Fee Clause Interpretation, Section 1717: $157,191 Fee And $7,219.60 Costs Award Under A Contractual Fees Clause Affirmed On Appeal

Defendants’ Nonsignatory Status Did Not Change The Result Because Plaintiffs Would Have Been Entitled To Fees Had They Won.

            Based on a broad contractual fees clause in an agreement governing a dispute over the use of large electric sign in the City of Long Beach to advertise car dealerships in the area, defendants obtained a summary judgment against plaintiffs.  The lower court then awarded prevailing party fees and costs to defendants to the tune of $157,191 in fees and $7,219.60 in costs.  The appellate court rejected plaintiffs’ challenges to the fee award in H.T.L. Properties, LLC v. Speck, Case No. B302436 (2d Dist., Div. 2 Apr. 26, 2022) (unpublished).  The principal argument on appeal was that defendants were nonsignatories to the agreement, so no fees were warranted.  Appellants, you are mistaken, said the appellate panel, pointing out that plaintiffs would have been entitled to fees against the nonsignatories such that the reciprocal entitlement ran in favor of the nonsignatories under Civil Code section 1717—citing Brown Bark III, L.P. v. Haver, 219 Cal.App.4^th 809, 819 (2013).