Alki Partners, LP v. DB Fund Services, LLC

After 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 is to be indemnified for losses, including reasonable attorney fees “resulting in any way from the performance or non-performance of Administrator’s duties hereunder . . . .”

The investors appeal, asserting triable issues of material fact preclude summary judgment. They also contend the court erroneously awarded attorney fees. We affirm summary judgment, determining the undisputed material facts establish the administrator did not breach the applicable contract. However, we reverse the award of attorney fees because the contractual language…