Can Tenant in Default Avoid Attorney Fees by Suing Landlord First?

Situation: A landlord sends a default notice and is preparing to evict a spa tenant that owes nearly $53,000 in unpaid rent. But the tenant beats the landlord to the punch by filing its own lawsuit asking the court to enjoin the landlord from terminating the lease. The tenant’s complaint raises eight claims, all based on the theory that the agreement between the parties isn’t a lease but an oral partnership. The landlord prevails on all eight claims. There’s a valid lease and the tenant has violated it, the court rules. The landlord then asks the court to order the tenant to pay its attorney fees, citing this lease provision on attorney’s fees: “In the event that either party gives the other Notice of default hereunder and the parties agree to arbitrate or that litigation ensues, the prevailing party shall be entitled to an award of all costs, including all attorney’s fees actually incurred.”

Q: Must the tenant pay the landlord’s attorney fees?

A.            Yes, because losers always pay winners’ attorney fees in landlord-tenant litigation.

B.            No, because the tenant sued first.

C.            Yes, because all conditions of the lease provision were met.

D.            No, because the landlord didn’t give notice of default.