Fourth District, Division 3 Finds No Fees Were Expended Even Though Nonsuit Grant Could Give Rise to Fee Exposure Under Different Circumstances.
In an unusual procedural context, the Fourth District, Division 3 reversed an award of $73,026.79 in Civil Code section 1717 fees to defendants after the plaintiff neighbors lost nuisance and trespass claims and after the trial court granted a nonsuit on the CC&R breach claim based upon lack of standing (plaintiff husband no longer owned the house). Allesandro v. Tecau, Case No. G039750 (4th Dist., Div. 3 June 15, 2009) (unpublished) is the case.
The basis for a reversal flowed from the nature of the peculiar adjudications made in the case. No fee entitlement could be had on the nuisance and trespass claims, because they were not actions “on a contract” under section 1717. However, Justice Aronson—on behalf of a 3-0 panel—determined that defendants did not “prevail” on the CC&Rs.
Although a successful motion for nonsuit can give rise to section 1717 in the usual case, Milman v. Shukhat, 22 Cal.App.4th 538, 545 (1994), the trial court in actuality granted leave but then denied it on the CC&R claim based on plaintiff husband’s lack of standing. “Given that it would have been impossible for defendants to have expended any attorney fees in defending against the claim, holding [plaintiff husband] liable for attorney fees based solely on his breach of contract claim would exalt form over substance.” (Slip Opn., at p. 17.)
With respect to plaintiff wife, she did abandon the contract claim after the jury returned its verdict and before entry of judgment. This was a viable dismissal, although late in the game, sufficient to preclude an award of fees. (Marina Glencoe, L.P. v. Neue Sentimental Film AG, 168 Cal.App.4th 874, 877-878 (2008) [section 1717(b)(2) contains no temporal limitation with respect to a voluntarily dismissal].)