Given That Plaintiffs Did Not Challenge Reasonableness Of Requested Fees, Judgment Modified To Allow Defendants Over $2.45 Million In Fees/Costs.
We have posted on a lot of cases about reversal of fortunes, and the next one is one of them. It may counsel that litigants need to oppose both fee entitlement and reasonableness of fees (or related “fee amount” issues) in order to avoid a colossal reversal of fortune.
In Pacifica Companies v. Patel, Case No. D066885 (4th Dist., Div. 1 July 14, 2017) (unpublished), litigation ensued over a letter of intent (LOI) about an Indio development project. Ultimately, plaintiffs lost on their claims but won on a limited cross-claim by one defendant. The trial judge denied fees to the defendants under an LOI fees clause, determining that the LOI was not a binding contract but only an “agreement to agree.”
The 4/1 DCA reversed and did something unusual—modified the judgment to award all defendant $2,453,977.50 in fees and costs (the requested amount). The reason for doing so was the appellate court’s conclusion that the LOI was a binding LOI (contractually) even if the parties could not further reduce the terms to a further writing. However, given that the plaintiffs never challenged the reasonableness of fees, that led the Court of Appeal to modify the judgment to award $2.45 million in fees and costs to the defendants and alter ego parties in light of its reversal based on fee entitlement! Quite a change in fortune.