Homeport Ins. Servs., Inc. v. Lundy
Filed 1/28/13 Homeport Ins. Servs., Inc. v. Lundy CA2/7
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
SEVEN
HOMEPORT INSURANCE SERVICES,
INC., et al.,
Plaintiffs and Respondents,
v.
WILLIAM LUNDY,
Defendant and Appellant.
B238296
(Los Angeles
County
Super. Ct.
No. NC054268)
APPEAL from
a judgment of the Superior Court
of
County. Ross M. Klein,
Jr., Judge. Affirmed.
Mower
& Carreon, Patrick A. Carreon, James A. Burton for Defendant and Appellant.
Russell,
Mirkovich & Morrow, Joseph N. Mirkovich, and Margaret E. Morrow for
Plaintiffs and Respondents.
_______________________
Appellant
William Lundy appeals from a post-judgment
order awarding attorney’s fees to respondents SSA Terminals LLC, SSA
Terminals (Long Beach) LLC, and SSA Pacific, Inc. (collectively SSA) under
Civil Code
After Lundy was injured while working for SSA as a longshoreman in the Port
of Long Beach, he filed a worker’s
compensation claim against SSA and a personal injury action against the City of
Long Beach (City). Following a global settlement of both cases
in which Lundy waived his right to seek reemployment with SSA, Lundy breached
the “no reemployment†provision in his settlement agreement with the City by
continuing to accept work assignments with SSA entities. In SSA’s ensuing action against Lundy to
enforce the “no reemployment†provision, the trial court entered summary judgment
for SSA and granted SSA’s motion for attorney’s fees. This Court previously affirmed the judgment
for SSA on the ground that the “no reemployment†provision in Lundy’s
settlement agreement with the City was enforceable by SSA. We now affirm the award of attorney’s fees to
SSA on the ground that SSA was a third party beneficiary of the settlement
agreement, including the attorney’s fees provision, and was therefore entitled
to recover its attorney’s fees under section 1717 as the prevailing party in an
action to enforce the agreement.
I.
Settlement of Lundy’s Claims Against the City
and SSA
Lundy is a longshoreman in the
International Longshore and Warehouse Union (ILWU). SSA Terminals LLC, SSA Terminals (Long Beach)
LLC, and SSA Pacific, Inc. are employers of longshoreman and are insured for
worker’s compensation benefit claims through Homeport Insurance Services, Inc.
(Homeport). In May 2006, Lundy was
injured while working for SSA at the Port of Long Beach on property leased by
SSA from the City. Lundy filed a
workers’ compensation claim against SSA with the United States Department of
Labor for benefits under the Longshore and Harbor Workers’ Compensation Act
(LHWCA). Lundy also filed a personal
injury action against the City in Los Angeles County Superior Court for damages
allegedly caused by a dangerous condition of property owned by the City. Lundy was represented by separate counsel in
his worker’s compensation and personal injury cases.
Pursuant to its lease agreement
with the City, SSA was contractually obligated to defend and indemnify the City
for claims that arose on the leased property, including the claims alleged in
Lundy’s personal injury complaint. After
accepting the defense of Lundy’s complaint from the City, SSA retained counsel
to defend the City and represent SSA’s interests in the personal injury
action.
In May 2008, Lundy agreed to settle
both his workers’ compensation claim against SSA and his personal injury action
against the City for a total payment of $175,000. As part of the settlement, Homeport agreed to
waive its lien of $112,742.60 for benefits paid to Lundy under the LHWCA. SSA and Homeport insisted in negotiations
that neither case would settle unless Lundy agreed to a provision waiving his
right to any future employment with SSA or other company insured by
Homeport. After consulting with his
attorneys in both cases, Lundy consented to the “no reemploymentâ€
provision.
Counsel for the City and SSA
prepared a written settlement agreement for Lundy’s personal injury action,
which was signed by both Lundy and his personal injury attorney. The agreement included a general release of
claims by Lundy against the City, its assigns, and all others acting on its
behalf. It also stated that the
settlement was contingent upon approval of a workers’ compensation settlement
by the Department of Labor. Paragraph 12
of the agreement, entitled “Plaintiff’s Future Employment,†specifically
provided as follows: “Plaintiff
specifically agrees, at any time, in the future, never to work for any company
insured by or in any way affiliated with Homeport Insurance, including but not
limited to SSA Marine, SSA Terminals, SSAT and Pacific Maritime Services.†Paragraph 15 of the agreement, entitled
“Enforcement of Agreement,†set forth the following attorney’s fees
provision: “If any litigation should
arise out of this Agreement, the prevailing party in such litigation shall
recover from the losing party its reasonable attorneys’ fees and costs incurred
in such litigation.â€
Homeport prepared a separate
written settlement agreement for Lundy’s worker’s compensation claim, which was
signed by both Lundy and his worker’s compensation attorney. Paragraph 1(n) of the agreement, entitled
“Adequacy Of Settlement,†included the following provision: “As part of this consideration, claimant has
agreed not to return to work for any Homeport Insurance insured. If claimant does return to work with a
Homeport Insurance insured, he is in violation of this agreement and is to
return all settlement amounts. This
clause has been explained to the claimant in full by his attorneys of
record.†Following Homeport’s submission
of the settlement agreement for approval under the LHWCA, the Department of
Labor issued an order approving Lundy’s worker’s compensation settlement
without modification.
In June 2008,
counsel for the City and SSA sent the settlement payment owed under the
parties’ global settlement to counsel for Lundy. Lundy accepted the settlement payment and did
not return any of the consideration paid.
However, following the settlement of his personal injury and worker’s
compensation claims, Lundy repeatedly breached the “no reemployment†provision
in both settlement agreements by accepting dispatch assignments from his union
to work for SSA. When Lundy refused
SSA’s request to cease accepting such work assignments, the underlying lawsuit
followed.
II.
SSA’s Action to Enforce the “No Reemploymentâ€
Provision
In March 2010, SSA and Homeport
filed the instant action against Lundy for specific performance of the personal
injury settlement agreement with the City and a permanent injunction barring
Lundy from working at SSA or other Homeport-insured company. The parties thereafter brought cross-motions
for summary judgment in which they disputed the enforceability of the “no
reemployment†provision. Lundy contended
that the provision was void as against public policy because it constituted
unlawful discrimination or retaliation under Labor Code section 132a, the
LHWCA, and the California Fair Employment and Housing Act (FEHA). Lundy also claimed that the provision was
severable from the settlement agreement and that its purported illegality did
not void the entire agreement, including the consideration paid to Lundy. SSA countered that the “no reemploymentâ€
provision was part of a freely negotiated global settlement which was approved
by Lundy, his counsel, and the Department of Labor, and that SSA was entitled
to enforce the provision as a third party beneficiary of Lundy’s settlement
agreement with the City.
The trial
court granted summary judgment for SSA and denied summary judgment for Lundy.
not support an inference of discriminatory or retaliatory animus by SSA in
conditioning the settlement on the “no reemployment†provision, but rather
showed that Lundy voluntarily agreed to the provision with the assistance of
counsel and ratified the settlement by refusing to return the consideration
paid. The trial court also found that
“[a]s part of a global settlement, the plaintiffs are third party beneficiaries
of the settlement with the City of Long Beach.â€
Following entry of a final judgment permanently enjoining Lundy from
working for SSA, Lundy filed an appeal challenging the enforceability of the “no
reemployment†provision. In a
nonpublished opinion, this Court affirmed summary judgment in SSA’s favor on
the ground that the “no reemployment†provision in Lundy’s settlement agreement
with the City was enforceable by SSA. (
Lundy (Nov. 5, 2012, B236276 [nonpub. opn.].)
III.
SSA’s Motion for Attorney’s Fees
SSA moved for a post-judgment award
of attorney’s fees pursuant to section 1717.
In its moving papers, SSA argued that it had prevailed in its action to enforce
the terms of Lundy’s settlement agreement with the City and that the settlement
agreement expressly provided for attorney’s fees to the prevailing party in any
litigation arising out of the agreement.
Lundy opposed the motion on the grounds that SSA had failed to prove
that it was a third party beneficiary of the fee provision in the agreement,
and failed to prove that Lundy would have been entitled to recover his
attorney’s fees from SSA if he had been the prevailing party. In its reply, SSA asserted that it was not
required to prove that it was an intended beneficiary of the fee provision as
long as it was an intended beneficiary of the “no reemployment†provision at
issue in the underlying action. SSA also
reasoned that, because the fee provision inured to the benefit of the
prevailing party in any action arising out of the agreement, SSA was entitled
to attorney’s fees as the prevailing party in its action to enforce the “no
reemployment†provision.
In a written
decision, the trial court granted SSA’s motion for attorney’s fees in the
amount of $129,525. With respect to the
legal basis for the award, the trial court stated as follows: “As the Court has found that the Plaintiffs
prevailed in this action, they are entitled to attorney fees pursuant to Civil
Code section 1717(a) and section 15 of the settlement agreement that is being
enforced.†Following the entry of the
trial court’s post-judgment order awarding attorney’s fees to SSA, Lundy filed
the current appeal challenging the legal basis for the fee award.
In this appeal, Lundy does
not dispute that SSA was the “prevailing party†in an “action on the contractâ€
within the meaning of section 1717. Nor
does Lundy dispute the reasonableness of the amount of attorney’s fees
awarded to SSA. Rather, Lundy’s
arguments on appeal are that SSA was not entitled to recover its attorney’s
fees under section 1717 because (1) SSA did not meet its burden of proving
that it was a third party beneficiary of the attorney’s fees provision in Lundy’s
settlement agreement with the City, and (2) SSA did not meet its burden of
proving that Lundy would have been entitled to recover his attorney’s fees from
SSA had Lundy prevailed in the underlying action.
I.
Section 1717 and Nonsignatory Parties
The determination of the legal
basis for an award of attorney’s fees is a question of law subject to de
novo review. (Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962, 966 (
84 Cal.App.4th 671, 678 (Sessions).) Ordinarily, each party to a lawsuit must bear
its own attorney’s fees except where a statute or contract provides
otherwise. (Code Civ. Proc.,
§ 1021; Reynolds Metal Co. v.
Alperson (1979) 25 Cal.3d 124, 127.)
Where there is a contractual fee provision, section 1717,
subdivision (a) states, in pertinent part, as follows: “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.â€
“The primary purpose of section
1717 is to ensure mutuality of remedy for attorney fee claims under contractual
attorney fee provisions.
[Citation.] Courts have
recognized that section 1717 has this effect in at least two distinct
situations. [¶] The first situation . .
. is ‘when the contract provides the right to one party but not to the other.’
[Citation.] In this situation, the
effect of section 1717 is to allow recovery of attorney fees by whichever
contracting party prevails, ‘whether he or she is the party specified in the
contract or not.’ [Citation.] [¶] “The second situation . . . is when a
person sued on a contract containing a provision for attorney fees to the
prevailing party defends the litigation ‘by successfully arguing the
inapplicability, invalidity, unenforceability, or nonexistence of the same
contract.’ [Citation.] . . . To ensure
mutuality of remedy in this situation, it has been consistently held that when
a party litigant prevails in an action on a contract by establishing that
the contract is invalid, inapplicable, unenforceable, or nonexistent, section
1717 permits that party’s recovery of attorney fees whenever the opposing
parties would have been entitled to attorney fees under the contract had they
prevailed. [Citations.]†(Santisas
v. Goodin (1998) 17 Cal.4th 599, 610-611.)
To effectuate its purpose, section
1717 has been interpreted to provide a reciprocal remedy in actions between
signatory and nonsignatory parties. (
128-129; Cargill,
334, 343-344 (Loduca);
Pasadena (1994) 25 Cal.App.4th 375, 383-384 (Real Property Services).) In
cases involving a nonsignatory to a contract with an attorney’s fees provision,
“[a] party is entitled to recover its attorney fees pursuant to a contractual
provision only when the party would have been liable for the fees of the
opposing party if the opposing party had prevailed.†(Real
Property Services, supra, at p.
382; see also Hyduke’s Valley Motors v.
Lobel Financial Corp. (2010) 189 Cal.App.4th 430, 435 [“nonsignatory who
prevails in an action on the contract is entitled to attorney fees provided it
would have been liable for fees had the other party prevailedâ€];
Transamerica Financial Services (1989) 212 Cal.App.3d 1370, 1381
[“nonsignatory party may recover attorney’s fees under Civil Code section 1717
provided the signatory party ‘would clearly be entitled to attorney’s fees
should he prevail in enforcing the contractual obligation against the
[nonsignatory party]’â€].)
As the Court
of Appeal explained in Cargill,
“[t]wo situations may entitle a nonsignatory party to attorney fees. First is where the nonsignatory party ‘stands
in the shoes of a party to the contract.’
[Citation.] Second is where the
nonsignatory party is a third party beneficiary of the contract.†(Cargill,
supra, 201 Cal.App.4th at p.
966.) At issue in this appeal is whether
SSA was entitled to recover its attorney’s fees as a third party beneficiary of
Lundy’s settlement agreement with the City.
II.
SSA did not waive its arguments on appeal.
As a preliminary matter, we address
Lundy’s contention that SSA waived its primary arguments on appeal by failing
to timely raise them in the trial court.
As Lundy points out, SSA did not argue that it was entitled to recover
its attorney’s fees as a third party beneficiary until its reply brief in
support of its motion for attorney’s fees.
Additionally, SSA never directly argued in the trial court proceedings
that Lundy would have been allowed to recover his attorney’s fees from SSA had
he prevailed in the underlying action.
We conclude, however, that there has been no waiver by SSA.
The record
reflects that SSA first argued that it was a third party beneficiary of Lundy’s
settlement agreement with the City in its motion for summary judgment, and the
trial court made a specific factual finding that SSA was a third party
beneficiary of the agreement in granting summary judgment in its favor. The record also reflects that SSA then moved
for an award of attorney’s fees on the ground that the settlement agreement
signed by Lundy specifically provided for attorney’s fees to the prevailing
party in any action arising out of the agreement and that SSA’s successful
action to enforce the “no reemployment†provision in the agreement was an
action on the contract under section 1717.
In its reply brief in support of the attorney’s fees motion, SSA
addressed Lundy’s opposition argument that it was not a third party beneficiary
of the fee provision in the agreement, and at the hearing on the motion, SSA’s
counsel argued that Lundy would have been allowed to seek his attorney’s fees
had he pursued an action against SSA arising out of the agreement. In light of this record, the legal issues
presented in this appeal were adequately raised in the trial court and have not
been waived by SSA.
title="">[3]
III.
The attorney’s fees provision was intended to
benefit SSA.
Although Lundy concedes that SSA
was an express third party beneficiary of the “no reemployment†provision in
his settlement agreement with the City, he contends that SSA was not entitled
to recover its attorney’s fees under section 1717 because it failed to prove
that it was a third party beneficiary of the attorney’s fees provision. SSA responds that it did not have to prove
that it was an intended beneficiary of the fee provision in particular, and
even if such a showing was required, the “no reemployment†provision created a
sufficient nexus between SSA and Lundy which extended to the enforcement
of the fee provision.
“A third party beneficiary may
enforce a contract made expressly for his or her benefit. [Citation.]â€
(Sessions,
qualify as a third party beneficiary “where the agreement reflects the intent
of the contracting parties to benefit the unnamed party.†(Cargill,
supra, 201 Cal.App.4th at p.
967.) “The party claiming to be a third
party beneficiary bears the burden of proving that the contracting parties
actually promised the performance which the third party beneficiary seeks. This remains largely a question of
interpreting the written contract.
[Citation.]†(
context of attorney’s fees, “‘[a] nonsignatory seeking relief as a third party
beneficiary may recover fees under a fee provision only if it appears that
extend such a right to one in his position.
[Citation.]’ [Citation.]†(Hyduke’s
Valley Motors v. Lobel Financial Corp., supra,
189 Cal.App.4th at p. 436.)
In Sessions, the Court of Appeal reversed an award of attorney’s fees
to a prevailing signatory defendant on the ground that the nonsignatory
plaintiff could not have recovered its fees under a third party beneficiary
theory had it prevailed in the action. (
The nonsignatory plaintiff, a payroll company, sued the signatory
defendant, a general contractor, for breach of a contract between the general
contractor and its subcontractor. (
reflect an intent by the general contractor and the subcontractor to include
the payroll company within the contract’s fee provision. (Id.
at p. 680.) Rather, the contract stated
that “‘[e]xcept as specifically prescribed herein, this Agreement shall not create any rights of or confer benefits upon, third
parties.’†(Ibid.) The contract
contained “no express recognition†of the payroll company and its fee provision
only permitted the recovery of attorney’s fees “‘[i]n the event it becomes
necessary for either party to enforce
the provisions of this Agreement . . . .’†(Id.
at p. 681.) The court reasoned that
“‘[e]ither’ refers only to the two parties to the contract,†and if the parties
had “wanted to include someone else, their contract would have referred to
‘any’ party.†(Ibid.; see also Blickman
Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 896
[contractual provision for attorney’s fees in “‘any litigation
any provision of this Agreement . . .’ limit[ed] fees to litigation between the
signatoriesâ€].)
In contrast, the Court of Appeal in
Real Property Services held that a
prevailing signatory defendant was entitled to attorney’s fees in an action
brought by a nonsignatory plaintiff for breach of a lease agreement. (Real
Property Services, supra, 25
Cal.App.4th at p. 377.) The agreement
signed by the defendant lessor specifically provided that the property would be
subleased to the plaintiff. (
Although a fee provision in the agreement limited the recovery of
attorney’s fees to “‘any action or proceeding brought by either party against
the other under this Lease,’†the court concluded that the nonsignatory
plaintiff would have been entitled to recover its fees as a third party
beneficiary had it prevailed in the action.
(Id. at pp. 377, 383.) The court explained that the agreement
expressly provided for the plaintiff to be the sublessee of the property,
“thereby establishing a nexus†between the signatory lessor and the
nonsignatory sublessee. (
the sublessee’s attorney’s fees if it had breached the lease agreement, it was
entitled to recover its fees from the sublessee in successfully defending the
action. (Id. at pp. 383-384.)
Similarly, in Loduca, the Court of Appeal affirmed an award of attorney’s fees to
a nonsignatory plaintiff, a property owner, who successfully sued a signatory
defendant, a subcontractor, for breach of a construction contract between the
subcontractor and the general contractor.
(Loduca, supra, 153 Cal.App.4th at p. 337.)
The contract included a fee provision stating that “‘[i]f a court action
is brought, prevailing party to be awarded attorney fees and collection costs .
. . .’†(Ibid.) In determining that
the nonsignatory property owner was entitled to enforce the fee provision as a
third party beneficiary, the court noted that “[u]nlike the clause at issue in
either Sessions Payroll or
makes no reference to a particular party to the contract bringing the
suit. It simply states if a court action
is brought, presumably on the contract, then the party that prevails in the
action will be awarded fees.†(
limitation by [the subcontractor] on any rights that [the owner] could derive
from the contract . . . . Since [the owner] had paid [the subcontractor]
directly, [the subcontractor] likely understood the party most likely to bring
such a claim was [the owner]. (
that the contracting parties “intended [the owner’s] enforcement right to
include a right to attorney fees.†(
nonsignatory where contract “reflect[ed] an intent to benefit†nonsignatory and
did “not express a clear intent to limit attorney fees†to signatories].)
In this case, the record reflects
that SSA was an intended beneficiary of Lundy’s settlement agreement with the
City, including the attorney’s fees provision.
As the lessee of the property on which Lundy was injured, SSA had a
contractual duty to defend and indemnify the City in Lundy’s personal injury
action. Lundy’s settlement agreement
with the City was part of a global settlement of both his workers’ compensation
and personal injury claims and was contingent upon the Department of Labor’s
approval of his settlement agreement with SSA.
Both Lundy and his counsel also understood that his settlement
agreement with the City was contingent upon the inclusion of the “no
reemployment†provision, which Lundy concedes was made for the express benefit
of SSA. After agreeing to the “no
reemployment†provision, Lundy accepted the settlement payment directly from
SSA and reasonably should have known that SSA was the party most likely to
bring a claim if he breached the provision.
Lundy admits that the underlying action arose out of his breach and SSA
ultimately prevailed in enforcing the provision as a third party
beneficiary. Indeed, in granting summary
judgment to SSA on the ground that the “no reemployment†provision was valid
and enforceable, the trial court specifically found that SSA was a third party
beneficiary of Lundy’s settlement agreement with the City and Lundy did not appeal
that finding.
The plain
language of the fee provision in Lundy’s settlement agreement further supports
the conclusion that it was intended to benefit SSA. As in Loduca,
the fee provision at issue here does not limit the recovery of attorney’s fees
to the signatories to the settlement agreement.
It makes no reference to a particular party to the agreement bringing a
legal action or recovering attorney’s fees.
Rather, it broadly provides that “[i]f any litigation should arise out
of this Agreement, the prevailing party in such litigation shall recover from
the losing party its reasonable attorneys’ fees and costs incurred in such
litigation.†The other provisions in the
settlement agreement likewise impose no express limitation on third party
rights. Under these circumstances, SSA’s
rights as a third party beneficiary of the “no reemployment†provision included
a right to recover its attorney’s fees as the prevailing party in an action to
enforce such provision.
IV.
The attorney’s fees provision reflects a mutuality
of remedy.
Alternatively, Lundy asserts that
even if SSA met its burden of showing that it was a third party beneficiary of
the fee provision, it failed to prove that Lundy would have been entitled to
recover his attorney’s fees from SSA had he prevailed in the underlying
action. Lundy reasons that if he had
prevailed in the action by successfully arguing that the “no reemploymentâ€
provision was void as against public policy, the entire settlement agreement
would have been deemed illegal, thereby precluding the recovery of attorney’s
fees by either party. This argument also
fails.
Ordinarily, a prevailing party “is
entitled to attorney fees under section 1717 ‘even when the party prevails on
grounds the contract is inapplicable, invalid, unenforceable
or nonexistent, if the other party would have been entitled to attorney’s
fees had it prevailed.’
[Citations.]†(
870.) However, as noted in
(1988) 201 Cal.App.3d 832 (Bovard)
and Geffen v. Moss (1975) 53
Cal.App.3d 215 (Geffen), “a different
rule applies where a contract is held unenforceable because of
illegality.†(Bovard, supra, at p. 843,
citing Geffen, supra, at p. 227.) “A party
to a contract who successfully argues its illegality stands on different ground
than a party who prevails in an action on a contract by convincing the court
the contract is inapplicable, invalid, nonexistent or unenforceable for reasons
other than illegality.†(
neither party can enforce the agreement there is no need for a mutual right to
attorney’s fees.’†(Ibid.)
This case, however, is
distinguishable from Bovard and
Unlike the prevailing parties in those cases, Lundy did not successfully
argue the illegality of the contract at issue.
Although Lundy contended that the “no reemployment†provision in his
settlement agreement with the City was void as against public policy, the trial
court concluded that the “no reemployment†provision was valid and enforceable
by SSA and this Court previously affirmed that ruling. Moreover, Lundy’s position in the underlying
action and in his prior appeal was that the “no reemployment†provision was
severable such that if the provision was held to be invalid, the rest of the
settlement agreement would remain fully enforceable, including the
consideration paid to Lundy. Therefore,
if Lundy had prevailed in the action and obtained the specific relief that
he sought, he would have been entitled to enforce the attorney’s fee provision.
Contrary to Lundy’s contention, the
plain language of the fee provision also supports the conclusion that SSA would
have been liable for Lundy’s attorney’s fees if Lundy had been the prevailing
party. The fee provision clearly reflects
the mutuality of remedy required by section 1717. Accordingly, if Lundy had prevailed in the
underlying action by proving that the “no reemployment†provision was
unenforceable, he would have been entitled to recover his attorney’s fees from
SSA. Likewise, if Lundy had brought a
separate action against SSA arising out of the settlement agreement and had
prevailed in that action, the fee provision would have allowed Lundy to recover
his attorney’s fees from SSA. The fact
that SSA was a nonsignatory to the settlement agreement would not have
precluded Lundy from asserting a contractual right to attorney’s fees as a
prevailing party. As the Court of Appeal
stated in Real Property Services,
“[w]here a nonsignatory plaintiff sues a signatory defendant in an action on a
contract and the signatory defendant prevails, the signatory defendant is
entitled to attorney fees . . . if the nonsignatory plaintiff would have been
entitled to its fees if the plaintiff had prevailed.†(Real
Property Services, supra, 25
Cal.App.4th at p. 382.)
Because SSA
was entitled to recover its attorney’s fees from Lundy as a third party
beneficiary of the fee provision, Lundy would have had the same right to
recover his attorney’s fees from SSA if he had been the prevailing party. Consequently, the trial court did not err in
awarding attorney’s fees to SSA under section 1717.
The post-judgment order awarding attorney’s fees to SSA
is affirmed. SSA shall recover its costs
on appeal.
ZELON,
J.
We concur:
PERLUSS, P.
J.
SEGAL, J.
name="_ftn1" title="">[1] Unless
otherwise stated, all further statutory references are to the Civil Code.
name="_ftn2" title="">[2] The
trial court also denied summary judgment for Homeport on the ground that the
“no reemployment†provision was too uncertain to be enforceable as to Homeport
because it failed to identify which entities other than SSA were insured by
Homeport. Following the denial of its
summary judgment motion, Homeport voluntarily dismissed its complaint against
Lundy without prejudice and is no longer a party to this action.
