Also, Hong Kong Law Was Consonant With California Reciprocity Law on Fees.
Dampier v. Solar & Environmental Technologies Corp. (SETC), Case No. G045805 (4th Dist., Div. 3 Oct. 8, 2013) (unpublished) (authoring justice: Justice Rylaarsdam), involves a case which co-contributors Marc and Mike were involved in, up to right before the appeal producing this decision. Marc argued the motion for attorney's fees in the trial court, on behalf of the prevailing party, SETC, as well as the motion that shifted the remainder of the case to Hong Kong arbitration.
The essential facts--and we stress, essential, given a convoluted history--were these: (1) defendant SETC won the sustaining of an eventual demurrer without leave, which left remaining counts as to defendants Derby and Speiser (obviously alleged to be involved with SETC); (2) the defense won a motion to compel arbitration in Hong Kong and stay the litigation except as against Derby and Speiser under an arbitration fees clause governed by Hong Kong law; (3) SETC obtained a several dismissal as to it; and (4) SETC, under Hong Kong law based on a shareholder agreement choice of law provision, obtained an attorney’s fees order of over $157,000.
Aggrieved plaintiffs appealed, but lost because they could not demonstrate any reversible error.
Plaintiffs first argued that the lower court lacked jurisdiction to award fees to SETC based on the stay order. No, CCP § 1281.4 did not oust the trial judge of jurisdiction and the lower court retained limited jurisdiction to award fees notwithstanding the stay pending arbitration. (Dial 800 v. Fesbinder, 118 Cal.App.4th 32, 45-46 (2004).) This principle was reinforced in this instance, because SETC’s dismissal with prejudice was entered such that nothing remained to be done for jurisdictional purposes; and, even if the lower court acted in excess of its jurisdiction (but not basic jurisdiction), plaintiffs failed to appeal from the dismissal order such that it was law of the case.
That brought the appellate court to the merits of the fees award. Although we could bore you to death, the upshot is that the Hong Kong fees clause in a shareholder agreement resulted in application of the so-called "English Rule" – the prevailing party was entitled to fees, and SETC prevailed. (Applera Corp. v. MP Biomedicals, LLC, 173 Cal.App.4th 769, 790 (2009) [Swiss law choice of law provision; Swiss prevailing party determination dictated same result].) End result, fee award affirmed.
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