Greenstar IH Rep, LLC an Gary Segal v. Tutor Perini Corporation ( 2019 )

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
417 S. State Street
JOSEPH R. SLIGHTS III Dover, Delaware 19901
VICE CHANCELLOR Telephone: (302) 739-4397
Facsimile: (302) 739-6179
Date Submitted: September 10, 2019
Date Decided: December 4, 2019
Kenneth J. Nachbar, Esquire Brian C. Ralston, Esquire
Lauren Neal Bennett, Esquire Aaron R. Sims, Esquire
Morris, Nichols, Arsht & Tunnell LLP Potter Anderson & Corroon LLP
1201 North Market Street 1313 North Market Street
Wilmington, DE 19801 Wilmington, DE 19801
Re: Greenstar IH Rep, LLC and Gary Segal v. Tutor Perini Corporation
C.A. No. 12885-VCS
Dear Counsel:
I have reviewed Plaintiffs’ Application for Attorneys’ Fees and Expenses (the
“Application”) (D.I. 209). For the reasons that follow, the Application is granted.
I. Background
On March 11, 2019, the Court issued an oral ruling addressing, among other
motions, Plaintiffs’ Motion for Evidentiary Relief (D.I. 129). 1 As part of that ruling,
I concluded that “the cost of preparing the motion for evidentiary
1
Telephonic Oral Arg. and Bench Ruling Tr. (“Tr.”) at 76 (D.I. 171).
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relief . . . justifiably should be borne by the Defendant.”2 Plaintiffs submitted a
proposed Implementing Order on March 21, which I entered that day. 3 The
Implementing Order required Defendant to pay some of Plaintiffs’ deposition
expenses and to “pay Plaintiffs’ reasonable attorneys’ fees and expenses incurred in
connection with preparing their Motion for Evidentiary Relief.” 4 The fees and costs
requested by Plaintiffs are tallied below: 5
2
Id. at 78.
3
Proposed Order Governing Pls.’ Mot. for Evidentiary Relief, Tutor Perini Corp.’s Mot.
for Protective Order and Pls.’ Mot. to De-Designate Portions of the Dep. of Ronald Tutor
(D.I. 160).
4
Id. at 4.
5
Pls.’ Appl. for Att’ys’ Fees and Expenses (“Pls.’ Appl.”) (D.I. 209) ¶¶ 4–5 (citing
Declarations of Kenneth J. Nachbar and Amit Sondhi).
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On July 31, Plaintiffs provided Defendant with redacted timesheets as support
for the requested fees and expenses as authorized by the Implementing Order.6
Defendant raised certain objections and, in response, Plaintiffs agreed to withdraw
their request for fees associated with preparing and arguing two motions not
addressed in the Implementing Order. 7 Certain of Defendants’ objections remain
unresolved and are now joined for decision.
II. Analysis
Defendant raises two objections to Plaintiffs’ requested fees. Neither
objection has merit.
First, Defendant argues “the language of the Court’s March 11 ruling and the
[Implementing] Order [does not entitle Plaintiffs] to recover fees and expenses for
preparing for argument on the Motion, arguing the Motion, and listening to argument
on the motion.” 8 I disagree. In my bench ruling, I stated, “the cost of preparing the
6
Id. at Ex. 1
7
Def.’s Opp’n to Pls.’ Appl. For Att’ys’ Fees and Expenses (“Def.’s Opp’n”) (D.I. 217)
¶ 6 (citing Pls.’ Appl. Ex. 1 at 1–2, 4–5).
8
Def.’s Opp’n ¶ 9.
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motion . . . I think, justifiably should be borne by the [D]efendant.”9 That ruling
rested on Court of Chancery Rule 37, which provides, in part, that when the court
grants a motion to compel, “the Court shall . . . require the party . . . whose conduct
necessitated the motion . . . to pay the moving party the reasonable expenses
incurred in obtaining the order.”10 When the court requires oral argument on a
motion to compel, the “reasonable expenses incurred in obtaining the order” include
the fees and expenses incurred in preparing for and presenting oral argument.
To hold otherwise would penalize the prevailing party by requiring him to present
the motion to compel at a hearing but denying him recoupment of the costs incurred
in doing so. Defendant cites no authority for the proposition that Rule 37 somehow
distinguishes between fees generated when preparing a written motion and those
generated when preparing for and attending a court-ordered hearing on the motion.
The dearth of authority reflects the obvious—both are recoverable.
Second, Tutor Perini argues, “even if the Court finds that fees and expenses
related to the argument are warranted, it is unreasonable to require Tutor Perini to
9
Tr. at 78.
10
Emphasis supplied.
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pay the fees of five of Plaintiffs’ attorneys when only one of those attorneys prepared
for and argued the Motion.”11 In this regard, Defendant attacks the reasonableness
of $3,022.56 of Plaintiffs’ fees incurred “for the mere attendance of four attorneys
at the March 11 hearing.”12
In response, Plaintiffs argue that all attorneys present at the oral argument
either drafted the motion, were actively involved in document and deposition
discovery or drafted the pretrial brief that was in the works at the time of the hearing.
The evidentiary motion had significant strategic implications for Plaintiffs’ pretrial
briefs because a substantial segment of the case turned on each party’s ability to
produce and process accounting documents—some of which were at issue in the
hearing.13
In arguing that the fees submitted by Plaintiffs’ counsel are excessive,
Defendant cites Richmont Capital Partners I, L.P. v. J.R. Investment Corp., which
analyzed the reasonableness of a defendant’s fees incurred in answering a complaint
11
Def.’s Opp’n ¶ 9.
12
Id. at ¶ 15.
13
Pls.’ Reply in Further Supp. of their Appl. for Att’ys’ Fees and Expenses (D.I. 218) ¶ 4.
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after a plaintiff voluntarily dismissed a case under Court of Chancery
Rule 41(a)(2).14 There, the court reviewed the reasonableness of fees under
Rule 1.5(a) of the Delaware Lawyers’ Rules of Professional Conduct. That rule
instructs courts to evaluate the reasonableness of fees looking to, among other
factors, the time and labor required, the novelty and difficulty of the questions
involved, the skill required to perform the legal services, the fee customarily charged
in the locality for similar legal services, the nature and length of the professional
relationship with the client and the experience, reputation and ability of the lawyer
or lawyers performing the services. Of particular relevance, the court noted that,
“[w]hen considering attorneys’ fees, a court should greet with healthy skepticism a
claim that several lawyers were required to perform a single set of tasks and may
discount the time for two or three lawyers in a courtroom or conference when one
would do.” 15
After reviewing Plaintiffs’ fees with “healthy skepticism,” I conclude that the
fees requested are reasonable. The four attorneys Defendant questions generated
14
2004 WL 1152295, at *3 (Del. Ch. May 20, 2004).
15
Id. (internal citations and quotation omitted).
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$3,022.56 of fees in connection with the contested discovery motion—a reasonable
ask given the Delaware legal market, the proximity of the motion to an important
trial and the fact that the outcome of the motion would likely impact Plaintiffs’
pretrial briefing strategy. The motion concerned Plaintiffs’ ability to access certain
expense information that would be directly at issue in the upcoming trial. It was
reasonable, therefore, to have the attorneys who would be conducting discovery,
drafting pretrial briefs and trying the case observe the hearing first hand rather than
having to read a cold transcript of the hearing (for which they justifiably would have
billed the client).
Based on the foregoing, the Application is GRANTED. Defendant shall pay
Plaintiffs’ fees and expenses in the amount of $52,436.14 within twenty (20) days. 16
IT IS SO ORDERED.
Very truly yours,
/s/ Joseph R. Slights III
16
Plaintiffs also request that the Court award fees incurred in bringing the Application.
(D.I. 209 at 6, n.4). Given the weakness of the grounds for opposing the Application,
I agree that reasonable “fees on fees” are appropriate here. The parties shall confer on a
form of implementing order that includes a reasonable amount for “fees on fees.”