$800,000 Fee Request Denied, With The Appellate Court Observing That The Result Could Have Gone The Other Way—But Discretion Is Involved When One Side Does Not Knock It Completely Out Of The Park.
Hakim-Baba v. Desai, Case No. H050787 (6th Dist. Mar. 4, 2026) (unpublished) was a messy case where plaintiff primarily sought to rescind an investment in an LLC, but plaintiff also brought tort claims for added damages and defendants brought a “defensive” cross-complaint likely to see if plaintiff would take a reasonable rescission settlement, with there being a broad contractual fee recovery clause in the LLC Agreement. After several years of litigation and unproductive informal settlement offers, defendants accepted a CCP § 998 offer which granted a rescission of $3.89 million and about half of the claimed prejudgment interest, but with no further “lost opportunity” or tort damages. The lower court reserved jurisdiction to consider a fees and costs motion, which plaintiff brought, but it was denied (about a $800,000 request).
The Sixth District affirmed in a case where it gave deference to the trial judge’s finding there was no “prevailing party” based on the posture of the case—a discretionary determination. Us bloggers believe the appellate court thought this was a close case, and it could have gone either way. However, with that observed, it felt a mixed success was obtained based on these factors: (1) plaintiff did not get any tort or extra-contractual damages, getting less prejudgment interest and foregoing additional damages; (2) plaintiff agreed to take the settlement without steering through the defensive cross-claims, which might have been brought to get the parties to a compromise rescission remedy; and (3) plaintiff’s tort claims and the defense counter-claims could be considered in the mix of who prevailed or whether no one prevailed—put another way, “we [the appellate court] will not require a trial court to ignore the interrelationship between all claims” (Slip Op., p. 13.)