CALIFORNIA ATTORNEY'S FEES

Nonsignatories, Section 1717: Lenders, As Third-Party Beneficiaries, Properly Awarded Attorney’s Fees Under Broad Fee Clause Encompassing Tort Claims

$150,000 Was The Fee Award Affirmed In Lenders’ Favor As Prevailing Cross-Defendants.

            Hom v. Petrou, Case No. A161770 (1^st Dist., Div. 4 Aug. 3, 2021) (published) involved a $150,000 contractual attorney’s fees award in favor of lenders obtaining a dismissal of a cross-complaint alleging primarily tort claims.  The 1/4 DCA affirmed, holding that there is no blanket rule prohibiting nonsignatories from collecting fees on tort claims—analyzing several cases to reach this holding and deciding that any ultimate conclusion rested on the particular wording of the contract at issue.  Specifically, the lease established that lenders were third-party beneficiaries, with the fees clause language not disqualifying lenders from being considered as parties to the clause and with the breadth of the language encompassing tort claims. 

Nonsignatories: Non-prevailing Individual Plaintiff Was Not Subject To Attorney’s Fees Exposure Because Nothing Indicated He Was A Contractual Third-Party Beneficiary

$430,000 In Fees Awarded Against Signatory LLC, But Not Against Losing Individual Plaintiff.

            For a non-prevailing nonsignatory party to be exposed to fees, there must be some substantial link to the underlying contract involving signatory parties—such as the nonsignatory being a third-party beneficiary of a contract.  (Real Property Services Corp. v. City of Pasadena, 25 Cal.App.4^th 375, 382 (1994).)  In the absence of that relationship, an individual plaintiff losing a case may not be liable for substantial fee exposure, as happened to be the case in Kavoukjian v. Imnaishvili, Case No. B300459 (2d Dist., Div. 8 Dec. 10, 2020) (unpublished).

            Defendants won a bench trial against both signatory and nonsignatory plaintiffs involving a joint venture agreement with a contractual fees clause.  The lower court awarded $430,000 in fees against the LLC signatory plaintiff, but not the losing nonsignatory, individual plaintiff.  Defendants appealed the fee denial as against the nonsignatory plaintiff.

            The 2/8 DCA panel affirmed.  Nonsignatory plaintiff’s claims were not based on breach of contract, given that only the LLC sued on this theory.  Although nonsignatory claimed to be a third-party beneficiary in a discovery response after commencement of litigation, this statement alone did not mean he was—with the joint venture agreement not manifesting any intent by the signatories to confer a direct benefit on the nonsignatory plaintiff.  The fact that the LLC could assign its interests and options to the nonsignatory did not make the nonsignatory a third-party beneficiary.  (Don Rose Oil Co., Inc. v. Lindsley, 160 Cal.App.3d 752, 756 (1984).)  Naming nonsignatory in the notice provision of the contract also was too incidental.  (Walters v. Calderon, 25 Cal.App.3d 863, 871 (1972).) 

Arbitration, Nonsignatories, Quantum Meruit, Retainer Agreements: Judgment Confirming Arbitration Award Of $1,273,765.91 In Fees Owed To Two Law Firms Plus Another $508,678.82 For Fees And Costs Incurred In The Arbitration Affirmed

Arbitration Was Properly Ordered Because The Claims Between Client And The Two Law Firms Arose Out Of The Underlying Retainer And Arbitration Agreements Client Signed With The First Law Firm.

            Client retained a law firm to represent her in an ongoing dissolution action – signing a Retainer Agreement and a binding Arbitration Agreement.  During the next 15 months, the law firm billed Client more than $4.5 million in fees and costs, which included fees/costs incurred for the first 23 days of trial (with an estimated 45 additional trial days to follow).  Around this time, the trial court denied the law firm’s request for an award of $1 million in interim attorneys’ fees to continue representing Client.  That same day, an attorney from the law firm notified Client that the law firm had dissolved and that he was forming a new law firm where the same staff would be available to continue working on her case.  He requested Client sign an acknowledgment that the new firm would represent her under the same terms as the Retainer and Arbitration Agreements from the first firm.  She refused to sign, but requested the new firm represent her.  The new firm and Client did not sign a retainer agreement.

            About a week-and-a-half later, the attorney filed a motion to withdraw as Client informed him she would not make additional payments until completion of the trial.  Client opposed the motion – stating she had “no irreconcilable differences with [the attorney]” and only disputed his demand for additional fees.  A year after the motion to withdraw was granted, the attorney, dissolved firm, and the new firm collectively filed a lawsuit against Client for breach of contract – among other causes of action – resulting from the unpaid fees.  On the same day, Client filed a lawsuit against the attorney and firms alleging breach of fiduciary duty, breach of contract, and legal malpractice – based on representations Client alleged were made to her when she agreed to retain the now dissolved law firm.

            The trial court related the two lawsuits, and attorney/firms successfully moved to compel arbitration of all claims raised in both lawsuits based on the Arbitration Agreement signed between Client and the now dissolved firm.  Several months after completion of the multi-day arbitration, the arbitrator issued written award in favor of the firms – awarding the now dissolved firm $1,037,719.16 in unpaid fees and costs, plus interest, under breach of contract; awarding the second law firm $236,046.75 for the reasonable value of its services, under the theory of quantum meruit, using the same billing rates outlined in the Retainer Agreement signed with the now dissolved firm; and awarding an additional $508,678.82 to the “prevailing party” attorney/firms for fees/costs incurred in the arbitration.  After the trial court confirmed the arbitration award, Client filed a motion for a new trial – arguing the trial court erred in granting the petition to confirm the arbitration award.  Upon denial of that motion, Client appealed.

            On appeal, Client argued that none of the claims concerning the new law firm arose out of the obligations created by the Retainer Agreement and Arbitration Agreement signed with the now dissolved firm, and that she never signed such agreements with the new firm.  The 2/3 DCA in Kolodny v. Wondries, Case No. B293985 (2d Dist., Div. 3 November 25, 2019) (unpublished) disagreed. 

            Citing Strasbourger Pearson Tulcin Wolff Ins. v. Wiz Technology, Inc. (1999) 69 Cal.App.4^th 1399, 1404, the 2/3 DCA found “an attorney-client relationship can be created by an express or implied agreement; the terms of an implied agreement ‘are manifested by conduct’.”  Here, although Client refused to sign anything with the new law firm, she requested that the attorney continue representing her through the new firm.  She never proposed different terms, nor did she ask to negotiate a different retainer agreement, when she requested the continued representation.  Further, Client pursued claims against the new law firm based on obligations originating out of the Retainer Agreement signed with the now dissolved firm.  Therefore, the trial court was correct in determining that the original Retainer and Arbitration Agreements were the source of the attorney-client relationship between Client and new firm, and that the disputes between the law firms and Client arose from those original agreements.

Section 1717: Nonsignatory Defendants Entitled To Fee Recovery Under Civil Code Section 1717

$61,565 Fee Award Sustained On Appeal

            Nonsignatories defendants were awarded attorney’s fees of $61,565, drawing an appeal from the plaintiff in Westco Petroleum Distributors, Inc. v. Huntington Beach Industrial, Case No. B269393 (2d Dist., Div. 2 Aug. 10, 2017) (unpublished).  After surveying section 1717 jurisprudence which does allow fee recovery to nonsignatories like the defendants here, the appellate court sustained the fee award given the breadth of the fees clause which did cover the contract and tort claims at issue. 

Nonsignatories: Prevailing Plaintiff Establishing Defendants Are Not Parties To License Agreement With Fee Provision Is Not Entitled To Fees Under Section 1717

When It Comes To Collecting Fees Under Civil Code Section 1717, A Prevailing Plaintiff Who Sues On A Contract Is Not The Same As A Prevailing Plaintiff Who Shows A Contract Does Not Exist.

     Glovia International, Inc. v. Actuant Corporation, et al., B267175 (2/5 12/22/16) (Kumar, Turner, Kriegler) (unpublished) reinforces a theme oft repeated in our fee blawg: the first condition a prevailing party must establish to collect attorney's fees is a legal basis for fee entitlement. In Glovia International, the Court of Appeal reversed a substantial fee award because a basis for fee entitlement under Civil Code section 1717 did not exist.

     Plaintiff and respondent Glovia sued defendants and appellants Maxima Technologies & Systems, LLC and its parent Actuant, alleging unauthorized use of Glovia's proprietary software. Glovia prevailed in the trial court by establishing that Maxima had not licensed Glovia's software, obtaining awards of compensatory damages, punitive damages, and attorney's fees. The Court of Appeal affirmed an award of compensatory damages, while reversing a $650,000 award in punitive damages, and a $1,474,151.75 award in attorney's fees pursuant to Civil Code section 1717.

     The punitive damages award was reversed because Glovia did not present sufficient evidence of defendant Maxima's financial condition.

     As to the fee award under section 1717, Glovia argued, "[W]here a dispute involves a contract that contains an attorney fee provision, section 1717 authorizes fees where a party prevails by proving the contract is invalid or unenforceable." Unfortunately for Glovia, that argument only holds true when a plaintiff sues on a contract containing a prevailing party fee provision, and the defendant prevails by arguing the contract is inapplicable, invalid, unenforceable, or nonexistent.

     Glovia, however, did not bring an action on a contract (here, a license) to enforce the contract's terms. "Instead, it brought an action claiming Actuant and Maxima were not valid holders of a license, a claim upon which Glovia prevailed." As the Court explains, because Glovia succeeded in proving it was not a party to a contract with Actuant or Maxima that contained an attorney fees clause, "it was not entitled to its attorney fees."

     So we return to our first point: there must be a legal basis for an award of attorney fees. Here, there was no basis for fee entitlement.

     NOTE: Blawg co-contributors Mike and Marc are attorneys at AlvaradoSmith. AlvaradoSmith and its attorneys Theodore E. Bacon, David John Masutani, and William M. Hensley represented Defendants and Appellants Actuant Corporation and Maxima Technologies & Systems, LLC.

Fee Clause Interpretation: Narrow Contractual Fees Clause Did Not Cover Tort And Subrogation Claims, Which Did Not Arise Under Contract With Fees Clause

 

Negligence And Subrogation Claims Did Not Give Prevailing Cross-Defendant Bank Entitlement To Fee Recovery.

    Under our category “Fee Clause Interpretation,” we have surveyed many decisions which really demonstrate that the wording of a fees clause actually determines if fee recovery is possible for tort clams or possible against losing contractual non-signatories.  The Fifth District’s decision in Ins. Co. of the West v. United Security Bank, Case No. F068649 (5th Dist. Mar. 21, 2016) (unpublished) is a good example of how these principles operate in the real world.

    There, a cross-defendant Bank obtained a summary judgment against a cross-complainant, which was not a signatory under a construction loan agreement with a narrow fees clause relating only to the loan agreement.  Bank nonetheless argued that cross-claims based on negligence and subrogation were “disguised” contract claims worthy of fee entitlement, but the trial judge denied any fee recovery to Bank.

    The Fifth District affirmed.  The negligence claim was not “on the contract” because it did not encompass tort claims, plus it was unilateral and did not allow fee recovery either for or against another litigant such as non-prevailing cross-complainant. The subrogation claim, although potentially applicable to non-signatories, did not give rise to fee entitlement because nothing allowed cross-complainant to step in the shoes of any party to the construction loan agreement—so, if cross-complainant could not recover for fees, Bank could not either under either contractual interpretation or Civil Code section 1717 reciprocity principles.

Arbitration/Fee Clause Interpretation: Defendant Nonsignatories Prevailing In Arbitration, Which Arbitration Award Was Reversed In Earlier Appeal, Also Not Entitled To Attorney’s Fees Award

 

Reason Is That They Were Not Parties To The Purchase Agreement With A Fees Clause.

    Defendants must have been very disappointed, after winning an arbitration award which was confirmed as a judgment and after winning attorney’s fees of $13,465 based on a fees clause in a purchase agreement involved in the arbitration, when the Second District, Division 7 earlier determined that the trial court improperly compelled arbitration because they were not parties to the purchase agreement with an arbitration clause.  They got even more bad news in Ahern v. Asset Management Consultants, Inc., Case No. 258030 (2d Dist., Div. 5 Sept. 3, 2015) (unpublished).

    Division 5 reversed the fee award, too, after determining defendants were nonsignatories to the purchase agreement so as to have no fee entitlement.  The problem as the appellate court saw it was the narrowness of the fees clause, applicable only to “either party hereto”—parties to the actual purchase agreement, which did not encompass defendants.  Defendants argued that they were assignees entitled to enforce the fees clause, but case law holding that an assignee is not a “party hereto” for purposes of fee recovery was fatal to this argument.  (Sessions Payroll Management, Inc. v. Noble Construction Co., 84 Cal.App.4th 671, 681 (2000); Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4th 898, 906 (2008).)  Civil Code section 1717’s reciprocity policy did not apply because defendants could never have prevailed for purposes of fee recovery in the first instance.

Section 1717, Non-signatories, Special Fee Shifting Statutes: Nonsignatory Defendant Entitled To Fee Recovery Based On Statute Which Would Have Made Him Personally Liable For Signatory’s Obligations

 

Impact of Perishable Agricultural Commodities Act Liability Considered By Appellate Panel.

 

     Plaintiff (produce seller) sued a restaurant (Jack’s La Jolla) and its controlling officer Berkley to recover monies owed for the produce, claiming that Berkley had signed a guaranty and Berkley was subject to personal liability for restaurant’s contractual obligations (under an agreement with a fees clause) through the Perishable Agricultural Commodities Act (PACA), which can impose personal liability on a corporate officer who controls and holds the assets of a produce buyer in trust for the produce seller. Originally, plaintiff won against both defendants, although the trial court rejected that Berkley had signed the guaranty but did rule he was liable personally under PACA. In a prior appellate decision, the reviewing court reversed the PACA liability ruling, which meant that Berkley was a prevailing party. He was then awarded $14,725 in fees for new trial and appellate work based on the guaranty agreement. That prompted an appeal by produce seller.

     The fee award was affirmed in Tomatoes Extraordinaire, Inc. v. Berkley, Case No. D065768 (4^th Dist., Div. 1 Mar. 20, 2015) (unpublished). Although the trial court incorrectly relied on the guaranty agreement not signed by Berkley, defendant was entitled to fees because PACA made him personally liable if he had lost. In cases where a nonsignatory “stands in the shoes” of the signatory contracting party, fees are recoverable under Civil Code section 1717, with it being inconsequential whether the liability is based on express terms of a contract or by operation of a statute like PACA. (E. Marmata, Inc. v. Platinum Funding Corp., 887 F. Supp. 590, 594-595 (S.D.N.Y. 1995) [contractual fees clause between PACA produce buyer and seller applied to nonsignatory party who took over buyer’s account and who was on constructive notice of its liability under PACA].)

Nonsignatories: LLC Members Receiving Distributions In De Facto Dissolution Liable For Fee Exposure To Prevailing Party In LLC Dispute Where Fee Clause Existed Between LLC And Plaintiff Listing Broker

 

Former Corporations Code Section 17355(a)(1)(B) Allows For Fee Entitlement In Litigation, But Not Fees Incurred In Arbitration.

     In CB Richard Ellis, Inc. v. Terra Nostra Consultants, Case No. G049803 (4^th Dist., Div. 3 Oct. 7, 2014) (partially published; fee discussion published), plaintiff listing broker sued to recover a commission in an arbitration between plaintiff and a seller LLC, with seller LLC having no assets to satisfy the arbitration award eventually obtained against it by broker due to a de facto dissolution in which monetary distributions were made to LLC members. Broker then brought formal litigation against the LLC members under former Corporations Code section 17355(a)(1)(B), which allows for causes of action against a dissolved LLC to be brought against LLC members obtaining distributions to members “upon dissolution of the limited liability company.” (The current statute, Corporations Code section 17707.07(a)(1), is not that materially different in nature.) The jury awarded broker $354,000 but the lower court refused to award both fees incurred by broker as against LLC members for work in the prior arbitration and at the subsequent trial.

     After finding that a “de facto” dissolution qualified as a dissolution under the statute, Justice Ikola—on behalf of a 3-0 panel of our local Santa Ana appellate court—determined that fees were allowable for broker’s trial efforts as against LLC members given the language in section 17355(a)(1)(B) and the analogy to Reynolds Metals Co. v. Alperson, 25 Cal.2d 124 [a venerable Civil Code section 1717 alter ego decision]. “This is not an alter ego case. But the statutory remedy provided by former section 17355 is similar to alter ego doctrine in that it prohibits investors from inequitably leaving creditors high and dry with an empty judgment against an insolvent entity.” (Slip Op., pp. 18-19.)

     However, different matter with respect to broker’s request to recover fees incurred in the arbitration. LLC members were not liable for any aspect of the arbitral judgment given that former section 17355 only authorizes third parties to enforce against members of a dissolved LLC the causes of action that ordinarily would be brought against the LLC. (Interestingly enough because of this statutory language, this meant broker had to re-prove the contract claim no matter that it had obtained a prior arbitration award against the LLC. The appellate court did find the lower court erred by admitting the entire arbitral award at trial, but found the error was not prejudicial in nature.) 

Estoppel/Section 1717: Nonsignatories To Operating Agreement Not Entitled To Fee Recovery

 

Recovery on Fiduciary Duty Aiding/Abetting Count Not Justify Fees, Even Though Plaintiff Recovered $7.1 Million Jury Verdict.

     Plaintiff recovering a $7.1 million jury verdict on a fiduciary duty aiding/abetting count was not happy when a fees motion was denied. Plaintiff appealed from the fee denial in American Master Lease LLC v. Idanta Partners Ltd., Case No. B247478 (2d Dist., Div. 7 Sept. 22, 2014) (unpublished).

     Plaintiff’s appeal was unsuccessful. First, the defense nonsignatories to an operating agreement with a fees clause were not subrogated, third-party beneficiaries, successors or alter egos to the signatory parties. Thus, no fee entitlement. Second, the estoppel argument did not fly, simply alleging fee entitlement as the defense did, if there was no basis, did not translate into actual fee entitlement. Affirmed.

Fee Clause Interpretation/Section 1717/Nonsignatories: Individual Non-Signatory Plaintiff Hit With Fee Exposure Based On Breadth Of Fee Clause

 

 

$370,850 Fee Award Affirmed On Appeal.

 

     In Bribiesca v. Pacific Perfusion, Inc., Case No. D063256 (4^th Dist., Div. 1 Sept. 17, 2014) (unpublished), a losing individual plaintiff appealed a contractual fees award of $370,850 in favor of the defense. Plaintiff’s appeal did not succeed in reducing the award.

     The first argument was a due process contention that individual plaintiff did not have any warning fees might be assessed against plaintiff. No, because the original judgment did give proper notice.

     Individual plaintiff decried the fee award because plaintiff was not a signatory to the operative contract. However, the breadth of the fees clause would have allowed plaintiff non-signatory to recover fees, because it was worded this way: “If any litigation is commenced between Partners or their personal representatives concerning any provision of this Agreement or the rights and duties of any person in relation thereto …”, then the prevailing party gets fees. The “personal representatives” language was broad enough to justify fee exposure against the appealing individual defendant, so the award was affirmed on appeal under Civil Code section 1717 non-signatory/third-party beneficiary cases.

Appealability/Section 1717: Nonsignatories Standing In Shoes Of Contractual Party Faced Fee Exposure Under Credit Application Fee Clauses

 

Appellate Fees After Prior Reversal Properly Appealable Under Collateral Order Doctrine.

     Defendants appealed from an assessment of $47,852.77 in appellate fees resulting from a prior appeal (involving a reversal) in Apex LLC v. Korusfood.com, Case No. G047737 (4th Dist., Div. 3 Dec. 23, 2013) (unpublished), where the appellate fees were awarded on remand. Defendants argued that they were not parties with plaintiff under credit applications with fee clauses. The fee award was affirmed on appeal, in a 3-0 decision penned by Justice Fybel.

     The threshold issue was one of standing, but with a twist. Usually, an order granting or denying fees is appealable. However, here, the fees were awarded from a judgment after a reversal such that there was no judgment. The answer: the matter still was directly appealable under the collateral order doctrine, even in the absence of a published decision on this precise appealability issue.

     Next, on the merits, it is clear that a nonsignatory can be faced with contractual fee exposure where it stands in the shoes of the the party to the contract. Both the pleadings and proof so showed, meaning the losing party was liable for fees.

Fee Clause Interpretation/Section 1717: Nonsignatory Successor Correctly Exposed To Fee Exposure Where Complaint And Cross-Complaint Sought Interpretation Of Settlement Agreement With A Fees Clause

 

Primary Right Showed Contractual Dispute Involved.

     In CT Glendale, LLC v. Liu, Case No. B241445 (2d Dist., Div. 2 July 17, 2013) (unpublished), plaintiff obtained $37,612 in Civil Code section 1717 contractual fees in a litigation dispute interpreting which party owned cabinetry under a settlement agreement also containing a fees clause. Plaintiff won the overall dispute, and the defense was miffed with the fee award.

     The appellate court affirmed.

     On the merits, the defense--although a nonsignatory--was liable under the settlement agreement fee clause because it applied to “successors in interest” encompassing the defense. (Leach v. Home Sav. & Loan Assn., 185 Cal.App.3d 1295, 1306 (1986) [nonsignatory successor in interest bound by fees clause].) After examining the overall litigation, both the complaint and cross-complaint sought interpretation of the settlement agreement, triggering fee exposure under the fees clause. The lower court’s application of section 1717, reviewed de novo by the appellate court, was found to be correct in nature.

     The amount of fees awarded, the full amount requested by plaintiff, was reasonably substantiated. Plaintiff in its reply brief presented a detailed spreadsheet chart replete with billings, billing rates, and hours of work expended by plaintiff’s attorneys. That sufficed such that the award amount was no abuse of discretion.

Section 1717: $23,323.83 Fee Award Remanded For Recalculation Because Contract Claim Did Give Rise To Recovery, But Tort Claims Did Not

 

Re-Do Is Result in this One.

     Defendants prevailed in a mixed contract/tort cause of action, awarded $23,323.83 in attorney’s fees by the trial court in Choi v. Behrman, Case No. B239288 (2d Dist., Div. 7 Nov. 20, 2012) (unpublished). On appeal, the reviewing court determined the matter had to go back for a recalculation of the fee award as to one prevailing defendant.

     Because plaintiff relied on a fee clause in an LLC operating agreement (because he signed personally), defendants were entitled to fee recovery under Civil Code section 1717 given that the adjudication that he lacked standing to sue on the contract did not dilute the fact a nonsignatory plaintiff or one claiming a third party beneficiary status can be liable for fees after losing. (Brusso v. Running Springs Country Club, Inc., 228 Cal.App.3d 92, 109 (1991); Steve Schmidt & Co. v. Berry, 183 Cal.App.3d 1299, 1313, 1315-1317 (1986).) Also, nonsignatory defendants are entitled to fees if they prove the contract is inapplicable, invalid or unenforceable. (Reynolds Metals Co. v. Alperson, 25 Cal.3d 124, 128 (1979) [one of our Leading Cases]; Rainier National Bank v. Bodily, 232 Cal.App.3d 83, 86 (1991).)

     Another matter completely with respect to the tort claims. “On the contract” under section 1717 does not encompass tort claims. However, the fees clause was broad, covering torts “arising out of” the contract, such that one prevailing defendant signatory could receive them. (Miske v. Coxeter, 204 Cal.App.4th 1249, 1262 n.5 (2012) [reviewed in our April 14, 2012 post].) The other prevailing defendant, who was not a signatory, was not entitled to fees because a prevailing nonsignatory cannot recover fees incurred in litigating non-contract claims. (Super 7 Motel Assocs. v. Wong, 16 Cal.App.4th 541, 548-549 (1993); Topanga & Victory Partners v. Toghia, 103 Cal.App.4th 775, 786 (2002).) [BLOG BONUS--The determination for the nonsignatory defendant mimics the same result reached in by the same appellate division in Behshid v. Petros (unpublished), examined in our November 14, 2012 post.]

     So, this one had to go back to recalculate the fee award due to prevailing nonsignatory defendant, parsing out work spent on the tort claims.

Section 1717: Fee Award To Contract Nonsignatory Reversed Because Nonsignatory Cannot Recover Fees On Noncontract Claims

 

$49,500 Fee Award Reversed.

     Tenant must have felt pretty good after winning $49,500 in attorney’s fees under Civil Code section 1717 after Landlords voluntarily dismissed with prejudice a mixed contract/tort case after Tenant filed a summary judgment claiming that he was not a party to a leasing agreement and that his signature was forged on the document.

     That exhilaration, on appeal, quickly went away when the appellate court reversed the fee award in Behshid v. Petros, Case No. B236530 (2d Dist., Div. 7 Nov. 13, 2012) (unpublished).

     Everyone agreed that, under Santisas (17 Cal.4th 599--one of our Leading Cases), the voluntary dismissal meant no fees based on the contract claims were warranted against Landlords. They also agreed, based on Reynolds Metal (24 Cal.3d 124--another of our Leading Cases), that a prevailing nonsignatory can collect fees on contractually-based claims.

     However, here the issue was whether a nonsignatory could collect fees on noncontract claims. The answer was “no,” based on Super 7 Motel Associates v. Wang, 16 Cal.App.4th 541, 549 (1993) and Topanga and Victory Partners v. Toghia, 103 Cal.App.4th 775, 786 (2012). Code of Civil Procedure section 1033.5(a)(1)(A), the general costs/fee recovery statute, did not dictate otherwise, because a contract was still needed between the parties to trigger its applicability (as observed in Toghia).