Result Was “Mixed” For Plaintiffs, While Plaintiffs Did Not Eclipse Defense 998 Offer.
The result in Smith v. Esmailzadeh, Case No. B239828 (2d Dist., Div. 8 Mar. 19, 2014) (unpublished) illustrates well our Mission Statement that "[a]ll too often attorney fees become the tail that wags the dog in litigation." Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993).
In this one, a sewer easement dispute between neighboring landowners, plaintiffs sued based upon an easement agreement with a broad fees clause encompassing “any controversy, claim, or dispute relating to the easement or breach thereof.” In Phase I of a bifurcated trial, the lower court extinguished the express easement and replaced it with an equitable easement in favor of plaintiffs, although this was no win—plaintiffs wanted to keep the original easement undisturbed, lost an attempt to prevent an equitable easement, lost an attempt to move a pipe, and did not succeed in enjoining neighbors from erecting a retaining wall over the easement. Plaintiffs did not prevail on the Phase II tort claims. Plaintiffs were denied a fees request, while defendants were awarded $478,022 in fees based on plaintiffs’ rejection of a 998 offer.
Plaintiffs were unsuccessful in challenging the fee rulings on appeal.
The lower court did not err in determining plaintiffs were not prevailing parties under Civil Code section 1717. Although they prevailed somewhat, the results were “mixed” in terms of the actual Phase I relief and the loss of the Phase II tort claims.
Also, defendants were properly awarded fees because plaintiffs did not beat a 998 offer from the defense offering equitable relief and $350,000 in damages. Because the easement fees clause was broadly worded, fees expended on the Phase II tort claims were properly factored into the lower court’s award. (Xuereb v. Marcus & Millichap, 3 Cal.App.4th 1338, 1343 (1993).)