$49,500 Fee Award Reversed.
Tenant must have felt pretty good after winning $49,500 in attorney’s fees under Civil Code section 1717 after Landlords voluntarily dismissed with prejudice a mixed contract/tort case after Tenant filed a summary judgment claiming that he was not a party to a leasing agreement and that his signature was forged on the document.
That exhilaration, on appeal, quickly went away when the appellate court reversed the fee award in Behshid v. Petros, Case No. B236530 (2d Dist., Div. 7 Nov. 13, 2012) (unpublished).
Everyone agreed that, under Santisas (17 Cal.4th 599--one of our Leading Cases), the voluntary dismissal meant no fees based on the contract claims were warranted against Landlords. They also agreed, based on Reynolds Metal (24 Cal.3d 124--another of our Leading Cases), that a prevailing nonsignatory can collect fees on contractually-based claims.
However, here the issue was whether a nonsignatory could collect fees on noncontract claims. The answer was “no,” based on Super 7 Motel Associates v. Wang, 16 Cal.App.4th 541, 549 (1993) and Topanga and Victory Partners v. Toghia, 103 Cal.App.4th 775, 786 (2012). Code of Civil Procedure section 1033.5(a)(1)(A), the general costs/fee recovery statute, did not dictate otherwise, because a contract was still needed between the parties to trigger its applicability (as observed in Toghia).