Recently, there have been a series of decisions in California that have limited the recovery of attorney fees. In my previous blog article titled, “Can you Really Get those Attorney Fees? ” I discussed the importance of complying with alternative dispute resolution provisions prior to filing suit. Now, the California Court of appeal has held that a defendant who prevailed in a lawsuit could be barred from recovering attorney fees because he also filed an unsuccessful cross-complaint in the same action.
Facts of the Case
In Zintel Holdings, LLC v. McLean, Zintel Holdings, LLC, the landlord, sued two tenants, Lilo McLean and Mark Huth, to reform a 50-year lease. In response, Lilo filed a cross-complaint for breach of the covenant of quiet enjoyment, elder abuse, and emotional distress. Mark Huth did not file a cross-complaint.
Eventually, the court granted motions for summary judgment finding that both the complaint and the cross-complaint lacked merit. After the dismissal of the complaint and cross-complaint, both tenants filed requests for attorney fees and were denied. However, the Court did award both tenants their costs of approximately $2,500.
The appellate court reversed the denial of attorney fees as to Mark Huth but affirmed the denial as to Lilo McLean. The Court found that McLean’s cross-complaint was an action on the contract so neither McLean nor Zintel were prevailing parties as neither achieved complete victory. On the other hand, since Huth did not file a cross-complaint, he had achieved complete victory by successfully defeating Plaintiff’s suit and was entitled to attorney fees.
This case demonstrates that although many people file cross-complaints as a tactic to aggressively defend the case, that strategy may come back to haunt a defendant. Before filing a cross-complaint, it is important to analyze if there is an attorney fee provision and the likelihood of success on the cross-complaint.
If you have any further questions regarding this article, feel free to contact Brewer Offord & Pedersen LLP at (650) 327-2900. www.BrewerFirm.com