Who is the “prevailing party” in an eviction trial, or, who gets attorneys’ fees?

SOURCE: Marc Hoag via Midjourney

Who’s the prevailing party in an unlawful detainer (eviction) lawsuit?

Spoiler alert: It’s the party that gets to keep possession of the home. Keep reading to learn more and understand what’s really going on here.

What exactly is an unlawful detainer (eviction) lawsuit?

In California, an eviction, also known as an unlawful detainer lawsuit, is a legal process used by landlords to regain possession of a property from a tenant who refuses to leave after proper notice has been given.

A landlord might need to evict a tenant for nonpayment of rent or breach of the lease agreement. For this discussion, let’s suppose a tenant has chosen to withhold rent. The landlord can then serve the tenant a 3-day notice to pay or quit. If the tenant pays the back rent demanded by the notice, they have effectively “cured” the issue and the matter is resolved. If the tenant does not pay, then the landlord can begin the eviction process.

Once the unlawful detainer action for nonpayment of rent is served on the tenant, the tenant has time to provide an “Answer” to the unlawful detainer suit. This is the tenant’s opportunity to provide an “affirmative defense” in which the tenant agrees that they did indeed withhold rent, but that they were justified in doing so. This can occur in situations where the tenant believes that the landlord has breached the “implied warranty of habitability” because the home is unsuitable for human habitation.

💡 Learn more about the implied warranty of habitability >

What happens at an eviction trial?

At this point, the parties go to trial. At trial, both sides present their evidence before a Judge; this typically takes a few hours, but it can get dragged on for days or even months if the tenant is determined to produce hundreds of meritless complaints. At the conclusion of the trial, the Judge will then make a decision on whether, and how much, back rent the tenant must pay to the landlord.

If the tenant doesn’t pay back the landlord as ordered, then the remedy for the landlord is repossession of the home: the tenant is evicted. If the tenant does pay back the landlord as ordered, then the tenant gets to keep possession of the home: the tenant is not evicted.

This is a critically important point to keep in mind: an unlawful detainer action is not really an action to evict a tenant, it’s an action to get a tenant to pay back improperly withheld rent, or to cure a breach of the lease agreement, for which the result is eviction if the tenant fails to comply accordingly.

Which party gets awarded attorneys’ fees and costs?

The question now is which party is declared the “prevailing party.” As a practical matter, this matters a lot since it determines which party gets awarded attorneys’ fees and costs (if any). If the amount of withheld rent is, say, $10,000, and the landlord spends $10,000 in attorneys’ fees, then it’s a wash. If the attorneys’ fees exceed the amount of withheld rent, then there would have arguably been no point to going to trial in the first place.

The law says that the “prevailing party” is defined as the party that “recovered a greater relief in the action on the contract,” in this case, the unlawful detainer action based on the lease agreement. (Cal. Civ. Pro. §1717(b)(1)) Counterintuitively, therefore, if the tenant complies with the court’s order to pay the landlord the withheld rent, the tenant is crowned the “prevailing party” because the payment enables the tenant to keep possession of the property, and possession of the property is arguably the “greater relief” in an unlawful detainer action, i.e., that’s what both sides are fighting over. This is true even if the lease agreement unilaterally declares that only the landlord can recover attorneys’ fees; the court is to assign attorneys’ fees to the “prevailing party” as defined above, even if the lease agreement doesn’t allow it, and furthermore, such fees shall be “reasonable.” (Cal. Civ. Pro. §1717(a))

The “reasonableness” of the fees to be awarded considers the holistic nature of the trial itself. In general, if a trial goes on for months because of a tenant’s meritless complaints, then even if the tenant is the prevailing party and has accumulated tens of thousands of dollars in attorneys’ fees, the court can exercise its discretion to limit fees accordingly, or alternatively, to comply with any local rules of court that otherwise limit attorneys’ fees for unlawful detainer actions.

This result — both in terms of which party is defined the “prevailing party” and how attorneys’ fees are calculated and to whom awarded — is an astoundingly nuanced and unexpected conclusion that is easily — and understandably — missed by many landlords; even attorneys sometimes miss this fact. And it’s arguably a glaringly unjust outcome for the landlord at least in scenarios where the tenant was ordered to pay back the majority of the withheld rent, but such is the nature of California’s pro-tenant laws. So this is an incredibly crucial detail that has profound implications for the recovery of attorneys’ fees and costs.

What if there are no habitability issues with the home and the tenant is ordered to pay back 100% of the withheld rent?

But what if the tenant is ordered to pay back 100% of the withheld rent? This would necessarily imply that there was no breach of the implied warranty of habitability in the first place. And “if the court determines that there has been no substantial breach of … [the implied warranty of habitability] … then … the landlord shall be the prevailing party for the purposes of awarding costs or attorneys’ fees.” (Cal. Civ. Code §1174.2(b)) This suggests that the landlord should be entitled to reasonable attorneys’ fees, and not the tenant, despite the tenant maintaining possession of the home, but it is not clear.

Suffice to say, as a practical matter, if you’re a landlord and you’re trying to evict a tenant for nonpayment of rent, and if your primary goal is to get back possession of your rental property, recognize that if the tenant complies with the court order to pay back the withheld rent, not only will the tenant get to keep possession of the home, but the tenant will likely be declared the prevailing party and thus entitled to “reasonable” attorneys’ fees and costs.

If you think you need to initiate an unlawful detainer action and have any questions, don’t hesitate to reach out.