Summary
The California Court of Appeal affirmed the denial of attorney’s fees to Walter Jones, concluding that the dismissal of a petition to confirm an arbitration award did not finally resolve the contract dispute and therefore did not establish a prevailing party under Civil Code section 1717. The court held that Jones was nevertheless entitled to recover court costs because he was a defendant in whose favor a dismissal was entered under Code of Civil Procedure section 1032. The matter was remanded for the limited purpose of awarding Jones his costs.
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Practice areas
Questions Presented
- Whether the trial court abused its discretion by determining that neither party prevailed on the contract for purposes of Civil Code section 1717 and denying Jones attorney’s fees.
- Whether Jones was entitled to recover costs as a defendant in whose favor a dismissal was entered under Code of Civil Procedure section 1032.
Holdings
- The trial court did not abuse its discretion in determining that neither party prevailed on the contract because the dismissal did not finally resolve the enforceability of the arbitration award or Jones’s liability under the guarantee.
- Jones was entitled as a matter of right to recover costs because he was a defendant in whose favor a dismissal was entered.
Key quotations
““[F]ees under section 1717 are awarded to the party who prevailed on the contract overall, not to a party who prevailed only at an interim procedural step.”” (at 5)
““Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”” (at 9)
Factual background
Jones signed a commercial lease on behalf of Green America and separately signed a guarantee making him responsible for rent and enforcement costs and attorney’s fees. An arbitration resulted in an award finding Jones liable as guarantor. The trial court confirmed the award against Green America but dismissed the confirmation petition as to Jones for lack of personal jurisdiction, without deciding whether the award was enforceable against him or ruling on his request to vacate it.
Procedural history
Scheinker obtained an arbitration award against Jones based on Jones’s guarantee of a commercial lease. The trial court confirmed the award against Green America but dismissed the petition as to Jones for lack of personal jurisdiction and expressly declined to rule on Jones’s request to vacate the award. The trial court denied Jones’s attorney’s-fee motion on the ground that neither party prevailed on the contract and did not separately address his request for statutory costs. The Court of Appeal affirmed the fee ruling but remanded for an award of costs to Jones.
Remand instructions
Remand to the trial court for the limited purpose of awarding Jones his costs under Code of Civil Procedure section 1032. O’Leary shall recover her costs on appeal.