Landlord Lost $23,029.88 Fee Recovery When Fee Award Deleted From Judgment by Appellate Court.
Although originally unpublished, the appellate court in Kumar v. Yu, Case No. B226335 (2d Dist., Div. 7 Nov. 17, 2011) certified its opinion for publication on December 16, 2011.
Basically, landlord lost a contractual lease dispute with a fee-shifting clause after proper damages “credit” was given for subsequent mitigation efforts. Tenant brought a defensive cross-complaint alleging that landlord had failed to give him statutory notices to retrieve personal property by which he was impeded from reclaiming some valuable videotapes. The trial court awarded nothing to either side, but found that both had prevailed on their respective cross-actions–awarding tenant $55,390.48 and landlord $23,029.88 in attorney’s fees. In line with the “dueling” fee awards, “dueling” appeals were filed by both sides.
The merits judgment and tenant’s fee award were affirmed on appeal. However, tenant did get the landlord’s fee award reversed on appeal, with the award being deleted from the original judgment.
Basis for the reversal? Landlord did not prevail “on a contract” for purposes of Civil Code section 1717. Clearly, the appellate court reasoned, tenant did prevail under the lease by defeating landlord’s damages claims. Different matter as to landlord’s defeat of the cross-complaint: it was based on personal property retrieval/disposal Civil Code statutes that were unrelated to the performance of the lease (not “on a contract”) or alternatively it was purely defensive such that tenant was still the prevailing party. (Hsu v. Abbara, 9 Cal.4th 863, 875 n.10 (1995).) However, plaintiff did prevail on the cross-complaint for a costs award, so not all was lost.
BLOG UNDERVIEW–For lawyers dealing with prospective rent cases, this case is must reading in this area, as it discusses how to credit subsequent mitigation efforts in these type of cases–discussing Willis v. Soda Shoppes of California, 134 Cal.App.3d 899 (1982) in the process.