Case Remanded on Winner’s Request to Recoup $237,150 in Attorney’s Fees.
Venturi & Co., Inc. v. Pacific Malibu Development Corp., Case No. B228427 (2d Dist., Div. 8 Nov. 29, 2011) (unpublished) demonstrates the type of “indemnity” fee clauses that will allow for recovery of attorney’s fees. The key distinction is between true indemnity clauses (involving third party liability) and direct indemnity clauses (which are between the two primary parties).
Plaintiff in this one lost a suit to recover a commission for work on a Bahama resort project in a summary judgment won by defendants, but the judgment was reversed in a prior appeal to see if plaintiff could get compensation for nonbroker services. Defendants then requested attorney’s fees of $215,000, but the lower court denied them on the basis that the fees clause was a true indemnification clause rather than a true fees clause. The earlier appellate reversal did not address the proper construction of the indemnification clause. The lower court then tried plaintiff’s quantum meruit claim and awarded plaintiff $94,000. Plaintiff then moved to recover $237,150 in attorney’s fees under the indemnification clause which it claimed allowed recovery of fees to it. The lower court denied this request.
The appellate court agreed with plaintiff’s position, reversing and remanding the fee request denial.
Because defendants’ cross-complaint alleged damages for plaintiff’s failure to obtain financing, the indemnification fee language did govern direct actions between the two sides. Plaintiff’s defeat of the cross-complaint allowed for recovery of attorney’s fees, because the clause did not require a traditional “prevailing party” as that term is used under Civil Code section 1717. The clause indeed was not a true fees clause, but its wording did allow for recovery of fees in direct indemnification actions. (Zalkind v. Ceradyne, Inc., 194 Cal.App.4th 1010, 1022 (2011); Dream Theater, Inc. v. Dream Theater, 124 Cal.App.4th 547, 555 (2004).) Reversed and remanded for a fee redetermination, if any.