Need For Precise Draftsmanship Demonstrated By This Case.
In Global Modular, Inc. v. Kadena Pacific, Inc., Case No. E063551 (4th Dist., Div. 2 Sept. 8, 2017) (published), general contractor, subcontractor, and subcontractor’s general liability carrier were drawn into a dispute about water damage to a construction site. A partial settlement was reached by all parties, with the trial judge eventually determining that general contractor was entitled to $360,000 in fees from subcontractor pursuant to the settlement agreement, finding the releases in the agreement did not prevent fee recovery. The appellate court affirmed the fee award. Subcontractor did agree to pay general contractor for activities in “enforcing any provision or obligation arising under” the contract, which was involved in the litigation. The carve-out provision in the releases further cemented fee recovery, given that claims were not released for the project that were “related to” damages covered under the insurance policies. Finally, the “related to” language did cover property damages, including attorney’s fees pursued in relation to those damages. Obviously, precise draftsmanship was needed to provide a different result.