Dismissal With Prejudice Was Key, With Section 1717 Containing No Pre-Merits, Pre-Dispositive Adjudication Limitations.
Shapira v. Lifetech Resources, Case No. B283445 (2d Dist., Div. 4 Apr. 17, 2018) (published) addresses the vexing question of when does a dismissal cut off attorney’s fees exposure under Civil Code section 1717 where there has been no prior pretrial dispositive motion indicating the case might be over. The takeaway is that a plaintiff can dismiss, if done with prejudice, without 1717 exposure as long as it is done before a merits-based submission accomplished after a trial.
Boiled down, this case involved a situation where the parties litigated a bench trial, agreed to submit closing arguments through written briefs, and plaintiffs attempted to dismiss the case with prejudice before briefs were submitted. The trial court would not grant the dismissal and eventually ruled for the defense, later awarding the defense $137,000 in Civil Code section 1717 attorney’s fees.
The fee award was reversed as a matter of law. The precise legal issue was whether plaintiff had the right to voluntarily dismiss his case after the parties rested but before closing arguments were completed after a bench trial through written submissions. The answer was yes, he did have a right to dismiss under the circumstances that 1717 fee exposure was o-v-e-r. It was inconsequential whether the situation resonated like sandbagging, to the appellate court, because there were no limitations in section 1717 precluding such a dismissal.
BLOG OBSERVATION—Although we cannot say it would have made a substantive difference, it certainly a pragmatic difference that plaintiff was dismissing with prejudice as far as the ultimate result in this case.
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