$214,189.50 Fee Award and $10,450.33 In Costs Was the Final Tally.
For whatever it is worth, transactional attorneys drafting California limited liability company documents seems to include very broadly worded attorney’s fees clauses–covering “any dispute” or “any action at law, suit in equity or arbitration proceeding relating to this Agreement.” Well, good for you, because this means your clients have an increased chance of obtaining a fee recovery, as the next case illustrates.
Farhangui v. Bay Area Surgical Group, Inc., Case No. H035808 (6th Dist. Mar. 14, 2012) (unpublished) is an opinion where an LLC member lost a suit against other LLC members about dishonestly dissolving the LLC, concealing an improper motive to resurrect the company without him, and excluding the losing litigant from profits that were eventually realized. The lower court awarded fees of $ 214,189.50 and costs of $10,450.33 under similarly-worded broad fees clauses in the LLC operating agreement and membership interest purchase agreement.
The fee/costs award held up on appeal. After all, they were broad in nature such that even tort claims can be subsumed if the clauses allowed for it–and they did. (Gil v. Mansano, 121 Cal.App.4th 739, 743 (2004).) Also, the winner did not have to plead entitlement to fees as an item of damages in the complaint, because contractual fees do not need to be demanded in the complaint in order to be recoverable. (Chinn v. KMR Property Management, 166 Cal.App.4th 175, 194 (2008).)