Khan v. ShimAnnotate this Case
Dr. Hoang, a dentist, died in 2010. Dr. Khan agreed to buy Hoang’s practice. The contract allows the prevailing party to be awarded fees if “any litigation . . . is commenced . . . concerning its terms, interpretation or enforcement or the rights and duties of any party.” Two years later, Khan filed suit for breach of contract, fraud, concealment, negligent misrepresentation, and rescission. Khan alleged failure to comply with warranties, including that none of the practice records contained any untrue statement or material omission; that the practice was in compliance with laws and regulations; that patients and insurance companies had been properly billed; that the practice had not billed for services for which the practice was not entitled to compensation; that the practice had not, as a usual practice, waived co-payments or deductibles; and the practice had not increased any employee’s salary after April 2010. The estate counter claimed that Khan had failed to remit accounts receivable and to provide proper accounting. Before trial, Khan voluntarily dismissed her entire complaint without prejudice. The court found for Khan on all causes of action in the counter-complaint. The estate obtained an award of attorney fees as the prevailing party under Code of Civil Procedure section 1032(a)(4). The court of appeal remanded. Section 1717(b)(2), generally bars the award of fees after a pretrial voluntary dismissal for defense of contract claims, but the agreement's fee provision was broad enough to cover fees for defense against tort actions.