$73,125 Fee Award Went POOF!, But Not Because of a Merits Reversal.
Tenant must have been feeling good at the trial court level, even though the dispute involved of all things a to-do about a $16,990 security deposit. After landlord commenced an unlawful detainer, the parties stipulated to a judgment (without a fees clause) which talked about future handling of the security deposit in line with California requirements for an inspection and substantiation of deposit use. Tenant did move out, but landlord gave tenant an unsatisfactory deposit use itemization. Tenant moved to vacate the unlawful detainer judgment based on the mistaken notion that landlord would comply with the security deposit procedures, but the lower court instructed tenant to file a new action on the issue, which tenant did. Eventually, the trial judge based on jury findings found in favor of tenant in the second action, awarding over $37,000 in damages for not abiding by security deposit dictates. Then, tenant was granted $73,125 in attorney’s fees under a lease fees clause (out of a requested $107,217).
Landlord appealed both the merits and fee awards in De Carlo v. Kosser, Case No. B237278 (2d Dist., Div. 5 Jan. 7, 2013) (unpublished).
Landlord lost on the merits, but probably felt much better by obtaining a reversal of the fees award. (And, not surprisingly, the fee award eclipsed the merits award by almost double.)
Tenant did not justify the fee award for two reasons. First, there was a mediation condition precedent clause in the lease, and tenant never demonstrated it proffered mediation before filing the separate action. However, the trial judge apparently reasoned that the separate security deposit action was a continuation of the unlawful detainer proceeding, which was expressly exempted from the mediation requirement. That brought the appellate court to the second reason for its reversal: the post-U.D. action was indeed a separate lawsuit on the lease subject to the mediation requirement and, furthermore, under the lower court’s logic, no fees should have been awarded in any event because the suit was on the settlement agreement rather than the lease--and the settlement agreement contained no fees clause. Fee award reversed as a matter of law, no matter how you sliced the ham.
Lewis Wiggins cutting off a slice of his homecured ham in his smokehouse. La Delta Project, Thomastown, Louisiana. Marion Post Wolcott, photographer. June 1940. Library of Congress.