Multiple Challenges By Losing Buyer Rejected By 2/6 DCA.
Real estate seller in Weinstock Porter Development, LLC v. Teixeira Farms, Inc., Case No. B253455 (2d Dist., Div. 6 Apr. 25, 2016) (unpublished) defeated buyer’s rescission claim based on environmental contamination where the record showed the parties entered into a release of claims because seller decreased the purchase price by $200,000 and buyer agreed to purchase environmental contamination insurance. After winning, seller received $95,707 in attorney’s fees and $1,406.50 in costs against losing buyer based on a fees clause in the Purchase and Sale Agreement.
Buyer’s multiple challenges to the fees/cost award were rejected on appeal.
First, buyer claimed that the lower court had no jurisdiction to award fees after the notice of appeal was filed. Wrong. (See Bankes v. Lucas, 9 Cal.App.4th 365, 368-369 (1992).)
Second, buyer argued that the fee clause in the release agreement did not encompass the rescission dispute, but the appellate court disagreed because the rescission claim was within the scope of the PSA fees clause. It also noted that there was no need to weigh in on the issue of whether raising a contract permutation as an affirmative defense gave rise to fees, noting this issue has divided different divisions of the Second District as far as the proper result.
Third, the hourly rates claimed by defending counsel, after the insurance carrier withdrew its defense at lower hourly rates, did not offend the appellate court given the fact that negotiated counsel – carrier rates are much lower in nature than normal “market” rates.
Finally, it did not matter if the fees were covered by an insurance carrier given the broad definition of “incurred” for fee shifting purposes under Civil Code section 1717.
Fees/costs award affirmed.