Equity: $346,993.39 Fee Recovery Under Illegal Contract Affirmed On Appeal

In Pari Delicto Exception Sustained the Fee Recovery.

            What happened in Assadian v. Parsi, Case No. G054037 (4^th Dist., Div. 3 Dec. 14, 2017) (unpublished) is that a business consultant, who apparently practiced law in an unauthorized manner, did not prevail on contract and other claims against his clients.  Just to make the suffering more severe, consultant plaintiff was socked with $346,993.39 in attorney’s fees based on a fees clause in the consultant agreement based on losing the contract claims against his former clients.  

           Knockout punch.  Sugar Ray Robinson v. Bobo Olson.  1956.  Library of Congress.

        On appeal, plaintiff basically said “unfair,” because you cannot award fees where the underlying contract is illegal, which happens to be the general rule under California law.  However, as with most things in life, there are exceptions.  One is the “in pari delicto” exception, which does allow recovery where both parties are not equally blameworthy.  Well, that one showed why fee recovery was not inequitable against consultant plaintiff, because here his activities resulted in the contract being found illegal.

            As far as the reasonableness of fees, plaintiff’s failure to make anything other than general objections did not carry the day under the abuse of discretion standard applicable to the amounts of fees awarded and the need to make specific objections to awarded fees.   (Lunada Biomedical v. Nunez, 230 Cal.App.4^th 459, 488 (2014).) 

            Acting Presiding Justice Moore authored the 3-0 panel decision.