Opinion
A155714
12-17-2019
CP III RINCON TOWERS, INC., Plaintiff and Appellant, v. ASSESSMENT APPEALS BOARD OF THE CITY AND COUNTY OF SAN FRANCISCO, Defendant and Respondent; RINCON EV REALTY LLC, et al., Real Parties in Interest and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (City & County of San Francisco Super. Ct. No. CPF14513493)
After the nonjudicial foreclosure sale of a San Francisco apartment complex (the Property), the purchasing entity, CP III Rincon Towers, Inc. (CP III), sought to be substituted as the applicant in four assessment appeals that the prior purchasers, Rincon EV Realty LLC and Rincon ET Realty LLC (collectively, Rincon), had filed with the Assessment Appeals Board of the City and County of San Francisco (the Board). (Rincon Assessment I, supra, A144104.) The Board denied most of the relief requested by CP III; the trial court granted CP III's petition for writ relief; and we reversed the trial court's decision, upholding the Board's initial ruling and directing the trial court to enter an order denying CP III's writ petition. (Ibid.)
The background of the parties' disputes and other litigation related to the Property is set forth in this court's opinion in Rincon EV Realty LLC v. CP III Rincon Towers, Inc. (2017) 8 Cal.App.5th 1, 5-7 (Rincon I). Additional background pertaining specifically to the assessment appeals and the resulting litigation (i.e., the present action) is set forth in this court's unpublished opinion in CP III Rincon Towers, Inc. v. Assessment Appeals Board of the City and County of San Francisco (Dec. 8, 2017, A144104) [nonpub. opn.] (Rincon Assessment I).
After we issued our remittitur and the trial court entered its order denying CP III's petition, the trial court granted a motion by Rincon for an award of prevailing-party attorney fees under Civil Code section 1717, based on a fee provision in a deed of trust entered into by Rincon in 2007 when it purchased the Property (the 2007 deed of trust). CP III now appeals that order, contending that its action seeking to participate in the assessment appeals was not based on the 2007 deed of trust, but was instead based on CP III's rights as the purchaser under a trustee's deed upon sale issued at the time of the foreclosure in 2010 (the 2010 trustee's deed upon sale), an instrument that does not include an attorney fees provision. As we shall explain, we agree with CP III that this action was not an "action on a contract" that includes an attorney fees provision, so section 1717 provides no basis for an award of fees to Rincon. We therefore reverse.
Undesignated statutory references are to the Civil Code.
I. BACKGROUND
"In June 2007, Rincon purchased the Property for approximately $143 million, financing the purchase in part with a $110 million loan. (See Rincon I, supra, 8 Cal.App.5th at p. 5.) CP III acquired the loan in April 2010, commenced nonjudicial foreclosure proceedings in June 2010, and purchased the Property at a nonjudicial foreclosure sale in October 2010. (See id. at pp. 6-7.)" (Rincon Assessment I, supra, A144104.)
"Between February 2009 and September 2010 (i.e., prior to the foreclosure sale), Rincon filed four applications with the Assessment Appeals Board of the City and County of San Francisco (the Board), challenging certain assessments of the Property." (Rincon Assessment I, supra, A144104.) "In March and April 2011, CP III sent letters to the Board stating it had purchased the Property in October 2010, and asking to be substituted for Rincon as the sole applicant in all four assessment appeals. CP III stated that, as part of its purchase at the foreclosure sale, it had acquired the right to pursue the assessment appeals. Rincon opposed the request, contending it had legal authority to pursue the appeals and CP III lacked standing to do so." (Ibid.)
After apparently deferring action on the issue due to pending litigation between the parties, in 2013 the Board received briefing and held hearings on the standing question. (Rincon Assessment I, supra, A144104.) The Board (first in a November 2013 letter and then in a February 2014 statement of decision) denied CP III's request to be substituted as the applicant in place of Rincon in the four assessment appeals, but ruled CP III could participate, along with Rincon, in one of the assessment appeals. (Ibid.)
CP III sought relief in the trial court, filing a petition for a writ of mandate and/or a writ of administrative mandamus in February 2014, and an amended petition in May 2014 (amended petition or amended writ petition). (Rincon Assessment I, supra, A144104.) After receiving briefing and holding a hearing, the trial court granted writ relief in a November 2014 order, holding that the Board had a duty to permit CP III to appear and present arguments and evidence in the four assessment appeals. (Ibid.)
Rincon appealed the trial court's order. (Rincon Assessment I, supra, A144104.) We reversed, holding that the Board's decision not to permit CP III to participate in three of the four assessment appeals was based on a reasonable interpretation of the statutory and regulatory provisions governing assessment appeals. (Ibid.) We directed the trial court to enter an order denying CP III's writ petition. (Ibid.)
The Board filed a cross-appeal challenging one aspect of the relief ordered by the trial court. (Rincon Assessment I, supra, A144104.) We did not address the Board's argument because we reversed the trial court's order on other grounds. (Ibid.)
After issuance of this court's remittitur, the trial court entered an order denying CP III's petition. Rincon subsequently filed a motion seeking attorney fees under section 1717, arguing it was the "prevailing party in an action on a contract that contains an attorney fees provision." Specifically, Rincon contended that CP III, in seeking to participate in the assessment appeals, had relied on the loan documents that accompanied the 2007 loan taken by Rincon to purchase the Property, including the 2007 deed of trust, which includes an attorney fees provision. That provision is unilateral, i.e., it only provides for an award of fees to the lender (not the borrower, Rincon), but Rincon argued that section 1717 made the fee obligation reciprocal.
In its opposition to Rincon's fee motion, CP III argued that, when it sought to participate in the assessment appeals, it did not seek to enforce the 2007 deed of trust. CP III contended that the document on which it based its effort to participate in the assessment appeals was instead the 2010 trustee's deed upon sale issued when CP III purchased the Property at the foreclosure sale. The 2010 trustee's deed upon sale does not include an attorney fees provision. In reply, Rincon argued the attorney fees provision in the 2007 deed of trust supported an award of fees because (1) CP III cited and relied on that document in arguing it was entitled to participate in the assessment appeals, and (2) the provisions of the 2010 trustee's deed upon sale on which CP III relied "arise out of and exist only because of the" 2007 deed of trust.
After a hearing, the court granted Rincon's motion and awarded attorney fees in the amount of $427,951.93. The court concluded "Rincon is a prevailing party in an action on [a] contract with an attorney's fee provision," i.e., the 2007 deed of trust. The court held that, although CP III relied on the 2010 trustee's deed upon sale, that document "merely carried out rights created and granted by" the 2007 deed of trust. "Therefore, any request for a declaration of rights under [the] Trustee's Deed Upon Sale necessarily involved a determination of rights provided under the Deed of Trust." CP III appealed.
II. DISCUSSION
A. The 2007 Deed of Trust and the 2010 Trustee's Deed Upon Sale
When Rincon purchased the Property in 2007, it financed the purchase in part with a $110 million loan (the Loan) from Bear Stearns Commercial Mortgage, Inc. (Bear Stearns). (See Rincon I, supra, 8 Cal.App.5th at p. 5.) The loan agreement between Rincon and Bear Stearns (the Loan Agreement), dated June 8, 2007, provides the Loan will be secured by a "Deed of Trust and Security Agreement" encumbering the Property.
The deed of trust, also dated June 8, 2007, states (in § 1.1) that Rincon grants certain identified "property, rights, interests and estates" as security for the Loan. The 2007 deed of trust states that Rincon grants the listed items "to [the trustee (then Chicago Title Insurance Company)] for the benefit of [Mortgage Electronic Registration Systems, Inc. (MERS)] as nominee of Lender [then Bear Stearns] and its successors and assigns." The list of granted items (§ 1.1) includes land, improvements, and a variety of other property and rights, including: "(k) Tax Certiorari. All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction;" and "(m) Rights. The right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Lender in the Property[.]"
Another provision of the 2007 deed of trust, section 7.4 ("Actions and Proceedings"), provides the lender has certain rights to participate in litigation: "Lender has the right to appear in and defend any action or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Borrower, which Lender, in its discretion, decides should be brought to protect its interest in the Property."
A unilateral indemnification provision in the 2007 deed of trust, section 9.1 ("General Indemnification"), requires the borrower (Rincon) to pay the attorney fees and costs of the lender in certain circumstances. Section 9.1 states in part: "Borrower shall, at its sole cost and expense, . . . indemnify . . . the Indemnified Parties [defined to include the Lender and related persons] from and against any and all . . . costs, expenses . . . (including but not limited to reasonable attorneys' fees and other costs of defense) (collectively, the 'Losses') imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: . . . (c) any and all lawful action that may be taken by Lender in connection with the enforcement of the provisions of this Deed of Trust, the Loan Agreement, the Note or any of the other Loan Documents, whether or not suit is filed in connection with same . . . ." (Italics added.)
In April 2010, CP III purchased the Loan from the Maiden Lane Trust (which had acquired the Loan after Bear Stearns collapsed in 2008). (See Rincon I, supra, 8 Cal.App.5th at p. 6.) As Rincon puts it in its appellate brief in the present appeal, CP III as a result of this purchase "became the 'Lender' " under the 2007 deed of trust and the other loan documents. As the lender, CP III initiated nonjudicial foreclosure proceedings in June 2010. (Id. at pp. 6-7.)
CP III purchased the Property at a foreclosure sale on October 12, 2010. (Rincon I, supra, 8 Cal.App.5th at p. 7.) The trustee's deed upon sale issued in connection with the foreclosure sale states that the trustee (now Fidelity National Title Company) grants and conveys to CP III the Property along with certain listed categories of "personal property." The listed items of "personal property"—set forth in "Exhibit 'A' " to the 2010 trustee's deed upon sale—include the items that Rincon pledged as security for the Loan in the 2007 deed of trust, including "(k) Tax Certiorari. All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction;" and "(m) Rights. The right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Lender in the Property[.]"
The 2010 trustee's deed upon sale states that the trustee, acting pursuant to its powers under the 2007 deed of trust, sold the listed Property to CP III at the foreclosure sale, and CP III "became the purchaser" of that Property. The 2010 trustee's deed upon sale does not include an attorney fees provision.
B. CP III's Action Was Not an "Action on a Contract" That Includes an Attorney Fees Provision, So There Was No Legal Basis to Award Fees
We review de novo the question whether the trial court had a legal basis for awarding attorney fees. (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).) The court determined Rincon, as the prevailing party in this action, was entitled to fees under section 1717. That statute provides in relevant 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." (§ 1717, subd. (a), italics added; see Code Civ. Proc., §§ 1032, subd. (b) [prevailing party shall recover costs], 1033.5, subds. (a)(10)(A), (c)(5)(B) [attorney fees awarded under § 1717 are allowable costs].)
CP III does not challenge the trial court's determination that Rincon is the prevailing party in light of the court's order denying CP III's petition. But the parties dispute whether the present litigation was an "action on a contract" that includes an attorney fees provision. CP III argues it brought the action to enforce its rights under the 2010 trustee's deed upon sale issued at the time of the foreclosure, a contract that does not contain an attorney fees provision. Rincon contends, and the trial court concluded, that this was also an action on the 2007 deed of trust entered into when Rincon purchased the Property, so the attorney fees provision in that contract triggers application of section 1717.
"The requirement under Civil Code section 1717 that the action be ' "on a contract" ' has been liberally construed. (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 240.) As one court has stated, ' " '[i]t is difficult to draw definitively from case law any general rule regarding what actions and causes of action will be deemed to be "on a contract" for purposes of [Civil Code section] 1717.' " ' (Id. at p. 241.) 'Nevertheless, we distill . . . the following principle: An action (or cause of action) is "on a contract" for purposes of section 1717 if (1) the action (or cause of action) "involves" an agreement, in the sense that the action (or cause of action) arises out of, is based upon, or relates to an agreement by seeking to define or interpret its terms or to determine or enforce a party's rights or duties under the agreement, and (2) the agreement contains an attorney fees clause.' (Id. at pp. 241-242.)" (Orozco v. WPV San Jose, LLC (2019) 36 Cal.App.5th 375, 407-408 (Orozco).) Invoking this standard, Rincon argues the attorney fees provision in the 2007 deed of trust applies here because CP III sought a determination of its rights under that document. We disagree.
Despite its broad scope, section 1717 does not apply when an action is on a contract that does not contain an attorney fees provision. (Brittalia Ventures v. Stuke Nursery Co., Inc. (2007) 153 Cal.App.4th 17, 31.) It is not sufficient that another contract between the parties includes a fee provision. " '[A] cause of action does not warrant a recovery under Civil Code section 1717 merely because a contract with an attorney's fees provision is part of the backdrop of the case.' " (Orozco, supra, 36 Cal.App.5th at p. 408; Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 533-535 [no basis for fee award under § 1717 where lawsuit "was for the enforcement of" a contract that contained no fee provision; other agreements between the parties that included fee provisions were "peripheral" to that contract].) In determining whether an action is "on a contract" that includes an attorney fee provision, we look to "the overall nature" of the plaintiff's complaint. (Orozco, supra, 36 Cal.App.5th at p. 410 [looking to complaint to determine whether it sounded in tort or was "on a contract"]; Pellegrini v. Weiss, supra, 165 Cal.App.4th at pp. 534-535 [where complaint alleged breach of only one contract, and attached and incorporated only that contract, fee provisions in other contracts between the parties did not provide a basis to award fees under § 1717].)
Here, in its amended writ petition filed in the trial court, CP III relied on the 2010 trustee's deed upon sale as the basis for its claimed right to participate in the assessment appeals. Specifically, CP III alleged in the amended petition that the items of property listed in the trustee's deed upon sale and transferred to CP III by that document gave CP III the right to participate in the assessment appeals.
CP III stated (in paragraphs 19-20 of the amended petition): "19. CP III acquired all of the real and personal Property at the non-judicial foreclosure sale on October 12, 2010 with a $73 million credit bid. Included with the purchase were the real property, improvements, bank accounts, fixtures, and the Tax Appeals and Tax Refunds. [¶] 20. Specifically, the Trustee's Deed Upon Sale lists the additional Personal Property that was included in the foreclosure sale and purchased by CP III, including as relevant here: [¶] ['](k) All refunds , rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction . [¶] (m) The right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Lender in the Property.['] " CP III did not assert in the amended petition any claims for relief based on the 2007 deed of trust. Instead, CP III repeated throughout the amended petition (see paragraphs 2, 4, 26, 32, 34) the argument that the 2010 foreclosure sale and the 2010 trustee's deed upon sale issued then gave it the right to participate in the assessment appeals.
The trial court recognized that "CP III relied upon the Trustee's Deed Upon Sale, which does not have an attorney fee provision," but the court held that CP III, by seeking a determination of its rights under the 2010 trustee's deed upon sale, necessarily also sought a determination of rights under the 2007 deed of trust, because "[t]he Trustee's Deed Upon Sale merely carried out rights created and granted by [the] Deed of Trust." Rincon echoes and expands on this point in its appellate brief urging affirmance. We disagree.
The trial court cited (and Rincon relies on) Kachlon v. Markowitz (2008) 168 Cal.App.4th 316 (Kachlon), but that case does not support a conclusion that CP III's action here sought a determination of rights under the 2007 deed of trust. In Kachlon, the borrowers/trustors under a promissory note and deed of trust (the purchasers of the property at issue) challenged an ongoing foreclosure attempt by suing both the trustee and the beneficiaries (the sellers) for declaratory and injunctive relief and to quiet title. (Id. at pp. 324, 329, 347-348.) The trustors claimed they had paid the debt reflected in the promissory note, so the note had to be cancelled, and the deed of trust required reconveyance of the property to the trustors. (Id. at pp. 347-348.) The equitable relief sought by the trustors included (1) "a declaration that the promissory note must be cancelled because it had been paid in full, and that the deed of trust must be reconveyed because the foreclosure violated the terms of the deed of trust" (ibid.), (2) an injunction halting the foreclosure (again on the ground that it violated the deed of trust) (id. at pp. 329, 348), and (3) an order quieting title, a claim that also "sought to enforce the terms of the deed of trust requiring a reconveyance of title upon satisfaction of the underlying debt" (id. at p. 348).
The trial court in Kachlon found in favor of the trustors on the equitable issues, granted the requested equitable relief, and awarded attorney fees to the trustors based on unilateral fee provisions in the promissory note and the deed of trust (favoring the beneficiaries/lenders) and the fee-shifting provision of section 1717. (Kachlon, supra, 168 Cal.App.4th at pp. 330-331, 345-347.) The appellate court affirmed, rejecting the beneficiaries' argument that section 1717 did not apply because the trustors' "claims for declaratory and injunctive relief and quiet title were equitable in nature, and not arising out of contract." (Kachlon, supra, at p. 346.) The appellate court stated: "In determining whether an action is 'on the contract' under section 1717, the proper focus is not on the nature of the remedy, but on the basis of the cause of action. [Citation.] Here, although the remedy sought in the relevant causes of action was equitable, the claims were still actions 'on the contract,' i.e., the note and deed of trust." (Kachlon, supra, at p. 347.) Because the trustors' claims for declaratory and injunctive relief and to quiet title were " 'based upon' " or "founded on" the note and deed of trust (contracts that included attorney fee provisions), those claims were " 'action[s] on a contract' within the meaning of section 1717, subdivision (a)." (Kachlon, supra, at p. 348.)
The Kachlon court did not hold or state that an action such as the one brought by CP III here—an action seeking to determine the scope of the property interests or rights obtained under a trustee's deed upon sale after a completed foreclosure—is an "action on" the earlier deed of trust that authorized foreclosure in the event of a default. And as CP III notes, a purchaser at a foreclosure sale will in some circumstances be a third party that was not a party to the original loan documents. An action by the purchaser to determine the scope of the property interests it obtained at a foreclosure sale does not necessarily require a determination of the rights of the parties to the original loan documents.
A second statement from Kachlon cited by the trial court and by Rincon—found in a section of the Kachlon opinion that did not discuss attorney fees or section 1717—also does not support application of section 1717 here. In Kachlon, in a section of the opinion outlining "general principles regarding nonjudicial foreclosure" as a prelude to addressing whether certain actions by the trustee and the beneficiaries were privileged under section 47 (see Kachlon, supra, 168 Cal.App.4th at p. 334), the appellate court stated: "The scope and nature of the trustee's duties are exclusively defined by the deed of trust and the governing statutes. No other common law duties exist." (Id. at p. 335, italics added.) Here, CP III did not seek a determination as to the rights or duties of the trustee, a role it never played at any point in the parties' dealings. CP III sought a determination of its rights as the purchaser of the Property, i.e., a determination of the scope of the property interests it obtained at the 2010 foreclosure sale, as reflected in the 2010 trustee's deed upon sale.
Also of no assistance to Rincon's claim for fees here is our Supreme Court's decision in Mountain Air, supra, 3 Cal.5th 744, cited by the trial court and by Rincon. In that case, Mountain Air sued Sundowner for failing to repurchase certain real property pursuant to the parties' agreement. (Id. at pp. 748-749.) Sundowner prevailed on affirmative defenses that the repurchase agreement was illegal and that a subsequent option agreement between the parties was a novation. (Ibid.) The Supreme Court held that Mountain Air's suit to enforce the repurchase agreement triggered the attorney fees provision in the option agreement. (Id. at p. 759.) The court reached that conclusion after analyzing the specific language of the bilateral fee provision in the option agreement. (Id. at pp. 752, 756-761.) The court did not analyze the phrase "action on a contract" in Civil Code section 1717. (See Mountain Air, supra, at pp. 756-761; Orozco, supra, 36 Cal.App.5th at pp. 410-411.)
"Here, by contrast, [Rincon's] entitlement to attorney's fees does not depend on the attorney's fee provision in the [deed of trust] (which, by its terms, benefits only [the lender, i.e., Bear Stearns and later CP III]) but instead on the reciprocal entitlement to fees afforded by the operation of Civil Code section 1717." (Orozco, supra, 36 Cal.App.5th at p. 411 [distinguishing Mountain Air on this basis].) For the reasons discussed above, CP III's action seeking to participate in the assessment appeals was not an "action on a contract" that contains an attorney fee provision (i.e., the deed of trust), and section 1717 thus does not provide a basis for an award of fees.
In holding the Mountain Air option agreement's fee provision applied, the Supreme Court stated (in a passage quoted by the trial court here): "In determining whether a contract contains an applicable attorney fees provision, courts have 'construe[d] together several documents concerning the same subject and made as part of the same transaction [citations] even though the documents were not executed contemporaneously [citation] and do not refer to each other.' " (Mountain Air, supra, 3 Cal.5th at p. 759; see § 1642 ["Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together."].) In Mountain Air, the Supreme Court stated that Mountain Air's suit to enforce the repurchase agreement "necessarily implicated" the option agreement, even though the complaint did not mention it (id. at p. 758); the parties there had to litigate "which of these competing and inconsistent agreements" controlled (id. at p. 759).
In this case, CP III claimed that the property interests granted to it by the 2010 trustee's deed upon sale included the right to participate in the assessment appeals. The 2007 deed of trust was not necessarily implicated by that claim. Any purchaser of the Property at the 2010 foreclosure sale (whether or not it was a party to the 2007 deed of trust or had any rights under that document) could have made the same claim. The 2007 and 2010 instruments "are not clearly and unequivocally part of the same transaction to be construed together under Civil Code section 1642." (R.W.L. Enterprises v. Oldcastle, Inc. (2017) 17 Cal.App.5th 1019, 1031 [distinguishing Mountain Air].)
Rincon's remaining arguments in support of affirmance are unpersuasive. Rincon insists an award of fees is warranted because, if CP III had prevailed in its effort to become a participant in the assessment appeals, it would have sought attorney fees. But even assuming CP III would have sought fees, "a party's mere assertion of the right to recover fees does not estop it from challenging a fee award or vest the other party with the right to recoup attorney fees if it prevails." (R.W.L. Enterprises v. Oldcastle, Inc., supra, 17 Cal.App.5th at pp. 1035-1036.)
Finally, Rincon points out that CP III cited the 2007 deed of trust in its briefs and arguments in support of its effort to participate in the assessment appeals. The trial court did not rely on this fact in awarding fees, and we are not persuaded it supports a conclusion that this case is an "action on" the 2007 deed of trust.
In its briefs filed with the Board and with the trial court, and in its appellate brief in Rincon Assessment I, CP III argued (consistent with the allegations in its amended petition) that the property interests transferred to it in the 2010 trustee's deed upon sale—specifically those described in paragraphs (k) ("tax certiorari") and (m) ("rights")—gave it the right (as the purchaser and owner of those interests) to participate in the assessment appeals. CP III also included footnotes in its briefs stating that, "even prior to the foreclosure," it had the right (as the lender) under section 7.4 of the 2007 deed of trust to pursue litigation in Rincon's name. Those assertions about the rights CP III held as the lender before the foreclosure sale do not establish that the 2007 deed of trust was the basis for CP III's post-foreclosure effort as the purchaser to participate in the assessment appeals.
We recognize that, at other points in its briefs, CP III did not keep its references to the two documents so neatly separated—it cited both paragraph (m) of the 2010 trustee's deed upon sale and section 7.4 of the 2007 deed of trust in support of an assertion that it had the right to pursue litigation in Rincon's name. In context, however, those efforts by CP III to bolster its central argument about its rights under the 2010 trustee's deed upon sale with citations to allegedly supportive provisions of the 2007 deed of trust do not persuade us this was an "action on" the 2007 deed of trust for purposes of section 1717.
Rincon also notes that, at the hearing before the Board, in a post-hearing letter to the Board, and at a hearing in the trial court, CP III made statements to the effect that the 2010 trustee's deed upon sale "comes from" the 2007 deed of trust or that the property interests initially listed in the 2007 deed of trust were transferred in the 2010 foreclosure sale. Those are accurate descriptions of the relationship between the two documents—as outlined above, the 2007 deed of trust provided that Rincon pledged certain property interests and rights as security for the Loan. When the foreclosure occurred in 2010, the trustee transferred those interests and rights to the purchaser, CP III. But in our view that does not mean that, when CP III sought to participate in the assessment appeals beginning in 2011 (after the foreclosure), it was seeking to determine or enforce its rights as the substituted lender under the 2007 deed of trust. Instead, as discussed, CP III sought to determine and enforce its rights as the purchaser and owner of the interests transferred by the 2010 trustee's deed upon sale.
III. DISPOSITION
The order granting Rincon's motion for prevailing-party attorney fees is reversed. The trial court is directed to enter an order denying Rincon's motion. CP III shall recover its costs on appeal.
STREETER, J. WE CONCUR: POLLAK, P. J.
TUCHER, J.