Sears

*1139 Opinion

This opinion considers a question which routinely troubles trial courts attempting to identify the “prevailing party” for the purpose of awarding attorney’s fees resulting from litigation of contracts. Periodic legislative modification of the “American” rule provided by Code of Civil Procedure section 1021, which generally requires litigants to pay their own attorney fees, has created uncertainty over the extent of trial court discretion to award fees. This has been particularly apparent in cases where there are multiple issues and parties, where there is recovery of extrajudicial or nontangible benefits, and where the line between “winner” and “loser” is not finely drawn. The two basic statutes regularly employed by the courts to award fees in contract cases, Code of Civil Procedure section 1032 (section 1032) and Civil Code section 1717 (section 1717) differ in their analytic approach to the issue. Trial courts may have little difficulty applying these statutes to simple victories, and within their express boundaries, but occasionally struggle to avoid an inequitable result seemingly prescribed by them. Prior appellate opinions have either taken a narrow view of…

I agree Martin H. Baccaglio was properly determined to be the prevailing party and awarded attorney fees. As the majority explains, the award is justified under Code of Civil Procedure section 1032 (section 1032). The majority’s painful attempt to also justify the award on the basis of Civil Code section 1717 (section 1717) is not only wrong, and destined to exacerbate the confusion that already exists in this area of the law, but entirely gratuitous.

The “prevailing party” language of Civil Code 1717 was intended to apply and should only be applied to unilateral contractual attorney fee provisions. Since the contract in this case contains a reciprocal fee provision, the statute has no application.

I.

Significantly, section 1717 does not appear in the chapter of the Code Civil Procedure devoted to attorney fees generally (Code Civ. Proc., ch. 6, § 1021 et seq.), but in a portion of the Civil Code entitled “Obligations Imposed by Law,” the other provisions of which have nothing to do with attorney fees. Section 1717, which creates a substantive, not a procedural right, was only intended to rectify the inequitable situation in which a contract of adhesion authorizes fees only for…

[Opinion certified for partial publication. [*] ]

OPINION

LAMBDEN, J.

This opinion considers a question which routinely troubles trial courts attempting to identify the "prevailing party" for the purpose of awarding attorney's fees resulting from litigation of contracts. Periodic legislative modification of the "American" rule provided by Code of Civil Procedure section 1021, which generally requires litigants to pay their own attorney fees, has created uncertainty over the extent of trial court discretion to award fees. This has been particularly apparent in cases where there are multiple issues and parties, where there is recovery of extrajudicial or nontangible benefits, and where the line between "winner" and "loser" is not finely drawn. The two basic statutes regularly employed by the courts to award fees in contract cases, Code of Civil Procedure section 1032 (section 1032) and Civil Code section 1717 (section 1717) differ in their analytic approach to the issue. Trial courts may have little difficulty applying these statutes to simple victories, and within their express boundaries, but occasionally struggle to avoid an inequitable result seemingly prescribed by them.…