Cross-Defendant Sought, But Did Not Get, $352,790.50 In Fees.
Cardiodiagnostic Imaging Inc. (Cardio), whose president was Mr. Kay, sued two parties who eventually took over a commercial leased space when Cardio encountered business problems. The two defendants denied that a business sale agreement had been reached with Cardio or Mr. Kay, but they brought a protective cross-complaint in the event a contract was found. Cardio and the defendant occupying its former space did have leases with a landlord, and the leases had fees clauses. The two defendants defensed the Cardio suit, dismissing their cross-complaint after the lower court found no business sale agreement had been reached. Mr. Kay then sought $352,790.50 in fees as the “successful” cross-defendant. The lower court denied the fee request.
The 2/1 DCA affirmed in Bledin v. Kay, Case No. B285852 (2d Dist., Div. 1 July 26, 2019) (unpublished).
The reason was the lack of a contract with any fees provision between Cardio and the two defendants. There were an email and a draft agreement, but no fees clause in either. Mr. Kay then argued that the lease fees clause provided him fee entitlement, but that did not work because (1) Kay was not a party to either lease; (2) the lease fees clauses did not encompass the cross-complaint claims; and (3) Kay never stood in the shoes of any party to the lease.