Submitted: September 28, 2018
Motion for Allowance of Attorney's Fees and Costs
William D. Fletcher, Jr., Esquire of Schmittinger and
Rodriguez, P.A., Dover, Delaware, attorney for the Plaintiff.
J. Rizzo Jr., Esquire of Reger, Rizzo, and Darnall LLP,
Wilmington, Delaware, attorney for the Defendant.
William L. Witham. Jr. Resident Judge.
consideration of the Motion for the Allowance of
Attorneys' Fees and Costs filed by the Plaintiff, Paul
Hamilton, pursuant to 18 Del. C. § 4102 and Del. Super.
R. 54(d) (Rule 54(d)), the opposition of the Defendant,
Nationwide Mutual Fire Insurance Co., and the record of the
case, it appears that:
January 23, 2015, the Defendant issued a Homeowner's
Insurance policy to the Plaintiff for coverage of his
dwelling. The insurance policy's maximum payout was $252,
600 under Section I, Coverage A of the policy.
or about March 17, 2015, a fire damaged the Plaintiffs
dwelling. The Defendant conducted a examination of the damage
and estimated the total damages amounted $ 127, 437.03
Initially, the Plaintiff did not further object to or
question the repair figures computed by the Defendant.
Defendant issued a check to the Plaintiff for $127, 437.03,
less deductibles and reserves. However, the Plaintiff then
rejected the Defendant's estimate, and demanded the
policy's maximum payout, prompting the present
actionbefore the Court.
After a lengthy procedural history, including a Pre-Trial
stipulation that included the Plaintiff s request for costs
and attorneys' fees,  the Defendant extended a $30, 000 offer
of judgment to the Plaintiff pursuant to Delaware Superior
Court Rule 68 (Rule 68). However, the Rule 68 offer was
silent regarding any reference to attorneys' fees and
other costs being included as part of the $30, 000.
Nevertheless, the Plaintiff immediately accepted and filed
with the Court on the same day.
weeks later, on June 14, 2018, the Plaintiff filed the
present motion for allowance of attorneys' fees and costs
pursuant to section 4102 and Rule 54(d). In response to the
Defendant's reply, the Plaintiff later supplemented their
motion with a certification concerning their attorneys'
fees totaling $41, 725.00. The requested amount for costs amounted
to $1, 389.75.
"In an action at law, attorneys' fees will not be
awarded unless clearly provided for by statute or
contract." Here, the applicable Delaware statute
authorizing attorney's fees as costs in insurance cases
is a fee shifting statute, 18 Del. C. £ 4102.
Section 4102 provides:
[t]he Court upon rendering judgment against any insurer upon
a policy of property insurance as 'property'
insurance is defined in [18 Del. C] §
[ ], shall allow the plaintiff a reasonable sum as
attorney's fees to be taxed as part of the
Pursuant to Rule 54(d), the recovery of costs by the
prevailing party shall be allowed upon application to the
Court within ten days of the final judgment's entry.
Here, the Plaintiffs application was timely and thus the
Court has discretion to award those costs that often include
filing and other service fees.
68 authorizes a defendant to make an offer of judgment and is
modeled after the Federal Rules of Civil Procedure Rule
68. Rule 68 encourages settlements between
opposing parties to avoid litigation by prompting parties to
balance the risks and costs of litigation against the
likelihood of success at trial. The rule provides:
[a]t any time more than [ten] days before the trial begins a
party defending against a claim may serve upon the adverse
party an offer to allow judgment to be taken against the
defending party for the money or property or to the effect
specified in the offer, with costs then accrued. If within
[ten] days after the service of the offer the adverse party
serves written notice that the offer is accepted, either
party may then file the offer and notice of acceptance
together with proof of service thereof and thereupon the
Clerk shall enter judgment.
crux of the Plaintiffs argument is straight forward. The
Defendant did not specifically include attorneys' fees
and costs in its Rule 68 offer, therefore the Plaintiff is
entitled to both pursuant to section 4102 and Rule 54(d).
a preliminary matter however, the Court must address the
Defendant's counter-argument that attorneys' fees and
costs were always a part of the parties' negotiations
throughout the process and were included in the Rule 68 offer
of judgment. In the alternative, the Defendant urges the
Court to void the Rule 68 agreement due to the lack of a
"meeting of the minds." In support, the Defendant
cites Ceccola v. State Farm Mut. Auto. Ins. Co.,
a case where the Delaware Supreme Court reversed the lower
court and voided a Rule 68 offer of judgment.
However, the Defendant's reliance on Ceccola
appears to be misplaced. In fact, our Supreme Court's
reversal was based on facets of that case not found in the
present case. First, while both cases involve a Rule 68 offer
and acceptance, in Ceccola, the plaintiff realized a
mistake in the agreement and revoked acceptance, both
verbally and via email. In our case, there was no revocation
of acceptance by the Plaintiff. Second, the defendant in
Ceccola manipulated the Court by deceiving the
Prothonotary and filing the earlier acceptance; turning a
previously extinguished contract into a final
judgment. In this case, no such "manipulation
of court processes" occurred that would suggest voiding
the Rule 68 agreement. In short, Ceccola is less a
"meeting of the minds" case and more a case about
an attorney's unethical and possibly fraudulent behavior.
is clear to the Court, based on the record, including the
Pre-Trial Stipulation, that both parties were aware that the
Plaintiff sought costs and attorneys' fees pursuant to 18
Del. C. § 4102. Thus, both parties were on
notice of the Plaintiffs intentions and the record is silent
to anything to the contrary that would suggest a lack of
"meeting of the minds."
Even if the Court was convinced by the Defendant's
argument and found that there had been no "meeting of
the minds" regarding the Defendant's Rule 68 offer
of judgment, the Court is (1) persuaded by legal precedent
that holds ambiguities in Rule 68 offers are construed
against the offeror and (2) bound by legal precedent that
holds the offeror responsible for specifying Rule 68 offer of
judgments to include costs and attorneys'
Marek,  the Supreme Court of the United States
(SCOTUS) held that costs under Fed. R. 68 included fees where
the underlying fee shifting statute defined costs as
inclusive of attorneys fees, and are
recoverable. SCOTUS further acknowledged:
[i]f an offer recites that costs are included or specifies an
amount for costs, and the plaintiff accepts the offer, the
judgment will necessarily include costs. If, on the other
hand, the offer does not state that costs are included
and an amount for costs is not specified, the court will be
obliged by the terms of the Rule to include in its judgment
an additional amount which in its discretion it determines to
be sufficient to cover the costs.
support of his position, the Plaintiff cites several post
Marek federal cases that applied Marek and
contends that Delaware courts apply Rule 68 as its federal
counterpart is applied by virtue of Rule 68 being modeled
after the former. In one of those cases,
Lima the Court stated:
[T]he [o]ffer was valid and was silent as to fees and costs.
That fact begins and ends our analysis In
interpreting a Rule 68 offer of judgment, courts must not
consider extrinsic evidence or the intentions of the
Delaware courts have applied Rule 68 in both the pre and post
Marek legal landscapes. In Ferrari v. New Castle
Mut. Ins. Co.,  a pve-Marek case, the plaintiff
brought a claim under section 4102 after accepting a Rule 68
offer of judgment. However, the Rule 68 offer failed to
mention attorney's fees. In denying Ferrari's
motion for attorneys' fees, Judge Balick held that
"costs then accrued" referred to costs routinely
allowed to a prevailing party and entered by the
Prothonotary, but not attorney's fees when they are
not mentioned in the Rule 68 offer or
post Marek cases however, Delaware courts appear to
have shifted its application of Rule 68 to align with its
sister federal district courts. For example in
Adams, a case similar to both Ferrari and
our present case, Nationwide (ironically the defendant in
that case) refused to pay the plaintiff under the terms of an
insurance policy involving the plaintiffs damaged
vehicle. During the negotiations between the
parties, Nationwide made a Rule 68 offer of judgment under
the following terms:
defendant, Nationwide Insurance Company, pursuant to Court of
Pleas Civil Rule 68, hereby offers to allow judgment to be
taken against it in the amount of $3, 700.00, together with
[c]ourt costs accrued' to the time of the making
of this offer. If this offer is not accepted within ten [ ]
days and the ultimate result is not more favorable than this
offer, all [c]ourt costs, including expert witness
fees, incurred subsequent to the making of this offer shall
be taxed to the plaintiffs."
the Rule 68 offer was silent regarding the inclusion of
attorneys' fees. As in our case, the plaintiffs promptly
filed acceptance and judgment was entered. Four days later,
the plaintiffs filed for attorneys' fees pursuant to
section 4102. Judge Trader, in Adams, found
for the plaintiff and held:
Since [section] 4102 includes attorney's fees as a
"part of costs," a Rule 68 offer of judgment
providing for "costs then accrued" must be read to
include "costs and attorney's fees then
this case, the Defendant's Rule 68 offer of judgment
stated the following:
Pursuant to Superior Court Civil Rule 68, Defendant
Nationwide...offers to allow judgment to be entered against
it in the above-captioned matter in the amount of [ ] $30,
000.00. This offer of judgment is made solely for the
purposes specified in Rule 68 and is not to be construed as
an admission that the Defendant is liable in this action or
that the Plaintiff has suffered damage.
Adams and Lima, nowhere in the present Rule
68 offer is any mention of attorneys' fees or costs.
Following precedent established in Marek and its
progeny, the plaintiff is entitled to those fees and costs.
Delaware's legislative will is clear and is supported by
Marek and its progeny. Rule 68 offers of judgment
must state the inclusion of attorneys' fees and costs in
the offer amount, if those are to be included. Since Delaware
courts apply Rule 68 in the same fashion as its federal
counterpart, the fact that the Defendant did not specifically
state attorneys' fees and other costs were included,
ends our analysis regarding whether the
Plaintiff is entitled to attorneys' fees and costs.
Court now turns its analysis towards establishing what
portion of the requested attorneys' fees and costs are
Court will first address the Plaintiff s request for costs
pursuant to Rule 54(d). In this case, the costs will be
awarded to the Plaintiff. The Plaintiff submitted
documentation supporting their costs and, upon examination,
none of those appear to be unreasonable. Also of note, the
Plaintiff has not requested costs that accrued after the
acceptance of the Rule 68 offer on June 1, 2018. This
suggests to the Court that the Plaintiff is not attempting to
recover unauthorized costs. Most importantly, the Defendant
has not directly objected to the Plaintiffs motion for
costs. As a result, the Court exercises its
discretional authority and awards the Plaintiff costs of $1,
Turning to the question of reasonable attorneys' fees,
the Court also has discretion in awarding reasonable fees
under section 4102 that are within the scope of the
statute. Here, based on application of the
Cox factors, ...