NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

CHAVEZ, J.

Elias Coronado (defendant) appeals from the trial court's order denying his motion for attorney fees pursuant to Civil Code section 1717 and Code of Civil Procedure sections 1032 and 1033.5 after judgment was entered in defendant's favor in an action brought by ABC-Learn, Inc. (ABC) and Debra Greenfield (collectively plaintiffs) to enforce an option to purchase certain real property contained in a lease agreement entered into by ABC and defendant. Defendant also prevailed in his cross-action for declaratory relief that he was under no obligation under the lease to convey the property to plaintiffs. Because the parties' lease agreement contains no attorney fee provision, we affirm the trial court's order.

BACKGROUND

ABC and defendant entered into a commercial lease agreement effective October 15, 2003. The lease contains an option to purchase the leased premises for a purchase price of $600,000 for a three-year option period commencing on the date of the signing of the lease. ABC sought to exercise the purchase option, opened an escrow, and sent defendant a commercial property purchase agreement and joint escrow instructions signed by Debra and Norman Greenfield. Defendant did not sign the purchase agreement and joint escrow instructions and refused to proceed with the purchase and sale transaction.

ABC then commenced the instant action for breach of contract, breach of the covenant of good faith and fair dealing, and specific performance, seeking an order conveying the leased premises to them pursuant to the option provision in the lease. Defendant filed a cross-complaint for declaratory relief seeking a declaration that he had no obligation under the lease to convey the property to plaintiffs.

Following a jury trial, judgment was entered in defendant's favor on each of ABC's three causes of action. Judgment was also entered in defendant's favor on his cause of action for declaratory relief, as follows: "[T]he Court finds and declares that [defendant] is under no obligation as a result of the Agreement to convey the Property to [plaintiffs] . . . ." The "Agreement" is defined in the judgment as the lease agreement entered into by the parties on October 15, 2003.

Defendant then filed a motion for attorney fees in the amount of $136,140, arguing that ABC's complaint had attached and incorporated a purchase agreement and joint escrow instructions that contained the following attorney fee provision: "`In any action . . . between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non-prevailing Buyer or Seller. . . .'" Defendant claimed that this provision entitled him to an attorney fee award, even though he had refused to sign the purchase agreement and joint escrow instructions.

The trial court denied defendant's motion, reasoning that the "gravamen of the Plaintiff's contract claim was the lease agreement executed by the parties on October 15, 2003" and not the purchase agreement and related escrow instructions that defendant had refused to sign. Defendant appeals from that ruling.

DISCUSSION

Applicable Law and Standard of Review

An appellate court reviews a determination of the legal basis for an award of attorney fees de novo as a question of law. (Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671, 677 (Sessions); Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 894.)

"Attorney fees are not recoverable as costs unless a statute or contract expressly authorizes them. [Citations.]" (Sessions, supra, 84 Cal.App.4th at p. 677.) The issue presented here is whether Civil Code section 1717 or Code of Civil Procedure sections 1032 and 1033.5 authorize an attorney fee award based on the attorney fee provision in the purchase agreement that defendant refused to sign.

Code of Civil Procedure section 1032, subdivision (b) grants prevailing parties the right "to recover costs in any action or proceeding." Section 1033.5 lists those expenses of litigation that may be claimed as recoverable costs by a prevailing party. Included among those expenses are "Attorney fees, when authorized by . . .: [¶] (A) Contract. [¶] (B) Statute. [¶] (C) Law." (§ 1033.5, subd. (a)(10).) Section 1033.5 also provides that attorney fees awarded under Civil Code section 1717 are allowable costs under Code of Civil Procedure section 1032.

Civil Code section 1717 provides in pertinent part: "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs."

Civil Code section 1717 "ensures mutuality of remedy for attorney fee claims under contractual attorney fee provisions . . . in at least two situations. [Citation.]" (Sessions, supra, 84 Cal.App.4th at p. 678.) The first situation involves a unilateral attorney fee contract, which provides the right to recover attorney fees to one party but not to the other. (Santisas v. Goodin (1998) 17 Cal.4th 599, 611 (Santisas).) In such circumstances, Civil Code section 1717 allows recovery of attorney fees by "whichever contracting party prevails," whether or not the contract specifies that party. (Ibid.) The instant case does not involve this first situation.

The second situation in which Civil Code section 1717 applies is when a defendant sued on a contract containing an attorney fee provision successfully defends against the action by establishing that the contract is invalid, inapplicable, unenforceable, or nonexistent. "If section 1717 did not apply in this situation, the right to attorney fees would be effectively unilateral — regardless of the reciprocal wording of the attorney fee provisions allowing attorney fees to the prevailing attorney — because only the party seeking to affirm and enforce the agreement could invoke its attorney fee provision. To ensure mutuality of remedy in this situation, it has been consistently held that when a party litigant prevails in an action on a contract by establishing that the contract is invalid, unenforceable, or nonexistent, section 1717 permits that party's recovery of attorney fees whenever the opposing parties would have been entitled to attorney fees under the contract had they prevailed. [Citations.]" (Santisas, supra, 17 Cal.4th at p. 611.)

In Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, the California Supreme Court set forth the circumstances in which Civil Code section 1717 will apply to a nonsignatory defendant. In that case, the plaintiff sued the shareholders of two bankrupt corporate signatories to promissory notes providing for recovery of collection costs, including attorney fees, in the event of default. (Reynolds Metals, at p. 127.) The shareholder defendants did not sign the promissory notes. Because Civil Code section 1717 applies to "any action on a contract," the court in Reynolds Metals held that the statute includes "any action where it is alleged that a person is liable on a contract, whether or not the court concludes he is a party to that contract." (Id. at p. 128.) The Supreme Court interpreted the statute to "provide a reciprocal remedy for a nonsignatory defendant, sued on a contract as if he were a party to it, when a plaintiff would clearly be entitled to attorney's fees should he prevail in enforcing the contractual obligation against the defendant." (Ibid.)

Defendant in this case is not entitled to an award of attorney fees under Civil Code section 1717. This was not an action to enforce the purchase agreement. ABC's complaint did not allege that defendant was liable as a result of the purchase agreement. Its causes of action for breach of contract, breach of the covenant of good faith and fair dealing, and specific performance were based, not on the purchase agreement that defendant refused to sign, but on the lease agreement entered into by the parties on October 15, 2003. ABC's complaint states in relevant part: "On or about October 15, 2003, Plaintiff and Defendant entered into a written lease agreement with an option to purchase the leased premises . . . . The lease agreement which is attached hereto and incorporated herein, required the Plaintiff to tender their intent to exercise the option to purchase the property within the first three years of the lease. . . . Defendant breached the contract by refusing to and continuing to refuse to sell the building pursuant to the contract to the Plaintiff." Although the complaint does not expressly define what "contract" defendant allegedly breached, it is evident from the context of the pleading that the "contract" referred to is the lease agreement, not the unsigned purchase agreement.

Although ABC's complaint refers to the purchase agreement and accompanying escrow instructions, it does so solely as evidence of ABC's compliance with the terms of the lease governing exercise of the purchase option. The complaint states: "Plaintiff has complied with the terms of the written agreement and the option to purchase the property. In fact, Plaintiff even opened up escrow to purchase the property on or about October 13, 2006. A true and correct copy of the escrow is attached hereto and incorporated herein."

The instant action concerned enforcement of a purchase option contained in the parties' lease agreement. The lease agreement contains no attorney fee provision. ABC would not have been entitled to recover its attorney fees had it prevailed on any of the causes of action it asserted. Defendant is therefore entitled to no reciprocal remedy under Civil Code section 1717 and no award of attorney fees as costs under Code of Civil Procedure sections 1032 or 1033.5.

The trial court did not err by denying defendant's motion for attorney fees.

DISPOSITION

The order denying the motion for attorney fees is affirmed. Plaintiffs are awarded their costs on appeal.

We concur:

BOREN, P. J.

ASHMANN-GERST, J.