Dismissal Occurred Before Any Definitive Merits Adjudication—Santisas Governed.
In German American Capital Corp. v. 1495 Pacific Highway, LLC, Case No. D063446 (4th Dist., Div. 1 June 24, 2014) (unpublished), plaintiff sued on some loan documents, asking for appointment of a receiver and judicial foreclosure, among other things, based on deeds of trust containing a fees clause. Plaintiff’s provisional requests for a receiver and preliminary injunction were denied, prompting plaintiff to voluntarily dismiss the action without prejudice. However, the lower court awarded the defense $90,000 in attorney’s fees as the prevailing party under Civil Code section 1717 in spite of the dismissal.
The appellate court reversed based on Santisas v. Goodin, 17 Cal.4th 599 (1998) [one of our Leading Cases] and Bank of America, N.A. v. Mitchell, 204 Cal.App.4th 1199, 1209 (2012), which held that a voluntarily dismissal before a definitive merits adjudication will preclude 1717 fee recovery as far as claims based “on the contract.” Because nothing in the papers suggested the provisional relief was akin to a summary judgment/adjudication merits determination, no determinative adjudication had been entered such that the dismissal “trumped” fee exposure under Santisas.