Fifth District Rules in a “Novel Situation for the Application” of Section 1717.
This next one is sure to engender some further jurisprudence in the Civil Code section 1717 area, with the appellate court acknowledging it presented “a novel situation for the application of section 1717.”
CDF Firefighters v. Maldonado, Case No. F061183 (Oct. 26, 2011) (certified for publication) involved a situation where a defendant union member invalidated a $22,789.96 fine levied by plaintiff labor union after six years of litigation and a defendant win upon a partial judgment on the pleadings. However, the trial court denied the motion for judgment on the pleadings as to a $743 fine, with plaintiff dismissing the complaint with prejudice on the entire complaint against defendant afterwards.
What happened next?
You guessed it. Defendant moved to recover fees as the prevailing party on the $22,000 fine claim. Plaintiff’s response? Because the adjudication of the $22,000 fine claim did not dispose of the entire case and plaintiff voluntarily dismissed the remainder of the claims, no fees were due. Well, the trial court (Donald R. Franson, Jr., at the time a Fresno County Superior Court Judge and now a judge of the appellate court deciding this case, but obviously not on the panel for this matter) sensed he was in a conundrum. Six years of litigation and a defeat of a substantial fine claim, and then a concession on the small fine seemed to be an unfair result for denying attorney’s fees on the $22,000 claim–with plaintiff trying to parlay a section 1717 technicality into a defense to fee exposure based on section 1717’s dismissal protections for the $22,000 fine adjudication. Judge (now Justice) Franson did deny the fee motion based on his view of the dismissal law with respect of section 1717.
So what did his fellow colleagues on the Fifth District do on appeal?
They reversed.
The Fifth District, in a 3-0 decision authored by Justice Levy, found that “[t]his case presents a novel situation for the application of section 1717.” The appellate court found that the two fines really involved two distinct obligations, with an “action” (under both Civil Code section 1717 and Code of Civil Procedure section 22) not being equivalent to a “complaint” (or, put another way, a cause of action to enforce an obligation). The dismissal of the $743 claim was not a dismissal of the separate action on the $22,000 fine, distinguishing prior cases where all causes of action (or at least causes contractual in nature) were dismissed.
This meant that defendant should seek recovery of fees for the $22,000 fine issue notwithstanding that the $743 fine dismissal did occur.
BLOG UNDERVIEW–We predicted that this issue would surface at some point. In our February 19, 2011 post, we discussed Civil Code section 1717(b)(2) and an article by Robert Frietas/Siddharta Venkatesen on the whole conundrum in this related area. We would predict that this case will cause an interesting uptick on decisions in the interesting arena.