Williams v. Meyer, Case No. B243491 (2d Dist., Div. 6 June 4, 2013) (unpublished) involved a debtor plaintiff/cross-defendant and creditor defendant/cross-complainant having dueling claims on two notes delivered in favor of defendant and secured by plaintiff’s house (with fees clause existing in both notes). Plaintiff sued to invalidate both notes, claiming the first note was usurious and had been repaid by the labor of her estranged husband. Plaintiff further claimed that the recording of the second note constituted slander of title to her home, causing her to lose refinancing opportunities. On the eve of trial, the parties settled the dispute over the first note by reducing the face amount a little over $1,500 and lowering the interest rate/resetting the interest accrual date. Then, after a two-day bench trial, the lower court ruled that defendant had slandered title to the tune of $29,639 in lost refinancing opportunities. Plaintiff was declared the prevailing party entitled to costs, and she filed an unopposed costs bill asking that $7,121.75 in costs and the $29,639 in damages be offset against the first note’s outstanding balance.
Now we come to the fee awards. Both sides moved for fees, with defendant being awarded $43,750 for prevailing on the first note and with plaintiff being awarded $122,500 in fees as damages for slander of title/Civil Code section 1717 fee recovery with regard to the second note.
Both sides appealed to the Second District, Division 6 reviewing court.
Although plaintiff did get a little lowering of the terms on the first note based on usury, defendant nonetheless prevailed when the court determined that $33,450 (out of $35,000) was owed on the note--rebuffing the theory that estranged husband’s labor had paid it off. Also, simply because plaintiff was the prevailing party for costs did not matter, because the concept is not the same when it comes to section 1717 fee recovery (“net monetary relief” for costs versus “greater relief” on the contract under section 1717).
Defendant claimed plaintiff’s fee request was four days late, but the lower court can implicitly extend the deadlines for “good cause” even after the deadline has run, which it apparently did. (Lewow v. Surfside III Condominium Owner Assn., Inc., 203 Cal.App.4th 128, 135 (2012).)
Alternatively, plaintiff was entitled to fee recovery for prevailing on the second note slander of title claim either under section 1717 by virtue of the fees clause or as damages under the title slander claim. (Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC, 205 Cal.App.4th 999, 1030-1031 (2012) [fees are damages under slander of title].)
Finally, although the fee awards were affirmed, the matter was remanded for the lower court to consider whether it would honor plaintiff’s request for an offset of the damages/fee recovery against what was owed under the first note--an equitable consideration for the trial court in the first instance.