Under A Broad Contractual Fees Clause, The Lower Court Can Determine The Prevailing Party—Much To The Chagrin Of A Losing Party.
We have posted for years as bloggers. We are not judges, nor pretend to be. But we can say certain themes prevail in many cases we have posted on: (1) broad contractual fee clauses may result in exposure for the non-prevailing party; and (2) in a “no home run case,” a trial court has a great leeway in determining who prevails based on the pragmatical result in a litigation case comparing the relief obtained and risks avoided in a case.
YCS Investments, Inc. v. County of Santa Clara, Case No. H052213 (6th Dist. Mar. 25, 2026) (unpublished) illustrates these principles. There, plaintiff won very limited declaratory relief for something which never developed (with County stipulating that plaintiff prevailed on the declaratory relief count), but County avoided a $6 million liability on a negligent misrepresentation claim based on a prior settlement agreement with a broad fees clause and a damages waiver. The lower court determined County was the prevailing party, awarding it over $800,000 in attorney’s fees and a little under $24,000 in costs.
The appellate court affirmed. The fee clause was broad enough and was applicable, given that the damages waiver applied to other claims such as negligent misrepresentation [broader fee clause–“in the event it is necessary for either Party to enforce this Agreement” versus narrower language “in the event an action is brought to enforce the terms of this agreement” with a different result]. With that determined, the prevailing party conclusion by the lower court was not hard to uphold—plaintiff won a non-guaranteed development possibility versus County avoiding a $6 million damage claim. No problem in finding that County prevailed based on the pragmatics of the litigation.