Even a Partial Reversal Can See a Substantial Fee Award Goes POOF!
City of Novato v. Morgan, Case No. A130899 (1st Dist., Div. 3 Feb. 27, 2014) (unpublished) involved the scope of personal guaranties to perform under two residential subdivision agreements. In prior litigation not involving the two guaranties, City was successful in actions against subdivision developers and received a fees award. However, because the developers could not satisfy the fee awards, City sought to enforce the personal guaranties and attempted to stick guarantors with the brunt of the fee awards.
However, as with any litigation sagas, this one was convoluted and hard fought. (Co-contributor Mike is married to a Viking, so he understands.)
Magnus Barelegs Viking Festival. Author: ardfern. Wikimedia Commons Creative Commons Attribution-Share Alike 3.0 Unported license.
No one really had a great argument that the guaranties did not have fee exposure if both guaranties were in play, but the real fight was about what was guaranteed—one or two subdivision agreements. So, developer got hit with a prior fee award of about $638,000 based on guaranty #1 in favor of City. Then, in subsequent litigation in the same matter, City lost its argument that guarantors were liable on guaranty #2, resulting in a $138,198.15 fee award in favor of defendant guarantors (obviously related to developers).
City appealed the fee awards.
Actually, somewhat of a draw, if we interpret the appellate decision correctly. The problem here was that there was a pragmatic “draw” on the dueling guaranty issues. The reviewing court determined that guarantors were not liable on guaranty #2, such that the prior fee award had to be looked at again. Given this uncertainty, the appellate court found that even the partial reversals meant the whole fee tamale had to be revisited. Apportionment maybe, intertwined result maybe, but back to the trial judge to see.
Way back on April 5, 2011, we posted about consolidated appeals concerning the enforceability of the Subdivision Improvement Agreement involving the developer, in the prior litigation, and whether the trial judge erred by deciding attorney’s fees issues while the modified decision was on appeal.
