Cases Under Review/Fee Clause Interpretation/Section 1717: Mountain Air Decision Pending For Review By California Supreme Court

 

Split Opinion Decided Novation Defense Was “On The Contract” For Fee Clause Interpretation/Section 1717 Purposes.

     On November 21, 2014, we posted on Mountain Air Enterprises, LLC v. Sundowner Towers, LLC, 2014 WL 6488418 (Nov. 20, 2014) [1^st Dist., Div. 2; majority opinion by Stewart, J. and dissenting opinion by Richman, J.], which held that “action” language in fees clause was interpreted broadly to allow recovery of fees for successful novation defense, agreeing with Windsor and dissenting opinion in Gil (both Second District decisions).

     This case was accepted for California Supreme Court review on March 18, 2015, with the Issues Summary stating what is involved: “This case includes the following issues: (1) Does the assertion of an agreement as an affirmative defense implicate the attorney fee provision in that agreement? (2) Does the term “action” or “proceeding” in Civil Code section 1717 and in attorney fee provisions encompass the assertion of an affirmative defense?”

     The case was fully briefed as of August 6, 2015.