Vice Chancellor Awards Approximately 94% of the Amounts Sought in the Co-Trustees’ Fee Applications

IMO The Hawk Mountain Trust CA #7334-VCP (September 8, 2015)

On September 8, 2015, Vice Chancellor Parsons issued an opinion ruling on fee applications filed by the co-trustees of a trust. While the parties still have pending disputes between them in other jurisdictions, the Vice Chancellor found that the fee applications were ripe for review as the Delaware case is resolved. The Vice Chancellor approved the majority of the sought fees, but did find that some deductions were appropriate.

In sum, approximately $1.1 million total fees were sought and the court awarded $1,033,800 total. Thus, there was about a 6% reduction. The reductions came for various reasons. The court agreed with certain objections filed by the respondents, finding that some work done did not benefit the trust and, thus, was not properly reimbursable. That work included the filing of a dismissed Pennsylvania case (for which the court awarded reimbursement for only some of the related fees) as well as the unnecessary cancellation of an LLC. The court also made a small deduction for work done that benefitted a trust other than the trust that was the subject of this case. And the court ordered a partial deduction for fees incurred to obtain, and then prepare for, a deposition that was never actually taken due to the co-trustees’ own strategic choice not to take that deposition.

Regarding whether the total fees sought were reasonable, the court generally concluded that they were. But the court did take a small deduction off of one fee application on the basis that the full fees were not adequately justified. In that regard, the court noted that the “petitioners presented no detailed evidence on the following factors of DLRPC Rule 1.5: “(1) … the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;” “(3) the fee customarily charged in the locality for similar legal services;” and “(7) the experience, reputation, and ability of the lawyer or lawyers performing the services.” The court noted that in this case only one of the firms billed more than $500 per hour for their services. Approximately 11.7% of the time spent by that firm involved lawyers charging more than $500 per hour, with the highest rate being $645. The court then found that “based on the limited record before me, I find that a maximum rate for reasonable attorneys’ fees in this matter is $500 per hour.” The Court therefore capped the reimbursable billing rates at $500 per hour.

It does appear, however, that if all of the factors of DLRPC Rule 1.5 were covered in the application at issue to the court’s satisfaction, the court would have allowed reimbursement for hourly rates in excess of $500.00.

Note: Grover C. Brown, Esq., the third party escrow agent in this case, is also Special Counsel to the Gordon, Fournaris & Mammarella, P.A., law firm.