$83,153 Fee Award Sustained Against Losing Tenant.
Landlord sued tenant for unpaid rent under a prior settlement agreement under which the lease was terminated, tenant would vacate the premises in “turn key” condition, and assign certain FF&E (furniture, fixtures, and equipment) as well as its liquor license. The agreement also specified that landlord could bring an action against tenant for the unpaid rent plus damages at a specified per diem rate. The settlement agreement importantly provided for an attorney’s fees award to the prevailing party in the event of litigation. Landlord sued after tenant failed to perform under the settlement agreement, with the parties agreeing to a stipulation that led to the release of significant writ of possession funds being held by the sheriff (which satisfied the unpaid rent claim) and specified that tenant would pay all claims for daily damages/interest.
Landlord then moved to recover $94,653 pursuant to Civil Code section 1717 and Code of Civil Procedure section 1033.5, which was granted in the sum of $83,154–prompting an appeal by tenant. Later, landlord dismissed the action with lower court imprimatur after it determined that landlord had obtained all necessary relief so there was nothing left to do.
Tenant was unsuccessful in Rose Garden Associates Danville, LLC v. ResMex Partners, LLC, Case No. A130562 (1st Dist., Div. 3 Oct. 7, 2011) (unpublished).
The fact that there was no judgment was irrelevant, because section 1717 does allow for fee recovery “whether or not the suit proceeds to final judgment” so that the settlement agreement clause was a solid anchor for landlord’s entitlement. Also, even though there were some niggling issues left on the FF&E feature of the settlement, landlord certainly prevailed by getting all of its monetary relief such that the fee motion was ripe for determination given the overwhelming recovery achieved by landlord. The dismissal did not lead to a different result, because the court actually entered the dismissal and tenant had taken a 180 degree opposite position on its effect in the lower court.