Fletcher v. A.J. Industries, Inc.

266 Cal.App. 2d 313 (1968)

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Nature of the Case

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Facts

The complaint in this derivative action alleged that Ver Halen had dominated and controlled the board of management of A.J. Industries. As a result of this control, P alleged that the corporation had been injured and also that Ver Halen had breached his contract of employment with the corporation. A settlement was negotiated. It is detailed on page 889 Choper 5th. The stipulated agreements provided that A.J. would be reorganized on lines that Ver Halen's and other wrongdoers’ ability to control it was dramatically reduced. Monetary damages were to be determined in the future and an arbitrator was allowed to award attorney fees to be paid by the corporation to any counsel who appeared in the arbitration proceedings, except P's attorneys could be awarded fees only in the event the corporation eventually received a monetary award. P's attorneys intended to apply to the trial court for fees and costs to be paid them by the court instead of to the arbitrator. The trial court entered the order and ordered the parties to perform its executory provisions. The trial court then ordered A.J. to pay Ps' attorney fees of $64,784 and costs of $2,179.26. It awarded the fees based on substantial benefits being conferred on A.J. This appeal resulted.