Real Property Service Case Found Dispositive.
After the business deteriorated, a plaintiff under an agreement with a fees clause sued defendant for selling a florist business, raising contract, UCL, fraud, and negligent misrepresentation claims. In Phase I of a court trial, the trier of fact found that the plaintiff lacked standing to sue for the contract and UCL claims. Later, in Phase II, the lower court found for the defense on the fraud/negligent misrepresentation claims. The trial judge then awarded the defense attorney’s fees as the prevailing party under the fees clause (based on Civil Code section 1717 jurisprudence).
Plaintiff’s appeal was unsuccessful in Son v. Lee, Case No. D063192 (4th Dist., Div. 1 July 21, 2014) (unpublished).
The appellate court found persuasive section 1717 cases conferring fee recovery upon a signatory defendant in a case brought by a nonsignatory plaintiff. It particularly found dispositive reasoning in Real Property Service Corp. v. City of Pasadena, 25 Cal.App.4th 375, 384 n. 7 (1994), which held that a defense win based on a lack of standing argument did give rise to fee recovery under section 1717.