United States District Court, D. Delaware
before me are Heritage Handoff Holdings, LLC's Motion for
Attorneys' and Professionals' Fees, Costs, Expenses,
and Post-Judgment Interest (D.I. 187) and Plaintiff Ronald
Fontanella's Motion for Reasonable Attorneys' Fees,
Costs, and Expenses (D.I. 189). The Parties have fully
briefed the issues. (D.I. 188, 189, 198, 200, 202, 203).
reasons discussed below, I will award Mr. Fontanella $120,
743.52, plus any costs or fees incurred litigating his
motion, and I will award Heritage Handoff Holdings
("Heritage") $538, 405.05, plus any costs or fees
incurred litigating both its motion and Plaintiffs Motion to
Alter or Amend the Judgment. I will also award post-judgment
interest pursuant to 28 U.S.C. § 1961.
entered final judgment in this case on March 13, 2019. (D.I.
186). I awarded Mr. Fontanella $499, 520.72 for breach of
contract and Heritage $5, 266, 899.13 for breach of contract
and securities fraud. (Id.). The Parties now request
attorneys' fees and costs pursuant to the Stock Purchase
Agreement ("SPA"). The SPA provides that the
Purchaser (Heritage) and the Shareholder (Mr. Fontanella)
shall each indemnify the other for "Damages"
arising out of their breaches of the SPA. (PTX 4 at §
6.1-6.2). The SPA defines "Damages" to include:
actual damages, penalties, fees, fines, costs, amounts paid
in settlement, liabilities, Taxes, losses, consequential
damages actually paid to third parties, reasonable expenses,
including court costs and reasonable attorneys' and other
professionals' fees and expenses, . . . and any other
costs of enforcing an Indemnified Party's rights under
this Agreement or any Related Agreement.
(PTX 4, Exh. A at 2-3).
Parties agree on a number of key issues. They agree that the
language of the SPA entitles them to attorneys' fees and
costs for the claims on which they prevailed. They also do
not dispute the reasonability of the other's hourly
billable rates. Thus, the only issues for me to decide are
(A) whether Mr. Fontanella preserved his right to
attorneys' fees and (B) what portion of its fees Heritage
Mr. Fontanella's Attorneys' Fees
Parties agree that the awardable amount of attorneys'
fees attributable to Mr. Fontanella's successful claims
should be $120, 743.52. (D.I. 202 at 1). Plaintiff, however,
argues that Mr. Fontanella waived his right to attorneys'
fees by failing to raise the issue in his complaint.
Plaintiffs argument ignores the fact that Mr. Fontanella
requested fees in the pretrial order. (D.I. 140 at 17-18).
Once adopted, the pretrial order supersedes all other
pleadings in a case. Rockwell Int'l Corp. v. United
States, 549 U.S. 457, 474 (2007) (citing Fed. Rule Civ.
Proc. 16(e)). Plaintiff did not object to Mr.
Fontanella's request for attorneys' fees at or before
the pretrial conference. Thus, I find that Mr. Fontanella did
not waive his right to collect such fees. I will award Mr.
Fontanella the agreed amount, $120, 743.52. I will also award
Mr. Fontanella the fees he incurred litigating his motion.
Heritage's Attorneys' Fees
reports incurring between $803, 999.40 and $897, 341.75 in
fees and expenses for its successful claims through judgment
and an additional $50, 144.88 spent on its motion. (D.I. 203
at 10). Its suggested fees award is derived from an
application of the lodestar method. (D.I. 188 at 3). The
lodestar method is normally applied in cases where the
"prevailing party" is statutorily entitled to
receive all of its reasonable attorneys' fees. See,
e.g., Knight v. Int'l Longshoremen's Ass'n,
2012 WL 1132761, at *4 (D. Del. Mar. 29, 2012) (statutory
fees calculated using the lodestar method in Labor Management
Reporting and Disclosure Act case); Mattern &
Assocs., L.L.C. v. Seidel, 678 F.Supp.2d 256, 272 (D.
Del. 2010) (statutory fees calculated using the lodestar
method in Delaware Uniform Trade Secrets Act case); Tobin
v. Gordon, 614 F.Supp.2d 514, 518 (D. Del. 2009)
(statutory fees calculated using the lodestar method in Civil
Rights Act case). The Parties agree, however, that neither of
them is entitled to all of its fees. Thus, the lodestar
method is not a natural fit for this case.
Fontanella suggests, based on an application of the
"reasoned fraction" approach, that Plaintiff should
receive 35% of the $975, 038.75 in costs and fees it incurred
in this case. (D.I. 198 at 6, 13). The reasoned fraction
approach is appropriate when "it is not reasonably
possible to parse between which fees are recoverable fees
[and] which are not." Dow Chem. Canada Inc. v. HRD
Corp., 2013 WL 3942052, at *l (D. Del. July 29, 2013).
This occurs, for example, when work for which a party owes
fees overlaps with work for which it does not. Id.
As the SPA awards fees only for claims on which a party
prevails, it is necessary to apportion the cost of the
litigation between Plaintiffs claims. Thus, I agree with Mr.
Fontanella that application of the reasoned fraction approach
is appropriate in this case. I do not, however, agree with
his proposed fraction. Instead, I will independently
determine the reasoned fraction in this case.
initial matter, the Parties agree that Plaintiffs costs
incurred litigating Mr. Fontanella's counterclaims are
not recoverable. Thus, I will subtract the cost of defending
the counterclaims, $77, 697 (D.I. 203 at 1 n.2), from the
award. This leaves $897, 341.75.
recognize that there are certain baseline costs that do not
vary depending on the number of claims litigated in a case.
It is difficult to determine exactly which portion of the
cost of litigation is constant, but I believe 20% is a
reasonable estimate in this case. That 20% represents costs
that Plaintiff incurred as a result of all claims but would
have incurred if it had litigated only the claims on which it
prevailed. Thus, I will award Plaintiff 20% of $897,
on having presided over the trial and my assessment of the
post-trial briefing, the remaining 80% of fees that Plaintiff
incurred litigating this case was likely split about evenly
between the customer-based claims and the equipment-based
claims. Thus, I will assign half of the variable ...