Zintel Holdings v. McLean, 209 Cal. App. 4th 431

Background

McLean and Huth occupy units G and H in an eight-unit Beverly Hills building; they pay a combined flat $200/month under rent control.
Zintel Holdings, LLC acquired ownership; McLean signed leases as building manager; last agreed lease covered May 2007–May 2012 with an attorney fees provision favoring the prevailing party.
Zintel served multiple inspections and parking requests from 2009–2010; 60-day notices to quit/cure were withdrawn.
Zintel filed a complaint seeking declaratory relief and equitable reformation; McLean cross-complained for breach of quiet enjoyment and related torts.
Court granted summary judgment for McLean on the complaint and for Zintel on the cross-complaint; both sides sought costs; attorney fees were denied.
Judgment awarded costs to McLean and Huth under CCP 1032, but held no prevailing party under Civil Code 1717; McLean and Huth appealed only about attorney fees.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was McLean a prevailing party for purposes of 1717?	McLean defeated Zintel on contract claims.	No single contract win; cross-complaint and mixed results undermine prevailing party status.	No prevailing party on the contract claims.
Is Huth the prevailing party entitled to attorney fees under 1717?	Huth fully defeated Zintel on contract claims and is entitled to fees as a prevailing party.	Unity of interest with McLean precludes independent prevailing party status.	Huth is entitled to attorney fees; remand for reasonable amount.
How should fees be apportioned when multiple parties share defense,
including joint counsel and overlapping work?	Either $64,789.80 or $70,965 should be recovered for Huth; time attributable to Huth must be separated.	Courts should apportion time from shared defense; complete consolidation would overrun the contract-fee framework.	Remand for proper apportionment of fees between McLean and Huth.

Key Cases Cited

Building Maintenance Service Co. v. AIL Systems, Inc., 55 Cal.App.4th 1014 (Cal. App. Dist. 2nd Div. 1997) (defines prevailing party for costs under §1032)
Hsu v. Abbara, 9 Cal.4th 863 (Cal. 1995) (limits on awarding attorney fees; strict prevailings on contract)
Goodman v. Lozano, 47 Cal.4th 1327 (Cal. 2009) (explanation of 1986 cost-shift and prevailing party concepts)
Ajaxo Inc. v. E*Trade Group Inc., 135 Cal.App.4th 21 (Cal. App. Dist. 2nd Div. 2005) (trial court wide discretion in prevailing party determinations)
Wakefield v. Bohlin, 145 Cal.App.4th 963 (Cal. App. 4th Dist. 2006) (unity of interest discussion in cost awards post-1986)
El Escorial Owners’ Assn. v. DLC Plastering, Inc., 154 Cal.App.4th 1337 (Cal. App. 4th Dist. 2007) (permissible fee apportionment where claims are connected)
Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (Cal. 1979) (allocation principles for attorney fees when related to contract actions)
Amtower v. Photon Dynamics, Inc., 158 Cal.App.4th 1582 (Cal. App. Dist. 2nd Div. 2008) (fee recovery where related contract claims exist)
Shadoan v. World Savings & Loan Assn., 219 Cal.App.3d 97 (Cal. App. Dist. 5th Div. 1990) (apportionment when issues are connected)
PNEC Corp. v. Meyer, 190 Cal.App.4th 66 (Cal. App. Dist. 2nd Div. 2010) (distinctness of contract vs noncontract relief in prevailing party analysis)
McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450 (Cal. App. Dist. 6th Div. 1991) (mixed results and prevailing party analysis in contracts)
Schrader v. Neville, 34 Cal.2d 112 (Cal. 1949) (old precedent on costs and multiple defendants)
Smith v. Circle P Ranch Co., 87 Cal.App.3d 267 (Cal. App. 1978) (unity of interest and costs discretion principles)
Silver Creek, LLC v. BlackRock Realty Advisors, Inc., 173 Cal.App.4th 1533 (Cal. App. 4th Dist. 2009) (contractual prevailing party vs costs framework)
Abdallah v. United Savings Bank, 43 Cal.App.4th 1101 (Cal. App. Dist. 2nd Div. 1996) (intertwined contract/noncontract fee considerations)