$750 Contractual Fee “Cap” Honored In Lease Agreement.
Senators comparing caps. Library of Congress. 1955.
A trial judge in 511 S. Park View, Inc. v. Tsantis, No. BV031134 (L.A. Superior Court App. Div. Oct. 5, 2015) (published) awarded $12,375 in attorney’s fees to prevailing defendants after an unlawful detainer trial based on a fees clause in a lease agreement. Plaintiff, miffed at the result, appealed based on the fact the lease between the parties had a $750 contractual “cap” for fee recovery in the attorney’s fees clause, which the lower court found to be in contravention of Civil Code section 1717 mutuality principles.
The Appellate Division of the Los Angeles County Superior Court reversed, finding that such a “cap” is perfectly valid because private parties can decide how they want to allocate fee entitlement and exposure. (Code Civ. Proc., § 1021.) With respect to the section 1717 argument, this was not found persuasive given the existence of ample case law recognizing that parties in a contractual setting may limit fee entitlement as they wish under their specific bargains.