COURT OF CHANCERY
OF THE
STATE OF DELAWARE
PAUL A. FIORAVANTI, JR. LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734
Date Submitted: October 12, 2021
Date Decided: November 8, 2021
Garrett B. Moritz, Esquire Kevin M. Gallagher, Esquire
Elizabeth M. Taylor, Esquire Angela Lam, Esquire
Ross Aronstam & Moritz LLP Richards, Layton & Finger, P.A.
100 S. West Street, Suite 400 One Rodney Square
Wilmington, DE 19801 920 N. King Street
Wilmington, DE 19801
RE: Roma Landmark Theaters, LLC et al. v. Cohen Exhibition Company LLC,
C.A. No. 2019-0585-PAF
Dear Counsel:
This letter resolves the motion of Plaintiffs Roma Landmark Theaters, LLC
and MMC Entertainment LLC (“Plaintiffs” or “Sellers”) for an award of attorneys’
fees and expenses for their successful efforts to confirm a post-transaction closing
price adjustment award. Defendant Cohen Exhibition Company LLC (“Defendant”
or “Buyer”) does not dispute that Plaintiffs are entitled to their reasonable fees and
expenses, but it challenges the reasonableness of the amount requested.1
1
Plaintiffs’ motion is cited as “Pls.’ Mot.”; Defendant’s opposition is cited as “Opp.”; and
Plaintiffs’ reply is cited as “Pls.’ Reply.”
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I. BACKGROUND2
On December 3, 2018, Sellers and Buyer executed a Securities Purchase
Agreement (“Purchase Agreement”) governing Buyer’s acquisition of Landmark
Acquisition Corporation from Sellers. Dkt. 81, Ex. 1. After closing, a purchase
price adjustment dispute arose, which the parties submitted to an independent
accounting firm for resolution in accordance with Section 1.3 of the Purchase
Agreement. That provision also provides, in pertinent part:
The costs of any dispute resolution pursuant to this Section 1.3,
including the fees and expenses of the Independent Accounting Firm
and of any enforcement of the determination thereof, shall be borne, on
the one hand by the Sellers and, on the other hand, by the Buyer, in
inverse proportion as they may prevail on the matters resolved by the
Independent Accounting Firm, which proportionate allocation shall be
calculated on an aggregate basis based on the relative dollar values of
the amounts in dispute and shall be determined by the Independent
Accounting Firm at the time the determination of such firm is rendered
on the merits of the matters submitted.
The accounting firm issued a “Determination Letter” on June 28, 2019, which
resolved each of the items in dispute. Dkt. 81, Ex. 6. As reflected in the
2
Background on the transaction and the dispute giving rise to the fee application at issue
here can be found in the two earlier decisions of the court in this matter. Roma Landmark
Theaters, LLC v. Cohen Exhibition Company LLC, 2020 WL 5816759 (Del. Ch. Sept. 30,
2020), and Roma Landmark Theaters, LLC. v. Cohen Exhibition Company LLC, 2021 WL
2182828 (Del. Ch. May 28, 2021). This letter opinion includes only those facts deemed
necessary to determine the fee application.
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Determination Letter, Sellers prevailed on 91.3% of the disputed items presented for
resolution. See id. at 15 (determining that Buyer was responsible for 91.3% of the
accounting firm’s fees pursuant to Section 1.3(e)).
On July 29, 2019, Plaintiffs filed this action to enforce the Determination
Letter. Dkt. 1. Defendant filed an answer and counterclaims, seeking damages and
vacatur of the Determination Letter pursuant to the Delaware Uniform Arbitration
Act (the “DUAA”). Dkt. 10. Plaintiffs moved for summary judgment to confirm
the Determination Letter and to dismiss the counterclaims. Dkt. 12. After Plaintiffs
filed their combined opening brief in support of their motion to dismiss the
counterclaims and for summary judgment, Defendant filed an amended answer and
counterclaims. Dkt. 24. The amended answer and counterclaims abandoned
Defendant’s claim for vacatur under the DUAA and asserted an affirmative defense
for vacatur under the Federal Arbitration Act (the “FAA”) on the grounds that the
Determination Letter had been “procured by corruption, fraud, or undue means.”
Dkt. 24 at 21.
On the same day, Defendant filed an answering brief in opposition to
Plaintiffs’ motion for summary judgment, in which Defendant argued that it had
adequately “alleged” a claim for fraud in its amended counterclaims, and for that
reason, it had “adequately pleaded a basis for vacating the [Determination Letter].”
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Dkt. 25 at 38–39. Relying on its allegations in its counterclaims, Defendant asserted
that “[f]or the reasons stated above, Defendant has amply pleaded both fraud as well
as ‘undue means’ justifying vacatur of the PwC award . . . .” Id.
Plaintiff filed a new motion to dismiss the amended counterclaims. Dkt. 34.
Following briefing and argument, the court issued a memorandum opinion granting
in part and denying in part Plaintiffs’ motion to dismiss the counterclaims and
denying the motion for summary judgment to confirm the Determination Letter
without prejudice. See Roma Landmark Theaters, LLC v. Cohen Exhibition Co.
LLC, 2020 WL 5816759 (Del. Ch. Sept. 30, 2020).
On November 20, 2020, Plaintiffs filed a renewed motion for summary
judgment to confirm the Determination Letter. Dkt. 7–8. Following briefing and
argument, the court granted Plaintiffs’ motion. See Roma Landmark Theaters, LLC
v. Cohen Exhibition Co. LLC, 2021 WL 2182828 (Del. Ch. May 28, 2021).
Pursuant to Court of Chancery Rule 88, Plaintiffs have submitted a motion for
an award of $839,255.59 in attorneys’ fees and expenses.3 Those fees and expenses
3
Dkt. 104. Court of Chancery Rule 88 provides, in pertinent part: “In every case in which
an application to the Court is made for a fee or for reimbursement for expenses or services
the Court shall require the applicant to make an affidavit or submit a letter . . . itemizing
(1) the amount which has been received or will be received, for that purpose from any
source, and (2) the expenses incurred and services rendered, before making such an
allowance.” Ct. Ch. R. 88.
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represent 91.3% of the fees and expenses billed by Plaintiffs’ counsel—Gibson
Dunn & Crutcher LLP (“Gibson Dunn”) and Ross Aronstam & Moritz LLP (“Ross
Aronstam”)—between July 2019 and April 2021 in pressing their affirmative claims
for enforcement of the award and seeking dismissal of Defendant’s counterclaims. 4
Plaintiffs derive their 91.3% figure from their level of success on the issues presented
to the accounting firm as reflected in the Determination Letter. Plaintiffs have
represented that their request does not seek reimbursement of time and expense
“unrelated to the enforcement of the Determination Letter, including work
performed in connection with Plaintiffs’ Answer to Defendant’s Counterclaims and
discovery.” Pls.’ Mot. at 8 n.3.
II. ANALYSIS
A. Standard of Review
This court has discretion in determining the reasonableness of an award of
attorneys’ fees. Mahani v. EDIX Media Corp., 935 A.2d 242, 245 (Del. 2007). In
reviewing a fee application under Rule 88, the court will “evaluate the
reasonableness of fees under the standards of Rule 1.5(a) of the Delaware Lawyers’
Rules of Professional Conduct, and normally exclude excessive, redundant,
4
Dkt. 104 ¶ 13.
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duplicative, or otherwise unnecessary hours.” Carpenter v. Dinneen, 2008 WL
2950765, at *1 (Del. Ch. July 3, 2008). In applying that standard, the court considers
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 employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and
(8) whether the fee is fixed or contingent.
Mahani, 935 A.2d at 246 (quoting Delaware Lawyers’ Rules of Professional
Conduct 1.5(a)). The party seeking an award of fees and expenses bears the burden
of establishing that the amount sought is reasonable. Glob. Link Logistics, Inc. v.
Olympus Growth Fund III, L.P., 2010 WL 692752, at *1 (Del. Ch. Feb. 24, 2010).
Defendant contends the amounts requested are unreasonable and should be
deeply discounted. Defendant insists that Plaintiffs should be awarded no more than
$385,690.50—less than half of the requested amount. Opp. at 13–14. Defendant
raises four challenges to the fee and expense request. I address each objection in
turn.
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1. Time Incurred in Litigating the Motion to Dismiss
Defendant’s Counterclaims
Defendant argues Plaintiffs’ fee request is excessive because it improperly
includes a request for reimbursement of fees and expenses incurred in Plaintiffs’
motion to dismiss Defendant’s counterclaims, which was not entirely successful.
See Opp. ¶¶ 9–15. Plaintiffs counter that their ultimate victory in obtaining
confirmation of the Determination Letter was inextricably intertwined with their
efforts seeking dismissal of Defendant’s counterclaims. They further argue that,
although they were not initially successful in obtaining confirmation of the
Determination Letter in the first round of motion practice, they ultimately prevailed
in their renewed motion for summary judgment and, therefore, all of those fees and
expenses are compensable, up to 91.3%. I agree.
Defendant mistakenly characterizes the outcome of Plaintiffs’ motion to
dismiss the counterclaims as “unsuccessful.” See, e.g., Opp. ¶¶ 2, 4, 9, 12, 14, 15,
21, 22. The motion was partially successful and partially unsuccessful. Specifically,
Plaintiffs obtained dismissal of three out of four counterclaims and a significant
portion of the fraud claim. See Roma Landmark, 2020 WL 5816759, at *19 (granting
Plaintiffs’ motion to dismiss claims for breach of contract, breach of the implied
covenant of good faith and fair dealing, and fraudulent concealment in full, and for
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fraud, in part). Defendant prevailed on a portion of its fraud claim, which served as
the initial basis for the denial of Plaintiffs’ motion for summary judgment to confirm
the Determination Letter. Id. But Plaintiffs later prevailed on their renewed motion
for summary judgment, and the time and expense incurred in obtaining that victory
is compensable under the Purchase Agreement.
Furthermore, Plaintiffs’ time and effort in litigating their motion to dismiss
the counterclaims—which included a claim seeking vacatur of the Determination
Letter—were intertwined with their affirmative efforts to confirm the Determination
Letter. Indeed, Defendant’s arguments during earlier motion practice confirm that
fact. See, e.g., June 12, 2020 Hrg. Tr. (Dkt. 70) 39:12–16 (Defendant’s counsel
arguing: “Judge, I think everybody agrees that the fraud claim asserted by the
defendant and counterclaim plaintiffs here is inextricably intertwined with the
plaintiffs’ motion here to confirm their arbitration award”); id. at 54 (Defendant’s
counsel arguing that its grounds to vacate the Determination Letter can be raised in
its counterclaims); id. at 70:16–20 (Defendant’s counsel arguing that it made a
timely application to vacate the Determination Letter under the FAA because it
sought vacatur in the original counterclaims “and we did plead fraud with specificity,
we think, as of that date”); Dkt. 88 at 9 (Defendant’s answering brief in opposition
to the renewed motion for summary judgment, stating “At the heart of Defendant’s
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counterclaims, both in the original and amended pleadings, is Defendant’s request
to vacate the [] Determination Letter based on the bad faith conduct of the Sellers
and their principal . . . .”); id. (“As relevant to the [summary judgment] motion,
Defendant pleaded the facts concerning” its fraud claim); id. at 14
(“DEFENDANT’S COUNTERCLAIMS ASSERT[] THAT THE
ARBITRATION AWARD SHOULD BE VACATED DUE TO FRAUD”); id. at
17 (“Defendant properly sought vacatur of the arbitration award by way of a
counterclaim”); Dkt. 25 at 28–39 (Defendant’s answering brief in opposition to
Plaintiff’s motion for summary judgment to confirm the Determination Letter
asserting Defendant alleged fraud in the amended counterclaims, which “adequately
pleaded a basis for vacating” the Determination Letter); id. at 38–39 (relying on the
allegations in the counterclaims, Defendant argued it “has amply pleaded both fraud
as well as ‘undue means’ justifying vacatur of the [Determination Letter]”).
In attempting to seek vacatur of the Determination Letter through the filing of
counterclaims, and then amended counterclaims, the Defendant created a litigation
dynamic requiring Plaintiffs to seek dismissal of the counterclaims in order to obtain
confirmation of the Determination Letter. To be sure, Defendant’s grounds for
denying Plaintiffs’ motion for summary judgment to confirm the Determination
Letter were not limited to its counterclaims for fraud. See Dkt. 25 (“THE
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REMAINDER OF BUYER’S COUNTERCLAIMS DEMONSTRATE THAT
SUMMARY JUDGMENT IS NOT APPROPRIATE AT THIS TIME”).
Where, as here, the Defendant’s counterclaims were “inextricably intertwined” with
Plaintiffs’ affirmative efforts to confirm the Determination Letter, “from a practical
standpoint, accurately separating work down in pursuit of each claim would be
difficult, if not impossible.” Great Am. Opportunities, Inc. v. Cherrydale
Fundraising, LLC, 2010 WL 338219, at *29 (Del. Ch. Jan. 29, 2010). This objection
to the fee and expense application is denied.
2. Redacted Time Entries
Defendant argues that Plaintiffs should not be reimbursed for any fees or
expenses in which the relevant billing statements are redacted. Plaintiffs have
confirmed, however, that their fee application does not include any of those time
entries. Pls.’ Reply ¶ 3 (“Plaintiffs have not sought reimbursement for any redacted
entries in the invoices attached to the declaration filed with Defendant’s
Opposition.”). Accordingly, this objection is denied.
3. Westlaw Charges
The fee request includes $68,985.39 in computer legal research charges using
Westlaw. Defendant contests that amount, and particularly focuses on $20,119.28
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in Westlaw charges for the month of February 2020. Opp. ¶¶ 19–22. Defendant
asserts that these amounts are excessive and should be disallowed in full. Id. ¶ 22.
Defendant argues “[i]t is well known that Westlaw research is available on an
unlimited basis for particular databases . . . for a modest fee . . . with additional per-
document charges for out-of-plan research items.” Opp. ¶ 20. Thus, according to
Defendant, the charges incurred here are wholly unwarranted to pass along to
Defendant, as it amounts to billing Defendant for what amounts to Gibson Dunn’s
overhead in maintaining a legal research account with Westlaw.” Id.
Reasonable Westlaw research charges are a reimbursable expense. See In re
TransPerfect Global, Inc., 2021 WL 1711797, at *13 (Del. Ch. Apr. 30, 2021)
(finding Westlaw, Lexis/Nexis and other research charges to be reasonable). It is
not surprising that 30 percent of Plaintiffs’ legal research charges were incurred in
one month, when Plaintiffs were preparing their reply brief in support of their motion
for summary judgment to confirm the award and their opening brief in support of
their motion to dismiss Defendant’s amended counterclaims. See Dkt. 36 & 41.
Furthermore, Defendant’s assertion that Plaintiffs’ counsel are unreasonably
marking up Westlaw charges and billing the Defendant for them is speculative and
without merit. The declarations of Plaintiffs’ counsel unequivocally state that the
expenses reflected in their fee application are expenses that they incurred. See
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Declaration of Marshall R. King ¶ 7 (“From July 2019 through April 2021, Gibson
Dunn incurred expenses in the amount of $69,988.74 in connection with this
litigation.”) (Dkt. 104); Declaration of Garrett B. Moritz (“From July 2019 through
April 2021, Ross Aronstam incurred expenses in the amount of $8,292.23 in
connection with this litigation.”) (Dkt. 104). Those expenses included the amounts
incurred as Westlaw expenses. To “incur” means “[t]o suffer or bring on oneself (a
liability or expense).” Black’s Law Dictionary (11th ed. 2019) (accessed online).
The Delaware Supreme Court has construed “incur” in the context of legal fees to
mean that the party “must have been liable for a payment at some point.” Scion
Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate Fund, 68 A.3d
665, 684 (Del. 2013). The Westlaw charges that Plaintiffs’ counsel incurred are
expenses for which Plaintiffs’ counsel were liable. Plaintiffs’ counsel, in turn, billed
those expenses to their clients, who were ultimately liable for payment. The
Plaintiffs, in fact, paid those expenses. Compare Opp. Ex. B at pdf 65, 69, 72, 77,
85, 94, 100, 114, 123, 131, 134, 142, 148, 156, 162, with id. at pdf 70, 75, 88, 98,
140, 146, 154, 160, 166.5
5
Defendant complains that Plaintiffs’ counsel’s Westlaw invoices were not submitted to
the court or produced to Defendant. Opp. ¶ 21. But Defendant does not indicate whether
it requested those invoices. Furthermore, Gibson Dunn’s invoices to the Plaintiffs, which
were produced to Defendant, reflected the monthly Westlaw charges and time entries of
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Notably, Defendant’s counsel have not submitted any of their Westlaw
expenses, indicated whether any of their computer research expenses are billed to
their clients, or explained the manner in which those expenses are calculated. In any
event, this court has not adopted the view that legal research charges are “overhead”
expenses that are not reimbursable in a fee application.6 This objection is denied.7
4. The Hourly Rates
counsel describing time devoted to legal research. See, e.g., Opp. Ex. B at pdf 66, 68-69,
72–74, 77–79, 85, 87, 94–96, 100–02, 114, 116, 123–24, 131, 134, 142, 145, 148–51, 156–
57, 159, 162–63.
6
See Lillis v. AT & T Corp., 2009 WL 663946, at *7 (Del. Ch. Feb. 25, 2009) (awarding
expenses that included reimbursement for Westlaw charges); TransPerfect, 2021 WL
1711797, at *31 (awarding expenses including Westlaw charges). But see BAM Capital,
LLC v. Houser Transport, Inc., 2020 WL 97459, at *4 (W.D. N.C. Jan. 8, 2020) (finding
that “computer research costs are most properly considered to be part of a law firm’s
overhead costs, which are encompassed in each attorney’s hourly billing rate and thus
cannot be recovered in addition to the award of attorneys’ fees”); Weinberger v. Great
Northern Nekoosa Corp., 801 F. Supp. 804, 827 (D. Me. 1992) (“The Court thinks it
inappropriate and unreasonable to permit an overhead item of this type to be recovered in
addition to recovery for the time of the lawyer who used the research facility.” (quoting
Auburn Police Union v. Tierney, 762 F. Supp. 3, 5 (D. Me. 1991))).
7
The $20,119 in Westlaw charges incurred in one month is not comparable to the one
category of Westlaw charges that the court found to be excessive in TransPerfect. Then-
Chancellor Bouchard significantly reduced $20,497 in Westlaw charges that appeared to
have been incurred for 5.6 hours of research conducted on a single day. TransPerfect, 2021
WL 1711797, at *47. The court observed that this was “a significant outlier from other
Westlaw charges in the billing records” and may have been “a mistaken entry.” Id. Thus,
he reduced it by 90%. Id. Unlike the one-day charge of over $20,000 in TransPerfect, the
$20,119 in Westlaw charges incurred by Gibson Dunn in February 2020 reflected multiple
days of research in connection with the preparation of Plaintiffs’ reply brief in support of
their motion for summary judgment and opening brief in support of their motion to dismiss
Defendant’s amended counterclaims. See Opp. Ex. B at pdf pages 101–02.
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Defendant challenges the hourly rates of one of Plaintiffs’ law firms as
excessive. Opp. ¶¶ 23–24.8 Defendant points to a Gibson Dunn partner’s hourly
rate of $1,645 and gripes that Plaintiffs have not “provided any proof as to what their
customary billing rates are for comparable matters” or “evidence as to each
attorney’s background and years of experience to support the respective claimed
rates.” Id. ¶ 24. As for the latter proposition, it appears that Defendant’s counsel
has not met the internet or reviewed their own attorney relationships. The attorney
profiles of the Gibson Dunn and Ross Aronstam lawyers who litigated this case are
available on their firms’ respective websites.9 Even more troubling is the fact that
Defendant fails to mention that Mr. King, the lead lawyer for Plaintiffs, was co-
counsel with Defendant’s counsel in another matter pending before this court at the
same time this action was being litigated. See AB Stable VIII LLC v. Maps Hotels
& Resorts One LLC, 2020 WL 7024929 (Del. Ch. Nov. 30, 2020) (listing Mr. King
of Gibson Dunn and Mr. Gallagher of Richards Layton & Finger as counsel for
Plaintiff and Counterclaim Defendant); see also In re Revlon, Inc. S’holders Litig.,
8
Defendant does not challenge Ross Aronstam’s billing rates.
9
See www.gibsondunn.com and www.rlf.com.
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990 A.2d 940 (Del. Ch. 2010) (listing Messrs. King and Gallagher and their
respective firms as representing the same defendants).10
As for Gibson Dunn’s hourly billing rates, they are in line with those of other
experienced litigators appearing in this court, which have been held to be reasonable.
See, e.g., TransPerfect, 2021 WL 1711797, at *24 (finding partner rates ranging
from $1,225 to $1,775 and associate rates of $695 to $1,120 to be reasonable).
Gibson Dunn’s hourly rates reasonably “reflect the complexity of the work
performed and the results obtained” in procuring confirmation of the Award. Id. In
his declaration, Plaintiffs’ counsel attests that “[t]he rates that Gibson Dunn charged
Plaintiffs for representation in this matter are the customary billing rates that Gibson
Dunn regularly charged its clients for other matters during the relevant time
periods.” Reply Declaration of Marshall R. King ¶ 4 (Dkt. 109). Notably, Defendant
has not supplied the court with its own counsel’s rates or amounts charged in this
litigation to provide any comparison. This objection is denied.
***
10
Another Richards, Layton & Finger lawyer moved Mr. King’s admission pro hac vice.
See AB Stable VIII LLC v. Maps Hotels & Resorts One LLC, C.A. No. 2020-0310-JTL,
Dkt. 17.
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For the foregoing reasons, having considered Plaintiffs’ motion for an award
for fees and expenses in light of the relevant factors described herein, I conclude that
Plaintiffs’ request is reasonable and should be granted in full. Accordingly,
Plaintiffs’ motion for an award of attorneys’ fees and expenses in the amount of
$839,255.59 is GRANTED.
IT IS SO ORDERED.
Very truly yours,
/s/ Paul A. Fioravanti, Jr.
Vice Chancellor