On Remand, Only Contract Claim Work Could be Awarded, Not On Non-Contract Claims—Lower Court Vested With Discretion To Allocate On Remand.
McCain v. Edwards, Case No. C101256 (3d Dist. May 14, 2026) (unpublished) is a very contested case where, eventually, some non-signatory, alter ego targets evaded exposure where the contract between the predicate signatory and losing parties had an attorney’s fees clause, with the debate being about how broad it was or what parties it encompassed. The lower court awarded prevailing alter ego targets $72,314.25 in attorney’s fees under Civil Code section 1717 based on both contract and non-contract work, determining no apportionment was in order.
The Third District reversed and remanded. The appellate court agreed that the losing parties were responsible for fees on contract claims. However, it did not believe the fee clause was broad to encompass prevailing on tort claims relating to the alter ego win because there was no suggestion that non-signatory alter ego targets were intended to be covered by the fee provision. Given that non-contract work was not recoverable, the matter was remanded to have the trial judge decide if apportionment was warranted.