COURT OF CHANCERY

OF THE 

STATE OF DELAWARE

 JOHN W. NOBLE 417 SOUTH STATE STREET

VICE CHANCELLOR DOVER, DELAWARE 19901

 TELEPHONE: (302) 739-4397

 FACSIMILE: (302) 739-6179

February 27, 2015

Melissa N. Donimirski, Esquire David S. Eagle, Esquire

Proctor Heyman LLP Klehr Harrison Harvey Branzburg LLP

300 Delaware Avenue, Suite 200 919 North Market Street, Suite 1000

Wilmington, DE 19801 Wilmington, DE 19801

Re: Sutherland v. Sutherland

C.A. No. 2399-VCN

Date Submitted: November 13, 2014

Dear Counsel:

Katten Muchin Rosenman LLP (“Katten”) asks to intervene in the long legal 

battle between Plaintiff Martha S. Sutherland (as trustee of the Martha S. 

Sutherland Revocable Trust dated August 18, 1976, “Martha”)1and Defendants,

directors of Nominal Defendants Dardanelle Timber Co., Inc. and Sutherland 

Lumber-Southwest, Inc. (the “Individual Defendants” and the “Companies,”

 

1

There is some effort to distinguish between formal representation of Martha as an 

individual and as a trustee, but any distinction is not critical for purposes of this 

motion. See infra, note 20.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 2

respectively).2 Katten seeks to file a Verified Petition for a Charging Lien based 

on $766,166.75 in unpaid fees and expenses incurred in representing Martha in 

earlier stages of this litigation.

Martha retained Katten in 2004 in connection with an action to inspect the

books and records of the Companies under 8 Del. C. § 220. Although Katten

cannot locate the engagement letter it executed with Martha,

3

it is undisputed that 

Katten served as counsel in this litigation through the filing of derivative and 

double-derivative claims against the Individual Defendants, a successful effort to 

oppose a motion to dismiss (during the pendency of which the Individual 

Defendants acted to moot some of the claims4), the filing of an amended 

complaint, and a partially successful defense against a motion for summary 

 

2 Unless otherwise noted, the facts are drawn from the representations made in 

Katten’s Motion for Leave to Intervene (“Mot. to Intervene”). The Court focuses 

on the facts relevant to the pending motion. A fuller background can be found in 

previous opinions. See, e.g., Sutherland v. Sutherland, 2014 WL 3906500, at *1 

n.2 (Del. Ch. July 31, 2014). The Court does not adjudicate the merits beyond 

what is necessary to determine whether Katten is entitled to intervene by filing its 

petition for a charging lien. 

3

See Reply in Further Supp. of Katten Muchin Rosenman LLP’s Mot. for Leave to 

Intervene (“Katten’s Reply”) ¶¶ 3, 21; Pl.’s Mem. in Opp’n to Katten Muchin 

Rosenman’s Pet. for Leave to Intervene (“Pl.’s Opp’n”) 6.

4

Sutherland, 2014 WL 3906500, at *2, *5.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 3

judgment.5In the spring of 2011, Martha retained Kusper Law Group, Ltd. 

(“Kusper”) as counsel, and Katten withdrew.

 To facilitate this transition, on March 29, 2011, Katten, Kusper, and 

Proctor Heyman LLP (“Proctor,” and together with Kusper, “Current Counsel”) 

agreed that Katten would “delay filing for an attorney charging lien.”6 In turn, 

Current Counsel would not contest the timeliness of such filing if made “within 30 

days of a substantive ruling by the Delaware Chancery Court that awards monies to 

Martha either as damages or as reimbursement of legal fees incurred” (the “March 

Agreement”).7 

 

5

See Mot. to Intervene ¶¶ 3-5, 8; see also Katten’s Reply ¶ 5.

6 Mot. to Intervene ¶ 11.

7

The March Agreement, in relevant part, is as follows:

(1) Except as specifically provided below, nothing contained herein 

alters, amends, waives or impairs in any way the respective rights, 

claims or defenses of the parties . . . concerning Katten’s assertion, 

prosecution, enforcement or validity of a charging or other lien . . . ;

(2) . . . [I]f Katten files a charging lien within the time period provided 

in Paragraph 3 below, then Katten’s asserted lien will be treated and 

considered as though filed as of the date of this email and such lien 

will have and retain the priority it would have had as if actually filed 

on the date hereof . . . ;

(3) If Katten files a charging or other lien within 30 days of a 

substantive ruling by the Delaware Chancery Court that awards 

monies to Martha either as damages or as reimbursement of legal fees 

incurred in the derivative case pending in the Delaware Chancery 
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 4

The Individual Defendants ultimately prevailed at trial. However, in a 

July 31, 2014, letter opinion, “the Court conclude[d] that Martha should be 

awarded attorneys’ fees and expenses of $275,000” because of amendments to 

certain employment agreements following “vigorous motion practice.”8Shortly 

before expiration of the time to appeal the Court’s order granting Martha’s fee 

petition (and within the period prescribed by the March Agreement), Katten moved 

to intervene, attaching a petition for a charging lien.

* * * * *

Katten moves to intervene pursuant to Court of Chancery 24 (and to file a 

petition for a charging lien deemed filed nunc pro tunc to the date of the March

Agreement), citing its engagement letter with Martha and the common law right to 

assert an attorney charging lien. Katten highlights its unique interest in relation to 

 

Court, then none of Martha (individually or as trustee), Kusper or 

Proctor will argue, claim or contend that such filed lien is invalid or 

untimely . . . because Katten failed to file it sooner than the foregoing 

time period[].

Aff. of Bonita L. Stone in Supp. of Reply in Further Supp. of Katten Muchin 

Rosenman LLP’s Mot. for Leave to Intervene (“Stone Aff.”) Ex. A, at 2. The 

agreement defines “Kusper” as “Kusper & Raucci Chartered,” but there has been 

no argument that the difference is material.

8

Sutherland, 2014 WL 3906500, at *5. The employment agreements were 

amended in July 2007.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 5

the parties to this litigation and their counsel, as well as the March Agreement 

purportedly justifying its timeline. 

Martha opposes intervention, emphasizing “stringent standards”9for postjudgment intervention due to concerns about judicial order and prejudice, given the 

protracted litigation and delayed filing. Martha also focuses on a lack of evidence 

supporting Katten’s contractual right to recover fees from Martha in her capacity

as trustee.

10

Katten replies that the March Agreement precludes a timeliness objection 

and that its right to recovery would need to be determined at some point after the 

Court made a fee award. It contends that “stringent standards” do not govern this 

dispute because the policy reasons underlying any enhanced standards are not 

applicable. With respect to the engagement letter, Katten argues that an inability to 

produce the letter is not determinative of the outcome of the pending motion and 

that it undoubtedly represented Martha (technical capacity aside) in this litigation.

 

9

Pl.’s Opp’n 2.

10 In later correspondence, Martha adds that Katten’s desired intervention would 

fall “outside of the scope of the jurisdiction retained by the Court”—namely, 

“Plaintiff’s application for attorneys’ fees and expenses.” Letter from Melissa N. 

Donimirski, Esq. to the Court 3, Nov. 7, 2014. The Court considers the question of 

the appropriate recipient to be within the jurisdiction it retained over Martha’s 

request for attorneys’ fees and expenses.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 6

* * * * *

A. The Standard for Intervention of Right

Court of Chancery Rule 24(a) provides for intervention of right 

Upon timely application . . . when the applicant claims an interest 

relating to the property or transaction which is the subject of the 

action and the applicant is so situated that the disposition of the action 

may as a practical matter impair or impede the applicant’s ability to 

protect that interest, unless the applicant’s interest is adequately 

represented by existing parties.11

“[T]imeliness is the threshold question to be determined, whether intervention is 

claimed of right or as permissive.”12 While “the mere fact that judgment already 

has been entered should not by itself require an application for intervention to be 

denied,”13 courts are reluctant to permit post-judgment intervention.14 Courts have 

 

11 Ct. Ch. R. 24(a).

12 Shanghai Power Co. v. Del. Trust Co., 1975 WL 4181, at *2 (Del. Ch. July 11, 

1975).

13 Dugan v. Dineen, 1990 WL 82719, at *5 (Del. Ch. June 12, 1990). There is 

some disagreement about whether the Court has entered a final judgment. See

Letter from Jay N. Moffitt, Esq. to the Court 2, Nov. 5, 2014. The dispute over 

attorneys’ fees and expenses was the only remaining part of the litigation, and the 

Court’s letter opinion “conclude[d] that Martha should be awarded attorneys’ fees 

and expenses.” Sutherland, 2014 WL 3906500, at *5. The Court assumes that its 

letter opinion was a final judgment but observes that the outcome here would not 

be different if final judgment has not been entered.

14 Dugan, 1990 WL 82719, at *5. Dugan’s analysis occurs in the context of 

permissive intervention, but the general policy considerations weighing against 
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 7

“require[d] post-judgment intervenors to make a strong showing of entitlement and 

of justification for failure to request intervention sooner,” based on concerns “that 

allowing intervention after judgment will either (1) prejudice the rights of the 

existing parties to the litigation or (2) substantially interfere with the orderly 

processes of the court.”15

B. Does Katten Have an Interest Relating to the Subject of the Action?

While timeliness is the central dispute, the Court begins here with the basic 

disagreement over whether Katten has an interest permitting intervention of right. 

Katten asserts an interest in the Court’s fee award under contractual and common 

law theories. Martha does not challenge the common law right to an attorney

charging lien but focuses on the post-judgment stage of the litigation and Katten’s 

inability to prove the terms of the elusive engagement letter. 

An attorney charging lien is “‘the right of an attorney at law to recover 

compensation for his services from a fund recovered by his aid, and also the right 

 

post-judgment intervention also apply to intervention of right. See Shanghai 

Power, 1975 WL 4181, at *2.

15 Dugan, 1990 WL 82719, at *5 (internal citations omitted).
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 8

to be protected by the court to the end that such recovery might be effected.’”16 

Delaware precedent recognizes an attorney’s right to a charging lien at law and 

equity.

17

 An agreement governing fees does not preclude the assertion of a 

charging lien.18 For example, in Zutrau v. Jansing, this Court looked to the terms 

of a fee agreement in determining the appropriate amount of an attorney charging 

lien.19

From the time Martha retained Katten20 until she retained Kusper, she 

incurred $766,166.75 in legal fees and expenses for Katten’s work in this litigation. 

 

16 Doroshow, Pasquale, Krawitz & Bhaya v. Nanticoke Mem’l Hosp., Inc., 36 A.3d 

336, 340 (Del. 2012) (quoting 2 Edward Mark Thornton, A Treatise on Attorneys 

at Law § 578 (1914)).

17 See id. (“The reference to courts of law and equity implies that, although the lien 

is equitable in nature and based on general principles of justice, it can be asserted 

as a common law right. Both Welsh and Wilkins have been cited in Delaware cases 

and incorporated into our common law.” (citing English common law cases)).

18 Zutrau v. Jansing, 2014 WL 7013578, at *2 (Del. Ch. Dec. 8, 2014).

19 Id.

20 Martha questions Katten’s interest in the pending matter because Katten refers to 

the engagement letter between itself and “Sutherland,” a defined term in Katten’s 

motion and the attached petition that refers to “Plaintiff Martha S. Sutherland” 

(instead of Martha expressly as a trustee). Pl.’s Opp’n 6-7 (referring to paragraphs 

one and fourteen of Katten’s Motion for Leave to Intervene and similar language in 

the charging petition). Katten served as counsel in actions Martha brought as a 

shareholder, and the trust “was the vehicle created to hold Dardanelle stock for the 

sole benefit of Martha S. Sutherland individually.” Katten’s Reply ¶ 24. The 

Court will not now engage in a technical analysis of capacity when it is clear that 
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 9

In the absence of the engagement letter, the Court does not have complete 

information about Katten’s contractual rights. Regardless, Martha does not dispute 

that an engagement letter was signed, and the Court need not know all of its terms 

to grant the pending motion.

21

 More importantly, there is no question that Katten 

has a common law right to pursue recovery of its fees and expenses incurred on 

Martha’s behalf (although considerable disagreement exists over Katten’s right to 

intervene at this time). There is no party to the action who represents Katten’s

interest in recovering its fees and expenses from this Court’s award, an award that 

did not cover all of Martha’s legal expenses.

22

 Therefore, Katten has the requisite 

interest for intervention of right under Court of Chancery Rule 24.

 

Katten served as counsel in litigation for which fees were awarded on July 31, 

2014.

21 The Court on a motion to intervene does not determine who is responsible for 

the missing letter. Katten will need to substantiate its right to recover (and Martha 

will have the opportunity to present her defenses) at a later point.

22 As is apparent from Martha’s opposition memorandum, Martha and Current 

Counsel do not believe that Katten is entitled to any part of this Court’s fee award. 

See, e.g., Pl.’s Opp’n 5 (“Katten has a full and complete remedy if it wants to 

litigate with Martha Sutherland since Katten can just file a breach of contract 

action in Illinois state or federal court.”). The possibility of an action in Illinois 

does not deprive Katten of its interest (or prejudice Martha) here.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 10

C. Was Katten’s Application Timely?

At the heart of this dispute is whether Katten, filing its motion for leave to 

intervene arguably just before the end of the period to appeal this Court’s fee 

award, has made the requisite showing of timeliness to proceed. Katten points to 

the March Agreement, purportedly securing Katten’s right to file a charging lien 

within thirty days of a substantive judgment on fees, and even prohibiting Martha 

and Current Counsel from contesting the timeliness of the application. Martha 

draws attention to the “strong showing” required for post-judgment intervention 

and points out that the March Agreement did not secure Katten’s right to file a 

belated motion to intervene.

Timeliness, as discussed above, is a fundamental requirement for 

intervention. It “is to be determined from all the circumstances.”

23 The fact that 

one seeks to intervene after final judgment has been entered does not automatically 

bar approval, but courts have required a strong showing that the circumstances 

justify the intervention due to concerns about prejudice and judicial order.24 Under 

 

23 Shanghai Power, 1975 WL 4181, at *2 (internal quotation marks omitted).

24 Whether this heightened standard applies, an issue Katten and Martha debate, 

does not affect the Court’s decision because of the private ordering, explained 

infra.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 11

the current set of facts, it is relevant that Delaware law generally respects the 

freedom of contract.

25 Nonetheless, contracting parties cannot force the Court to 

find that intervention is timely.26 

Katten filed a motion to intervene on August 28, 2014—nearly one month 

after the Court resolved the last issues remaining in what has been more than ten 

years of litigation between Martha and the Individual Defendants. Katten knew

about the litigation and Martha’s accrued fees and expenses but “made no effort to 

intervene during the pendency of this action such that the parties and this Court 

could understand the potential impact of Katten’s involvement and plan for it as 

this litigation wound up.”27 Katten’s intervention would prevent the Court’s final 

judgment from taking prompt effect, and the missing engagement letter suggests 

the possibility for fact discovery and a contractual dispute.

 

25 See, e.g., ev3, Inc. v. Lesh, 103 A.3d 179, 181 n.3 (Del. 2014).

26 Cf. e.g., de Adler v. Upper N.Y. Inv. Co. LLC, 2013 WL 5874645, at *8 (Del. Ch. 

Oct. 31, 2013) (“The Court’s subject matter jurisdiction cannot be determined by 

contract, by consent in the pleadings, or even by procedural waiver.” (footnotes 

omitted)); Del. Elevator, Inc. v. Williams, 2011 WL 1005181, at *15 (Del. Ch. 

Mar. 16, 2011) (“In Delaware, a contractual stipulation to irreparable harm does 

not force the Court’s hand but is sufficient to support injunctive relief.”).

27 Pl.’s Opp’n 4.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 12

The critical fact, however, is that Martha, Katten, and Current Counsel 

reached an agreement, on March 29, 2011,28 anticipating the filing of a charging 

lien within thirty days of a substantive judgment on fees by this Court. Katten 

entered into the March Agreement to facilitate Martha’s ongoing litigation, not to 

cause delay or to pursue some other improper purpose. Given the current record, 

the Court does not find the agreement to postpone filing unenforceable or illusory. 

As noted above, a private agreement cannot compel the Court to find that a filing is 

timely (although a private agreement might prevent the parties from arguing about 

timeliness among themselves). Here, for the goals the parties sought to accomplish 

with respect to the change in representation, the March Agreement appears to set a 

permissible timeline.

Martha contends that granting the motion will “cause prejudice to the parties 

and this Court by impacting negatively upon the orderly process of this 

litigation.”29 Admittedly, allowing intervention will add issues to resolve and 

prevent this litigation from coming to its anticipated end. Yet the March 

Agreement provides for an attorney charging lien to be filed within thirty days of 

 

28 See Stone Aff. Ex. A, at 1-2 (email chain showing acceptance).

29 Pl.’s Opp’n 5.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 13

this Court’s decision on fees, and attorneys generally have a right to be 

compensated for their work. The Court does not deem prejudicial the resolution of 

a dispute that Martha and her counsel all expected to resolve at some reasonable 

time. Under these circumstances, granting the motion to intervene does not 

prejudice the Court or the parties.30 Additionally, the intervention is not disruptive. 

Allowing intervention for the limited purpose of Katten’s charging lien petition 

will not reopen issues that the Court has already decided. Rather, it would give 

proper effect to the agreement among Martha, Katten, and Current Counsel to 

prioritize litigation for their own necessary purposes. Therefore, policy concerns 

do not persuade the Court to deny Katten’s motion.31

Finally, there is a suggestion that the March Agreement does not protect the

filing of a motion to intervene (as opposed to a charging lien petition which could 

be filed in another court). The March Agreement technically did not address a 

motion to intervene. Nonetheless, the motion is a procedurally reasonable step to 

 

30 To the extent that Current Counsel argue that they should have been given notice 

earlier so that they could have planned for the claim, the Court observes that it, too, 

might have benefited from knowing of the agreement reached by Martha and her 

counsel.

31 Or, framed in a more focused manner, the March Agreement offers a compelling 

justification for Katten’s timeline.
Sutherland v. Sutherland

C.A. No. 2399-VCN

February 27, 2015

Page 14

lodge the charging lien: in order to file a charging lien, Katten should become a 

party to the action. Katten’s argument that the implied covenant of good faith and 

fair dealing protects the procedural mechanism to file the charging lien petition,

32

thus, also is persuasive. Katten participated in this litigation in this Court, and 

Delaware law recognizes a right to a charging lien. Therefore, Katten has met the 

requirements for intervention pursuant to Court of Chancery Rule 24(a).

* * * * *

For the reasons above, Katten’s Motion for Leave to Intervene is granted.33 

IT IS SO ORDERED.

Very truly yours,

/s/ John W. Noble

JWN/cap

cc: Jay N. Moffitt, Esquire

Robert S. Saunders, Esquire

Register in Chancery-K

 

32 Katten’s Reply ¶ 9.

33 Katten asks that the charging petition be deemed filed and effective as of 

March 29, 2011, the date of the March Agreement. Determination of an effective 

date is not essential to the question of whether leave to intervene should be 

granted.