Alki Partners v. DB Fund Services
Annotate this CaseAfter allegedly losing millions of dollars in a hedge fund, investors sued the fund's administrator for breach of contract, alleging the administrator failed to: (1) value the hedge fund's assets, (2) advise investors of the hedge fund's net asset value, and (3) respond to investor inquiries about the fund. The superior court granted summary judgment in favor of the fund administrator, determining the undisputed material facts established no breach of contract. Later, the court awarded the fund administrator $3,027,237.96 in attorney fees based upon a contractual provision entitled "Standard of Care," which provides the administrator was to be indemnified for losses, including reasonable attorney fees pertaining to administration of the fund. The investors appealed, arguing that there were triable issues of material fact that should not have been dismissed through summary judgment. They also argued the court erroneously awarded attorney fees. After review, the Court of Appeals affirmed summary judgment, determining the undisputed material facts established the administrator did not breach the applicable contract. However, the Court reversed the award of attorney fees because the contractual language relied upon was a third party indemnity provision that did not create a right to prevailing party attorney fees in litigation between the parties to the contract.
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