Bank Wanted To Obtain Custodial Deposit Account Priority On Injunctive Claim, But Did Not Achieve Main Objective By Losing Lien Priority Issue.
Courts will focus on who pragmatically “won” as far as determining the prevailing party under Civil Code section 1717. The next case well illustrates this principle.
In Wells Fargo Bank, N.A. v. Cabazon Band of Mission Indians, Case No. E060447 (4th Dist., Div. 2 June 15, 2016) (unpublished), Bank ultimately won a $65 million verdict against borrower Tribe for a loan to build a parking garage for a casino, to be operated by a Development Authority which was also indebted to Bank. However, Bank did not win an injunction to force Development Authority to transfer moneys from a custodial account to Bank, attempting to elevate its status over Development Authority’s secured creditors.
The lower court denied Bank’s fees motion against the Tribe under Civil Code section 1717. The appellate court affirmed, determining that the main objective was to obtain the Development Authority custodial deposits rather than a win based on the default under the Tribe’s loan agreement, a default never contested by anyone in the case. The “main objective” test meant that Bank did not prevail on appeal as far as getting a chance to recoup what we would perceive to be substantial trial court fee expenses.
TRIVIA: The Wikipedia article on the Cabazon Band of Mission Indians states that the tribe has no unemployment.