Reconsideration Warranted Because This Was Bulk of Damages Award.
Our POOF! principle–that the reversal of a merits judgment often times results in reversal of a fees award–resurrected itself in the next case.
In Greenwich S.F., LLC v. Wong, Case Nos. A123670/A124882 (1st Dist., Div. 2 Dec. 2, 2010) (certified for publication), plaintiffs were awarded compensatory damages totaling $750,000 in a real estate sale agreement breach dispute. The lower court also awarded $391,000 in attorney’s fees to plaintiffs. [BLOG OBSERVATION–Notice the fee award compared to the compensatory damages award.] Defendant appealed.
The Court of Appeal reversed the substantial $600,000 lost profits component of the jury verdict. Because this was the bulk of damages awarded, the original fees award went POOF! and the matter remanded for a redetermination of the fees to be awarded to plaintiff (because the judgment was corrected to show only one plaintiff was entitled to the fee award).
BLOG UNDERVIEW–For you real estate practitioners, this case has a scholarly discussion of the damage measure codified in Civil Code section 3306 (for breach of a real estate agreement to sell or convey property). The appellate court decided that lost profits may be awarded as part of consequential damages under section 3306 upon a proper showing (such as demonstrating that the damages are reasonably certain and not speculative in nature).
