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New Castle Auto Auction & Consignments, Inc. v. Riley

Court of Common Pleas of Delaware, New Castle

April 17, 2017

ERIC RILEY & JEANNE RILEY, Defendants-Below/ Appellees.

          D. Miika Roggio, Esquire Silverman, McDonald & Friedman Attorney for Appellant.

          David J.J. Facciolo, Esquire Minster & Facciolo, Attorney for Appellees.


          JOHN K. WELCH, JUDGE.

         I. Procedural Posture

         On November 25, 2015, this Court issued a Memorandum Opinion and Order on the breach of contract issue in this case, awarding Appellant $8, 574.50 plus pre- and post-judgment interest at the legal rate, court costs, and attorney's fees. In the decision, the Court found that- based upon the factors set forth in Delaware Professional Conduct Rule 1.5(a)-Appellant was entitled to an award of reasonable attorney's fees. The Court directed Appellant's counsel to file an affidavit of attorney's fees with the Clerk of Court within fifteen days, and advised Appellees' counsel that they would be granted fifteen days to file a written response. The Court stated that it would then issue a separate written decision on the amount of attorney's fees.[1]

         On December 2, 2015, Appellant's counsel submitted an affidavit of attorney's fees, requesting $14, 640.00 for 73.2 hours billed at $200.00 per hour. The time sheet, which was attached as Exhibit A, denoted work performed from March 20, 2013 to November 2, 2015. Instead of filing a response to Appellant's affidavit, Appellees appealed to the Delaware Superior Court on December 22, 2015. On November 21, 2016, the Superior Court dismissed the appeal, deeming the judgment not final.[2]

         On March 8, 2017, Appellant's counsel submitted a letter to this Court requesting an award of attorney's fees, revising the original attorney's fees time sheet to include costs incurred defending against Appellees' appeal. On March 15, 2017, this Court issued an Order requesting that Appellees file a response to Appellant's affidavit of attorney's fees by March 30, 2017. Appellees submitted their response to the Court on April 11, 2017, contesting the award of attorney's fees solely in connection with their "improvident interlocutory appeal." Appellees argue that those fees should only be considered after Appellees properly appeal this decision, and the Superior Court remands this case for a second attorney's fees determination.

         II. The Law

         In Delaware, the general rule-the venerable "American Rule"-is that each party is responsible for its own costs and attorney's fees unless there is a contractual or statutory basis for the award of such fees.[3] When such an appropriate basis exists-as in the present case-the United States Supreme Court has held that "even for work performed on the successful claim, the court 'should award only that amount of fees that is reasonable in relation to the results obtained.'"[4] The determination of whether attorney's fees requested in a particular case are reasonable is within the discretion of the Court.[5] Delaware precedent requires the Court to consider the following factors:

(a) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (b) The likelihood, if apparent to the client, that the substance of the particular employment will preclude other employment by the lawyer; (c) The fees customarily charged in the locality for similar legal services; (d) The amount involved and the results obtained; (e) The time limitations imposed by the client or by the circumstances; (f) The nature and length of the professional relationship with the client; (g) The experience, reputation, and ability of the lawyer or lawyers to perform the services; (h) Whether the fee is fixed or contingent; (i) The employer's ability to pay; and (j) Whether claimant's counsel has received or expects to receive compensation from any other source.[6]

         III. Analysis

         In the present case, there is a contractual provision which states, "[t]o the extent not prohibited by applicable law, you agree to pay any attorney's fees and collection costs we incur at any time in collecting amounts you owe under this Contract, including during any bankruptcy proceedings or upon any appeal.'"[7] Because the contractual language that underlies Appellant's claim does not differentiate between an improper appeal and an appeal based on a final judgment, Appellant's counsel is entitled to attorney's fees incurred while defending against Appellees' improper appeal. That is, Appellees cannot force Appellant to defend an improper appeal and pay for such forced representation, as the contractual right present in this case supplants the American Rule.[8]

         In total, Appellant counsel requests $23, 800.00 in attorney's fees for 119.0 hours billed at $200.00 per hour. Counsel's revised time sheet denotes work performed from March 20, 2013 to November 21, 2016. This case is fact-intensive, but is not particularly complex; it concerns a breach of contract and related questions of jurisdiction and mitigation. The Court also considered the fact that Appellant's counsel: was not prevented from simultaneously handling other matters; diverged from communal billing standards by charging a lesser hourly rate than a junior associate at a small-sized Delaware law firm;[9] was granted a full judgment award;[10] is an experienced member of the Delaware bar who is employed by a small-sized Delaware law firm; and charged an hourly fee for services rendered. The Court did not attribute weight to factors (e) and (f) in its analysis, as the former was not relevant and the Court professes no knowledge as to the nature and length of the professional relationship present here.

         Turning to Appellant's original affidavit and request of $14, 640.00 in attorney's fees, the Court notes that Appellees did not challenge the reasonableness of the attorney's fees. However, the Delaware Court of Chancery has opposed the notion that a trial court should relax its reasonable analysis when the attorney's fees are "uncontested."[11] In Appellant's written ...

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