Although we have presaged this crescendo in lengthy litigation between well-known novelist Clive Cussler (who has written novels featuring Dirk Pitt) and film producer Crusader Entertainment in prior September 9, 2010, and February 13, 2011 posts, the denouement apparently has arrived as far as fee/costs recovery in Cussler v. Crusader Entertainment, LLC, Case Nos. B230770/B232046 (2d Dist., Div. 3 Dec. 21, 2012) (published) and Cussler v. Crusader Entertainment, LLC, Case No. B238364 (2d Dist., Div. 3 Dec. 21, 2012) (unpublished).
An overview is in order before we discuss these two opinions. The jury rejected dueling direct contract and fraud claims brought by both Mr. Cussler and Crusader relating to a movie development arrangement, but did award Crusader $5 million for breach of the implied covenant of good faith and fair dealing (which left Crusader as the prevailing party). The trial court then awarded Crusader $14 million in attorney’s fees. Based on the $14 million fee award and $5 million jury award, Crusader collected about $21 million from Mr. Cussler (figuring in interest and other items). The trial court then granted yet another $150,000 in postjudgment activity fees. However, the appellate court in an earlier opinion reversed the $5 million implied covenant jury verdict and fee orders, which meant that quite a bit of restitutionary disgorgement was owed to Mr. Cussler by Crusader. After all this dust had settled, the trial court found that there was no prevailing party for fee recovery purposes but that Crusader was entitled to routine costs (“routine,” but not necessarily insignificant) of $514,237.47.
In the published decision, the appellate court agreed with the conclusion there was no prevailing party for fee recovery purposes. After all, neither side got the main objective of the litigation: both sides sought to recover millions on the contract claims, and both recovered nothing. With respect to the costs of suit awarded to Crusader, they were justified because routine costs are awardable to a defendant where “neither plaintiff or defendant obtains any relief.” (Code Civ. Proc., § 1032(a)(4); McLarand, Vasquez & Partners, Inc. v. Downey Sav. & Loan Assn., 231 Cal.App.3d 1450, 1452.)
With respect to the companion unpublished decision, Crusader was awarded $161,378.78 in fees separately under ¶ 18 of the contract between the parties, a determination reversed on appeal. The problem here was that this was an indemnity clause, not a real fees clause. The clause had an indemnification heading and contemplated indemnification only for third-party claims–easily falling within the reasoning of cases like Myers and Carr (surveyed in numerous posts under our heading “Indemnity”) precluding similar recovery of fees. The appellate court found this was reinforced by the fact that there was an arbitration/fees clause governing intellectual property rights in the contract, showing the parties knew when to agree to a fees clause when they really wanted to (but not doing so in the indemnification clause). Dirk Pitt, looks like your litigation saga is over!