Prevailing Party, Section 1717: Alter Ego Defendants Obtaining Dismissal Of Declaratory Relief Action Were Entitled To Attorney’s Fees Under A Fees Clause Between Plaintiff And The Signatory Defendant

$58,223 Was The Fee Award, With A Credit For Smaller CCP § 128.7 Sanctions.

               In ATM Professional, Inc. v. Repiping.com, Inc., Case No. B331046 (2d Dist., Div. 3 Mar. 26, 2025) (unpublished), alter ego defendants obtained a dismissal (based on failure to name an indispensable party, the contract signatory) in a declaratory relief complaint when the underlying contract had a fees clause.  The court awarded prevailing party fees of $58,223 to the successful alter ego defendants under Civil Code section 1717, even though the defendants granted a credit for a smaller CCP § 128.7 fees sanctions award.  Plaintiff’s appeal was unsuccessful because:  (1) a declaratory relief action is “on the contract” under Civil Code section 1717; (2) defendants were prevailing parties because they achieved their litigation objectives in obtaining a dismissal of the action; (3) no mediation condition precedents were unsatisfied because the claims were not directed at alter ego defendants; and (4) the assertion that fees were awarded for duplicative work was unsupported by specific objections to the requested fees.