Delaware Business Litigation Report

Federal Court Permits Reconsideration of Fees and Costs Award, and Imposes Them Entirely on Other Defendant for Bad-Faith Conduct

Money Centers Of America, Inc. v. Regen, No. Civ. A. No. 04-1516-KAJ, 2005 WL 3309610 (D.Del. Dec. 6, 2005). This Memorandum Order ruled on three motions related to the Court's Order of October 17, 2005 ("October Order"): (1) reconsideration or, in the alternative, alter or amend judgment; (2) Protective Order related to depositions; and (3) stay, pending appeal. The October Order granted relief to plaintiffs Money Centers of America, Inc., and Available Money Inc., to reopen the Order to allow the settlement agreement between the parties to be entered on the record and permitted defendant Available Money to take additional discovery. The Court ruled that: (1) defendant Coast ATM and Mrs. Regen would not be liable to the extent of the attorney fees and costs incurred with regard to the October motion to reopen the judgment; (2) that Coast ATM's motion for reconsideration was appropriate; (3) denied the relief requested as moot with respect to the relief sought from earlier Delaware-based depositions; and (4) denied Defendant Mr. Regen's motion to the extent that it would have relieved him from bearing all attorney fees and costs related to the October Order. This proceeding resulted on account of the October Order. Defendant Coast ATM filed the motion for reconsideration of the October Order because it was held jointly and severally liable along with Defendant Mr. Regen for attorney fees and costs when it was Mr. Regen's misconduct that primarily invited the attorney-fee and costs award as sanctions. The Court therefore held that because the record did not suggest any bad-faith conduct on part of Defendant Coast ATM, the fees and costs should be absorbed only by Mr. Regen. Additionally, the court held that because Mrs. Regen was not a defendant, she would likewise not shoulder the fees and costs either. The Court denied the motion requesting a protective order for the depositions earlier agreed by the parties to be taken in California, rather than Delaware as moot. It also denied a stay pending appeal as moot. The Court had sanctioned Mr. Regen for litigation misconduct and observed that it was his failure to pay his "portion of the settlement agreement that required reopening of this case." As a result, the Court imposed the entire fees and costs incurred to reopen the case on him quoting Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991) that "a court may assess attorney's fees when a party has 'acted in bad faith, vexatiously, wantonly, or for oppressive reasons' ... [w]e discern no basis for holding that ... the rules displaces the inherent power to impose sanctions for the bad-faith conduct...." Authored by: Raj Srivatsan 302 888 6831 rsrivatsan@morrisjames.com Share