Connelly Gallagher, LLP v. Fred Earl Reynolds, III

• Court: Delaware Court of Common Pleas
• Decided: August 7, 2023
• Docket: CPU4-20-003274
• Status: Published

Opinion

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

CONOLLY GALLAGHER, LLP ) ) Plaintiff, ) ) v. ) ) CPU4-20-003274 FRED EARL REYNOLDS, III ) ) Defendant. )

Submitted: May 19, 2023 Decided: August 7, 2023

Josiah R. Wolcott, Esq. Fred Earl Reynolds, III 1201 North Market Street, Suite 2000 5034 Overlook Road NW Wilmington, DE, 19801 Washington, D.C. 20016 Attorney for Plaintiff Self-represented Defendant

ORDER AWARDING DAMAGES

Surles, J. This case stems from an agreement between the parties (the “Fee

Agreement”), whereby Plaintiff Connolly Gallagher, LLP (“Connolly Gallagher”)

agreed to represent Defendant Fred Early Reynolds, III (“Mr. Reynolds”) in

litigation against Mr. Reynolds’ former employer in the United States District Court

for the District of Delaware (the “Employment Case”). In exchange, Mr. Reynolds

agreed to render payments to Connolly Gallagher for its legal representation,

charged at the rates set forth in the Fee Agreement.

On November 11, 2020, Connolly Gallagher initiated this breach of contract

action against Mr. Reynolds to recover unpaid legal fees incurred under the Fee

Agreement, totaling $30,426.08. On July 20, 2021, this Court granted Connolly

Gallagher’s motion for summary judgment on the issue of liability alone, as there

existed genuine issues of material fact as to damages. The parties engaged in

mediation on the issue of damages, but without success; so, the matter was scheduled

for an inquisition hearing for the Court to determine damages.1

The inquisition hearing was held on May 19, 2023, during which the Court

heard testimony from four witnesses, and received exhibits into evidence.2 At the

1 See CCP Civ. R. 56(d). 2 Mr. Reynolds testified on his own behalf. The Court also heard testimony from three witnesses on behalf of Connolly Gallagher, all of whom were employees of Connolly Gallagher: Christina Phillips, Timothy Holly, Esq., and Lauren DeLuca, Esq. Connolly Gallagher submitted nine exhibits into evidence. 2 conclusion of the hearing, the Court reserved decision. This is the Court’s Final

Decision and Order on the issue of damages.

FACTUAL BACKGROUND

Based on the testimony and evidence adduced at the inquisition hearing, the

Court finds the following relevant facts:

On June 20, 2019, Mr. Reynolds executed the Fee Agreement, pursuant to

which Connolly Gallagher agreed to represent him in the Employment Case, for

which they would charge a specified hourly rate.3 Prior to the execution of the Fee

Agreement, Connolly Gallagher had represented Mr. Reynolds in a pre-litigation

capacity and, as of the date of the Fee Agreement, Mr. Reynolds had an existing

balance due and owing.4

Mr. Reynolds’ legal claim in the Employment Case was far from unassailable.

From the outset, the parties acknowledged a statute of limitations issue, but Connolly

Gallagher developed a legal strategy to potentially overcome that hurdle. As part of

the legal strategy, Connolly Gallagher amended the complaint to focus on a different

cause of action. However, before doing so, Connolly Gallagher advised that

opposing counsel would likely challenge the effort, and it explicitly cautioned that

3 Pl. Ex. 9. 4 Id.; Pl. Ex. 2. 3 success was not guaranteed.5 Nevertheless, Mr. Reynolds elected to proceed with

litigation.

During the litigation, Connolly Gallagher diligently communicated with Mr.

Reynolds regarding the litigation expenses.6 Connolly Gallagher consulted with Mr.

Reynolds before taking certain actions, affording consideration to costs,7 and

invoices reflecting fees incurred were submitted to Mr. Reynolds each month for

payment.8 As time progressed, so did the communications from Connolly Gallagher

regarding the mounting balance of unpaid legal fees.9

Despite the apparent transparency regarding litigation expenses, Mr.

Reynolds failed to remit payment in full. Finally, after numerous communications

relating to his ongoing non-payment,10 Connolly Gallagher moved to withdraw as

counsel. While the motion to withdraw was pending, Connolly Gallagher—which

had continued to discuss the case with Mr. Reynolds regardless of his non-

payment—sent Mr. Reynolds an e-mail, apprising him of the legal landscape and

upcoming deadlines, as he would have to proceed pro se or with alternate counsel.11

5 See Pl. Ex. 2; Pl. Ex. 7. As anticipated, opposing counsel challenged the cause of action set forth in the amended complaint by filing a motion for judgment on the pleadings. 6 See Pl. Ex. 1-8. 7 For example, Connolly Gallagher suggested Mr. Reynolds work one of the firm’s highly recommended associates in the early phases of the litigation as it would “help keep costs under control,” and noted financial impact of discovery strategies. Pl. Ex. 2 at p. 3; Pl. Ex. 8 at p. 5. 8 Pl. Ex. 1. 9 See Pl. Ex. 3-6. 10 See Pl. Exs. 2-6. 11 Pl. Ex. 6. 4 In response, Mr. Reynolds asked Connolly Gallagher for a referral and thanked the

attorneys for “actively producing ways to increase the chances for success for [the]

case.”12 Mr. Reynolds also noted that he would “continue to make payments to

satisfy the balance.”13 However, that did not occur. Consequently, Connolly

Gallagher filed the present suit to recover the unpaid legal fees.

PARTIES’ POSITIONS

Connolly Gallagher argues that the fees charged to Mr. Reynolds were

reasonable based on its experience, the complexity of the case, and relative to the

rates of other law firms in the community. Consistent with the invoices admitted

into evidence at the damages hearing, Connolly Gallagher requests damages for the

legal work it performed under the Fee Agreement, totaling $30,426.08.14

Mr. Reynolds’ argument is less delineated; the precise basis and extent to

which he challenges the legal fees was not clearly presented. He did not claim that

the hours charged were artificially inflated or disproportionate to the work

performed. He did not introduce evidence to contest the reasonableness of the rate

agreed upon,15 nor did he impute bad faith or wrongdoing in Connolly Gallagher’s

12 Id. 13 Id. 14 Pl. Ex. 2. 15 Mr. Reynolds insinuated that, in advance of the damages hearing, he consulted with other legal professionals regarding the strength of the Employment Action and the decision to move forward. However, he failed to call any witnesses to testify to those communications and, on objection from counsel for Connolly Gallagher, such testimony was excluded as hearsay. 5 general legal strategy. Rather, he seemed to suggest that he should not be required

to pay fees incurred from work performed in the Employment Action beyond the

filing of the amended complaint given the “statute of limitations issue.”

DISCUSSION

The sole focus of an inquisition hearing is “the amount of damages owed to

the plaintiff, which is determined by the ... judge.”16 The Court’s finding on damages

must be based on a preponderance of the evidence, meaning “the side on which the

greater weight of the evidence is found.17

The only issue before the Court is the amount of damages owed to Connolly

Gallagher for Mr. Reynolds breach of the Fee Agreement. Yet the argument asserted

by Mr. Reynolds at the inquisition hearing—that he should be relieved of any

obligation to pay fees incurred after the filing of the amended complaint—goes to

liability, not the calculation of damages. The Court previously found Mr. Reynolds

liable for breach of contract and entered judgment in favor of Connolly Gallagher;

thus, Mr. Reynolds’ argument is moot.

In contrast, Connolly Gallagher presented cogent evidence as to the damages

it incurred as a result of Mr. Reynolds’ breach of the Fee Agreement. It offered

unrefuted testimony regarding the fees accrued in its representation of Mr. Reynolds.

16 Jagger v. Schiavello, 93 A.3d 656, 659 (Del. Super. Ct. 2014). 17 Id. 6 That testimony was supported by documentary evidence, including invoices

depicting the hours worked on Mr. Reynolds' case. 18 The Court finds that Connolly

Gallagher has proven, by a preponderance of the evidence, that it suffered damages

in the amount of $30,426.08.

CONCLUSION

For the reasons set forth above, the Court finds damages in the amount of

$30,426.80 owed to Connolly Gallagher by Mr. Reynolds, plus pre and post­

judgment interest at a rate of 10.5% until satisfied. 19

obert H. Surles, Judge

18 Pl. Ex. 1. 19 6 Del. C. § 2301. 7