prevailing party clause in California

2022A prevailing party analysis under section 1717 requires the trial court “to compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources.” (Hsu v. Abbara (1995) 9 Cal.4th 863, 876 .) Carp’s $90,000 settlement with Radius contrasts starkly with the $2,120,000 it initially sought from defendants.

2016(Santisas v. Goodin (1998) 17 Cal.4th 599, 610 ; Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 128 .)6 Although AMG successfully defended against Kern Health’s action for breach of contract and was clearly the prevailing party on that claim (see Hsu v. Abbara (1995) 9 Cal.4th 863, 876 [“when a defendant defeats recovery by the plaintiff on the only contract claim in the action, the defendant is the party prevailing on the contract under section 1717 as a matter of law”]), the court denied AMG’s motion for attorney fees under section 1717.

2015(See Sands, supra, 209 Cal.App.4th at p. 1281 .) The Sands court reiterated the fundamental identification between “of counsel” and the law firm in even plainer terms: “[B]ecause the relationship between a law firm and ‘of counsel’ is close, personal, regular, and continuous, we conclude that a law firm and ‘of counsel’ constitute a single, de facto firm, and thus a law firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by “of counsel.” (Sands, supra, 209 Cal.App.4th at p. 1273 , italics added; accord, SpeeDee Oil, supra, 20 Cal.

2012As stated, in SpeeDee Oil, supra, 20 Cal.4th 1135, the Supreme Court adopted a bright-line rule in disqualification matters regarding “of counsel.” (See id. at pp. 1142, 1155; Sukowicz, “Of Counsel” Liability, supra, vol. 23, No. 6 <http://www.lacba.org/showpage.cfm?pageid=3123> [as of Oct. 10, 2012].) We follow the high court’s example and adopt a bright-line rule regarding attorney fees: When a law firm holds an attorney out to the public as “of counsel,” the firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by “of counsel.” O

2015(See Sands, supra, 209 Cal.App.4th at p. 1281 .) The Sands court reiterated the fundamental identification between “of counsel” and the law firm in even plainer terms: “[B]ecause the relationship between a law firm and ‘of counsel’ is close, personal, regular, and continuous, we conclude that a law firm and ‘of counsel’ constitute a single, de facto firm, and thus a law firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by “of counsel.” (Sands, supra, 209 Cal.App.4th at p. 1273 , italics added; accord, SpeeDee Oil, supra, 20 Cal.

2015(See Sands, supra, 209 Cal.App.4th at p. 1281 .) The Sands court reiterated the fundamental identification between “of counsel” and the law firm in even plainer terms: “[B]ecause the relationship between a law firm and ‘of counsel’ is close, personal, regular, and continuous, we conclude that a law firm and ‘of counsel’ constitute a single, de facto firm, and thus a law firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by “of counsel.” (Sands, supra, 209 Cal.App.4th at p. 1273 , italics added; accord, SpeeDee Oil, supra, 20 Cal.

2014(Frog Creek Partners, LLC v. Vance Brown, Inc. (2012) 206 Cal.App.4th 515, 539-540 ; see Hsu v. Abarra, supra, 9 Cal.4th at p. 876 [“[t]he prevailing party determination is to be made only upon final resolution of the contract claims and only by 15 Apparently embracing the view asserted by Anchor Pacifica’s expert Jardini that our decision reversing the unlawful detainer judgment merely followed the decades-long ruling in Appel v. Beyer (1974) 39 Cal.App.3d Supp. 7 , the trial court minimized the significance of the decision and the role of counsel in securing that result, notwithstanding the

2014(Frog Creek Partners, LLC v. Vance Brown, Inc. (2012) 206 Cal.App.4th 515, 539-540 ; see Hsu v. Abarra, supra, 9 Cal.4th at p. 876 [“[t]he prevailing party determination is to be made only upon final resolution of the contract claims and only by 15 Apparently embracing the view asserted by Anchor Pacifica’s expert Jardini that our decision reversing the unlawful detainer judgment merely followed the decades-long ruling in Appel v. Beyer (1974) 39 Cal.App.3d Supp. 7 , the trial court minimized the significance of the decision and the role of counsel in securing that result, notwithstanding the

2010Code § 3260 2 percent ‘penalty’ provision and the attorney fees provision of subd. (g)].)”]; see also McAndrew v. Hazegh (2005) 128 Cal.App.4th 1563, 1566 [ 27 Cal.Rptr.3d 836 ] [“the 2 percent penalty or attorney fees . . . under section 3260, subdivision (g)”]; cf. Morton Engineering & Construction, Inc. v. Pats check (2001) 87 Cal.App.4th 712, 111 [ 104 Cal.Rptr.2d 815 ] [with respect to a prevailing party clause, “[a] provision that has equal application to both parties is not a sanction against one of the parties”].) Thus, we do not have to reach Yassin’s argument that the statute of limi

2010Code § 3260 2 percent ‘penalty’ provision and the attorney fees provision of subd. (g)].)”]; see also McAndrew v. Hazegh (2005) 128 Cal.App.4th 1563, 1566 [ 27 Cal.Rptr.3d 836 ] [“the 2 percent penalty or attorney fees . . . under section 3260, subdivision (g)”]; cf. Morton Engineering & Construction, Inc. v. Pats check (2001) 87 Cal.App.4th 712, 111 [ 104 Cal.Rptr.2d 815 ] [with respect to a prevailing party clause, “[a] provision that has equal application to both parties is not a sanction against one of the parties”].) Thus, we do not have to reach Yassin’s argument that the statute of limi

2010Code § 3260 2 percent ‘penalty’ provision and the attorney fees provision of subd. (g)].)”]; see also McAndrew v. Hazegh (2005) 128 Cal.App.4th 1563, 1566 [ 27 Cal.Rptr.3d 836 ] [“the 2 percent penalty or attorney fees . . . under section 3260, subdivision (g)”]; cf. Morton Engineering & Construction, Inc. v. Pats check (2001) 87 Cal.App.4th 712, 111 [ 104 Cal.Rptr.2d 815 ] [with respect to a prevailing party clause, “[a] provision that has equal application to both parties is not a sanction against one of the parties”].) Thus, we do not have to reach Yassin’s argument that the statute of limi

2010Code § 3260 2 percent ‘penalty’ provision and the attorney fees provision of subd. (g)].)”]; see also McAndrew v. Hazegh (2005) 128 Cal.App.4th 1563, 1566 [ 27 Cal.Rptr.3d 836 ] [“the 2 percent penalty or attorney fees . . . under section 3260, subdivision (g)”]; cf. Morton Engineering & Construction, Inc. v. Pats check (2001) 87 Cal.App.4th 712, 111 [ 104 Cal.Rptr.2d 815 ] [with respect to a prevailing party clause, “[a] provision that has equal application to both parties is not a sanction against one of the parties”].) Thus, we do not have to reach Yassin’s argument that the statute of limi

2026Byrd argued that, as the prevailing party on that claim, he was entitled to attorneys’ fees under Civil Code section 1717, which authorizes an award of fees to the prevailing party on any “causes of action sounding in contract and based on a contract containing an attorney fee provision.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 617 (Santisas); Civ.

2026Byrd argued that, as the prevailing party on that claim, he was entitled to attorneys’ fees under Civil Code section 1717, which authorizes an award of fees to the prevailing party on any “causes of action sounding in contract and based on a contract containing an attorney fee provision.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 617 (Santisas); Civ.

2017"In general, a prevailing party may recover attorney's fees only when a statute or an agreement of the parties provides for fee shifting. [Citation.] Labor Code section 218.5 requires the awarding of attorney's fees to the prevailing party '[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.' This provision awards fees to the prevailing party whether it is the employee or the employer; it is a two-way fee-shifting provision." ( Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244 , 1248, 140 Cal.Rptr.3d 173 , 274 P.

2017"In general, a prevailing party may recover attorney's fees only when a statute or an agreement of the parties provides for fee shifting. [Citation.] Labor Code section 218.5 requires the awarding of attorney's fees to the prevailing party '[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.' This provision awards fees to the prevailing party whether it is the employee or the employer; it is a two-way fee-shifting provision." ( Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244 , 1248, 140 Cal.Rptr.3d 173 , 274 P.

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2022(Karuk Tribe of Northern California v. California Regional Water Quality Control Bd., North Coast Region (2010) 183 Cal.App.4th 330, 363 (Karuk) [“ ‘ “normal standard of review is abuse of discretion” ’ ”].) Not only do the cases demonstrate the discretionary nature of the trial court’s analysis, but other principles also come into play in a court’s discretion, two of which were in fact quoted by Judge Kahn in his order here: (1) “ ‘The analysis of who is a prevailing party under the fee-shifting provisions of the [Davis-Sterling] Act focuses on who prevailed “on a practical level” by achievin

2022(Rancho Mirage Country Club Homeowners Association v. Hazelbaker (2016) 2 Cal.App.5th 252, 260 [suggesting that the prevailing party inquiry is the same for all Davis-Sterling Act fee provisions]; see generally Artus I, supra, 19 Cal.App.5th at p. 944 .) And also for fee orders in section 1021.5 cases.

2022(Karuk Tribe of Northern California v. California Regional Water Quality Control Bd., North Coast Region (2010) 183 Cal.App.4th 330, 363 (Karuk) [“ ‘ “normal standard of review is abuse of discretion” ’ ”].) Not only do the cases demonstrate the discretionary nature of the trial court’s analysis, but other principles also come into play in a court’s discretion, two of which were in fact quoted by Judge Kahn in his order here: (1) “ ‘The analysis of who is a prevailing party under the fee-shifting provisions of the [Davis-Sterling] Act focuses on who prevailed “on a practical level” by achievin

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2022(Rancho Mirage Country Club Homeowners Association v. Hazelbaker (2016) 2 Cal.App.5th 252, 260 [suggesting that the prevailing party inquiry is the same for all Davis-Sterling Act fee provisions]; see generally Artus I, supra, 19 Cal.App.5th at p. 944 .) And also for fee orders in section 1021.5 cases.

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2022(See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b]ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered determination of the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].) 40 (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to ad

2021Proc., § 1021.5, discussing 42 U.S.C. § 1988 (b), which also applies prevailing party standard]; Chavez, at p. 989 [reduced award appropriate for limited success]; accord, Espejo v. The Copley Press, Inc. (2017) 13 Cal.App.5th 329, 377-378 [remanding to consider degree of success].) SFG contends the success “trigger” is “evidence that the legislature intended to limit fees for work on claims that prevailed.” The prevailing party standard that applies to private attorney general fee awards has no bearing on section 1861.10(b), as discussed above.

2014(See Doyle v. Superior Court (1991) 226 Cal.App.3d 1355, 1358-1359 [ 277 Cal.Rptr. 630 ].) As we already explained, section 1038, subdivision (a) empowers the court to award the prevailing party its defense costs if the court *335 determines the proceeding was not pursued with reasonable cause and in the good faith belief that there was a justifiable controversy.

2014(See Doyle v. Superior Court (1991) 226 Cal.App.3d 1355, 1358-1359 [ 277 Cal.Rptr. 630 ].) As we already explained, section 1038, subdivision (a) empowers the court to award the prevailing party its defense costs if the court *335 determines the proceeding was not pursued with reasonable cause and in the good faith belief that there was a justifiable controversy.

2012II DISCUSSION “The issue of a party’s entitlement to attorney’s fees is a legal issue which we review de novo.” (Garcia v. Santana (2009) 174 Cal.App.4th 464, 468 [ 94 Cal.Rptr.3d 299 ]; see Carpenter, supra, 195 Cal.App.4th at p. 378 ; MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 6 [ 54 Cal.Rptr.3d 724 ].) On appeal, Juknavorian contends the Sands firm and Of Counsel should be deemed a single, de facto firm for purposes of awarding attorney fees and, consequently, the trial court erred in awarding fees under the prevailing party clause in the retainer agreement.

2012II DISCUSSION “The issue of a party’s entitlement to attorney’s fees is a legal issue which we review de novo.” (Garcia v. Santana (2009) 174 Cal.App.4th 464, 468 [ 94 Cal.Rptr.3d 299 ]; see Carpenter, supra, 195 Cal.App.4th at p. 378 ; MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 6 [ 54 Cal.Rptr.3d 724 ].) On appeal, Juknavorian contends the Sands firm and Of Counsel should be deemed a single, de facto firm for purposes of awarding attorney fees and, consequently, the trial court erred in awarding fees under the prevailing party clause in the retainer agreement.

2012II DISCUSSION “The issue of a party’s entitlement to attorney’s fees is a legal issue which we review de novo.” (Garcia v. Santana (2009) 174 Cal.App.4th 464, 468 [ 94 Cal.Rptr.3d 299 ]; see Carpenter, supra, 195 Cal.App.4th at p. 378 ; MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 6 [ 54 Cal.Rptr.3d 724 ].) On appeal, Juknavorian contends the Sands firm and Of Counsel should be deemed a single, de facto firm for purposes of awarding attorney fees and, consequently, the trial court erred in awarding fees under the prevailing party clause in the retainer agreement.

2012(See Carpenter & Zuckerman, LLP v. Cohen (2011) 195 Cal.App.4th 373, 375, 385 [ 124 Cal.Rptr.3d 598 ] (Carpenter); see also Trope v. Katz (1995) 11 Cal.4th 274, 277, 292 [ 45 Cal.Rptr.2d 241 , 902 P.2d 259 ] (Trope).) Second, the relationship between a law firm and “of counsel” is “ ‘close, personal, continuous, and regular.’ ” (People ex rel.

2012(See Carpenter & Zuckerman, LLP v. Cohen (2011) 195 Cal.App.4th 373, 375, 385 [ 124 Cal.Rptr.3d 598 ] (Carpenter); see also Trope v. Katz (1995) 11 Cal.4th 274, 277, 292 [ 45 Cal.Rptr.2d 241 , 902 P.2d 259 ] (Trope).) Second, the relationship between a law firm and “of counsel” is “ ‘close, personal, continuous, and regular.’ ” (People ex rel.