Defendant Gravitated More On The “Winning Side,” Although Mixed Bag For Everyone.
This next case takes us back to law school for co-contributor Mike. He had a great Uniform Commercial Code professor in law school (E. Hunter Taylor, who is a professor emeritus at Rutgers-Camden Law School but is still practicing law in New Jersey), and this case is must reading on how an appellate court steered through various UCC provisions to enforce certain UCC disclaimers and liability limitations to a significant extent. However, as we must, we talk about the attorney’s fees aspect of the case—however, this case is must reading for practitioners in the UCC area.
In City of Imperial v. Ferguson Enterprises, Inc., Case No. D072737 (4th Dist., Div. 1 April 15, 2019) (unpublished), City eventually won compensatory damages of $626,232.50 against a defendant for installation of defective products by a manufacturer, although City did not win its “grand banana” of much more exorbitant exposure for the defective system which was installed (close of $4 million claimed during the trial). City wanted substantial contractual attorney’s fees based on a fees clause, but the trial judge would have none of it.
The fee denial was affirmed on appeal. The reason was that under Civil Code section 1717, the case was a “mixed bag” for both sides, especially City wanting fee recovery, such that no one really prevailed in a pragmatic sense. Although City did win on the installation issue, it lost on the bigger defective systems theory of the case against defendant. In the end, the defense got much closer to its goal of evading large exposure—with some indications in closing argument that it admitted installation costs might be a legitimate exposure although advocating a zero-sum approach based on a stricter interpretation of the UCC disclaimers/limitations. However, plaintiff did not clearly prevail, so that the fee denial was not erroneous.
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