CCP § 1021 Trumped Civil Code § 1717 Rules, With Plaintiff Prevailing “Overall.”
Under Civil Code section 1717, a prevailing party can receive attorney’s fees based on prevailing under a contract claim, even though losing tort claims, if the fees clause is limited to contractual claims. However, if the fee clause is broader, CCP § 1021 is the governing statute, and may lead to a different result as the next case demonstrates.
Maynard v. BTI Group, Inc., Case No. 136093 (1st Dist., Div. 3 May 29, 2013) (published) involved a situation where a plaintiff won a $24,000 negligence verdict but lost contractual claims against defendant. The fees clause at issue applied to “[t]he prevailing party in the event of arbitration or litigation . . . .” The trial court construed the provision to mean the prevailing party was the one who prevailed in the overall dispute, determining that was plaintiff (awarding her fees) and denying fees to defendant.
Defendant appealed, principally arguing that it should be entitled to fees under section 1717 for defeating the contractual claims. The appellate court said “no.” Because the fees clause was broad enough to encompass contract and noncontract claims, the trial court did not have to base its award solely on breach of contract damages but could award fees to plaintiff because she prevailed “in the resolution of the entire controversy.” CCP § 1021 was the proper section, which allowed the specific wording of the clause to have priority over section 1717 rules.