Reason is that Civil Code section 1717(a) Says that Narrow Fee Clause Still Applies to the Entire Contract
In Lillibridge v. Kennington, Case Nos. D062020/D062935 (4th Dist., Div. 1 June 27, 2014) (unpublished), defendants won a demurrer without leave against plaintiffs’ First Amended Complaint involving a real estate dispute, a merits determination affirmed on appeal. The lower court also awarded defendants $91,180 in attorney’s fees as the prevailing parties under a promissory note fees clause. Plaintiffs also appealed the fee award.
The appellate court affirmed, rejecting Plaintiffs’ argument that the note fees clause applied only narrowly to note defaults. Plaintiffs had, after all, sought to effectively accelerate the note payments in their FAC. The reason that the note fees clause conferred entitlement to the defense was based on Civil Code section 1717(a), which holds that even if a fee clause applies only to certain types of action, the provision will be applied to actions to the entire contract. (See also Ganey v. Doran, 191 Cal.App.3d 901, 911 (1987).) Given that the note was part of an overall integrated real estate deal, section 1717(a) adequately supported the trial judge’s ruling.
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