Court of Appeal Enforces Faces the Conflict Between Civil Code Section 1717 and Government Code Section 25845(c).
Civil Code section 1717 is straightforward in allowing for mutual recovery of attorney’s fees in California by a prevailing party where a contractual clause so authorizes such a recovery. However, sometimes this provision seemingly comes into conflict with other statutes. For example, Government Code section 25845(c) limits the amount of prevailing party attorney’s fees to those incurred by the losing county in an action, administrative proceeding, or special proceeding to a abate a nuisance, but only if the attorney’s fees were authorized by a county ordinance. However, Government Code section 25845(b) also makes clear that the recovery of attorney’s fees not predicated upon a county ordinance “shall be in addition to and shall not limit any prevailing party’s right to recover costs pursuant to [Code of Civil Procedure] section 1032 and 1033.5 [with section 1033.5 including as costs attorney’s fees authorized by contract] …”
The collision between these Civil Code and Government Code sections was confronted by the Third District, recently, in County of Sacramento v. Sandison, Case No. C058396 (3d Dist. May 29, 2009) (certified for partial publication).
In Sandison, Sacramento County filed a nuisance abatement action against the Sandisons alleging that they were maintaining a second dwelling on their property without required CUPs and building permits. The parties entered into a written settlement agreement and written stipulation for a permanent injunction, with the settlement agreement containing a fees clause working in favor of the winner of any action/proceeding to enforce the permanent injunction. County subsequently brought contempt proceedings to enforce the injunction, but lost when the trial court found it failed to show the Sandisons willfully violated the injunction. Sandisons moved to recoup fees of $44,089.50 based on the settlement agreement fee clause, and the trial court awarded them $29,674. County appealed, then settled with the Sandisons, and asked that the appeal be dismissed. The Third District refused, because the appeal raised an issue of continuing public importance (an exception to the mootness doctrine).
In the unpublished portion of its opinion, the appellate panel found that Sandisons were entitled to a fee award. County argued that a final decision of contempt was never resolved in the contempt proceeding, analogizing it to an interim order before the merits are finally adjudicated. Wrong, said the Third District. There was a final termination of a special (contempt) proceeding such that the requisite finality existed. (Cf. Otay River Constructors v. San Diego Expressway, 158 Cal.App.4th 796, 807-808 (2008) and cases cited therein [fees allowed in a discrete legal proceeding, even though further litigation was possible in a different forum or venue].)
The appellate panel, in the published portion of the opinion, rejected County’s argument that Government Code section 25845(c) trumped or limited Sandisons’ fee recovery under Civil Code section 1717. In essence, nothing in section 25845 prevented an award of fees under another statutory provision that contains no fee limitations (such as Civil Code section 1717). “More questionable is whether [section 25845’s limitation] should apply to a recovery where there is an ordinance but recovery is sought under some other authority. More problematic still is whether it should apply to a recovery where there is no such ordinance and recovery is sought under some other authority. The optional nature of such an ordinance suggests that the policy concerning limitation of attorney’s fees awards should pertain only to awards under the authorization of section 25845.” (Slip Opn., at p. 11.) Sandisons’ fee award survived the County’s salvos on appeal, given that it was predicated on section 1717.