Party’s Effort To Invalidate Agreements With Fee Clause Did the Trick For Fee Entitlement.
In Eden Township Healthcare Dist. v. Eden Medical Center, Case No. A136695 (1st Dist.,, Div. 1 Oct. 9, 2013) (published), cross-defendant appealed a lower court’s decision denying it attorney’s fees under Civil Code section 1717 after cross-complainant lost a declaratory relief action to declare certain agreements illegal and void even though there was a fees clause in the operative agreements between the parties.
This fee denial was reversed. An action to avoid enforcement of a contract is “on the contract” within the meaning of section 1717 fee entitlement. (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc., 211 Cal.App.4th 230, 241-242 (2012); Turner v. Schultz, 175 Cal.App.4th 974, 977-980 (2009).) Because the losing cross-complainant had “teed up” the issue, it did not matter whether cross-defendant had asserted its own affirmative claim to enforce the contract but did beat cross-complainant’s issue. “We conclude awarding attorney fees to the party who successfully thwarts the other party’s efforts to have a contract declared void at its inception is consistent with the mutuality of remedy doctrine [of section 1717].” (Slip Opn., p. 12.) Reversed and remanded to fix attorney’s fees in cross-defendant’s favor.