Chase Manhattan Mortgage Corp. v. Lessel

In Chase Manhattan Mortgage Corp. v. Lessel (1997) 55 Cal.App.4th 10, Chase, as the successor beneficiary under a deed of trust, sought judicial foreclosure; a deficiency judgment; a receiver to rent out the property; and a constructive trust on proceeds received by the trustor/property owner, Lessel, in a settlement with the developer over damage to the residence. By summary judgment, the trial court concluded that most of Chase's causes of action were precluded as a matter of law. As a result, Chase voluntarily dismissed the action. Lessel then sought an award of fees as the prevailing party under Civil Code section 1717 and section 730, contending that both sections provided a basis for a statutory award of attorney fees. (Chase, supra, 55 Cal.App.4th at p. 12.) The trial court, which was affirmed by the court of appeal, held that fees could not be awarded under Civil Code section 1717, subdivision (b)(2) because the action had been voluntarily dismissed. (Ibid.) The court further held that section 730 did not operate as an independent statutory basis for an award of fees to a prevailing party in a foreclosure action. (Id. at pp. 13-14.) The appellate court construed section 730 as merely giving the trial court the power to fix a fee in a foreclosure action at any sum not exceeding that amount stipulated by the mortgagor but not requiring the court to render an award. (Ibid.)