Fee Activities Were Not Within the Purview Of Either Statute.
Debtor/employer eventually “defensed” a bankruptcy nondischargeability action brought by certain employees arguing employer was an ERISA fiduciary for purposes of the “fiduciary” exception to bankruptcy discharge, a determination found to not legally be sustainable under a prior Ninth Circuit opinion (meaning employer was not an ERISA fiduciary for purposes of nondischargeability). Employer then moved to recover fees expended in defending the nondischargeability action from bankruptcy court through appellate court levels. The fee request was made before the Ninth Circuit, which denied it in Bos v. Board of Trustees, No. 13-15604 (9th Cir. Mar. 24, 2016) (published).
California Civil Code section 1717 did not provide a fee entitlement basis because the nondischargeability action was not “on a contract” as required under the statute. The nondischargeability action only involved the Bankruptcy Code, and no determination was necessary on the enforceability of any contracts between the involved parties; in fact, any contract was only collateral to the overall dispute on nondischargeability.
ERISA’s discretionary fee-shifting provision, 29 U.S.C. § 1132(g)(1), was not implicated because the nondischargeability action was not an “action under” ERISA, but was grounded only under the Bankruptcy Code given how the cause of action was framed.