Abbett Electric Corp. v. California Federal Savings & Loan Ass'n

In this case we hold that a mechanic’s lien claimant with a contractual right to attorney’s fees, which prevails in an action against the property owner for breach of contract and foreclosure of the mechanic’s lien, is not entitled to have its attorney’s fees included in the mechanic’s lien.

I. Background

Respondent Abbett Electric Corporation entered into a written contract with Storek & Storek Environmental Center (Storek) to perform electrical work on Storek’s property at 530 Bush Street, San Francisco. The contract provided for attorney’s fees to the prevailing party in case of any dispute. In 1981, respondent recorded a mechanic’s lien against the subject property. A few weeks later respondent filed a complaint against Storek for breach of contract and foreclosure of its mechanic’s lien, at the same time recording a lis pendens. The complaint prayed for judgment in the sum of $314,652, plus estimated attorney’s fees of $100,000 pursuant to the contract.

After an initial mistrial, the case proceeded to trial in May of 1989. During the pendency of those proceedings, appellants Citicorp Real Estate, Inc., and Massachusetts Mutual Life Insurance Co., each recorded a…