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Judge Wallace Grants Request for Attorneys' Fees and Refuses to Second-Guess Attorneys' Hours

October 31, 2018

In Bellmoff v. Integra Services Technologies, Inc., C.A. No. N17C-10-312 PRW CCLD, Judge Wallace granted the plaintiffs’ request for attorneys’ fees. The issue arose from an underlying contract dispute previously resolved by Judge Wallace involving a share purchase agreement. In the underlying dispute, Judge Wallace granted a motion for judgment on the pleadings in favor of plaintiffs Dean P. Bellmoff and Beatrice E. Salazar and against defendant Integra Services Technologies, Inc. The issue of attorneys’ fees was left for another day.

When the parties could not resolve the issue, however, the instant motion for attorneys’ fees was filed. The plaintiffs requested $41,110.54 in attorneys’ fees for 68.1 hours of work. The defendant argued that the plaintiffs were only entitled to $34,994.96 or less, an amount representing 56.8 hours of legal work, or the equivalent amount that the defendant paid its attorneys to defend the underlying suit.

In analyzing the issue, Judge Wallace noted that attorneys’ fees are typically not paid by a losing party unless the payment of such fees is authorized by some provision of statute or contract. Here, the payment of fees was governed by contract under a cost-shifting provision. Accordingly, Judge Wallace examined the eight-factor test set forth in the Delaware Lawyers’ Rule of Professional Conduct 1.5(a) to assess the reasonableness of the fee. In considering the factors, Judge Wallace rejected the defendant’s attempt to measure reasonableness “by simple comparison” to the legal bills of the other side. The Court highlighted the so-called “Pizza Principle,” which states that “it is more time-consuming to clean up the pizza thrown at the wall than it is to throw it.” The Court therefore could not say that the 11 extra hours billed by the plaintiffs’ legal team were unreasonable. Overall, the Court declared that it “will not examine each hour spent on the case through the lens of hindsight” and found that “[i]n 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.”

Analysis: In complex litigation, parties often add fee-shifting provisions to their contracts. This case highlights the benefit of adding such provisions to contracts that may lead to a dispute before a Delaware court. Although the fees sought must be reasonable, courts often do not second-guess them. For example, in Boeing Co. v. Spirit Aerosystems, Inc., C.A. No. N14C-12-055 EMD CCLD (Del. Super. Ct. Dec. 5, 2017), Judge Davis awarded a multimillion-dollar fee, and Judge Wallace found the fees reasonable based on the time expended.

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