David Goldman v. LBG Real Estate Companies, LLC

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER
CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734
February 26, 2024
Peter J. Walsh, Jr. Thad Bracegirdle
Nicholas D. Mozal Bayard, P.A.
Eric J. Nascone 600 N. King Street, Suite 400
Potter Anderson & Corroon LLP Wilmington, DE 19899
1313 N. Market Street, 6th Floor
Wilmington, DE 19801
Re: David Goldman v. LBG Real Estate Companies, LLC
C.A. No. 2023-0426-KSJM
Dear Counsel:
This letter resolves Defendant LBG Real Estate Companies, LLC (“LBG”)’s
Rule 59(f) motion seeking partial reargument of my November 27, 2023 Ruling on the
parties’ cross-motions for summary judgment. 1
Under Court of Chancery Rule 59(f), “[t]he Court will deny a motion for
reargument ‘unless the Court has overlooked a decision or principle of law that would
have a controlling effect or the Court has misapprehended the law or the facts so that
the outcome of the decision would be affected.’” 2 If a motion for reargument “merely
rehashes arguments already made by the parties and considered by the Court” in
1 Dkt. 32 (“Mot.”).
2 Nguyen v. View, Inc., 2017 WL 3169051, at *2 (Del. Ch. July 26, 2017) (quoting Stein
v. Orloff, 1985 WL 21136, at *2 (Del. Ch. Sept. 26, 1985)).
C.A. No. 2023-0426-KSJM
February 26, 2024
Page 2 of 3
rendering the decision for which reargument is sought, the motion must be denied. 3
On a motion for reargument, the movant bears a “heavy burden[.]” 4
LBG argues that I erred by awarding Plaintiff David Goldman fees-on-fees
proportionate to his degree of success. 5 California law and the LBG LLC agreement
govern Goldman’s right to fees-on-fees. California courts follow Delaware law as to
advancement issues “[i]n the absence of guidance from California courts[.]” 6 And
Delaware law authorizes fees-on-fees proportionate to an advancement claimant’s
degree of success. 7 Therefore, I ordered fees-on-fees proportionate to Goldman’s
degree of success.
3 Wong v. USES Hldg. Corp., 2016 WL 1436594, at *1 (Del. Ch. Apr. 5, 2016) (citation
omitted).
4 In re ML/EQ Real Est. P’ship Litig., 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000).
5 Mot. ¶¶ 1, 4.
6 Allergia, Inc. v. Bouboulis, 229 F.Supp.3d 1150, 1156 n.3 (S.D. Cal. 2017) (“In the
absence of clear guidance from California courts, the [United States District Court
for the Southern District of California, applying California law,] finds Delaware law
on advancement particularly persuasive because of the depth of its experience with
corporate governance issues[.]” (citations omitted)); see also Oakland Raiders v. Nat’l
Football League, 113 Cal.Rptr.2d 255, 266 n.5 (Cal. Ct. App. 2001) (applying
Delaware law and noting “[t]he parties agree that we may properly rely on corporate
law developed in the State of Delaware given that it is identical to California
corporate law for all practical purposes” (citation omitted)).
7 See Marino v. Patriot Rail Co., 131 A.3d 325, 349 (Del. Ch. 2016) (“Because Marino
succeeded in part on the merits of his claim for advancements, he is entitled to an
award of fees and expenses proportionate to his success.” (citing 8 Del. C. § 145(c);
Stifel Fin. Corp. v. Cochran, 809 A.2d 555, 561 (Del. 2002); Fasciana v. Elec. Data
Sys. Corp., 829 A.2d 178, 183 (Del. Ch. 2003)); see also Zaman v. Amedeo Hldgs., Inc.,
2008 WL 2168397, at *39 (Del. Ch. May 23, 2008) (“[T]his court has held that
plaintiffs who are only partially successful shall receive fees on fees reflecting the
extent of their success, and has made clear that the determination of the level of
success is a nonscientific inquiry that simply involves a reasoned consideration of the
C.A. No. 2023-0426-KSJM
February 26, 2024
Page 3 of 3
LBG argues that California law does not permit proportionate fees-on-fees
unless expressly authorized in the agreement at issue. 8 In briefing, LBG relies on
two California cases: Patch v. Hanley and Otis Elevator Co. v. Toda Construction. 9
But both cases involved indemnification. Neither dealt with advancement. Based on
the authorities cited to me, therefore, California law is not as clear as LBG argues.
The motion for reargument is denied.
IT IS SO ORDERED.
Sincerely,
/s/ Kathaleen St. Jude McCormick
Chancellor
cc: All counsel of record (by File & ServeXpress)
issues at stake in the case and an assessment of the plaintiffs’ level of success.”
(citation omitted)).
8 Mot. ¶ 3.
9 Dkt. 14 at 47–48 (citing Patch v. Hanley, 2002 WL 31647908, at *10 (Cal. Ct. App.
Nov. 22, 2002) (“Since the indemnity agreement at issue here did not explicitly
provide for attorney fees incurred in pursuing an indemnity claim, the indemnitee
was not entitled to them.” (internal quotation marks and citations omitted)); Otis
Elevator Co. v. Toda Construction, 32 Cal.Rptr.2d 404, 406–07 (Cal. Ct. App. 1994)
(“A provision including attorney fees as an item of loss in an indemnity clause is not
a provision for attorney fees in an action to enforce the contract.” (internal quotation
marks and citations omitted))).