STEELE, Chief Justice.
Defendant-appellant Parham Mahani appeals the Court of Chancery's decision to award EDIX the full amount of the attorneys' fees and other expenses it incurred when it enforced a confidentiality and non-competition agreement with Mahani. Mahani argues that the Chancellor erred when he interpreted the fee shifting provision literally and awarded EDIX the full amount of the fees and expenses instead of a reduced amount based on the reasonableness of the fees. Specifically, Mahani contends that the award should reflect EDIX's limited trial success and take into account the excessive time EDIX devoted to the litigation.
We affirm the Chancellor's decision to award EDIX the full amount of its attorneys' fees and other expenses because the Chancellor properly weighed all the factors listed in Rule 1.5(a) of the Delaware Lawyers' Rules of Professional Conduct. In weighing the factors listed in DLRPC 1.5(a), the Chancellor correctly refused to give primary weight to EDIX's limited trial success. The Chancellor also concluded that Mahani's refusal to cooperate at every stage of the proceedings outweighed EDIX's limited trial success and contributed significantly to the excessive number of hours EDIX spent litigating the case. Accordingly, we AFFIRM the Chancellor's decision to award EDIX the full amount of its attorneys' fees and other expenses.
FACTS
Plaintiff-appellee, EDIX Media Group, Inc., publishes a car modification magazine called StreetTrenz, and derives revenue from the sale of magazine subscriptions and advertising space. In the summer of 2004, EDIX hired Defendant-appellant,
On May 14, 2006, EDIX fired Mahani for allegedly making false representations to Sony Electronic, Inc. while conducting business on EDIX's behalf.
On May 21, 2006, Mahani sent e-mails to EDIX's advertisers in which Mahani asserted that EDIX "inflated membership numbers and web traffic statistics," "provided advertising rates paid by various customers" and "supposedly released all advertisers from their contracts and any payments still due on their accounts."
On June 6, 2006, in contempt of the Chancellor's order, Mahani sent an anonymous e-mail to EDIX's advertisers that "not only disparaged StreetTrenz's ability to provide value for an advertising dollar and revealed rates that EDIX had supposedly charged to different customers, but also described the membership program as a `scam.'"
On November 13, 2006, after a three day trial, the Chancellor held that Mahani breached the Agreement when he disclosed confidential information regarding EDIX's "financial data, . . . invoices and other financial statements, . . . customers, . . . employee salaries, . . . names, addresses or any other compilation of information written or unwritten which is used in [EDIX's] business."
On appeal, Mahani argues that the Chancellor erred when he awarded EDIX the full amount of its attorneys' fees and other expenses. Mahani contends that the Chancellor should not have interpreted the fee shifting provision literally, but, instead, should have assessed the reasonableness of the fees and expenses and awarded EDIX a reduced amount based on that assessment. Specifically, Mahani asserts that the Chancellor should have weighed the "factors identified in Rule 1.5(a) of the Delaware Lawyers' Rule of Professional Conduct and existing case law" and determined that the fees and expenses were unreasonable because EDIX had limited success in litigating the Agreement and devoted an excessive number of hours to litigating the Agreement.
In response, EDIX contends that the Chancellor properly weighed all the DLRPC Rule 1.5(a) factors and existing case law and determined that the fees and expenses were reasonable. Specifically, EDIX asserts that the Chancellor correctly found that the fees and expenses were reasonable considering Mahani's responsibility for the increased cost of litigation.
DISCUSSION
We review a judge's decision to award attorneys' fees for abuse of discretion.
Under the American Rule and Delaware law, litigants are normally responsible for paying their own litigation costs.
Chancellor's Assessment of the Fees' Reasonableness
On appeal, Mahani does not challenge the fee shifting provision itself, but rather argues that the Chancellor did not assess the reasonableness of the fees and expenses as required by Delaware law. Mahani contends that the Chancellor's decision to enforce the fee shifting provision of the Agreement "makes it clear that the court abdicated any role in determining whether the fee was a `reasonable fee[.]'"
EDIX argues that the Chancellor assessed the reasonableness of the attorneys' fees and expenses. EDIX contends that the Chancellor "did not place exclusive weight on DLRPC 1.5(a)(4), but rather . . . place[d] `considerable weight' on other factors including `[t]he time and labor required to carry a case to trial.'"
The language of the Chancellor's opinion illustrates that the Chancellor weighed several factors when he assessed the reasonableness of the fees and expenses, and decided not to award the fees and expenses exactly in "proportion to [EDIX]'s success on the merits" and not to reduce EDIX's award because EDIX vigorously pursued its contractual rights.
Reasonableness of EDIX's Attorneys' Fees and Other Expenses
Mahani further argues that EDIX's award for attorneys' fees and other expenses was not reasonable because it neither reflected EDIX's limited trial success nor accounted for the excessive time EDIX devoted to litigation. Mahani contends that EDIX's limited trial success should have been the Chancellor's primary consideration when he assessed the reasonableness of the fees and expenses. To
EDIX argues that the award was reasonable and contends that the Chancellor properly refused to give primary weight to its limited trial success and considered all the factors listed in Rule 1.5(a) of the Delaware Lawyers' Rules of Professional Conduct and their relatively relationship when he assessed the reasonableness of its attorneys' fees and other expenses. EDIX cites Comrie v. Enterasys Networks, Inc. to support its argument.
Mahani argues that we also should reduce the award to account for the excessive time EDIX devoted to litigating the case. Mahani contends that the 430 hours that a member of EDIX's counsel, billed were excessive because the case was not complex. Mahani concedes that he was responsible for delaying the trial because he changed his attorney, but asserts that the delay did not account for "the extraordinary number of hours that [EDIX's counsel] devoted to th[e] case."
EDIX responds that its attorneys' fees were reasonable because Mahani was intransigent throughout the case. EDIX points to the fact that Mahani contested at least one allegation in every count of the complaint, denied authorship of the anonymous e-mails, changed attorneys and violated several procedural rules. EDIX maintains that these considerations justified the 430 hours that its counsel devoted to the case.
To assess the reasonableness of EDIX's award for attorneys' fees and other expenses, we consider the factors "identified in Rule 1.5(a) of the Delaware Lawyers' Rules of Professional Conduct and [relevant] case law."
The Chancellor properly refused to give primary weight to EDIX's limited trial success and considered all the factors listed in DLRPC 1.5(a) when he assessed the reasonableness of EDIX's award of attorneys' fees and other expenses. The Comrie court held that the reasonableness of attorneys' fees and other expenses in a contractual fee shifting case "should be assessed by reference to legal services purchased by those fees, not by reference to the degree of success achieved in the litigation."
EDIX's award for the full amount of its attorneys' fees and other expenses cannot be considered unreasonable because the Chancellor properly weighed all the factors in DLRPC 1.5(a). The Chancellor, we believe, correctly concluded that "[t]he amount involved in litigation and results obtained [were] only two of many factors to be considered,"
CONCLUSION
Because we find that the Chancellor adequately assessed the reasonableness of EDIX's attorneys' fees and expenses, and because we find that the fees and expenses themselves were reasonable under the circumstances, we, hereby, AFFIRM the Court of Chancery's judgment that awarded EDIX the full amount of its attorney's fees and other expenses.
FootNotes
The court in Comrie awarded the plaintiffs $1,302,991 in damages and $503,057.03 for attorneys' fees and other expenses. In this case, EDIX's attorneys' fees and other expenses of $109,638.78 are more than its damages of $16,500.06. Comrie, however, remains applicable here because there is no law that stipulates that the amount of the prevailing party's attorneys' fees and other expenses awarded pursuant to a contractual fee provision must be less than or in proportion to the amount of its award for damages. The Chancellor addressed this issue in his opinion, suggesting that a party that prevails at trial may collect the full amount of its attorneys' fees and expenses from the losing party if the losing party contracted to reimburse the prevailing party for those expenses, no matter what the amount of those expenses: "A private party possessed of contractual rights may pursue those rights vigorously even if, as here, they are ultimately only partially successful. If the contract includes reimbursement of expenses necessary to enforce those rights, then such expenses may be awarded."
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