If one side does not win a clear victory in a case (such as nominal damages), the lower court can certainly award fees to the other side where it beat major exposure on claims involving a fee-shifting clause. That is exactly what happened in the next case we explore.
In Core Wealth Mgt., LLC v. Klein, Case No. B199366 (2d Dist., Div. 6 Apr. 13, 2010), plaintiff won a $41 million verdict on its complaint, while cross-complainants won nominal damages on a cross-complaint (including a claim to rescind a note with a fees clause, although claiming damages of over $20 million). The lower court remitted the damage award on the complaint to $4 million (an amount accepted by plaintiff), but also awarded plaintiff $250,000 in attorney’s fees for prevailing on the cross-complaint. Among other things, cross-complainants appealed the fee award, claiming they actually won on the cross-complaint.
The appellate court affirmed. Civil Code section 1717 has a pragmatic, equitable test for gauging which side prevailed where there was no clear victory, allowing the “prevailing party” determination is to be a discretionary call for the trial court. In this situation, cross-complainant did not gain a clear victory on the cross-complaint, obtaining only nominal damages and falling well short of its $20 million damage request. On the other hand, plaintiff achieved its main litigation objective by avoiding any material liability on the cross-complaint. The lower court did not abuse in discretion in implicitly concluding that plaintiff prevailed on the contract for section 1717 purposes. (Scott Co. of California v. Blount, 20 Cal.4th 1103, 1109 (1999).)