Section 1717 Did Not Give Rise To Fees Based Upon DisputeSuite Opinion.
This opinion highlights the importance of wording in a fees clause. Broader language, such as “the prevailing party in any dispute or proceeding arising hereunder shall be entitled to recovery its costs and expenses incurred therein (including reasonable attorneys’ fees and expenses),” can give rise to fee entitlement under more general CCP costs/fees provisions even though the entitlement would not lie under Civil Code § 1717.
The quoted language above was at issue in a contractual fees clause between two businesses in Velaro, Inc. v. LG Electronics Alabama, Inc., Case No. B336280 (2d Dist., Div. 8 Feb. 6, 2026) (unpublished). Based on an Alabama forum selection clause, defendant obtained dismissal of the case in California and then sought $64,000 in fees under the contractual fees clause based on both CCP §§ 1021, 1032, and 1033.5 and Civil Code § 1717. The trial court agreed that, under DisputeSuite [our Leading Case No. 21], section 1717 could not provide a basis for fee entitlement. However, the lower court did find entitlement through the other statutory provisions relied on by the defendant.
The 2/8 DCA affirmed. The broader “any dispute” language did allow for fee recovery, even though Civil Code section 1717 did not (because section 1717 did not apply based on the broader contractual language), relying on Thompson v. Miller, 112 Cal.App.4th 327, 329, 335, 337 (2003) as instructive in reaching its conclusion.