Developments of Interest

New Cases of Interest - July 1, 2013

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07/01/2013

Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984.  Seller brought an action against a business broker in connection with the sale of the seller's business.  The seller contended that the broker was to have obtained security for the obligation owed to the seller from the buyer, which the broker failed to do.  The buyer subsequently filed for bankruptcy protection and the full amount of the purchase price to the seller went unpaid.

The seller prevailed on a negligence cause of action, but there was also a finding that the business broker had not breached its contract with the seller.  The contract contained an attorney's fees clause and the seller contended that she was entitled to attorney's fees under that clause even though she had not prevailed on the contract cause of action.

The court agreed with seller.  The court found that the attorney's fees provision was sufficiently broad so that it would encompass any tort claim as well as the contract claim.  The attorney's fees provision stated, "All parties to this agreement agree to mediate, in good faith, any dispute prior to initiating arbitration or litigation.  The prevailing party in the event of arbitration or litigation shall be entitled to costs and reasonable attorney's fees except that any party found in those proceedings not to mediate in good faith shall not be so entitled."

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