Fifth District So Holds in Recent Unpublished Decision.
Plaintiff chicken feed company had defendants sign a credit application to purchase chicken feed on certain terms. Among other things, the application contained a provision for an award of attorney’s fees to the prevailing party if “any action is taken for collection on this account.” Plaintiff sued defendants for a $39,579.61 account delinquency (including claims for breach of contract and book account) and won after a one-day court trial. Later, the court awarded plaintiff $17,980 in attorney’s fees.
On appeal, in Integrated Grain & Milling Co. v. Rashidian, Case No. F052015 (5th Dist. May 23, 2008), defendants claimed the credit application was not a contract for Civil Code section 1717 purposes and that the trial court could only award minimal open book account fees to defendant under Civil Code section 1717.5. (PRACTICE POINTER—Civil Code section 1717.5 allows a court to award the lesser of $1,000 or 25% of the principal delinquency in commercial cases when the action is brought on a book account.)
The Fifth District, in an unpublished opinion authored by Justice Hill, rejected the defense challenges on appeal.
The credit application was found to be a contract, with the terms being clear and with plaintiff extending credit based on the application. This put to rest the first challenge. (Slip Opn., at pp. 6-7.)
Justice Hill next determined that section 1717.5 only applies to cases where there was no contract containing an express attorney’s fees clause—facts not in play because the credit application was a contract with an express fee clause. (Slip Opn., at p. 7.)
Another fee determination affirmed on appeal, amounting to almost one-half of the damage claim at issue in the first place.