Loo

In this case we consider whether a lessor who prevails in an action in subrogation brought by his lessee’s property insurer is entitled to recover attorney fees under a provision in the lease.

Background

Allstate insureds Tony and Eleanor Dudley were tenants in an apartment building owned by Dennis J. Loo. After their personal property was destroyed in a fire in the apartment building, they filed a claim with their insurer. After paying the claim Allstate Insurance Company commenced the instant action in subrogation against Loo, asserting causes of action for negligence, failure to disclose a latent defect, and breach of an implied warranty of habitability.

Loo successfully moved for summary judgment. Following entry of judgment, Loo filed a “Motion to Determine Prevailing Party and to Fix Amount of Attorney Fees as Costs in Contract Action,” attaching a copy of the residential lease agreement he had with the Dudleys. The lease contained a provision authorizing a “reasonable attorney’s fee” to the prevailing party “In any legal action brought by either party to enforce the terms hereof or relating to the demised premises . . . .” Allstate opposed the motion, arguing…