Substantial Fees Against Public Agency Went Away For Now.
San Luis Obispo Local Agency Formation Com’m v. Central Coast Development Co., Case No. B304144 (2d Dist., Div. 6 Jan. 3, 2022) (published) establishes that where an indemnity provision in a public agency contract, even though potentially allowing for fee recovery, is void; there is no recovery of fees against the public agency.
What happened here is that earlier proceedings had determined that the indemnity agreement was not supported by consideration and the governmental agency had no statutory standing to impose the indemnity agreement at all. However, the trial judge awarded substantial fees of $172,850 to the City and $428,864 to the developer. But all of that went away on appeal. The reason was that voidability of a contract as to a public agency meant that it could neither enforce nor be liable on the contract, including fee recovery. Even more so, here, because the developer brought a meritless action against the governmental entity such that there was equity in not allowing the entity to be saddled with fees.
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