Ferry Joseph, P.A. v. Appu Chacko

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY

FERRY ]OSEPI-I, P.A.,
a Delaware professional corporation

Plaintiff,
V?r

C.A. No. CPU4-15-001931

APPU CHACKO,

\X\/\Z\Z\_/\_/\ZL/\_/\Z\./

Defendant.
Submitted: April 11, 2016
Decided: May 18, 2016

james Gaspero,]r., Esquire Appu Chacko

Ferry ]oseph, P.A. 401 Topsfield Road

824 N. Market Street Hockessin, DE 19707
P.O. Box 1351 fef-Repre.renz‘ed Defendanz‘
Wilmington, DE 19899

Afz‘ome)/for P/az'n!zjj’

DECISION AFTER TRIAL

SMALLS, C.J,

In the matter before the Court, Ferry ]oseph, P.A. ("Plaintiff’) seeks to recover
attorney’s fees for legal services it provided to Appu Chacl<o ("Defendant") for
representation in a guardianship matter. The Complaint alleged Defendant agreed to pay
for legal services at Plaintiff" s normal hourly rate, and as a result of his failure to pay for
these legal services, he owes Plaintiff $4,89().85 in attorney’s fees, plus interest and costs.

Defendant filed an answer to the complaint in which he admitted that he entered into
an Engagement Agreement (the "Agreement") for legal services; however, he denied any
amount is due. Defendant claims that he is not liable because Plaintiff’s attorney’s fees are
unreasonable and excessive pursuant to the Delaware Lawyers’ Rules of Professional
Conduct. Defendant further alleges that Plaintiff did not handle his case in the way that the
parties agreed. Additionally, he brings a counterclaim for the amount of attorney’s fees in
which the Court determines is excessive and unreasonable.

Plaintiff denies that it breached the agreement, and raised a number of affirmative
defenses, which include failure to state a claim under Coz/rz‘ of Com#m¢ P/em Cz`vz`/ Rz¢/e l2(b)(6),
acquiescence, and that Defendant’s claims are barred by the statute of limitations

On April ll, 2016, the Court held trial and reserved its decision. lt is undisputed that
an agreement existed between the parties. The Court is called upon to determine whether
Plaintiff breached that agreement, and whether the attorney’s fees at issue are reasonable.

This is the Court’s final decision after trial.

FACTUAL BACKGROUND
In November 2005, Defendant retained Plaintiff to represent him in a Court of
Chancery matter in which he sought guardianship of his daughter (the "guardianship
matter"). When Defendant retained Plaintiff, he signed the Agreement which outlined the
legal services Plaintiff would provide, and the fees and expenses associated while

representing Defendant. In particular, the agreement provides:

You will receive an itemized bill on a monthly basis regarding
professional services rendered in the Matter. Bills will be submitted to client
at [the client’s address]. Professional services will be billed at an hourly rate of
Two Hundred Fifty Dollars ($250.()0) for David Ferry, ]r., and One
I~Iundred Seventy-five Dollars ($175.00) to Two Hundred Twenty Five
Dollars ($225.0()) for associate counsel. This rate may be adjusted in the
future, and client will receive adequate notice of the increase. Paralegal/ law
clerk expenses are charged at the hourly rate of One Hundred Dollars
($IO0.00) per paralegal. We will endeavor to use our time as efficiently as
possible, as well as delegate tasks to hold the total fee down. lt is understood
that Mr. Ferry will be primary counsel and that asocial counsel will provide
services only as needed.

ln addition to the professional fees referenced above, client will also be
billed for certain out-of-pocket costs that may occur in the Matter. For
example, we may include on our statements separate charges for services such
as photocopying, messenger and delivery service, computerized research,
travel, long-distance telephone and telecopy and search and filing fees. Fees
and expenses of others (court reporters and experts) will not be advanced by

us, but will be billed directly to client.
David Ferry, ]r., Esquire ("Mr. Ferry"), testified that the guardianship was very combative,
aggressive, and one of the most difficult cases that he ever litigated. He also testified that the

guardianship was so demanding that it required other counsel and legal assistants to assist

him with the case, all of whom had different tasks and spent different amounts of time on
the case.l This litigation_which commenced in November 2005 and continued until
October 2012-required Plaintiff to expend a significant amount of time preparing, and as a
result, Defendant incurred approximately $67,604.47 in expenses and fees.

Throughout the course of litigation, and even after the case concluded, Defendant
made regular payments to Plaintiff_to date, he has paid $62,713,65--however, on March
2(), 2014, he emailed Mr. Ferry, and asked whether Plaintiff would consider writing off the
balance on his account or reducing it.? Ferry testified this was the first time Defendant had
expressed any concerns about his bill or the fees.3 In response, Mr. Ferry offered to reduce
his invoice by twenty percent if he was able to pay the remaining $4,890.85 in one lump
sum/l Defendant declined the offer, explaining that he asked for a reduction because he had
concerns about work performed by other counsel.-" Mr. Ferry then told Defendant that he
would review the bills and address his concerns.é Defendant replied by acknowledging that
the litigation was difficult and that the outcome was fair, and stated, “I did not bring this up
sooner because I thought I would pay you your fees in any case because of [t]he efforts you
all put into it. I have since retired and have a need to review my expenses I have seen the

numerous times that you have put in ‘NC - No Charge’ for your time."7 Nevertheless,

l At times, the Court of Chancery ordered in-camera interviews and appointed two individuals to serve as a
Guardian Ad Litum. Throughout litigation, counsel deposed a number of individuals, reviewed multiple
documents, researched a number of complex legal issues, and drafted numerous legal documents.

2 Pl. Ex. 3.

3 Pl. Ex. 5.

4 Pl. Ex. 4.

5 Id.

6 Pl. Ex. 5.

7 Pl, Ex. 5

Defendant ceased making payments, Plaintiff now seeks recovery of the remaining
$4,89().85.
DISCUSSION

In order to prevail on a claim for breach of contract, Plaintiff must prove, by the
preponderance of the evidence, that: (1) an agreement existed between Plaintiff and
Defendant; (2) Defendant breached an obligation imposed by the agreement; and (3) as a
result of that breach, Plaintiff suffered damages.$ It is undisputed that an agreement existed
between the parties, however, the parties dispute whether Plaintiff properly fulfilled its
obligations under the agreement, and whether Plaintiff’ s attorney’s fees were reasonable.

The Court’s ultimate goal in interpreting a contract is "to determine the parties’
shared intent."9 Delaware courts adhere to the objective theory of contract interpretation,
and interpret contracts "as would an objectively reasonable third-party observer."l@

In assessing the reasonableness of attorney’s fees, the Court is entitled to exercises its
discretion, and in doing so, relies on Rule 1.5 of the Delaware Lawyers’ Rules of Professional
Conduct for guidance, which sets forth the factors that the Court should consider when
deciding whether the fees are reasonable.“ The factors are as follows:

(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 like]ihood, 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 lirnitations imposed by the client or

_=1

3 VLIW Tec'/Jno/o<gy, LLC 1). Heu//ez‘f-P¢z¢vé¢zrd Co., 840 A.Zd 606, 612 (Del. 2003).

9 _Y¢zs.r¢zno v. CIBC Worl¢iMar/éez‘r Ca¢]>., 948 A.Zd 453, 462 (Del. Ch. 2008).

10 Id. at 462 (citations omitted).

" Danenbe);g 1). Fz`z‘r¢zwéx, In¢'., 58 A.f’)d 991, 995-96 (Del. Ch. 2012) (citing Mah¢znz' a EDIX Medz'a G})., In¢'., 935
A.zd 242, 245 (Del. 2007)).

provide Defendant with the best representation possible. Plaintiff also claims that it utilized
legal assistants to assist counsel in order to decrease the expenses Defendant incurred.

These proceedings were litigated in the Court of Chancery and Ferry testified that
opposing counsel were aggressive and the case required extensive pre-trial and trial
preparation. In considering the parties arguments, I find that Plaintiff did not breach its
agreement with Defendant. Considering the amount of time Plaintiff spent in litigating this
case_which was over the course of seven years_and the complexity of the case, Plaintiff
provided Defendant with more than adequate representation. The Court is not inclined to
second-guess Plaintiff° s judgment of how he utilized the services of other counsel in his firm.
The record supports a basis to conclude Plaintiff expended its resources appropriately and
designated certain individuals to complete tasks which was appropriate in their area of
expertise, thus sufficiently providing Defendant with legal representation.

Defendant also objects to the amount of attorney’s fees that he incurred, arguing that
the fees were unreasonable. After reviewing the evidence, l do not find Plaintiff° s argument
persuasive. Mr. Ferry has been a member of the Delaware Bar for more than thirty years,
and his practice focuses on estates and guardianships. In light of his experience, his hourly
rate of 1£25().00 per hour is more than reasonable.lg The Court also finds that Mr. Ferry’s
decision to delegate certain tasks to other counsel and to legal assistance was not only
reasonable, but it was also cost-effective, since those individuals billed at hourly rates less
than l\/[r. Ferry. Additionally, even when Defendant first contested his bill in 2014, he

acknowledged the time and effort that Plaintiff expended in defending him in the

13 B@wz`eu/ M¢mor II Maz'ntena)u'e Co)yf). a A//€z/aaz‘z'b, 2015 WL 4789762 at *3 (Del. Com. Pl. Apr. 30, 2012) (finding
that counsel’s $175.00 hourly rate was competitive in light of his nearly twenty-year experience).

7

guardianship matter, and stated that the outcome was fair.” He also stated that he was
planning on continuing to pay Plaintiff’ s fees, however, because he had retired, he needed to
review his expenses.zo In considering this acknowledgment, as well as l\/Ir. Ferry’s
experience, and the complexity of the case, I find that Plaintift’s attorney’s fees are
reasonable.
CONCLUSION

For the foregoing reasons, judgment is entered in favor of Plaintiff in the amount of

$4,890.85, cost and interest at the legal rate until paid. I also find for the Plaintiff on

Defendant’s counterclaim

IT IS SO ORDERED.

Chief]udge

Ferry v Chacko-OP May 2016

19 fee Pl. EX. 5. l
29 Id.