Fee Denial Reversed and Remanded.
Santisas v. Goodin, 17 Cal.4th 599 (1998) is one of our Leading Cases. It held that a voluntary dismissal of a case will bar Civil Code section 1717 contractually-based fee claim recovery, but not recovery under other claims. Instead, a broadly phrased fees clause may afford a contractual right to fees under the general costs statutes, namely, Code of Civil Procedure sections 1032 and 1033.5 with respect to noncontract or tort claims.
In 6126, LLC v. DNAM Apparel Industries, LLC, Case No. B239780 (2d Dist., Div. 4 Apr. 22, 2013) (unpublished), plaintiff respondent voluntarily dismissed a trademark licensing case without prejudice, with a licensing agreement containing one section broadly providing for fee recovery “[i]n any dispute arising out of the [License] Agreement.” The trial court did not award fees to the requesting defendant appellant after finding all causes of action were based on contract.
The appellate court reversed because there was a fraud, noncontract claim in addition to the contract claim. The reversal was firmly grounded in Santisas, but also provided other guidance on remand: if the wording of the fees clause does not provide guidance, the lower court may utilize its discretion in determining whether a dismissed party nevertheless prevailed, evaluating the reasons for the dismissal. (Silver v. Boatwright Home Inspection, Inc., 97 Cal.App.4th 443, 452 (2002).) If the dismissal related to the merits rather than on a factor such as the other side’s insolvency, this might give rise to prevailing party status against the dismissing party in the trial court’s discretion. (Santisas, 17 Cal.4th at 621.)
On remand, the lower court was directed to exercise its discretion under Santisas, with the appellate court giving some guidance on apportionment principles and on excluding work relating to one party (an individual defendant) who was not a signatory to the license agreement.