California, United States of America
The following excerpt is from Emma Court LP v. United Am. Bank, A144462 (Cal. App. 2017):
or the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." Subdivision (b)(2) of Civil Code section 1717, however, contains an exception to the recovery of attorney fees in an action on a contract: "Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section." (See Civ. Code, 1717, subd. (b)(2).) This exception reflects a policy of encouraging settlements and discouraging the maintenance of pointless litigation. (Santisas v. Goodin (1998) 17 Cal.4th 599, 613 (Santisas) [" 'permitting recovery of attorney fees by defendant in all cases of voluntary dismissal before trial would encourage plaintiffs to maintain pointless litigation in moot cases or against insolvent defendants to avoid liability for those fees' "].)
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