Very interesting, but not funny.
In Kayne Anderson Private Investors v. Colak, Case No B239111 (2d Dist., Div. 2 May 16, 2013) (unpublished), plaintiffs got hit with a multimillion arbitration award based on breaching a Stock Purchase Agreement representation/warranty by providing inaccurate information (although not being found liable for fraud). A CEO of one of the parties in the arbitration was found to be credible by the arbitrator.
Plaintiffs then attempted to sue CEO defendant in court, claiming equitable indemnity and attempting to recoup arbitration defense costs under the “tort of another” doctrine.
The lower court eventually granted a demurrer without leave with respect to plaintiffs’ action against CEO.
All the lower court orders were sustained. Although recognizing that “tort of another” is an exception to the American rule for fee recovery, the appellate court found that it did not apply in the context where plaintiffs (as defendants in the arbitration) were attempting to recoup fees and expenses incurred in defending against defendants’ own wrongdoing. (Davis v. Air Technical Industries, Inc., 22 Cal.3d 1, 6 (1978); Santa Clara Valley Water Dist. v. Olin Corp., 655 F.Supp.2d 1048, 1063 (N.D. Cal. 2009).)
Topsy turvy: The Barnum and Bailey greatest show on earth--L'Auto Bolide thrilling dip of death--M'lle Mauricia de Tiers, the fearless, young and fascinating Parisian, in a dreadful, headlong leap, loop and topsy turvy plunging somersault with an automobile . . . c1905. Library of Congress.