Miske v. Coxeter
139 Cal. Rptr. 3d 626
Cal. Ct. App.2012Background
- Coxeter, Bisno, and TAFC formed two private placement California limited partnerships (TACMI, TAC I) with Bisno managing Berkeley project.
- Bisno concealed material facts and embezzled funds; Moriwaki/Haldir purchased TACMI units, becoming a limited partner.
- Miske, as assignee of Haldir’s fraud claims, sued TACMI, TACI, and partners for fraud in inducement.
- Jury found Haldir reasonably relied on Bisno’s concealment; Bisno acted within authority; damages including compound prejudgment interest were awarded.
- Trial court awarded substantial attorney fees to Miske under TACMI’s LPA; Coxeter challenged, citing Kazanjian.
- Court later reversed the attorney fee award, holding Miske’s assignment did not pass rights under the LPA; prejudgment interest award affirmed on estoppel grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Coxeter liability under Kazanjian | Miske: Haldir is an innocent third party; Coxeter liable for Bisno’s conduct. | Coxeter: as innocent general partner, not liable to Haldir for cogeneral partner's fraud. | Coxeter liable; Haldir treated as innocent third party, not an innocent limited partner. |
| Attorney fees transfer via assignment | Miske: assignee stands in assignor’s shoes and gets LPA fees. | Coxeter and Bisno: assignment of fraud claims does not transfer LPA rights. | Haldir’s assignment did not confer LPA rights to Miske; fees reversal affirmed. |
| Prejudgment interest and estoppel | Interest accrues per judgment and prior rulings. | Challenge to prejudgment interest and its basis. | Compound prejudgment interest affirmed on estoppel grounds. |
Key Cases Cited
- Kazanjian v. Rancho Estates, Ltd., 235 Cal.App.3d 1621 (Cal. Ct. App. 1991) (innocent general partner not liable to limited partner for co-partner's wrongdoing)
- Stout v. Turney, 22 Cal.3d 718 (Cal. 1978) (general partnership liability to partners and creditors)
- Ver Halen, 75 Cal.App.3d 751 (Cal. Ct. App. 1977) (assignment of rights to attorney fees where underlying agreement provides fees)
- Marco, 100 Cal.App.2d 338 (Cal. Ct. App. 1936) (assignment of lease rights carried with attorney fees for enforcement)
- Lerner v. Ward, 13 Cal.App.4th 155 (Cal. Ct. App. 1993) (fraud arising out of real estate transactions with fee clause)
- Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th 1338 (Cal. Ct. App. 1992) (fee-shifting under contract/tort where agreement broadly covers disputes)