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Head & Neck Associates of Orange County v. Coastal Vascular Specialists, Med. Corp.

California Court of Appeals, Fourth District, Third Division
Oct 17, 2008
No. G039159 (Cal. Ct. App. Oct. 17, 2008)

Opinion


HEAD AND NECK ASSOCIATES OF ORANGE COUNTY, Plaintiff and Respondent, v. COASTAL VASCULAR SPECIALISTS, MEDICAL CORPORATION et al., Defendants and Appellants. G039159 California Court of Appeal, Fourth District, Third Division October 17, 2008

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

Appeal from a judgment of the Superior Court of Orange County No. 06CC05969, Derek W. Hunt, Judge.

Law Offices of George B. Piggott and George B. Piggot for Defendants and Appellants.

Madden, Jones, Cole & Johnson, Montgomery Cole and Scott J. Quan for Plaintiff and Respondent.

OPINION

ARONSON, J.

Defendants Coastal Vascular Specialists Medical Corporation (CVS) and Marcello A. Borzatta, M.D., challenge a referee’s statement of decision awarding lost rent damages and attorney fees to plaintiff Head and Neck Associates of Orange County (H&N). Defendants contend H&N breached a sub-sublease by refusing to consent to a proposed assignment of CVS’s interest in the sub-sublease to a third party based on the sublessor’s objection to the assignment. Defendants also contend the trial court erred by allowing the referee to hear their posttrial motions, and awarding H&N attorney fees based on a fee provision in the sublease.

We conclude the referee’s decision is correct. The sublease required the lessor’s consent to any further sublease or assignment, and the parties stipulated that H&N did everything it could reasonably do to persuade the sublessor to consent to the assignment. If H&N had allowed assignment of the sublease without the sublessor’s consent, H&N would have breached the sublease and jeopardized its tenancy.

We also conclude the trial court did not err in allowing the referee to hear defendants’ posttrial motions because the parties stipulated to a general reference authorizing the referee to hear and determine all issues of fact and law in the action. We conclude, however, the trial court erred in awarding attorney fees. The sub-sublease did not contain an attorney fee provision, and did not incorporate by reference the sublease’s fee provision. Accordingly, we reverse the attorney fee award and affirm the judgment in all other respects.

I

Factual and Procedural Background

In December 2004, Mission Hospital Regional Medical Center (Mission) granted H&N a license to temporarily occupy space at a medical office facility (premises) during the time Mission’s subsidiary, Mission Viejo Medical Ventures (MVMV), and H&N negotiated a sublease agreement. MVMV and H&N eventually executed a sublease agreement covering the premises in April 2005.

In January 2005, H&N entered into an agreement with CVS to sub-sublease a portion of the premises to CVS for 12 years. Before executing the sub-sublease, CVS received a copy of the draft lease agreement between MVMV and H&N, which contained essentially the same terms as the agreement later executed in April 2005. Borzatta, the sole shareholder of CVS, personally guaranteed CVS’s obligations under the sub-sublease.

CVS failed to make the required lease payments. In November 2005, CVS located a third party willing to assume the sublease, Mission Internal Medical Group, Inc. (MIMG). MIMG planned to use the premises for physical therapy as an adjunct to other treatment then being offered to its own patients. By letter, CVS requested H&N to prepare the necessary paperwork to transfer the sub-sublease to MIMG. At that time, MIMG met the necessary qualifications to take possession of the premises and stood ready to do so on December 1, 2005. H&N sent MVMV a letter seeking MVMV’s consent to the assignment of the sub-sublease from CVS to MIMG, and provided MVMV a $500 transfer fee. MVMV subsequently notified H&N it would not consent to assignment because MIMG’s intended use of the premises for physical therapy was a use granted exclusively to H&N.

In December 2005, H&N filed an unlawful detainer action against CVS. Shortly thereafter, MIMG directly requested MVMV agree to the assignment of the sub-sublease from CVS to MIMG. MVMV notified H&N it would not consent to the assignment of the sub-sublease because “allowing MIMG to bring on a program that would clearly compete with the hospital . . . would really nearly put [MVMV’s] physical therapy program out of business, which would make it very difficult for [MVMV] to function as a medical center.” H&N unsuccessfully continued its efforts to obtain MVMV’s consent for the assignment. Moreover, as stipulated by the parties, H&N “did everything that they reasonably could do to get their landlord to consent to the assignment to MIMG . . . .” Because of MVMV’s continuing objections, however, H&N withheld its own consent to MIMG taking possession of the premises. CVS vacated the premises in February 2006. After reasonable efforts to locate another tenant, H&N entered into a new sub-sublease with a third party in January 2007.

H&N sued CVS to recover lost rent and other damages incurred after the date of the unlawful detainer judgment. The parties agreed to a reference under Code of Civil Procedure section 638, and tried the case before a retired Court of Appeal justice. The parties stipulated that if the referee found CVS liable for lost rent resulting from MVMV’s refusal to consent to the sub-sublease assignment to MIMG, H&N would recover damages totaling $323,418.07, and H&N qualify as the prevailing party in determining attorney fees and costs.

The referee ruled in H&N’s favor, and rendered a statement of decision which provided in part: “CVS and Dr. Borzatta contend that it was unreasonable for H&N to elect not to confront its landlord, MVMV, and simply ask MIMG to move into the space without MVMV’s consent. H&N contends that it was reasonable for it to elect to respect the decision of its landlord, MVMV, to refuse consent and that it was not obligated to force the issue as part of its duty to act reasonably. Based on the evidence, it does appear that permitting MIMG to move in against the wishes of MVMV would have resulted in litigation and perhaps jeopardized H&N’s own tenancy. In addition, the above quoted portion of [MIMG’s] December 15 letter and logic demonstrates that MIMG, which was also a tenant in other MVMV properties, would not have been willing to move in only to confront litigation. Therefore, it was both reasonable for H&N not to seek to force MIMG to enter into possession and unreasonable to assume that MIMG would have been willing to enter into a tenancy that would immediately result in a lawsuit. The evidence establishes that H&N must prevail and is entitled to judgment against CVS and Dr. Borzatta.”

The trial court entered judgment in favor of H&N and against defendants, jointly and severally, in the sum of $380,416.14. The referee denied defendants’ motions for new trial and to set aside the judgment and enter a new judgment. The trial court adopted the referee’s award of prevailing party attorney fees to H&N, and included the fees in an amended judgment.

II

Standard of Review

In reviewing the judgment of the trial court, we must uphold the trial court’s findings if supported by substantial evidence. (Sabbah v. Sabbah (2007) 151 Cal.App.4th 818, 822.) Moreover, where undisputed facts are susceptible to conflicting inferences, we are bound by the trial court’s factual conclusions based on the inferences drawn. (Halaco Engineering Co. v. South Central Coast Regional Com. (1986) 42 Cal.3d 52, 74-75.) When, however, the facts are undisputed and only one inference reasonably may be drawn from those facts, the issue is one of law that we may review de novo. (Estate of Anderson (1997) 60 Cal.App.4th 436, 441.) We review the trial court’s interpretation of a contract de novo, except where conflicting extrinsic evidence was admitted to aid in its interpretation, in which case the substantial evidence rule applies. (Roden v. Bergen Brunswig Corp. (2003) 107 Cal.App.4th 620, 625.)

Defendants contend the facts in the case are undisputed and therefore we must review the judgment de novo. But defendant disputes at least one of the trial court’s findings, that H&N might have faced litigation had it permitted MIMG to move in against MVMV’s wishes. Because, as we discuss below, this finding is supported by substantial evidence we are required to accept it as true. The remainder of our decision here turns largely on our interpretation of the agreements at issue and the law applicable to them. We review these matters independently.

III

Discussion

A. H&N Did Not Breach the Sub-Sublease When It Did Not Consent to the Assignment

Defendants contend H&N was not entitled to recover damages for lost rent because it breached the sub-sublease and the covenant of good faith and fair dealing. Defendants argue MIMG’s proposed operation of a physical therapy clinic was a permitted use under the sub-sublease, and H&N was therefore required to consent to defendants’ proposed assignment to MIMG despite MVMV’s objection. We disagree.

Civil Code section 1995.250 provides: “A restriction on transfer of a tenant’s interest in a lease may require the landlord’s consent for transfer subject to any express standard or condition for giving or withholding consent, including, but not limited to, either of the following: [¶] (a) The landlord’s consent may not be unreasonably withheld. [¶] (b) The landlord’s consent may be withheld subject to express standards or conditions.” The Law Revision Comments to this section explain: “The meaning of ‘unreasonably withheld’ under subdivision (a) is a question of fact that must be determined under the circumstances of the particular case, applying an objective standard of commercial reasonableness as developed by case law.” (Cal. Law Revision Com. com., 10 West’s Ann. Civ. Code (2008 Supp.) foll. § 1995.250, p. 159.)

As defendants note, the sub-sublease contains no provisions expressly limiting CVS’s ability to assign its rights to the sub-sublease. But the sublease includes a provision that it “is subject to all the provisions of the Sublease, and Sub-Sublessee shall not permit any act or omission to act that will violate any of the provisions of the Sublease.” The sublease between MVMV and CVS prohibits further sublease or assignment without MVMV’s written consent. The sublease provides that any sublease or assignment in violation of this requirement is void, and constitutes a default giving MVMV the right to terminate the sublease.

Defendants assert the transfer restrictions in the sublease do not apply to their proposed transfer to MIMG because the terms of the sub-sublease never incorporated by reference the terms of the sublease. Specifically, although the sublease provides that the “portions of the Sublease attached hereto are incorporated by reference into, and made a part of, this Sub-Sublease,” no portions of any sublease were ever attached. Moreover, the sub-sublease identified only a sublease dated October 13, 2004, but no sublease bearing that date ever existed. Finally, because MVMV and H&N executed the sublease after the sub-sublease took effect, defendants argue their sub-sublease agreement with H&N cannot be altered by a subsequent agreement they did not approve.

Any failure of the sub-sublease here to incorporate by reference the anti-transfer provisions of the sublease is of no legal significance. “‘A sublessee is bound by the terms and conditions of the original lease; its rights are dependent upon and subject to the sublessor’s rights.’” (Boston Properties v. Pirelli Tire Corp. (1982) 134 Cal.App.3d 985, 992 (Boston Properties).) Accordingly, where an original lease forbids successors and assigns from transferring the leasehold interest, the prohibition on transfer is understood to “run with the land,” and is binding upon them. (Crowell v. City of Riverside (1938) 26 Cal.App.2d 566, 573.) Consequently, the sublease’s anti-transfer provision applies to defendants, even though not incorporated by reference into the sub-sublease.

The sub-sublease’s reference to an apparently nonexistent “October 13, 2004” sublease is also legally insignificant. “‘“It is the duty of a person contracting for a sublease to ascertain the provisions of the original lease; and a subtenant is charged with notice of the existence of the original lease, and is bound by its terms and conditions.”’” (Recorded Picture Company [Productions] Ltd. v. Nelson Entertainment, Inc. (1997) 53 Cal.App.4th 350, 367, citing Pedro v. Potter (1926) 197 Cal. 751, 760.) True, the sublease between MVMV and H&N had not been signed at the time the sub-sublease was executed. But a draft of the sublease was provided to defendants before they executed the sub-sublease. As defendants acknowledge, the draft sublease provided to them “is substantially the same” as the sublease MVMV and H&N later executed. Defendants therefore knew they would be subject to the limitations of the sublease, and were on notice of its specific limitations when they executed the sub-sublease.

Thus, CVS is bound by the anti-transfer provision of the sublease. Section 18(b) of the sublease provides that any assignment of the sublease or subletting of the premises without the written consent of the lessor is void. H&N’s consent therefore would have been meaningless as long as MVMV withheld its consent to the proposed assignment.

Moreover, if H&N had consented to the assignment from CVS to MIMG without obtaining MVMV’s permission, H&N would have breached the sublease, potentially allowing MVMV to terminate H&N’s sublease. H&N would have found itself in the same unhappy position as the lessee in Boston Properties, supra, 134 Cal.App.3d 985. There, a commercial lease provided: “‘Lessee will not . . . sublet all or any part of the Demised Premises, without the prior written consent of the Lessor in each instance, . . . [.] The consent by Lessor to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent . . . subletting.’” (Id. at p. 991.) The lessor had previously consented to the lessee’s sublease of the property. Although the sublease did not incorporate the master lease’s anti-transfer provision, the sublease generally stated that it was subject to the terms of the master lease. (Id. at p. 989.) The lessee then gave its consent to the sublessee to sub-sublease the property, but did not seek or obtain the lessor’s permission. The lessor successfully sued the lessee, obtaining possession of the premises and damages. (Id. at p. 988.)

On appeal, the lessee argued the master lease provision requiring the lessor’s consent for any sublease did not apply to the sub-sublease. Noting that the plain language of the lease prohibited the lessee from entering into any sublease of the premises without the lessor’s permission, the appellate court in Boston Properties reasoned: “Neither [the sublessee] nor anyone else subletting directly or indirectly from [the lessee] or in succession to [the lessee] or its sublessee had any greater rights under the master lease or to the demised premises than [the lessee] had. [The lessee] could not give [the sublessee] or anyone else any more than it had. Conversely, the failure of any successive sublessee to live up to the terms of the master lease could not, and did not, enlarge [the lessee]’s rights under that lease.” (Boston Properties, supra, 134 Cal.App.3d at p. 992.) Because the lessee granted permission for the sublessee to enter into the sub-sublease agreement without obtaining the lessor’s permission, the court upheld the trial court’s ruling awarding the lessor possession of the premises and damages. (Id. at p. 998.)

Defendants devote a considerable portion of their briefs arguing that MVMV unreasonably refused to consent to the MIMG assignment. The referee, however, never determined this issue and the failure to do so is not germane to the issues before us. Defendants opposed H&N’s action to recover lost rent on the grounds that H&N acted unreasonably when it refused to consent to the assignment. The parties stipulated, however, that H&N refused consent solely because of MVMV’s objection. Defendants in essence seek to place H&N between the Scylla of breaching the sublease by giving its consent, and the Charybdis of breaching the sub-sublease agreement by failing to do so. We decline to place H&N in this position.

Defendants challenge the referee’s finding that “permitting MIMG to move in against the wishes of MVMV would have resulted in litigation and perhaps jeopardized H&N’s own tenancy.” Although no direct evidence supports this finding, the referee could have inferred this fact from MVMV’s steadfast refusal to consent to the assignment coupled with section 18(g) of the sublease stating that any assignment or further sublease by H&N without MVMV’s permission constitutes a default entitling MVMV to terminate the sublease at its option. Defendant, however, cites evidence submitted in connection with posttrial motions demonstrating H&N had a direct or indirect interest in the medical building leased, thus demonstrating a close relationship between MVMV and H&N. Even accepting the evidence belatedly presented as true, it does not follow that H&N would not face litigation. Cases involving partners suing each other over business disagreements are legion. Absent a complete identity of interest between MVMV and H&N, we cannot say the referee’s finding was erroneous.

Defendants also note that Civil Code section 1995.310 authorizes H&N to sue MVMV for damages due to its purportedly wrongful refusal to consent to the assignment. But defendants also could have sued MVMV for its purportedly wrongful refusal to consent. (See Sade Shoe Co. v. Oschin & Snyder (1984) 162 Cal.App.3d 1174, 1179 [causes of action stated for interference with prospective business advantage and interference with contractual relations where complaint alleged landlord unjustifiably withheld consent to assignment of commercial lease]; Richardson v. La Rancherita (1979) 98 Cal.App.3d 73, 80-82.) In sum, we find no basis for disturbing the referee’s decision that H&N acted reasonably in refusing to consent to the MIMG assignment.

Civil Code section 1995.310 provides: “If a restriction on transfer of a tenant’s interest in a lease requires the landlord’s consent for transfer subject to an express or implied standard that the landlord’s consent may not be unreasonably withheld, and the landlord unreasonably withholds consent to a transfer in violation of the tenant’s rights under the lease, in addition to any other remedies provided by law for breach of a lease, the tenant has all the remedies provided for breach of contract, including, but not limited to, either or both of the following: [¶] (a) The right to contract damages caused by the landlord’s breach. [¶] (b) The right to terminate the lease.”

B. The Trial Court Did Not Err in Its Handling of Defendants’ Posttrial Motions

Defendants contend the trial court erred when it referred their posttrial motions to the referee instead of resolving the issues. We disagree.

The parties stipulated to a general reference under Code of Civil Procedure, section 638, subdivision (a), “[t]o hear and determine any or all of the issues in an action or proceeding, whether of fact or of law, and to report a statement of decision.” The statement of decision reported under a general reference “stand[s] as the decision of the court, and upon filing of the statement of decision with the clerk of the court, judgment may be entered thereon in the same manner as if the action had been tried by the court.” (Code Civ. Proc., § 644, subd. (a).) The statement of decision may be “excepted to and reviewed in like manner as if made by the court.” (Code Civ. Proc., § 645.)

Clark v. Rancho Santa Fe Assn. (1989) 216 Cal.App.3d 606, 623 (Clark) addressed whether the referee under a general reference may hear a new trial motion. There, the parties had stipulated to have the referee render a “‘complete and final adjudication’” of the matter. In determining whether the referee could hear posttrial motions, the appellate court not only relied on the broad language of the reference, but also the various statutes governing references and new trial procedures. In particular, Code of Civil Procedure section 661 provides that the same judge who presided at trial, if available, should hear the new trial motion. As Clark explains, the rule reflects the broad powers conferred on a judge in ruling on a new trial motion: “‘Such a motion is addressed to the judge’s sound discretion; he is vested with the authority, for example, to disbelieve witnesses, reweigh the evidence, and draw reasonable inferences therefrom contrary to those of the trier of fact; on appeal, all presumptions are in favor of the order as against the verdict, and the reviewing court will not disturb the ruling unless a manifest and unmistakable abuse of discretion is made to appear. [Citations.]’” (Clark, at p. 624.) Recognizing nothing in the broadly-worded stipulation could be read as limiting the referee’s power to hear the new trial motion, the court in Clark concluded the referee was the most appropriate person to hear the motion, noting: “[The referee] was most familiar with the facts and as well qualified as a sitting superior court judge to draw legal conclusions from those facts, such as the timeliness of the notice of intention to move for new trial and the grounds stated for new trial, the proper standard of decision upon the petition.” (Id. at p. 625.)

Defendants rely on Daverkosen v. Kelley (1872) 43 Cal. 477, which concerned a stipulation that the referee should “‘take the evidence and report a judgment.’” (Id. at p. 478.) After the referee’s ruling, the trial court granted a new trial, and the referee retried the case over the defendant’s objection. The Supreme Court reversed, explaining the stipulation ended the referee’s power upon reporting the judgment, and therefore the parties no longer were bound by their earlier stipulation and could demand a jury trial. (Ibid.)

Daverkosen does not control here. This 1872 decision predated the current statutes relating to references and new trials and therefore did not base its reasoning on legislative directives we are bound to follow. Moreover, the general reference here was not simply to “take the evidence,” but “[t]o hear and determine any or all of the issues in an action or proceeding, whether of fact or of law . . . .” Finally, Daverkosen never addressed whether the referee should hear the new trial motion, the precise issue raised here. Cases are not authority for propositions not considered. (People v. Barragan (2004) 32 Cal.4th 236, 243.) We conclude the trial court did not err by referring the defendants’ posttrial motions to the referee.

C. The Statement of Decision Did Not Omit Necessary Findings

Defendants contend the trial court erred in not setting aside the statement of decision and reopening the case for additional evidence. Specifically, defendants argue the statement of decision failed to address (1) whether some of the sublease provisions were incorporated into the sub-sublease; (2) whether MIMG’s proposed use of the premises was permitted under the lease agreements; and (3) whether MVMV’s refusal to give its permission for the assignment was unreasonable.

In defending the lost rent claim, defendants asserted H&N breached the contract by not approving the MIMG assignment over MVMV’s objection. We determined above, however, the sublease between MVMV and H&N limited CVS’s ability to assign its rights under the sub-sublease, even if the sub-sublease did not specifically incorporate the terms of the sublease. Moreover, the referee found that H&N did not act unreasonably in refusing its consent to the assignment due to the threat of litigation. In light of this, issues concerning MIMG’s proposed use of the premises or whether MVMV acted unreasonably in not consenting to the assignment were not germane. We therefore conclude the failure to address these specific issues in the statement of decision does not require us to set aside the judgment.

D. The Court Erred in Awarding Attorney Fees

Defendants contend the trial court erred in awarding H&N prevailing party attorney fees because the sub-sublease did not contain an attorney fee clause. We agree.

Under the American rule, each party to a lawsuit must ordinarily pay his or her own attorney fees. (Trope v. Katz (1995) 11 Cal.4th 274, 278.) The rule is codified in Code of Civil Procedure section 1021: “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation . . . is left to the agreement, express or implied, of the parties . . . .” Thus, the question whether the court erred in awarding fees turns on whether the parties agreed to prevailing party attorney fees.

The sub-sublease does not contain an attorney fee clause. H&N, however, contends that the attorney fee clause in the sublease was incorporated into the sub-sublease. In support, H&N cites portions of the sub-sublease referencing the sublease, including a provision that CVS “is subject to all the provisions of the Sublease. . . .” As we recognized above, “‘A sublessee is bound by the terms and conditions of the original lease; its rights are dependent upon and subject to the sublessor’s rights.’” (Boston Properties, supra, 134 Cal.App.3d, at p. 992.) This legal principle recognizes that “[the lessee] could not give [the sublessee] or anyone else any more than it had.” (Ibid.)

Although the sub-sublease was subject to the provisions of the sublease, it does not follow that the sub-sublease automatically incorporated all of the provisions of the sublease. In Pedro v. Potter (1926) 197 Cal. 751 (Pedro), the court considered the difference between a sublease being subject to a master lease’s provisions and a sublease incorporating the master lease provisions. There, the defendants signed a five-year lease on farming land, and subleased it to the plaintiff. The master lease provided that the lessor reserved the right to terminate the lease at any time by giving 60 days’ written notice to the lessees, and paying to the lessees “‘all loss and damage occasioned thereby.” (Id. at p. 754.) The sublease payments were payable semiannually, in advance.

Several months after executing the sublease, the lessor gave the requisite 60 days’ notice requiring the plaintiff subtenant to vacate the land. Although the sublease allowed the plaintiff to recover certain costs on termination, it did not provide for an apportionment of prepaid rent. To justify recovery of apportionment damages, the plaintiff relied on the following clause in the sublease: “‘This lease is made subject to the conditions of the lease of this property from the [lessor] to parties of the first part’. . . .” (Pedro, supra, 197 Cal. at p. 758.) The plaintiff asserted the sublease thus incorporated by reference the covenant in the master lease to “‘pay[] to the lessees all loss and damage occasioned thereby.’” (Ibid.)

The court rejected the plaintiff’s argument, noting the difference between making a sublease subject to the conditions of the lease, and making “all of the stipulations and agreements of the [master] lease a part of said subleases.” (Pedro, supra, 197 Cal.at p. 758.) Thus, the court concluded that although the plaintiff was subject to the master lease’s provision granting the lessor the right to terminate on 60 days’ notice, the plaintiff could not sue the defendants for damages under the master lease’s covenant to pay for loss and damage arising from the termination. (Id. at pp. 762-763.)

Reed v. South Shore Foods, Inc. (1964) 229 Cal.App.2d 705, reached a similar result. There, a sublessor attempted to rely on a “subject to” provision in the sublease to take advantage of a provision in the master lease requiring the lessor to give the lessee a 30-day grace period in the payment of rent. The court, relying on Pedro, ruled the sublessee could not take advantage of the provision for the grace period, observing: “The reason for the rule lies in the fact that the master lease and the sublease vest different estates and rest upon different agreements. Benefits conferred and considerations given for such benefits may be entirely different.” (Id. at p. 712.)

In the present case, the attorney fee provision represents an agreement only between MVMV and H&N, and is based on considerations separate from the exchanges in the sub-sublease. Thus, the defendants are not subject to the attorney fee provision.

Our conclusion that the attorney fee clause in a master lease is binding only on the parties to that agreement is bolstered by Selma Auto Mall II v. Appellate Department (1996) 44 Cal.App.4th 1672. There, the trial court required the petitioner and its codefendants to post a bond as a condition for a stay of execution of an unlawful detainer judgment. The bond amount included a set aside for attorney fees. Although the codefendants were parties to the master lease, the petitioner was a sublessee. Because the petitioner was not a party to the lease and there was no evidence the petitioner expressly assumed the lease obligations, the appellate court issued a write of mandate requiring the trial court to remove this condition as to petitioner. (Id. at p. 1687.)

In addition to the “subject to” language, H&N notes the sub-sublease provides: “The portions of the Sublease attached hereto are incorporated by reference into, and made a part of, this Sub-Sublease.” As H&N correctly notes, one contract may validly incorporate by reference the terms of another agreement. (Kleveland v. Chicago Title Ins. Co. (2006) 141 Cal.App.4th 761, 765.) The problem for H&N is that it failed to attach portions of the sublease to the sub-sublease. Clearly, the sub-sublease did not purport to incorporate all portions of the sublease; absent evidence the parties intended to incorporate the sublease’s attorney fee provisions into the sub-sublease, we must conclude the trial court erred in awarding H&N attorney fees. Accordingly, we modify the judgment to eliminate the attorney fee award.

IV

Disposition

The trial court’s attorney fee award is reversed. In all other respects, the judgment is affirmed. In the interests of justice, each party is to bear its own costs of this appeal.

WE CONCUR: SILLS, P. J. MOORE, J.


Summaries of

Head & Neck Associates of Orange County v. Coastal Vascular Specialists, Med. Corp.

California Court of Appeals, Fourth District, Third Division
Oct 17, 2008
No. G039159 (Cal. Ct. App. Oct. 17, 2008)
Case details for

Head & Neck Associates of Orange County v. Coastal Vascular Specialists, Med. Corp.

Case Details

Full title:HEAD AND NECK ASSOCIATES OF ORANGE COUNTY, Plaintiff and Respondent, v…

Court:California Court of Appeals, Fourth District, Third Division

Date published: Oct 17, 2008

Citations

No. G039159 (Cal. Ct. App. Oct. 17, 2008)