 2019

Before SEITZ , Chief Justice; VAUGHN , and TRAYNOR , Justices.

O R D E R

This 3rd day of December 2019, after careful consideration of the parties’ briefs and the record on appeal, it appears to the Court that the March 26, 2019 letter opinion of the Court of Chancery awarding Appellees the recoverable expenses they incurred in connection with a motion to compel discovery under Court of Chancery Rule 37(a)(4)(C) should be affirmed on the basis of and for the reasons stated in the letter opinion. 1

1 Owen v. Tavistock Civic Association, Inc. , 2019 WL 1349656 (Del. Ch. Mar. 26, 2019) (“ Opinion Below ”).2

(1) The underlying dispute concern ed a fence. Appellees James W. Owen,

Jr. and Jana L. Owen (“Appellees” or the “Owens” ) purchased a home in the Tavistock Community, a deed

- restricted community in which “[no] . . . fence shall be commenced, erected or maintained” unless approved in writin g by Appellant Tavistock Civic Association, Inc. (“Appellant” or “Tavistock” ). 2 According to Tavistock, b efore the Owens purchased their home , they asked the Tavistock b oard whether they could erect a six

- foot tall stockade privacy fence on the property. Tavistock’s b oard said no, and the Owens purchased the property anyway. Nevertheless, on January 25, 2017, the Owens submitted a n application to the

Tavistock b oard seeking permission to build the six

- foot tall privacy fence they had previously inquired about. Tavistock’s b oard denied the Owens’ application, explaining that Tavistock had a “long standing practice” of allowing only certain types of fences, and those only up to four fee t tall, in order to “preserve the open feel of the community.” 3 As litigation progressed, Tavistock continued to maintain that it had “uniformly upheld the deed restrictions regarding fences from April 9, 1984, to the present.” 4 (2) Accordingly, the Owens so ught discovery dating back to 1984, including identification and production of “ all documents that reference or relate in

2 App. to Opening Br. at A0028 (hereinafter “A___”). 3 A0022; A0057. 4 A0137; see, e.g. , A0080.3

any way to all requests by residents of Tavistock

. . . for a fence on their property.” 5

Tavistock responded to the discovery request s with the specific objection that the requests sought “ information without any limitation to the time period relevant to [the] matter” 6 and offered to “produce documents created, received or obtained only within three (3) years of the filing of the Compla int.” 7 (3) The Owens filed a motion to compel under Court of Chancery Rule 37 (the “Motion to Compel” or the “Motion”) , requesting that the Court of Chancery

order Tavistock to “conduct a complete and thorough search of all its records and documents, whether in the custody of current Board Members or past Board Members, or elsewhere.” 8 The Owens also requested attorney s ’ fees in connection

with the M otion. (4) The Court of Chan cery granted in part and denied in part the Motion to Compel, and denied attorneys’ fees without prejudice, noting that “fees and costs will be handled pursuant to 10 Del. C. § 348(e) at the conclusion of this action.” 9 The Court found that, because Tavis tock , in its defense, asserted that it had consistently enforced the deed restriction on fences since April 9, 1984 , discovery was appropriate going back to that date. But the c ourt also found that certain

5 Exhibit B to Plaintiff’s Motion to Compel Discovery Responses, Owen v. Tavistock Civic Ass’n, Inc. , 2018 WL 38 77179 (Del. Ch. Aug. 14, 2018)

. 6 App. to Answering Br. at B 14 (hereinafter “B___”); B 45. 7 B 1 4; B 4 5. 8 B8. 9 A0138.4

interrogatories that the Owens had propounded and that were the subject of the Motion to Compel were protected by privilege. (5) Shortly after the Court of Chancery’s order was entered, Tavistock’s

b oard decided to moot the Owens’ complaint in order to avoid discovery costs by amending the board’s fence poli cy and approving the Owens’ request. 10 (6) The Owens then petitioned for all of their costs and legal fees. 11 After a hearing, the Cou rt of Chancery granted attorney s ’ fees in the amount of $ 5 , 000.00

in connection with the Motion to C ompel under Court of Chancery Rule 37(a)(4)(C). Tavistock appealed. (7) We review the Court of Chancery’s award of attorneys’ fees for abuse

of discretion. 12 (8) Rule 37(a)(4) authorizes an award of fees and sanctions in relation to a motion to compel under thre e scenarios: (A) fees for the movant if the motion is granted (subsection (A)) ; (B) fees for the opposition if the motion is denied (subsection (B)) ; and (C) discretionary allocation if the motion is granted in part and denied in part (subsection (C)). 13 Under both subsections (A) and (B), the award of

10 According to Tavistock, it is a voluntary civic association with very limited resources. 11 The Owens sought fees for being the prevailing party under Court of Chancery Rule 54(d) in th e amount of $1,127.50, attorney s ’ fees in connection with the Motion to Compel in the amount of $5,340.40, and fees in the amount of $18,906.16 because Tavistock allegedly acted in bad faith while defending its enforcement of the commun ity’s deed restrictions. 12 RBC Capital Mkts., LLC v. Jervis , 129 A.3d 816 (Del. 2015). 13 D EL

. R. C H

. C T

. 37(a)(4).5

fees is warranted unless the Court finds that the losing party was “substantially justified” in opposing or making the motion to compel or that other circumstances make an award of expenses unjust

. 14 (9) While subsection (C) does not explicitly require an analysis of whether the positions taken by a party against whom fees and expenses are sought are

“ substantially justified , ” implicitly it does

. Otherwise, for instance, a party who is substantially justi fied in opposing the entirety of a motion to compel

— but, despite that justification, is unsuccessful as to a portion of its opposition

— c ould arguably be liable for fees related to the unsuccessful portion, merely based on a partial lack of success. That, in our view, is not how Rule 37(a)(4) is structured. Instead, reading subsections (A), (B), and (C) together, Rule 37(a)(4) only allows for the shifting of fees in favor of a successful party

— either a movant or opposing party

— when its adversary’s position was not substantially justified. Subsection (C) merely authorizes the court to apportion the fee award “in a just manner” where, as here, the success of the party seeking fees is partial. (10) Tavistock complains that, although the Court of Chancery recog nized
that , to avoid fee

- shifting, Tavistock’s opposition had to be “substantially justified,”
the court “ equated substantial justification with success in its opposition.” 15 If we

14 Id. 15 Opening Br. 22.6

were to look no further than the Court of Chancery’s finding that “[the] apportionment of reasonable fees is justified here because the Owens succeeded in nearly all of their requests in the Motion to Compel,” Tavistock’s contention would gain some purchas e. But the Court of Chancery went further, finding that Tavistock’s opposition to the thirty

- year discovery date range was not substantially justified because its representation regarding that date range

— that it had consistently upheld the relevant deed r estriction since April 9, 1984

— was a cornerstone of its

defense . Given that Tavistock sought to rely on a representation and then opposed discovery aimed at testing its accuracy , it was within the court’s discretion to find that Tavistock’s objections wer e not substantially justified by its alleged countervailing interests. (11) Tavistock also argues that the Court of Chancery erred in failing to consider the burden on Tavistock of complying with the Motion to Compel. But Tavistock did not proffer

— in opposit ion to either the Motion to Compel or the Owens’ motion for costs and fees

— anything more than conclusory allegations as to

the actual burden it would be forced to bear should it produce “34 years

- worth of information from anyone and everyone who had ever b een a member of Tavistock’s [b]oard during the last three decades.” 16 For example, Tavistock did not provide an estimate of the cost of such production, nor did it provide an estimate of the number

16 Opening Br. 19.7

of individuals it would have to seek such documents from. In the absence of such evidence, Tavistock’s contention that the Court of Chancery abused its discretion in its treatment of the purported burden and expense is unpersuasive. 17 (12) The remaining arguments Tavistock advances in scattershot fashion are, in one way or another, attacks on the Court of Chancery’s determination that Tavistock’s opposition to the motion to compel was not substantially justified. The main thrust of these argume nts is that the court failed to engage substantively with Tavistock’s claims about how burdensome compliance with the Owens’ discovery requests would be. We reject these arguments for the same reasons that are set forth

above.

N OW, TH EREFORE, IT IS ORDERED that the judgment of the Court of Chancery is AFFIRMED

. BY THE COURT: /s/ Gary F. Tr aynor Justice

17 Tavistock’s “unduly burdensome” argument rests solely on Texaco Dev. Corp. v. Dow Chem. Co. , 1985 WL 44675 (Del. Ch. Sept. 11, 1985), a case where “the parties attempted to resolve their [discovery disputes] on their own,” mutual acknowledgments and concessions were made, and the scope of the discovery was narrowed via agreement between the parties before the motion to compel was ruled upon. H ere, Tavistock may have produced some materials, but it stood by its opposition to the time range and no concessions were made by either party as to any production from more than three years prior to the litigation

— a far cry from the attempts made by the p arties in Texaco to resolve their problems without interference by the court. We also separately note that the award of attorney s ’ fees for discovery violations rests squarely in the Court of Chancery’s discretion, and we will not hold that one Vice C hancellor’s discretion in one situation binds another V ice C hancellor’s discretion in another situation as a matter of law.