Landlord/Tenant/Prevailing Party: Fees Award To Plaintiff Where Both Parties Gained Some Relief Reversed Because Trial Court Erroneously Applied Wrong Standard

Lower Court Used CCP § 1032, Rather Than Civil Code § 1717, For Purposes Of Determining The Prevailing Party.

            8121 Van Nuys Associates, Inc. v. Hoffman, Case No. B276900 (2d Dist., Div. 4 March 21, 2018) (unpublished) involved a landlord/tenant case where both parties won some relief.  Landlord won past rent/damages, while tenant won a security deposit award, resulting in a net judgment in favor of landlord.  Both sides moved for fees, with landlord requesting $43,123.60 and tenant requesting $233,949.   The trial court then determined that landlord was the prevailing party under a lease fees clause, awarding it $42,513.62.  It reasoned that landlord was the prevailing party based under CCP § 1032 because it received a positive net judgment.

            The 2/4 DCA reversed and remanded.  The flaw in the lower court’s analysis was that CCP § 1032 does not determine which side prevailed in this context; rather, Civil Code section 1717 governs.  (Zintel Holdings, LLC v. McLean, 209 Cal.App.4^th 431, 438 (2012).)  Because discretion was not exercised under section 1717, a remand was appropriate.  However, the appellate court somewhat provided some guidance on remand by observing landlord had claimed damages of about $61,000 (out of a request exceeding $1 million), while tenant obtained its security deposit request—such that both sides obtained some success.  But, in the end, the lower court had to exercise discretion under section 1717 for purposes of determining the prevailing party.