202 Cal.Rptr. 518]; Froid v. Fox (1982) 132 Cal.App.3d 832, 836 [ 183 Cal.Rptr. 461]; Fox v. Prime Ventures LTD. (1978) 86 Cal.App.3d 333 [ 150 Cal.Rptr. 202]; Shirai v. Karpe (1976) 57 Cal.App.3d 276, 279 [ 127 Cal.Rptr. 549]; Nordahl v. Department of Real Estate, supra, 48 Cal.App.3d 657, 661; Wolff v. Hoaglund (1970) 11 Cal.App.3d 227, 234 [ 89 Cal.Rptr. 778].) Although courts have concluded that "actual and direct loss" does include allowable costs and statutory interest ( Nordahl v. Department of Real Estate, supra, 48 Cal.App.3d 657, 660-667; Antonio v. Hempel, supra, 71 Cal.App.3d at p. 131), they have determined that "actual and direct loss" does not include treble damages ( Circle Oaks Sales Co. v. Smith (1971) 16 Cal.App.3d 682, 683-685 [ 94 Cal.Rptr. 232]), punitive damages ( Acebo v. Real Estate Education etc. Fund, supra, 155 Cal.App.3d 907, 910-911), attorney's fee awards ( ibid.), or attorney's fees incurred in the defense of a foreclosure proceeding by third persons ( Lewis v. Edmonds (1987) 190 Cal.App.3d 1101, 1104 [ 235 Cal.Rptr. 835]). More recently, a court has found that the measure of recovery from the account is not equal to the loss of the benefit of the bargain but rather it is equal to the out-of-pocket economic loss.
First, no recovery is permitted for fees incurred in litigation directed against the tortfeasor, even though other parties are incidentally involved. (Schneider v. Friedman, Collard, Poswall & Virga (1991) 232 Cal.App.3d 1276, 1281 (Schneider); see Lewis v. Edmonds (1987) 190 Cal.App.3d 1101, 1104.) In Schneider, a law firm asserted a medical malpractice claim on behalf of a minor and secured an arbitration award that failed to provide for attorney fees. (Schneider, supra, 232 Cal.App.3d at p. 1278.)
[a]nd the damages claimed in this action are the attorneys' fees and costs that Plaintiffs allegedly expended in the claims related to the Paine Parties, i.e., the same fees and costs that were settled as part of the Paine 2012 Settlement" (id. at 5, citing Settlement Agreement at ΒΆΒΆ 5[a][i] and 5 [b][i]). Defendants further dispute Plaintiffs' argument that the American Rule barred their recovery of attorneys' fees because it "ignores the third-party tort exception recognized under California law (the law that appears to apply to the Underlying Actions)" (id., citing Lewis v Edmonds, 190 Cal App 3d 1101, 1104 [Cal Ct App 1987]). According to Defendants, "[u]nder this exception, Plaintiffs were entitled to seek, and appear to have sought, attorneys' fees incurred in litigating and arbitrating tort claims against co-conspirators" and based on the ad damnum of the individual demands for arbitralion,"Plaintiffs appear to have alleged exactly this type of injury ...." (id. at 5-6).