Section 1717: $547,532.33 Contractual Fee Award Against Otis Elevator Based On Litigant’s Cross-Complaint Affirmed On Appeal In Duty To Defend Situation

It Was Irrelevant Who Paid The Fees, Law Of The Case Sustained The Award Based On Earlier Appellate Opinion, And Duty To Defend Ruling Was “On The Contract.”

            In Sierra Pacific Properties, Inc. v. Otis Elevator Co., Case Nos. A162854 et al. (1^st Dist., Div. 5 Nov. 21, 2022) (unpublished), Otis Elevator was not happy that it suffered a $547,532.33 contractual, Civil Code section 1717 based fees/costs award based on an adverse judgment on an opponent’s duty to defend cross-complaint after the appellate court earlier reversed a judgment in Otis Elevator’s favor.  Unfortunately, those are the breaks in contested litigation and appeals in the California state system.  Otis Elevator appealed, but its arguments were rejected as follows: (1) it did not matter who paid the fees for purposes of fee entitlement under the contractual fees clause (Sonoma Land Trust v. Thompson, 63 Cal.App.5^th 978, 984-985 (2021)); (2) the other side was the prevailing party under law of the case based on the earlier appellate court decision on the duty to defend reversal issue; and (3) the duty to defend was “on the contract,” an independent reason to conclude Otis Elevator’s opponent was the prevailing party.