Fee Clause Interpretation: Losing Party To An Oral Agreement To Foreclose On A Property Was Not Liable For Fees Under A Promissory Note

Losing Party Was Not A Signatory To The Note, And The Foreclosure Oral Agreement Was Separate From The Note.

               Kim v. Kim, Case No. B336809 (2d Dist., Div. 1 May 14, 2025) (unpublished) involved a fight between plaintiffs and defendants over an oral agreement to foreclose property, with plaintiffs paying $25,000 under that agreement but defendants claiming $420,000 was owed.  Plaintiffs lost the case, and defendants sought $280,700 under a contractual fees clause in a note between defendants and the note borrower.  The lower court denied the fee request.  The 2/1 DCA affirmed, determining that (1) plaintiffs were not signatories to the note, and (2) the foreclosure arrangement was separate from the note and not “related”/”connected” to the note. 

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