Entire Contract Must Be Considered in Fashioning Fee Award.
Acting Presiding Justice O’Leary, from our local Fourth District, Division 3, has penned a 3-0 decision that reminds us of the statutory breadth of Civil Code section 1717, the fee shifting provision applicable to contractual fee clauses. The case is Ghods v. Citicorp Vendor Finance, Inc., Case No. G042251 (4th Dist., Div. 3 Dec. 29, 2010) (unpublished).
There, an attorney lost a convoluted contractual battle over a broken leased photocopier in which damages of $250,000 were alleged. Be careful of what you allege, because--with this exposure--the trial court had no problem awarding $68,960 in attorney’s fees in favor of the winning defendant and against plaintiff after he lost (albeit an $18,220 reduction in requested defense fees of $88,180).
Disgruntled attorney appealed, but did not win his challenge to the fee award.
His main challenge was that the fee clause did not apply because it was not reciprocal: after all, it only applied if attorney was in default under the photocopier contract but did not make the leasing company liable at all for fees. Wrong, because the Legislature in 1983 amended section 1717 to overturn decisions limiting fee recovery to particular types of claims. Rather, parties may not limit fee recovery to a particular type of claim, such as a default action, unless the contract actually specifies that each party was represented in the negotiation and execution of the contract so as to narrow the ambit of recovery--an exception not applicable. (Harbor View Hills Community Assn. v. Torley, 5 Cal.App.4th 343, 348-349 (1992).)
No apportionment was necessary given the overall relation of the issues to an overarching contractual dispute.
The last salvo launched by losing plaintiff was to the amount of fees awarded. Sorry, said the appellate court, but no dice. Plaintiff litigated the case vigorously, and the lower court did reduce fees by quite a chunk. No abuse of discretion here, especially given the vigor with which the case was prosecuted by the loser.
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