Second District, Division Five So Holds In Unpublished
Opinion.
In Santisas v. Goodin, 17 Cal.4th 599, 617 (1998), the
California Supreme Court held that plaintiff's voluntary dismissal of a
contract-based action bars a prevailing defendant from recovering attorney's
fees incurred in defending the contract claims under Civil Code section 1717.
The next case involves an interesting procedural "spin" on this issue, although
the result was still found to be governed by Santisas.
Granite Group of
California, Inc. v. MMGD Properties, LLC, Case No. B202297 & B204189 (2d
Dist., Div. 5 Oct. 21, 2008) (unpublished) involved a buyer-assignor and
assignee which initially both sued a putative real estate seller for the
purchase of Long Beach commercial property riddled with potential contamination
issues. The original complaint named two plaintiffs, assignor and assignee, but
all parties (including defendant seller) stipulated that assignee was the proper
party and that assignee would file a first amended complaint. Assignee did file
a first amended complaint, but it bore the original caption including the name
of assignor (even though the operative allegations only talked about plaintiff
assignee). Seller eventually prevailed after a bench trial, moving for an award
of attorney's fees against both assignor and assignee based on a fees clause in
the purchase agreement. The trial court only awarded fees against assignee,
with seller appealing the denial of fees against assignor. The appellate court
agreed with the trial court's conclusion.
Acting Presiding Justice Armstrong, writing for a 3-0 panel on the fee
aspect of the appeal, used a de novo standard of review and found that assignor
had the better end of the argument. "With the stipulation, all parties,
including [successful defendant], recognized that [assignor] was no longer a
part of the action. The stipulation was thus tantamount to a dismissal for
purposes of Santisas." (Slip Opn., at p. 8.)
Finally, the appellate court dismissed the notion that assignor was
liable under the law of assignments. Its conclusion: "We express no opinion on
that point, because that body of law is not relevant to fees motion under the
Code of Civil Procedure." (Ibid.)