Tenant Also Entitled To Costs And Appellate Fees For Winning On Appeal.
Strength Farm, LLC v. The Heron Family Trust, Case No. B285264 (2d Dist., Div. 8 July 25, 2018) (unpublished) illustrates that contractual fee recoveries do not have to proportionate to the compensatory breach of contract award (may even be more if tort claims are intertwined) under Civil Code section 1717 contractual fee principles.
In this one, tenant won a tenant improvement allowance dispute against landlord in a commercial gym lease situation. A jury awarded tenant $84,595 based on a breach of contract claim under a lease with a fees clause (although abandoning or losing some noncontractual claims). Then, tenant moved to recover $434,528 in fees, with the trial judge ultimately awarding $371,135. That award was affirmed on appeal.
Fundamentally, the fees clause was broad, encompassing actions involving the premises, “whether founded in tort, contract or equity to declare rights thereunder.” Given the breadth of this clause, that might have been the end of this appeal, but the reviewing panel did give an extended discussion. The breach of contract claim was the focus, such that all of the other noncontractual claims were interrelated, not requiring an apportionment of fees. However, the lower court did make some reductions for lack of success on some claims such that prevailing tenant was entitled to fees and the amount awarded was no abuse of discretion.
As the clear winner, the appellate court also determined tenant was entitled to appellate costs and appeal fees as the prevailing party, awards which the lower court would scrutinize after tenant’s win on appeal.