Opinion
C.A. No. 05C-03-013-ESB.
June 29, 2007.
July 3, 2007.
Kathi A. Karsnitz, Esquire, Georgetown, DE.
Maryanne T. Donaghy, Esquire, Stradley, Ronon, Stevens Young, L.L.P., Wilmington, DE.
Dear Counsel:
In my decision dated June 29, 2007, I inadvertently did not include post-judgment interest on the $252,4 16.00 that the jur y awar ded to t he p lai nti ff. I hereby modify the decision to include post-judgment interest at the appropriate legal rate on damages of $252,416.00 as of May 12, 2006.
IT IS SO ORDERED.
Dear Counsel:
This is my decision in this wrongful termination of employment case on the post-trial motions filed by Plaintiff Cheryl Bunting ("Bunting") and Defendants Citizens Financial Group, Inc. and Citizens Bank (collectively, "Citizens"). Citizens operates branch banks in Delaware and other states. Bunting worked as an assistant branch manager at Citizens' branch in Georgetown, Delaware. Bunting was also a notary. Citizens terminated Bunting for not following its written notary policy when she notarized the signatures on a customer's mortgage. After Citizens refused to pay Bunting wages that she had earned before she was terminated, Bunting filed a complaint against Citizens, alleging a wage claim (Count I), a wrongful termination claim (Count II), and a breach of the implied covenant of good faith and fair dealing claim (Count III). The case went to trial before a jury on May 1, 2006. At the conclusion of Bunting's case-in-chief, Citizens moved for judgment as a matter of law as to Counts II and III. I denied Citizens' motion. The case then went to the jury after Citizens' brief defense. The jury awarded Bunting $8,222.66 for her wage claim and $252,416.00 for her wrongful termination and breach of the implied covenant of good faith and fair dealing claims. Citizens then filed a renewed motion for judgment as a matter of law and a motion to amend its answer to add the defense of illegality. Bunting filed a motion to amend the judgment and an application for her attorney's fees and costs.
Statement of Facts
Bunting worked for Citizens and its predecessors-in-interest for 26 years. She started as a teller and was an assistant branch manager and acting branch manager at Citizens' branch in Georgetown, Delaware, when she was terminated by Denise Burton ("Burton") and Lee Walls ("Walls"), a regional manager and acting regional manager, respectively, on October 29, 2004.
Bunting was terminated for violating Citizens' written notary policy. She notarized the signatures on a customer's mortgage, but did not see the customer and his wife sign the mortgage. The mortgage was brought back to the bank by John Craig ("Craig"), a Citizens' relationship manager, for notarization and processing. Craig worked on the commercial side of the bank, but was in the same building as Bunting. Craig took the loan documents, which included a prom issory note and mortgage, to a long-standing customer, a local doctor, who was too busy to come to the bank to sign the documents. Craig left the documents at the doctor's office and returned the next day and retrieved them. Craig did not see either the doctor or his wife sign the documents. However, based on having seen their signatures in the past, he believed that the signatures were genuine. He brought the documents back to the Georgetown branch to be notarized and processed. Bunting notarized the signatures on the mortgage even though she had not seen the doctor and his wife sign the mortgage. The mortgage was sent to another Citizens' office for review before it was recorded. The review raised an issue about how the doctor's wife had signed the mortgage. Citizens asked the wife to resign the mortgage. Between the time the mortgage was signed and when the issue of the propriety of the wife's signature arose, the doctor and his wife became estranged. The wife refused to re-sign the documents, questioned the validity of her signature and asked Citizens to confirm that the debt was that of her husband alone. When C itizens learned that Bunting notarized the signatures without having seen the doctor and his wife sign the mortgage, Citizens terminated Bunting
The written policy provides, in part, that: Notaries must personally witness the signature before them. Notaries can never notarize documents unless the signer personally appears before the notary and either signs or acknowledges the signature. If a branch notary is asked to notarize a document without the customer being present, or you witness such act, report this violation to policy (sic) to your management or to the Citizens Bank Alertline at 1-800-700-1107.
The practice Bunting engaged in occurred regularly at Citizens' Georgetown branch and at other Citizens' branches in Delaware. Every witness at the trial who had actually worked in a Citizens' branch in Delaware testified to this fact. Burton and Walls, who also worked in the Georgetown branch with Bunting, and other Citizens' employees routinely asked Bunting to notarize documents outside the presence of the signor. When Citizens opened a new branch in Middletown, Delaware, it did not have a notary on staff. In order to get documents that were originated in the Middletown branch notarized, Citizens sent them to the Dover branch to be notarized. Other notaries at Citizens sent their signed but un-notarized Oath of the Office to Bunting to be notarized and recorded. The actual notary practice at Citizens existed as a matter of convenience both for Citizens and its customers. It was more convenient for Citizens' customers because they did not have to come to the bank for loan closings. It was more convenient for the loan officers because they did not have to work around the notaries' schedules, who had other functions to perform at the branch besides notarizing documents and were sometimes simply unavailable because of illness, vacation or lunch.
Although the practice of notarizing documents as Bunting did in connection with the loan transaction in this case was long-standing, widespread and condoned by and participated in by both Bunting's supervisor, Walls, and his supervisor, Burton, the practice was not considered by Dennis Ferretti ("Ferretti"), Citizens' Financial Gro up Retail Manager, when he terminated Bu nting. Neither he nor Barbara Blyth ("Blyth"), Citizens' Human Resources General Manager, or any of the other people who participated in the decision to terminate Bunting, were told by Burton that Bunting's conduct was consistent with what was expected of her and other branch notaries, in spite of the fact that Burton participated in the conference call at which the decision to terminate Bunting was made. Blyth testified that Burton was very quiet during the conversation regarding what to do with Bunting and only raised the possibility of a "final written warning" after the group had concluded that Bunting should be fired for violating the bank's written notary policy. Both Ferretti and Blyth, who were obviously unaware of C itizens' actual notary practice, te stified during their dep ositions that they wou ld have considered the practice relevant in deciding whether to terminate Bunting had they known about it.
Ferretti testified at trial that he was troubled by having to terminate Bunting and that although he did not know of the actual practice and custom regarding the manner in which documents were notarized in Delaware at the time he made his initial decision, after a great deal of thought he concluded that had he known, he would have still terminated Bunting. Blyth testified that she supported the position Ferretti took at trial.
At the time Bunting was terminated, she was participating in Citizens' Mid-Atlantic Retail Incentive Plan (the "Plan"). The purpose of the Plan is to reward employees for both team and individual performance when they meet or exceed their performance objectives. Incentive payouts are made quarterly, typically six weeks after the close of the quarter. Citizens refused to pay Bunting incentive compensation she earned under the Plan prior to her termination because she was not employed on the day the incentive compensation was determined and allocated to the participants. Bunting also sought compensation for performing the branch manager's duties. The compen sation was supposed to be in the form of the branch manager's incentive compensation. Bunting also made a claim for compensation that she would have earned had she not been wrongfully terminated by Citizens.
Standard of Review
A motion made pursuant to Superior Court Civil Rule 50(b) requires this Court to view the evidence in the light m ost favorable to the no n-mov ing party. The Court must determine whether the evidence and all reasonable inferences that can be drawn therefrom could justify a verdict in favor of the non-moving party. The Court does not weigh the evidence. The Court does not determine witness credibility. In order to find for the moving party, the court must find that there is no legally sufficient evidentiary basis for a reasonable jury to find for the non-mov ant. The sole issue is whether the case's "facts and inferences would permit reasonable persons to reach but one conclusion."
Mumford v. Paris, 2003 WL 231611, *2 (Del.Super. Jan. 31, 2003).
Id.
Burgos v. Hickok, 695 A.2d 1141, 1145 (Del. 1997).
Trievel v. Sabo, 714 A.2d 742, 745 (Del. 1998) ( citing Burgos).
Mumford, 2003 WL 231611, *2.
Gannett Co., Inc. v. Re 496 A.2d 553, 557 (Del. 1985).
The Wage Claim
Bunting alleged, and the jury found, that Citizens owed her wages but did not pay them. There were two parts to Bunting's wage claim, which was Count I of her complaint. One, Bunting testified that she was owed incentive compensation under the Plan for working as the assistant branch manager for the third and fourth calendar quarters of 2004 (the "Incentive Compensation Claim"). Two, Bunting testified that Citizens agreed to pay her for working as the acting branch manager (the "Acting Branch Manager Claim"). The compensation was to be in the form of the branch manager's incentive compensation. The jury awarded Bunting $8,222.66 for the Incentive Compensation Claim and $4,016.66 for the Acting Branch Manager Claim. Notwithstanding Bunting's testimony and the jury's finding, Citizens argues that it is entitled to judgment as a matter of law on these claims because Bunting was not an employee when the incentive compensation was calculated and allocated. I have denied Citizens' motion for judgment as a matter of law on Bunting's wage claim because Citizens did not move under Superior Court Civil Rule 50(a) for judgment as a matter of law on this claim at the conclusion of Bunting's case-in-chief. Citizens only moved for judgment as a matter of law on Counts II and III. Accordingly, Citizens is now precluded from attacking the jury's verdict on Bunting's wage claim.The Implied Contract Claim
Bunting alleged, and the jury found, that there was an implied contract between her and Citizens modifying her employment-at-will status to provide that in exchange for her notarizing documents in violation of Citizens' written notary policy, Citizens would not terminate her for doing so. Notwithstanding the jury's finding, Citizens argues that Bunting did not prove certain elements of her claim. Specifically, Citizens argues that Bunting did not prove that there was "consideration" for the contract and that there was no "meeting of the minds" as to its terms. Citizens argues that there was no "consideration" because Bunting, as a bank employee, had to notarize documents as a part of her job. Given that a pre-existing duty cannot be "consideration" for a contract, Citizens reasons that there was no "consideration." Citizens argues that there was no "meeting of the minds," or "mutual assent," because Bunting did not believe that she was violating Citizens' written notary pol icy.
Capital Management Co. v. Brown, 813 A.2d 1094, 1098 (Del. 2003).
There is no basis in either law or fact for Citizens' arguments. Bunting had no pre-existing duty to notarize documents that were signed outside of her presence. Indeed, Citizens' written notary policy required otherwise. Thus, Citizens' argument is based on a factual premise that simply does not exist. Moreover, there clearly was consideration for Bunting's implied contract claim. Consideration lies in either some benefit to the promisor or detriment to the promisee. Before Citizens asked Bunting to notarize signatures that she did not witness, Citizens could have fired Bunting for any reason or no reason at all. Similarly, Bunting had no obligation to notarize signatures that she did not witness. Indeed, Bunting could have refused to notarize any signature that she did not witness and reported the matter to management. Citizens' written notary policy states, in part, that:
Szyman ska v. Equitable Life Ins . Co., 183 A. 30 9, 314 (Del.Super. 1936). See also Street Search Partners, L.P. v. Ricon International, LLC., 2006 WL 1313859, *4 (Del.Super. May 12, 2006), and Paoli v. Whispering Pines, 2006 WL 2165690, *2 (Del. Com. Pl. July 31, 2006).
"If a Branch Notary is asked to notarize a document without the customer being present, or you witness such act, report this violation to your management or to the Citizens Bank Alertline at 1-800-700-1107."
Bunting obviously could not have reported this to her management, Walls and Burton, because they already knew of, and participated in, the actual notary practice. In any event, this was a practice that Citizens, not Bunting, used to benefit itself and its customers. Citizens, in violation of its own written notary policy, requested Bunting to notarize signatures that she did not witness. Bunting did what her superiors and other co-workers asked her to do. The quid pro quo for this was that, not surprisingly, Citizens would not fire Bunting for doing what it had asked her to do. Burton admitted as much when she told Bunting that she had nothing to worry about when the matter first came to light. Clearly, there was "consideration" for this contract.
It is irrelevant that Bunting did not know that her actions violated Citizens' written notary policy. There is no doubt, based upon the testimony at trial, that Citizens expected Bunting to notarize signatures that she had not witnessed. Similarly, there is no doubt that Bunting did this in response to Citizens' request to do so and that she did not expect to be terminated for doing it. In order to establish mutual assent, conduct in accordance with what is requested constitutes mutual assent.
Capital Management v. Brown, 813 A.2d 1094, 10 98 (Del. 20 02). See also Ripsom v. Beaver Blacktop, Inc., 1998 WL 32071, *10 (Del.Super. April 26, 1988).
Citizens argues that even if Bunting established a prima facie case for an implied contract, the contract is unenforceable as a matter of law because it is an illegal contract. Bunting argues that Citizens did not raise illegality as an affirmative defense in its answer to her complaint. Citizens filed a post-trial motion seeking to add illegality as an affirmative defense. Illegality of contract is an affirmative defense that must pled. Whether Citizens failed to raise illegality as a defense resulting in the waiver of it is for the Court to decide as a matter of law. Citizens raised 26 affirmative defenses in its answer. In one of them, Citizens alleged that Bunting may not recover due to her own violation of law. Pleadings are to be interpreted liberally. I am satisfied that Citizens put Bunting on notice that her contract claim was barred by applicable law. Moreover, Bunting and Citizens were aware of this issue and addressed it at length before the trial. Thus, I have granted Citizens' motion to amend its answer to add the defense of illegality.
Contracts may be unenforceable if they are eit her i lle gal p er s e or v iol ate pub lic pol icy. The notary law does not specifically prohibit Citizens and Bunting from doing what they did. Thus, in order for Citizens to prevail on this argument it must establish that enforcement of the contract would vio late publi c policy. To determine if a contract, which violates the terms of a statute, should be unenforceable as a matter of public policy, the Court must consider the statute's language, nature, object, purpose, subject matter, reach, the wrong or evil which the law seeks to remedy or prevent, the class of persons sought to be controlled, the legislative history and the effects of holding a contract in violation of the law invalid as well as balancing the interest in enforcement of the contract agai nst the law's u nde rlyi ng pu bli c policy. Citizens argues that the purpose of the notary statute is to protect the public and help ensure the credibility and integrity of transactions in order to promote the proper operation of business, government and commerce and ensure lawfully executed transactions.
17A Am. Jur. 2d Contracts § 237 (2007). See also Della Corporation v. Diamond, 210 A.2d 847, 850 (Del. 1965), and State v. Smith, 809 A.2d 1174 (Del.Super. 2002).
Bank of Baltimore v. Auto's Plus, 1994 WL 19 937,**2 (Del. Sup er. Jan. 4, 1994).
id.
The only type of document that was discussed in this case was a mortgage. In order for a mortgage to be recorded at the Recorder of Deeds Office, the mortgagor's signature must be notarized. The obvious purpose of the notary law is to provide a way for signatures to be authenticated. Citizens and Bunting did not seek to evade this requirement. The actual notary practice at Citizens was based on the assumption that the Citizens' employee who had presented a document to a notary for notarization, knew the customer and had actually seen the customer sign the document. Both Citizens and Bunting, as the notary, believed that in all cases the customer had actually signed the document. Thus, the implied contract substantially complied with the notary law. The parties most affected by a mortgage are, not surprisingly, the parties to it. The legislature has determined that defectively acknowledged instruments are still valid. It has indicated that the failure to follow the requirements of 29. Del.C. Chapter 43 may be excused where notarization is merely a technical and not a substantive requirement.
The rule that a contract in violation of a statute is invalid and unenforceable is not inflexible. Given that the implied contract substantially implied with the notary law and the fact that the Delaware legislature itself has indicated, by its favorable treatment of defectively acknowledged mortgages, that strict adherence to the notary law in such situations is not necessary to protect the public interest, I conclude the imp lie d contr act is not u nen forceab le as a m att er of pub lic policy. Citizens' motion for judgment as a matter of law is denied.
The Covenant of Good Faith and Fair Dealing
Bunting alleged, and the jury found, that Citizens falsified or manipulated her employment record to create fictitious grounds for her termination. The evidence at trial was that Burton did not tell Ferretti that Bunting only did what was expected of her when she notarized the signatures on the doctor's mortgage and that it was a long-standing and widespread practice to notarize documents this way at Citizens and that Burton was aware of, and had participated in, the practice.
E. I. DuPont de Nemours and Co. v. Pressman, 679 A.2d 436 (Del. 1 996).
Citizens argues that it is entitled to judgment as a matter of law on this claim because Bunting did not prove "bad faith" and "fraud." In order to establish bad faith, Bunting had to offer evidence sufficient to prove ill-will, intent to harm and an active and affirmative intent to deceive. Citizens argues that Bunting proved, at best, that Burton was interested in keeping her own job and, in fact, actually tried to save Bunting's job by suggesting that Bunting should be given a "final written warning" instead of being terminated.
In failing to disclose the actual notary practice at Citizens to Ferretti and the others who participated in the decision to terminate Bunting, as well as her own role in it, Burton created the impression that Bunting's actions were isolated, done at her own initiative, and not condoned by Walls and Burton. This was a dramatic distortion of both the actual notary practice at Citizens and Bunting's employment record. The evidence showed that Citizens' actual notary practice was longstanding, widespread and known to, condoned by, and used by Citizens' branch and regional management for both work and personal purposes. Burton and Walls, in addition to using the notary practice for the convenience of Citizens' customers, also had a Citizens' notary notarize the signatures on their own home equity loans so that their respective spouses would not have to appear before a notary. However, Burton did not mention a word of this to Ferretti. Burton testified that she did not tell Ferretti because she didn't think it would make a difference. This is nonsense because the truth always makes a difference. Burton had to know that Citizens' actual notary practice would be important to Ferretti because Citizens sustained a substantial loss under similar circumstances the previous year. Burton was aware of this loss. It was also the very reason that Bunting's job was at risk. Burton's testimony was unbelievable and obviously not accepted by the jury. Ferretti readily admitted during his deposition that the actual practice was something that he would have considered when deciding what to do about Bunting. It is painfully obvious, viewing the facts in the light most favorable to Bunting, that Burton didn't tell Ferretti what was going on because she was afraid for her own job. Citizens argues that the only conclusion to be drawn from this is that Burton was interested in keeping her own job. In making this argument, Citizens ignores the undeniable fact that Burton wanted to keep her own job at Bunting's expense and that she did it by concealing the actual notary practice from Ferretti. If saving yourself by sacrificing a long-term, loyal and hardworking employee under these circumstances is not evidence of ill will, intent to harm and an active and affirmative intent to deceive, then it is difficult to think of what would suffice. Citizen's argument that Burton actually tried to save Bunting's job by suggesting that she should be given a "final written warning" instead of being terminated is underwhelming. This would have been meaningful only if Burton had told Ferretti that he should do this because Bunting was only doing what she was expected to do. But this was not the case. Indeed, by failing to provide a rationale for her suggestion, and doing it only after Ferretti had already deci ded to term inate Bunti ng, Burton made it clear that she was willing to save herself at Bunting's expense.
Citizens also argues that Bunting did not prove the elements of fraud because Ferretti testified at trial that even if he had known everything about the actual notary practice that he still would have fired Bunting. Thus, Citizens reasons that there was no fraud because, regardless of Burton's omissions, Ferretti would have done the same thing. Blythe and Ferretti both testified at their depositions that they would have considered the actual practice in deciding what to do about Bunting. At trial they changed their position and testified that the actual practice would not have mattered. The jury was presented with two different versions and was free to accept either one. It concluded that Ferretti fired Bunting because Burton created the impression that Bunting's actions were isolated and not condoned by her immediate management. The evidence in this case, when viewed in the light most favorable to Bunting, certainly supports the jury's finding. Citizens' motion for judgment as a matter of law is denied.
Judgment Correction
The jury awarded Bunting $8,222.66 for her Incentive Compensation Claim. It also awarded Bunting $4,016.66 for her Acting Branch Manager Claim, which the jury concluded was a part of the $8,222.66. Thus, Bunting's total wage claim is $8,222.66, which is increased by liquidated damages of $8,222.66 pursuant to 19 Del.C. § 1103(b). The jury also awarded Bunting $252,416.00 for her wrongful termination and breach of the implied covenant of good faith and fair dealing claims. This amount was wrongly recorded on the Court's docket as $252,116. I have corrected the docket to reflect the jury's actual award. Bunting and Citizens agree that these amounts, as corrected, accurately reflect the jury's verdict. Bunting filed a post-trial motion seeking to amend the jury's verdict to include $2,533.33 for incentive compensation for the fourth quarter. Bunting admits that she did not offer evidence at trial to support this claim. Thus, her motion is denied.
Attorney's Fees and Costs
Bunting incurred attorney's fees of $144,866.70 and costs of $6,672.70 in pursuing her claims against Citizens. Bunting's wage claim consists of the Incentive Compensation and Acting Branch Manager claims. Bunting and Citizens agree that both claims are wages within the meaning of 19Del.C. § 1101(a)(5). The jury awarded Bunting $8,222.66 for the Incentive Compensation Claim and $4,016.66 for the Acting Branch Manager Wage Claim. Thus, Bunting is entitled to her attorney's fees for these claims pursuant to 19 Del.C. § 1113(c). The issue is how to properly allocate a portion of Bunting's total attorney's fees to the wage claim. Bunting argues that she is entitled to all of her attorney's fees for two reasons. One, Bunting argues that her three claims are inextricably entwined because Citizens argued that she was not entitled to any wages because she was terminated before the incentive compensation was calculated and allocated. Bunting reasons that if Citizens had not wrongfully terminated her, then she would have been employed when the incentive compensation was calculated and allocated. Two, Bunting argues that Citizens litigated this case in bad faith. Citizens argues that each claim is separate and distinct and that Bunting's attorney's fees must be apportioned to all three claims with Bunting only receiving the attorney's fees for her wage claim. Citizens also argues that it did not litigate this case in bad faith.
Nagy v. Bistrice, 770 A.2d 43 (Del.Ch. 2000).
Bunting's Incentive Compensation Claim is based on the Plan. After Citizens fired Bunting on October 29, 2004, it refused to pay her incentive compensation for the third and fourth calendar quarters of 2004. The Plan provides, in part, that a participant in the Plan has to be an employee when the incentive compensation is calculated and allocated. Bunting had done everything that she could do to earn the incentive compensation for the third quarter. However, Citizens took the position that she was not entitled to anything for the third and fourth quarters because she was not an employee when the incentive compensation for these quarters was calculated and allocated. Thus, given the language of the Plan and Citizens' position, Bunting had two ways to prove that she was entitled to incentive compensation. One, Bunting could prove that, notwithstanding the plain language of the Plan, she had really earned her incentive compensation for the third and fourth quarters. Two, Bunting could prove that the only reason that she wasn't an employee at the time of the calculation and allocation of the incentive compensation for the third and fourth quarters was because Citizens wrongfully terminated her. The legal rationale for the second approach was the wrongful and bad faith termination claims in Counts II and III, respectively. Thus, Bunting had to prove counts I, II and/or III in order to prove her Incentive Compensation Claim. Bunting did not have the luxury of knowing which theory the jury would accept, leaving her with no choice but to pursue all theories. I agree with Bunting's reasoning. All three of her claims were inextricably entwined. Given the language of the Plan and Citizens' position, Bunting had no choice but to make the arguments that she did. The Acting Branch Manager Wage Claim was a claim for wages earned. Citizens denied that it ever agreed to pay Bunting for serving as the acting branch manager. The jury found otherwise. Therefore, I have concluded that Bunting is entitled to her attorneys' fees on a largely unallocated basis.
Bunting argues that Citizens acted in bad faith by 1) terminating Bunting's employment in bad faith; 2) telling Bunting that she had to be an employee in order to be eligible for incentive compensation; 3) attempting to force the wage issue to arbitration in Rhode Island; 4) failing to comply with subpoenas at both a December 2004 unemployment hearing and at the arbitration hearing in this case held in June of 2005; 5) failing to answer fully interrogatories put to it and to file answers under oath; and 6) filing two motions for protective orders and five motions in limine.
While the jury found that Citizens acted in bad faith in terminating Bunting, this claim, in and of itself, does not provide for an award of attorneys' fees. The cases creating this exception to the employment-at-will doctrine simply do not authorize an award of attorneys' fees for the successful employee. While Citizens told Bunting that she had to be an employee to get incentive compensation, this is consistent with the Plan language and Delaware cases allowing for such a requirement. The venue selection provision does, in my view, run afoul of Delaware's wage statute. Earlier in the case Citizens sought to dismiss Bunting's wage claim based on this. I denied Citizens' request. However, this alone does not, in my view, rise to the level of bad faith. I cannot determine if Citizens' alleged refusal to comply with subpo enas for the unemployment and arbitra tion heari ngs was done in bad faith because there is no factual basis to make such a determination. If Bunting was dissatisfied with Citizens' answers to discovery, then she should have raised the issue at the time so that I could have dealt with it. Regarding the various pre-trial motions, I, to some extent, agreed with Citizens' positions. My impression of this case was, and is, that Bunting was aggressively pursuing her claims and that Citizens was aggressively defending them. Thus, I have concluded that Citizens' actions do not rise to the level of bad faith.
Reasonable Attorneys' Fees
The Court must consider the following factors in determining reasonable attorneys' fees: a) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; b) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; c) the fee customarily charged in the locality for similar legal services; d) the amount involved and the results obtained; e) the time limitations imposed by the client or by the circumstances; f) the nature and length of the professional relationship with the client; g) the experience, reputation, and ability of the lawyer performing the services; h) whether the fee is fixed or contingent; i) the ability of the employer to pay fees; and j) whether any part of the fees or costs will be paid from some other source.
Delaware Lawyers' Rule of Professional Conduct 1.5; General Motors Corporation v. Cox, 304 A.2d 55, 57 (Del. 1973).
Bunting was represented by Kathi A. Karsnitz, Esquire ("Karsnitz"). Karsnitz spent 690.97 hours on this case. This case has been extensively litigated by both sides. There was extensive dis covery, numerous pre-trial, trial and post-trial motions. The trial itself lasted nearly two weeks. The time she spent on this case is appropriate.
The legal questions presented in this case were novel and difficult. Bunting was in most respects an employee-at-will who could be fired for any reason or no reason at all. This would, under normal circumstances, suggest that the legal questions presented were simple. However, this case was anything but normal. Citizens fired Bunting for doing exactly what it had asked her to do and then refused to pay her wages that she had earned. Moreover, Burton did not tell Ferretti that Bunting was merely doing what she and other notaries had been asked to do many times before. While Bunting's actions violated Citizens' written notary policy, they were in full compliance with Citizens' actual notary practice, at least as it was followed in the Sussex County branches. This left Bunting with a number of viable claims. While viable, they were not easy to prove because, in part, of the evolving and complicated nature of the wrongful discharge and bad faith case law and the law pertaining to "earned" wages, the fact that Citizens Bank operates the branch in Georgetown, but the branch policies and incentive compensation plan are handled by Citizens Financial Group, Inc., the number of Citizens' employees who were involved in the termination decision and the decision not to pay wages. This case required a tenacious and highly-skilled lawyer with extensive understanding of employment law. As a solo practitioner, Karsnitz's ability to take on other cases after March of 2006 was severely limited by her obligations in this case. Karsnitz's hourly billing rate is $175.00.
She has sought a contingency surcharge of $25.00 per hour. It is, in my view, merited in this case. This rate is, I believe, substantially lower than what attorneys who typically practice employment law charge for cases of this nature. Her fee in this case is contingent upon a successful outcome.
In re Caremark Intern. Inc. Derivative Litigation, 698 A.2d 959 (Del.Ch. 1996) (The Court awarded a premium in addition to the lawyer's normal hourly rate).
There was a lot at stake in this case. Bunting was terminated from a well-paying job with excellent benefits. She was only able to find a job paying substantially less with less than excellent benefits. At trial, Bunting offered evidence of damages well over $500,000.00. Bunting recovered $8,222.66 on her wage claim and liquidated damages under 19Del.C. § 1103(b), causing the amount to double to $16,445.32. Bunting recovered $252,416.00 on the wrongful termination and bad faith claims. In summary, the amount involved and the amount recovered were both substantial.
Karsnitz has known Bunting for many years, but she did not represent her until November 2004. Karsnitz has been a member of the Delaware Bar for nearly 24 years and during that time has represented employers and employees in a variety of cases including wrongful termination, claims for pension and disability benefits, grievances of all sorts, and unemployment and workers' compensation claims from both sides. Citizens is, by any measure, a large banking corporation with more than sufficient assets to pay Bunting's attorney's fees. No part of Karsnitz's fees will be paid from any other source.
Given these factors, I have concluded that Karsnitz's total fees are reasonable, subject to a deduction for work that was unrelated to the wage claim. All of the legal arguments that Bunting made in this case were, in one manner or another, made to prove her wage claim. The only effort that Bunting made that was unrelated to her wage claim was to prove damages for the wrongful termination and bad faith claims. Thus, I have reduced her claim for attorney's fees by deducting the time Karsnitz spent developing and presenting these damages. This amount is $7,222.00, leaving an award of attorney's fees to Bunting of $137,644.70.
Court Costs
Bunting is seeking reimbursement for the following expenses:
Prothonotary's Fees — $ 710.00
Transcription Fees — 2,980.00
Expert Witness Fee — 1,575.00
Service Fees — 1,407.70
Total — $6,672.90
19 Del. C. § 1113(c) provides that "any judgment entered for a plaintiff in an action brought under this section shall include an award for the costs of the action." Determining when costs are to be awarded and when they are not is a matter of judicial discretion under 10Del. C. § 5101. Section 5010 provides that a party for whom final judgment in any civil action is given shall recover against the adverse party costs of the suit. Superior Court Civil Rule 54(d) provides that "costs shall be allowed as of course to the prevailing party upon application to the Court within ten (10) days of the entry of final judgment unless the Court otherwise directs." Bunting is entitled to recover the Prothonotary's fees in the amount of $710.00.
Superior Court Civil Rule 54(f) permits only the cost of the transcription of the Court's copy of a deposition introduced into evidence to be taxed as costs. Bunting only introduced into evidence the deposition transcripts of Barbara Blyth, Dennis Ferretti, Michael Hill and Patricia Bauer. The transcription fees for these are $1,158.00. Thus, Bunting is only entitled to transcription fees of $1,158.00.
Expert witness fees may be taxed as costs against the unsuccessful party pursuant to 10 Del.C. § 8906. 10 Del. C. § 8906 specifically states:
Stevenson v. Henning, 268 A.2d 872 (Del. 1972).
"The fees for witnesses testifying as experts or in the capacity of professionals in cases in the Superior Court, the Court of Common Pleas and the Court of Cha ncer y, within this State, shall be fixed by the court in its discretion, and such fees so fixed shall be taxed as part of the costs in each case and shall be collected and paid as other witness fees are now collected and paid."
David E. Black, an economist, testified as to Bunting's economic damages. This Court has treated fees charged by economists for testifying as comparable to a medical doctor's fee for testifying. Under this standard, Dr. Black's fee is appropriate and Bunting is entitled to recover $1,575.00.
Foley v. Elkton Plaza Associated, LLC, 2007 WL 959521**3 (Del.Super. March 30, 2007).
This Court has repeatedly interpreted "costs" to include the usual and customary costs incurred in service of process. Thus, Bunting is entitled to service of process fees of $1,407.70. In summary, Bunting is entitled to $4,850.70 in costs.
Conclusion
Citizens' renewed motion for judgment as a matter of law is denied. Citizens' motion to amend its answer to add the defense of illegality is granted. Bunting's motion to amend the judgment is denied. Bunting's motion for attorney's fees and costs is granted as set forth herein. Bunting shall be entitled to (1) pre — and post-judgment interest at the appropriate legal rate on $8,222.66 from December 31, 2004, (2) post-judgment interest at the appropriate legal rate on liquidated damages of $8,222.66 as of May 12, 2006, (3) post-judgment interest at the appropriate legal rate on attorney's fees of $137,644.70 as of May 12, 2006, and (4) post-judgment interest at the appropriate legal rate on costs of $4,850.70 as of May 12, 2006.
IT IS SO ORDERED.
Very truly yours,
E. Scott Bradley