Opinion ID: 2323659
Heading Depth: 1
Heading Rank: 4

Heading: O'Brien's Attorneys' Fees Were Reasonable

Text: The attorneys' fees the Court of Chancery ordered IAC to pay O'Brien include O'Brien's attorneys' hourly fees and certain contingency (premium or success) fees based on those hourly fees. On appeal, IAC challenges only the premium fee arrangements that would reward O'Brien's attorneys with payments above their standard hourly rates. Specifically, IAC challenges: (1) a 20% success fee to the firm that worked on the arbitration; (2) a $100 per hour increase to the same firm's hourly rates for all work after the arbitration; (3) a 50% premium above standard hourly rates to a second firm; and (4) a contingent $100 per hour premium above standard hourly rates to a third firm. Corporate officers are entitled to indemnification only for those attorneys' fees that are actually and reasonably incurred. [12] In determining whether fees meet that standard, Delaware courts have considered, [1] were the expenses actually paid or incurred; [2] were the services that were rendered thought prudent and appropriate in the good faith professional judgment of competent counsel; and [3] were charges for those services made at rates, or on a basis, charged to others for the same or comparable services under comparable circumstances. [13] IAC objects to the fee awards on two grounds. First it says that the premium fees were not incurred because they do not represent work done, but rather the success achieved. The Court of Chancery correctly rejected that argument. A premium or contingent fee is payable for work done, if that work is successful. The fact that the amount of the fee is not set until the result is obtained does not change the fact that the fee is incurred based on hours or work performed for the client. IAC also objects to the amounts awarded by the trial court. We review the trial court's decision for abuse of discretion, and we find none. [14] Although an award of contingency or premium fees is unusual, the trial court recognized that fact and decided that O'Brien acted reasonably under the circumstances in making those fee arrangements. In addition, the court carefully analyzed the amounts charged and the work performed, applying the correct legal standard. Accordingly, we affirm the award on the basis of the Court of Chancery's opinion. [15]