Vogel v. Boris

Background

Stephen Vogel brought a contract action against David Boris and Marshall Kiev. On August 24, 2023, the court denied Vogel’s summary-judgment motion and granted Boris and Kiev’s summary-judgment motion. Summary judgment is a decision made without a trial when the court determines that no genuine dispute of important facts requires a trial and that one side is entitled to judgment as a matter of law.

The Operating Agreement contained a fee-shifting provision stating that the winning party in an action arising from the agreement could recover reasonable legal fees, costs, and expenses from the losing party, including fees and expenses related to appeals. Boris and Kiev moved to recover $1,679,911.83 in fees and costs incurred in defending the lawsuit, along with fees and costs for making the fee motion and for Vogel’s appeal.

Enforceability of the Fee Provision

Vogel argued that the defendants had not shown that Section 12.07 of the Operating Agreement survived the agreement’s termination. The court rejected that argument. Applying Delaware law, which governed the agreement, the court held that contract provisions concerning resolution of disputes generally survive termination, even when the contract does not expressly say so. Because Section 12.07 concerned disputes between the parties, the court held that it remained enforceable.

Reasonableness of the Requested Award

Delaware law required the court to determine whether the requested fees were reasonable. The court considered factors including the time and labor required, the difficulty of the issues, customary fees, the amount involved and results obtained, time limitations, the professional relationship, the lawyers’ experience and ability, and whether the fee was fixed or contingent.

Boris and Kiev supported their request with records showing 2,360.8 hours of work by lawyers and paralegals and other litigation costs. The court found the $1,679,911.83 request mostly reasonable. It noted that the defendants had obtained summary judgment on a claim seeking more than $33 million and that the defendants had actually paid the requested fees and costs. The court also found the lawyers’ hourly rates reasonable.

The court agreed, however, that the defendants’ lawyers had billed substantially more hours than Vogel’s lawyers over a comparable period. It also found that partners had billed 1,323.1 of the 2,360.8 hours and that at least some document-review and production work could have been performed by associates with lower rates. Following Delaware precedent, the court reduced by 20 percent the $1,115,124.50 billed by the three partners. That reduction was $223,024.90, leaving an award of $1,456,886.93.

The court rejected Vogel’s objections to combined billing entries and vague descriptions of work. It also declined to second-guess the defendants’ litigation strategies, such as document review and depositions.

Additional Fees and Stay Request

The court denied without prejudice the defendants’ request for fees and costs incurred in making the fee motion and on appeal. The defendants had not provided records showing the hours worked, rates charged, or tasks completed, so the court could not determine whether those amounts were reasonable. “Without prejudice” meant that the defendants could make another request supported by appropriate evidence.

Vogel asked the court to delay enforcement of the fee award while his appeal was pending. The court declined to enter a stay at that time, explaining that a party seeking a stay after judgment must provide a bond or other security.

Disposition

Judge Victor Marrero ordered that the fee motion filed by David Boris and Marshall Kiev was granted in part and denied in part. Stephen Vogel was directed to reimburse them $1,456,886.93 in reasonable attorneys’ fees and costs, and the Clerk was directed to enter judgment for that amount in their favor and against Vogel.