Unusual Holding in Rainier Decision Did Not Compel Contrary Result.
In Mir v. Iungerich & Spackman, Case No. B250393 (2d Dist., Div. 3 Jan. 29, 2015) (unpublished), judgment debtor obtained partial success on a motion to vacate a renewed judgment arising from a legal retainer agreement with a fees clause. Judgment debtor persuaded the trial court to reduce a $438,594.16 judgment by about $30,000. The lower court then denied judgment debtor’s motion to recover fees for this result based on Civil Code section 1717.
The fee denial was affirmed.
Because the Enforcement of Judgments Law only allows fee post-enforcement recovery by judgment creditors, that left judgment debtor having to rely on section 1717 for fee entitlement. First, the judgment acted as a merger and barred fees, because section 1717—although a statute (and statutory fees are not barred by a judgment)—does not create a right to fees but only transforms a unilateral fees clause into a bilateral one. Put another way, the fees clause was merged. Second, the unusual decision in Rainier National Bank v. Bodily, 232 Cal.App.3d 83, 85-86 (1991) did not compel a different result, because it involved a situation where section 1717 justified fee recovery where a judgment debtor successfully vacated an entire judgment sought to be domesticated from the State of Washington—not the partial success achieved by judgment debtor in this case in obtaining a small judgment “haircut” (actually being denied relief on another motion to vacate). Third, the fees clause only allowed recovery to a prevailing party “in any action or proceeding,” not recovery to a judgment debtor achieving partial success on a motion rather than the entire action.