Second District, Division 8 Affirms $250,000 Fee Award to Prevailing Defendants.
A broadly-worded attorney’s fees provision—such as one allowing for fee recovery in “any action whatsoever arising from rights and obligations established under [the] Bylaws, including but not limited to actions for damages resulting from a breach of these Bylaws or actions for specific enforcement hereof”—can give rise to substantial fee exposure to the losing party, as the next case attests to.
Plaintiffs lost various contractual and tort claims against defendants associated with a residential water supplier, which had an attorney’s fees clause in its bylaws covering the overall dispute. Plaintiffs lost summary judgment/adjudication motions and voluntarily dismissed remaining claims (including dismissal of certain contractual claims). Defendants moved for recovery of up to $650,000 in fees under the bylaws fee clause, with the trial court awarding fees of $250,000.
Upon the subsequent appeal of plaintiffs, the Court of Appeal affirmed in Fernandez v. SPV Water Co., Case No. B203902 (2d Dist., Div. 8 Nov. 10, 2009) (unpublished).
Because defendants prevailed, they were entitled to costs as a matter of right even though the judgment failed to mention costs at all. (Code Civ. Proc., sec. 1032(b).) Although defendants were not entitled to recover fees for the dismissed contractual claims under Santisas v. Goodin, 17 Cal.4th 599, 615-617 (1998) [one of our Leading Cases], this did not impact upon the availability of fee recovery under the non-contract claims which were undisputedly covered by the broadly-worded fees clause (a key exception even under Santisas).