Opinion
A150984
10-15-2018
COLETTE SAVAGE, Plaintiff, Appellant, and Cross-Respondent, v. MARK SAVAGE, Defendant, Respondent, and Cross-Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Mateo County Super. Ct. No. PRO-124417)
This is an appeal and cross-appeal from an order denying cross-motions for contractual attorney fees and denying a motion to tax costs. The probate court ruled "there was no prevailing party in this action" and denied both motions for fees and denied appellant Colette Savage's motion to tax. We affirm, but not for the reasons identified by the probate court, which included that it did not set aside the two promissory notes at issue on any of the grounds asserted by Colette, and that defendant Mark Savage could have avoided nearly all fees had he made a competent evidentiary showing at the outset of the proceeding that the two notes in dispute "had in fact been cancelled."
Rather, as we explain, the probate court lacked subject matter jurisdiction over this personal dispute between siblings Colette and Mark. Accordingly, the court had no power to adjudicate their contractual dispute, and the court should have sustained Mark's jurisdictional objection and dismissed Colette's petition. However, while Mark should have obtained a quick procedural dismissal of Colette's petition, we nevertheless conclude the trial court's no-prevailing-party determination should be affirmed under our Supreme Court's decision in DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968 (DisputeSuite.com).
BACKGROUND
We need not recount all of the details of this lengthy probate case, as much of it is not material to our disposition. Suffice it to say the case was commenced in April 2014 with the filing of a petition for appointment of a conservator of the person and estate of Colette's and Mark's mother by the son of Colette's and Mark's half-brother, Steven Sommer. Apparently, there was a rift within the family—between Colette and Mark, on the one hand, and their half-brother, on the other—and this extended to the appropriate care of their aged and infirm mother.
Within several weeks, the court appointed a professional fiduciary as conservator. Because their mother's assets were largely held in a living trust, the court also appointed the professional fiduciary as successor trustee (replacing Mark), and the trust proceeding was subsumed within the conservatorship proceeding, with the two matters carrying the same probate case number.
Colette's, Mark's and Steven's mother died several months later, and in November 2014, the probate court approved the conservator's first and final report and the conservatorship ended.
The trust proceeding, however, continued. The following month, in December 2014, Steven's daughter filed a petition contesting the trust, which provided for numerous specific cash bequests, but left the bulk of the trust property to Colette and Mark. This dispute was assigned a different probate case number and in July 2015, it was voluntarily dismissed.
Six months after the trust contest was dismissed, Colette, on December 31, 2015, filed a petition in the instant trust proceeding to "set aside promissory note[s] to Mark Savage." Colette sought an order "determining to the maximum extent possible" that two notes with California choice of law provisions (which the parties and probate court referred to as the "California notes") in favor of Mark in connection with an ostensible $240,000 loan were "void (or at least satisfied in full and set aside)" so she would have "undisputable evidence for use in Texas, or elsewhere, to establish that any underlying original obligation owing to Mark is satisfied in full and is unavailable to support any Texas security or foreclosure or other enforcement actions by Mark, in Texas or otherwise." Colette claimed Mark had pressured her into signing the California notes in order to help him financially and to help alleviate his personal trauma over the situation with their mother and the attacks by their half-brother's family. She alleged the California notes failed for want of consideration, were "not an enforceable gift," were a breach of fiduciary duties owed to her, an abuse of Mark's power as trustee, and were the result of "undue influence." Colette maintained her claims against Mark were "related" to the trust and therefore within the jurisdiction of the probate court because the parties contemplated (a) that the amount she owed Mark would be reduced to the extent Mark's expenditure of personal funds was "reimbursed" by the trust and (b) that she would repay Mark once she received the distribution to which she was entitled under the terms of the trust. She also claimed that for several of the months during which the parties "negotiated" the notes, Mark was the trustee of their mother's trust and held a power of attorney.
As best we can tell from the record, the "two" notes refer to a note bearing Colette's signature of June 3, 2014 and an identical note bearing Colette's signature, again dated June 3, 2014, and also bearing a second signature by her dated June 26, 2014, as well as two other signatures dated June 26, 2014 (apparently witnesses).
The probate court allowed Mark reimbursement for "gifts" to family members made with his personal funds in the amount of $18,835.52, but refused to allow recovery for any additional expenditures, ruling they were personal expenses.
In the meantime, Colette had also filed a civil action in the federal district court in San Francisco against her half-brother and his family, and others, alleging claims for emotional distress, invasion of privacy, interference with her "expected inheritance," and malicious prosecution.
In January 2016, Colette filed a "Supplement" to her petition. She alleged that she had sought a temporary restraining order (TRO) in a Texas court to stop Mark from proceeding with "nonjudicial foreclosure" on Texas properties securing a third note she had apparently executed in Texas in connection with the $240,000 loan, which had matured on January 1. Colette took issue with assertions Mark had allegedly made in the Texas court in opposing the TRO, namely that the consideration for the loan included a $7,000 loan he had previously made to her, funds he had given her to pay her taxes, and payment for legal work from which she benefitted and for which he paid with his personal assets. Apparently, the Texas court denied her request for a TRO, as she further alleged she had had to "buy back" her property for $10,001, and she claimed this amount, and numerous fees and costs, as additional damages she wanted the probate court to award to her in her dispute with Mark.
The following month, Mark filed an "Objection" to Colette's petition asking that it be dismissed with prejudice on the ground the probate court lacked subject matter jurisdiction. Mark maintained the dispute was a matter between him and his sister concerning notes they had executed in their personal capacities to repay Mark for financial assistance he purportedly had provided to Colette from his personal resources. He also pointed out the trustee had advised the court that Colette's petition did not request any relief that affected the trust.
Colette then filed a second "Supplement" to her petition. She continued to assert the probate court had subject matter jurisdiction over her claims against her brother, alleging that even if Mark was not in fact the trustee when she signed the California notes, she "believed" that he was. She further claimed Mark had, in any case, continued to use "the influence" he had once had as the original trustee to pressure her into executing the notes and thus he had breached "fiduciary duties" owed to her "whether or not he was technically trustee" when she executed the notes.
In mid-March, the probate court held a "trial-setting" conference, at which the court and counsel for Colette and counsel for Mark discussed Mark's jurisdictional objection. Colette's counsel asserted the dispute was related to the trust. Mark's counsel asserted the matter was a personal dispute between two Texas residents. He further stated the two California notes were unsecured, and Colette and Mark had executed the third note in Texas in order to secure the loan with a deed of trust on Colette's Texas real property. Counsel asked that the matter be dismissed or stayed pending the conclusion of the Texas litigation. The probate court concluded there was "no real jurisdictional issue" because the two notes were executed in California, the parties had appeared, and the trust was "clearly" "affected by the note[s]" because the parties contemplated repayment by Colette after, and with, her distribution from the trust.
The court next considered Mark's alternative request for a stay. In the course of this discussion, Mark's counsel reiterated that the California notes were not secured and there had been no action to enforce them. The court then asked whether there had been "a request to cancel them," and counsel responded there had not been. Counsel added he did not see any point in cancelling, as the third note in Texas was in full force and effect and was being litigated in Texas. The court then asked if the California notes were a "duplicate" of the Texas note. Counsel responded they were not "necessarily" duplicative and agreed with the court that the Texas note was "a separate and different note." Counsel immediately pointed out, however, that all the notes memorialized "the same debt." The court made no ruling as to a stay and allowed Mark to file a written motion to stay.
At the close of the hearing, counsel for the trustee stated the trustee was "neutral" and asked if the trustee could be taken off the service list for papers pertaining to the dispute between Colette and Mark since they were immaterial to the trust and resulted in an unnecessary expenditure of trustee time in reading and filing them. The court agreed there was "no reason for the trustee to participate" in the litigation between Colette and Mark, but did not believe it could change the service requirement.
Two weeks later, Mark filed a declaration by his attorney advising the court Mark would not be filing a motion to stay, and counsel had, instead, notified Colette's attorney that the two California notes "are extinguished" and asked that she file a request for dismissal.
Colette responded with a "Third" supplement to her petition. This document purported to be an effort "to connect" a proposed order submitted with the supplement "to the existing record" and "to formally request" that the probate court "adopt" the proposed order. Colette also filed an "Objection" to the declaration submitted by Mark's attorney, objecting to counsel's statement that the California notes are "extinguished" as "in-admissible hearsay and double hearsay" and improper "opinion testimony" by an attorney that was "not rationally based on his perceptions, is not helpful to any issue, and opines as to an issue of law which will not assist the trier of fact."
In May, the probate court (a different judge) held another trial setting conference. Mark's attorney got stuck in traffic and was late. Before he arrived, Colette's attorney told the court there no longer appeared to be any dispute about the notes, pointing to the letter from Mark's attorney to which he had filed a vociferous objection, but which he now characterized as "effectively declaring the case over." Counsel assured the court that Colette's proposed order was "correct" and Mark's counsel had received it and made no objection. He further asserted Mark had never disputed "the substance of the allegations" of Colette's petition, either "factually or legally," and that "this part of the conservatorship" could be wrapped up by signing the proposed order.
The court then asked the trustee's attorney what the trustee's position was. Counsel again responded: "My client takes no position on the moving papers. No opposition."
As the court was looking for the proposed order, Mark's attorney appeared, and the court called a recess to allow counsel to collect himself. Mark's attorney then explained at length why Mark did, indeed, oppose Colette's petition and object to the proposed order. In reply, Colette's attorney insisted the proposed order accurately recited the facts and that it would "completely establish[] the invalidity, the voidness, the ineffectiveness of all of this transaction" between Colette and Mark, leaving only the determination of the damages owing to Colette from Mark and of reasonable attorney fees under the fee provision in the notes. There continued to be mention of the Texas court proceedings, with Mark's counsel stating he understood that Mark was about to file a motion for summary judgment and Colette had just filed a motion to recuse the judge.
The probate court refused to sign Colette's proposed order and set a trial date.
Thereafter, Colette and Mark litigated discovery disputes, with Mark ultimately being ordered to provide discovery and appear for deposition.
The parties appeared before the probate court again in August to reschedule the trial date. Counsel for the trustee again stated on the record that the trustee had no interest in the dispute and asked whether the court wanted the trustee and counsel to appear at trial: "We would like clarification, if possible this morning, whether or not the court wants us present. We have nothing to offer to the trial, but we are willing to be there if you would like us there." Counsel for both Colette and Mark stated they saw "no reason whatsoever" for the trustee to be present, with Mark's attorney commenting "this is a civil dispute between two parties as to a promissory note." The court accordingly excused the trustee and his attorney from appearing at the trial. It then set a new trial date, whereupon Mark's attorney stated Mark intended to file a formal motion to stay pending the conclusion of the Texas litigation.
Colette's petition was finally called for trial in late September. At the outset, the court stated in-chambers discussions had been held and the "critical issue," in the court's view, was "whether or not there has been extinguishment of the notes which are the basis for relief in this matter," referencing the declaration and letter from Mark's attorney. Observing that Colette had made evidentiary objections to the declaration and letter, the court reiterated that, "the key issue is, do these notes continue to exist, or do they not." Mark's attorney responded that the Texas note "continue[d] to exist" and "replaced the California notes," and confirmed that the California notes "had been extinguished." The problem, said the court, was that Mark had not submitted any admissible evidence of that. Counsel then offered testimony by Mark, who was duly sworn and testified he was not seeking to enforce the California notes and that they had "been cancelled."
With that testimony, the court ended the trial and ruled it was "satisfied that the notes have been cancelled." The court refused to hear testimony or argument that the California notes had been replaced by the Texas note, ruling that was a matter for the Texas court to decide (and also indicating the Texas court had granted partial summary judgment for Mark). Given that the California notes had been cancelled, the court pronounced that that "determine[d]" the matter before it. Colette's attorney took issue with the court's limited, cancellation ruling, claiming the court had subject matter jurisdiction even "beyond the California notes" to resolve all of Colette's substantive claims about the purported debt, including whether or not the Texas note replaced the California notes. Unmoved, the court proceeded to deny Mark's stay motion as moot and denied Colette's motion for sanctions. The court then ruled from the bench that the two notes had "been cancelled" and therefore there was "nothing to litigate," and ordered the matter "dismissed." It further stated, in response to further objections by Colette, that "[t]o the extent there is a Texas action pending, this court's rulings are not intended to have . . . any effect on that" and that it would not rule on the Texas note. The court issued a written order memorializing its ruling in late October.
Thereafter, Colette and Mark filed cross-motions for contractual attorney fees, and motions to tax their respective memoranda of costs. We need not, and do not, discuss the details of their copious moving and opposing papers. Suffice it to say, the motions were hotly contested, with each party leveling numerous accusations against the other.
The attorney fees motions and motions to tax came on for hearing in late January 2017. The arguments largely focused on the court's query, at the outset of the hearing, why the matter had not been resolved quickly after Colette filed her petition, given that Mark ultimately testified the California notes had been cancelled. Mark's perspective was that Colette sought far more than mere cancellation of the notes—that she wanted a ruling that the underlying debt was invalid and unenforceable, which she could employ in the Texas litigation to defeat any effort by Mark to recover on the loan. As Mark saw it, this was why Colette had never asked him for cancellation and why she had objected to his attorney's declaration and letter stating the California notes were extinguished. Colette, in turn, maintained she had asked her brother many times "to tear up the notes" (apparently, this included the Texas note) and claimed Mark's assertion that the Texas note "replaced" the California was belatedly advanced, "contradicted" earlier statements under oath by Mark, and was meritless. In short, Colette continued to argue that the Texas note did not "replace" anything and the California notes and the Texas note were one and the same. She also pointed out she had properly objected to Mark's lawyer's declaration and letter, detailing the evidentiary infirmities of these documents. She also complained that because of Mark's counsel's "peculiar" "burnt leg incident"—which resulted in a continuance of the trial date—the Texas court had been "allowed" the time to grant partial summary judgment for Mark, which she claimed would not have happened had the trial date been maintained in the instant proceeding. At the close of arguments, the court stated—"I don't agree with either counsels' characterization of the state of affairs, frankly. It is ridiculously complicated for what is really a simple issue, and has been from the outset of this litigation"—and took the motions under submission.
The court issued a written order on February 1, 2017 (filed February 3), denying the cross-motions for attorney fees on the ground there was no prevailing party. The court noted that "simultaneous actions to collect various promissory notes were being litigated by Colette Savage and Mark Savage in both this court and in a Texas court" and that "[m]ost of the litigation effort that took place before the San Mateo Court sought determinations by this court concerning the California notes that were calculated to affect the outcome of the Texas action." (Italics added.) The "only aspect" of that litigation effort "that affected the ultimate outcome of this case," said the court, "was the appearance and testimony of Mark Savage at trial that the two California notes were cancelled." The order also denied Colette's motion to tax costs.
DISCUSSION
The Probate Court Lacked Subject Matter Jurisdiction
After reviewing the record in this appeal and cross-appeal, we requested supplemental letter briefs on whether the probate court had subject matter jurisdiction over the claims made by Colette in her petition. We have reviewed both party's submissions.
While probate courts are courts of "general jurisdiction" (Prob. Code, § 800), that does not mean a probate court has jurisdiction over any dispute put before it by individuals who happen to be involved in a probate matter. What it means is that probate courts have the same powers that are invested in the superior courts to resolve the matters that are properly before them. (See Code Civ. Proc., § 128 [enumerating "powers of courts"]; see e.g., Estate of Kraus (2010) 184 Cal.App.4th 103, 113-114 [probate court has jurisdiction to order misappropriated funds and statutory penalties placed in estate for future distribution; even apart from statutory authority, probate court is a court of general jurisdiction with broad equitable powers]; Estate of Beard (1999) 71 Cal.App.4th 753, 773-774 [as court of general jurisdiction, probate court has jurisdiction to set aside preliminary order for distribution of estate if judgment is void on its face or on basis of equitable jurisdiction to correct extrinsic fraud or mistake]; see generally Ross & Cohen, Cal. Practice Guide: Probate (The Rutter Group 2017) ¶ ¶ 3:60.6, 3:60.16, pp. 3-22 to 3-25.)
Probate Code section 800 provides: "The court in proceedings under this code is a court of general jurisdiction and the court, or a judge of the court, has the same power and authority with respect to the proceedings as otherwise provided by law for a superior court, or a judge of the superior court, including, but not limited to, the matters authorized by Section 128 of the Code of Civil Procedure."
At a minimum, however, a dispute properly before a probate court must involve or affect the estate, conservatorship or trust that is before the court. (See Estate of Jimenez (1997) 56 Cal.App.4th 733, 735, 739-740 ["[a]lthough the probate court has all the powers of the superior court when considering cases brought before it under the Probate Code, its jurisdiction is limited in the sense that it exercises only such powers over decedents' estates as conferred upon it by statute," and holding probate court had no jurisdiction over petition to disinter the decedent and recover damages from funeral home and other parties "responsible" for allegedly wrongful burial]; see generally Ross & Cohen, Cal. Practice Guide: Probate, supra, ¶ 3:54, pp. 3-18 to 3-19 ["once probate jurisdiction attaches over a decedent's estate, the court may determine all claims in and to, for and against and affecting the estate"], ¶ 3:60.15, p. 3-24 ["the authority to grant 'equitable' relief is contingent on the probate court's having jurisdiction over the particular proceeding: i.e., unless the controversy involves the administration or distribution of a decedent's estate or trust, the probate court has no 'equitable power' in the matter."].)
Although the Rutter Group practice guide states the jurisdictional holding in Jimenez "is almost certainly wrong because it ignores Prob.C. §800" (Ross & Cohen, Cal. Practice Guide: Probate, supra, ¶ 3:56.3, p. 3-20), we note that in the decade since that case was decided no court has disagreed with its holding or suggested it is incorrect. Nor do we share the view the case was wrongly decided. --------
The problem in the instant case is that the dispute between Colette and Mark has nothing to do with the trust proceeding that has remained pending following the death of their mother. The trust was not a party to the California notes, nor did it own or have any other interest in the notes. It had no right to receive any payment due under the notes, nor did it have any repayment obligation in connection with the notes. Rather, the notes evidenced a personal repayment obligation Colette purportedly owed to her brother, supposedly for personal funds he advanced and personal resources he provided to her. In short, this was a personal dispute between Colette and her brother over a private debt that had nothing to do with the administration or distribution of the trust.
Indeed, the trustee (the private fiduciary who was appointed conservator of their mother's person and estate and subsequently appointed successor trustee of their mother's then revocable trust) repeatedly made this clear—taking "no position" on the contract dispute between Colette and Mark and stating the dispute did not affect the trust. In fact, the trustee asked to be excused from appearing at the trial because the trust had no interest in the outcome. Colette and Mark concurred, and the court granted the trustee's request. The scope of the probate court's jurisdiction simply cannot be stretched to include a civil matter between two parties that has nothing to do with, and no effect on, the estate, conservatorship or trust before the court.
The fact the parties were already litigating in Texas over the third note they executed, further underscores that Colette's dispute with Mark over whether she was obligated to repay him for funds and services he provided to her was a personal dispute between the two siblings and had nothing to do with their mother's trust.
Thus, while the scope of probate jurisdiction is generous with respect to disputes that concern the ownership and extent of the assets of the estate or trust before the court, or the acts of the executor, conservator or trustee, it does not extend to a dispute in which the estate, conservatorship or trust has no interest and which does not in any way affect the management or handling of the estate, conservatorship or trust.
Although Mark repeatedly claimed in the probate court that it had no subject jurisdiction over the contract claims Colette was asserting against him, in his letter brief he now maintains otherwise, apparently so he can leverage the court's extinguishment ruling. Mark cites Estate of Baglione (1966) 65 Cal.2d 192 (Baglione). In that case, the widow of the decedent filed a proceeding to determine heirship, claiming she had both a community interest in and a contractual right to "certain real property in [the decedent's] estate." (Id. at p. 194.) While the probate court upheld her community property interest, it declined to hear her contract claim on the ground it lacked jurisdiction. (Ibid.) The Supreme Court held the probate court had had jurisdiction because "[w]hen a party invokes the jurisdiction of a court sitting in probate by asserting a substantive right in a particular piece of property or in certain assets as an heir, legatee, or devisee, he may also obtain a judgment in that court determining any additional claims that he asserts against those in privity with the estate in the same property." (Id. at p. 196.) "The rationale for this exception" to a probate court's otherwise statutorily circumscribed jurisdiction said the court "is the conservation of time, energy, and money of all concerned. To deny a superior court sitting in probate the power to determine the whole controversy between the parties before it is pointless. In the exercise of its legal and equitable powers [citations], a superior court sitting in probate that has jurisdiction over one aspect of a claim to certain property can determine all aspects of the claim." (Id. at p. 197.)
Thus, Baglione is significantly different from the case at hand. In that case there was a dispute between the heirs over the ownership of property included in the decedent's estate. Here, in contrast, Colette and Mark are quarreling over two notes they executed, as between themselves, and in which their mother's trust has no interest whatsoever. There is no "aspect" of this personal dispute that was ever within the probate court's jurisdiction and to which any other "aspect" of their dispute could be appended for jurisdictional purposes. (See Baglione, supra, 65 Cal.2d at pp. 196-197.)
Mark also now urges, despite repeatedly arguing to the contrary in the probate court, that Colette's contract claims "affected" the trust proceedings because he and Colette contemplated that Colette might repay Mark after the trust assets were distributed and she received her share, and that Colette would receive credit for any reimbursement Mark received for trust expenses that he had paid with personal resources during the few months he was trustee. As Mark points out, the California notes stated, in pertinent part: "Colette Savage . . . hereby promises to pay to the order [of] Mark L. Savage . . . the principal sum of $240,00 on or before January 1, 2015 or upon distribution of Savage Trust Funds to be deducted by any reimbursed funds by Savage trust."
To begin with, this provision does not tie Colette's repayment obligation to the trust—the notes were due and payable on January 1, 2015, regardless of the status of the trust proceedings. And, indeed, by the time Colette filed her petition "to set aside" the notes on December 31, 2015, the notes had been due and payable for nearly a year. In short, Colette's repayment obligation was triggered by events wholly outside the probate proceedings. Furthermore, the fact Colette and Mark contemplated that if the trust was distributed before January 1, 2015 (which it was not), Colette would repay Mark at the time of distribution, presumably with some of the funds she received, did not make their contractual dispute "related" to the trust—once trust assets are distributed, they are no longer trust assets, but the property of the recipient to use however he or she sees fit. Thus, notably, Colette's petition did not seek any instructions to the trustee as to the management or distribution of the trust. As the trustee repeatedly stated, the dispute between Colette and her brother as to their rights and obligations under the notes had no bearing on the management of the trust or the distribution of trust assets.
In the probate court, Colette urged a number of other theories as to why the probate court had jurisdiction to hear her contract dispute with her brother. These ranged from a claim that she and Mark had some negotiations about the terms of the notes "while" Mark was still the trustee, to an assertion that, even if he was not the trustee, she felt pressured by the powers he had once held and she continued to rely on fiduciary duties he had once owed her as trustee, to a claim that repayment of the notes effectively transferred her distribution to Mark, since the parties contemplated she might repay Mark after the trust assets were distributed and she received her share of those assets. None of these theories has merit.
Rather, the salient facts are simply these: The California notes are not property of the trust, the trust has no interest in or obligations under the notes, and the outcome of this personal dispute between Colette and her brother will not affect the management and handling of their mother's trust in any way, as the trustee repeatedly stated in asking to be excused from service of Colette's and Mark's copious filings and from attending the trial on Colette's petition. The probate court therefore should have sustained Mark's jurisdictional objection and dismissed Colette's petition at the first hearing on the matter.
The Denial of Attorney Fees
The question then becomes whether the probate court's denial of attorney fees to both Colette and Mark should nevertheless be affirmed.
We first conclude that even though the probate court had no subject matter jurisdiction to hear the contract dispute between Colette and Mark, it did have jurisdiction to rule on the cross-motions for attorney fees and Colette's motion to tax. In Barry v. State Bar of California (2017) 2 Cal.5th 318 (Barry), our Supreme Court held that a defendant who prevails on a special motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16) on the ground the trial court lacks subject matter jurisdiction over the dispute may be awarded statutory attorney fees. (Barry, at pp. 320-321.) The court first concluded that when a trial court rules it lacks subject matter jurisdiction, the court has not heard the merits of the claim and thus has not impermissibly exceeded its jurisdiction. (Id. at pp. 324-325.) The high court secondly concluded that a trial court that grants a special motion to strike on jurisdictional grounds can also award statutory fees and costs. (Id. at pp. 325-326 ["[t]his conclusion is consistent with the conclusions of federal courts that have held that a court that lacks jurisdiction to determine the merits of an action may nevertheless consider 'collateral issues' such as whether the prevailing party should be awarded its litigation expenses"].) In connection with this latter point, the court rejected the assertion that when a trial court lacks subject matter jurisdiction, a defendant cannot possibly "prevail" within the meaning of the anti-SLAPP statute. (Id. at pp. 327-328.) "A defendant that successfully moves to strike . . . , whether on merits or non-merits grounds, has 'prevailed' on the motion" and therefore is entitled to statutory fees. (Id. at p. 327.)
While Barry dealt with statutory attorney fees, the case nevertheless provides guidance on two pertinent points—first, that a trial court that dismisses a case for lack of subject matter jurisdiction has the residual power to award fees and costs when they are recoverable by the prevailing party, and second, that a defendant who secures a dismissal on the ground of lack of subject matter jurisdiction can be designated the "prevailing" party.
We next conclude, however, that under a different Supreme Court case—DisputeSuite.com—the denial of contractual fees here should be affirmed. In DisputeSuite.com, the high court affirmed a no-prevailing-party determination and denial of contractual attorney fees where the defendant procured a dismissal under a forum selection clause. (DisputeSuite.com, supra, 2 Cal.5th at p. 971.) The court first reiterated the relevant law: "The trial court ruling on a motion for fees under [Civil Code] section 1717 is vested with discretion in determining which party has prevailed on the contract, or that no party has. (Hsu v. Abbara [(1995)] 9 Cal.4th [863,] 871 . . . (Hsu).) 'If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees.' (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109. . . .) As we explained in Hsu, a party who obtains an unqualified victory on a contract dispute, including a defendant who defeats recovery by the plaintiff on the plaintiff's entire contract claim, is entitled as a matter of law to be considered the prevailing party for purposes of [Civil Code] section 1717. (Hsu, supra, at p. 876.) But 'when the results of the [contract] litigation are mixed,' the trial court has discretion under the statute to determine that no party has prevailed. (Ibid.)" (DisputeSuite.com, at p. 973.)
The court went on to conclude that the trial court had not abused its discretion in concluding neither party had prevailed. "While Score had succeeded in enforcing the forum selection clauses in two of its agreements with DisputeSuite, it had not defeated DisputeSuite's breach of contract and related claims. Because none of those claims had yet been resolved and the litigation was still ongoing in Florida, the California trial court was in no position to 'compare the relief awarded on the contract claim or claims with the parties' demands on those same claims . . . ; that comparison could be made only 'upon final resolution of the contract claims.' " (DisputeSuite.com, supra, 2 Cal.5th. at p. 974, quoting Hsu, supra, 9 Cal.4th at p. 876.) "In obtaining dismissal in favor of a Florida venue, Score did not defeat DisputeSuite's breach of contract and related claims, but succeeded only in moving their resolution to another forum. . . . Far from 'obtain[ing] a "simple, unqualified win"' on the contract claims [citation omitted], Score merely obtained a different forum in which to oppose them. Such a victory was insufficient to make Score the prevailing party as a matter of law." (DisputeSuite.com, at p. 975.)
The high court observed that a defendant obtaining an involuntary dismissal might be a prevailing party for purposes of contractual fees "[i]f refiling in another forum would be legally barred—by the statute of limitations, for example—or would be otherwise impossible or impractical." (DisputeSuite.com, supra, 2 Cal.5th. at p. 975.) But that was not the case in DisputeSuite.com. Nor is it the case here. On the contrary, when Colette filed her petition in the probate court, she and Mark were already litigating their contractual dispute in Texas.
The Supreme Court in DisputeSuite.com also rejected the defendant's assertion that upholding a no-prevailing-party determination after a successful motion to dismiss would invite "forum abuse" if defendants could not obtain fees for enforcing forum selection clauses. The court commented "fees may ultimately be shifted should the defendant prevail in the contract action" (and also include the fees incurred in connection with dismissal of the California case), and, further, if the plaintiff filed in California "for an improper purpose, such as to harass the defendant or cause him or her needless litigation costs," the defendant "could seek sanctions under Code of Civil Procedure section 128.7." (DisputeSuite.com, supra, 2 Cal.5th at pp. 977, fn. 1, 981.)
We recognize the circumstances in the instant case are not identical to those in DisputeSuite.com. However, the circumstances bear sufficient similarity to those in DisputeSuite.com to warrant the same outcome—that the probate court's no-prevailing-party determination and denial of contractual attorney's fees should be affirmed.
The Denial of the Motion to Tax Costs
Colette also challenges the denial of her motion to tax costs. The thrust of her argument is that she should have been declared the prevailing party as that term is defined in the cost statute, Code of Civil Procedure section 1032. Thus, it appears she is challenging the denial of her motion to tax principally as additional support for her challenge to the denial of her motion for attorney's fees. As we have discussed above, given that the probate court lacked subject matter to hear Colette's petition and should have dismissed it at the earliest opportunity, we cannot, under DisputeSuite.com, say that the court abused its discretion in denying contractual attorney's fees to either Colette or Mark. We therefore need not, and do not, further address her motion to tax to the extent it was directed at Mark's claim for contractual attorney fees.
Mark also claimed costs for filing fees and depositions (totaling $2,857.20), and to the extent Colette is challenging the probate court's order denying her motion to tax as to these costs, the question before us is, again, whether the denial order should be affirmed, given that the probate court lacked subject matter jurisdiction and should have dismissed Colette's petition. The unequivocal answer is, "yes." When a case is dismissed for lack of subject matter jurisdiction, the defendant is the prevailing party as that term is defined in the cost statute and, as such, is "plainly entitled to recover its costs as a matter of right." (Brown v Desert Christian Center (2011) 193 Cal.App.4th 733, 738.)
DISPOSITION
The order denying Colette's and Mark's motions for contractual attorney fees and Colette's motion to tax costs is affirmed. Parties to bear their own costs on appeal.
/s/_________
Banke, J. We concur: /s/_________
Margulies, Acting P.J. /s/_________
Dondero, J.