Court Opinion

ID: 4287454
Source: CourtListenerOpinion
Date Created: 2018-06-22 19:08:51.438669+00
Date Added: 2024-06-11T14:37:04.065694
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

DEAN P. BELLMOFF, AND
BEATRICE E. SALAZAR,

Plaintiffs,

v. C.A. No. N17C-10-312 PRW CCLD

INTEGRA SERVICES
TECHNOLOGIES, INC.,

Defendant.

Submitted: March 26, 2018
Decided: June 22, 2018

Upon Plaintijj‘s Dean P. Bellmojj” and Beatrl'ce E. Salazar ’s
Requestfor Attorney ’s Fees,
GRANTED.

MEMORANDUM OPINI()N AND ORDER

 

Todd C. Schiltz, Esquire, Stephen S. Herst, Esquire, Drinker Biddle & Reath LLP,
Wilmington, Delaware, Attorneys for Plaintiffs.

Garvan F. McDaniel, Esquire, Hogan McDaniel, Wilmington, Delaware, Ronald R.
Rossi, Esquire (pro hac vice), Kasowitz Benson Torres LLP, New York, New York,
Attorneys for Defendant.

WALLACE, J.

I. INTRODUCTION

Plaintiffs Dean P. Bellmoff and Beatrice E. Salazar (together, “Bellmoff and
Salazar”) move this Court to grant their request for attorney’s fees in the amount of
$41,1 10.54. Defendant Integra Services Technologies, Inc. (“Integra”) counters that
Bellmoff and Salazar are entitled to no more than $34,994.96 in attorney’s fees.

II. FACTUAL AND PROCEDURAL BACKGROUND

This issue arises from an underlying contract dispute recently resolved by this
Court. In August 2015, Bellmoff, Salazar, and Integra entered into a Share Purchase
Agreement: in exchange for selling, assigning, and transferring certain Integra stock
to Integra, Bellmoff and Salazar Would each receive both a cash payment at the
closing of the transaction and a promissory note in the amount of $1,450,000 (the
“Notes”).‘

Under each Note’s terms, Integra Was to pay the remaining principal in three
installments With accrued interest on the Notes’ unpaid balance.2 Integra made the
first principal and interest payments to Bellmoff and Salazar on or about August l2,

2016.3 Integra then informed Bellmoff and Salazar that it Would pay the second

 

' This committed Integra to pay Bellmoff and Salazar a remainder principal of $2,900,000
under the Notes. Compl. 11 6.

2 Ia'. at 1[ 8.

3 Ia'. at 1 9.

accrued interest sum due on August 12, 2017, but it Would not tender the second
principal installment until October 2, 2017.4 Bellmoff and Salazar granted this
extension, but Integra failed to make the required Note payments under the new
deadline.5

Because of Integra’s failure to pay the delinquent amounts, Bellmoff and
Salazar flled a Complaint against Integra on October 25, 2017, alleging breach of
the Share Purchase Agreement. Integra filed an Answer raising several affirmative
defenses Bellmoff and Salazar then brought a Motion for Judgment on the
Pleadings. Bellmoff and Salazar requested an order granting judgment in their favor
against lntegra; Integra opposed, saying material questions of fact remained.

This Court held argument on Bellmoff and Salazar’s Motion for Judgment on
the Pleadings in mid-February 2018. At the hearing, the Court ruled in Bellmoff and
Salazar’s favor on Integra’s liability and damages and reserved judgment on the
issue of reasonable attorney’s fees.

A Week later, the Court issued an Order (the “Order”) directing Integra to pay
all costs of collection that Bellmoff and Salazar have incurred as a result of Integra’s

breach of the Notes. This Was required under the Notes’ cost-shifting provision.(’

 

4 Compl.1l ll.
5 Id. at 1] l2.

6 Order, Bellmojj“v. Integra Servs. Techs., Inc., C.A. No. l7C-10-312 PRW [CCLD] (Del.
Super. Ct. Feb. 22, 2018).

_2_

The Order also directed that the parties meet and confer on payment of attorney’s
fees to see if they could agree on what amount of fees would be reasonable.7

The parties have attempted, unsuccessfully, to reach an agreement on
attorney’s fees. Bellmoff and Salazar now request the Court adjudge the proper
amount of reasonable attorney’s fees to be $41,110.54.8 Integra opposes Bellmoff
and Salazar’s request, asking the Court to award something less.9

III. STANDARD OF REVIEW

“In an action at law, a court may not order the payment of attorney’s fees as
part of costs to be paid by the losing party unless the payment of such fees is
authorized by some provision of statute or contract.”IO But when an award of
attorney’s fees is warranted, the Court “should look to the eight-factor test set forth
in the Delaware Lawyers’ Rule of Professional Conduct 1.5(a) [to] assess[] the

reasonableness of [that] fee award.”ll Rule 1.5(a) prescribes the following factors:

 

7 Order 11 2.

8 See Aff. of Todd C. Schiltz, Esq., Bellmoffv. Integra Servs. Techs., Inc., C.A. No. l7C-10-
312 PRW [CCLD] (Del. Super. Ct. Mar. 15, 2018) (hereinafter “Schiltz Aff.”).

9 Def.’s Opp. to Pls.’ Attorney’s Fees Request, Bellmo_}j‘"v. Integra Servs. Techs., Inc., C.A.
No. 17C-10-312 PRW [CCLD] (Del. Super. Ct. Mar. 26, 2018) (hereinafter “Def.’s Opp.”).

10 Casson v. Nationwia'e Ins. Co., 455 A.2d 361, 370 (Del. Super. Ct. 1982).

" Mine Sc_lfely Applicmces C0. v. AIUIns. Co., 2014 WL 4724804, at *2 (Del. Super. Ct. Sept.
19, 2014).

_3_

(1) the time and labor required, the novelty and difficulty
of the questions involved, and the skill requisite to
perform the legal service properly;

(2) the likelihood, if apparent to the client, that the
acceptance of the particular employment will preclude
other employment by the lawyer;

(3) the fee customarily charged in the locality for similar
legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the
circumstances;

(6) the nature and length of the professional relationship
with the client;

(7) the experience, reputation, and ability of the lawyer or
lawyers performing the services; and

(8) whether the fee is fixed or contingent.12
When using these factors, the Court should consider “whether the number of
hours devoted to litigation was ‘eXcessive, redundant, duplicative or otherwise
unnecessary.”’l3 Too, the Court should consider the terms of any fee agreement

between the law firm and the requesting client. Because, while “[f]ee agreements

99 66

cannot absolve the Court of its duty to determine a reasonable fee, an arm’s-length

 

‘2 DEL. RULEs oF PRoF’L. CoNDUCT R. l.5(a) (2018).

13 Mahani v. Ea'ix Media Grp., Inc., 935 A.2d 242, 247 (Del. 2007) (quoting All Pro Maia’s,
Inc. v. Layton, 2004 WL 3029869, at *5 (Del. Ch. Dec. 20, 2004), aff’d, 880 A.2d 1047 (Del.
2005)).

_4_

agreement, particularly with a sophisticated client, . . . can provide an initial ‘rough
cut’ of a commercially reasonable fee.”14

IV. DISCUSSION

Bellmoff and Salazar suggest that the fees they request, totaling $41,110.54,
are accurate and reasonable. Integra complains that Bellmoff and Salazar’s charged
fees are excessive in comparison to Integra’s own legal costs, $31,851.54. In turn,
Integra says, the Court should award no more than $34,994.96-_Be11moff and
Salazar’s requested amount reduced by 15%.

Bellmoff and Salazar have submitted an affidavit of costs and fees broken
down by each of their attorneys’ activities related to the suit.15 Bellmoff and Salazar
request $41,110.54 for 68.1 total hours of their attorneys’ work. Integra counters
that Plaintiffs only needed to spend $31,851.84 for 56.8 total hours of legal work_
the same amount Integra paid its attorneys to defend here.

“Determining reasonableness of amounts sought [] does not require the Court
to assess independently whether counsel appropriately pursued and charged for a
particular motion, line of argument, area of discovery, or other litigation tactic. ‘For

a Court to second-guess, on a hindsight basis, an attorney’s judgment . . . is

 

14 Wis. Inv. Bd. v. Bartlett, 2002 WL 568417, at *6 (Del. Ch. Apr. 9, 2002), aff’d, 808 A.2d
1205 (Del. 2002).

15 See Schiltz Aff.

hazardous and should whenever possible be avoided.”’16 “The party seeking fees
carries its burden to justify a challenged litigation decision by showing that ‘the
services . . . rendered [were] thought prudent and appropriate in the good faith
professional judgment of competent counsel.”’17

And, as Delaware courts have observed, any attempt to measure
reasonableness by simple comparison of the opposing parties’ lawyers’ bills is
inadequate The Court of Chancery’s treatment of this issue helps here.

In Danenberg v. Fitracks, Inc., Plaintiff Danenberg sought $292,019.91 in
fees and costs incurred in an underlying Chancery action.18 Defendant Fitracks, Inc.
(“Fitracks”) sought a reduction, complaining that Danenberg could not have
reasonably incurred the amount sought when, in the same underlying action,

Fitracks’s parent company incurred only $85,125 in expenses.19

 

16 Danenberg v. Fitracks, Inc. , 58 A.3d 991, 997 (Del. Ch. 2012) (quoting Arbitrum (Cayman
Islana's) Hana’elsAG v. Johnston, 1998 WL 155550, at *4 (Del. Ch. Mar. 30, 1998)).

17 Ia'. (quoting Delphi Easter P ’rs Ltd. P ’ship v. Spectacular P ’rs, Inc., 1993 WL 328079, at
*9(De1. Ch. Aug. 6, 1993)).

18 Ia'. at 998.

19 ld.

Citing the Pizza Principle_-“it is more time-consuming to clean up the pizza

thrown at the wall than it is to throw it”2°_-the Court of Chancery disagreed and

found in Danenberg’s favor:

At bottom, Fitracks objects not to the rates that
Danenberg’s counsel has charged, nor to the amounts
billed for particular tasks, but rather to the overall quantum
of work that Danenberg’s counsel performed This
objection asks the Court to second-guess the judgment of
Danenberg’s counsel, something the Court is loath to do.
Danenberg has carried his burden by showing that the
services rendered were thought prudent and appropriate in
the good faith professional judgment of competent
counsel.21

The difference in total fees incurred by each party here (a little over $9,000)
is far less than that in Danenberg (more than $200,000). And that difference here
derives from an 11-hour gap in each legal team’s time spent working on the case.
No doubt, Bellmoff and Salazar’s counsel had to spend time cleaning up Integra’s
thrown pizza: reviewing and responding to each of the affirmative defenses Integra

chucked in to the litigation.22

 

20 Danenberg, 58 A.3d at 998 (quoting Auriga Capital Corp. v. Gatz Props., LLC, 40 A.3d
839, 882 n.184(De1. Ch. 2012)).

21 Id. at 1000.

22 See Schiltz Aff. at 13-17 (citing 21 .8 hours spent responding to Integra’s Answer: 0.9 hours
spent reviewing the Answer; 8.6 hours researching Bellmoff’ s Motion for Judgment on the
Pleadings and the effects Integra’s affirmative defenses might have on the motion; 9.0 hours
researching the affirmative defenses specifically; and 3.3 hours preparing for oral argument on the
issues); Def.’s Opp., Ex. A at 1-3 (citing 12.4 hours spent on the same issues: 4.40 hours drafting

_7_

The Court will not examine each hour spent on the case through the lens of
hindsight. Bellmoff and Salazar have carried the burden of showing that the services
rendered were thought prudent and appropriate at the time, in the good faith
professional judgment of counsel. In sum, their counsel successfully secured a
million-dollar award and charged less than 5% of that sum to do so. Not bad.
Certainly not unreasonable The Court therefore finds Bellmoff and Salazar’s

requested fees wholly reasonable, and awards attorney’s fees in the amount of

/2;./)

Paul R. Wallace, Judge

$41,110.54.23

IT IS SO ORDERED.

 

the Answer and affirmative defenses; 2.00 hours reviewing the Answer; 4.50 hours to edit the
Answer; and 1.50 hours preparing for oral argument).

23 Bellmoff and Salazar may, under the Notes’ cost-shifting provision, also collect the now-
additional costs and fees incurred for their counsel’s time spent battling this wholly reasonable

attorney’s fees request.

_8_