Section 1717, Section 998: Because Plaintiff Voluntarily Dismissed Its Unlawful Detainer Action Without Prejudice, Santisas Prevented Recovery Of Contractual Attorney’s Fees By The Other Side Despite The Winning 998 Offer

However, Plaintiff Did Pay The Other Side $118,372.65 In Routine Costs.

               In Riverside Mining Limited v. Quality Aggregates, Case No. E081228 (4^th Dist., Div. 2 Aug. 19, 2024) (published), Quality leased 73 acres from Riverside Mining, operating a quarry on the land.  Quality brought a civil lawsuit against Riverside Mining for infringing its leasehold, while Riverside Mining countered by filing an unlawful detainer action against Quality.  Quality offered to compromise under a CCP § 998 offer by having Riverside Mining dismiss the UD action with prejudice, each side to bear their own fees and costs.  Riverside Mining did not accept the offer and, after substantial discovery but before trial, it voluntarily dismissed its UD action without prejudice.  Riverside Mining paid $118,372.65 in routine costs to Quality (inclusive of expert witness expenses) based on the winning 998 offer, but successfully resisted Quality’s motion for an attorney’s fees award of $199,514.38 (inclusive of a 1.25 multiplier).

               The 4/2 DCA affirmed the fee denial, agreeing that the lower court properly applied the reasoning of Ford Motor Credit Co. v. Hunsberger, 163 Cal.App.4^th 1526, 1533 (2008).  Because the unlawful detainer action was contractual in nature, Ford found that Civil Code section 1717(b)(2) blocked recovery of fees because CCP § 998 does not expressly authorize a fees award and section 1717(b)(2) effectively “trumped” section 998 in disallowing fees based on the voluntary dismissal. 

               BLOG HAT TIP—We note that Susan Allison of Jeffer Mangels Butler & Mitchell was one of the winning appellate attorneys.  Co-contributor Mike worked with her and other Jeffer attorneys during a Pomona Superior Court trial.  Congratulations, Susan.