COURT OF CHANCERY OF THE STATE OF DELAWARE KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734
February 14, 2024
Peter J. Walsh, Jr. Samuel D. Cordle Michael A. Pittenger Peter C. Cirka Hayden J. Driscoll Abrams & Bayliss LLP Potter Anderson & Corroon LLP 20 Montchanin Road, Suite 200 1313 N. Market Street, 6th Floor Wilmington, DE 19807 Wilmington, DE 19801
Michael A. Barlow Quinn Emanuel Urquhart & Sullivan, LLP 500 Delaware Avenue, Suite 220 Wilmington, DE 19801
Re: Charlie Javice v. JPMorgan Chase Bank, N.A., et al., C.A. No. 2022-1179-KSJM
Dear Counsel:
This letter resolves Plaintiff Charlie Javice’s Motion for Payment of
Unresolved Advancement Amounts (the “Rule 88 Motion”). 1
By way of background, I granted the plaintiff’s claim for advancement on May
8, 2023 (“May 8 Ruling”). 2 The parties later agreed on a form of Fitracks Order
implementing the May 8 Ruling, which I entered on June 27, 2023. 3 The plaintiff
submitted her initial demand pursuant to the Fitracks Order on June 28, 2023,
1 C.A. No. 2022-1179-KSJM, Docket (“Dkt.”) 80 (“Pl.’s Opening Br.”).
2 Dkt. 61 (Del. Ch. May 8, 2023) (TRANSCRIPT), application for certification of interlocutory appeal denied, 2023 WL 4561017 (Del. Ch. July 13, 2023), interlocutory appeal refused, 303 A.3d 616 (Del. Aug. 16, 2023) (TABLE). 3 Dkt. 67. C.A. No. 2022-1179-KSJM February 14, 2024 Page 2 of 7
seeking fees and costs in connection with five proceedings since mid-2022. 4 The
defendants objected to nearly half of the amounts due. The senior lawyers for both
sides have met and conferred, and that process resulted in compromises on some
issues. The defendants continue to object to time entries representing approximately
22% of the amount sought by Javice.
The defendants’ remaining objections to the Rule 88 Motion challenge three
categories of time entries:
• Work performed in connection with Javice’s six counterclaims asserted in the District of Delaware (the “Counterclaims Objection”);
• Work performed in connection with the pursuit of insurance coverage (the “Insurance Work Objection”); and
• Work logged through “round-hour” billing entries (the “Round-Hour Objection”) and “block-billing” entries by Javice’s counsel (the “Block- Billing Objection”).
A. The Counterclaims Objection
Javice asserted six counterclaims in the District of Delaware action, JPMorgan
Chase Bank, N.A. v. Javice, et al. 5
• Counterclaim 1 sought nine declarations, including a declaration that Javice was improperly terminated under her employment agreement. 6
• Counterclaim 2 asserted that JP Morgan breached the employment agreement. 7
4 Dkt. 80, Barlow Aff., Ex. 1A at 1.
5 Dkt. 80, Ex. 1 (Case No. 1:22-cv-01621-MN (D. Del. Feb. 27, 2023)).
6 Id. ¶¶ 107–10.
7 Id. ¶¶ 111–18.
2 C.A. No. 2022-1179-KSJM February 14, 2024 Page 3 of 7
• Counterclaim 3 asserted that JP Morgan breached the payment- direction agreement. 8
• Counterclaim 4 asserted that JP Morgan breached the implied covenant of good faith and fair dealing contained in the employment agreement. 9
• Counterclaim 5 asserted that JP Morgan breached the implied covenant of good faith and fair dealing contained in the payment-direction agreement. 10
• Counterclaim 6 asserted that JP Morgan took retaliatory actions against Javice. 11
In her complaint, Javice did not seek advancement in connection with these
counterclaims. Consequently, I did not address her entitlement to advancement in
connection with these counterclaims in my May 8 Ruling.
Javice argues that I already ruled that she is entitled to advancement for the
“Subsequent Investigation and Dispute,” defined by the plaintiff to include the
defendants’ investigation of Javice and “any other potential or threatened claims
relating to Plaintiff’s conduct prior to or in connection with the Merger as an officer
of TAPD or following the Merger as an employee of JPM Morgan Bank or an
affiliate.” 12 But the truth is that I was not presented with this issue and did not rule
on it. The broadly worded language in the Fitracks Order cannot cover up that fact.
8 Id. ¶¶ 119–28.
9 Id. ¶¶ 129–37.
10 Id. ¶¶ 138–45.
11 Id. ¶¶ 146–56.
12 Dkt. 85 at 3 (citing Dkt. 1 ¶ 6; Dkt. 26 at 24 (Pl.’s Mot. for Summary Judgment);
Dkt. 26, Proposed Order); see Fitrack Order at 1–2.
3 C.A. No. 2022-1179-KSJM February 14, 2024 Page 4 of 7
Javice cannot shoehorn a claim for entitlement to fees incurred in connection with
these counterclaims into the Rule 88 Motion.
Javice argues that the work incurred in support of the counterclaims would
have been done in connection with the other claims subject to advancement. 13 Under
Delaware law, “if the fees would have been incurred independently in defense of the
advanceable proceeding, such fees are wholly advanceable, even though the fees also
were useful or applicable in a non-advanceable proceeding.” 14 Javice states “[t]he
process of preparing the Counterclaims required a factual investigation that
encompassed the rationale for the deal, discussions regarding JPMorgan’s
investment thesis, the merger diligence process, and the nature of the synthetic data
project. . . .Whether or not Javice filed the Counterclaims, counsel would have
performed the same, or substantially similar work, in preparing Javice’s defense.” 15
It is extremely difficult for me to assess, on this record, whether the work billed
in connection with the counterclaims would have been necessary in connection with
the claims subject to advancement. This difficulty is due in part to the fact that Javice
did not claim advancement for the counterclaims, so I lack the level of argument
needed to determine the factual overlap between those claims and the advanceable
matters.
The Counterclaims Objection is sustained.
13 Pl.’s Opening Br. at 17–18.
14 Holley v. Nipro Diagnostics, Inc., 2015 WL 4880418, at *2 (Del. Ch. Aug. 14, 2015).
15 Pl.’s Opening Br. at 18.
4 C.A. No. 2022-1179-KSJM February 14, 2024 Page 5 of 7
At this stage, Javice could seek leave to amend her complaint to add a claim
for entitlement to advancement in connection with this category of expenses. The
defendants could reassert the arguments made in connection with the Rule 88 Motion
in response. There might be other ways to resolve this issue, including a negotiated
resolution. But a Rule 88 motion is not the appropriate vehicle for presenting this
issue to the court for resolution.
B. The Insurance Work Objection
Javice demanded advancement for the expenses she incurred in attempting to
obtain insurance coverage after JP Morgan refused her demand. 16 In her complaint,
Javice did not seek advancement in connection with this category of billing entries.
Consequently, I did not address her entitlement to advancement for this issue in my
May 8 Ruling. Javice argues that fees incurred in pursuit of insurance coverage are
included in fees-on-fees, but that is not so. Fees-on-fees do not cover fees incurred in
this action. Once again, Javice cannot shoehorn this request into a Rule 88 Motion.
As with the Counterclaims Objection, Javice could seek leave to amend her
complaint to add a claim for entitlement to advancement in connection with the
insurance work.
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COURT OF CHANCERY OF THE STATE OF DELAWARE KATHALEEN ST. JUDE MCCORMICK LEONARD L. WILLIAMS JUSTICE CENTER CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734
February 14, 2024
Peter J. Walsh, Jr. Samuel D. Cordle Michael A. Pittenger Peter C. Cirka Hayden J. Driscoll Abrams & Bayliss LLP Potter Anderson & Corroon LLP 20 Montchanin Road, Suite 200 1313 N. Market Street, 6th Floor Wilmington, DE 19807 Wilmington, DE 19801
Michael A. Barlow Quinn Emanuel Urquhart & Sullivan, LLP 500 Delaware Avenue, Suite 220 Wilmington, DE 19801
Re: Charlie Javice v. JPMorgan Chase Bank, N.A., et al., C.A. No. 2022-1179-KSJM
Dear Counsel:
This letter resolves Plaintiff Charlie Javice’s Motion for Payment of
Unresolved Advancement Amounts (the “Rule 88 Motion”). 1
By way of background, I granted the plaintiff’s claim for advancement on May
8, 2023 (“May 8 Ruling”). 2 The parties later agreed on a form of Fitracks Order
implementing the May 8 Ruling, which I entered on June 27, 2023. 3 The plaintiff
submitted her initial demand pursuant to the Fitracks Order on June 28, 2023,
1 C.A. No. 2022-1179-KSJM, Docket (“Dkt.”) 80 (“Pl.’s Opening Br.”).
2 Dkt. 61 (Del. Ch. May 8, 2023) (TRANSCRIPT), application for certification of interlocutory appeal denied, 2023 WL 4561017 (Del. Ch. July 13, 2023), interlocutory appeal refused, 303 A.3d 616 (Del. Aug. 16, 2023) (TABLE). 3 Dkt. 67. C.A. No. 2022-1179-KSJM February 14, 2024 Page 2 of 7
seeking fees and costs in connection with five proceedings since mid-2022. 4 The
defendants objected to nearly half of the amounts due. The senior lawyers for both
sides have met and conferred, and that process resulted in compromises on some
issues. The defendants continue to object to time entries representing approximately
22% of the amount sought by Javice.
The defendants’ remaining objections to the Rule 88 Motion challenge three
categories of time entries:
• Work performed in connection with Javice’s six counterclaims asserted in the District of Delaware (the “Counterclaims Objection”);
• Work performed in connection with the pursuit of insurance coverage (the “Insurance Work Objection”); and
• Work logged through “round-hour” billing entries (the “Round-Hour Objection”) and “block-billing” entries by Javice’s counsel (the “Block- Billing Objection”).
A. The Counterclaims Objection
Javice asserted six counterclaims in the District of Delaware action, JPMorgan
Chase Bank, N.A. v. Javice, et al. 5
• Counterclaim 1 sought nine declarations, including a declaration that Javice was improperly terminated under her employment agreement. 6
• Counterclaim 2 asserted that JP Morgan breached the employment agreement. 7
4 Dkt. 80, Barlow Aff., Ex. 1A at 1.
5 Dkt. 80, Ex. 1 (Case No. 1:22-cv-01621-MN (D. Del. Feb. 27, 2023)).
6 Id. ¶¶ 107–10.
7 Id. ¶¶ 111–18.
2 C.A. No. 2022-1179-KSJM February 14, 2024 Page 3 of 7
• Counterclaim 3 asserted that JP Morgan breached the payment- direction agreement. 8
• Counterclaim 4 asserted that JP Morgan breached the implied covenant of good faith and fair dealing contained in the employment agreement. 9
• Counterclaim 5 asserted that JP Morgan breached the implied covenant of good faith and fair dealing contained in the payment-direction agreement. 10
• Counterclaim 6 asserted that JP Morgan took retaliatory actions against Javice. 11
In her complaint, Javice did not seek advancement in connection with these
counterclaims. Consequently, I did not address her entitlement to advancement in
connection with these counterclaims in my May 8 Ruling.
Javice argues that I already ruled that she is entitled to advancement for the
“Subsequent Investigation and Dispute,” defined by the plaintiff to include the
defendants’ investigation of Javice and “any other potential or threatened claims
relating to Plaintiff’s conduct prior to or in connection with the Merger as an officer
of TAPD or following the Merger as an employee of JPM Morgan Bank or an
affiliate.” 12 But the truth is that I was not presented with this issue and did not rule
on it. The broadly worded language in the Fitracks Order cannot cover up that fact.
8 Id. ¶¶ 119–28.
9 Id. ¶¶ 129–37.
10 Id. ¶¶ 138–45.
11 Id. ¶¶ 146–56.
12 Dkt. 85 at 3 (citing Dkt. 1 ¶ 6; Dkt. 26 at 24 (Pl.’s Mot. for Summary Judgment);
Dkt. 26, Proposed Order); see Fitrack Order at 1–2.
3 C.A. No. 2022-1179-KSJM February 14, 2024 Page 4 of 7
Javice cannot shoehorn a claim for entitlement to fees incurred in connection with
these counterclaims into the Rule 88 Motion.
Javice argues that the work incurred in support of the counterclaims would
have been done in connection with the other claims subject to advancement. 13 Under
Delaware law, “if the fees would have been incurred independently in defense of the
advanceable proceeding, such fees are wholly advanceable, even though the fees also
were useful or applicable in a non-advanceable proceeding.” 14 Javice states “[t]he
process of preparing the Counterclaims required a factual investigation that
encompassed the rationale for the deal, discussions regarding JPMorgan’s
investment thesis, the merger diligence process, and the nature of the synthetic data
project. . . .Whether or not Javice filed the Counterclaims, counsel would have
performed the same, or substantially similar work, in preparing Javice’s defense.” 15
It is extremely difficult for me to assess, on this record, whether the work billed
in connection with the counterclaims would have been necessary in connection with
the claims subject to advancement. This difficulty is due in part to the fact that Javice
did not claim advancement for the counterclaims, so I lack the level of argument
needed to determine the factual overlap between those claims and the advanceable
matters.
The Counterclaims Objection is sustained.
13 Pl.’s Opening Br. at 17–18.
14 Holley v. Nipro Diagnostics, Inc., 2015 WL 4880418, at *2 (Del. Ch. Aug. 14, 2015).
15 Pl.’s Opening Br. at 18.
4 C.A. No. 2022-1179-KSJM February 14, 2024 Page 5 of 7
At this stage, Javice could seek leave to amend her complaint to add a claim
for entitlement to advancement in connection with this category of expenses. The
defendants could reassert the arguments made in connection with the Rule 88 Motion
in response. There might be other ways to resolve this issue, including a negotiated
resolution. But a Rule 88 motion is not the appropriate vehicle for presenting this
issue to the court for resolution.
B. The Insurance Work Objection
Javice demanded advancement for the expenses she incurred in attempting to
obtain insurance coverage after JP Morgan refused her demand. 16 In her complaint,
Javice did not seek advancement in connection with this category of billing entries.
Consequently, I did not address her entitlement to advancement for this issue in my
May 8 Ruling. Javice argues that fees incurred in pursuit of insurance coverage are
included in fees-on-fees, but that is not so. Fees-on-fees do not cover fees incurred in
this action. Once again, Javice cannot shoehorn this request into a Rule 88 Motion.
As with the Counterclaims Objection, Javice could seek leave to amend her
complaint to add a claim for entitlement to advancement in connection with the
insurance work. The defendants can reassert their arguments made in connection
with the Rule 88 Motion in response. Again, a Rule 88 motion is not the appropriate
vehicle for presenting this issue to the court for resolution.
16 Id. at 22–25.
5 C.A. No. 2022-1179-KSJM February 14, 2024 Page 6 of 7
C. The Round-Hour And Block-Billing Objections
The defendants argue that certain “round-hour” billing entries should not be
advanced because it is “mathematically improbable that 44% of [the time-keeper’s]
time was spent in round hours if time was being properly recorded in six-minute
increments.” 17 JP Morgan argues that statistics indicates that “approximately 10%
of entries should be round hours[.]” 18 Javice asserts that the time-keeper’s entries
were a product of how the time-keeper structured his day. 19 To this assertion, the
defendants argue that after they brought up the issue to Javice, the time-keeper’s
entries no longer were disproportionately whole numbers. 20
The defendants also argue that certain time entries constitute “egregious”
block-billing, which has prevented the defendants from assessing the reasonableness
of the advancement demand. 21 In support of their block-billing objection, the
defendants point to a single District of Delaware case that concerned an award of
attorney’s fees, not advancement. 22
17 Dkt. 82 (“Defs.’ Answering Br.”) at 31–32.
18 Id.
19 Pl.’s Opening Br. at 29.
20 Defs.’ Answering Br. at 31–32 (citing Pl.’s Opening Br. at 29).
21 Id. at 32–33.
22 Id. (citing Blattman v. Siebel, 2021 WL 7411946, at *4 (D. Del. Aug. 10, 2021)
(Special Master’s Report and Recommendation), adopting report and recommendation as modified, 2021 WL 7209226 (D. Del. Dec. 6, 2021)). In Blattman, the court found that its ability to adequately review invoices had been stymied by counsel’s use of block-billing and redactions. 2021 WL 7411946, at *4. The alleged block-billing here was not combined with redactions that would stymie review.
6 C.A. No. 2022-1179-KSJM February 14, 2024 Page 7 of 7
This court has held that “[a]dvancement is not the proper stage for a detailed
analytical review of the fees, whether in terms of the strategy followed or the staffing
and time committed.” 23 With a good faith certification from counsel, fees are
generally advanced. 24 Counsel certified that the fees incurred were actually incurred
and that they were reasonable, and the court has no reason to doubt that averment
at this stage of the proceedings. 25 The defendants’ objections to these categories of
expenses are overruled.
IT IS SO ORDERED.
Sincerely,
/s/ Kathaleen St. Jude McCormick
Chancellor
cc: All counsel of record (by File & ServeXpress)
23 Duthie v. CorSolutions Med., Inc., 2008 WL 4173850, at *2 (Del. Ch. Sept. 10, 2008).
24 Id.
25 Dkt. 80, Barlow Aff. ¶¶ 4, 10.