Sellers Wanted Over $2.5 Million—Did Not Happen, Based On Lower Court’s Apportionment Which Was Found Appropriate.
Where different contracts are involved and no success/limited success is involved, California law gives deference to a lower court to fashion a reasonable award and even apportion fees based on the facts. That is what occurred in Life Care Residences, Inc. v. Affordable Senior Housing Foundation, Case No. D084316 (4th Dist., Div. 1 July 16, 2025) (unpublished).
The dispute arose between Appellants’ sale of an assisted living facility in Escondido, which involves claims for violations of a Purchase Agreement and Escrow Holdback Agreement. There were dueling claims and cross-claims. At the end of the litigation before fee proceedings, the lower court determined that buyer failed to timely make a claim for damages under the Escrow Holdback Agreement and ordered a release of the escrow holdback to Sellers through a summary adjudication motion. A jury later determined that buyer breached the holdback agreement, awarding some damages, but did not award damages under the Purchase Agreement or related tort claims. Sellers then moved to recover contractual fees under the Purchase and Escrow Holdback Agreements of over $2.5 million. The lower court determined no side prevailed under the Purchase Agreement, but that Sellers did prevail under the Escrow Holdback Agreement. However, it only awarded apportioned fees of $722,530.01 based on recoverable work for activities incurred in connection with the summary adjudication motion which was granted on the escrow holdback issues.
The 4/1 DCA affirmed, despite Sellers’ appeal that more fees should be awarded. First, the lower court did not abuse its discretion in not awarding anyone prevailing party fees under the Purchase Agreement—after all, no one obtained any affirmative relief under this specific agreement. (Cussler v, Crusader Entertainment, LLC, 212 Cal.App.4th 356, 366 (2012).) Second, the lower court could conclude, based on only partial success by Sellers, that drawing a “line in the sand” for work before or in connection with the escrow holdback summary adjudication win was a reasonable apportionment of efforts. After all, limited success is an important factor to be considered in attorney’s fees requests, both at the state and federal levels in many cases.