Allocation, Fee Clause Interpretation, Section 1717: Intervening Insurer Not Responsible For Fees To Prevailing Party, While Litigant Losing Alter Ego Arguments Was Responsible For Fees

Lower Court Also Did Not Err By Awarding Insurer Rate Fees To A Prevailing Party, Apportioning Out Noncompensable Fees.

               Yee v. Weinberg, Case No. A163850 et al. (1^st Dist., Div. 4 Mar. 5, 2024) (unpublished) is a situation where a plaintiff landlord prevailed against defendant tenant, with landlord receiving some fees (but none against the intervening insurer eventually withdrawing from the case), but with landlord having to pay fees to defendants not proven to be alter egos.  Some of the winning defendants were awarded fees, but at lower rates charged by the insurance carrier and with some apportionment done by the lower court.

               All of the fee determinations were affirmed on appeal.  The insurer was not responsible for fees because (1) there was no contract or statute allowing fee entitlement to landlord, and (2) insurer’s dismissal of its intervention complaint was a contractual dismissal which invoked the Santisas fee bar.  The fee award to the alter ego defendants was no fluke because plaintiff failed to prove they were alter egos, which invoked Reynolds Metals as the fee entitlement basis.  Defendants complaining about the lower court’s reduction in fee requests, through cross-appeals, showed no abuse of discretion in allowing compensation only at the rates charged by the insurance carrier’s counsel and apportioning out fees which were not compensable.