Litigators Score Victory by Obtaining Court Order Requiring Plaintiff to Pay Client’s Legal Fees

Kane Kessler successfully obtained advancement of legal fees on behalf of its client in connection with a litigation commenced against the client by his former employer in the Superior Court of California, County of San Diego. The client was sued by its former employer, a network technology company, which asserted causes of action for, among other things, breach of contract and breach of fiduciary duty in connection with the client’s alleged misappropriation of confidential information. The indemnification agreement between the client and the former employer required the company to advance all expenses, including attorneys’ fees, incurred by the client in any litigation relating to his role as a corporate officer. Such “advancement” provisions are a common feature of employment agreements of high level executives and provide corporate officials with immediate interim relief from the personal out-of-pocket financial burden of paying significant expenses involved with legal proceedings. Relying on the legal arguments advanced by Kane Kessler, the Court granted the motion to compel the company to advance such expenses, holding that under Delaware law “mandatory advancement” provisions are broadly construed and rejecting the former employer’s argument that advancement was not available because the litigation was not brought “by reason of the fact” of the client’s position as an officer of the company. Accordingly, the client’s fees for this litigation will be paid by his former employer who brought the lawsuit. The attorneys for the Firm who represented the client were Jeffrey Daichman and Jonathan Sabin of the firm’s Litigation Department.  See AMIE Inc. v. Tagg, No. 37-2022-22153 (Cal Super. Ct.) (San Diego Cnty)