$332,697.80 Fee Award Resulted From Fee Clauses In Trust Deed/Promissory Note For 5 Year Old-Plus Litigation Over Sellers’ Carryback Loan.
Goradia v. Vega, Case No. B228128 (2d Dist., Div. 2 Mar. 5, 2012) (unpublished) again demonstrates that the “prevailing party” determination under Civil Code section 1717 is a pragmatic one, with trial and appellate courts focusing on who really won and whether they won convincingly.
In this particular case, real estate sellers carried back a loan secured by a trust deed given by the buyer, which spawned a judicial foreclosure action by sellers after buyer allegedly defaulted. In the first trial, buyer won when the trial court concluded sellers did not prove a delinquency, a determination reversed because of an evidentiary error later found prejudicial by the appellate court in a prior appeal. Sellers then apparently commenced a nonjudicial foreclosure action against buyer, which caused buyer to file her own complaint for various contractual, tortious, and equitable claims (including an injunction request). Both cases were consolidated together. Eventually, a bench trial was held, with the lower court concluding that a $253,292.73 shortfall was owed on the loans and buyer was liable for the note principal amount of $228,000. The lower court also found judicial foreclosure was proper, and found against buyer on all causes of action but accounting and injunctive relief (which were rendered moot by the findings in sellers’ case). Based on a trust deed and promissory note containing attorney’s fees clauses, the lower court awarded $332,697.80 (out of a requested $382,697.80) in attorney’s fees after reducing the request by $50,000 for buyer’s successful effort to stop the nonjudicial process, but denying buyer’s request for a fee award totaling $298,185. Buyer then appealed the fee award in favor of sellers.
The fee award was affirmed.
Buyer’s interim success on stopping the nonjudicial process did not make her a prevailing party; rather, the entire litigation results had to be assessed. (Estate of Drummond, 149 Cal.App.4th 46 (2007).) Also, the trial court did reduce sellers’ fees by $50,000 for the unsuccessful nonjudicial efforts, which constituted a proper apportionment. The “stark realities of the case” showed sellers did accomplish their litigation objective of a foreclosure on the house and defense of buyer’s claims (or claims rendered moot by the win in the sellers’ phase of the case). Civil Code section 2924c(d), which caps amounts awardable as fees, did not apply because it only applies in a “cure” situation, not when the case proceeds all the way to a foreclosure decree. (Bruntz v.. Alfaro, 212 Cal.App.3d 411, 419-420 (1989).) The amount of fees awarded was proper, with sellers not needing to submit cancelled checks or evidence of payment of lawyers’ bills–it was enough that they “incurred” fees. The $225-300 hourly rates did not appear unreasonable, or the work on the case which spanned over 5 years in length.