Prematurity Arguments Were Rebuffed.
In Barbanell v. Lodge, Case No. D084193 (4th Dist., Div. 1 Dec. 17, 2025) (unpublished), the parties entered into a settlement agreement to resolve a longstanding water rights dispute, with the settlement agreement having an attorney’s fees clause allowing a prevailing party in a lawsuit arising out of the settlement to recover fees and costs incurred in having the matter referred to arbitration (given arbitration was a contractual dispute resolution requirement). After a dispute arose, it went to arbitration for several years (not based on a motion to compel to arbitration), with appellant filing to disqualify the arbitrator, who voluntarily withdrew and left the arbitration unresolved.
While respondents searched for a replacement arbitrator, appellant filed a lawsuit asserting the same claims he made in the arbitration. Respondents then filed a separate discrete action, filing a petition to appoint a new arbitrator under CCP § 1281.6. That petition was granted based on the settlement agreement fees clause, with respondents awarded fees of $68,800 in prevailing under Civil Code section 1717.
Appellant’s challenges on appeal were not successful. Recognizing that the language of section 1717(b)(1) discusses fee awards as it relates to a discrete and insular “action on the contract” rather than the status of all disputes or actions arising under the contract, the appellate court observed appellant cited no authority that supported postponing dee awards where the superior court appoints an arbitrator—given that orders compelling arbitration of contract claims are procedurally distinct from orders appointing an arbitrator. The lower court’s action was distinct, because it had no “twilight” jurisdiction after appointing the arbitrator so the arbitration could proceed, much different than vestigial jurisdiction which only is triggered once the arbitration resolves the arbitral claims. (See Acosta v. Kerrigan, 150 Cal.App.4th 1124, 1132, 1132 n. 16 (2007) [fees properly awarded to enforce an independent provision of the contract to which the litigant is entitled, even if that litigant ultimately loses on the merits].)