Civil Code Section, Third-Party Beneficiary, Equitable, And Judicial Estoppel Arguments Did Not Prevail.
In Onerent, Inc. v. Galanter, Case No. H046916 (6th Dist. Aug. 11, 2020) (unpublished), an occupant, who thought she was co-tenant, eventually prevailed against a landlord, although the proof showed she never executed lease modifications to make her a true tenant. Landlord gave up and dismissed without prejudice, although that actually turned into a full-fledged judgment for occupant. However, occupant sought $11,512.50 in attorney’s fees based on the idea she prevailed under numerous theories, especially prevailing party fee clauses in the lease and the lease modifications. The lower court denied her request, and the Sixth District affirmed.
The major problem was that occupant was not a tenant under the lease/modification documents, because she never signed any of them. Civil Code section 1717 reciprocity principles were not availing, because landlord could not have recovered fees against occupant, so occupant could not do the same. The third-party beneficiary theory failed because nothing showed she was intended to benefit from the contract, other than incidental references to her in certain documents. Equitable principles did not dictate otherwise, because the fact of the matter was that she--as a nonsignatory--did not have significant skin in the game and was not alleged to be an alter ego/successor of the actual lease signing tenant.
Moral of the story—put your signature on the line and belly up if you want fee entitlement (which, also, means fee exposure). Otherwise, do not rely on downstream theories on fee entitlement to save the game!
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