Court Opinion

ID: 2745208
Source: CourtListenerOpinion
Date Created: 2014-10-23 18:04:28.430173+00
Date Added: 2024-06-11T09:53:39.109794
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
                        IN AND FOR NEW CASTLE COUNTY

KURATLE CONTRACTING, INC.,                  )
a Delaware Corporation                      )
                                            )
                                            )
Plaintiff,                                  )
                                            )
v.                                          )              C.A. No. N12C-03-079 MJB
                                            )
LINDEN GREEN CONDOMINIUM,                   )
ASSOCIATION, a Delaware                     )
Corporation                                 )
                                            )
Defendant.                                  )

                                    Submitted: July 3, 2014
                                   Decided: October 22, 2014

             Upon Plaintiff’s Motion for Reimbursement of Attorney’s Fees and Costs,

                           GRANTED in part and DENIED in part.

                                           OPINION

Thomas C. Marconi, Esq., Losco & Marconi, P.A., Attorney for Plaintiff

Michael F. Duggan, Esq., and Marc Sposato, Esq., Marks, O’Neill, O’Brien, Doherty & Kelly,
P.C., Attorneys for Defendant

BRADY, J.
                                       I. INTRODUCTION

       The underlying cause of action in this case concerns a contract dispute between Kuratle

Corporation, Inc. (“Plaintiff”) and Linden Green Condominium Association (“Defendant”).

Plaintiff is a Delaware corporation that is engaged in the business of management and

maintenance of condominium complexes.         Plaintiff is owned and operated by Henry and

DruAnne Kuratle (individually, “Mr. Kuratle” and “Mrs. Kuratle”). Defendant is a non-profit

Delaware corporation that manages the business and affairs of the Linden Green condominium

complex in New Castle County, Delaware.

       In 2002, 2007, and 2010, Plaintiff and Defendant entered into a series of contracts under

which Plaintiff was to provide management and maintenance for Defendant. In 2011, a dispute

arose over the validity of the 2010 Agreement. In 2012, Plaintiff commenced the instant action,

asserting that Defendant had breached the 2007 and 2010 agreements. Defendant responded and

counterclaimed alleging various kinds of managerial misconduct by Plaintiff.         Defendant

voluntarily dismissed its counterclaims before trial. Before trial, the Court determined as a

matter of law that Defendant breached a valid contract. Trial was held in December 2013 solely

to determine the extent to which Plaintiff sustained damages as a result of Defendant’s breach.

The jury found for Plaintiff in the amount of $165,000.

       After trial, Plaintiff filed a Motion for Additur or New Trial, which was subsequently

denied by the Court. Plaintiff also filed the instant Motion for Costs and Fees. Defendant

responded in opposition to Plaintiff’s Motion.      On March 18, 2014, the Court requested

simultaneous supplemental briefing on the issue of whether Defendant’s counterclaims were

made in bad faith. The supplemental briefing was submitted by both Plaintiff and Defendant,

and the Court took the matter under consideration on July 3, 2014.

                                                1
          For the reasons set forth below, Plaintiffs Motion for Cost and Fees is GRANTED in part

and DENIED in part.

                               II. FACTS AND PROCEDURAL BACKGROUND

                                A. The 2002, 2007, and 2010 Agreements

          The parties entered into three agreements, in 2002, 2007, and 2010, respectively. The

three agreements all contained nearly identical terms. For each agreement, in addition to the

main contract signed by the parties, there were additional documents specifically addressing

proposed work by Plaintiff for “Landscaping and Maintenance,” “Snow Removal,” and

“Property Management.” These additional documents were not signed by the parties, but neither

party has disputed that the additional documents were part of the agreements.

          In November 2002, the parties executed the first written agreement (“2002 Agreement”),

under which Defendant employed Plaintiff “to manage the maintenance, operations, landscaping,

snow removal, and finances of [Defendant].” 1 The 2002 Agreement covered the roughly five-

year period from December 1, 2002 to December 31, 2007.

          In October 2007, prior to the expiration of the 2002 Agreement, the parties executed the

second written agreement (“2007 Agreement”), which contained nearly identical terms. 2 The

2007 Agreement was supposed to cover the next five-year period, from January 1, 2008 to

December 31, 2012.

1
    Complaint, Ex. A, “2002 Agreement”.
2
    Complaint, Ex. B, “2007 Agreement”.

                                                  2
        In September 2010, the parties executed the third written agreement (“2010 Agreement”),

again containing nearly identical terms except for updated pricing. 3              The 2010 Agreement

replaced and superseded the 2007 Agreement. 4                   The commencement date printed on the

agreement was January 1, 2010, and its expiration date was December 31, 2017. 5 Plaintiff

argued that the parties hence intended the 2010 Agreement to apply retroactively. However,

Defendant argued that the 2010 Agreement was not intended to apply retroactively and offered

the deposition testimony of Olive Shepherd, who was Secretary of the Linden Green

condominium association at the time, in support of Defendant’s view. 6 Prior to trial, upon the

parties’ cross-motions for partial summary judgment, the Court found that the question of

whether the 2010 Agreement was intended by the parties to apply retroactively from January 1,

2010 could not be determined as a matter of law, but that the retroactivity question did not affect

the agreement’s validity. 7

                                     B. The Parties Exchange Letters

        On December 12, 2011, over a year after the 2010 Agreement was executed, Defendant

sent a letter to Plaintiff advising that Defendant had submitted the 2010 Agreement to an

attorney who advised that the 2010 Agreement was “invalid and unenforceable.” 8 Defendant’s

letter further advised that Defendant would expect Plaintiff to continue to operate under the 2007

Agreement, but added that the attorney had found “some problems” with the 2007 Agreement. 9

Defendant proposed an “Addendum,” which provided for a consultant to oversee various aspects

3
  Complaint, Ex. C, “2010 Agreement”.
4
  Complaint, Ex. C, “2010 Agreement”.
5
  Complaint, Ex. C, “2010 Agreement”.
6
  Plaintiff’s Motion for Partial Summary Judgment (Sept. 17, 2013), Tab 3 at 16.
7
  Opinion (Nov.19, 2013) at 20-21.
8
  Complaint, Ex. E, “2011 Letter: Linden Green to Kuratle”.
9
  Complaint, Ex. E, “2011 Letter: Linden Green to Kuratle”.

                                                         3
of Plaintiff’s performance. 10 Defendant requested that Plaintiff “sign the Addendum and keep a

copy for [Plaintiff’s] records.” 11 The Addendum itself stated that Plaintiff’s failure to sign the

Addendum would be considered a default, which could result in the termination of the 2007

Agreement. 12

        On December 29, 2011, Thomas B. Ferry, Esq. (“Ferry”), who was then counsel for

Plaintiff, wrote to Defendant in response. 13 In the letter to Defendant, Ferry stated that he had

reviewed to 2010 Agreement and concluded that it was valid and enforceable. 14 Ferry’s letter

also stated that the Addendum was not acceptable to Plaintiff and that Plaintiff would not sign

the Addendum. 15 Finally, Ferry’s letter stated that Plaintiff intended to comply with the original

2010 Agreement (without the Addendum) and expected Defendant to do likewise. 16

        Thereafter, in a letter dated January 16, 2012, Defendant declared Plaintiff to be in

default of the 2007 Agreement for failing to execute the addendum. 17 The letter stated that

because of the default, Defendant was hereby terminating its 2007 contract with Plaintiff. 18

                                           C. The Instant Action

        Plaintiff filed suit on March 7, 2012, asserting two alternative theories under which

Defendant had breached the contract between the parties. First, Plaintiff contended that the 2010

Agreement was valid and enforceable, and that Defendant had breached the 2010 Agreement by

10
   Complaint, Ex. E, “Linden Green’s Addendum”.
11
   Complaint, Ex. E, “2011 Letter: Linden Green to Kuratle”.
12
   Complaint, Ex. E, “Linden Green’s Addendum”.
13
   Complaint, Ex. F, “Ferry’s Letter”.
14
   Complaint, Ex. F, “Ferry’s Letter”.
15
   Complaint, Ex. F, “Ferry’s Letter”.
16
   Complaint, Ex. F, “Ferry’s Letter”.
17
   Complaint, Ex. H, “2012 Letter: Linden Green to Kuratle”.
18
   Complaint, Ex. H, “2012 Letter: Linden Green to Kuratle”.

                                                        4
trying to impose the Addendum, 19 wrongfully locking Plaintiff out of the Condominium

Association’s office, failing to pay invoices for specific maintenance services, and prematurely

terminating the parties’ business relationship. 20 Second, Plaintiff alleged that even if the Court

were to find the 2010 Agreement invalid, Defendant breached the 2007 Agreement by

terminating the parties’ business relationship prematurely. 21 Plaintiff contended that Defendant

had no right to terminate the 2007 Agreement on the basis of Plaintiff’s refusal to sign the

addendum. 22

        On April 13, 2012, Defendant filed an Answer, Affirmative Defenses, and a

Counterclaim. 23 Defendant’s Counterclaim and Affirmative Defenses stated that Plaintiff had

acted tortuously and breached the contract by mismanaging the Linden Green complex and

failing to perform under the 2002 and 2007 Agreements in various ways. 24

                                            D. Pre-Trial Motions

        Plaintiff filed a Motion for Partial Summary Judgment on September 17, 2013,

contending that the undisputed facts support a finding that Defendant breached a valid,

enforceable contract—namely, the 2010 Agreement. 25 On October 15, 2013, Defendant filed a

Motion for Partial Summary Judgment, asserting that (a) the 2010 Agreement was unenforceable

because the provision stating the contract’s term was indefinite, and (b) even if the 2010

19
   More specifically, Plaintiff alleged that Defendant breached by trying to impose the Addendum, which was stated
to be an addendum to the 2007 Agreement; when (a) the terms of the 2007 Agreement had already been superseded
by the 2010 Agreement, and (b) the terms of the Addendum were independently unacceptable to Plaintiff.
Complaint at 6.
20
   Complaint at 6.
21
   Complaint at 7.
22
   Complaint at 7.
23
   Answer, Affirmative Defenses, and Counterclaim (“Answer”).
24
   Answer at 4-5.
25
   Brief in Support of Plaintiff’s Motion for Partial Summary Judgment (Sept. 17, 2013).

                                                        5
Agreement was enforceable, it was properly terminated by Defendant. 26 Finally, also on October

15, 2013, Plaintiff filed a second Motion for Partial Summary Judgment, arguing that Defendant

was barred from pursuing a counterclaim for any conduct that occurred prior to April 13, 2009,

citing a three-year statute of limitations. 27

        On November 19, 2013, the Court granted both of Plaintiff’s Motions for Partial

Summary Judgment and denied Defendant’s Motion for Partial Summary Judgment. Concerning

Plaintiff’s Motions, the Court concluded that (1) the 2010 Agreement was valid and enforceable,

and Defendant breached the 2010 Agreement when it ultimately terminated the parties’ business

relationship, and (2) the three-year statute of limitations, under 10 Del. C. §8106, barred

Defendant from asserting any claims after April 13, 2009. The Court found that Defendant

failed to satisfy its burden of pleading adequate facts to support an application of the time-of-

discovery rule, which would have allowed Defendant to assert tort claims after April 13, 2009. 28

        Concerning Defendant’s Motion, the Court found that (1) the 2010 Agreement was valid

and enforceable despite the dispute over its effective date, and (2) Defendant breached the 2010

Agreement when it terminated the parties’ business relationship based on Plaintiff’s refusal to

execute the Addendum. 29

                                                  E. Trial

        Because the Court determined as a matter of law that Defendant breached a valid

contract, the sole issue at trial was the extent to which Plaintiff sustained damages as a result of

Defendant’s breach. Trial commenced on December 2, 2013 and concluded on December 4,

26
   Defendant’s Motion for Partial Summary Judgment (Oct. 15, 2013).
27
   Plaintiff’s Motion for Partial Summary Judgment (Oct. 15, 2013).
28
   Opinion (Nov. 19, 2013) at 29.
29
   Opinion (Nov. 19, 2013) at 27.

                                                      6
2013. At the close of Plaintiff’s case in chief, Defendant moved for and was granted judgment

as a matter of law that Plaintiff was not entitled to punitive damages. The jury returned a verdict

for Plaintiff in the amount of $165,000. After trial, on December 12, 2013, Plaintiff filed a

Motion for Additur or New Trial, which was denied by the Court on March 27, 2014.

                                III. PLAINTIFF’S MOTION FOR COSTS AND FEES

                      A. Plaintiff’s Motion and Defendant’s Response in Opposition

           Plaintiff filed the instant Motion for Costs and Attorney’s Fees on December 17, 2013.

Plaintiff argues that Plaintiff is entitled to costs and fees under both the fee-shifting contractual

provision exception and the bad faith exception to the American Rule that parties are responsible

for bearing their own litigation costs. 30 Plaintiff argues that the 2010 Agreement, which the

Court found valid, contains a fee-shifting provision on the second page of the document entitled

“Landscaping and Maintenance Proposal.”

           In the alternative, Plaintiff argues that costs and fees should be taxed against Defendant

for asserting claims in bad faith, including claims against Plaintiff for fraud, theft, gross willful

and wanton negligence, intentional concealment, self-dealing, and improperly removing over

$100,000 from Defendant’s bank accounts. 31 Plaintiff alleges that Defendant knew these claims

were baseless, but chose to assert them as a litigation strategy. Plaintiff relies on the trial

testimony of Charles Hamrick (“Hamrick”), who was president of the condominium association

from September 2011 to September 2013 and who is representing Defendant in the instant

litigation.      Plaintiff’s interpretation of Hamrick’s testimony is that Defendant made these

allegations because it had been sued by Plaintiff and felt that it needed to assert a strong

30
     Plaintiff’s Motion for Costs and Fees at 3.
31
     Plaintiff’s Motion for Costs and Fees at 5.

                                                    7
defense. 32 Plaintiff suggests that Defendant asserted these claims “in an effort to make good on

a threat by [Defendant] to make Plaintiff’s ‘business practices… a matter of public record’ if

Plaintiff refused to abide by [Defendant’s] demand to disavow the 2010 agreement, and agree to

the proposed Amendment to the 2007 Agreement.” 33

        Defendant submitted a Response in Opposition to Plaintiff’s Motion for Costs and Fees

on January 2, 2014. Defendant disputes Plaintiff’s characterization of the provision within the

“Landscaping and Maintenance Proposal” document as a general fee-shifting provision. 34

Defendant alleges that when this provision is read in context, it is clear that it applies only to

reimbursement for costs incurred in using a collection agency or an attorney to collect delinquent

invoices for certain additional lawn care services. 35 In contrast, says Defendant, the contract’s

general indemnification provision (at §E of the main document, which is signed by both parties)

does not include a provision for fee-shifting. 36

        Defendant argues that the bad faith exception also does not apply. Defendant argues that

it voluntarily dismissed its counterclaim, not because the claim was frivolous or intended to be

vexatious, but “because the cost of proceeding with the claim was not justified by the amount of

recovery available from [Plaintiff],” as Defendant allegedly discovered that “[Plaintiff] had little

to no recoverable assets to satisfy a judgment.” 37          Defendant argues that Plaintiff has

mischaracterized the testimony of Hamrick, and that Hamrick’s answers concerning the validity

of the counterclaims were based on his limited personal knowledge rather than what Defendant

32
   Plaintiff’s Motion for Costs and Fees at 5-6.
33
   Plaintiff’s Motion for Costs and Fees at 6.
34
   Defendant’s Response in Opposition (Jan. 2, 2014) at 2.
35
   Defendant’s Response in Opposition (Jan. 2, 2014) at 2.
36
   Defendant’s Response in Opposition (Jan. 2, 2014) at 4.
37
   Defendant’s Response in Opposition (Jan. 2, 2014) at 6.

                                                         8
knew. 38 Defendant maintains that Defendant itself did have adequate basis for believing that

Plaintiff had mismanaged the condominium complex. Defendant cites a report issued by a

forensic accountant (the “Horty Report”), which Defendant says “outlines very clearly the

deficiencies in [Plaintiff’s] management of the books and records,” including seven months of

missing bank statements from a bank account belonging to Defendant and under Plaintiff’s

control, bank statements showing disbursements totaling $197,802.85 with no transactional

support, and thirty-five disbursements to Plaintiff from a bank account belonging to Defendant

without supporting invoices. 39 Defendant concludes that this evidence shows that Defendant had

at least a good faith basis for its allegations that Plaintiff engaged in fraud and mismanagement.

                       B. Supplemental Briefing at the Direction of the Court

        On March 18, 2014, the Court requested simultaneous supplemental briefing specifically

on the bad faith argument. The Court requested that the parties cite with specificity to the record

to support their respective positions.           Plaintiff and Defendant both submitted supplemental

memoranda on July 3, 2014.

        In its supplemental memorandum, Plaintiff states first that Plaintiff is not seeking

reimbursement under the bad faith theory for costs incurred in litigating the main claim. 40

Plaintiff says that it is only seeking costs and fees expended in opposing Defendant’s affirmative

defenses and counterclaim. 41 Plaintiff alleges that Defendant dragged its heels in discovery,

before finally producing the Horty Report. Plaintiff alleges that “[Defendant’s] response to

nearly every interrogatory and request for production seeking specific facts, witnesses, and

38
   Defendant’s Response in Opposition (Jan. 2, 2014) at 7-8.
39
   Defendant’s Response in Opposition (Jan. 2, 2014) at 8.
40
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 1-2.
41
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 2.

                                                         9
documents supporting the affirmative defenses and counterclaim, was that it could produce

nothing to support these allegations, but that an audit of [Defendant’s] books and records going

back to 2002 was being performed… and this audit would uncover the evidence justifying the

allegations.” 42 After a lengthy back-and-forth between the parties, which included the Court

granting Plaintiff’s Motion to Compel and for Sanctions, Defendant finally served the Horty

Report on May 16, 2013. However, while the report stated that there were “practices” that the

expert found to be “deficient,” Plaintiff contends that there was no specific evidence to support

any of Defendant’s allegations. 43

         Defendant voluntarily dismissed its counterclaim six business days before trial. While

Defendant contends that it did so because it believed that Plaintiff had no funds to pay any

judgment, Plaintiff argues that this was not the real reason. 44 According to Plaintiff, Defendant

knew that Plaintiff’s expert had opined that the net present value of Plaintiff’s compensatory

damages claim was $518,000. 45 In light of this estimate, Plaintiff contends that it would have

been reasonable for Defendant to pursue any valid counterclaims in hopes of offsetting any

damage award to Plaintiff. 46

         Plaintiff contends that even though the counterclaim had been dismissed prior to trial, the

issues of the affirmative defenses and the counterclaim were raised at trial. 47           Plaintiff

specifically cites the testimony of Hamrick, who Plaintiff characterizes as having been in charge

of the instant litigation since he was acting as Defendant’s representative. 48 According to

42
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 3-4.
43
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6.
44
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6.
45
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6.
46
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6.
47
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6.
48
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6.

                                                          10
Plaintiff, Hamrick “was unable to state any facts which supported the allegations of fraud, theft,

gross, willful, and wanton negligence, intentional concealment, comingling of funds,

overcharging [Defendant] and unit owners for work performed, charging for work not

performed, and improperly removing over $100,000 from [Defendant’s] bank accounts.”49

Instead, Plaintiff interprets Hamrick’s trial testimony as blaming Defendant’s attorney for
                                                               50
coming up with the allegations against Plaintiff.                   Plaintiff also interprets Mr. Hamrick’s

testimony as suggesting that Defendant fabricated allegations as a litigation strategy. 51 Plaintiff

cites a large excerpt of Mr. Hamrick’s trial testimony for all of Plaintiff’s assertions. 52

         In its supplemental memorandum, Defendant renews its argument that there is no

evidence that Defendant’s counterclaim or affirmative defenses were asserted in bad faith. 53

Regarding the trial testimony of Hamrick, Defendant suggests that (a) Hamrick’s testimony is the

entire basis for Plaintiff’s argument that Defendant acted in bad faith, and (b) the portions of

Hamrick’s testimony on which Plaintiff relied likely never would have been presented at trial but

for a scheduling issue in response to which Defendant agreed to call Hamrick early. 54 The result

was that Hamrick’s testimony was presented before the Court granted Defendant’s motion

dismissing Plaintiff’s claim for punitive damages. Defendant argues that it would not have

called Hamrick to testify if it knew that the punitive damages claim would be dismissed. Thus,

Defendant suggests that it is unfair for the Court to find bad faith on account of Hamrick’s

testimony, when Defendant only presented Hamrick early in an effort to be accommodating of

scheduling.

49
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 6-7.
50
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 7.
51
   Plaintiff’s Supplemental Briefing (July 7, 2014) at 7.
52
   Plaintiff’s Supplemental Briefing (July 7, 2014), Exhibit G, “Excerpts from Trial Transcript” at 171-190.
53
   Defendant’s Supplemental Briefing (July 7, 2014).
54
   Defendant’s Supplemental Briefing (July 7, 2014) at 5.

                                                         11
         Putting aside the issue of why Hamrick was called to testify, Defendant argues that

Plaintiff has mischaracterized Hamrick’s testimony and his role in the litigation. 55 Defendant

says that Plaintiff “repeatedly tried to establish that Mr. Hamrick solely was responsible for the

contents of the counter claim [sic] and affirmative defenses by characterizing Mr. Hamrick as

being ‘in charge’ of the litigation.” 56 Defendant says that “Plaintiff then uses the fact that Mr.

Hamrick did not have firsthand knowledge supporting certain of those facts and allegations in the

counter claim [sic] and affirmative defenses[ ] as evidence that there was no basis for those facts

and allegations.” 57 Contrary to what Plaintiff suggests, Defendant maintains that Hamrick’s

knowledge of the litigation was limited.58 Instead, Defendant argues that in many cases Hamrick

relied in good faith on the representations that had been made to him by other board members

and residents.

         However, even though Defendant argues that Hamrick relied greatly on what others told

him about Plaintiff’s alleged misconduct, Defendant disputes Plaintiff’s characterization that

Hamrick had no firsthand knowledge of misconduct. Defendant argues that Mr. Hamrick did

testify that he had firsthand knowledge supporting some of the factual allegations in the

counterclaim and affirmative defenses. 59 Defendant cites Hamrick’s testimony concerning his

knowledge of Plaintiff’s alleged rigging of the bidding process, 60 Plaintiff’s alleged overcharging

55
   Defendant’s Supplemental Briefing (July 7, 2014) at 6.
56
   Defendant’s Supplemental Briefing (July 7, 2014) at 6 (citing Exhibit B, Trial Transcript, Dec. 3, 2013 at 170-
171).
57
   Defendant’s Supplemental Briefing (July 7, 2014) at 6.
58
   Defendant’s Supplemental Briefing (July 7, 2014) at 6.
59
   Defendant’s Supplemental Briefing (July 7, 2014) at 7.
60
   Defendant’s Supplemental Briefing (July 7, 2014) at 6 (quoting Exhibit B, Trial Transcript, Dec.3, 2013 at 185).

                                                         12
of Defendant, 61 and Plaintiff’s failure to perform, or poor performance of, certain maintenance

tasks. 62

                                       C. Hamrick’s Trial Testimony

            While both parties’ interpretations of Hamrick’s trial testimony are based in fact, the

Court finds that the parties have distorted Hamrick’s somewhat ambiguous testimony to suit their

purposes. Hamrick testified that he was the president of the Linden Green board from September

2011 to September 2013. 63 Mr. Hamrick also testified that Defendant had specially designated

him to represent Defendant in the instant litigation. 64 When asked about the alleged misconduct

of Plaintiff as asserted in Defendant’s counterclaims, Mr. Hamrick alluded to general problems

such as Plaintiff’s alleged failure to make financial records accessible and transparent, 65 as well

as deterioration of the physical buildings and grounds of the condominium complex, which

Plaintiff was responsible for maintaining. 66 However, when asked to provide more specifics,

Mr. Hamrick resorted to the position that many of his suspicions of mismanagement were based

on what other persons had told him rather than personal knowledge. For example, when asked,

“How about the financial records?,” Mr. Hamrick replied, “Financial records, I understand that

there was [sic] some problems with those.” 67 But when asked the clarificatory question, “[what

were the problems] To your knowledge, your personal knowledge?”; Hamrick replied, “My

personal knowledge, I don’t exactly know.” 68

61
   Defendant’s Supplemental Briefing (July 7, 2014) at 6 (quoting Exhibit B, Trial Transcript, Dec.3, 2013 at 179).
62
   Defendant’s Supplemental Briefing (July 7, 2014) at 6 (quoting Exhibit B, Trial Transcript, Dec. 3, 2013 at 153-
154, 157).
63
   Trial Transcript, Dec. 3, 2013 at 150-151.
64
   Trial Transcript, Dec. 3, 2013 at 150.
65
   Trial Transcript, Dec. 3, 2013 at 151.
66
   Trial Transcript, Dec. 3, 2013 at 153.
67
   Trial Transcript, Dec. 3, 2013 at 169.
68
   Trial Transcript, Dec. 3, 2013 at 169.

                                                         13
         Counsel for Plaintiff further asked Mr. Hamrick how he could, as representative for

Defendant, accuse Plaintiff of specific misconduct, namely failure to collect dues and

assessments, when he did not have personal knowledge of the financial records. Hamrick

replied, “First of all, I didn’t write this, okay. Second of all, the board members had expressed

this in their meetings.” 69 Hamrick testified that the allegation that Plaintiff had comingled funds

was based on the treasurer’s report to the condominium association board. 70

         When Plaintiff’s counsel asked Hamrick whether it was fair to say that Defendant’s

allegation that Plaintiff misappropriated over $100,000 was “completely made up,” Mr. Hamrick

stated, “No, it’s not made up.” 71 Nonetheless, when asked to “identify one fact” in support of

this allegation, Hamrick admitted that he could not do so. 72 Similarly, Hamrick admitted that the

allegation that Plaintiff had committed fraud was probably “a poor thing to say,” given that this

allegation was based on Plaintiff’s alleged failure to inform the residents that Plaintiff has signed

another agreement with the board (which Hamrick acknowledged on reflection does not meet the

definition of fraud). 73

         When asked why he would make allegations against Plaintiff without a stronger basis,

Hamrick told the Court that “[the condominium association’s] intention was not to do anything

that would cause harm or malice to Kuratle Contracting. This was out of, I believe[,] we were

being sued, we needed to come up with things that we felt were necessary to counter sue [sic] on

69
   Trial Transcript, Dec. 3, 2013 at 175.
70
   Trial Transcript, Dec. 3, 2013 at 177.
71
   Trial Transcript, Dec. 3, 2013 at 180-181.
72
   Trial Transcript, Dec. 3, 2013 at 181.
73
   Trial Transcript, Dec. 3, 2013 at 186.

                                                 14
and which we had gotten from information from other members of the condominium association

complex as owners, simply, and board members, so that was put in as far as counterclaim.” 74

                                            IV. LEGAL STANDARD

                                             A. Costs of Litigation

          The general rule in Delaware is that court costs are usually allowed to a prevailing

party. 75 10 Del. C. §5101 provides, “Generally a party for whom final judgment in any civil

action [is awarded]… shall recover, against the adverse party, costs of suit, to be awarded by the

court.”

          However, costs are not always awarded without exception. 76 The Delaware Supreme

Court has recognized that “there may be circumstances under which costs do not go to the party

to whom a final judgment is awarded. Determining when costs are awarded and when they are

not is… a matter of judicial discretion under the statute.” 77 The Court has found that the

conclusion that awarding costs is ultimately discretionary is consistent with both 10 Del. C.

§5101 and Superior Court Civil Rule 54(d). 78 Moreover, even when costs are awarded “as a

matter of course,” a court has discretion as to the amount of the award. 79 A significant factor for

the court to consider is whether the costs could have reasonably been avoided. 80 Costs that are

74
   Trial Transcript, Dec. 3, 2013 at 181-182.
75
   Casson v. Nationwide Insurance Co., 455 A.2d 717, 722 (Del. 1976).
76
   Donovan v. Delaware Water & Air Resources Commission, 358 A.2d 717, 722 (Del.1976).
77
   Id.
78
   Id.
79
   Christiana Marine Service Corp. v. Texaco Fuel & Marine Marketing, 2004 WL 42611, at *7 (Del. Super. Ct.
Jan. 8, 2004).
80
   Id. at *8 (holding that the plaintiff was not entitled to pro hac admissions fees because plaintiff could have
reasonably avoided these fees by selecting a qualified Delaware attorney).

                                                         15
not necessary but are incurred for the convenience of the claimant are not compensable under 10

Del. C. §5101. 81

         Costs beyond those recoverable under 10 Del. C. §5101 and Superior Court Civil Rule

54(d) may be recoverable when authorized by a contractual provision 82 or when the Court finds

that the opposing party acted in bad faith. 83

                                               B. Attorney’s Fees

         Unlike costs, attorney’s fees are usually not recoverable by the prevailing party. One

exception to this rule is when a statutory or contractual provision authorizes fee-shifting. 84

However, even when fee-shifting is authorized under a contractual provision, the court may still

elect to award fees only in proportion to a party’s limited success. 85 The United States Supreme

Court has held that attorney’s fees should not be awarded for work related to claims distinct from

the claim on which the party was successful. 86

         A second exception, recognized by both the Delaware Supreme Court and the United

States Supreme Court, is for cases of bad faith. “Although there is no single definition of bad

faith conduct, courts have found bad faith where parties have unnecessarily prolonged or delayed

litigation, falsified records[,] or knowingly asserted frivolous claims.” 87

81
   See, e.g., Ciappa Const., Inc. v. Innovative Property Resources, LLC, 2007 WL 1705632, at *2 (Del. Super. Ct.
June 12, 2007) (finding photocopying costs to be convenience expenses that are not compensable).
82
   Salaman v. National Media Corp., 1994 WL 465535, at *2 (Del. Super. Ct. July 22, 1994).
83
   There is case law that suggests, but does not explicitly hold, that bad faith may be the basis for recovery of cost
beyond what is authorized by 10 Del. C. §5101. See, e.g., Lawson v. State, 91 A.3d 544, 552 (Del. 2014); E.I.
DuPont de Nemours & Co. v. Medtronic Vascular, Inc., 2013 WL 1792824, at *2 (Del. Super. Ct. Apr. 24, 2013).
84
   Casson, 455 A.2d at 370.
85
   Fasciana v. Electronic Data Systems Corp., 829 A.2d 178, 185 (Del. Ch. 2003) (citing Hensley v. Eckerhart, 461
U.S. 424 (1983)).
86
   Hensley, 461 U.S. at 440.
87
   Johnson v. Arbitrium (Cayman Islands) Handels AG, 720 A.2d 542, 545 (Del. 1998).

                                                          16
                                                   V. DISCUSSION

                                  A. Plaintiff’s Requested Compensation

         Plaintiff has asked for counsel fees in the amount of $135,546.05 and costs of

$30,420.94, which Plaintiff maintains it incurred in pursuit of the main claim. In the alternative,

Plaintiff asks for fees and costs associated only with opposing Defendant’s counterclaim and

affirmative defenses, which Plaintiff says are 35% of the total amount (counsel fees of

$47,441.12 and costs of $10,647.33). 88 Plaintiff argues that these costs and fees are recoverable

under the contractual fee-shifting provision and/or the bad faith exception to the general rule that

attorney’s fees are not recoverable. 89

         If the Court does not adopt either of these fee-shifting theories, Plaintiff argues that

certain of its costs are still recoverable under 10 Del. C. §5101 and Superior Court Civil Rule 54.

Concerning this subset of its costs, Plaintiff has provided an itemized list by category of costs as

follows: LexisNexis filing fees ($1,372.50), Westlaw Research ($1,850.24), Parking ($58.50),

Courier Services ($195.00), Photocopying ($200.92), Service Fees ($30.00), and Mediator’s Fee

($2,330.50); for a total of $6,037 in costs.90 Plaintiff also argues that a portion of its expert

witness fee for trial testimony ($1,320.00) should be included as a cost recoverable under 10 Del.

C. §5101 and Superior Court Civil Rule 54.91

                                                     B. Costs

i. Costs under 10 Del. C. §5101

88
   Plaintiff’s Motion for Costs and Fees at 7.
89
   Plaintiff’s Motion for Costs and Fees at 7.
90
   Plaintiff’s Motion for Costs and Fees at 8.
91
   Plaintiff’s Motion for Costs and Fees at 8-9.

                                                        17
        It is undisputed that Plaintiff is the prevailing party. As such, Plaintiff is entitled to costs

under 10 Del. C. §5101 and Superior Court Civil Rule 54. The Court begins by considering the

itemized list of costs that Plaintiff claims under 10 Del. C. §5101.

        Filing and service costs are well-recognized as compensable. 92 Hence, the Court awards

all of the LexisNexis filing fees ($1,372.50) and Service Fees ($30.00).                      Fees for expert

testimony at trial are similarly well-established as compensable, so long as they are reasonable,

which is a determination to be made by the Court. 93 There is no “fixed formula” for determining

what a reasonable expert fee should be. 94 As expert testimony most frequently arises in the

medical context, most of the Delaware cases specifically concern medical experts. To determine

the reasonableness of medical experts’ fees, Delaware courts have relied on industry-specific

studies of the Delaware Medico-Legal Affairs Committee. 95 However, there is no corresponding

index for CPAs. In determining whether an expert fee is reasonable, courts in other jurisdictions

have considered factors including the background of the expert, the rates charged by other

experts in the same field and region, the time and effort involved in testifying, and the

complexity of the matter. 96 In 2007, a Delaware court awarded $1,200 for the trial testimony of

a CPA. 97 Plaintiff has presented evidence that expert David J. Ford charged 4.4 hours for a total

of $1,320 for his trial testimony. 98 The Court finds that this fee is reasonable and awards

Plaintiff $1,320.00 for the expert testimony of David J. Ford, CPA.

92
   See, e.g., Christiana Marine Service Corp., 2004 WL 42611, at *7.
93
   Payne v. Home Depot, 2009 WL 659073, at *7 (Del. Super. Ct. Mar. 12, 2009).
94
   McLaughlin v. Dover Downs, Inc., 2008 WL 795311, at *2 (Del. Super. Ct. Mar. 26, 2008).
95
   Dunkle v. Prettyman, 2002 WL 83337 , at *3 (Del. Super. Ct. May 1, 2002).
96
   Axelson v. Hartford Ins. Co. of the Midwest, 2013 WL 1261757, at *2 (D. Nev. Mar. 26, 2013).
97
   Foley v. Elkton Plaza Associates, LLC., 2007 WL 959521 (Del. Super. Ct. Mar. 30, 2007).
98
   Plaintiff’s Motion for Costs and Fees, Exhibit C, “Email from David Ford”.

                                                       18
        Costs for legal research are not an itemized, necessary cost under 10 Del. C. §5101. 99

Hence, Plaintiff’s claim for reimbursement for Westlaw Research ($1,850.24) is not

compensable under 10 Del. C. §5101. Similarly, photocopying costs are not recoverable unless

they are specifically for exhibits used at trial. “Photocopies made by plaintiff for use of himself

and his attorney… are not allowable costs because they are for the use of the party and not for

the Court.” 100 Hence, Plaintiff’s claim for Photocopying ($200.92) is also not reimbursable

under 10 Del. C. §5101. Courier services have also been found not compensable. 101 Hence, the

Court also finds the courier services claimed by Plaintiff ($195.00) not compensable under 10

Del. C. §5101.

        Courts have found traveling, lodging, and parking fees compensable when they are

incurred by an expert witness in relation to his or her testimony at trial. 102 However, courts have

declined to include parking costs incurred by the parties or by counsel. 103 As Plaintiff has not

specified that the cited parking costs were incurred by an expert witness testifying at trial, the

Court finds the Parking expenses ($58.50) not compensable under 10 Del. C. §5101.

        Mediator’s fees have traditionally been split between the parties, and there has been at

least one decision in this Court that saw no reason to disturb this longstanding practice. 104 The

Court finds the reasoning sound, and finds that Plaintiff should be responsible for their share of

the mediator’s fee. It is presumed that the amount sought, $2,330.50, is the Plaintiff’s share of

the mediator’s fee.

99
   Ripsom v. Beaver Blacktop, Inc., 1989 WL 147336, at *2 (Del. Super. Ct. Dec. 4, 1989).
100
    Id. at *1 (quoting Ota v. Health-Chem. Corp., 1987 WL 12440, at *1 (Del. Super. Ct. May 18, 1987).
101
    Ciappa Const., Inc., 2007 WL 1705632, at *2.
102
    Payne, 2009 WL 659073, at *8; Crook v. Ford Motor Co., 2001 WL 1738869, at *1 (Del. Super. Ct. Nov. 1,
2001).
103
    Ciappa Const., Inc., 2007 WL 1705632 at *2.
104
    See, e.g., Reinke v. Furbush, 2011 WL 7063367, at *2 (Del. Super. Ct. Dec. 1, 2011).

                                                      19
         The Court GRANTS Plaintiff’s Motion for Costs in the amount of $1,372.50 plus

$30.00, for a total of $1402.50, in filing and service fees and $1,320.00 for the expert testimony

of David J. Ford, CPA.

ii. Is there a valid fee-shifting provision?

         Plaintiff argues that Plaintiff is entitled to all costs, beyond those traditionally

compensable under 10 Del. C. §5101, because of a contractual fee-shifting provision.           In

Salaman v. National Media Corp., the court found claimant entitled to a number of billable costs

not recoverable under 10 Del. C. §5101 (e.g., photocopying, travel, and research costs) because

there was a valid, unambiguous contract which required the opposing party to “pay all costs and

expenses (including attorneys’ fees and disbursements)”. 105

         The provision relied upon by Plaintiff is found in one of the documents that follows the

main body of the 2010 Agreement. This document is entitled, “Landscaping and Maintenance

Proposal.” This document appears distinct from the main text of the contract, and, unlike the

main contract, is not signed by the parties. Mrs. Kuratle’s trial testimony suggests that part of

the initial dispute between the parties over the validity of the 2010 Agreement may have

concerned whether these additional documents were in fact part of the contract. 106 Nonetheless,

Plaintiff includes this document as part of the 2010 Agreement in its trial exhibit, 107 Defendant

includes the 2002 and 2007 analogs of this document as part of the 2002 and 2007 Agreements

105
    Salaman, 1994 WL 465535, at *2.
106
    Trial Transcript, Dec. 2, 2013 at 49.
107
    Plaintiff’s Trial Exhibit 1, Tab 1.

                                                20
in its trial exhibits, 108 and Defendant refers to this document in the 2010 Agreement as “the

‘Landscaping and Maintenance Proposal’ section of the contract.” 109

          The provision within the “Landscaping and Maintenance Proposal” that Plaintiff cites

reads as follows:

        Delinquent accounts may be referred to a collection agency and or attorney.
        Client agrees to payment of invoice amount, services charges, and any related
        legal expenses of balance on contract. 110

While Plaintiff concedes that this provision is “not artfully drafted,” Plaintiff maintains that “the

phrase ‘any related legal expenses of balance on contract’ clearly indicates the parties’ intention

that if Plaintiff incurs counsel fees and costs in connection with a legal proceeding to enforce its

rights under the 2010 Agreement, [Defendant] will be responsible to pay those counsel fees and

costs.” 111 In response, Defendant argues that, when read in context, this provision “does not in

any way articulate an intent by the parties to shift attorneys’ fees incurred in the course of

litigation between the parties. It simply governs the use of a collection agency or an attorney to

collect delinquent invoices for certain additional lawn care services.” 112

        The parties appear to be in agreement that the document containing the alleged fee-

shifting provision was in fact part of the 2010 Agreement. Defendant appears to concede that

this fee-shifting provision is applicable to the collection of monies owed for landscaping and
                           113
maintenance services.            It would be a mistake, however, to extend this narrow fee-shifting

provision beyond its intended narrow scope. The Court finds that while there is a valid fee-

108
    Defendant’s Trial Exhibit 1, 2.
109
    Defendant’s Response in Opposition (Jan. 2, 2014) at 2.
110
    Complaint, Ex. C, “2010 Agreement”.
111
    Plaintiff’s Motion for Costs and Fees at 4.
112
    Defendant’s Response in Opposition (Jan. 2, 2014) at 2.
113
    Defendant’s Response in Opposition (Jan. 2, 2014) at 2.

                                                        21
shifting provision, it applies only to costs and fees specifically incurred in the collection of

unpaid landscaping and maintenance invoices. The plain language of the provision indicates that

it applies to “delinquent accounts,” and authorizes fee-shifting for legal expenses incurred in the

collection of these accounts. Second, the provision does not appear in the main body of the

agreement (the document to which the signatures of the parties are affixed).

         Among the damages asserted by Plaintiff in the Complaint were unpaid maintenance

invoices. 114 However, evidence of these delinquent invoices was never presented to the Court.

Further, the trial testimony of Mrs. Kuratle focused on lost income after Defendant breached the

2010 Agreement. The jury awarded $165,000 in lost profits but did not make an award for

unpaid invoices. Given the very minor role the unpaid invoices claim played in the litigation and

the fact that it was not reflected in the jury award, the Court finds that Plaintiff is not entitled to

additional costs in the instant action, beyond what those permitted under 10 Del. C. §5101, under

the fee-shifting provision.

iii. Is Plaintiff entitled to additional costs due to bad faith?

        Plaintiff suggests that, in the alternative, Plaintiff is entitled to costs beyond what is

authorized under 10 Del. C. §5101 for costs incurred in litigating Defendant’s affirmative

defenses and counterclaim, which Plaintiff alleges were brought in bad faith.                        It is well

established that bad faith may serve as the basis for awarding attorney’s fees. 115 There is also

case law that suggests, but does not explicitly hold, that bad faith may also serve as the basis for

awarding costs beyond those compensable under 10 Del. C. §5101. 116 However, costs and fees

114
    Complaint at 6.
115
    In re Grupo Dos Chiles, LLC, 2006 WL 2507044, at *1 (Del. Ch. Aug. 17, 2006).
116
    Lawson v. State, 91 A.3d 544, 552 (Del. 2014); E.I. DuPont de Nemours & Co. v. Medtronic Vascular, Inc., 2013
WL 1792824, at *2 (Del. Super. Ct. Apr. 24, 2013).

                                                       22
are awarded for bad faith only in “extraordinary cases,” where the claimant can demonstrate by

“clear evidence” that the party against whom fees are sought acted in bad faith. 117 Where there

is “a ‘colorable basis’ for a claim, the award of attorneys’ fees and costs is unwarranted.” 118

        In Fairthorne Maintenance Corp. v. Ramunno, the Court of Chancery found sufficient

evidence of bad faith conduct to impose fee-shifting. 119 The defendants were homeowners who

refused to remove personal property, including a children’s outdoor playset from a common area

belonging to their neighborhood homeowner’s association. The court found that the arguments

advanced by the defendants “involve[d] tangential issues and [were] designed solely to help [the

defendants] delay the legal consequences of their undisputed [tortuous] conduct.” 120 Among

other things, the court found that the defendants had asserted frivolous age discrimination claims

on behalf of defendants’ minor children “without consideration of any of the applicable statutes

or case law precedent” (emphasis in original) in an effort to make good on their threat to “make

this a federal case.” 121 At oral argument, defense counsel conceded that the age discrimination

for minor children claims were without a basis in law. 122

        The Fairthorne defendants also argued that plaintiff could not prosecute them for trespass

while allowing others to similarly trespass. 123 The court found this claim to be without basis in

fact as well as without basis in law. Concerning the legal basis for the claim, the defendants

failed to cite “a single case from any jurisdiction—much less from Delaware—standing for the

117
    Lawson, 91 A.3d at 552.
118
    E.I. DuPont de Nemours & Co., 2013 WL 1792824, at *2.
119
    Fairthorne Maintenance Corp. v. Ramunno, 2007 WL 2214318 (Del. Ch. July 20, 2007).
120
    Id. at *1
121
    Id. at *11.
122
    Id.
123
    Id. at *6.

                                                     23
proposition that a landowner may not allow some trespasses while preventing others.” 124

Concerning the factual basis for the claim, defendants did not provide “a single concrete detail…

that would identify by name, address, or otherwise these supposed infringements.” 125

        On the other hand, Delaware courts have declined to engage in fee shifting when the

evidence of bad faith was less than clear. For example, in Estate of Carpenter v. Dinneen, the

estate sued decedent’s former financial advisors for breach of fiduciary duty and other

misconduct in the handling of decedent’s monies. 126                  The defendants counterclaimed for

pension-like gifts that they had allegedly been promised by the decedent. The court found that

the defendants’ counterclaims, while ultimately rejected by the court, were not frivolous to the

point of constituting bad faith. The defendants cited two principal cases in support of their legal

arguments. 127 The court found both of these cited cases to be relevant to the defendants’

counterclaims.      The court observed that, “[a]lthough both cases are distinguishable, they

illustrate the fact intensive nature of [defendants’] counterclaims.” 128 In addition to providing a

legal basis for their claims, the Dinneen defendants also “presented evidence of several facts that

provided at least some support for their contention [that the decedent] would have wanted them

to receive [the gifts under the circumstances].” 129 Moreover, the court noted that it could not use

the fact that defendants ultimately withdrew the counterclaim as evidence of its frivolousness

because doing so would “discourage future parties from withdrawing claims when advisable[ ]

and waste judicial resources.” 130

124
    Id.
125
    Id.
126
    Estate of Carpenter v. Dinneen, 2008 Del. Ch. LEXIS 40 (Del. Ch. Mar. 26, 2008).
127
    Id. at *106-109.
128
    Id. at *106.
129
    Id. at *109.
130
    Id. at *77-78, n.198.

                                                       24
         In the instant case, unlike in Fairthorne and like in Dinneen, Defendant have provided

legal arguments in support of the counterclaim causes of action, alleged supporting facts, and

provided at least some evidence in support of these allegations. Defendant did commission and

eventually provide a twenty-four page report (the Horty Report), prepared by the Certified Public

Accounting Firm of Horty & Horty, P.A., which “noted accounting and bookkeeping errors and

noted material financial reporting statements,” as well as missing records. 131

         Plaintiff points to the fact that Mr. Hamrick testified, “I can’t identify one fact,” in

response to the request that he identify one fact in support of Defendant’s contention that “upon

information and belief that [Plaintiff] took a hundred thousand dollars.” 132 However, the Court

recognizes that Hamrick is not Defendant, and Hamrick’s lack of knowledge of certain facts

should not necessarily be imputed to Defendant. 133 The Horty Report alone provides adequate

basis to support Defendant’s contention that it has a colorable basis for its counterclaims.

         Further, the trial testimony of Mr. Hamrick, while inconclusive, suggests that Defendant

had at least some reasonable basis for alleging misconduct on the part of Plaintiff. Hamrick did

testify that, “[the Condominium Association’s] intention was not to do anything that would cause

harm or malice to Kuratle Contracting. This was out of, I believe[,] we were being sued, we

needed to come up with things that we felt were necessary to counter sue on and which we had

131
    Defendant’s Response in Opposition (Jan. 2, 2014), Exhibit B at 2 of 24. While the Court did grant Plaintiff’s
Motion to Exclude the testimony of the author of the report on the grounds that the report did not adequately specify
the methodology used, this fact is immaterial to the present inquiry. Order (Nov. 15, 2013). To find defendant’s
counterclaims non-frivolous, the Court needs only to find them “colorable.” E.I. DuPont de Nemours & Co., 2013
WL 1792824, at *2. As the court in Dinneen affirmed once again, the fact that a claim is not successful cannot be
evidence that it was frivolous.
132
    Trial Transcript, Dec. 3, 2013 at 181.
133
    While knowledge is imputed to a business organization when a director or officer of the organization acquires the
knowledge, the converse does not hold (i.e., it is not true that the lack of knowledge on the part of one director or
officer is generalized to the organization). If the latter were true, then all of the directors and officers would have to
know a fact in order for the organization to know the fact, and this is clearly not what Delaware case law holds. See,
e.g., Chaplake Holdings, Ltd. v. Chrysler Corp., 2002 WL 148088, *32 (Del. Super. Ct. Jan. 10, 2002) (reversed in
part on other grounds).

                                                           25
gotten from information from other members of the condominium association complex as

owners, simply, and board members, so that was put in as far as counterclaim.” 134 This is the

testimony that Plaintiff contends evidences Defendant’s bad faith. However, when Hamrick’s

testimony is examined in context, the evidence is inconclusive. Hamrick made this statement in

response to the following question from Plaintiff’s counsel: “You said earlier that you had no

malice or didn’t want to hurt anybody, that you just wanted to get along with Kuratle, but yet at

the same time, sir, you make all these wild accusations against them. Please explain how you

can make these accusations and have no malice at all or not try to hurt Kuratle, what was your

intention if it wasn’t to hurt them to say these things?” 135 Further, Hamrick unequivocally

testified that Defendant believed that there was evidence of misconduct by Plaintiff; Hamrick

said, “we didn’t make things up. The profit and loss statements actually showed, if you looked at

them closely in the last four years of Kuratle Contracting, they ballooned out of proportion.”136

In this context, a reasonable person could conclude that Hamrick did have a good faith belief that

Plaintiff had engaged in misconduct but would not have asserted these claims (due to a desire to

“get along with Kuratle”) if Plaintiff had not first filed suit against Defendant.

         For these reasons, the Court finds that there is no clear evidence that Defendant’s

counterclaims were vexatious or asserted in bad faith. Keeping in mind that the party seeking a

fee award under a bad faith theory bears the “stringent evidentiary burden of producing clear

evidence of bad faith conduct,” the Court will not award additional costs or attorney’s fees on

134
    Trial Transcript, Dec. 3, 2013 at 182.
135
    Trial Transcript, Dec. 3, 2013 at 181.
136
    Trial Transcript, Dec. 3, 2013 at 182.

                                                 26
this ground. 137 Plaintiff’s Motion for Costs beyond that which the Court has found allowable

under 10 Del. C. §5101 is hereby DENIED.

                                               C. Attorney’s Fees

           As explained above, attorney’s fees are not awarded to a prevailing party absent a valid

contractual fee-shifting provision or demonstrable bad faith by the opposing party. The Court

has found no demonstrable bad faith by Defendants. While the Court has found a valid fee-

shifting provision, the Court finds that the claims to which the provision applies (namely, claims

for unpaid maintenance and landscaping invoices) constitute such a minor part of the litigation as

not to warrant an award of attorney’s fees. Although Plaintiff raised this issue in the Complaint,

the issue of unpaid invoices played no real part in the litigation of this case. For this reason, the

Court cannot find that any significant portion of Plaintiff’s attorney’s fees can be separated out

as attributable to the litigation of the unpaid invoices claim.              The Court hereby DENIES

Plaintiff’s Motion for Attorney’s Fees.

                                                VI. CONCLUSION

           For the foregoing reasons, the Court GRANTS in part Plaintiff’s Motion for Costs under

10 Del. C. §5101 and finds Plaintiff entitled to Lexis filing fees in the amount of $1,372.50,

service fees in the amount of $30 and the expert’s fee in the amount of $1,320.             Plaintiff’s

Motion for Attorney’s Fees is DENIED.

IT IS SO ORDERED.
                                                                 _____/s/_______________
                                                                 M. JANE BRADY
                                                                 Superior Court Judge

137
      Estate of Carpenter, 2008 Del. Ch. LEXIS 40 at *76.

                                                            27