Judicial Estoppel Doctrine Also Found Inapt for Awarding Fees to Winning Appellate Parties, Noting International Billing Rationale Not Embraced by California Supreme Court.
Plaintiffs (lenders) must have been feeling pretty good after garnering a $450,000 plus attorney’s fees award from defendants (borrowers) based upon a simple indemnification provision which was found to have incorporated a fees clause by a lower court. The glee did not last on appeal in Dodge v. Dollarstore, Inc., Case No. G045064 (4th Dist., Div. 3 Aug. 16, 2012) (unpublished), a 3-0 opinion authored by Justice Ikola where the fee award was reversed.
The appellate court examined the contractual clauses relied on by the lower court, determining they were indemnification provisions (plaintiffs’ duty to indemnify Dollarstore against third party claims based on plaintiffs’ breach), but not containing any express attorney’s fees clause running against defendants. (If you go to our category “Indemnity,” the reviewing court discussed cases like Myers, Building Maintenance Service (BMS), Baldwin Builders, and Continental Heller in reversing the fee award in plaintiffs’ favor.)
Now, for the chutzpah (see Blawg comment below) part of the decision. Defendants, not content to be giddy about obtaining a $450,000 reversal of fortune, then made an appellate plea to award them attorney’s fees. Go away, said the appellate court very politely. Not only was the issue not raised in the trial court (a forfeiture in and of itself), but the reciprocity/judicial estoppel theory utilized in International Billing Services, Inc. v. Emigh, 84 Cal.App.4th 1175, 1190 (2000) has never been embraced by the California Supreme Court and had been declined to be followed by the very court (the Third District) deciding International Billing. Although the forfeiture argument prevailed, our local Santa Ana appellate court did give some delicious future indications of what formulations of the judicial estoppel rule it does not agree with. Defendants obtained an award of routine costs on appeal, but not fees.
COMMENT: While not expressly referring to chutzpah in Dodge v. Dollarstore, Inc., supra, Justice Ikola has previously concurred in two opinions referring to “chutzpah”: People v. Haidl, 2010 WL 1218496 (2010) (unpublished) (“Displaying the chutzpah of a thief who demands a reward for returning the wallet he stole, counsel asserted the right to further impeachment on a subject he should never have raised”); De La Cuesta v. Benham, 193 Cal.App.4th 1287, 1297 (“Hilltop . . . is notable for the chutzpah of the party seeking fees”).