Very Elaborate Discussion Of “Tender” Under Section 1717(b)(2), Which Appellant Did Not Meet.
D.R. Horton Los Angeles Holding Co., Inc. v. Milgard Mfg. Co., Inc., Case No. D074889 (4th Dist., Div. 1 March 29, 2019) (unpublished) is an interesting case which interpreted the nature of Civil Code section 1717(b)(2). That provision says that where a defendant alleges in his answer that he tendered to the plaintiff the full amount to which he was entitled and then deposits in court that same amount so tendered, if found true, then defendant is deemed the prevailing party on the contract under section 1717.
The case involved a subcontractor’s obligation to indemnify and defend a general contractor/developer for certain sums under an indemnity obligation. Although we briefly summarize the facts, deep into the litigation, subcontractor was granted leave to amend its answer to allege a section 1717(b)(2) tender and filed a deposit document with the court for $11,000 deep into the litigation. The 4/1 DCA conceded that section 1717(b)(2) did not define tender, but applied law saying that it had to be a full and unconditional tender of the amount due before the litigation commenced. It was inappropriate for subcontractor to make the tender post-litigation in an attempt to cut off the other party’s entitlement of prevailing party fees because it had to go deep into the case to obtain success. Subcontractor wanted to be the prevailing party for fees, but that was nixed on application of conservative “tender” principles.
The appellate court also emphasized that this tender provision was not akin to a CCP § 998 shifting mechanism. Subcontractor did not make an appropriate tender, so that its $11,000 “deposit” did not operate to make it prevail under section 1717(b)(2).
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