Ron Sheng, Inc. v. Li, Case No. B239682 (2d Dist., Div. 7 Feb. 19, 2013) (unpublished) is a wild landlord-tenant dispute where landlord settled with tenants and tenants won a $200,760 fee award pursuant to an arbitration which was eventually sustained on appeal. However, landlord brought a rescission action claiming that the settlement agreement contained an illegal provision, but eventually dismissed the rescission action after the appellate court affirmed the prior win by tenants. Tenants then moved to recovery fees/costs of $17,365 as prevailing party in the rescission action, $1,265 of which were costs. The trial court found no fee entitlement, and denied tenants’ request altogether.
The denial of fees was affirmed, but the judgment was modified to allow appealing tenants to recover the relatively small amount of costs.
Landlord defended against another fee award because the rescission lawsuit did not arise under a residential hotel eviction statute (Civ. Code, §1940.1(b)) and did not arise under the inhabitablility statute (Civ. Code, §1942.4)--rather, it was a common law rescission action not arising under either fee entitlement statute. The appellate court agreed with this construction of the statutes. (Cf. SC Manufactured Homes, Inc. v. Canyon View Estates, Inc., 148 Cal.App.4th 663, 675, 677 (2007).)
However, tenants were entitled to routine costs. After all, the rescission case was dismissed with prejudice such that tenants were the prevailing party under CCP § 1032(a)(4).
So, tenants got another $1,265, but each party bore their own costs on appeal. Somewhat of a small victory for appealing tenants, we should observe.