Is a defendant who has received the benefit of a voluntary dismissal of an action against it a prevailing or successful party?

California, United States of America


The following excerpt is from Graham v. DaimlerChrysler Corp., 101 P.3d 140, 21 Cal.Rptr.3d 331, 34 Cal.4th 553 (Cal. 2004):

This practical definition of prevailing or successful party is consistent with our construction of the meaning of "prevailing party" within the context of Civil Code section 1717, which provides that when a contract specifically provides for attorney fees for one party, fees are to go to the prevailing party "whether he or she is the party specified in the contract or not." In Santisas v. Goodin (1998) 17 Cal.4th 599, 71 Cal.Rptr.2d 830, 951 P.2d 399, we held that although a defendant who has received the benefit of a voluntary dismissal of an action against it is not necessarily a prevailing party, it may be under some circumstances. In discussing the meaning of the term "prevailing party" when it is undefined by contract, we stated that "a court may base its attorney fees decision on a pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise." (Id. at p. 622, 71 Cal.Rptr.2d 830, 951 P.2d 399, italics added.) If, as is clearly the case, a defendant can be a prevailing or successful party after a plaintiff has voluntarily dismissed the case against it, it is difficult to fathom why a plaintiff cannot be considered a prevailing or successful party when it achieves its litigation objectives by means of defendant's "voluntary" change in conduct in response to the litigation. When a creditor sues a debtor to collect a debt, and the debtor pays the debt before a judgment is entered against it, the creditor has been a "successful party" by any conventional understanding of that term.

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