Is a claimant entitled to attorney fees under section 1717 of the California Code of Civil Procedure if he is not a named beneficiary in an action against a bank for breach of a written deposit agreement?

California, United States of America


The following excerpt is from U.S. Fin., L.P. v. LNR Grp., Inc., D065276 (Cal. App. 2015):

In Exarhos v. Exarhos, supra, 159 Cal.App.4th 898, a grandson filed an action against a bank for breach of a written deposit agreement, claiming to be a named beneficiary and his grandmother's successor in interest with respect to certain bank accounts. (Id. at pp. 900-901.) The trial court sustained the bank's demurrer without leave to amend, and thereafter awarded it attorney fees under section 1717. (Exarhos, at p. 902.) On appeal, the grandson argued he was a nonsignatory to the deposit agreement. (Id. at p. 903.) This court observed that "[a] person who acts as a decedent's successor in interest, 'step[s] into [the decedent's] position,' as to a particular action" (id. at p. 905) and that a "successor in interest 'succeeds to a cause of action' by operation of law." (Id. at p. 906, citing Code of Civil Procedure section 377.11.) The court explained the grandson was liable for contractual attorney fees under the deposit agreement and section 1717; he had not pointed to any language in the deposit agreement manifesting an intent to exclude alleged successors in interest from the scope of the attorney fee provision, and because he was in control of the litigation and primed to take the benefits if he had prevailed, he would have been entitled to fees. (Exarhos, 159 Cal.App.4th at pp. 903, 906-907.)

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