$38,000 Fee Award Out of Requested $88,795 Amount Affirmed on Appeal.
Civil Code section 1717 does not always govern the award of contractual attorney’s fees. Code of Civil Procedure section 1021 allows the parties to make attorney’s fees agreements, by contract, that go beyond section 1717 dictates, allowing recovery for tort or even other causes of action depending on the breadth of the language in the fees clause. Section 1021 was the important provision at issue in the next case.
In Ha v. Yi, Case No. 214212 (2d Dist., Div. 7 Jan. 6, 2010) (unpublished), the LLC Operating Agreement between different members contained a broad attorney’s fees provision—“In the event of a dispute arising out of or in connection with this Agreement, the party prevailing in such dispute shall be entitled to its reasonable costs and attorney’s fees in addition to all other relief to which it may be entitled.” A donnybrook lawsuit ensued in which both contractual and tort claims were asserted by some signatories against other contractual parties. The lower court eventually awarded $38,000 in attorney’s fees (out of a requested $88,795) to the prevailing party, mainly on tort claims.
On appeal by the losing party, the appellate panel affirmed. CCP § 1021—as interpreted by the trilogy of Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th 1338, 1341 (1992), Allstate Ins. Co. v. Loo, 46 Cal.App.4th 1794, 1798-1799 (1996), and Lerner v. Ward, 13 Cal.App.4th 155, 158-160 (1993)—allows fee recovery for torts under a broadly-worded attorney’s fees clause. The clause in this case was broad enough to encompass recovery on various torts, so no substantive problem with the result below according to the Court of Appeal.
Losing party was shocked by the amount of the fees, apparently ignoring the $50,000 discount by the trial court. Didn’t go very far with the reviewing court. Appellant only made generalized assertions of unreasonableness and did not include a hearing of the reporter’s transcript on the fee hearing, effectively waiving an assertion of error on appeal. (See Gee v. American Realty & Construction, Inc., 99 Cal.App.4th 1412, 1416 (2002).)