Agreements Were Unambiguous, Not Allowing For Fee Recovery.
Where contracts with no extrinsic conflicts are involved, appellate courts will construe agreements by their terms—no fees clause, no fee recovery..
That is what happened in Sznyter v. Spun.com, Inc., Case No. D061832 (4th Dist., Div. 1 Apr. 25, 2014) (unpublished).
The basics are that plaintiff lost a bid in a repurchase share dispute because the defendant company had engaged in a prior corporate merger (with notice) and had no shares to repurchase—an impossibility situation accepted by the lower court. Then, defendant company moved to recoup attorney’s fees under the merger agreement clause even though plaintiff was not a signatory to it. The fee request was denied.
Company cross-appealed on the fee denial, but did not do any better at the intermediate appellate review stage. Plaintiff was never seeking to do anything relating to the merger agreement with a fees clause; rather, he was dealing with a separate contract with no fees clause—meaning defendant company could not recover in any event under either agreement. However, the merger agreement fees clause was narrow also, such that it could not be interpreted to provide third party beneficiary status to losing plaintiff much less defendant company seeking fees. Fee denial sustained.