Sciarrotta v. Teaford Construction Co

In Sciarrotta v. Teaford Construction Co. (1980) 110 Cal.App.3d 444, the court held that section 1717 limits reciprocity of attorney fees to those specific provisions of the contract in which attorney fees are provided for. There the building contract provided for an award of attorney fees incurred to enforce payment of the contract price to the defendant building contractor. Plaintiffs, however, sued and recovered for a breach of the contractor's failure to construct the house in a workmanlike manner. In concluding that plaintiffs were not entitled to recover attorney fees, the court determined that section 1717 was meant to have a "selective and literal application." The Sciarrotta court rested its decision upon two grounds. First, it examined the precedential authorities establishing that the parties to a contract may limit the instances in which attorney fees may be recovered in litigation touching upon the contract. Second, it weighed various policy considerations which disfavored an award of attorneys fees to a plaintiff under any action on the contract where the unilateral attorney's fee provision in favor of the defendant is limited to a particular kind of action on the contract. Among those policy factors were to resist invitation of frivolous litigation, to avoid the encouragement of needless litigation, and to encourage settlement.