Fourth District, Division 3 Demonstrates, Yet Again, the POOF! Principle.
The POOF! principle—that reversal of an underlying judgment generating attorney’s fees awards means the fee award will be reversed—is so commonly seen in decisions we discuss that it now has its own category on the left side of our Homepage.
The next case is a recent illustration of this principle in real time.
In Enriquez v. Amerifirst Mortgage Corp., Case No. G039465 (4th Dist., Div. 3 Feb. 27, 2009) (unpublished), plaintiff borrower obtained a positive jury verdict against lender Amerifirst out of a refinancing, but the jury verdict was offset completely by a prior settlement with a party that the trial court decided was a joint tortfeasor. Based on this offset, the trial court awarded Amerifirst $61,465 as the prevailing party based on an attorney’s fees clause in the trust deed. Plaintiff appealed both the merits judgment and the fee award.
On appeal, Justice Aronson—on behalf of a 3-0 panel of the Fourth District, Division 3—decided that the settling party was not a joint tortfeasor with Amerifirst, which meant that the jury’s positive verdict for plaintiff borrower was reinstated. Guess what? As a result, what else happened? You are onto it—the fee award in Amerifirst’s favor was reversed. POOF! (and borrower might be able to seek fees as the prevailing party in subsequent proceedings). Quite a reversal of fortune.