A judge dismissed the case after attorneys for Spears and her family argued that Lutfi hadn't proven his case after six days of testimony.
Lutfi, 38, a onetime confidante of the singer, sued the singer for unpaid fees, her father Jamie Spears for allegedly punching him, and mother Lynne Spears for purportedly defaming him in her 2008 book, the People magazine reported.
"I really thought long and hard about this. It's the right thing to do," Superior Court Judge Suzanne Bruguera said before dismissing the case.
Jamie's attorney Leon Gladstone said following the hearing, "We're delighted, we feel it's the right result."
Lutfi said he is going to appeal.
He was with Britney while she went through a very public meltdown. Her family claim that Lutfi tried to block the access to their daughter during this crucial time.
The singer is back in the spotlight and currently judging talent reality show 'The X Factor'.