Appellant lessee sought review of an order of the Superior Court of Los Angeles County (California), which awarded attorney fees to appellee broker, on grounds that Cal. Civ. Code § 1717 precluded an award of attorney fees on a declaratory relief claim which had been previously settled and dismissed. The litigants retained California class action attorney in their civil litigation matter.
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Overview
After entering into a standard commercial lease, appellant lessee discovered several defects in the premises that interfered with its use of the property. Appellant filed a lawsuit against appellee broker for declaratory relief, constructive fraud, breach of fiduciary duty, and equitable relief, alleging that appellee should have disclosed the defects before the lease was executed. The action was settled and dismissed. Appellee moved for attorney fees pursuant to a provision in the lease. The trial court awarded the fees and appellant challenged the award. The court found that Cal. Civ. Code § 1717 precluded an award of attorney fees on the contract claim for declaratory relief claim. The court found that because the underlying action was dismissed, there was no prevailing party and that the attorney fees provision in the lease did not authorize an award of fees on the tort claims of constructive fraud and breach of fiduciary duty, or the claims for equitable relief. The court held that the trial court erred in awarding the attorney fees and in denying appellant’s motion for costs. Judgment of the trial court was reversed and costs were awarded to appellant.
Outcome
The order denying appellant lessee’s motion to tax costs and the order awarding attorney fees to appellee broker were reversed because there was no statutory authorization for fees on the contract claim, and the lease provision did not authorize fees on the tort claims. Appellants were entitled to costs on appeal.
Procedural Posture
Defendant borrower appealed a judgment entered by the Superior Court of San Diego County, California, in favor of plaintiff bank in its action against him arising out of his nonpayment of a home loan. The trial court granted the borrower’s motion for summary adjudication of the bank’s breach of contract cause of action, but denied his motion for summary adjudication of the bank’s causes of action for unjust enrichment and money lent.
Overview
The court concluded that the Code Civ. Proc., § 338, subd. (d), three-year statute of limitations applied to the bank’s unjust enrichment claim based on mistake. The bank did not discover, and should not have reasonably discovered, its unjust enrichment claim until, at the earliest, September 15, 2000, when the borrower’s September installment became subject to a late charge. Thus, the unjust enrichment claim did not begin to accrue until that date, at the earliest. Because the bank filed its complaint on September 5, 2003, its unjust enrichment claim was timely asserted within the applicable three-year statute of limitations. In granting the borrower’s motion for summary adjudication on the bank’s breach of contract claim based on the Code Civ. Proc., § 726, one-action rule, the trial court gave the borrower a simple, unqualified victory on the only contract cause of action. Accordingly, the borrower was entitled to an award of attorney fees incurred in defending against the breach of contract claim pursuant to the loan note’s attorney fee provision and Civ. Code, § 1717.
Outcome
The court reversed the judgment to the extent it denied the borrower’s motion for an award of § 1717, attorney fees and remanded the matter with directions that the trial court enter a new order and judgment granting that motion and awarding the borrower reasonable attorney fees and costs consistent with the court’s opinion. The court affirmed the judgment in all other respects.