Two Unpublished Decisions Highlight the Key Distinction.
1. Solomon v. Solomon, Case No. B209627 (2d Dist., Div. 7 Nov. 12, 2009) (unpublished).
In this one, former wife sued to enforce a settlement agreement containing an attorney’s fees clause. She moved to enforce the settlement under Code of Civil Procedure section 664.6, the statutory summary proceeding codified to enforce settlements. She sought to recoup $394,146 in fees and $45,064.37 in expenses (a total of $439,210.97), and was awarded every penny sought by the trial court. On appeal, ex-husband tried to argue that the fees were incurred primarily for noncontractual causes of action upon which plaintiff did not prevail. Wrong, said the appellate court. Plaintiff’s motion was brought to enforce the settlement agreement with a fees clause, so defendant’s mischaracterization of what was at stake did not disturb the fee award at all.
2. Pfeffer v. Missionary Foundation, Inc., Case No. E046866 (4th Dist., Div. 2 Nov. 12, 2009) (unpublished).
Here, plaintiff sought to nullify a prior settlement agreement based on extrinsic fraud and eventually sought damages (after waiving the right to seek rescission). Defendant later obtained a judgment on the pleadings on plaintiff’s claim and sought to recover attorney’s fees under Civil Code section 1717, a fee request denied in entirety by the trial court.
On appeal, the appellate court agreed with the trial court’s analysis that plaintiff’s claim was not “on the contract” for section 1717 fee recovery purposes. Rather, the action was one for fraud that is not within the purview of 1717. Specifically, the courts have drawn a distinction between fraud actions in which rescission of a contract is sought and fraud actions in which monetary damages are sought. (Contrast Reveles v. Toyota by the Bay, 57 Cal.App.4th 1139, 1152 & n.6 [fraud action seeking rescission was “on the contract” under 1717], disapproved on other grounds in Gavaldon v. DaimlerChrysler Corp., 32 Cal.4th 1246, 1261 (2004) and Snukal v. Flightways Mfg., Inc., 23 Cal.4th 754, 775-776 n.6 (2000) with Walters v. Marler, 83 Cal.App.3d 1, 16, 27-28 (1984) [fraud action seeking monetary damages in not “on the contract” but in derogation of it], overruled on other grounds in Gray v. Don Miller & Associates, Inc., 35 Cal.3d 498, 505-507 (1984).) In this case, plaintiff sought monetary damages for fraud and withdrew his demand for rescission; this election of remedy meant that he forfeited fee recovery under section 1717.