Second District, Division Six Case Illustrates the Need to Have a Fee Entitlement Predicate for Recovery of an Attorney’s Fees Award.
Mobile home purchasers sued mobile home dealer and installer, with the jury awarding plaintiffs $36,275 each against the dealer (based on breach of contract) and the installer (for negligence). The trial court denied purchasers’ motion to recover $166,147.50 in attorney’s fees against dealer and installer. All parties appealed, including plaintiff’s separate appeal of the fee denial order.
In Castillo v. Flohr, Case Nos. B189123 & B193625 (2d Dist., Div. 6 Sept. 16, 2008) (unpublished), the Second District, Division Six affirmed across the board, in an opinion authored by Presiding Justice Gilbert (who has a blog we have cross-referenced).
All bases advanced by plaintiffs failed to show a basis for fee recovery:
- Breach of contract with a fees clause (Civil Code section 1717)—The purchase agreement between plaintiffs and dealer had no fees clause. Although plaintiffs argued that the purchase agreement, escrow instructions, and security agreement were an integrated transaction, this did not aid them. The escrow instructions’ fee clause only applied to actions by or against the escrow agent. The security agreement’s fee provision was inapt, because plaintiffs did not prevail on causes of action to collect money owed under the security agreement or for possession.
- Health and Safety Code section 18035(f). Although this provision does allow the prevailing party to recover attorney’s fees, it did not work because neither dealer nor installer violated the statute. The statutory provision places a duty on the escrow agent not to close escrow upon being notified of a dispute; no such duty was placed upon dealer or installer.
- Code of Civil Procedure section 1021.5. Plaintiffs claimed a “public benefit” under the private attorney general statute based on being a victor in a prior published decision. The flaw with this theory is that the prior decision was against the escrow agent, rather than dealer or installer.
- Civil Code section 1794(d). A new mobile home buyer who prevails in an action for breach of warranty against a dealer is entitled to an award of attorney’s fees. However, plaintiff never pled a breach of warranty, and jurors never made findings on such a claim. Thus, there was no predicate for a fee award.
The message from this case is clear: make sure you have a fee entitlement basis for fee recovery. Otherwise, it is likely that trial and appellate courts will parse through the advanced theories to see if a basis truly exists to sustain fee recovery.