California, United States of America
The following excerpt is from Jue v. Patton, 33 Cal.App.4th 456, 39 Cal.Rptr.2d 364 (Cal. App. 1995):
For example, in Xuereb, the defendants prevailed in an action alleging that real property was delivered in a defective condition. At trial, the plaintiffs also proceeded on a breach of contract claim but dropped the contract theory after the conclusion of testimony. The trial court denied the defendants attorney's fees which were sought pursuant to a provision in the purchase agreement for attorney's fees to the prevailing party " 'if this agreement gives rise to a lawsuit or other legal proceeding.' " (Xuereb v. Marcus & Millichap, Inc., supra, 3 Cal.App.4th at p. 1340, 5 Cal.Rptr.2d 154.) Division Three of this court held that the plaintiffs were entitled to attorney's fees under section 1021 3 because the tort causes of action arose from the contract. "Under [section 1021], the allocation of attorney fees is left to the agreement of the parties. There is nothing in the statute that limits its application to contract actions alone. It is quite clear from the case law interpreting Code of Civil Procedure section 1021 that parties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract." (Id. at p. 1341, 5 Cal.Rptr.2d 154.) The court concluded that attorney fees were awardable pursuant to the purchase agreement because the attorney's fee provision was broad enough to encompass both tort and contract actions and that "but for the Purchase Agreement by which the allegedly defective property was sold to respondents, the dispute between the parties would not have arisen." (Id. at pp. 1343-1344, 5 Cal.Rptr.2d 154.)
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