Fee Clause Interpretation, Section 1717: Prevailing Defendant’s Dismissal Of Cross-Complaint After Winning Did Not Give Rise To Fee Exposure

Santisas Rule Applied, With Dismissed Cross-Complaint Only Raising Contractual Claims.

               In Colaco v. Marcum LLP, Case No. B326252 (2d Dist., Div. 2 July 30, 2024) (unpublished), plaintiff sued his accounting firm for misrepresentation after losing money in some investments, with the defendant obtaining summary judgment and then voluntarily dismissing a cross-complaint containing indemnity and declaratory relief cross-claims.  Although the accounting firm’s engagement letters had broad fee clauses, the lower court denied plaintiff’s request to be awarded attorney’s fees under Civil Code section 1717.  The 2/2 DCA affirmed under the Santisas v. Goodin, 17 Cal.4^th 599, 602 (1998) rule applicable to voluntarily dismissed contract claims.  Plaintiff could not distance himself from admissions that he was suing “on the contract,” and he could not articulate persuasively how the dismissed cross-claims were tort claims falling outside of Santisas.