Discretion Only Goes So Far, Says Our Local Appellate Court
Presiding Justice Sills, on behalf of a 3-0 panel of our local appellate court, determined in La Cuesta v. Benham, Case No. G043788 (4th Dist., Div. 3 Mar. 29, 2011) (certified for publication) that discretion can only go so far when a litigant wins a lopsided victory. With that, contractual fees should have been awarded under Civil Code section 1717 based on a contractual fees clause in a lease.
Landlord recovered possession and 70% of his claimed damages, even though tenant claimed nothing was owed. The lower court rebuffed landlord’s attempt to recoup $42,000 in fees by finding he was not the “prevailing party” under section 1717.
Reversed and remanded to award fees to landlord.
Although only a simple unqualified win allows entitlement to fees under section 1717, the trial court abused its discretion because the landlord’s win was lopsided so that “greater” relief was indeed obtained against tenant. (Silver Creek, LLC v. BlackRock Realty Advisors, Inc., 173 Cal.App.4th 1533, 1541 (2009).) “We note: Essentially, the Silver Creek court was thus condemning the simple ‘good news bad news’ approach to section 1717 when it is done without reflection on the relative litigation success of the respective parties.” (Slip Opn., p. 13.) Since landlord obtained repossession and compensation for the tenant’s occupation, “[i]t [was] not enough to hide the difference under the cover of an abuse-of-discretion standard.” (Id.)
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