The rich are different than you and me. They have more money.
-- Famous phony quote of conversation between F. Scott Fitzgerald and Ernest Hemingway.
OK, let's see if I have this right. Jeffrey Drazan is a big deal VC in Silicon Valley, now the managing partner of Bertram Capital. Worth a few bucks. In 2002, he decides to build a $13 million house in Woodside. He hires a contractor by the name of Vance Brown to build it for him.
But construction manager? He don't need no stinkin' construction manager. He's going
to be the construction manager himself, starting an LLC, Frog Creek Partners, LLC to manage the project.
And lawyers? He don't need no stinkin' lawyers either. He let's Brown start the job
before a contract is signed, and for some time after that, drafts of contracts pass back and forth, and by the time they are done, nobody seems to know exactly what is and what is not the contract.
Drazan / Frog Creek sue Brown. Brown cross complains, but also moves to compel arbitration under Brown's version of the contract. The trial court denied arbitration in that it couldn't find mutual assent for Brown's contract version, and the Court of Appeal affirmed. This was about six years ago.
So then Brown apparently pieces together Fox Creek's version of the contract and it has an arbitration provision also, and he moves to compel arbitration on that one. The trial court denied the motion, but the Court of Appeal reversed, ordering arbitration in 2007.
Now the case goes to arbitration. As we learn in the latest Court of Appeal case involving Mr. Drazan's Dream House,
Following 50 days of arbitration hearings, an American Arbitration Association panel issued a 65-page decision awarding Brown damages against Frog Creek of $1,905,902.90, plus $2,517,687.31 in attorney fees for the arbitration proceeding and $666,422.78 in costs. The arbitrators declined to rule on whether attorney fees and costs might be awarded for litigation activity before the arbitration. Frog Creek paid the arbitration award in February 2010, and the trial court entered judgment on it on April 7, 2010.
The contract -- whatever it is -- has a provision that the prevailing party in any dispute gets attorneys fees. So Brown moves for pre and post arbitration attorneys' fees of close to a million bucks. And Drazan goes, oh yeah? and moves for attorneys' fees of his own for defeating the first attorneys' fee petition. And the trial court gives Brown about $700K in attorneys' fees and Drazan about $125K.
To which the Court of Appeal says, "nope." Doesn't work that way. Under Civil Code section 1717, there is only one prevailing party, and that's the one who gets the most relief. Hmm, Vance Brown -- got about $2 million in damages. Jeffrey Drazan -- gets to delay arbitration for five or six years. i'm thinking it worked out better for Brown. And that's what the Court of Appeal thought too, as they (a) took away Drazan's $125K, and (b) told the trial court to give Brown fees for the first effort to take the case to arbitration, and for this appeal.
Read all about it in Frog Creek Partners LLC v. Brown (May 24, 2012) ___Cal.App.4th___ . Or not. The opinion is 37 pages long.
CBL is going with the commentary of Legal Pad a few years ago talking about the same case:
Anyway the moral of the story is: if you want someone who knows how to pick start-up stars like FrontBridge Technologies and Theravance, call Jeff Drazan. If you want someone to manage construction of your next $13 million home, call someone else, like Bob the Builder.