Shadoan v. World Savings & Loan Assn

In Shadoan v. World Savings & Loan Assn. (1990) 219 Cal. App. 3d 97, the plaintiffs prepaid their loan plus a penalty as required by their loan agreement. In a single cause of action, the Shadoans sued World Savings & Loan Association pursuant to Business and Professions Code section 17200 and Civil Code section 1670.5 (contract unenforceable because unconscionable), and alleged that the prepayment penalty provision was an unfair business practice. ( Shadoan, supra, 219 Cal. App. 3d at pp. 101, 108.) The trial court sustained the defendant's demurrer without leave to amend, and the defendant moved for its attorney fees. ( Id. at p. 107.) The Court of Appeal held that the trial court properly apportioned attorney fees between those recoverable fees incurred in connection with the Shadoans' private action for relief from their contract and those unrecoverable fees incurred in connection with the Shadoans' efforts to enjoin an unfair business practice. (Ibid.)