Not All Clauses Referring To Attorney’s Fees Are Prevailing Party Fee Provisions.
Many deeds of trust refer to attorney’s fees – but do they provide for attorney’s fees to a prevailing party? Not here, said the Court of Appeal in Hart, et al. v. Clear Recon Corp., et al., B283221 (2/8 9/18/18) (Rubin, Bigelow, Goodman).
In Hart, a lender that prevailed against non-borrowers who had brought an unsuccessful action to halt a foreclosure sale and obtain declaratory relief, sought attorney’s fees as the prevailing party. The lender relied on deed of trust language referencing attorney’s fees, and on the further fact that the plaintiffs had themselves prayed for attorney’s fees. The trial court granted attorney’s fees to the lender.
The Court of Appeal reversed for two reasons. First, the deed of trust language provided that attorney’s fees could be added to the debt owed to the lender, rather than providing for an award of attorney’s fees to the prevailing party. Second, “pleading a right to attorney’s fees is not a sufficient basis to judicially estop a party from challenging the opposing party’s alleged contractual basis for an award of attorney’s fees.” There also needs to be a genuine contractual basis for awarding attorney’s fees to the prevailing party.
COMMENT: The California Court of Appeal referred to federal cases that had already interpreted the relevant language in the deed of trust and found that it added attorney’s fees to the debt, without entitling the prevailing party to recover attorney’s fees. One of the federal cases, Dufour v. Allen, also cited to an unpublished California Court of Appeal opinion, to conclude that the language in the standard form deed of trust is not a litigation attorney’s fees provision. The federal opinions can cite to unpublished California cases, whereas a California case cannot cite to an unpublished California case. As the Court explained in Hart, “[W]e choose neither to ignore the unpublished opinion nor redact it from our quotation of the federal case which cited it. Nevertheless, we recognize that the California unpublished case is not precedent.”
What an oddity! The California published opinion cannot directly cite the unpublished case, whereas the federal case can cite it, and the California published opinion can cite the federal case quoting and citing the unpublished California case. Do those rules of citation make sense?
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