Dorian v. San Jose Towers CA6, H050432M

Michael Dorian, through his company Briand Properties, owned two lots in San José, which were sold to San Jose Towers, LLC (SJT) after Briand's bankruptcy.
A series of agreements between Dorian, the bankruptcy trustee, and SJT (along with individuals Bock and Kamrin) were made regarding the transfer of the lots and profit sharing from subsequent sales.
Dorian did not contribute agreed excess funds from the bankruptcy to the new LLC, and SJT did not distribute any profits to Dorian as required by certain agreements.
Dorian sued SJT and its principals for breach of contract and breach of fiduciary duty; Defendants cross-claimed for breach of contract.
The trial court found in favor of Dorian, awarding over $2 million in damages and attorney’s fees; defendants appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Right to Enforce Purchase Agreement	Dorian is an intended beneficiary and signatory; should enforce	Dorian not a party and Agreement bars third-party claims	Dorian has no right to enforce—expressly barred as third party
Fiduciary Duty of Bock & Kamrin	They owed fiduciary duty as parties to related agreements	Only SJT, as managing member, owed fiduciary duty as matter of law	Only SJT owed fiduciary duty; claims against Bock/Kamrin denied
SJT Breach of Fiduciary Duty via Profits	SJT failed to distribute profits from sale as required	No profits to distribute and miscalculation of revenue/costs	SJT breached duty; miscalculation of costs; remand for damages
Enforceability of November Agreement	No valid consideration; improperly modifies earlier agreements	Valid, distinct contract supported by consideration and proper reference	November Agreement enforceable; remand for breach determination
Award of Attorney’s Fees	Recoverable under Purchase Agreement	Not recoverable since Dorian not proper party to contract	Award vacated; to be reconsidered on remand

Goonewardene v. ADP, LLC, 6 Cal.5th 817 (2019) (third-party beneficiaries’ enforcement of contracts requires consistency with parties’ objectives)
Parson v. Bristol Development Co., 62 Cal.2d 861 (Cal. 1965) (interpretation of contracts reviewed de novo where no relevant extrinsic evidence)
Feresi v. The Livery, LLC, 232 Cal.App.4th 419 (Cal. Ct. App. 2014) (LLC managers owe fiduciary duties to members)
City of Hope Nat’l Medical Center v. Genentech, Inc., 43 Cal.4th 375 (Cal. 2008) (fiduciary obligations arise only from certain relationships or knowing undertakings)
Kendall-Jackson Winery, Ltd. v. Superior Court, 76 Cal.App.4th 970 (Cal. Ct. App. 1999) (three-part test for the unclean hands defense)