Opinion ID: 1057781
Heading Depth: 3
Heading Rank: 3

Heading: Amount of Fees

Text: Paragraph 13 of the Severance Agreement states: If a Participant commences a legal action to enforce any of the obligations of the Company under this Agreement and it is ultimately determined that the Participant is entitled to any payments or benefits under this Agreement, the Company shall pay the Participant the amount necessary to reimburse the participant in full for all reasonable expenses (including reasonable attorneys' fees and legal expenses) incurred by the Participant with respect to such action. (Emphasis added.) A plain reading of this paragraph makes it clear that a participant is only entitled to attorneys' fees and legal expenses for legal actions brought to enforce obligations of ORC under this Agreement. Curiously, ORC contends that our holding in Ulloa v. QSP, Inc., 271 Va. 72, 624 S.E.2d 43 (2006), is controlling and bars Lawlor's recovery of attorneys' fees for anything beyond Count III, and that the trial court mistakenly ruled that Delaware law entitled Lawlor to fees on all counts on an all or nothing basis. We note that the Severance Agreement is governed by Delaware law, and our holding in Ulloa is therefore inapplicable. We must, therefore, examine Delaware law and the cases relied upon by the trial court. 30 In reaching its determination that Lawlor was entitled to all of his attorneys' fees and expenses, the trial court relied upon West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 2009 Del. Ch. LEXIS 23 (Del. Ct. Ch. 2009), Comrie v. Enterasys Networks, Inc., 2004 Del. Ch. LEXIS 53 (Del. Ct. Ch. 2004), and Brandin v. Gottlieb, 2000 Del. Ch. LEXIS 97 (Del. Ct. Ch. 2000), to reach its conclusion that Delaware law espouses an all or nothing approach to attorneys' fees. However, all of those cases involved situations distinguishable from the facts in this case. In all three of the cited cases, the issue before the court was whether the party seeking attorneys' fees was a prevailing party since they had not been successful on all the claims they brought. Additionally, in each of these cases, the court interpreted provisions of a particular agreement. The court in all three cases determined that under the all or nothing approach, the party who prevailed on any of their claims was the prevailing party and they were entitled to all their fees, even fees for the claims they lost. See West-Willow Bay Court, 2009 Del. Ch. LEXIS 23 at -34 & n.58 (holding that the plaintiff was entitled to all of its fees for the breach of contract action, even though the plaintiff was denied specific performance); Comrie, 2004 Del. Ch. LEXIS 53 at -11 (holding that the court's decision rested solely on a breach of contract 31 theory and the plaintiffs were the prevailing party even though they only received 28% of the remedy sought); Brandin, 2000 Del. Ch. LEXIS 97 at -92 and n.76 (holding that plaintiff was the prevailing party and entitled to all of her litigation expenses even though she was unsuccessful on some of her claims). All of the claims in these cases were related to breach of the same underlying agreement or contract. In the present case, by contrast, Lawlor's claims for unjust enrichment, wrongful termination, breach of 2005 Plan and breach of 1999 Plan were separate from the claim to enforce ORC's obligations under the Severance Agreement. Because, as noted above, we affirm the jury's verdict for breach of the Severance Agreement in Count III, we hold that the trial court would be correct in awarding Lawlor attorneys' fees and expenses with respect to that count. However, the trial court erred in awarding Lawlor his attorneys' fees and expenses for the claims outside of Count III. We note that Lawlor did not prevail on his claim for wrongful termination, but the attorneys' fees calculation was apparently included this claim. We reverse the trial court's award of $2,131,034.75 in attorneys' fees and remand this matter to the trial court for a determination of the amount of attorneys' fees and expenses Lawlor incurred as a result of enforcing ORC's obligations under the Severance Agreement. We are mindful that such a 32 determination will require careful consideration of overlapping issues.