Procedurally Curious Easement Dispute Resulted in Split Opinion on Propriety of Section 1717 Fee Award.
Even unpublished decisions result in a difference in opinion, as the next case involving Civil Code section 1717 demonstrates.
Goldsmith v. Caldwell, Case Nos. C059420/C060427 (3d Dist. Jan. 11, 2010) (unpublished) involved a somewhat gnarly dispute between Nevada County neighbors about plaintiffs’ request that defendant neighbors grant an expanded easement pursuant to a “good faith hearing” type of clause in a Roadside Maintenance Agreement which mandated that property owners consider the request and then vote on it in good faith. Although procedurally entangled, the Third District earlier reversed a trial court judgment granting the easement, but remanded to direct compliance with the good faith and fair dealing covenant and to reconsider whether any attorney’s fees should be granted in favor of plaintiffs. Eventually, a settlement was reached with other defendants after they voted for the expanded easement even though defendant neighbors had sold their property and were disenfranchised from voting on the issue at hand. The trial court, even though it did not grant prospective relief given the settlement, did rule on remand that defendants (ex-neighbors) breached the good faith covenant and then awarded unspecified attorney’s fees to plaintiffs as the prevailing parties under the Agreement (which had a fees clause).
On appeal, in a 2-1 decision, the Third District reversed.
Acting Presiding Justice Blease, joined by Justice Raye, found that section 1717 drove the reversal in this case. Because defendants were no longer property owners and did not participate in the settlement, there was no prospective relief granted and 1717’s provisions on a settlement driving a result meant that fee entitlement was not to be had by plaintiffs. Plaintiffs achieved their result through the settlement with remaining parties, not through any “relief” entered in the action as against defendant ex-neighbors.
Justice Hull, in dissent, saw things much differently. This jurist believed that it was illogical to find that defendants could defeat fee exposure simply because they sold their property despite breaching the good faith covenant. Plaintiffs did obtain greater relief, because the order reconsidering the good faith hearing requirement directly led to the settlement producing the expanded easement. In this justice’s opinion, the trial court decision to award fees should have been affirmed.