Hunt v. Fahnestock

• Decision Date: 18 May 1990
• Docket Number: No. B032806,B032806
• Citation: 269 Cal.Rptr. 614,220 Cal.App.3d 628
• Parties: Robert J. HUNT, Plaintiff and Appellant, v. Joseph FAHNESTOCK, Jr., et al., Defendants and Respondents. Civ.
• Court: California Court of Appeals Court of Appeals

Page 614

269 Cal.Rptr. 614

220 Cal.App.3d 628

Robert J. HUNT, Plaintiff and Appellant, v. Joseph FAHNESTOCK, Jr., et al., Defendants and Respondents.

Civ. No. B032806.

Court of Appeal, Second District, Division 6, California.

May 18, 1990.

George & Dapeer and Philip D. Dapeer, Los Angeles, for plaintiff and appellant.

Hirschman & Marcus and David M. Marcus, Hollywood, for defendants and respondents Fahnestock.

Christopher J. Anderson, for defendant and respondent Community Thrift & Loan.

GILBERT, Associate Justice.

Here we hold that in a lawsuit involving several contracts, attorney's fees pursuant to CIVIL CODE SECTION 1717¹ may be awarded to the prevailing party on each contract whether or not that party is a prevailing party in the lawsuit.

Plaintiff Robert J. Hunt appeals a judgment awarding attorney's fees to defendants Joseph and Winona Fahnestock under section 1717. We affirm.

FACTS

On February 25, 1985, defendants Joseph and Winona Fahnestock purchased real property on Calle Margarita in Thousand Oaks, California, from plaintiff Robert J. Hunt. The Fahnestocks assumed existing loans of $100,476.47 and executed two promissory notes to Hunt to complete the $129,576.47 purchase price. One promissory note for $15,000 was secured by a junior lien on the Margarita property, and another for $14,100 was secured by a junior lien on another piece of real property owned by the Fahnestocks on Calle Tulipan in Thousand Oaks.

Fourteen months later, the Fahnestocks defaulted on the two promissory notes to Hunt, as well as on the senior loans on the Margarita property. To protect his junior interest, Hunt advanced sums to pay the senior loans in default on the Margarita property. He then brought this action for judicial foreclosure and receivership against the Fahnestocks and the senior lienholders on the Margarita and Tulipan properties.

Defendant Community Thrift & Loan (Community), the senior lienholder on the Tulipan property, brought a cross-complaint for indemnity against the Fahnestocks. This cross action stems from covenants Three months before trial, the Fahnestocks brought current the promissory note to Hunt secured by a trust deed on the Tulipan property. They also tendered to Hunt $200 in attorney's fees in accordance with section 2924c, subdivision (d). Nevertheless, Hunt pursued judicial foreclosure of the Tulipan property. He contended that the Fahnestocks were liable for his actual attorney's fees, as well as the sums advanced to pay senior obligations on the Margarita property. Hunt based this claim upon the future advance clause in the deeds of trust and upon the argument that the parties intended to secure each obligation to him with both deeds of trust.

in the deed of trust between the Fahnestocks and Community.

At trial the Fahnestocks stipulated to judicial foreclosure on the Margarita property for the unpaid principal balance of the loan, interest, advances on senior obligations and attorney's fees. After a court trial, the trial judge denied judicial foreclosure on the Tulipan property, deciding that each promissory note was an independent obligation secured by only one trust deed. (Roseleaf Corp. v. Chierighino (1963) 59 Cal.2d 35, 27 Cal.Rptr. 873, 378 P.2d 97.) This decision rested upon the plain language of the promissory notes and trust deeds. The court then awarded the Fahnestocks their attorney's fees of $5,000 for successfully defending the Tulipan foreclosure and Community its attorney's fees of $4,258 on the cross-complaint. The court offset Community's attorney's fees against the unpaid principal balance due Hunt on the promissory note secured by a deed of trust on the Tulipan property.

On appeal Hunt contends that the trial court erred by awarding attorney's fees to the Fahnestocks and by offsetting Community's attorney's fees against the unpaid principal balance of the note secured by a deed of trust on the Tulipan property.

DISCUSSION

Hunt does not appeal the trial court's decision that the promissory notes were independent obligations, each for a portion of the single purchase price and each secured by only one deed of trust. He suggests this decision is wrong, but offers no supporting authority. Therefore, we need not belabor the issue.

Hunt contends the trial court's decision creates three prevailing parties within section 1717 because he, Community and the Fahnestocks received attorney's fees. He contends that only one party can prevail within section 1717 or the trial court, in its discretion, may decide that no party has prevailed. (§ 1717, subd. (b)(1).) He adds that insufficient equity exists in the Margarita property to pay his actual attorney's fees and he can not obtain a deficiency judgment against the Fahnestocks for the fees. (Code Civ.Proc., § 580b.)

It is true the parties agreed that Hunt should receive his attorney's fees in the stipulated foreclosure of the Margarita property. Hunt's attorney stated, however, that these fees were limited to those incurred on the Margarita foreclosure. As to the fees incurred to foreclose the Tulipan property, Hunt's attorney stated, "... I would only want those [fees] ... to be assessed against Tulipan." The Fahnestocks received their attorney's fees because they prevailed on the Tulipan foreclosure action. Community received attorney's fees because it prevailed on its cross-complaint. Therefore, the action and cross-action involved three independent, unrelated contracts, and a different party prevailed upon each.

The promissory note secured by a trust deed on the Margarita property was a purchase money...