Real Property Services Corp. v. City of Pasadena

This case concerns whether a signatory to a contract with an attorney fee provision, who is sued by a nonsignatory for breach of that contract, is entitled to attorney fees if the signatory is the prevailing party. Defendant and appellant the City of Pasadena (the City) appeals from that portion of a judgment against plaintiff and respondent Real Property Services Corp. (RPS) denying the City’s request for attorney fees after the trial court found in the City’s favor following a court trial. The sole issue on appeal is whether the trial court erred in failing to award reasonable attorney fees to the City, the prevailing party. We conclude the City is entitled to reasonable attorney fees pursuant to Civil Code section 1717, and reverse.

Facts

On December 16, 1986, the City and BWC Development Corp. entered into a written lease for the development and construction of a site for use as a parking garage and multiscreen movie theater. The City agreed to send out requests for bids, hire the architects and contractors, and underwrite the basic property development costs. BWC, as developer, agreed to pay for any theater-specific property development, and to own and operate a…