Both Sides Partially Succeeded, So Lower Court’s Ruling Was No Abuse of Discretion.
The next case illustrates how appellate courts will defer to the lower court’s determination that there was no prevailing party for Civil Code section 1717 fee recovery unless there was a truly unqualified winner, with the result climaxing an apparent 15 years dispute between the two sides over commercial leasehold disputes.
In Campagna v. Gatley Properties, LLC, Case No. H039123 (6th Dist. June 4, 2014) (unpublished), the fifth appeal in what the appellate court labeled as “protracted litigation,” the cause involved a challenge to the lower court’s determination that defendant/cross-complainant was not the prevailing party so as to be entitled to recover attorney’s fees under Civil section 1717 (given the existence of a fees clause in the commercial lease). That ruling was affirmed on appeal.
We have to say that appellant tried hard to argue that a de novo review standard applied (with the reviewing court disagreeing, going with the abuse of discretion standard) and it obtained the greater relief in the action (with the appellate court admitting the latter was a “closer question”).
Basically, the “math” of the ultimate result led to the appellate court’s opinion that both parties partially succeeded, not enough to brand appellant as the “clear” winner. Appellant had demanded $18,000 a month in adjusted base rent ($864,000) plus $244,299.60 for four years of overage rent, while respondent’s objective was to pay either $3,500 in base rent for 19 years plus overage rent or the base rental value of between $7,620-$10,000 with no overage rent. The ultimate judgment allowed $9,600 per month ($460,000) plus overage of $197,167.50. In the reviewing court’s view, that meant appellant overstated the rental amounts due and respondent understated those amounts. “Thus, in substance, each party partially succeeded in accomplishing its objectives in the litigation. The exact amount of each party’s overstatement or understatement is immaterial here.” (Slip Op., p. 8.) There simply was not enough to overthrow the deference given to the lower court’s discretionary call.