Judge: Theodore R. Howard, Case: 20-1168467, Date: 2022-12-15 Tentative Ruling
Defendants Brennan Appel and Global Hookah Distributors, Inc.’s (“Defendants” for purposes of this ruling), Motion for Attorney Fees (“Motion”) is DENIED without prejudice.
Attorney fees are recoverable only when authorized by contract, statute, or law. (Civ. Proc. Code § 1033.5(a)(10).) Civ. Code § 1717 is a statute that permits recovery of attorney fees on an action based on contract, when the contract specifically contains an attorney fees provision.
“California law ordinarily does not allow for recovery of attorneys' fees. [Citation.] One exception is where the parties contractually obligate themselves to pay attorneys' fees. [Citation.] These contractual provisions are governed by California Civil Code § 1717, which provides: [¶] In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.[¶] Section 1717 was enacted to provide for a mutuality of remedy when a contract makes recovery of attorneys' fees available only to one party.” (Farmers Ins. Exch. v. L. Offs. of Conrado Joe Sayas, Jr., 250 F.3d 1234, 1237 (9th Cir. 2001).)
“California Civil Code § 1717 makes reciprocal an otherwise unilateral contractual obligation to pay attorney's fees. [Citation.] Three conditions must be met before the statute applies. First, the action in which the fees are incurred must be an action “on a contract,” a phrase that is liberally construed. [Citation.] Second, the contract must contain a provision stating that attorney's fees incurred to enforce the contract shall be awarded either to one of the parties or to the prevailing party. And third, the party seeking fees must be the party who “prevail[ed] on the contract,” meaning (with exceptions not relevant here) “the party who recovered a greater relief in the action on the contract.” Cal. Civ.Code § 1717(b)(1). If § 1717 's conditions are met here, Penrod may recover her attorney's fees from AmeriCredit, provided that AmeriCredit would have been entitled to recover its fees had it prevailed.” [Emphasis added.] (In re Penrod, 802 F.3d 1084, 1087–88 (9th Cir. 2015)(“Penrod”).)
At this time, Defendants have failed to meet their initial burden of showing there was a contract that contained an attorney fees provision. As noted, a breach of contract cause of action does not automatically permit recovery of attorney fees, but rather the contract must specifically state the prevailing party is entitled to recovery of attorney fees. (Id.) There is no evidence of any contract before this court, let alone one that contains the requisite attorney fees provision.
Defendants base their attorney fees claim on a single sentence allegation included in only one of the four versions of plaintiff Rose ML, Inc.’s (“Plaintiff”), complaint. The Second Amended Complaint (“SAC”) alleges:
“Plaintiff is entitled to attorney fees by agreement expressly written in the terms of the invoice, which award of fees will be according to proof.” (SAC ¶¶ 96, 103.)
Again, that sentence was contained in only one of the four versions of the complaint and not in any of the others. The SAC was also not the operative complaint at the time Defendants were voluntarily dismissed by Plaintiff, the Third Amended Complaint (“TAC”) having been filed approximately 12-days prior to the dismissal. Each of the cases cited by Defendants had written contracts that contained attorney fees provisions that permitted the prevailing party to recover attorney fees. Even if Defendants had not been dismissed and Plaintiff was determined to be the prevailing party in this action, Plaintiff would not have been able to recover attorney fees based on the single sentence allegation, but would instead need to provide proof to the court that there was a valid attorney fees provision. No evidence of such provision has been provided to this court, and attorney fees cannot be awarded pursuant to Civ. Code § 1717.
Plaintiff also correctly pointed out Defendants were not the prevailing party for purposes of a Civ. Code § 1717 attorney fee award as Plaintiff voluntarily dismissed Defendants. (ROA ##199, 205; Civ. Code § 1717(b)(2); (CDF Firefighters v. Maldonado (2011) 200 Cal. App. 4th 158, 164–65.)
Even if there were in theory an attorney fee provision applicable to this case, the voluntary dismissal would preclude any recovery of attorney fees on the contract cause of action. (Civ. Code § 1717(b)(2).) While there are certain circumstances that permit recovery of attorney fees on tort causes of action, they must be based on a statute, law, or contract. (Civ. Proc. Code § 1033.5(a)(10.) Attorney fees for tort causes of action based on an attorney fee provision can be permitted, but only when the language of the provision specifically encompasses tort causes of action. (Santisas v. Goodin (1998) 17 Cal. 4th 599, 607-09.) Here, there is no evidence of a contract, an attorney fees provision, or the terms of such a provision encompassing tort causes of action. Defendants have also not identified any other statute or law that would permit recovery of attorney fees in this action.
The Motion is DENIED without prejudice. Defendants are given 30-days leave to re-file the Motion with supporting evidence.
Plaintiff to give notice.