Reciprocity Principle of Section 1717 Made It Operative.
Landlord wasn’t happy about losing an unlawful detainer action to tenant, given that there was a unilateral fees clause that led to the lower court awarding $14,587.50 (out of a requested $$18,576) in fees to tenant as prevailing party under Civil Code section 1717. Even though the fees clause was unilaterally worded to allow fees only to landlord, tenant was entitled to fees under the reciprocity principle of section 1717 given that an unlawful detainer action is contractually based via the lease. (Santisas v. Goodin, 17 Cal.4th 599, 610 (1998); Drybread v. Chipain Chiropractic Corp., 151 Cal.App.4th 1063, 1073-1076 (2007).)
Even though the fee award was affirmed in Arman v. Poojani, Case No. C067227 (3d Dist. July 24, 2012) (unpublished), what caught our eye was landlord’s argument that there was no fee entitlement based on Civil Code section 1717(a), which provides that a fees clause applies to the entire contract unless there was representation by counsel in the negotiation/signing of the contract and that representation is specified in the contract. This argument was rejected, because this provision does not limit the section 1717 reciprocity principle, but was added to allow the parties to limit the availability of fees in connection with a bargained-for contractual indemnity clause. (Myers Bldg. Industries, Inc. v. Interface Technology, Inc., 13 Cal.App.4th 949, 970-973 (1993).) So, this statutory language in section 1717 is limited in nature and did not apply, which led to sustaining the fee award on appeal.