Case Fell Between the Cracks of Unnamed Parties and Third Party Beneficiary Cases, Fifth District Rules.
The Fifth District, in Cargill, Inc. v. Souza, Case No. F061767 (5th Dist. Dec. 9, 2011) (certified for publication), reversed a decision denying requested attorney’s fees to an unsecured creditor claiming it was a third party beneficiary under a fees clause.
Needless to say, the reversal was fact intensive in nature.
However, there are lessons that can be derived from the reversal. The operative fees clause in an agreement between debtor and creditor, with the fee claimant contending it was a third party beneficiary as an unsecured third party creditor of debtor, said fees were available to “any party,” rather than more restrictive fees clauses targeted to only contractual signatories such as debtor and creditor strictly. “The contract in this case falls between Sessions and Blickman Turkus and Real Property Services and Loduca.” Although third party creditor (claimed third party beneficiary) was not expressly named in the fees clause, “the fees clause does not express a clear intent to limit attorney fees to the signatories to the contract.” So, everyone, draftsmanship does matter–keep it broad, and you may get fee recovery; keep it narrow, and beware!