3 Cal. App. 5th 1155
Cal. Ct. App.2016Background
- Christie and Justin Hjelm leased an apartment from Prometheus Real Estate; within ~15 months the unit had a severe bedbug infestation and there was raw sewage on the property, and the family moved out.
- The Hjelms sued asserting negligence, premises liability, constructive eviction, breach of implied warranty of habitability, negligent infliction of emotional distress, breach of covenant of quiet enjoyment, and nuisance; they sought damages and attorney fees.
- Prometheus defended on factual and procedural grounds and pleaded affirmative defenses including contract-based defenses and statutes of limitation.
- At summary adjudication the trial court ruled Civil Code § 1717 applied to make one-sided lease fee provisions reciprocal; the case proceeded to an eight‑day jury trial and the jury awarded the Hjelms economic and noneconomic damages.
- The trial court awarded the Hjelms $326,475 in attorney fees under § 1717; Prometheus appealed the fee award and attempted to attack the underlying verdict as well.
- The Court of Appeal affirmed the fee award, held the attempt to appeal the underlying verdict was untimely/waived, and remanded for determination of appellate fees to the Hjelms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness/ability to appeal the jury verdict | N/A (Hjelms sought fees; verdict final) | Prometheus sought to challenge the underlying verdict on appeal | Appeal as to the verdict was untimely; postjudgment fee order did not reopen the final-judgment appeal window; verdict challenge waived |
| Applicability of Civ. Code § 1717 (one‑sided fee provisions) | § 1717 applies because several lease clauses allowed Prometheus to recover fees; the Hjelms prevailed on contract‑based theories (e.g., warranty of habitability, constructive eviction) | § 1717 does not apply because Hjelms asserted tort claims and did not bring a contract claim on which fees can be awarded | § 1717 applies: the Hjelms’ claims arose from the lease (were "on a contract"); fee clauses must be applied reciprocally when unenforceable one‑sided clauses exist |
| Election of tort remedies / emotional distress damages bars § 1717 | Jury awarded emotional distress but Hjelms also sought and prevailed on contract‑based theories; they did not elect exclusively tort remedies | Because plaintiffs recovered distinctive tort remedies (emotional distress), § 1717 should not apply | Rejection of defendant’s election argument: presence of tort damages does not preclude § 1717 where causes of action arise from contract and jury found contract‑based theories (constructive eviction, warranty of habitability) |
| Apportionment and reasonableness of fee award | Hjelms: lodestar supported by detailed time records; fees are reasonable and not subject to downward apportionment because claims were intertwined | Prometheus: trial court failed to explain award and should have apportioned fees (reducing award proportionally to economic damages) | Trial court acted within discretion; lodestar submissions were adequate, apportionment not required where claims are inextricably intertwined; no abuse of discretion shown |
Key Cases Cited
- Trope v. Katz, 11 Cal.4th 274 (Cal. 1995) (one‑sided attorney‑fee clauses are subject to § 1717 reciprocal application)
- Santisas v. Goodin, 17 Cal.4th 599 (Cal. 1998) (purpose of § 1717 is to prevent oppressive one‑sided fee provisions)
- Torres v. City of San Diego, 154 Cal.App.4th 214 (Cal. Ct. App. 2007) (postjudgment addition of fees/costs does not extend appeal period to attack the original judgment)
- Fairchild v. Park, 90 Cal.App.4th 919 (Cal. Ct. App. 2001) (warranty of habitability claims are actions on the contract for § 1717 purposes)
- Dell Merk, Inc. v. Franzia, 132 Cal.App.4th 443 (Cal. Ct. App. 2005) (liberal construction of "on a contract" under § 1717)
- Maxim Crane Works, L.P. v. Tilbury Constructors, 208 Cal.App.4th 286 (Cal. Ct. App. 2012) (attorney fees need not be apportioned when claims are inextricably intertwined)