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Bellmoff v. Integra Services Technologies, Inc.

Superior Court of Delaware

June 22, 2018

DEAN P. BELLMOFF, AND BEATRICE E. SALAZAR, Plaintiffs,
v.
INTEGRA SERVICES TECHNOLOGIES, INC., Defendant.

          Submitted: March 26, 2018

         Upon Plaintiffs Dean P. Bellmoffand Beatrice E. Salazar 's Request for Attorney's Fees, GRANTED.

          Todd C. Schiltz, Esquire, Stephen S. Herst, Esquire, Drinker Biddle & Reath LLP, Wilmington, Delaware, Attorneys for Plaintiffs.

          Garvan F. McDaniel, Esquire, Hogan McDaniel, Wilmington, Delaware, Ronald R. Rossi, Esquire (pro hac vice), Kasowitz Benson Torres LLP, New York, New York, Attorneys for Defendant.

          MEMORANDUM OPINION AND ORDER

          PAUL R. WALLACE, JUDGE.

         I. INTRODUCTION

         Plaintiffs Dean P. Bellmoff and Beatrice E. Salazar (together, "Bellmoff and Salazar") move this Court to grant their request for attorney's fees in the amount of $41, 110.54. Defendant Integra Services Technologies, Inc. ("Integra") counters that Bellmoff and Salazar are entitled to no more than $34, 994.96 in attorney's fees.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         This issue arises from an underlying contract dispute recently resolved by this Court. In August 2015, Bellmoff, Salazar, and Integra entered into a Share Purchase Agreement: in exchange for selling, assigning, and transferring certain Integra stock to Integra, Bellmoff and Salazar would each receive both a cash payment at the closing of the transaction and a promissory note in the amount of $1, 450, 000 (the "Notes").[1]

         Under each Note's terms, Integra was to pay the remaining principal in three installments with accrued interest on the Notes' unpaid balance.[2] Integra made the first principal and interest payments to Bellmoff and Salazar on or about August 12, 2016.[3] Integra then informed Bellmoff and Salazar that it would pay the second accrued interest sum due on August 12, 2017, but it would not tender the second principal installment until October 2, 2017.[4] Bellmoff and Salazar granted this extension, but Integra failed to make the required Note payments under the new deadline.[5]

         Because of Integra's failure to pay the delinquent amounts, Bellmoff and Salazar filed a Complaint against Integra on October 25, 2017, alleging breach of the Share Purchase Agreement. Integra filed an Answer raising several affirmative defenses. Bellmoff and Salazar then brought a Motion for Judgment on the Pleadings. Bellmoff and Salazar requested an order granting judgment in their favor against Integra; Integra opposed, saying material questions of fact remained.

         This Court held argument on Bellmoff and Salazar's Motion for Judgment on the Pleadings in mid-February 2018. At the hearing, the Court ruled in Bellmoff and Salazar's favor on Integra's liability and damages and reserved judgment on the issue of reasonable attorney's fees.

         A week later, the Court issued an Order (the "Order") directing Integra to pay all costs of collection that Bellmoff and Salazar have incurred as a result of Integra's breach of the Notes. This was required under the Notes' cost-shifting provision.[6] The Order also directed that the parties meet and confer on payment of attorney's fees to see if they could agree on what amount of fees would be reasonable.[7]

         The parties have attempted, unsuccessfully, to reach an agreement on attorney's fees. Bellmoff and Salazar now request the Court adjudge the proper amount of reasonable attorney's fees to be $41, 110.54.[8] Integra opposes Bellmoff and Salazar's request, asking the Court to award something less.[9]

         III. STANDARD OF REVIEW

         "In an action at law, a court may not order the payment of attorney's fees as part of costs to be paid by the losing party unless the payment of such fees is authorized by some provision of statute or contract."[10] But when an award of attorney's fees is warranted, the Court "should look to the eight-factor test set forth in the Delaware Lawyers' Rule of Professional Conduct 1.5(a) [to] assess[] the reasonableness of [that] fee award."[11] Rule 1.5(a) prescribes the following factors:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other ...

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