The winning party on a lawsuit is entitled to attorney fees from the losing party, even if the fees were already paid by a third party, the Court of Appeal ruled Sept. 8.
The losing party is often required to pay for the victor’s attorney fees after a lawsuit ends. In this case, Riverside Superior Court mistakenly ruled that the loser, Cell-Crete Corp., would not have to pay for Federal Insurance Co.’s fees, because a third party, Granite Construction Co., paid for Federal’s legal defense under an agreement between the two parties.
The Court of Appeal relied on precedent established by the Fourth District Court of Appeal, Division One, and the 1943 case Ceranski v. Muensch.
The court did not rule that Federal would be able to keep the money, or would have to pay it back to Granite. That depends on the agreement between the two companies, and applicable law, which the court did not research, the ruling said.
The ruling quoted the 2002 California Supreme Court decision Lolley v. Campbell, which said, “(t)he right of a party to seek an award of statutory attorney fees is not equivalent to a right to retain such fees.”
“So long as the fee award is limited to attorney fees incurred defending Federal against the cause of action Cell-Crete brought against them in the superior court, the award will do the work the Legislature intended by directing the courts to award fees to prevailing parties,” the court ruled.
P. Randolph Finch, Jr., Jason Thornton, and Lindsey Herzik of San Diego’s Finch, Thornton & Baird represented Federal Insurance Co..
David Brault of Aliso Viejo’s Law Offices of David L. Brault represented Cell-Crete Corp.
Fourth District Court of Appeal, Division Two, Associate Justice Marsha Slough wrote the opinion, which was joined by Presiding Justice Manuel Ramirez and Associate Justice Richard Fields.
Riverside Superior Court number PSC1606343.
Appellate court number E075264.
Read the ruling here.
