Blickman Decision Found Persuasive By Appellate Court.
In a somewhat complicated post-probate settlement context, beneficiaries of a trust prevailed against a law firm–which had been previously owned by both the current owner and the deceased trustor of the trust—by obtaining a favorable summary judgment ruling based on a probate settlement agreement entered into critically between the trust and the current owner of the law firm, with releases which were broad in nature. Then, based on a settlement agreement fees clause, the trial judge awarded $112,646.25 in contractual attorney’s fees against the law firm and in favor of two trust beneficiaries.
The summary judgment ruling was affirmed on appeal, but the fee award was reversed in Galligan & Biscay v. Galligan, Case No. A138617 (1st Dist., Div. 1 Aug. 19, 2014) (unpublished).
The problem here was that there was no contractual right to fees against the law firm. The fees clause was narrow and only applied to carefully defined “parties,” namely the trust and the current owner of the law firm (not trust beneficiaries or the law firm itself). The defense argument that a third-party beneficiary theory would save the day, didn’t—unlike Mighty Mouse—given that the clause only applied to the strictly-defined “parties.”
The appellate court found the reasoning in Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4th 858, 893, 896 (2008) to be instructive in resolving the case, given the similar narrowness of an operative fee provision.