Opinion
A150274
11-29-2017
2437 PIEDMONT AVENUE, LLC, Plaintiff and Respondent, v. CHRISTINE SCHWARTZ, Defendant and 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG15794736)
In this landlord-tenant dispute, the owner of an apartment complex located in Berkeley, California, respondent 2437 Piedmont Ave, LLC (the landlord), sued its tenant Christine Schwartz for fraud, alleging Schwartz had concealed the fact that she no longer occupied her rent-controlled apartment as her primary residence. In the midst of pre-trial proceedings, the landlord voluntarily dismissed the action, and Schwartz then moved for an award of contractual attorney fees under an attorney fees provision of her lease. The trial court denied her fee motion and she now appeals, arguing the fraud claim fell within the scope of the fee clause and thus the trial court erred.
We conclude the attorney fees provision of the lease does not apply, and therefore we affirm the trial court's order denying Schwartz's request for attorney fees.
BACKGROUND
Schwartz' landlord commenced this action by filing a complaint against her containing a single cause of action for fraud. The landlord alleged that, in or about September 1995, Schwartz signed a lease and began living in an apartment complex it owned located at 2437 Piedmont Avenue in Berkeley, California, and that the apartment she occupied was subject to the rent control regulations of the City of Berkeley, which enabled Schwartz to enjoy substantially lower than market rent. The fraud claim was based on allegations that "[u]nder Berkeley law, Schwartz's lease of the rent-controlled apartment required that it be her primary residence"; yet, on information and belief, Schwartz at some point began living elsewhere as her primary residence instead, in an apartment in San Leandro, California, without disclosing that fact to her Berkeley landlord. The landlord alleged that, "[t]o avail herself of the rent control ordinance of the City of Berkeley, California, Defendant Schwartz was obligated to maintain the Piedmont [Avenue] Apartment as her primary residence, and she had a duty to inform Plaintiff of any change in that primary residence," and as a result of her "misrepresentations" that the Piedmont Avenue apartment was still her primary residence, the landlord "was unable to rent the . . . Apartment to a new tenant and charge market rent as allowed by law" which would have been significantly higher than Schwartz's rent. The landlord sought compensatory damages in excess of $25,000 as well as punitive damages.
Schwartz moved for summary judgment, and while the motion was pending the landlord voluntarily dismissed the action.
After the dismissal, Schwartz filed a motion requesting $55,932.50 in attorney fees and costs pursuant to paragraph 22 of her lease, which provides for an award of prevailing party fees and costs in actions brought "to enforce" the lease. In full, that provision states: "In any legal action or proceeding brought by either party to enforce any part of this Agreement, the prevailing party shall recover, in addition to all other relief, reasonable attorney's fees and costs." In support of her motion, she submitted a declaration attaching a copy of a 1995 lease that was largely illegible but for the fee provision. The owner was identified as "H.R. Reddy." Schwartz authenticated the document as the lease she had entered into with her landlord, "pursuant to" which "I have been a tenant at this unit since 1995."
The trial court denied the motion, on multiple grounds. Although it found her to be the prevailing party entitled to her recoverable statutory costs, the court declined to decide whether she was the "prevailing party" under the contract because it concluded Schwartz had not met her burden of showing an entitlement to fees under the contract "for several reasons." "First, although no party addresses this, Defendant did not introduce any evidence that Plaintiff 2437 Piedmont Ave., LLC ('Plaintiff') is a party to the [1995 lease]. Though the complaint herein alleges that Defendant executed the [1995 lease] and began living as a tenant at the subject premises in 1995, there is no allegation (and no evidence) that Plaintiff is the successor to 'H.R. Reddy' under the [1995 lease], or that the [1995 lease] remains in effect between Plaintiff and Defendant, as distinguished from a subsequent written, oral or implied agreement."
The trial court's second ground was that Schwartz hadn't demonstrated that the lawsuit was brought "to enforce" the lease within the meaning of its fee clause, citing numerous authorities. The court reasoned, "Aside from the reference in paragraph 6 [of the complaint] to [Schwartz's] having 'signed a lease' in 1995, there are no allegations that the instant action is based on the terms of that lease, much less is an action 'to enforce' [the lease]. Among other things, there is no cause of action for breach of contract (whether based on the [1995 lease] or otherwise); the [1995 lease] is not attached as an exhibit to the complaint; and the sole cause of action is one for 'fraud.' " The court also reasoned that "the [1995 lease] does not appear to contain a provision requiring that the premises be [Schwartz's] primary residence, and Plaintiff did not allege that it did; . . . Plaintiff alleged that the 'primary residence' requirement is based on 'the rent control regulations of the City of Berkeley and '[u]nder Berkeley law'; and . . . the sole cause of action for fraud does not allege that [Schwartz] violated the lease but instead alleges that '[t]o avail herself of the rent control ordinance of the City of Berkeley,' [Schwartz] 'was obligated to maintain the Piedmont Apartment as her primary residence, and she had a duty to inform Plaintiff [of] any change in that primary residence,' and thereafter made misrepresentations in this regard."
DISCUSSION
On appeal, Schwartz's primary argument is that the trial court misapplied the attorney fees clause of the lease. And as we recently observed, " 'The parties to a contract may agree that the prevailing party may recover attorney fees not only for work on contract causes of action but also for work attributable to tort and other noncontract claims. . . . For the fee clause to apply to noncontract claims, its language must be broad enough to clearly show that the parties intended it to do so.' " (Calvo Fisher & Jacob LLP v. Lujan (2015) 234 Cal.App.4th 608, 621-622, quoting 1 Pearl, Cal. Attorney Fee Awards (3d ed. 2014) § 4.3, p. 4-6 (rev. 3/14).) So the issue here, stated simply, is whether the fee clause in paragraph 22 of the lease is worded broadly enough to encompass the landlord's fraud claim against Schwartz. That is, whether the fraud claim was brought "to enforce any part of" the lease, within the meaning of that provision.
Although the argument is not captioned separately under an appropriate heading as it should be (see Cal. Rules of Court, rule 8.204(a)(1)(B)), Schwartz also addresses the trial court's determination that she failed to prove the 1995 lease was still in effect between these parties by asking us to take judicial notice of various records that were not before the trial court concerning the chain of title between the landlord named in the lease ("H.R. Reddy") and the present plaintiff, respondent 2437 Piedmont Ave., LLC. We previously took her motion for judicial notice under submission in order to decide it in connection with the appeal, the landlord has opposed it, and we now deny it. Generally an appellate court will not take judicial notice of evidence not presented to the trial court unless there are exceptional circumstances. (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [denying request].) "Rather, normally 'when reviewing the correctness of a trial court's judgment, an appellate court will consider only matters which were part of the record at the time the judgment was entered.' " (Ibid.) Nevertheless, it is unnecessary for us to address this alternative basis for the court's ruling, which the landlord does not address in its respondent's brief, because we conclude the attorney fees provision of the lease does not apply.
Both parties agree that our review of this issue is de novo because no extrinsic evidence was introduced to interpret the contract and the facts are not in dispute. (Exxcess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 705 (Exxcess Electronixx).)
A number of cases have construed similar language and have held uniformly that narrow contractual provisions such as this, authorizing the recovery of attorney fees in an action to "enforce" a contract, do not encompass tort claims, and our Supreme Court has indicated the same thing. (See Santisas v. Goodin (1998) 17 Cal.4th 599, 622, fn. 9 [fee provision of lease that was "narrowly drawn to cover only claims ' "to recover the possession of the demised premises, collect any money due . . . hereunder or enforce any other provision, condition or agreement of this lease" ' " did not apply to tort claims]; Exxcess Electronixx, supra, 64 Cal.App.4th at p. 709 [construing Santisas]; see also Casella v. SouthWest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1160-1162 [provision limited to attorney fees " 'incurred in enforcing or attempting to enforce any of the terms, covenants or conditions' " of employment agreement held inapplicable to tort claims for wrongful termination in violation of public policy and fraud]; Exxcess Electronixx, at pp. 708-709 [lease provision authorizing fee award in action or proceeding " 'to enforce the terms hereof' " held inapplicable to commercial tenant's claims for constructive fraud and breach of fiduciary duty against real estate broker who allegedly failed to disclose defects in premises]; Loube v. Loube (1998) 64 Cal.App.4th 421, 429-430 [provision of legal retainer agreement providing for attorney fees award " '[i]f legal action or arbitration is necessary to enforce the terms of this Agreement' " held inapplicable to legal malpractice claim, even though "professional negligence breaches a duty that exists only because the parties have a contractual agreement, and . . . constitutes both a tort and a breach of contract"]; DeMirjian v. Ideal Heating Corp. (1949) 91 Cal.App.2d 905, 910-911 [lease provision authorizing attorney fees award in any action " 'to enforce lessors' rights hereunder' " held inapplicable to commercial landlord's negligence claims against tenant for fire damage; "[i]f such unusual and extensive liability is to be created, it must be by clearly expressed agreement of the parties"].) We are aware of no case to the contrary, and Schwartz has cited none.
Instead, Schwartz contends Kangarlou v. Progressive Title Co., Inc. (2005) 128 Cal.App.4th 1174 (Kangarlou) supports her bid for fees, but her reliance is misplaced. Kangarlou did not involve the interpretation of an attorney fees clause but, rather, the application of Civil Code section 1717. It held the statute applied to an action for breach of fiduciary duties, thus making reciprocal a narrowly drawn, unilateral attorney fees clause and entitling the prevailing plaintiff to attorney fees, because the duties the defendant breached arose out of the parties' contract. (See id. at pp. 1178-1179.) Schwartz acknowledges the case "involved a claim for attorney fees under Civil Code Section 1717 and this case does not," yet "can fathom no reason why this Court should not apply the reasoning of Kangarlou" here. But the answer is to be found 11 pages earlier in her opening brief, at page 23: Civil Code section 1717, she writes, "is not implicated in the present case, as [her] motion for fees was not brought under it," is "irrelevant" and "does not apply." And she's right: that statute applies to any "action on a contract," a statutory phrase the courts construe liberally. (Civ. Code, § 1717, subd.(a); Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 821.) " ' " 'As long as the action "involve[s]" a contract it is " 'on [the] contact' " within the meaning of section 1717. [Citations].' " ' . . . Any action that is based on a contract is an action on that contract regardless of the relief sought." (Brown Bark III, L.P., at pp. 821-822.) The meaning of the statutory phrase "action on a contract," though, has no bearing on the meaning of the contractual language the parties to this lease used in its attorney fees provision.
The fee provision in that case stated: " 'In the event of failure to pay fees or expenses due [defendant] hereunder, on demand, I [plaintiff] agree to pay the attorney's fees and costs incurred to collect such fees or expenses.' " (Kangarlou, supra, 128 Cal.App.4th at p. 1177.) --------
Schwartz also argues that many of the foregoing authorities are distinguishable, and that this case presents "unique facts," because her tort claim is premised on a duty—i.e., the "primary residence" requirement—created by the contract, and so the fraud claim did seek to "enforce" the lease. It is unnecessary for us to decide whether that is a tenable legal distinction, however, and whether a fraud claim of that sort could be deemed to "enforce" a contract within the meaning of an attorney fees clause, because Schwartz's factual premise is wrong.
And it rests upon a rather stark misreading of the record. Schwartz's entire appellate argument, in fact, boils down to her position that she was required by her lease to maintain the apartment as her primary residence, and it is a contention she repeats no fewer than 13 times in her 53-page opening brief; and twice in her considerably shorter reply brief. Yet it is based upon a single, highly misleading and incomplete quotation from the record. The first occurrence is at page 12 of her opening brief, where she writes: "As stated by Respondent in the operative Complaint, paragraph 8: 'Schwartz's lease of the rent-controlled apartment required that it be her primary residence.' " Paragraph 8 of the complaint then becomes the sole record support in her briefs, cited over and over again, for this position. In its entirety, though, the quoted sentence in paragraph 8 of the complaint reads as follows (and we italicize the portion selectively omitted from Schwartz's briefing): "Under Berkeley law, Schwartz's lease of the rent-controlled apartment required that it be her primary residence."
Schwartz not only misquotes the record, she also ignores what the trial court said on this subject: the lease "does not appear to contain a provision requiring that the premises be [Schwartz's] primary residence, and Plaintiff did not allege that it did." (Italics added.) We could say that her failure to confront this adverse factual finding is a waiver, but we needn't go so far. Suffice it to say, her appellate position is defied by this record: by the complaint, by the only copy of the lease that is in evidence, and by the trial court's ruling.
In fact, in a footnote, Schwartz acknowledges she is "not certain" whether the lease expressly requires her to maintain the apartment as her primary residence. Nevertheless, she asserts in that same footnote, in passing, that the primary residence requirement "is either an express provision of the written lease, a covenant implied into that lease by Berkeley law, or both." But she doesn't explain how or why such a requirement must be "implied" into the lease, nor does she cite any legal authority bearing on the question. The point is therefore waived. (See Cinema West, LLC v. Baker (2017) 13 Cal.App.5th 194, 218-219.) And that is doubly true, because the "implied by law" point is relegated to a footnote where appellate arguments don't belong. (See Committee for Re-Evaluation of the T-Line Loop v. San Francisco Municipal Transportation Agency (2016) 6 Cal.App.5th 1237, 1242, fn. 7.)
In sum, the landlord's fraud claim against Schwartz for allegedly failing to disclose that, in violation of Berkeley's rent control law, she was not occupying her apartment as her primary residence was not an action to "enforce" the lease within the meaning of the attorney fees provision of paragraph 22. As sympathetic as we might be to Schwartz for incurring the expense of litigation that she believes was motivated by high-pressure tactics of a landlord bent on dispossessing her of her rent-controlled unit and that ultimately went nowhere, we cannot rewrite paragraph 22 to make it broader than it is. (See Exxcess Electronixx, supra, 64 Cal.App.4th at p. 712.)
DISPOSITION
The order denying attorney fees is affirmed. Respondent shall recover its costs on appeal.
/s/_________
STEWART, J. We concur. /s/_________
RICHMAN, Acting P.J. /s/_________
MILLER, J.