No Fees Clause In Express Warranty Provisions, With Fees Clauses In Documents With A Different Lender Party.
Under Civil Code section 1717, you must have a contractual or third-party beneficiary/subrogation/successor relationship of some sort in order to press for fee recovery. These crucial relationships were missing in MGM Equipment Leasing Co., LLC v. Vermeer Manufacturing Co., Case No. B239253 (2d Dist., Div. 1 Feb. 11, 2015) (unpublished).
There, plaintiff machine buyer sued defendant machine seller/manufacturer on various theories, eventually winning on a breach of express warranty claim against machine seller. However, no fees clause was associated with express warranty provisions although there were fee provisions in documents between buyer and a third party lender not even involved in the lawsuit. Plaintiff appealed the trial court’s denial of a fee request against defendant seller.
That decision was affirmed on appeal. A Note and Security Agreement fees clause only applied to arbitrations. The other fees clauses were in documents between buyer and an outside lender, meaning there was no contract before the lower court to allow a “party” under section 1717 terminology to recover anything.