Velaro v. LG Electronics Alabama CA2/8

CourtCalifornia Court of Appeal
DecidedFebruary 6, 2026
DocketB336280
StatusUnpublished

This text of Velaro v. LG Electronics Alabama CA2/8 (Velaro v. LG Electronics Alabama CA2/8) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Velaro v. LG Electronics Alabama CA2/8, (Cal. Ct. App. 2026).

Opinion

Filed 2/6/26 Velaro v. LG Electronics Alabama CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

VELARO, INC., B336280

Plaintiff and Appellant, (Los Angeles County Super. Ct. No. 22SMCV02457) v.

LG ELECTRONICS ALABAMA, INC.,

Defendant and Respondent.

APPEAL from an order of the Superior Court of Los Angeles County, H. Jay Ford, III, Judge. Affirmed. Atabek & Co., Jon A. Atabek, Nyja A. Prior and Shirin Ehyaei for Plaintiff and Appellant. Gordon Rees Scully Mansukhani, Calvin E. Davis, Christopher R. Wagner and Crystal W. Yu for Defendant and Respondent.

___________________________ Velaro, Inc. (Velaro), sued LG Electronics Alabama, Inc. (LG), for breach of contract and services rendered. The trial court granted LG’s motion to dismiss the operative first amended complaint based on improper forum, as the contract underlying Velaro’s claims contained a forum selection clause mandating resolution of all disputes arising thereunder in Alabama. After entry of judgment in its favor, LG moved for attorney fees under Code of Civil Procedure sections 1021, 1032, and 1033.5. In the alternative, LG also sought fees under Civil Code section 1717. 1 The trial court awarded LG the attorney fees it incurred in litigating its motion to dismiss. Noting LG was not the party prevailing on the contract for purposes of section 1717, the court determined LG was nonetheless entitled to its fees under sections 1021, 1032, and 1033.5. It found the attorney fee provision in the parties’ contract broadly authorized an award of fees for the prevailing party in any dispute arising under the contract, including the application of the contract’s forum selection clause. Velaro seeks reversal of the attorney fee award. It asserts section 1717 alone governs all attorney fee motions arising from contract claims and, therefore, LG was not entitled to its fees because it was not the “prevailing party on the contract” per the applicable statutory definition. (§ 1717, subd. (b)(1).) Velaro also argues that, if allowed to stand, the attorney fee award in this case will pave the way for inconsistent and absurd outcomes. We find these contentions unpersuasive, and we affirm.

1 Except for references to Civil Code section 1717, which we will refer to as “section 1717,” all undesignated statutory references are to the Code of Civil Procedure.

2 BACKGROUND I. The Live Chat Agreement LG services and sells parts and accessories for LG products in the United States. Velaro is a technology corporation that provides live-chat, traffic monitoring, consulting, and customer services to clients. In 2008, LG executed an agreement to purchase a license for Velaro’s software application enabling real-time communication between LG’s customers and staff on its website (Live Chat Agreement). The Live Chat Agreement had the following forum selection clause and choice of law provision: “This Agreement shall be governed by, construed, interpreted and enforced according to the laws of the State of Alabama and of the United States of America, without regard to principles of conflict of laws and rules. Each party hereby consents to the exclusive jurisdiction of the courts of the State of Alabama and United States Federal Courts located in Alabama to resolve any dispute arising out of this Agreement.” The Live Chat Agreement remained in place for the next 14 years and was amended periodically. Relevant to this appeal is the parties’ February 2022 amendment adding the following attorney fee provision: “ ‘The prevailing party in any dispute or proceeding arising hereunder shall be entitled to recover its costs and expenses incurred therein (including reasonable attorneys’ fees and expenses).’ ” II. The Underlying Action In November 2022, Velaro sued LG for breach of contract and services rendered. Its operative first amended complaint (FAC) alleged LG terminated the Live Chat Agreement prior to the expiration of the two-year term to which the parties had

3 recently agreed and refused to pay the full amount due. The FAC further alleged that sometime after May 26, 2021, LG’s Digital Channel Operations Manager clicked through an updated version of a “ ‘Terms of Service’ ” agreement, which contained a forum selection clause and choice of law provision requiring the parties’ disputes to be resolved in Los Angeles and under California law, respectively. According to the FAC, the click-through agreement superseded the Live Chat Agreement’s forum selection clause and choice of law provision. In January 2023, LG moved to dismiss the FAC under sections 410.30 and 418.10 based on the Live Chat Agreement’s forum selection clause. The trial court granted the motion in April 2023, and a judgment of dismissal was entered in LG’s favor in May 2023. III. LG’s Motion for Attorney Fees In July 2023, LG filed a motion for attorney fees under sections 1021, 1032, and 1033.5. In the alternative, LG sought to recover its attorney fees under section 1717. Arguing it was a prevailing party under both section 1032 and section 1717, LG asserted entitlement to the $64,000 in fees it incurred in defending the underlying case. In October 2023, the trial court awarded LG the attorney fees it incurred in litigating its motion to dismiss. In support of its ruling, the court first observed that under DisputeSuite.Com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968 (DisputeSuite), LG “is clearly not the prevailing party under Civil Code § 1717” because it “merely obtained a dismissal of [the underlying] . . . action” and “ha[d] yet to prevail on the contract dispute between the parties.” Immediately thereafter, however, the trial court acknowledged LG “only argue[d] Civil Code § 1717 in the

4 alternative” and “primarily argue[d] it is entitled to recover fees under” sections 1021, 1032 subdivision (b), and 1033.5, subdivision (a). In analyzing LG’s entitlement to fees under those provisions, the court noted the breadth of the Live Chat Agreement’s attorney fee provision, which “encompasses any dispute” thereunder, “including any dispute over the interpretation and enforcement of a specific provision.” The court concluded that because LG “prevailed on its motion to dismiss based on the forum selection clause[,]” LG was “entitled to recover those fees incurred in litigating the motion to dismiss only.” Velaro timely appealed. DISCUSSION I. Governing Principles and Standard of Review A. Statutory Framework – Attorney Fees “Under the American rule, each party to a lawsuit ordinarily pays its own attorney fees. [Citation.] Code of Civil Procedure section 1021, which codifies this rule, provides: ‘Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . .’ In other words, section 1021 permits parties to ‘ “contract out” of the American rule’ by executing an agreement that allocates attorney fees. [Citations.] Thus, ‘ “[p]arties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract.” ’ ” (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).)

5 Sections 1032 and 1717 are “[t]he two basic statutes regularly employed by the courts to award fees in contract cases . . . .” (Sears v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Shirey v. Los Angeles County Civil Service Commission
216 Cal. App. 4th 1 (California Court of Appeal, 2013)
Thompson v. Miller
4 Cal. Rptr. 3d 905 (California Court of Appeal, 2003)
Xuereb v. Marcus & Millichap, Inc.
3 Cal. App. 4th 1338 (California Court of Appeal, 1992)
Sears v. Baccaglio
60 Cal. App. 4th 1136 (California Court of Appeal, 1998)
Disputesuite, LLC v. Scoreinc.com
391 P.3d 1181 (California Supreme Court, 2017)
Mountain Air Enters., LLC v. Sundowner Towers, LLC
398 P.3d 556 (California Supreme Court, 2017)
Santisas v. Goodin
951 P.2d 399 (California Court of Appeal, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
Velaro v. LG Electronics Alabama CA2/8, Counsel Stack Legal Research, https://law.counselstack.com/opinion/velaro-v-lg-electronics-alabama-ca28-calctapp-2026.