Estoppel, Prevailing Party, Section 1717: Trial Court’s Conclusion That It Lacked Jurisdiction To Entertain Motion To Enforce Settlement Means That Neither Side Could Be Prevailing Party

Motion Was Not On The Contract, Opposing Side Was Not Estopped From Denying Fee Exposure, And Prevailing Party Determination Was Premature In Nature.

            The Fourth District, Division 1, in Howeth v. Coffelt, Case No. D072543 (4^th Dist., Div. 1 June 18, 2018) (unpublished) (Howeth II), had to deal with one side’s appeal of an order denying attorney’s fees based on a settlement agreement relating to a longstanding reciprocal easement dispute. In the end, the appellate court concluded that the “prevailing party” determination was premature until someone used the settlement agreement remedy to file an independent enforcement action and actually won, rather than resort to a quicker CCP § 664.6 motion procedure found to be inapt for resolving the dispute.

            In this one, the parties settled the easement dispute through a settlement agreement requiring an independent action to enforce it, also replete with a prevailing party fees clause. One side brought a motion to enforce, which was denied because the proper remedy was to bring an independent action—with the 4/1 DCA determining in a prior appeal that the denial order was not appealable. Then, the other side brought a motion for an award of fees and costs as the prevailing party in the prior proceeding. The trial court denied the motion, finding that neither party had prevailed at the time of denial of the Howeths’ previous motion because the court lacked jurisdiction to entertain it.

            Coffelt, the other side, appealed the appeal denial in Howeth II. They, too, were not successful.

            Although finding that the denial order was sufficiently “collateral” to an underlying judgment and was equivalent to an enforcement matter, the 4/1 DCA affirmed the denial order for numerous reasons. First, the matter was not an action “on the contract” because the motion to enforce did not really implicate the proper avenue to file an independent action truly based on the contract. Second, despite Howeths’ allegation of entitlement to attorney’s fees, this did not result in equitable estoppel because a Civil Code section 1717 fee claimant must show that there was an actual exposure to liability for fees by the opposite site, not just allegations of exposure—relying on Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4^th 858, 899, 899 n. 12 (2008). Third, any prevailing party determination was premature because no one prevailed until the independent action determined who won, colorfully quoting from Estate of Drummond, 149 Cal.App.4^th 46, 53 (2007) [“By achieving that result, appellants no more ‘prevailed’ than does a fleeing army that outruns a pursing one. Living to fight another day may be a kind of success, and surely it is better than defeat. But as long as the war goes on neither side can be said to have prevailed.”].