Narrow Fees Clause and Tort Claims Were The Determining Factors Here.
In Echeverria v. Cohen, Case No. B285085 (2d Dist., Div. 8 Nov. 26, 2018) (unpublished), plaintiff dental corporation sued defendant landlord over a commercial lease termination, and defendant cross-claimed against the tenant and tenant’s principal under an alter ego theory. Landlord prevailed on the complaint and cross-complaint against tenant, garnering around $202,000 in compensatory damages. However, defendant did not win the cross-complaint against the individual cross-defendant, who requested $244,625 in attorney’s fees under the lease fees clause and Civil Code section 1717. The lower court denied the request, one which was affirmed on appeal.
The key reasons for the denial of fees to the individual defendants were the following: (1) the fees clause was narrow, applying only to parties (landlord and tenant, rather than other persons or entities); and (2) section 1717 does not apply to tort claims. Considering these principles in tandem, section 1717 does not apply to tort claims so as to encompass prevailing “alter ego” defendants, with the fees clause being narrow such that it could not sweep individual defendant into its scope for winning tort claims. So, this one shows how the claims won on and scope of fees clause determine the result on appeal.