Souza

Appellants, Daniel and Joyce Souza, made loans to Manuel and Esmeralda Teixeira evidenced by promissory notes and secured by an interest in dairy cattle and farm equipment. Respondent, Cargill, Inc. (Cargill), was an unsecured creditor of the Teixeiras. Upon the Teixeiras’ default on the promissory notes, the Souzas and the Teixeiras entered into a “TRANSFER IN LIEU OF FORECLOSURE AGREEMENT” (Transfer Agreement). Under this Transfer Agreement, the Teixeiras agreed to transfer the dairy cattle and farm equipment to the Souzas and the Souzas agreed not to sue the Teixeiras on the promissory notes. The Souzas also agreed to pay the Teixeiras’ outstanding obligations listed on an exhibit to the Transfer Agreement. However, this exhibit was left blank.

Cargill filed a complaint against the Souzas to reform and enforce the Transfer Agreement as an alleged third party beneficiary. Cargill sought to schedule the Teixeiras’ debt to it on the blank exhibit and then enforce appellants’ covenant to pay that debt under the Transfer Agreement.

On the Souzas’ motion, summary judgment was granted in their favor. As the “prevailing party,” the Souzas moved for an award of attorney fees.…