Reid v. Valley Restaurants, Inc.

California Supreme Court May 28, 1957 No. L. A. 24064Published

Before: McCOMB

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Holding. The court held that the defendant was not entitled to attorney's fees or costs because the underlying litigation was resolved via a compromise agreement rather than a judgment for a successful party, and the trial court's implied findings are presumed correct in the absence of findings of fact and conclusions of law.

Issues

Whether the trial court's judgment violated the parties' stipulation regarding the dismissal of the complaint.
Whether the defendant was entitled to attorney's fees as the 'successful party' under the lease agreement.
Whether the trial court erred in denying the defendant's request for costs.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The record supports the trial judge’s implied finding that the situation was a compromise and that neither party was successful.”

“Since defendant was not the successful party, it was not entitled to attorney’s fees under the express provisions of the lease.”

McCOMB, J.

From a judgment denying defendant and cross-complainant attorney’s fees, defendant and cross-complainant appeals.

Chronology

i. On or about July 14, 1953, plaintiffs leased to defendant a restaurant known as “The Goody-Goody Drive-In.” The lease contained provisions (a) prohibiting assignment or subletting by lessee without the written consent of lessors first being obtained, and (b) that in case suit should be brought by either party against the other by reason of the breach of any of its provisions the successful party in such suit should be entitled to a reasonable attorney’s fee and costs of said action in such amount as might be fixed by the court.

ii. On December 28,1954, plaintiffs filed a complaint against defendant for unlawful detainer and to quiet title to the property covered by the lease, alleging that defendant had violated the terms of the lease in assigning it without first obtaining the written consent of plaintiffs and failing properly to account to plaintiffs for gross profits derived from the business.

iii. On January 3, 1955, defendant filed its answer and also a cross-complaint, by which it sought to recover attorney’s fees in accordance with the provisions of the lease.

iv. During the course of the trial plaintiffs offered to reinstate the lease and to dismiss the action upon payment of back rents and an accounting being made for other rents, to which defendant’s counsel replied: “We have no objection to the reinstating of the lease by virtue of the dismissal of the complaint. However, I see no reason why the defendant should be put to the burden of his

attorney’s fees and costs in this matter and I believe we should proceed on the cross-complamt for fees.”

(Italics added.)

After further discussion plaintiffs’ counsel stated to the court: “We have reached an understanding which I will endeavor to state to the Court. If counsel disagrees, he may interrupt me, otherwise there will be a. stipulation that the matter of whether or not any attorney’s fees should be paid by one party to the other, shall be determined by the Court based upon the files before the .Court and the depositions; and that then the action be dismissed, the lease reinstated and the back rents paid up. ...”

[609]

Reid v. Valley Restaurants, Inc.

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