Re-Do Is Result in this One.
Defendants prevailed in a mixed contract/tort cause of action, awarded $23,323.83 in attorney’s fees by the trial court in Choi v. Behrman, Case No. B239288 (2d Dist., Div. 7 Nov. 20, 2012) (unpublished). On appeal, the reviewing court determined the matter had to go back for a recalculation of the fee award as to one prevailing defendant.
Because plaintiff relied on a fee clause in an LLC operating agreement (because he signed personally), defendants were entitled to fee recovery under Civil Code section 1717 given that the adjudication that he lacked standing to sue on the contract did not dilute the fact a nonsignatory plaintiff or one claiming a third party beneficiary status can be liable for fees after losing. (Brusso v. Running Springs Country Club, Inc., 228 Cal.App.3d 92, 109 (1991); Steve Schmidt & Co. v. Berry, 183 Cal.App.3d 1299, 1313, 1315-1317 (1986).) Also, nonsignatory defendants are entitled to fees if they prove the contract is inapplicable, invalid or unenforceable. (Reynolds Metals Co. v. Alperson, 25 Cal.3d 124, 128 (1979) [one of our Leading Cases]; Rainier National Bank v. Bodily, 232 Cal.App.3d 83, 86 (1991).)
Another matter completely with respect to the tort claims. “On the contract” under section 1717 does not encompass tort claims. However, the fees clause was broad, covering torts “arising out of” the contract, such that one prevailing defendant signatory could receive them. (Miske v. Coxeter, 204 Cal.App.4th 1249, 1262 n.5 (2012) [reviewed in our April 14, 2012 post].) The other prevailing defendant, who was not a signatory, was not entitled to fees because a prevailing nonsignatory cannot recover fees incurred in litigating non-contract claims. (Super 7 Motel Assocs. v. Wong, 16 Cal.App.4th 541, 548-549 (1993); Topanga & Victory Partners v. Toghia, 103 Cal.App.4th 775, 786 (2002).) [BLOG BONUS–The determination for the nonsignatory defendant mimics the same result reached in by the same appellate division in Behshid v. Petros (unpublished), examined in our November 14, 2012 post.]
So, this one had to go back to recalculate the fee award due to prevailing nonsignatory defendant, parsing out work spent on the tort claims.