Silence Means That Cost And Fee Recovery Can Be Obtained For A Breach If the Underlying Agreements Had Fees/Costs-Shifting Clauses.
Lin v. A-Z Essential Pharmaceutical Inc., Case No. B344056 (2d Dist., Div. 7 Nov. 12, 2025) (unpublished) is a reminder for litigants and their attorneys to take care in crafting stipulated judgments where the litigants agree to fund a monetary recovery in an opponent’s favor.
The parties entered into a Real Property Agreement containing a prevailing party fees and costs clause. The parties settled on the first day of trial through a stipulated judgment under which plaintiffs obtained a total sum of $500,000 from defendants, although the judgment was silent on the issue of fees and costs. Plaintiffs filed a costs memorandum seeking $163,609.35 in fees based on the fees and costs clause in the Real Property Agreement. The lower court denied a later motion for fees and costs due to the silence on the fees/costs issue.
The 2/7 DCA reversed and remanded for a determination of the amount of fees to be awarded to plaintiffs, relying on several cases reasoning that silence does not preclude a recovery of fees and costs in a stipulated judgment where there was a monetary recovery to one side and there were contractual fee-shifting clauses in other documents. (See, e.g., Rapp v. Spring Valley Gold Co. (1888) 74 Cal. 532, 533; Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 671, 677-678; Lanyi v. Goldblum (1986) 177 Cal.App.3d 181, 187; see also DeSaulles v. Community Hospital of Monterey Peninsula (2016) 62 Cal.4th 1140, 1151; Engle v. Copenbarger & Copenbarger (2007) 157 Cal.App.4th 166, 170; On-Line Power, Inc. v. Mazur (2007) 149 Cal.App.4th 1079, 1084; Ritzenthaler v. Fireside Thrift Co. (2001) 93 Cal.App.4th 986, 991.) The upshot is that silence can be deadly, so expressly address the handling of fees and costs in the stipulated judgment or compromise agreement, under penalty of having to endure the unexpected result in Lin.