Section 1717 Tender Rules Were At Issue, Affirming Determination That The Party Attempting To Settle The Debt Was In The Right.
Believe me, the equities in a case do matter, even one involving numerous lower court proceedings (both in California and Maryland courts) and six appeals considered by the Second District.
This is very much demonstrated in United Grand Corp. v. Stollof, Case No. B305146 (2d Dist., Div. 8 Jan. 19, 2022) (published). This case involved a guarantor of a lease who was the subject of a default judgment and rabid judgment enforcement efforts by landlord. (The rent payment delinquency was not that big.). Guarantor attempted on multiple occasions to pay off the alleged amount in dispute, only to be rebuffed by landlord—including deposit of a judgment amount in a Maryland court. Landlord refused to accept the tenders. Given how litigation can be unpredictable, guarantor was able to obtain a vacating of the default judgment, again making attempts to satisfy the amount in dispute before guarantor even filed an answer, although alleging a tender defense. Eventually, the trial court entered an order by which a judgment was confirmed against guarantor, but also finding guarantor had properly tendered moneys and landlord had acted in bad faith in not accepting the tenders. Guarantor was deemed to be the prevailing party and was awarded $165,870 in attorney’s fees under a contractual guaranty clause.
The 2/8 DCA affirmed. It was persuaded that David S. Karton, A Law Corp. v. Dougherty, 231 Cal.App.4th 600 (2014) was the governing Civil Code section 1717 “tender” decision on what happens when a party pays a default judgment only to have that judgment later set aside. The equities were important here—guarantor tried to resolve this, landlord did not, and guarantor certainly prevailed given that the vacating of the default judgment left landlord with nothing.