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Norman v. Elkin

United States District Court, District of Delaware

February 10, 2014

JEFFREY M. NORMAN, Plaintiff,
v.
DAVID W. ELKIN, RICHARD M. SHORIN, and THE ELKIN GROUP, INC., Defendants, and US MOBILCOMM, INC., Nominal Defendant.

Sean J. Bellew, Esq., of Ballard Spahr LLP, Wilmington, DE. David A. Felice, Esq., of Bailey & Glasser, LLP, Wilmington, DE. Attorneys for Plaintiff.

Steven L. Caponi, Esq. and Adam V. Orlacchio, Esq., of BLANK ROME LLP, Wilmington, DE. Attorney for Defendant David W. Elkin.

MEMORANDUM OPINION

STARK, U.S. District Judge

I. INTRODUCTION

Pending before the Court is a motion filed by defendant David W. Elkin ("Defendant" or "Elkin") to disqualify Sean J. Bellew, Esquire and Ballard Spahr LLP ("Ballard") as counsel for plaintiff Jeffrey M. Norman ("Plaintiff or "Norman"). (D.I. 192) Also before the Court is a related motion in limine filed by Norman. (See D.I. 196 Ex. C) The Court held an evidentiary hearing on June 17, 2013. (See D.I. 217 ("June Tr.") For the reasons that follow, the Court will grant the motion to disqualify and deny the motion in limine.

II. BACKGROUND [1]

1. The 2004 Court of Chancery Action

On November 16, 2004, Norman commenced an action in the Delaware Court of Chancery against Elkin, Richard M. Shorin, and The Elkin Group (collectively, "Defendants") pursuant to 8 Del. C. § 220, concerning the inspection of books and records. See Norman v. Elkin, 726 F.Supp.2d 464, 467-68 (D. Del. 2010); see also Oct. 11, 2012 Hr'g Tr. at 30-31; D.I. 195 at 2 & Ex. C (portion of Delaware Court of Chancery post-trial discussion following bench trial); D.I. 206 at 1, 8, Ex. 7; June Tr. at 36) (the "2004 Action"). Norman was represented in the 2004 Action by attorneys at the law firm Cozen O'Connor, PC ("Cozen"), including Bellew. (See June Tr. at 58-59)

2. The 2005 Court of Chancery Action

On December 5, 2005, Norman filed a complaint in the Delaware Court of Chancery seeking damages against Defendants for breach of contract, breach of fiduciary duties, and other related claims (the "2005 Action"). Norman was represented by attorneys at Cozen, including Bellew and David A. Felice. (See D.I. 1 Ex. A)

3. Delaware District Court - First Trial

On January 3, 2006, Defendants removed Norman's 2005 Action to the United States District Court for the District of Delaware. (D.I. 1) (the "Delaware Action") On May 18, 2009, following a jury trial, the Honorable Joseph J. Farnan, Jr., now retired, entered judgment in Norman's favor in the amount of $191, 819. (See D.I. 118 (Verdict); D.I. 123 (Judgment); see also D.I. 195 Ex. D) On July 30, 2010, following post-trial briefing, Judge Farnan granted judgment as a matter of law in favor of Defendants on several of Norman's claims. (See D.I. 156, 157) Judge Farnan also reduced the total damage award to Norman to $1.00 plus post-judgment interest. (See D.I. 158 (Amended Judgment))

Norman's representation changed over the course of the Delaware Action. As a result of a dispute over Norman's failure to pay Cozen for its services, Cozen withdrew from its representation in July 2008. See Cozen O'Connor v. Jeffrey M. Norman, 2011 WL 219666, at *1 (D. Conn. Jan. 21, 2011) ("Cozen I"). Also, Bellew and Felice left Cozen to work at Ballard Spahr. See Cozen O'Connor v. Jeffrey M. Norman, 2011 WL2198311, at *3, *5 (D. Conn. June 6, 2011)("Cozen II”).

4. The Connecticut Action

In the meantime, in 2008, Cozen commenced suit against Norman in the U.S. District Court for the District of Connecticut to recover its unpaid legal fees and costs it incurred during its representation of Norman (the "Connecticut Action"). Cozen and Norman never entered into a written fee agreement. See Cozen II, 2011 WL 2198311, at * 1, *3. Norman testified that he believed he and Cozen had an unwritten contingency fee agreement. See Id . at *6. There was no evidence that Cozen consented to or otherwise entered into a contingency fee agreement between the firm and Norman. See Id . at *2, *7-8.

Following a February 2011 bench trial, on June 6, 2011 the Honorable Mark R. Kravitz ruled in favor of Cozen, in part based on what he expressly found to be Norman's lack of credibility. Judge Kravitz explained:

From December 2005 through April 2008, Cozen O'Connor represented Mr. Norman in the Delaware action by and through various attorneys, and expended significant legal fees and costs on Mr. Norman's behalf. At some point between August 2006 and February 2007, Cozen O'Connor began to have disputes with Mr. Norman over his failure to pay the monthly bills that he was by that time regularly receiving from Cozen O'Connor.

Id. at *3. Judge Kravitz found that "Cozen O'Connor and Mr. Norman never reached an agreement regarding a contingency fee, and that after the firm began representing Mr. Norman, Mr. Norman unequivocally promised to pay the firm for its hourly fees and costs." Id. at *2. The Court further concluded that "Mr. Norman is bound by that promise; that he breached that promise; and that he is liable to ...


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