Plus, Wife Also Represented By Husband Lawyer Had Commonly Held Interests, So Her Fees Were Barred Under Trope.
As we come to the end of 2025, we have a published opinion on the Trope v. Katz,11 Cal.4th 274 (1995) prohibition [our Leading Case #12]. The case is Honchariw v. PFM CA REIT, LLC, Case No. B337927 (2d Dist., Div. 3 Dec. 31, 2025) [partially published; fee discussion published].
What happened in this one is that a referee found in favor of borrowers as far as payment of default interest to the tune of $261,489, and the referee also awarded borrowers $251,200 in attorney’s fees under a contractual fees clause against lender. Lender appealed, wisely, the fee award, which was reversed as a matter of law on appeal.
The problem was that husband, on behalf of himself and his wife (as borrowers), represented both. The appellate court found unconvincing that the Trope rationale on “incurring” fees did not apply to both Civil Code section 1717 and Code of Civil Procedure section 1021 situations—the rationale applied to both. With respect to wife’s claims that her fees independently were recoverable, the appellate court found that she and husband had commonly held interests such that the Trope limitation still applied, discussing and trying to reconcile Gorman, Rickley, Gillotti, and Gogal opinions in the process after articulating a “commonly held interests” test.