Court Opinion

ID: 2736792
Source: CourtListenerOpinion
Date Created: 2014-09-25 14:02:37.950732+00
Date Added: 2024-06-11T12:58:40.794259
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

                    IN AND FOR NEW CASTLE COUNTY

MINE SAFETY APPLIANCES                     )
COMPANY,                                   )
                                           )
            Plaintiff,                     )
                                           )
       v.                                  ) C.A. No. N10C-07-241 MMJ
                                           )
AIU INSURANCE COMPANY, et al.,             )
         Defendants.                       )
                                           )

                         Submitted: September 17, 2014
                          Decided: September 19, 2014

        Upon Defendant AIG Insurers’ Exceptions to the August 29, 2014
              Recommendation of the Special Discovery Master
                                 DENIED

                                    ORDER
JOHNSTON, J.

      On March 10, 2014, the Special Discovery Master (“Special Master”) issued

a Memorandum Opinion (“March 10 Order”) that granted Plaintiff Mine Safety

Appliances Company’s (“MSA”) Motion to Compel a second Rule 30(b)(6)

deposition of the representative of three defendants affiliated with AIG Insurers

(collectively “AIG”).
      On June 10, 2014, MSA filed a Motion to Sanction AIG for Refusing to

Comply with the Court’s March 10, 2014 Order. AIG opposed MSA’s motion for

sanctions, and on June 27, 2014, AIG filed a cross-motion for a protective order,

sanctions, and costs. After briefing on both motions, oral argument was presented

to the Special Master on July 10, 2014.

      On July 16, 2014, the Special Master issued an Order (“July 16 Order”)

granting in part MSA’s motion for sanctions, and denying AIG’s cross-motion for

a protective order, sanctions, and costs. In the July 16 Order, the Special Master

recommended that AIG be required to pay 100 percent of MSA’s reasonable fees

and costs in connection with both motions subject to that ruling. 1

      On July 23, 2014, MSA filed its statement of fees and costs totaling

$33,440. On July 30, 2014, AIG filed its Opposition to MSA’s Statement of Fees

and Costs. MSA subsequently filed a reply brief in further support of its statement

of fees and costs.

      On August 29, 2014, the Special Master issued a recommendation (“August

29 Recommendation”) regarding MSA’s statement of fees and costs.             In the

August 29 Recommendation the Special Master recommended that MSA be

awarded its full request of $33,440.          More specifically, the Special Master

reasoned: (1) AIG should be required to pay for all of MSA’s tasks reasonably

1
 The Court simultaneously is entering an Order approving the Special Master’s
July 16, 2014 Order.
                                          2
related to the motions subject to the July 16 Order, both before and after the oral

argument; (2) MSA’s entries were sufficient to explain the tasks to which the

attorneys devoted time; (3) the alleged inconsistencies in time entries should not

reduce MSA’s fees; (4) MSA did not include time entries that related to purely

clerical matters; and (5) MSA did not include time entries that were redundant,

unnecessary, or excessive.

        On September 9, 2014, AIG filed Exceptions to the Special Master’s August

29 Recommendation.       In its Exceptions, AIG asserts: (1) the Special Master

applied the incorrect legal standard when examining MSA’s statement of fees; (2)

MSA’s counsel’s hourly rates are unreasonable and should be lowered pursuant to

the “Lodestar” Doctrine; and (3) MSA’s fees should be reduced pursuant to the

“hours reasonably expended” requirement of the “Lodestar” Doctrine.

        In response, MSA argues the Special Master applied the correct legal

standard in reviewing MSA’s fees, MSA’s hourly rates are reasonable, and there is

no basis to reduce MSA’ fees and costs.

        The Order of Reference to Special Master, dated December 5, 2012,

establishes the Court’s proceedings when a party files an exception to a decision of

the Special Master during the course of this litigation. The Court reviews de novo

the Special Master’s Ruling.2 The Order of Reference also states that the Special

2
    Trans. ID 48202156
                                          3
Master may recommend to the Court that the prevailing party on a discovery

motion be awarded costs including reasonable attorneys’ fees.3 The Court will be

the final arbiter of any award of attorneys’ fees. 4

      As to AIG’s Exceptions, AIG cites Servino v. The Medical Center of

Delaware, Inc., 5 in support of the use of the “Lodestar” Doctrine to determine the

reasonableness of MSA’s fees.           However, the Court finds Servino to be

distinguishable from the current circumstances. The award of attorney’s fees in

Servino was statutorily granted to the prevailing party of a 42 U.S.C. § 1988

claim. 6 In that case the Court applied the Lodestar method because The United

States Supreme Court had adopted it as the appropriate method of determining

reasonable attorney’s fees in Section 1988 cases. 7 Here, MSA is not seeking

attorney’s fees after prevailing on a statutory claim. Instead, MSA has been

awarded attorney’s fees and costs due to Court-approved sanctions following a

discovery motion. Thus, the Lodestar method is not required.

      The Court finds that the Special Master applied the correct legal standard

when examining MSA’s statement of fees and costs in the August 29

Recommendation.       As reasoned by the Special Master, Delaware trial courts

3
  Id.
4
  Id.
5
  1997 Del. Super. LEXIS 254, n at *2 (Del. Super.).
6
  Id. at *4.
7
  Id. at *5-6.
                                            4
should look to the eight-factor test set forth in the Delaware Lawyers’ Rule of

Professional Conduct 1.5(a) when assessing the reasonableness of a fee award. 8

However, if fees are awarded as a sanction, the Court need not narrowly focus on

individual factors under Rule 1.5(a).9       Rather, the Court should focus more

generally on the reasonableness of the fee, given the remedial nature of the

award.10

      AIG also cites Laymon v. Lobby House, Inc., 11 in support of AIG’s

contention that it was MSA’s burden to establish a reasonable market rate for

MSA’s counsel’s hourly rates. The Court also finds Laymon to be distinguishable

from the current case. In Laymon, the plaintiff was required to bear the burden of

establishing reasonable hourly rates under the Lodestar method within the context

of a Section 1988 claim. 12 Because this is not a Section 1988 case, and the

Lodestar method does not apply, the Court finds MSA did not have to meet a

burden of establishing a reasonable market rate for counsel’s hourly rates.

      Instead, the Court looks to Comment 2 of Rule 1.5(a) for guidance in

determining if MSA’s counsel’s hourly rates are reasonable. Under the title “Basis

8
  Staffieri v. Black, 2013 Del. Ch. LEXIS 322, at *9 (Del. Ch.).
9
  In re SS & C Techs., Inc. S’holders Litig., 2008 WL 3271242, at *3 n.14 (Del.
Ch.).
10
   Staffieri, 2013 Del. Ch. LEXIS 322 at *10; see also, Aveta Inc. v. Bengoa, 2010
WL 3221823, at *6 (Del. Ch.).
11
   2009 U.S. Dist. LEXIS 38680, at *7-8 (D. Del.).
12
   Id. at *6.
                                         5
of Rate or Fee”, Comment 2 states: “When the lawyer has regularly represented a

client, they ordinarily will have evolved an understanding concerning the basis or

rate of the fee and the expenses for which the client will be responsible.” 13 This

comment indicates that one way of determining reasonableness of fees is whether

the client understands they will be responsible for such fees. In support of this,

MSA stated in its opposition to AIG’s Exceptions that all time incurred by MSA’s

counsel in relation to the sanctions has been billed to MSA.

        Additionally, looking more generally at total MSA’s fees, the Court finds

MSA’s fees to be reasonable. As the Special Master concluded, tasks taking place

after the oral argument were reasonably related to MSA’s motion and allowed for

in the July 16 Order. The Court also finds that MSA’s time entries sufficiently

advise the Court as to the task being completed. Despite MSA’s use of various

verbs, there were no descriptions that left the Court unsatisfied as to what task was

being completed. Similarly, the Court finds MSA’s explanations as to the nature

of any disputed work to be credible. Thus, AIG is not paying for purely clerical

tasks. Finally, the Court finds AIG is not paying for redundant and unnecessary

tasks, or excessive time. Given the complex nature of this litigation, and AIG’s

addition of a cross-motion, the time spent on briefing is neither excessive nor

unnecessary.

13
     DLRPC 1.5(a) cmt. 2.

                                         6
      The Court finds that the Special Master carefully considered all issues raised

by the parties. The August 29 Recommendation is consistent with applicable legal

precedent and the Delaware Superior Court Civil Rules.          This Court is not

persuaded by any exceptions to the ruling. Upon de novo review, the Court finds

the Special Master’s recommendation for fees and costs to be well-reasoned.

      THEREFORE, the Special Discovery Master’s August 29, 2014

Recommendation is hereby APPROVED. All exceptions are hereby DENIED.

      IT IS SO ORDERED.

                                               /s/__Mary M. Johnston________
                                                 The Honorable Mary M. Johnston

                                         7