Consumer Statutes, Landlord-Tenant, Section 1717: Tenant Prevailing On Common Law Residential Inhabitability Claim Limited To Contractually-Capped Fees Of $1,600

Although More Fees Potentially Allowable Under Statutory Inhabitability Claim, Jury Did Not Base Its Verdict On The Statute Such That Contractually Capped Amount Was The Proper Award.

            This next case involves an intersection between the parties’ contractually capped fee recovery under lease agreements and potentially more expansive damages under a statute allowing recovery for a tenant if that tenant recovers under the statute (Civil Code section 1942.4(b)(2), which specifies recovery for a prevailing tenant if the elements of the statute are met).

            What happened in Brookshire v. HPG Management Inc., Case No. B269544 (2d Dist., Div. 1 Oct. 25, 2018) (unpublished) was that tenant prevailed on a common law implied warranty of habitability claim against landlord under four leases. Each lease did allow fee recovery to a prevailing party, but capped recovery at $400 per lease. Tenant moved to recoup $146,670 in attorney’s fees under both the lease fees clause and Civil Code section 1942.4(b)(2). The lower court determined that plaintiff was entitled to contractual fees, but only $1,600 ($400 under the four leases) and was not entitled to fees under the statutory implied warranty of habitability claim because the jury did not render findings under the statute (instead awarding recovery under the different, but somewhat related, common law implied warranty claim).

            The fee award was affirmed on appeal.

            On the lease fee clauses, there was nothing wrong with the cap because the limits applied to all parties equally.   The appellate court relied greatly on the reasoning in 511 S. Park View, Inc. v. Tsantis, 240 Cal.App.4^th Supp. 44, 48 (2015) [reported in our October 10, 2015 post], which did sustain a similar contractual cap on fees. There was nothing “one sided” about such a cap given that it applied to all parties.

            With respect to the claim for greater fees under the statutory claim, the problem here was that the jury only awarded recovery under a common law implied warranty claim with much different elements than the statutory claim. Given this reality, no greater fees were justified under Civil Code section 1942.4.