Plaintiff Sued On An Oral Agreement Which Was Not Within The Scope Of Stock Purchase Agreement Fee Clause Relied On By The Defense.
Fee entitlement is a basic issue, often tethered to whether a fees clause in a written contract covers the claims at issue in a complaint or cross-complaint. If it does not, you can obtain the result reached in Beck v. NoBug Consulting, Inc.,
Case No. H040136 (6th Dist. Mar. 20, 2017) (unpublished).
In Beck, defendants did prevail on claims for breach of oral contract and fraud against plaintiff in arduous litigation. The defense was then awarded over $1.79 million against plaintiff based on a fees clause in a written Stock Purchase Agreement.
The Sixth District modified the judgment to delete the fee award as a matter of law.
The problem here was that plaintiff was pursuing recovery on an oral agreement having no fees clause, given that the gist of his claims were to enforce an oral obligation to enter into a written Stock Purchase Agreement. The fees clause only related to enforcing the obligation “of an other party pursuant to this Agreement.” Given the fees clause did not relate to the oral agreement, there was no fee entitlement basis and no basis for the fees award jettisoned on appeal.