Opinion
C.A. No. 19557-NC.
Submitted: September 19, 2003.
December 18, 2003.
Samuel L. Guy, Esquire Law Office of Samuel L. Guy, Wilmington, DE.
Rick S. Miller, Esquire Ferry, Joseph Pearce, P.A., Wilmington, DE.
Dear Counsel:
Pending are cross-motions for reargument of the Court's bench ruling of August 20, 2003, as implemented by Order, dated August 22, 2003. Defendant's motion for reargument was filed August 26, 2003; Plaintiffs' cross-motion was not filed until September 14, 2003.
Motions for reargument are governed by a familiar standard: "[A] motion for reargument will usually be denied `unless the Court has overlooked a decision or principle of law that would have controlling effect or the Court has misapprehended the law or the facts so that the outcome of the decision would be affected.'"
Miles, Inc. v. Cookson Am., Inc., 677 A.2d 505, 506 (Del.Ch. 1995) (quoting Stein v. Orloff, 1985 WL 21136, at *2 (Del.Ch. Sept. 25, 1985)).
1. Defendant's Motion for Reargument
The Court awarded Plaintiffs' counsel a fee of $15,000 for preserving representation from the West Center City area on Defendant's board in the face of an improper effort to revise the Defendant's bylaws. The Defendant now contends that the fee award is excessive. It challenges both the hours attributed by the Court to Plaintiffs' counsel's efforts with respect to the challenged bylaw amendments and the effective hourly rate awarded.
See West Ctr. City Neighborhood Ass'n, Inc. v. West Ctr. City Neighborhood Planning Advisory Comm., Inc., 2002 WL 1403322, at *2-*3 (Del.Ch. June 20, 2002). In this proceeding, the Plaintiffs also raised several other claims, some of which were unsuccessful, but for which no fees were awarded.
The Defendant does not, for purposes of its reargument motion, argue that no corporate benefit was conferred through the Plaintiffs' efforts. See Defendant's Mot. for Reagrument, ¶ 2.
The Defendant tries to limit the fees awarded to Plaintiffs' counsel to those based on hours clearly devoted exclusively to the successful motion for summary judgment. The Court's decision of August 20, 2003, was based upon a review of Plaintiffs' counsel's billing records, and it concluded that the time allotted was reasonably necessary to develop and pursue this action through successfully challenging the bylaw amendment that would have reduced West Center City's representation on the Defendant's board. Although the Court's consideration of the number of hours reasonably devoted to this effort does not involve application of any precise scientific principles, the Defendant has not identified any grounds for the Court to change these factual findings.
The Defendant focuses upon the effective hourly rate of the Court's fee award (something less than $190 per hour) and tenders two arguments — both of which are premised upon a letter, dated April 4, 2002, from Plaintiffs' counsel to one of the Plaintiffs. That letter recites a rate of $125 per hour and provides that only the corporate plaintiff (and not the individual plaintiffs) would be liable for any fees incurred. Plaintiffs' counsel has represented — and has been subjected to cross-examination by the Defendant — that the agreement was subsequently modified to allow for an hourly rate of $210. The absence of a writing confirming the revised agreement does not necessarily mean that such an agreement was never reached.
Of course, Plaintiffs' counsel should have preferably memorialized the new agreement in writing.
The Plaintiffs, by preserving the integrity of the Defendant's bylaws from an attack by another faction within the greater community served by the Defendant, obtained a corporate benefit. The fees in corporate benefit cases are governed by Sugarland Industries, Inc. v. Thomas and its progeny. Among the factors that the Court should consider are: the amount of time and effort required of counsel; the relative complexities of the litigation; the skill and standing of counsel; the contingent nature of the fee; and the standing and ability of counsel.
420 A.2d 142 (Del. 1980).
Id. at 149.
The Defendant is correct in its assertion that, even though substantial doubt existed as to whether the Plaintiffs would have been able to pay their counsel's fee, the fee was not contingent in the sense that it was dependent upon the outcome. That the compensation agreement was not contingent in nature is but one factor to assess. The contingent nature, however, is usually important because it is a means of recognizing the payment risk assumed by counsel in pursuing such claims.
The process of determining an appropriate fee is not merely the mechanical process of multiplying an hourly rate by the number of hours. Instead, it requires a consideration of all relevant factors — including those identified in Sugarland After reviewing the Sugarland factors and Defendant's arguments, the Court is satisfied that it neither misapprehended the facts nor misapplied the law with respect to the fee award.
Defendant argues that the fee award included a success bonus that should not be awarded when representation is not on a contingent fee basis. See United Vanguard Fund v. TakeCare, Inc., 727 A.2d 844, 856-57 (Del.Ch. 1998). In light of the renegotiated fee agreement, no premium is embedded in the award. Indeed, this case is an example where the Court has awarded a fee with an effective hourly rate below that sought by the Plaintiffs' counsel.
2. Plaintiffs' Motion for Reargument
Plaintiffs' motion for reargument is denied because it was not timely filed. Moreover, even if it were timely filed, it would not have satisfied the standards for the grant of reargument set forth in Miles, Inc. v. Cookson America, Inc.
See Court of Chancery Rule 59(f).
3. Conclusion
For the foregoing reasons, the motions for reargument are denied.