Thursday, November 15, 2012
Appeals Court Finds That ‘Legal Expense’ Connotes Attorney Fees
Justice Ashmann-Gerst Says Contractual Fee-Shifting Provision Was Specific Enough to Support Award
By a MetNews Staff Writer
A contract providing that in the event of a dispute, the prevailing party would receive recompense for its “legal…expense” is sufficiently certain as to require an award of attorney fees to the victor, the Court of Appeal for this district held yesterday.
Justice Judith Ashmann-Gerst wrote the opinion for Div. Two. It was not certified for publication.
The appellant, Donald F. Dickerson Associates, Inc., successfully sued ShinYoung 3670, LLC, for unpaid fees incurred in connection with a construction project, but Los Angeles Superior Court Judge John A. Kronstadt declined to award attorney fees. He ruled that the fee-shifting provision in the parties’ contract would not support such an order.
Wording of Contract
The contract read:
“In the event of legal or collection expense in connection with this agreement, [defendant] agrees to pay such expenses.”
Kronstadt relied on the wording of Civil Code Sec. 1717(a) which provides:
“(a) In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.”
The jurist noted that the contract does not “specifically” provide for an award of attorney fees.
Explaining the reversal, Ashmann-Gerst wrote:
“We cannot imagine what the phrase ‘legal...expense[s]’ would include if not attorney fees. At the hearing on plaintiff’s motion, defendant’s counsel suggested that ‘[l]egal expense’ could be limited to litigation costs, but we are not convinced. Litigation costs are recoverable by a prevailing party as a matter of right….Thus, a contractual provision allowing solely for the recovery of costs would be unnecessary, rendering this paragraph ineffectual and superfluous….
“To the extent the trial court determined that the parties’ agreement was not specific enough, we disagree.”
The case is Dickerson Associates v. ShinYoung 3670, B232074.
Stone, Rosenblatt & Cha, along with John V. Tamborelli of the Tamborelli Law Group, represented Dickerson Associates. There was no appearance for the respondent.
Copyright 2012, Metropolitan News Company