Rodrigues v. Alliant Credit Union

Background

Joanne Rodrigues, who represented herself, sued Alliant Credit Union in a diversity-jurisdiction case. She alleged that Alliant violated the 2019 Membership and Account Agreement by freezing access to her bank accounts during her divorce proceedings. Her claims included breach of contract, negligence, conversion, violations of California Financial Code section 1450 and California’s Unfair Competition Law, declaratory relief, and a claim under the Truth in Savings Act and its regulations.

On November 7, 2022, the court granted Alliant’s motion for summary judgment and directed that the case be closed. Alliant then moved for attorneys’ fees under California Code of Civil Procedure sections 1717 and 1021. Rodrigues opposed the motion.

Contract Provisions

Alliant relied on sections 13 and 26 of the account agreement. Section 13 stated that, if legal action was brought against an account, expenses or attorney fees incurred in responding to legal process could be charged against the account. Section 26 stated that the account holder would be liable for losses, costs, or expenses resulting from failure to follow the agreement, and that Alliant could recover reasonable attorney fees if it brought an action to collect money owed or enforce the agreement.

Court’s Analysis

The court rejected Alliant’s reliance on section 13. It held that the provision applied only when legal action was brought against the account. Rodrigues had brought the action against Alliant for blocking access to her account, and Alliant did not show that Rodrigues had brought the action against the account itself.

The court also rejected Alliant’s reliance on section 26. That provision applied when Alliant brought a legal action to collect an amount due or enforce the agreement. Alliant had not brought such an action; Rodrigues had brought the case to enforce Alliant’s contractual obligations.

The court explained that California Civil Code section 1717 can make a one-sided contractual fee provision mutual and can allow fees to a party sued on a contract when that party successfully argues that the contract does not apply, is invalid, or cannot be enforced. But even when section 1717’s requirements are met, the party opposing the fee request must have been entitled to recover fees had that party prevailed. The court found that neither section 13 nor section 26 would have allowed Rodrigues to recover attorneys’ fees. Alliant therefore could not use section 1717 to broaden those provisions.

Disposition

Judge Donna M. Ryu denied Alliant’s motion for attorneys’ fees.