Fee Award Does Not Have to be Proportional to Damages Award for Civil Code Section 1717 “Prevailing Party” Purposes.
Here is one which, yet again, reiterates that trial courts have tremendous discretion in determining the “prevailing party” under Civil Code section 1717 as well as the amount of damages to be awarded–which do not have to be proportionate to the damages award.
Monarch Consulting, Inc. v. Karkehabadi, Case No. B214178 (2d Dist., Div. 2 Jan. 6, 2011) (unpublished) concerned a defendant who lost a contract dispute with plaintiff to the tune of $79,267.65 (about half of what plaintiff sought). The trial court then determined plaintiff had prevailed under a contractual fees clause, assessing against defendant a fee award of $261,176.50 plus $22,312.87 in costs.
After losing a merits based appeal of certain issues, defendant challenged the “prevailing party” fee determination of the lower court. That was not persuasive, either.
Hsu v. Abbara, 9 Cal.4th 863, 876 (1995) [one of our Leading Cases], which bases prevailing party status on a comparative analysis of the success or failure of litigation objectives by each side, “does not suggest that the trial court’s prevailing party determination need be inflexibly applied based on the monetary award,” preferring instead resort to an “equitable considerations” compass. (Slip Opn., p. 15.) Even though plaintiff did not get every penny that he requested, the lower court was well within its discretion in awarding the fees that it did–especially after a hard fought battle that went to a jury for eventual resolution.