Is a contract allowing the prevailing party to recover attorney fees in the event of an action being dismissed?

California, United States of America


The following excerpt is from Roslyn Lane, LLC v. Cave St. Homeowners Ass'n, D065134 (Cal. App. 2016):

"If . . . the contract allows the prevailing party to recover attorney fees but does not define 'prevailing party' or expressly either authorize or bar recovery of attorney fees in the event an action is dismissed, a court may base its attorney fees decision on a pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise." (Santisas, supra, 17 Cal.4th at p. 622, italics added.) In assessing litigation success, courts should respect substance rather than form and, to that extent, be guided by equitable considerations. (Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1156; Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1019.)

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