Silence in the Record as to Apportionment Required Remand.
The Third District in Painter v. Francis Realty, Inc. Profit Sharing Plan, Case No. C073864 (3d Dist. June 23, 2014) (unpublished) considered a situation where a borrower under a promissory note/deed of trust brought multiple causes of action against creditor. The problem was that most claims were based on a deed of trust not having a fees clause or were based on tort claims. However, the trial court awarded the defense a full fee request of $41,350 against plaintiffs based on a promissory note fees clause under Civil Code section 1717.
That determination got reversed on appeal.
The main reason was that most of the claims, except one declaratory relief count, were not “on the contract” under section 1717—they involved claims relating to instruments without fees clauses or tort claims. The real problem was that the lower court did no apportionment analysis so as to determine if the one compensable claim (hinged to the promissory note fees clause) was so interrelated with noncompensable claims to justify 1717 fee recovery. The record was silent on this apportionment point, requiring a remand to the trial judge to exercise its discretion in allocating the fees sought by the defense.