$74,124 in Fees/$1,529.40 to Successor Trustees Were the Winning Awards.
Portico Management Group, LLC v. Harrison, Case No. C062060 (3d Dist. Dec. 28, 2011) (unpublished) is a chilling opinion–forget that it is the Holidays that are not as chilly in California as other areas of the country–both about making sure proper parties are named as well as the breadth of fee clauses encompassing arbitration and related proceedings.
In a word, an arbitration claimant won a damages action for a real estate purchase agreement breach, but the arbitrator made the award against the trust. Claimant did not seek to correct or vacate the award, with catastrophic results. The trustees and successor trustees avoided, for years, claimant’s efforts to collect against the trust property or its proceeds. In fact, claimant lost some third-party claim judicial proceedings against a couple of successor trustees, who won prevailing party fees of $74,124 and costs of $1,529.40, against claimant based on a broad purchase agreement fee clause covering events “arising out of the agreement,” including any arbitration.
The fee/costs awards were affirmed on appeal. The Third District found that the third-party claim post-arbitration proceedings did arise out of the purchase agreement, even though they were judicial in nature–justifying the lower court’s decisions on fees and costs. (Ajida Technologies, Inc. v. Roos Instruments, Inc., 87 Cal.App.4th 534, 552 (2001).)
There is another moral to this story, so to speak–if suing a trust, name the trustees and make sure they are named in the judgment in representative capacities.