$380,000 In Aggregate Fees To Three Defendants Was The Final Tally.
In Baharian-Mehr v. SGRL Investments, Inc., Case No. G048796 (4th Dist., Div. 3 Aug. 7, 2014) (unpublished), defendants in a general partnership dispute--where the original partnership agreement had a contractual fees clause favorable to prevailing parties—won a defense judgment in a multi-count complaint for an accounting, fiduciary duty breach, fraud, constructive trust, contractual breach, assault/battery, and declaratory relief brought by plaintiff who was a signatory to a partnership agreement addendum. The lower court then awarded three defendants the following respective amounts as against the losing plaintiff: $163,146.50 (out of a requested $300,954); $85,377.75 (out of a requested $88,674.75); and $130,677.25 (out of a requested $167,534.25).
Plaintiff lost all challenges to the fee awards on appeal.
Writing for a 3-0 panel, Justice Moore found that Civil Code section 1717 reciprocity principles applied because plaintiff would have recovered contractual fees had he prevailed. Plaintiff then argued that the second defendant was not entitled to fees because it was covered by the corporate defendant, a defendant which ultimately beat plaintiff, pursuant to the corporate indemnity provisions of Corporations Code section 317. This did not prevent recovery of fees under section 1717 because plaintiff “does not offer any argument why such a rule would be appropriate, leaving the corporation to hold the bag and the losing party with a get-out-of-attorneys-fees free card. It would frustrate the purposes of Corporations Code section 317 and leave the wrong party [the innocent, vindicated corporation] to pay the fees.” (Slip Opn., p. 7.) Because the claims were interrelated, no apportionment was required. Finally, the trial judge did reduce the requested fees such that he showed care in awarding the amounts he did. Affirmed across-the-board.