Section 1717 Allows For Recovery “On A Contract,” Not For Fraud.
An individual defendant in High Sierra Properties, Inc. v. Mitchell, Case No. B280201 (2d Dist., Div. 7 March 25, 2019) (unpublished) was feeling pretty good after winning a nonsuit in which he was sued for fraud, both individually and as an alter ego of a corporate defendant. Plaintiff and corporate defendant were parties to a contract with a fees clause, but the individual defendant was not. However, he argued that, under Reynolds Metals [our Leading Case No. 5], he was entitled to prevailing party fees based on defeating the alter ego fraud allegations. The trial court disagreed, denying his fee request. The 2/7 DCA affirmed for a simple reason: individual defendant’s win on the fraud claim was not “on a contract” so as to allow for reciprocal fee recovery under Civil Code section 1717.