Allocation, Nonsignatory, and Unsuccessful Work Arguments Rejected.
In Cal-Murphy, LLC v. Hines Interests Limited Partnership, Case Nos. A137609/A139772 (1st Dist., Div. 5 Aug. 1, 2014) (unpublished), non-prevailing parties appealed some adverse fee rulings, which aggregated about $1.6 million. With a very slight modification, the orders were sustained on appeal.
Non-prevailing plaintiffs were parties assuming lease provisions from an original tenant, and parties who may have “illegally” subleased to another downstream party which failed to assume the lease provisions or obtain necessary consents of prior parties.
The non-prevailing plaintiffs argued that they were nonsignatories not liable for fees under Civil Code section 1717, but the problem was that they did plead assumption of lease obligations and never conclusively disavowed the right to recover under the lease, reason enough to find 1717 exposure based on reciprocity principles.
They then argued that apportionment was in order, but that one failed because they were multiple plaintiffs represented by the same attorney and litigated the same basic theory against the defense—under that situation, no allocation was required. (Acosta v. SI Corp., 129 Cal.App.4th 1370, 1376.)
Finally, even though the defense was unsuccessful on some forays, the unsuccessful attacks did not mean 1717 fees were not justified where they were but some of the tactics necessary to get to a successful end result. (Acree v. Gen. Motors Acceptance Corp., 92 Cal.App.4th 385, 405 (2001).)