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Court Of Chancery Awards Litigation Fees Advancement Under LLC Agreement And Fees On Fees For Present Suit

Joyce C. Delucca v. KKAT Management, L.L.C. et al., C.A. No. 1384-N, 2006 WL 224058 (Del. Ch. Jan. 23, 2006). This case was decided on a motion for judgment on the pleadings. Plaintiff sought to obtain advancement of attorney fees allegedly contractually agreed, to defend a New York action and fees on fees for initiating and prosecuting this action. The plaintiff was sued in the New York action by affiliates-entities of her then employer. This action originates from the alleged breach of fiduciary and contractual duties and claims against plaintiff filed in the New York action. Relying on Steifel v. Cochran, 809 A.2d 555 (Del. 2002) and its progeny, particularly Tafeen v. Homestore, 2005 WL 1314782 (Del. Ch. May 26, 2005), the court rejected the defendants' arguments and held that plaintiff was additionally entitled to fees on fees. The court emphatically supported Delaware's public policy driving advancement provisions under its law, to provide support to key personnel. Distinguishing 8 Del. C. §145 and LLC advancement provisions, the court exhaustively examined the operating agreement featuring the contractually-agreed advancement and indemnification provisions and using rules of statutory interpretation, it interpreted the meaning of "indemnified member," "operations" and "affairs." The court concluded that the plaintiff was entitled to advancement for defending against the New York action under the terms of the operating agreement and fees on fees for this litigation. Authored by: Raj Srivatsan 302-888 6831 rsrivatsan@morrisjames.com Share

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