Civil Code section 1717, which authorizes an award of attorney fees to the prevailing party in a contract action, was intended to establish uniform treatment of fee recovery in actions on contracts containing attorney fee provisions and to eliminate distinctions between fee awards based on contract or statute. Thus, restrictive language in a contractual attorney fee provision will not always be given effect as equitable and public policy considerations under section 1717 prevail over technical rules of statutory construction. Continue reading
Contracts frequently contain a prevailing party attorney fee provision and a provision requiring that any controversy arising under the contract be decided by binding arbitration. Where both parties agree to arbitration there is no tension between these two provisions. The prevailing party and the award of reasonable attorneys fees will be determined by arbitration.
There can be tension, however, where the parties do not agree that the controversy between them is governed by the contract provision requiring arbitration. In that case a party may file a petition to enforce the arbitration agreement or the party may file a lawsuit. If a party files a lawsuit the defendant may respond with a petition to compel arbitration. If there is a pending action, a petition to compel arbitration must be filed in that action. Continue reading