Prevailing Party, Section 1717: 2/4 DCA Affirms Trial Court’s Denial Of $216,610 In Section 1717 Attorneys’ Fees To Prevailing Defendant Who Entered Into A Contract With Plaintiff That Contained An Attorneys’ Fees Clause

There Was No Basis For Section 1717 Attorneys’ Fees Because Plaintiff’s Action Was Not On The Contract, And Defendant Failed To Apportion Fees For Its Successful Cross-Complaint On The Contract.

            Plaintiff retained defendant law firm to defend him in a legal malpractice lawsuit, and the parties entered into a retainer agreement which contained an attorneys’ fees clause. Plaintiff subsequently sued defendant for professional negligence, breach of contract, and breach of fiduciary duty, and defendant counter-sued for breach of contract.  Following a bench trial, judgment was entered in favor of defendant, but the trial court denied defendant’s motion for $216,610 in attorneys’ fees it sought pursuant to Civ. Code section 1717 for fees it incurred in defending against plaintiff’s claims.  Defendant appealed in Rosen v. Century Law Group, Case No. B309991 (2d Dist., Div. 4 May 16, 2022) (unpublished).

            Agreeing with the trial court’s conclusion that the “gravamen of the case was the underlying legal malpractice claim,” and citing Loube v. Loube, 64 Cal.App.4^th 421 (1998), the 2/4 DCA affirmed. The fees clause in the parties’ retainer agreement was narrowly drawn and mirrored the language of section 1717, but plaintiff’s action was not on the contract.  In fact, plaintiff’s breach of contract claim was entirely premised on the malpractice claim – alleging that the breach of contract was defendant’s failure to provide plaintiff with competent legal services.  Defendant’s contention that it was entitled to prevailing party fees on its successful cross-complaint for breach of contract also failed because defendant did not provide the trial court with evidence allowing it to apportion fees for defendant’s cross-complaint.