Multi Case Name

Court of Chancery of Delaware·Decided July 31, 2025·No. Multi Case Filing·Published

Opinion

EFiled: Jul 31 2025 02:25PM EDT Transaction ID 76767931

Case No. Multi-Case

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE BREMERTON CELLULAR ) CONSOLIDATED TELEPHONE COMPANY LITIGATION ) C.A. No. 5949-VCL

IN RE SALEM CELLULAR ) CONSOLIDATED TELEPHONE COMPANY LITIGATION ) C.A. No. 6886-VCL

IN RE PROVO CELLULAR ) C.A. No. 6887-VCL TELEPHONE COMPANY LITIGATION )

IN RE BLOOMINGTON CELLULAR ) C.A. No. 6888-VCL TELEPHONE COMPANY LITIGATION )

IN RE SARASOTA CELLULAR ) C.A. No. 6889-VCL TELEPHONE COMPANY LITIGATION )

IN RE BRADENTON CELLULAR ) C.A. No. 7030-VCL TELEPHONE COMPANY LITIGATION )

IN RE LAS CRUCES CELLULAR ) C.A. No. 7031-VCL TELEPHONE COMPANY LITIGATION )

IN RE ALTON CELLTELCO ) C.A. No. 7032-VCL LITIGATION )

IN RE GALVESTON CELLULAR ) C.A. No. 7033-VCL PARTNERSHIP LITIGATION )

IN RE BELLINGHAM CELLULAR ) C.A. No. 7036-VCL PARTNERSHIP LITIGATION )

IN RE RENO CELLULAR TELEPHONE ) C.A. No. 7042-VCL COMPANY LITIGATION )

MEMORANDUM OPINION

ADDRESSING MOTION FOR FINAL DISTRIBUTION

Date Submitted: April 21, 2025 Date Decided: July 31, 2025

Carmella P. Keener, COOCH AND TAYLOR, P.A., Wilmington, Delaware; Norman M. Monhait, REID COLLINS & TSAI LLP, Wilmington, Delaware; Michael A. Pullara, Houston, Texas; Allan B. Diamond, Justin Strother, DIAMOND MCCARTHY LLP, Houston, Texas; Attorneys for Michael Pullara and Moving Plaintiffs.

Mary S. Thomas, THOMAS LAW LLC, Wilmington, Delaware; Attorneys for Darr Barshis and Ajamie LLP.

LASTER, V.C.

Michael A. Pullara and Ajamie LLP litigated these cases together under a hybrid fee arrangement. They agreed to charge their clients 50% of their published rates and, if they obtained a recovery, split a contingency fee. Pullara would get a fixed 30% of the contingency fee and Ajamie a fixed 20%. They would split the other 50% in proportion to their lodestars. They documented the arrangement in a fee- sharing agreement.

By the time they secured a favorable settlement, Pullara and Ajamie were fighting over the fee. The parties placed the recovery in an escrow account. Pullara and Ajamie distributed the lion’s share to the clients, made an initial distribution to themselves, and joined issue over the remaining $31,049,015.01.

Pullara had the primary client relationships, and he led the clients in contesting Ajamie’s entitlement to a fee. Among other things, they argued that the fee-sharing agreement was unenforceable under the Texas Disciplinary Rules of Professional Conduct. The court agreed, invalidated the fee-sharing agreement, and awarded Ajamie a fee of $15,814,340.14 under principles of quantum meruit. If the fee-sharing agreement had been valid, Ajamie would have received more. After a distribution to Ajamie, $17,862,185.15 remained in the escrow account.

Pullara now claims he is entitled to $16,469,753.20. That would leave a balance of $1,392,431.95 in the account.1 Pullara proposes for the balance to go to the clients. He maintains that the court’s invalidation of the fee-sharing agreement means he is

1 Neither amount includes interest. The escrow account bears interest, and

Pullara and the clients are entitled to a proportionate share of the accrued interest when the escrow agent makes distributions to them.

entitled to those funds as well. Absent the ethical violation that rendered the fee- sharing agreement void, Ajamie would have received them. Pullara has disclaimed the increased amount, saying he does not want to profit from an ethical violation.

That is a laudable sentiment, but Pullara does not have any claim to those funds. Under principles of unclean hands, Pullara cannot benefit from the invalidation of the fee-sharing agreement. Pullara and Ajamie both committed the ethical violation that rendered the fee-sharing agreement invalid. If anything, because Pullara had the primary client relationship, Pullara was more responsible for the oversight. It would be inequitable for Pullara to benefit at the expense of his clients by getting more than he would have received if the unethical fee-sharing agreement remained in place. Pullara’s show of generosity reflects only the outcome equity demands.

Pullara also offers an inflated calculation of his entitlement. If the fee-sharing agreement had been valid, Pullara would have received a total fee of $15,463,221.76. He cannot receive more than that.

Taking into account fees Pullara already received, Pullara is entitled to $14,167,344.02. The clients are entitled to $3,694,841.13. Both Pullara and the clients are entitled to interest on their share. The escrow agent must make the appropriate distributions.

I. FACTUAL BACKGROUND

The facts are drawn from the parties’ submissions and the court’s previous decision on Ajamie’s fee.2 As the court noted in that decision,

The record contains a large number of exhibits, affidavits, declarations, and other documents that contain various calculations relating to how many hours each attorney worked, how much each attorney billed, what their lodestars would have been, when payments have been made and how much, and what the value of the services. Many of the documents are inconsistent or contain gaps. The court has spent considerable time deciphering the documents and striving to reach values that are as objectively correct as possible.3

That observation applies here too. A. The Squeeze-Outs, Client Agreements, and Sharing Agreement For historical reasons, AT&T, Inc. came to hold a majority interest in partnerships that owned cellular telecommunications licenses covering particular geographic areas. AT&T periodically engaged in freeze-out transactions that eliminated the minority investors in those partnerships.

Pullara is a Texas-licensed solo practitioner who had litigated successfully against AT&T during an initial round of freeze-outs. When AT&T engaged in a second round, many of the minority partners (the “Clients”) signed agreements retaining Pullara as counsel (the “Client Agreements”).

As a solo practitioner, Pullara needed help litigating against AT&T. To that end, each Client Agreement authorized Pullara to associate with joint venture

2 In re Bremerton Cellular Tel. Co. Litig. (Ajamie Fee Decision), 328 A.3d 330 (Del. Ch. 2024).

3 Id. at 337 n.16.

counsel. The Client Agreements committed Pullara and joint venture counsel to bill their hourly fees at 50% of their published rates. The attorneys also would be reimbursed for their expenses. As additional compensation, Pullara and joint venture counsel would receive a contingency fee equal to 20% of any recovery. Some of the Clients later signed amendments that raised the contingency fee percentage to 30% in exchange for eliminating their obligation to pay hourly fees. The Client Agreements made clear that adding joint venture counsel would not affect the size of the contingency fee.

The Client Agreements noted that Pullara intended to work with Ajamie. As foreshadowed, Pullara associated with Ajamie as joint venture counsel, and they agreed on how they would share any contingency fee (the “Sharing Agreement”). Texas law governed the Sharing Agreement.

Under the Sharing Agreement, Pullara would receive a fixed 30% of the contingency fee and Ajamie a fixed 20% (the “Fixed Tranches”). They would allocate the remaining 50% based on their relative contributions to the case, measured by their lodestars (the “Allocated Tranche”). B. Pullara and Ajamie Disagree About The Contingency Fee.

Pullara and Ajamie had not planned to file in Delaware, but in 2009, AT&T filed preemptive declaratory judgment actions in this court. Litigating the resulting cases took a long time. In 2022, the court issued a post-trial decision in a bellwether case. In 2023, the Delaware Supreme Court affirmed. In 2024, the parties reached a global settlement keyed off the bellwether result. In the settlement, AT&T agreed to pay total consideration of $134,371,982.85. For purposes of the current motion, the

parties agree that the recovery generated a contingency fee of $29,606,757.66 (the “Contingency Fee”).

Free access — add to your briefcase to read the full text and ask questions with AI

Multi Case Name, (Del. Ct. App. 2025).

Multi Case Name (Multi Case Name) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

SmithKline Beecham Pharmaceuticals Co. v. Merck & Co., Inc.
766 A.2d 442 (Supreme Court of Delaware, 2000)
Nakahara v. NS 1991 American Trust
718 A.2d 518 (Court of Chancery of Delaware, 1998)