OptimisCorp v. William Atkins, C.A. No. 2020-0183-MTZ

Background

Defendants (Atkins, Smith, Waite) served as derivative plaintiffs and, after arbitration, secured an approximately $6.8 million award nominally on OptimisCorp’s behalf (compensatory damages, interest, $1,435,107.90 in attorneys’ fees awarded by the arbitrator, and costs).
Defendants’ former counsel, Bayard, had a 30% contingent-fee engagement with the defendants; the arbitrator awarded Bayard a lodestar-based fee (with multiplier) rather than enforcing the 30% contingency.
Defendants (through counsel) received the Award, did not immediately turn it over to Optimis, and indicated an intent to pay Bayard additional contingent fees and to distribute remaining funds pro rata to selected stockholders (excluding certain alleged wrongdoers); defendants also levied Rancho accounts receivable, harming the company’s cash flow.
Optimis sued in the Court of Chancery seeking (inter alia) a declaratory judgment that the Award is derivative and must be paid to the corporation; the court ruled the Award is derivative and ordered defendants to deliver the Award to Optimis.
Optimis amended to assert breach-of-fiduciary-duty and unjust-enrichment claims based on defendants’ withholding of the Award and the levy; defendants moved to dismiss and separately sought a court award of additional attorneys’ fees for Bayard above the arbitrator’s fee award.
The Court denied the motion to dismiss as to breach of fiduciary duty and unjust enrichment (claims survive pleading stage) and denied defendants’ request for additional fees, deferring to and enforcing the arbitrator’s fee determination.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do derivative plaintiffs owe fiduciary duties to the corporation (Optimis) as well as fellow stockholders?	Derivative plaintiffs act as fiduciaries for both the corporation and all shareholders with respect to the derivative cause of action.	Any fiduciary role is only to fellow stockholders, not to the corporation itself.	Court: Derivative plaintiffs owe fiduciary duties to the corporation and all shareholders with respect to the derivative asset.
Did defendants breach those fiduciary duties by withholding the Award and related conduct?	Withholding the Award, failing to seek judicial guidance, not holding proceeds in interest-bearing account, and levying accounts were self‑interested actions that prejudiced Optimis.	No actionable breach: duties limited; remedies limited (e.g., disqualification); allegations insufficient as a matter of law.	Court: Allegations are sufficiently pleaded to state a breach claim; dismissal denied; remedies (including damages) to be resolved after discovery.
Is Optimis’s unjust enrichment claim viable given overlap with breach claim?	Defendants were unjustly enriched and Optimis impoverished by withholding the Award plus levy and competitive conduct; unjust enrichment seeks restitution/accounting distinct from breach damages.	Claim is duplicative or fails because no separate enrichment or justification exists.	Court: Unjust enrichment is plausibly pleaded and not duplicative at this stage; claim survives.
May the Court award Bayard additional contingent fees beyond the arbitrator’s lodestar-based fee?	Bayard (via defendants) is contractually entitled to 30% (or more) of any common fund; court should enforce the engagement agreement to award additional fees.	Arbitrator already decided fee entitlement and awarded lodestar-based fees with multiplier; arbitration decision is binding.	Court: Denies additional-fee request; enforces arbitrator’s fee award and declines to re-adjudicate fees reserved to arbitration.

Key Cases Cited

Savor, Inc. v. FMR Corp., 812 A.2d 894 (Del. 2002) (pleading/motion-to-dismiss standards govern accepting well‑pleaded facts and reasonable inferences).
Central Mortgage Co. v. Morgan Stanley Mortgage Capital Holdings LLC, 27 A.3d 531 (Del. 2011) (construing the minimal "conceivability" standard for pleadings).
Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (U.S. 1949) (derivative plaintiff occupies a representative fiduciary position for class/corporation).
Ross v. Bernhard, 396 U.S. 531 (U.S. 1970) (derivative suits have dual aspects and protect corporate and shareholder interests).
Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031 (Del. 2004) (distinguishing derivative vs. direct claims; derivative recovery typically flows to the entity).
In re El Paso Pipeline Partners Derivative Litigation, 132 A.3d 67 (Del. Ch. 2015) (explains limited circumstances when a derivative recovery may be distributed to stockholders rather than the corporation).
Wied v. Valhi, Inc., 466 A.2d 9 (Del. 1983) (fiduciary may not profit at expense of those he represents; remedies tailored to misconduct).
Berger v. Pubco Corp., 976 A.2d 132 (Del. 2009) (Court of Chancery has broad equitable remedial discretion for fiduciary violations).