Deeds Of Trust: Wife Obtaining Property, But Not Signing Note, Was Not Liable For Attorney’s Fees Under Deed Of Trust Provisions

Civil Code Section 1717 Prevailing Party Analysis Did Not Apply.

            In Ruegsegger v. Homeward Residential, Inc., Case No. G052879 (4^th Dist., Div. 3 Sept. 19, 2017) (unpublished), ex-husband solely signed a note (ex-wife did not sign), although both signed a deed of trust on property, even though ex-husband conveyed property to ex-wife through a quitclaim deed as part of a divorce.  Ex-wife tried to stop a nonjudicial foreclosure, but lender-affiliated parties won. Lenders filed to recoup prevailing party attorney’s fees under two provisions of the deed of trust.  The trial court denied the fee motion, with our local 4/3 DCA—in an opinion authored by Presiding Justice O’Leary—agreeing.

            Civil Code section 1717 prevailing party analysis did not apply, because the unilaterally worded fees clauses simply did not allow for fee entitlement of the lenders and the fees clauses were not prevailing party clauses.  Instead, the main deed of trust clause made it clear that ex-wife was not personally obligated to pay sums secured by the deed of trust (such as attorney’s fees) if she did not sign the note, something she did not.  The trust deed provisions did allow the fees to be added to the amount foreclosed upon (when and if there was a foreclosure), but did not result in ex-wife being personally liable for those amounts.  Fee entitlement was missing in this one based on the precise language of the primary trust deed clauses.