The Fees Clause In The Parties’ Contract Covered Only Contract Claims And Plaintiff’s Tort Claim Was Not Inextricably Intertwined With Its Dismissed Contract Claim.
In WindAirWest v. Castle & Cooke, Case Nos. B295513 and B299043 (2d Dist., Div. 3 January 8, 2021) (unpublished), plaintiff, an operator of a private jet charter company, entered into a sublease agreement with defendant, a fixed-base operator that leases airport space and provides aircraft services to aviation companies that sublease parts of defendant’s space. The parties’ agreement gave plaintiff access to defendant’s facilities at Van Nuys airport, including ramp and hangar space as well as an office.
Less than a month into the sublease, one of defendant’s employees moved plaintiff’s Citation X aircraft in order to access another aircraft, but parked the Citation X on a downhill slope without putting wheel chocks in place to prevent accidental movement, and the Citation X rolled down the slope and crashed into another aircraft – causing serious damage to the Citation X.
Plaintiff sued defendant asserting negligence and breach of contract causes of action, but dropped the breach of contract claim through its first amended complaint filed about a year-and-a-half into the litigation – leaving only the tort negligence claim for which it sought $4,235,935 in lost profits. Defendant admitted liability – which left the only determination at trial to be whether defendant’s conduct caused plaintiff to lose profits and, if so, how much. The jury returned a verdict in plaintiff’s favor, awarding it $2,464,560 in lost profits. Additionally, the trial court awarded plaintiff its attorney fees as the prevailing party.
Defendant raised several challenges on appeal, but we focus on the attorney fees award. Plaintiff moved for fees, pursuant to Code Civ. Proc. §§ 1021, 1032, and 1033.5, based on the attorney fees provision in the parties’ agreement. The trial court concluded the provision was broadly enough worded to encompass tort claims, but the 2/3 DCA disagreed and reversed as to the fees. Although attorney fees are recoverable costs under §§ 1021 and 1032 if authorized by contract, the appellate panel – interpreting the parties’ fees clause under the ordinary rules of contract interpretation – found the mutual intent of the parties was clear that the prevailing party would be entitled to fees for a claim brought “to enforce any provision of this Sublease.” Because plaintiff’s action did not enforce a provision of the sublease agreement, it was not entitled to fees under the fees provision. Additionally, because plaintiff did not contend its tort claims were inextricably intertwined with its dismissed contract claim, its reliance on Lockton v. O’Rourke, 184 Cal.App.4th 1051 (2010) was misplaced and to no avail.
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