Second District, Division 1 Affirms Fee Award to Broker Under Broadly Worded CAR Form Agreement.
Under Santisas v. Goodin, 17 Cal.4th 599 (1998), a voluntary dismissal will end fee exposure on contract claims. However, there is a hitch (usually is). The dismissal will not necessarily insulate against fee exposure for tort or noncontract claims. That hitch came to bite the losing litigants in the next case, Kymm v. O’Loughlin, Case No. B211512 (2d Dist., Div. 1 Sept. 24, 2009) (unpublished).
Buyers sued seller and seller’s brokers over a transaction in which prevailing parties and brokers were entitled to recover attorney’s fees in the governing CAR (California Association of Realtors) form agreement. Brokers were sued for torts only, and buyers voluntarily dismissed brokers without prejudice. Brokers moved to recover fees of $34,575 in fees and $1,187.18 in costs, with the trial court awarding them $21,456.52 in fees and $1,187.18 in costs.
On appeal, buyers tried to bank hopes for a reversal primarily on Santisas. It didn’t work.
Only tort claims were alleged against brokers, and the CAR contract fees clause was broad enough to allow for fee recoupment by brokers. (See also Pacific Preferred Properties, Inc. v. Moss, 71 Cal.App.4th 1456, 1464 (1999) [tripartite contract concerning the award of attorney’s fees can be formed between buyer, seller and broker, one that entitled broker to fees].)
Buyers also argued that the brokers were ineligible for a fees award because their dismissal was without prejudice, meaning they could refile their claims against brokers and might obtain some damages in the future. The Court of Appeal was not impressed with this argument—brokers still substantially defeated the relief sought by buyers in the case before it such that they fit the “prevailing party” definition.