Deeds of Trust/Section 1717: Fee Denial Reversed In Trust Deed Cancellation Case

 

Nonassuming Grantee Under Deed Of Trust “Steps Into Shoes” For Civil Code Section Purposes.

     Plaintiff prevailed on her cause of action to cancel a trust deed with an attorney’s fees clause, but the lower court—although sympathetic to her cause—denied a fee request of over $130,000 in Reynoso v. Patel, Case No. H039016 (6^th Dist. Sept. 22, 2014) (unpublished).

     Plaintiff’s appeal of the fee denial was reversed.

     Plaintiff did win a trust deed cancellation battle based on a forged instrument. Even though plaintiff won a judicial arbitration and got minimal fees, she did request a de novo trial after prevailing at the judicial arbitration (likely wanting another trial because the award of attorney’s fees was pretty small). The reviewing court determined that plaintiff’s de novo trial request did not preclude a subsequent fee award because the judicial arbitration statutes do not apply to equitable claims such as those brought by plaintiff, so there was no bar from prior judicial arbitration activities. Then, on to the merits. The appellate court found that plaintiff nonsignatory’s success was no different than nonassuming grantee’s situation in Saucedo v. Mercury Sav. & Loan Assn., 111 Cal.App.3d 209, 315, entitling her to a 1717 fee recovery. So, a remand was ordered to allow plaintiff to recoup 1717 fees in a yet-to-occur fee hearing. Plaintiff also obtained costs on appeal, which logically would mean more fees for winning on appeal.