Fee Clause Interpretation, Landlord/Tenant: Guarantor Limitation Of Liability Provision Did Not Limit Fee Recovery

Guaranty Limitation Applied Only To Damages, Not To Attorney’s Fees Which Are Costs Instead.

            In Valencia Gateway Retail IV, LLC v. Woltman, Case No. B288726 (2d Dist., Div. 5 Aug. 20, 2019) (unpublished), two defendant guarantors of a breached lease argued that a guaranty liability limitation—“equal to six months’ charges due under the lease” after tenant successfully performed for three years—prevented an award of attorney’s fees against them as non-prevailing parties despite a fees clause in the guaranty stating “[i]f Landlord is required to enforce Guarantor’s obligations by legal proceedings, Guarantor shall pay to Landlord all costs incurred including, without limitation, reasonable attorney’s fees.”  The trial court did not buy the argument, awarding prevailing landlord $30,365.000 in fees under the guaranty fees clause.

            The 2/5 DCA affirmed the fee recovery.  It, too, did not believe that the guaranty limitation applied to fees because the guaranty fees clause was not so limiting, and the limitation only applied to damages rather than costs such as attorney’s fees.