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Preferred Investments, Inc. v. T&H Bail Bonds

Court of Chancery of Delaware

November 21, 2013

Preferred Investments, Inc.
v.
T&H Bail Bonds, et al.

Submitted: August 12, 2013

Theopalis K. Gregory, Esq. E. Calvin Harmon, Jr., Esq. 2227 N. Market Street Wilmington, DE 19802

Douglas A. Shachtman, Esq. The Shachtman Law Firm 1200 Pennsylvania Avenue, Suite 302 Wilmington, DE 19806

Neil R. Lapinski, Esq. Gordon Fournaris & Mammarella 1925 Lovering Avenue Wilmington, DE 19806

Dear Counsel:

On July 24, 2013, I issued a Memorandum Opinion (the "Opinion") rendering my findings of fact and conclusions of law following a three-day trial in this matter.[1] In the Opinion, I found in favor of Defendant T&H Bail Bonds, Inc. ("T&H") on Plaintiff Preferred Investment Services, Inc.'s ("PISI") breach of contract claim and on T&H's breach of contract counterclaim because PISI materially breached the parties' exclusive cash bail financing agreement (the "Agreement") before T&H engaged in any alleged breach. I held that T&H is entitled to recover damages for PISI's breach. I also found, however, that T&H did not prove its abuse of process counterclaim and that PISI is entitled to payment for certain loans, bail refunds, and bail forfeitures.[2] In addition, I held that Defendants were entitled to an award of eighty percent of the attorneys' fees and expenses they reasonably incurred in this litigation (the "Fee Award") because PISI had engaged in bad faith and vexatious litigation conduct throughout most, if not all, of this case. Furthermore, I instructed counsel for T&H to submit an affidavit setting forth the basis for Defendants' claimed reasonable attorneys' fees and expenses, and I required counsel for both parties to confer and submit a proposed form of final judgment.

On July 31, 2013, PISI timely filed a motion for reargument or clarification of the Opinion under Court of Chancery Rules 59(e) and 59(f). Defendants oppose the motion and further request that I order PISI to reimburse them for their attorneys' fees and expenses in responding to the motion.

For the following reasons, I deny PISI's motion in its entirety. I also deny Defendants' request for an award of attorneys' fees and expenses related to the motion. Finally, I specify the procedures to be followed by the parties for presenting issues related to the amount of the Fee Award and for facilitating entry of a final judgment.

I. PARTIES' CONTENTIONS[3]

As noted, PISI seeks, under both Rule 59(e) and Rule 59(f), reargument or clarification of the Opinion. As an initial matter, I consider PISI's invocation of Rule 59(e) misplaced. Motions under Rule 59(e) generally seek to "alter or amend a judgment." Such a motion "may be granted „if the plaintiff demonstrates (1) an intervening change in controlling law; (2) the availability of new evidence not previously available; or (3) the need to correct a clear error of law or to prevent manifest injustice.'"[4]

Here, only two aspects of PISI's motion conceivably could fall under Rule 59(e): (1) PISI's challenge of the Court's application of the doctrine of excuse; and (2) its disagreement with the Court's statement that it was "not convinced that PISI would have been willing to cure its failures under the Agreement by refraining from funding or assisting other cash bail agents."[5]

To date, no judgment has been entered, but even if I assume that PISI intended to request that the Court alter or amend the Opinion, PISI has not articulated any persuasive reason for the Court to do so. As discussed infra Part II, PISI has not pointed to either an intervening change in controlling law or the availability of new evidence not previously available, nor has it identified any need to correct a clear error of law or to prevent manifest injustice. Thus, to the extent PISI bases its motion for reargument or clarification on Rule 59(e), I deny that aspect of the motion. Instead, I examine all of PISI's arguments as if they were presented under Rule 59(f).[6]

A. The Award of Attorneys' Fees and Expenses

PISI argues that "[t]he Court has granted reasonable attorney fees to Defendants but has not provided the parties a standard or process to determine whether attorney fees are reasonable."[7] Because of this perceived uncertainty, PISI further asserts that the Court's bases for granting attorneys' fees "make[] it unclear whether it applies to the entire litigation or certain parts of [it.]"[8] In particular, PISI questions six of the Court's findings in support of its conclusion that Defendants are entitled to an award of attorneys' fees and expenses. First, PISI contends that it is unclear from the Opinion whether the Court found its claims to be frivolous. PISI bases this argument on the following sentence from the Opinion: "I am not convinced that PISI knew when it brought this action that it had no chance of success on its claims."[9] Second, PISI states that its delayed production of electronic accounting records "was the subject of prior sanctions and it is unclear what bearing this has on additional sanctions."[10] Third (and fourth), PISI disputes the Court's reliance on PISI's undue complication of the production of accounting records and its refusal to provide bank statements and cancelled checks, arguing that those actions only applied to "narrow timeframe[s]."[11] On the latter issue, PISI notes that it obtained protective orders related to Defendants' efforts in acquiring those records. Fifth, PISI asserts that it should not be blamed for the delay of the trial from January 2011 to September 2012. Finally, ...


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