Allocation, Fee Clause Interpretation, Prevailing Party, Section 1717: Lease Rescission Claim Did Give Rise To Successful Fee Recovery To The Tune Of $418,730.75 In Fees And $16,260.79 In Costs In Tenant’s Favor

“Any Remedy Hereunder” Lease Language Salted Away The Result.

            In The Redbean House Corp. v. Colonnade Wilshire Corp., Case No. B276837 (2d Dist., Div. 2 Aug. 16, 2017) (unpublished), tenant successfully obtained rescission of a commercial lease based on a substantial seismic retrofit issue, although landlord obtained $49,647 in damages for waste after a lot of claims were dismissed by both sides, including landlord’s dismissal of a breach of lease claim.  Then, in post-judgment activities, the trial judge awarding tenant $418,730.75 in attorney’s fees based on a lease fees clause and $16,260.79 in routine costs.

            Landlord appealed the fees/costs orders; landlord lost.

            The first issue was whether rescission of the lease was compensable under Civil Code section 1717.  It was; the lease clause had broad language including “any remedy hereunder” which happened to encompass a rescission remedy.  Given that lease rescission was tenant’s primary litigation objective, the lower court did not abuse its discretion in finding tenant was the prevailing party despite dismissing and not winning every claim.  Landlord’s voluntary dismissal of its breach of contract claim did not alter the result, given that tenant still prevailed on an actually adjudicated claim of import.  (CDF Firefighters v. Maldonado, 200 Cal.App.4^th 158, 161, 167 (2011).)  Finally, no apportionment of fees was required because the trial judge determined that enforceability of the lease was a common issue across the board.  Fees/costs orders affirmed.