Denial Of Fees Would Ignore Realities of “Dual Track” Arbitration/Court Realities Of Modern Litigation.
Mesa Shopping Center-East, LLC v. O Hill, Case No. G049205 (4th Dist., Div. 3 Dec. 23, 2014) (published) is an interesting case involving the propriety of Civil Code section 1717 court fees where there is a “dual track” case, one involving both arbitration and court issues.
In a word, defendants winning an arbitration were denied court costs in a matter where court matters were ancillary to the arbitration proceedings. Specifically, defendants beat back injunctive relief in the trial court and moved to recoup fees even though plaintiffs voluntarily dismissed the court action, but only after losing injunctive relief and submitting the merits to arbitration—dismissing the case once the arbitration decision was ripe for adjudication.
The appellate court reversed the court fee denial order to defendants, in a 3-0 opinion authored by Justice Ikola. The main reason was that commencement of trial for 1717 dismissal purposes should be deemed commencement of arbitration under the circumstances of this case, a tailored test for Santisas preclusion purposes. So, this one got reversed with a chance for the arbitration winner to get more fees for court costs on remand.
Also, we note there was an independent appealability issue, with the appellate court determining a voluntary dismissal in tandem with provisional rulings on fee denial issues with respect to a motion to vacate qualified as an appealable order.
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