iac/interactivecorp v. O'Brien
2011 Del. LEXIS 411
| Del. | 2011Background
- O'Brien, a corporate officer, was indemnified by PRC under Florida-law provisions when he served as COO/CEO from 1998.
- IAC/InterActiveCorp acquired PRC in 2000 and assumed PRC's indemnification obligations to O'Brien.
- Arbitration between PRC and O'Brien regarding breaches and indemnification occurred in 2002–2005, with an Arbitration Award in 2005 denying PRC's claims and denying O'Brien's declaratory relief.
- O'Brien sought indemnification and advancement in Florida, where the litigation progressed until PRC filed for bankruptcy in 2008, staying the Florida action.
- IAC controlled PRC's defense in the Florida action, despite not being a party, and later the bankruptcy plan limited recoveries.
- In 2008, O'Brien filed in Delaware (Court of Chancery) seeking indemnification and advancement from IAC; the court delayed reliance on the statute of limitations and applied laches due to unusual circumstances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether laches can override the statute of limitations for indemnification claims. | O'Brien argues laches applies due to extraordinary circumstances. | IAC argues statute of limitations should govern and laches cannot override it. | Laches applied; extraordinary circumstances allowed ignoring the statute of limitations. |
| Whether the indemnification claim was timely under laches given proceedings in Florida and bankruptcy. | O'Brien promptly sought advancement and indemnification; control by IAC and bankruptcy supported delay. | Delay predates unusual circumstances and should be barred. | Delay not unreasonable; extraordinary factors justified timeliness under laches. |
| Whether the attorneys' fee awards, including contingency premiums, were reasonable. | Fees were incurred and reasonably charged for work performed, including premiums for success. | Premium fees were not incurred and amounts were excessive. | fees were reasonable; Court of Chancery did not abuse discretion. |
Key Cases Cited
- Adams v. Jankouskas, 452 A.2d 148 (Del. 1982) (equity aids the vigilant; laches concept)
- Reid v. Spazio, 970 A.2d 176 (Del. 2009) (relation of statutes and laches; timing considerations)
- Whittington v. Dragon Group, L.L.C., 991 A.2d 1 (Del. 2009) (delaware laches standards)
- Wright v. Scotton, 121 A. 69 (Del. 1923) (early laches and equitable timing principles)
- Stifel Financial Corp. v. Cochran, 809 A.2d 555 (Del. 2002) (statutory limitations and related doctrines)
- Scharf v. Edgcomb Corp., 864 A.2d 909 (Del. 2004) (fee awards; reasonableness standards)
- Mahani v. Edix Media Grp., Inc., 935 A.2d 242 (Del. 2007) (attorney's fees; contingency considerations)