Sixth District Correctly Sets Forth Standard of Review and Still Determines Prevailing Party Not Entitled to Fee Recovery Under the Mobile Residency Law, Civil Code section 1717, or the Unruh Act.
In Ideal Homes v. DenHoy, Case No. H031071 (6th Dist. May 27, 2008) (unpublished), the Sixth District reminded us that the issue of statutory entitlement to attorney’s fees is usually a question of law reviewed de novo by the appellate court. This contrasts with review of such issues as the amount of fees, which is scrutinized under a much less rigorous abuse of discretion standard. (Slip Opn., at p. 5, citing Connerly v. State Personnel Bd., 37 Cal.4th 11169, 1175 (2006).)
Here, a manufactured homes dealer (Ideal) sued mobilehome park owner (DenHoy) for illegally preventing Idea from conducting business in the park. DenHoy prevailed after a jury absolved him of violating the Unruh Act (Civil Code section 51) or interfering with contractual relations. The jury trial lasted 4 days, and DenHoy had expended substantial fees. He sought recovery of $150,584.75 in fees under various theories. The trial judge denied DenHoy’s fee motion, a ruling that DeHoy appealed.
The Sixth District, in a 3-0 unpublished decision by Justice Duffy, affirmed the denial of fees to DenHoy.
The Court of Appeal initially found that DenHoy could not recover fees under the Mobilehome Residency Law (Civil Code section 798 et seq.). Focusing on statutory language that the action must “arise out of” the MRL rather than just be “related to” the scheme, the Sixth District found Ideal was not suing on behalf of his customers, the mobilehome residents. Rather, Ideal sought to recover for its damages, too remote to allow for recovery.
No basis for fee recovery could be found based in contracts between Ideal and persons other than DenHoy. First, the appellate court determined that the contractual interference claim was one in tort, which is not covered by Civil Code section 1717. Second, because DenHoy was a not a party to any of the contracts, there was no provision indicating that he was a third party beneficiary of any of the germane contractual terms. Third, in line with our May 18, 2008 post on Blickman Turkus, the Sixth District nixed the idea that a generalized prayer for attorney’s fees in Ideal’s complaint provided a contractual right to fees, citing M. Perez Co. v. Base Camp Condominiums Assn. No. One, 111 Cal.App.4th 456, 463-470 (2003)—which was discussed in Blickman Turkus.
Finally, the Court of Appeal turned to the claim that fees were warranted under the Unruh Act. After citing the relevant provision in Civil Code section 52(a), the appellate court determined that it only establishes a unilateral right to attorney’s fees for a prevailing plaintiff successfully asserting an Unruh Act claim. Referencing broader statutory provisions in the Unruh Act, the Sixth District explained its conclusion: “[Subdivision (a) of Civil Code section 52] does not use broader language, such as ‘prevailing party,’ that would suggest a reciprocal right to attorney fees in favor of a party who successfully defends an Unruh Act claim.” (Slip Opn., at pp. 17-18.)
Ideal shows that appellate courts will carefully examine statutes and contracts before awarding fees to a prevailing party. Unless a litigant can show entitlement to fees, there is no need to spend the time to substantiate the amount of services provided by counsel. PRACTICE POINTER–Frequently, this justifies a litigant asking for a bifurcated proceeding, requesting the trial judge to initially determine whether there is a prevailing party before expending resources in documenting time spent. If this option is utilized, make sure your opponent stipulates to continue the motion deadline set forth in California Rules of Court, rule 3.1702 (discussed in our May 19, 2008 post).