Considering Mixed Results On Noncontractual Claims Was Error.
Justice Thompson, author of a 3-0 panel opinion in Sadr v. Sabet, Case No. G050493 (4th Dist., Div. 3 Apr. 5, 2016) (unpublished), provides us with an important nuance in cases where attorney’s fees awards are governed by Civil Code section 1717: the prevailing party determination depends on an analysis which is confined to the success on the contractual causes of action. In this matter, the trial judge denied fees to ex-clients of an attorney after ex-clients defeated the attorney’s contractual claims although attorney did recover on a quantum meruit basis. The lower court decided that no one got an unqualified win after examining success on both the contract and non-contract claims.
The appellate court decided this was error because success on the non-contract (quantum meruit) claim could not be factored into the determination of prevailing party under section 1717. However, the panel did caution that apportionment might be necessary as far as compensable work, unless the issues were so interrelated such that they cannot be separated out or the issues were common to both contract/non-contract claims. Reversed and remanded to decide fees to the contract prevailing ex-clients.
BLOG OBSERVATION Obviously, the apportionment doctrine exists to make sure the prevailing party on contract claims under section 1717 is only awarded what is fair. We would surmise that the result might be different where a fees clause is broad, allowing recovery for non-contract claims, or where a statutory fee-shifting statute was involved; in these instances, it would seem fair that overall success in the litigation or “dueling” success under fee entitlement bases would be considered in determining who prevailed.