Second District, Division 4 Applies Santisas in Affirming Denial of Fees.
In our category “Leading Cases,” we have listed Santisas v. Goodin, 17 Cal.4th 599 (1998), which held that a voluntary dismissal of contractually-based claims will not lead to fee exposure under Civil Code section 1717. However, Santisas did leave open the exception that the breadth of a fees clause might give rise to fees for covered tort or statutory claims. The next case followed Santisas, determining that the narrow fees clause at issue only covered contract-based claims that were dismissed by the plaintiff. Hence, plaintiff did not face fee exposure.
Mendez v. Charob LLC, Case No. B207701 (2d Dist., Div. 4 Mar. 24, 2009) (unpublished) involved two apartment dwelling plaintiffs that sued defendants other than the landlords for damage arising out of a fire, alleging causes of action for breach of the quiet enjoyment covenant, breach of the implied habitability warranty, negligence, L.A. rent stabilization ordinance violations, and Business and Professions Code section 17200 violations. The lease had an attorney’s fees which provided: “If any legal action or proceeding be brought by either party to enforce any part of this Agreement, the prevailing party shall recover, in addition to all other relief, reasonable costs, including attorney’s fees, whether or not the action proceeds to judgment.” Plaintiffs dismissed the action without prejudice, and the trial court denied a defense request for an award of attorney’s fees.
Defendants appealed, but lost.
Initially, appealing defendants failed to show they were parties to the lease with the fees clause; rather, the lease was with landlords who were not sued by plaintiffs. This alone was dispositive. (Topanga and Victory Partners v. Toghia, 103 Cal.App.4th 775, 786 (2002).)
Beyond that, Santisas applied so as to prevent fee exposure after plaintiffs’ voluntary dismissal. The fees clause only applied to claims incurred to enforce the lease, which excluded the denominated causes of action in plaintiffs’ complaint. Plaintiff successfully invoked Santisas as a back-up precedent that precluded an adverse fee award.