In a fifty-eight page Opinion issued today, Chancellor Bouchard analyzed and ultimately granted a motion to shift attorneys’ fees due to a party’s bad faith litigation tactics. Given the demanding standard of establishing “clear evidence” that a party acted in bad faith, the Chancellor discussed at length the extensive evidence that proved to His Honor that the accused party had in fact “acted in bad faith vexatiously during the course of this litigation.”
The Chancellor found clear evidence that the party acted in bad faith in the following, troubling ways: “(1) by intentionally attempting to destroy information on his laptop computer after the Court had entered an order requiring him to provide the laptop for forensic discovery, (2) by, at a minimum, recklessly failing to safeguard evidence on his phone, which he regularly used to exchange text messages with employees and which was an important source for discovery, and (3) by repeatedly lying under oath to conceal aspects of his secret extraction of information from Elting’s hard drive and the deletion of information from his laptop.”
To remedy these egregious violations, the Chancellor shifted a significant portion of the abused party’s attorneys’ fees. The Court shifted 100% of her fees’ incurred in prosecuting the sanctions motion, including the likely extensive fees paid to a forensic computer expert. The Court also shifted 33% of all of her fees incurred from the date of the first instance of the bad faith litigation. Given that this matter went to trial and given the extensive record created regarding the sanctions motion, the amount of fees to be shifted is likely to be substantial.
The Chancellor’s full Opinion in the matter of In re: Shawe & Elting LLC, et al. is available here.