Substantial Fee Recovery Allowed
We know of nothing proprietary, so here is a fees clause contained in a LLC Operating Agreement that reaped one party a truck load of fees: “If any party to this Agreement institutes any action, suit, counterclaim, appeal, arbitration or mediation for any relief against another party, declaratory or otherwise (collectively an ‘Action’), to enforce the terms hereof or to declare rights hereunder or with respect to any inaccuracies or material omissions in connection with any of the covenants, representations or warranties on the part of the other party to this Agreement, then the prevailing party in such Action, whether by arbitration or final judgment, shall be entitled to have and recover of and from the other party all costs and expenses of the Action, including reasonable attorneys’ fees and costs . . . incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or award (collectively, a ‘Decision’) granted therein.”
In Abrahams v. Hentz, Case No. B217665 (2d Dist., Div. 2 July 20, 2011) (unpublished), defendants won a demurrer to a Second Amended Complaint against a plaintiff suing for breach of fiduciary duty, fraud, account, declaratory relief, and injunctive relief in a complaint pitting LLC members against each other. Based on the above clause, the trial court awarded some defendants a fee recovery of $364,924 and another defendant fees of $91,497.75. The appellate court affirmed because the fees clause was broad enough to encompass both contract and tort claims. (Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th 1338, 1342-1343 (1992).)
Also, losing plaintiff got hit with $4,000 for bringing a frivolous appeal as an in pro per litigant.