Frog Creek Partners, LLC v. Vance Brown, Inc.

*520 Opinion

Two parties enter into a contract with an arbitration clause and a separate attorney fee provision. A dispute arises, a lawsuit is filed, and the defendant petitions to compel arbitration. Under Civil Code section 1717, if the plaintiff defeats that petition, is it entitled to recover attorney fees, even if the plaintiff ultimately loses the substantive contractual dispute? This court considered an analogous question in Green v. Mt. Diablo Hospital Dist. (1989) 207 Cal.App.3d 63 [ 254 Cal.Rptr. 689 ] (Green). There, albeit with relatively little discussion, we held that a party’s request for Civil Code section 1717 attorney fees for defeating a petition to compel arbitration filed in a pending lawsuit was “premature.” (Green, at pp. 76-77.) In the present case, we reaffirm Green's holding in light of the relevant legislative history and more recent case law. In particular, we hold that, under Civil Code section 1717, there may only be one prevailing party entitled to attorney fees on a given contract in a given lawsuit. 1 On that basis, we reverse the trial court’s fee award, which awarded attorney fees to both parties on the same contract in the same lawsuit. On…