California Court of Appeal Holds Attorney Fees Incurred in Enforcing a Judgment May Be Recovered if the Judgment Includes an Award of Attorney Fees Pursuant to Contract

In Chunlei Guo v. Moorpark Recovery Services, 2021 Cal. App. LEXIS 112, the Court of Appeal of California, First Appellate District, Division Five reversed a postjudgment order denying attorney fees under California Code of Civil Procedure § 685.040, which authorizes the recovery of attorney fees incurred for enforcement of a judgment when the underlying judgment includes an award of attorney fees pursuant to a contract. The judgment at issue awarded reasonable attorney fees, but it did not set a particular amount of fees to be recovered and no costs bill including such fees was ever filed. The Court of Appeal concluded that because the underlying judgment awarded reasonable attorney fees, the court’s failure to include a specific amount of fees in the judgment did not defeat section 685.040:

Was this sufficient to trigger section 685.040 when no costs bill was filed, and the court never ordered that a particular dollar amount be paid? We conclude it was. The judgment provided: “Defendants Luminary Spa, Inc. and Svetlana Mazurova are hereby deemed the prevailing parties under Code of Civil Procedure Section 1032 and shall be entitled to recover their costs of suit and reasonable attorney’s fees in this action as permitted by law.” Although it did not state a dollar amount, this language was unambiguous that Moorpark’s predecessors-in-interest were entitled to attorney fees. They were thereby “awarded” such fees under section 685.040.

Case law interpreting section 685.040 recognizes that we look to the judgment rather than the contract itself when determining a party’s entitlement to fees. (Jaffe, supra, 165 Cal.App.4th at p. 935) “An award of such postjudgment attorney fees under section 685.040 is not … based on the contract. As explained in Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1766, 1770 [31 Cal. Rptr. 2d 224][], ‘When a party recovers a judgment for breach of contract, entry of the judgment absolves the defendant of any further contractual obligations, and the judgment for damages replaces the defendant’s duty to perform the contract. [Citation.] Upon entry of judgment, all further contractual rights are extinguished, and the plaintiff’s rights are thereafter governed by the rights on the judgment, not by any rights which might have been held to have arisen from the contract.’” (Globalist Internet Technologies, Inc. v. Reda (2008) 167 Cal.App.4th 1267, 1273–1274 [84 Cal. Rptr. 3d 725]; see also Jaffe, supra, 165 Cal.App.4th at p. 934.) This is sometimes known as extinction by merger. (Jaffe, supra, 165 Cal.App.4th at p. 935.)