Section 1717, Settlement: Settlement Agreement Silent As To Allocation Of Attorney’s Fees/Costs Did Not Bar Section 1717 Fee Recovery By Prevailing Alter Ego Defendant

$15,806.50 Fee Recovery Affirmed, Plus Fees/Costs On Appeal.

            The next case shows how one needs to make fees/costs recovery explicit under a settlement agreement; if not, a later prevailing party not involved may get attorney’s fees and costs.

           In J Sylvester Construction, Inc. v. Standeford, Case No. G057337 (4^th Dist., Div. 3 Jan. 8, 2020) (unpublished), contractor sued a subcontractor performing unlicensed plumbing work under a subcontract with a prevailing party fees clause.  Later, both parties entered into a settlement agreement that was silent as to an allocation of attorney’s fees and costs.  However, contractor continued to prosecute a suit against individual defendant Standeford based on an alter ego theory, with defendant defensing that claim.  The lower court then awarded $15,805.50 in fees pursuant to the contractual fees clause and Civil Code section 1717.

            The 4/3 DCA, in an unpublished decision authored by Justice Moore, affirmed.  The problem for appellant was that the settlement did not address an allocation of attorney’s fees such that fees still could be awarded to the alter ego prevailing defendant.  The appellate court also directed that Standeford was entitled to fees on appeal for winning.