Reynolds Was Controlling, Not Blickman Turkus.
What happened in Kaddu, Inc. v. Gauze, Case No. H045090 (6th Dist. Nov. 27, 2019) (unpublished) is that a cross-complainant filed a contractually-based cross-complaint against nonsignatory cross-defendants where they were alleged to be alter egos of the primary cross-defendant. Cross-complainant sought attorney’s fees, in addition to damages, based on the theory that the nonsignatory cross-defendants were in actuality the “Buyers” under a business purchase agreement given the alter ego theory predicate. (Of course, the business purchase agreement had a contractual “prevailing party” fees clause.) Nonsignatory cross-defendants successfully moved for summary judgment, but the lower court denied their request for attorney’s fees because they were not defined “buyers” under the business purchase agreement, relying on Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4th 858, (2008) in reaching its conclusion.
The Sixth District reversed. The reason why Blickman Turkus was distinguishable had to do with cross-complainant’s alter ego allegations, which under Reynolds Metals Co. v. Alperson, 25 Cal.3d 124, 129 (1979) [our Leading Case No. 5] would have exposed nonsignatory cross-defendants to exposure had the alter ego allegations had been proven. They were not, such that Reynolds controlled over Blickman Turkus.