Defendants Oliva Anaya Valenzeula ("Valenzeula"), Maria Anaya Taglioli ("Taglioli") Gustave Anaya ("Anaya"), and United Home Buyers ("UHB") (collectively, "the Defendants") have moved for an order awarding them attorney's fees in the amount of $261,782.50 and costs in the amount of $18,202.80.  The Defendants'  motion rests on the premise that, having obtained summary judgment on the claims against them asserted by Plaintiffs Mark Buchheim, Tatjana Luethi, and Prima Impresa, LLC. (collectively, "the Plaintiffs"), the Defendants are prevailing parties under the contract that gave rise to this action and thus they are entitled to attorney's fees and costs under Civil Code Section 1717(a).  For the reasons set forth below, the Court is continuing the hearing on the motion.

Defendants'  motion is not premature.  Plaintiffs are incorrect in this regard.

Plaintiffs are on firmer footing, however, in their challenge to the fees and costs Defendants are seeking for work in this Court after entry of judgment in favor of Valenzuela and Taglioli on May 11, 2021 that was based on the summary judgment ruling.   The Court  deferred entering judgment for Anaya and UHB on Plaintiffs' claims against them at that time because they had filed a cross-complaint against Plaintiffs that was still pending and remained so until Anaya and UHB voluntarily dismissed it on March 12, 2024; the Court subsequently entered judgment for Anaya and UHB on April 25, 2024 based on the Court's summary judgment ruling in their favor.  As Plaintiffs noted in their opposition to the Defendants' motion, the amount of fees and costs that Defendants seek for work after May 11, 2021 is over $100,000.   What work did Defendants’ counsel do following May 11, 2021 that is recoverable under Section 1717, the Defendants ask.   The Court has the same question.  Defendants' reply brief does not adequately answer it.  

 It appears that Defendants' position is that they are entitled to fees and costs incurred after May 11, 2021 because the work in question relates to Anaya and UHB's cross-complaint, and Anaya and UHB should be deemed the prevailing parties on the cross-complaint as that pleading was "defensive" to the Plaintiffs' complaint on which Anaya and UHB (and Valenzuela and Taglioli too) were prevailing parties.  The Court disagrees with Defendants here.  Anaya and UHB voluntarily dismissed their cross-complaint on the eve of trial on the cross-complaint, nearly three years after the summary judgment ruling in their favor on the Plaintiffs' complaint.  In the Court's view, whether the cross-complaint was defensive or not, Anaya and UHB did not prevail on it.  Accordingly, they are not entitled to fees and costs incurred in prosecuting the cross-complaint after the summary judgment ruling.  Anaya and  UHB may be entitled to some fees and costs (and Valenzuela and Taglioli too) for work in this Court after the summary judgment ruling that is unrelated to the cross-complaint.   The Court is directing the Defendants' to submit a supplemental brief in support of their motion, along with an accompanying declaration, that eliminates cross-complaint-related work following the summary judgment ruling and details what other work thereafter Defendants' attorneys did.   The Court will continue the hearing on the Defendants' motion and set a briefing schedule.

The Court has no issues with the amount of fees and costs that Defendants are seeking in their motion for work that was done through May 11, 2021, the date the Court entered judgment for Valenzuela and Taglioli based on the summary judgment ruling.  In the Court's view, those fees and costs are adequately documented in the motion.

PLAINTIFFS’ MOTION FOR FEES AND COSTS RELATED TO THE ANAYA AND UHB CROSS-COMPLAINT

For their part, Plaintiffs contend that they are the prevailing parties on the Anaya and UHB cross-complaint because Anaya and UHB voluntarily dismissed it in bad faith on the eve of trial.  The bad faith, Plaintiffs say, is manifested in the failure of Anaya and UHB to prepare for trial, which prompted them to seek a continuance, which the Court denied. Having failed to get the continuance, Anaya and UHB dismissed the cross-complaint.

Plaintiffs’ claim of entitlement to attorney’s fees and costs on the Anaya and UHB cross-complaint is mistaken.  Civil Code Section 1717(b)(2) speaks loud and clear on this: “Where an action has been voluntarily dismissed. . . there shall be no prevailing party for purposes of this section[‘s] [authorization of an award of fees and costs].”  The California Supreme Court has interpreted this provision in the absolute terms in which it is written.  (Santisas v. Goodin (1998) 17 Cal.4th 599, 613-614.)  The no-prevailing party rule of Section 1717(b)(2) controls even when a party voluntarily dismisses its complaint in the middle of trial.   (D&J, Inc. v. Ferro Corp. (1986) 176 Cal.App.3d 1191, 1194.)  Plaintiffs cited no authority to support the proposition that there is an exception to the rule for an allegedly bad faith voluntary dismissal just before trial is to start, and the Court is unaware of any.  In sum, Plaintiffs’ motion for attorney’s fees and costs is denied.