Lender Also Asked For Fees For Prevailing On Contract Claims, But That Was Forfeited By Not Timely Asking For Them Earlier.
In Vakili v. Bank of America, N.A., Case No. C091767 (3d Dist. Jan. 20, 2022) (unpublished), a borrower and lender won and lost some claims where there were contractual attorney’s fees clauses in a note and deed of trust. Lender obtained a directed verdict on contractual claims, but borrower won two tort claims (fraud and negligence) which resulted in a remitted award of a little over $1.7 million. Borrower then moved for $1.9 million in contractual attorney’s fees, a request denied because the lower court determined that the fees were for tort claims which were not “on the contract” under Civil Code section 1717.
The Third District affirmed, basically telling both sides that no fees were allowable. The contractual clauses involved lender’s unilateral entitlement to enforce the note or lender being able to add third party expenses to the debt due under the note—none of these provisions applied to the fraud and negligence claims won by borrower. Section 1717 does not generally apply to tort claims, especially where the enabling contractual clauses do not involve these types of broader claims. Interestingly, lender sought fees for winning the contractual claims, but it did not timely seek fees earlier such that the request for fees was forfeited.