Gil

Gil v. Mansano

Good Law
121 Cal. App. 4th 739·17 Cal. Rptr. 3d 420
Court of Appeal of CaliforniaAugust 24, 2004B165668California6,061 words

Opinion

Opinion

Certified for Partial Publication. [*]

GRIGNON, Acting P.J.

Three individuals engaged in a business venture together. Two of the individuals purchased the third individual's share of the business. All three entered into a written purchase agreement and a separate written release. The release included an attorney fee provision applicable to an action brought to enforce the release. One of the two remaining owners sued the other for fraud, and the defendant asserted the release as an affirmative defense. The defendant prevailed on summary judgment and was awarded attorney fees pursuant to the attorney fee provision in the release. In the published portion of this opinion, we conclude the assertion of a contractual defense to a tort action is not an "action brought to enforce the contract" and, therefore, the prevailing party is not entitled to an attorney fee award. In the unpublished portion of the opinion, we address the remaining contentions. We reverse the attorney fee award and otherwise affirm the judgment.

The parties in this case signed a release that included the following attorney fee provision: "In the event action is brought to enforce the terms of this [Release], the…

Lead Opinion

Grignon, J.

INTRODUCTION

Three individuals engaged in a business venture together. Two of the individuals purchased the third individual’s share of the business. All three entered into a written purchase agreement and a separate written release. The release included an attorney fee provision applicable to an action brought to enforce the release. One of the two remaining owners sued the other for fraud, and the defendant asserted the release as an affirmative defense. The defendant prevailed on summary judgment and was awarded attorney fees pursuant to the attorney fee provision in the release. In the published portion of this opinion, we conclude the assertion of a contractual defense to a tort action is not an “action brought to enforce the contract” and, therefore, the prevailing party is not entitled to an attorney fee award. In the unpublished portion of the opinion, we address the remaining contentions. We reverse the attorney fee award and otherwise affirm the judgment.

*742 FACTS AND PROCEDURAL BACKGROUND

DISCUSSION

I.-III. *

IV. Attorney Fee Award

The parties in this case signed a release that included the following attorney fee provision: "In the event action is…

Dissenting Opinion

Armstrong, J.

I respectfully dissent.

As the majority notes, the laws of contract interpretation direct us to base an interpretation on the ordinary use of words (Lloyd’s Underwriters v. Craig & Rush, Inc. (1994) 26 Cal.App.4th 1194, 1197-1198 [ 32 Cal.Rptr.2d 144 ]) and to avoid an interpretation which makes the contract unusual or extraordinary. (Sayble v. Feinman (1978) 76 Cal.App.3d 509, 513 [ 142 Cal.Rptr. 895 ].) I believe that by taking a magnifying glass to the word “action” and ascribing a technical meaning to that word, the majority has violated the rules it cites.

The majority impliedly finds that the parties intended that “action” bear a technical meaning and that they knowingly agreed to only a “narrowly drawn” fee provision. I see no basis for that implied finding. The fee provision in the release seems to be an ordinary one, in which the parties add teeth to their commitment to release all claims by providing that if there is litigation on those claims in violation of the release, the loser pays the winner’s fees. In this case, there was litigation in violation of the release, which means, in my view, that fees should have been awarded. The majority has defeated; not enforced,…

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