Eric Pulier v. CSC Agility Platform, Inc. ( 2018 )

IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE
ERIC PULIER,
Plaintiff,
V.
CSC AGILITY PLATFORM, INC. C.A. No. 2017-0081-CB
(F/K/A SERVICEMESH INC.),
a Delaware Corporation,
Defendant.
`` CSC AGILITY PLATFORM, INC.
(F/K/A SERVICEMESH INC.),
a Delaware Corporation,
Counterclaim Plaintiff,
v.
ERIC PULIER,
Counterclaim Defendant.
\./\./\./\/\./\./\./\./V\./\./V\/ \/\/\_/\/\./\_/\/\/\./\/\/\./
ORDER DENYING PLAINTIFF’S MOTION FOR REARGUMENT
WHEREAS:
A. On September 13, 2017, the court entered an advancement order
awarding plaintiff Eric Pulier lOO% of his attorneys’ fees and other expenses
reasonably incurred in defending against or in connection With multiple
government investigations and proceedings, including those initiated by the United
States Department of Justice, the United States Securities and Exchange
Commission, and the Australian government
B. On November 3, 2017, defendant CSC Agility Platform, Inc. (F/K/A
ServiceMesh Inc.) filed a motion to amend the advancement order under Court of
Chancery Rule 60(b) after the United States Department of Justice brought
criminal charges against Pulier as a result of a federal grand jury indictment issued
on September 27, 2017 (the “Indictment”). On December 20, 2017, Pulier filed
an opposition to the motion to amend.
C. On January 30, 2018, the court granted the motion to amend With
modifications, (1) ruling that Pulier is not entitled to advancement for Counts
Thirteen, Fourteen, and Fifteen of the Indictment (the “Non-Covered Counts”) and
(2) amending the September 13, 2017 advancement order to reduce Servicel\/Iesh’s
advancement obligation from 100% to 80%, beginning October 1, 2017.
D. On February 6, 2018, Pulier filed a motion for reargument of the
court’s ruling on the motion to amend, to Which defendant responded on February
13, 2018.
It is hereby ORDERED, this 9th day of April, 2018, that:
1. “A motion for reargument under Court of Chancery Rule 59(f) will be
denied unless the court has overlooked a controlling 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 different.”l A motion for
reargument is not a mechanism to “relitigate claims already considered by the
court,”2 or to make new arguments3 Pulier thus bears “a heavy burden on a Rule
59 motion.”4
2. Pulier does not contend in his reargument motion that he is entitled to
advancement for the Non-Covered Counts. Rather, he argues that the court’s
reduction of ServiceMesh’s advancement obligation from 100% to 80% was
predicated upon a misapprehension of material facts for essentially two reasons.
3. First, Pulier contends that the Rule 88 process is the most “practical
and efficient” process for challenging time entries related to the Non-Covered
Counts because the parties have “successfully engaged in the [Rule 88] process
[since September 2017].”5 This argument does not provide a legitimate basis for
reargument because Pulier previously made, and the court previously rejected, this
same argument.
l T hose Certaz'n Underwrl'ters at Lloya”S, Lona’on v. Nat’l Installment Ins. Servs., Inc.,
2008 WL 2133417, at *1 (Del. Ch. May 21, 2008).
2 In re ML/EQ Real Estate P’shl'p Ll'tl'g., Consol., 2000 WL 364188, at *1 (Del. Ch. Mar.
22, 2000) (Strine, V.C.).
3 See, e.g. Am. Legacy Found. v. Lorl'llard Tobacco C0., 895 A.2d 874, 877 (Del. Ch.
2005).
4 ML/EQ, 2000 WL 364188, at *l.
5 Mot. for Reargument 1111 18-21.
4. Specifically, Pulier argued in his opposition to the motion to amend
that the parties should use the Rule 88 process because “ServiceMesh has not, and
cannot, explain why this process is not the precise way for the parties to address
any concerns Servicel\/Iesh has regarding the [Non-Covered Counts].”6 The court,
which is familiar with the issues involving these parties from having decided
numerous motions in multiple cases involving them, specifically rejected that
argument, concluding that “[i]t would not be practical or efficient for the parties to
attempt to carve-out [the expenses attributable to the Non-Covered Counts]
through the Rule 88 process based on line-item review of bills submitted for
advancement.”7 The court further explained that it “selected 80% in an effort to
make a fair allocation taking into account, among other considerations, that the
non-covered counts of the indictment concern only three of the fifteen counts and
that the Order covers other government investigations and proceedings” aside from
the investigation that led to the Indictment.8 Rehashing arguments previously
made to the court is not a proper basis for a motion for reargument9
6 Opp’n to Mot. to Amend 11 27.
7 Am. Order 11 3.
8 Am. Order 11 3. In reaching this conclusion, the court rejected defendant’s request that
the allocation be set at 66%.
9 See Ml'les, Inv. v. Cookson Am., Inc., 677 A.2d 505, 506 (Del. Ch. 1995) (“Where, as
here, the motion for reargument represents a mere rehash of arguments already made
[earlier] . . . the motion must be denied.”); see also ML/EQ, 2000 WL 364188, at *1
4
5. Second, Pulier contends, in the alternative, that if the court is
unwilling to reconsider its use of an allocation to address the Non-Covered Counts,
Servicel\/Iesh’s advancement obligation should be 95% instead of 80%.10 In
support of this argument, Pulier relies on the affidavits of Mark Holscher and
Nathan Hochman, which estimate that, “going forward from October 1, 2017,” “no
more than 5% of the defense team’s time . . . will be spent defending against the
Non-Covered Counts.”‘l The fundamental problem with this argument is that
Pulier is relying on new evidence in the form of affidavits from his counsel that
could have been provided to the court before it decided the motion to amend the
advancement order.
6. At the time the motion to amend was decided, Pulier made the
strategic choice to argue_without any evidentiary support_that “no more than
three percent (3%) of the fees and expenses incurred by Pulier in the disputed
invoices have been incurred solely in connection with the [Non-Covered]
Counts.”'2 Pulier does not contend, nor could he in my judgment, that he was
unable to provide the estimates from his counsel previously, when the court was
deciding the motion to amend. Accordingly, it would be improper for the court to
(“[Rule 59] motions are not a mechanism for litigants to relitigate claims already
considered by the court.”).
'0 Mot. for Reargument1111 23-26.
" Mot. for Reargument11 25 n.3, Ex. 1 at 1111 5, 7, Ex. 2 at 1111 5-6.
12 Opp’n to Mot. to Amend 11 26 (emphasis in original).
5
consider this evidence now in the context of a Rule 59(f) motion for reargument,
which generally “is only available to reexamine the existing record.”13
7. In sum, Pulier’s motion for reargument fails to establish that the court
misapprehended a material fact. Instead, the motion improperly seeks to rehash
arguments the court already considered and rejected, or to rely on evidence Pulier
could have submitted before through reasonable diligence but failed to do so.
Accordingly, the motion for reargument is denied.
fhancelloy/Andre G. Bouchard
13 See Pontone v. Milso Ina’us. Corp., 2014 WL 4352341, at *1 (Del. Ch. Sept. 3, 2014)
(“In appropriate circumstances . . . a litigant may seek reargument based on newly
discovered evidence. To succeed on such a basis, an applicant must show the newly
discovered evidence came to his knowledge since the trial and could not, in the exercise
of reasonable diligence, have been discovered for use at the trial.”) (internal citations and
quotations omitted).