Kim v. Tao
The buyers of a house chose not to go through with the purchase when their inspection revealed unexpected defects. They timely cancelled the sale. Pursuant to their purchase agreement, buyers were to be refunded their initial deposit. However, the seller refused to execute escrow cancellation instructions which would have resulted in the deposit being refunded to the buyers. The buyers brought suit against the seller for breach of contract and specific performance. Seven months later, the seller executed the cancellation instructions and the buyers were refunded their deposit. The buyers then sought, and were awarded, their attorney fees, as prevailing parties, pursuant to an attorney fee clause in the purchase agreement. The seller appeals, arguing that the escrow cancellation instructions executed by both parties contained a mutual release which extended to the claim for attorney fees. Court disagree and affirm.
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