Prevailing Party/Section 1717: There Can Be Dual “Prevailing Parties” In Contractual Dispute.

Prevailing Alter Ego Defendant Entitled To Fee Recovery, Despite Fact That Plaintiff Prevailed Against LLP Defendant.

            What happened in Burkhalter Kessler Clement & George LLP v. Hamilton, Case No. G054337 (4^th Dist., Div. 3 Jan. 8, 2018) (published) is that plaintiff prevailed in a sublease dispute against an LLP defendant but did not prevail against an alter ego individual defendant who was the managing partner of the LLP defendant.  The trial court granted plaintiff’s motion for fees against the LLP, but denied alter ego defendant’s motion for fees against plaintiff (to the tune of $105,928, half the fees spent in the joint defense of both defendants) as to the alter ego defendant.

            The fee denial as to the alter ego defendant was reversed and remanded. 

            The appellate court made clear that there can be more than one prevailing party in a multi-party dispute, as here.  Each party to a suit deserves its/her/his own examination as far as prevailing status.  Alter ego defendant prevailed such that she was entitled to fees no matter what happened with regard to the LLP defendant.  However, upon remand, the trial court was instructed to apportion fees incurred by alter ego defendant versus those incurred in the defense of the jointly represented LLP defendant.

            Justice Moore authored the 3-0 panel decision.