Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. LC075336, Richard B. Wolfe, Judge.
Kenneth A. Freedman for Plaintiff and Respondent Jonathon R. Bates.
Law Offices of Arthur D. Hodge and Arthur D. Hodge for Plaintiff and Respondent Markus S. Shepherd.
Abrams, Tofer & Reghabi and Alan K. Abrams; Ronald P. Kaplan for Defendants and Appellants.
MOSK, Acting P. J.
INTRODUCTION
This is a breach of contract action between the sellers and buyers of a Cessna jet aircraft. The sellers were defendants and appellants Tristen Aviation Group, LLC (TAG) and Ray Hashman. The buyers were plaintiffs and respondents Jonathon R. Bates and Markus S. Shepherd (collectively, plaintiffs). After a bench trial, the trial court issued an 84-page statement of decision in which it ruled, as relevant here, that defendants breached and repudiated the contract by failing timely to perform agreed upon maintenance and repairs to the aircraft and refusing to deliver the aircraft to plaintiffs for the purpose of a prepurchase inspection. The trial court awarded plaintiffs as damages the $320,000 they had paid toward the purchase price.
The trial court found that TAG and Hashman were alter egos of one another, and defendants do not challenge that finding on appeal. Accordingly, we refer to TAG and Hashman collectively as defendants, and ascribe actions to defendants without distinguishing one from the other.
On appeal, defendants do not challenge the trial court’s findings of fact. Instead, they ask for de novo review, arguing that the trial court misinterpreted the contract. We conclude that the trial court properly interpreted the contract and that, in any event, any error was rendered harmless by the trial court’s unchallenged findings of fact. We further reject defendants’ argument that the trial court was bound by certain allegations in plaintiffs’ verified complaint.
Defendants also challenge the trial court’s postjudgment awards of attorney fees to plaintiffs as the prevailing parties under the contract. We conclude that the fee awards were authorized by the contract and that defendants have failed to establish an abuse of discretion by the trial court as to the amount of the award. We affirm the judgment.
BACKGROUND
We state the facts in the light most favorable to the trial court’s decision, resolving all conflicts and indulging all reasonable inferences to support the judgment. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053, abrogated on another ground as stated in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 100.) Because defendants do not challenge the trial court’s findings of fact, we accept the facts set forth in the trial court’s statement of decision. (See City of Merced v. American Motorists Ins. Co. (2005) 126 Cal.App.4th 1316, 1322-1323.)
In March 2006, plaintiffs and defendants executed a Purchase and Sale Agreement effective as of February 9, 2006 (the Agreement) with respect to a Cessna Citation II jet aircraft. The total purchase price was $1.6 million. The relevant terms of the Agreement are set forth in more detail in our discussion post. In general, the Agreement provided that plaintiffs would make an initial payment of $320,000, which would become nonrefundable after plaintiffs had conducted a prepurchase inspection and approved the condition of the aircraft. Defendants were to deliver possession of the aircraft to plaintiffs after plaintiffs met certain conditions, such as procuring insurance and executing promissory notes for the balance of the purchase price. Defendants would retain legal title to the aircraft until plaintiffs had paid the remainder of the purchase price, after which title to the aircraft would pass to plaintiffs.
Shortly after the Agreement was executed, plaintiffs each paid $160,000 toward the $320,000 initial payment. A few days later, the aircraft was flown to an aircraft maintenance facility in Chino called Championship Aviation (Championship) for repairs and maintenance. Championship proposed a series of repairs to be done on the aircraft and estimated the cost to be $26,185. The maintenance and repair process was beset with delays caused both by defendants’ failure timely to pay Championship and problems with the aircraft’s air conditioning and “angle of attack” instrument. The trial court found that the repairs were not completed by Championship until May 19, 2006.
Based on conflicting evidence produced at trial and recounted in the statement of decision, the trial court found that the services provided by Championship did not include plaintiffs’ prepurchase inspection pursuant to the Agreement. For example, plaintiffs had delivered a check for $10,000 to an entity controlled by defendants to pay for the prepurchase inspection, but that check was never cashed or returned to plaintiffs, and plaintiffs were never billed for inspection services. In addition, plaintiffs never executed or delivered the Inspection Completion Receipt called for by the Agreement.
By the time the maintenance and repairs were completed on May 19, 2006, relations between the parties had deteriorated for reasons not relevant here. Defendants had the aircraft flown to Van Nuys and, as found by the trial court, “refused to deliver the aircraft to [plaintiffs] for the purpose of the performance of a prepurchase inspection.” In June 2006, plaintiffs cancelled the contract and demanded a refund of their $320,000 initial payment plus other out-of-pocket damages. Defendants did not refund the money.
B. Procedural Background
Plaintiffs filed this action in July 2006. In December 2006, plaintiffs filed their operative verified first amended complaint, alleging claims for breach of contract and conversion. Between July and September 2008, the trial court conducted a ten-day bench trial, and on November 6, 2008, issued an extensive statement of decision. The trial court found for plaintiffs on their breach of contract claim and against plaintiffs on their conversion claim. The trial court awarded plaintiffs contract damages of $320,000 plus prejudgment interest. Judgment was entered on December 16, 2008. Defendants timely filed a notice of appeal.
The trial court also found against defendants on their cross-complaint. No issues relating to the cross-complaint have been raised on appeal.
Plaintiffs each made a postjudgment motion for attorney fee awards under the Agreement. In March 2009, the trial court issued a lengthy written statement of decision on the fee motions, awarding plaintiff Bates attorney fees of $102,134.16 and plaintiff Shepherd attorney fees of $146,397.20. A first amended judgment was entered, and defendants timely appealed the amended judgment. This court ordered the appeals from the original and amended judgments consolidated.
DISCUSSION
A. Appealability
Plaintiffs contend that defendants “waived” their right to appeal the statement of decision because they appealed not from the statement of decision itself, but from the subsequent judgment. There was an oral stipulation in the trial court that any appeal “may be from the Statement of Decision.” (Italics added.) The stipulation was not mandatory. Moreover, an agreement by the parties to circumvent the procedural requirements for taking an appeal is not necessarily binding. (See Magaña Cathcart McCarthy v. CB Richard Ellis, Inc. (2009) 174 Cal.App.4th 106, 116-117.) We do not consider it to be binding in this case. “The general rule is that a statement or memorandum of decision is not appealable. [Citations.] The rule’s practical justification is that courts typically embody their final rulings not in statements of decision but in orders or judgments. Reviewing courts have discretion to treat statements of decision as appealable when they must, as when a statement of decision is signed and filed and does, in fact, constitute the court’s final decision on the merits. [Citations.] But a statement of decision is not treated as appealable when a formal order or judgment does follow, as in this case. [Citations.]” (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 901; see also Eisenberg, et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2009) ¶ 2:258 at pp. 2-122 to 2-122.1 (rev.#1 2009).) The appeal is properly before us.
B. Breach of Contract
Defendants’ primary contention on appeal is that the trial court erroneously interpreted three paragraphs in the Agreement—paragraphs 3, 4 and 6—and as a result, erroneously concluded that plaintiffs’ $320,000 initial payment on the aircraft was “refundable.” Defendants’ contention is without merit.
1. Standard of Review
Defendants assert that our task on this appeal is to interpret the contract, and that the standard of review is therefore de novo. Plaintiffs, in contrast, argue that we must apply the substantial evidence rule.
Our review of the contract interpretation issue is governed by the standards set forth by our Supreme Court in Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861: “The interpretation of a written instrument, even though it involves what might properly be called questions of fact [citation], is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.] Extrinsic evidence is ‘admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible’ [citations], and it is the instrument itself that must be given effect. [Citations.] It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence. Accordingly, ‘An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence [citations], where there is no conflict in the evidence [citations] or a determination has been made upon incompetent evidence [citation].’ [Citations.]” (Id. at pp. 865-866, fn. omitted.)
In this case, although there was a great deal of conflicting evidence with respect to whether the Agreement was breached, the trial court relied on no extrinsic evidence in its statement of decision to interpret the Agreement. To the contrary, the trial court conducted a close textual analysis of paragraphs 3, 4 and 6 of the Agreement to determine the parties’ respective rights and obligations thereunder and the sequence in which the parties intended events to occur. In these circumstances, “interpretation [of the Agreement] is purely a judicial function to be exercised according to the generally accepted canons of interpretation. [Citations.] Those principles are well settled. ‘[T]he mutual intention of the parties as it existed at the time of contracting’ governs. [Citations.] We ascertain that intention solely from the written contract, if possible, while also considering the circumstances under which the contract was made and the matter to which it relates. [Citation.] ‘Unless the parties have indicated a special meaning, the contract’s words are to be understood in their ordinary and popular sense.’ [Citations.]” (Martin Brothers Construction, Inc. v. Thompson Pacific Construction, Inc. (2009) 179 Cal.App.4th 1401, 1416.)
We note that although defendants tender the issue as one of contractual interpretation, much of the argument in their brief is devoted to reciting evidence that defendants contend was inconsistent with the trial court’s finding that defendants were in breach. But defendants have tendered no issue in their opening brief regarding the sufficiency of the evidence. “An appellate court will consider the sufficiency of the evidence to support a given finding only after a party tenders such an issue together with a fair summary of the evidence bearing on the challenged finding, particularly including evidence that arguably supports it.” (Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 409-410.) Moreover, even if we were to construe defendants’ arguments as a challenge to the trial court’s factual findings, defendants do not discuss the evidence supporting the trial court’s findings. “‘It is well established that a reviewing court starts with the presumption that the record contains evidence to sustain every finding of fact.’ [Citations.] Defendants’ contention herein ‘requires [them] to demonstrate that there is no substantial evidence to support the challenged findings.’ [Citations.] A recitation of only defendants’ evidence is not the ‘demonstration’ contemplated under the above rule. [Citation.] Accordingly, if, as defendants here contend, ‘some particular issue of fact is not sustained, they are required to set forth in their brief all the material evidence on the point and not merely their own evidence. Unless this is done the error assigned is deemed to be waived.’ [Citations.]” (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; accord, Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937, 951.) Defendants have thus forfeited any claim of insufficiency of the evidence to support the trial court’s lengthy factual findings.
Accordingly, we presume the record contains sufficient evidence to support the trial court’s findings of fact. We independently review the trial court’s interpretation of the contract, and we will reverse only if that interpretation was erroneous and the error was prejudicial.
2. Additional Background
a. Relevant Terms of the Agreement
Paragraph 3(a) of the Agreement provided that plaintiffs were to make an initial payment of $320,000 at the time the Agreement was executed, which would be “applied to the Purchase Price” at the close of escrow. That payment was to “become non-refundable upon approval of the condition of the Aircraft as set forth in Paragraph 4 herein.”
Paragraph 4 of the Agreement was entitled “Condition of the Aircraft.” Subparagraph (a) provided that plaintiffs would have the right to have an inspector of its choosing perform one or more prepurchase mechanical inspections of the aircraft, to be initiated no later than five business days after the Agreement was executed. Defendants “agree[d] to make the aircraft and its records reasonably available to the inspector(s).” Once the inspection was completed, plaintiffs had the option to “approve the condition of the Aircraft or request the Seller in writing to remedy any deficiencies reasonably discovered in the inspection....” If defendants refused to remedy such deficiencies, plaintiffs could terminate the agreement by written notice, and their initial payment of $320,000 would be refunded. A form of an “Inspection Completion Receipt” was attached to the Agreement as an exhibit.
Subparagraph (4)(b) provided that defendants “covenant[ed] and agree[d]” that the aircraft “shall be delivered” (1) “with any and all manufacturer’s recommended inspections... and inspection items up to date and current at the time of delivery”; (2) “with any and all manufacturer’s recommended maintenance programs current and fully paid up”; (3) “in an airworthy and fully operational condition”; (4) with a current and valid United States Standard Airworthiness Certificate and “all FAA Airworthiness Directives and all mandatory and recommended Service Bulletins with effective dates on or prior to the Delivery Date complied with....”; and (5) “with all available Aircraft documents printed or published in English, original and complete, continuous and up-to-date....” The Agreement did not separately define the term “Delivery Date.”
Paragraph 6 of the Agreement was entitled “Delivery and Possession.” Subparagraph 6(a) provided, “Seller shall deliver possession of the Aircraft to Buyer upon satisfaction of all of the following conditions: (i) approval of the Condition of the Aircraft by the Buyer in accordance with Paragraph 4; and (ii) payment of the [$320,000] Initial Payment set forth in [P]aragraph 3(a); (iii) procurement of the necessary insurance... and (iv) execution by the Buyer of a promissory note for the balance of the Purchase Price and a security instrument secured by the Aircraft; and (v) Buyer’s agreement [to make installment payments, to engage a specified individual as pilot for the period between delivery of possession and the close of escrow, and to operate the aircraft safely and legally during that period].” Possession of the aircraft was to be delivered to plaintiffs at McCarren International Airport in Las Vegas. Plaintiffs were to execute and deliver to defendants a confirmation of their acceptance of the aircraft.
Paragraph 5 provided that escrow “shall be deemed ‘opened’” when the escrow agent received both the fully executed Agreement and “a written notice from the Buyer approving the pre-[purchase] inspection of the Aircraft as set forth in Paragraph 4 herein.” Unless extended by the parties in writing, escrow was to close on or before August 15, 2006. Payment of the full purchase price was due three days before the close of escrow. Once escrow closed, title to the aircraft would pass to plaintiffs.
b. The Trial Court’s Interpretation of the Agreement
The essential contract interpretation issue before the trial court was whether paragraph 4(b)—which provided that the aircraft “shall be delivered” by defendants to plaintiffs in a specified condition and with specified documentation— referred to (1) delivery for purposes of “mak[ing] the aircraft and its records reasonably available” to plaintiffs for the prepurchase inspection, as required by paragraph 4(a); or (2) the final “delivery of possession” of the aircraft to plaintiffs pursuant to paragraph 6. The trial court concluded that paragraph 4(b) related to paragraph 4(a). Accordingly, the trial court concluded that the contract contemplated the following sequence of events:
2. The initial payment would become nonrefundable upon approval of the condition of the aircraft after the prepurchase inspection, in accordance with paragraph 4(a).
4. Plaintiffs would perform the prepurchase inspection.
The trial court reasoned that this conclusion was consistent with paragraph 6, which used the phrase “delivery of possession” rather than “deliver,” and which incorporated the approval process of paragraph 4 as one of several conditions precedent for defendants’ final “delivery of possession” of the aircraft to plaintiffs. The trial court found that defendants failed timely to complete the required maintenance and repairs so as to permit plaintiffs to conduct a prepurchase inspection prior to May 19, 2006; and that, once the repairs were completed, defendants breached and repudiated the contract by refusing to deliver the aircraft to plaintiffs for the prepurchase inspection.
3. Analysis
Defendants claim that “the crucial issue in the case was whether the deposit had become non-refundable, which in turn depended upon whether [plaintiffs] had ‘approved... the condition of the Aircraft as set forth in Paragraph 4’ of the contract.” Although that might have been the crucial issue at trial from defendants’ perspective, that issue is incidental for purposes of this appeal. The trial court found defendants in breach of the Agreement. By virtue of that breach, plaintiffs were entitled to recover, inter alia, any portion of the purchase price they had paid, including the initial payment. (Cal. U. Com. Code, § 2711, subd. (1); Al-Husry v. Nilsen Farms Mini-Market, Inc. (1994) 25 Cal.App.4th 641, 650.) The crucial issue on appeal is whether the trial court’s finding that defendants were in breach was legally correct. If it was, then whether plaintiffs might have been entitled to a refund of their initial payment had they breached the Agreement or voluntarily withdrawn from the transaction (for example, because they were unable to finance the purchase) is of no consequence.
We conclude that the trial court did not err in interpreting the contract. It is apparent from the structure and language of the Agreement that the purpose of the prepurchase inspection provided for in paragraph 4(a) was to permit plaintiffs to determine whether the aircraft was in good repair, properly maintained, and in compliance with FAA regulations before they accepted delivery and became obligated to pay the full $1.6 million purchase price. Paragraph 4(a) did not give plaintiffs the right to abort the transaction based on their findings during the inspection—plaintiffs’ only options were to approve the condition of the aircraft (in which case their $320,000 initial payment would become nonrefundable), or to request that defendants remedy any deficiencies “reasonably discovered” during the inspection. Plaintiffs were entitled to “one or more pre-purchase mechanical inspections of the aircraft” (italics added), indicating that plaintiffs could conduct multiple inspections if necessary to ensure that defendants had delivered the aircraft in a satisfactory condition. The inspection had to be “initiated no later than five (5) business days” after execution of the Agreement. (Italics added.)
To facilitate these inspections, paragraph 4(a) obligated defendants “to make the aircraft and its records reasonably available to” plaintiffs’ inspectors. Paragraph 4(b) prevented defendants from delivering the aircraft in disrepair for the inspection. The defendants agreed that the aircraft would be delivered in a saleable condition—that is, properly repaired and maintained and with complete, adequate, and compliant documentation. In other words, the Agreement contemplated that defendants would deliver the aircraft for inspection in the same condition the aircraft would be in when plaintiffs took possession. That there had to be some delivery contemplated in paragraph 4(a) can be inferred from the fact that it provides that the inspection “shall be conducted at the aircraft location mutually acceptable to Seller and Buyer.” That defendants’ obligations in this regard were set forth in paragraph 4 (“Condition of the Aircraft”) rather than in paragraph 6 (“Delivery of Possession”) further supports this interpretation. Indeed, contrary to defendants’ assertion, there is nothing in the Agreement that would prevent the prepurchase inspection and the delivery of possession from occurring at or about the same time, if defendants delivered the aircraft in the appropriate condition and plaintiffs had satisfied their funding and other obligations.
Defendants contend that the reference to delivery in paragraph 4(b) was not delivery for the inspection, but delivery of possession under paragraph 6. Although paragraph 6 sets forth various conditions precedent to delivery of possession, it does not refer to paragraph 4(b). Rather, paragraph 6 refers to “approval of the Condition of the Aircraft by the Buyer in accordance with Paragraph 4.”
Defendants argue that the trial court’s interpretation was untenable because (1) the maintenance and inspections required by paragraph 4(b) could not have been completed prior to the prepurchase inspection because paragraph 4(a) required that inspection to be initiated within five days of execution of the Agreement; and (2) the prepurchase inspection had to be completed and the condition of the aircraft approved prior to the opening of escrow. Neither argument is persuasive.
As to the first point, there is no indication in the Agreement—and defendants cite to no evidence in the record—that it would be impossible or impractical to have the plane in compliance with paragraph 4(b) within five days of the execution of the Agreement. To the contrary, given that defendants were in the business of chartering the aircraft, one would expect that the aircraft would be in good repair and properly maintained at all times.
As to the second point, the escrow appears to be irrelevant. The Agreement does not require that escrow be opened before defendant could bring the aircraft and its documentation into compliance with paragraph 4(b)— the Agreement did not even require that the escrow be opened prior to delivery of possession of the aircraft to plaintiffs. Whenever the escrow was opened, it was just “deemed ‘open’” after the Agreement was signed and the condition of the aircraft approved by plaintiffs following the inspection. As described in paragraph 5, the subject of the escrow was the passage of title to the aircraft, not the transfer of possession.
Defendants assert that the trial court’s “erroneous [interpretation]... was the result of its demonstrable failure to understand that the buyers were to get and use the plane for six months before title actually passed to them.” The statement of decision contradicts that assertion. Both when describing the structure of the Agreement and when framing the disputed issues on the breach of contract claim, the trial court quoted from paragraph 10 of the first amended verified complaint, In relevant part as follows: “‘e. Notwithstanding that title to the aircraft would not pass to plaintiffs until the close of escrow [on August 15, 2006], plaintiffs and [defendants] agreed that possession of the aircraft would transfer to plaintiffs upon the completion of the prepurchase inspection and repairs; plaintiff[s’] payment of the $320,000 deposit; plaintiff[s’] procurement of an aircraft insurance policy; plaintiff[s’] execution of a promissory note for the balance of the purchase price, execution of a security agreement, and plaintiffs’ forward payment of the existing monthly bank payments owed by [defendants] from date of possession to close of escrow on August 15, 2006. (Agreement, paragraph 6(a)(b)(c)).” (Italics added.) The trial court then noted that defendants admitted this allegation in their answer. The trial court summarized, “Notwithstanding that title to the aircraft would not pass to the plaintiffs until the close of escrow, plaintiffs and [defendants] agreed that possession of the aircraft would transfer to plaintiffs upon the completion of the prepurchase inspection and repairs[.]” The trial court correctly understood that possession would pass to plaintiffs before title did. The trial court properly interpreted the Agreement.
Even if the trial court incorrectly interpreted the Agreement as contended by defendants, the error was harmless. (See Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580; Cal. Const., art. VI, § 13.) Paragraph 3(a) of the Agreement stated unambiguously that the initial payment would become nonrefundable “upon [plaintiffs’] approval of the condition of the Aircraft as set forth in Paragraph 4 herein.” (Italics added.) Paragraph 4(a) provided that such approval would follow “one or more pre-purchase mechanical inspections[.]” The trial court made explicit findings that “the prepurchase inspection was never completed” and that “approval of the condition of the aircraft as set forth in paragraph 4 of the agreement never occurred....” (Italics added.) Those findings of fact compel the legal conclusion that the conditions were never satisfied for the initial payment to become nonrefundable. Although defendants disagree with the trial court’s findings, they raise no cognizable challenge to the sufficiency of the evidence. We note that there was evidence supporting the trial court’s findings that the prepurchase inspection did not take place because defendants did not deliver the aircraft for such an inspection, and plaintiffs did not waive such an inspection. As a result, even if the trial court had erred in interpreting paragraph 4(b), it would make no difference to the outcome.
B. Judicial Admission
Defendants argue that plaintiffs’ verified allegation that they had “performed each and every one of their obligations required under the Agreement necessary for delivery and possession of the Aircraft” constituted a binding judicial admission that plaintiffs approved the condition of the aircraft, because such approval was one of the conditions to delivery of possession under paragraph 6(a) of the Agreement. Defendants assert that the trial court erred in concluding that defendants’ denial of the allegation “negate[d] [the allegation’s] otherwise binding effect[.]” We disagree.
1. Additional Background
Paragraph 25 of plaintiffs’ first amended verified complaint stated, “As of May 23, 2006, Plaintiffs had performed each and every one of their obligations required under the Agreement necessary for delivery and possession of the Aircraft as provided for in paragraph 6 of the Agreement; Plaintiffs had paid the deposit of $320,000 towards the purchase; Plaintiffs had paid $10,000.00 for the pre-purchase inspection and an additional $18,000.00 actually owed by defendants for maintenance; obtained an aircraft insurance policy; arranged for financing of the Aircraft; executed a Storage Agreement at Las Vegas for delivery of the Aircraft; and, opened an escrow... in Oklahoma City.”
Defendants denied the relevant allegations of paragraph 25 in their verified answer. Defendant’ answer stated, “Answering paragraph 25 of the complaint, defendants deny all allegations contained therein, except [they] admit[] that plaintiffs have paid the non-refundable deposit of $320,000.” Defendants cite and the record contains no motion in limine or other request in the trial court to preclude plaintiffs from presenting evidence at variance with the allegations of paragraph 25, nor does the record contain any briefing or oral argument by either party on the issue.
It appears that defendants filed a pretrial motion in limine to exclude some voice mail messages, but the motion is not included in the record and the trial court’s oral ruling on the motion indicates that the motion did not raise any issue relating to judicial admissions. The register of actions does not indicate that defendants filed a pretrial brief, and none is included in the record. Plaintiffs each filed such a brief; neither discusses any issues relating to judicial admissions generally or paragraph 25 specifically. Whether paragraph 25 constituted a binding admission also was not raised in defendants’ oral opening statement in the trial court. In their oral and written summations, defendants argued that an allegation in paragraph 16 of the complaint relating to the prepurchase inspection should be treated as an “evidentiary statement” for the purpose of impeaching the testimony of plaintiff Bates, citing Code of Civil Procedure section 2015.5 [permitting use of declarations under penalty of perjury]. Defendants have raised no issue on appeal relating to paragraph 16.
In its statement of decision, the trial court raised the issue of whether the allegation in paragraph 25 that plaintiffs had complied with their obligations might constitute an admission that plaintiffs had inspected and approved the condition of the aircraft. The trial court concluded it did not. The trial court stated, “[W]hile the plaintiffs allege in paragraph 25... compliance with paragraph 6 of the agreement necessary for delivery and possession of the aircraft, it is the defendants who deny same, and thus put the question of whether there was compliance with paragraph 6 and hence paragraph 4 at issue. While indeed the Court can take judicial notice of the verified pleadings... no California case has been cited, indicating or suggesting that the Court must accept as true allegations contained in a verified complaint where said allegations are summarily denied by a verified answer.”
2. Analysis
“A judicial admission is a party’s unequivocal concession of the truth of a matter, and removes the matter as an issue in the case. [Citations.]” (Gelfo v. Lockheed Martin Corp. (2006) 140 Cal.App.4th 34, 48.) “Judicial admissions may be made in a pleading, by stipulation during trial, or by response to request for admission. [Citations.]” (Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746.) “Because an admission in the pleadings forbids the consideration of contrary evidence, any discussion of such evidence is irrelevant and immaterial. [Citation.] ‘“When a trial is had by the Court without a jury, a fact admitted by the pleadings should be treated as ‘found.’... If the court does find adversely to the admission, such finding should be disregarded in determining the question whether the proper conclusion of law was drawn from the facts found and admitted by the pleadings.... In such case the facts alleged must be assumed to exist. Any finding adverse to the admitted facts drops from the record, and any legal conclusion which is not upheld by the admitted facts is erroneous.” [Citations.]’ [Citation.]” (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.) The doctrine of judicial admissions applies, however, only to unequivocal statements of fact. (See Stroud v. Tunzi (2008) 160 Cal.App.4th 377, 384-385.) “An unclear or equivocal statement does not create a binding judicial admission.” (Id. at p. 385.) Similarly, “[l]egal conclusions and assertions involving a mixed question of law and fact are not the stuff of judicial admissions.” (Id. at p. 384; see also Castillo v. Barrera (2007) 146 Cal.App.4th 1317, 1324.)
In this case, defendants forfeited the right to rely on plaintiffs’ allegation that they “performed each and every one of their obligations required under the Agreement necessary for delivery and possession of the Aircraft” as a judicial admission. Rather than assert against plaintiffs the truth of that allegation, defendants denied that allegation in their verified answer and sought at trial to prove that plaintiffs had failed to meet their obligations under paragraph 6(a). “‘“The rule is well settled that the theory upon which a case is tried must be adhered to on appeal. A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant. [Citations.]”’” (Strasberg v. Odyssey Group, Inc. (1996) 51 Cal.App.4th 906, 920.) Moreover, defendants provide no citation to the record to establish that they asserted in the trial court at any time that the allegation in paragraph 25 constituted a binding judicial admission that plaintiffs had approved the condition of the aircraft. Whether a statement constitutes a judicial admission, and the determination of the scope and effect of any such admission, are issues that must be presented first to the trial court. (See Fredericks v. Kontos Industries, Inc. (1987) 189 Cal.App.3d 272, 277 [trial court retains discretion to determine scope and effect of admissions]; 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 454, p. 587 [trial court has discretion to relieve a party from the effects of a judicial admission].) We will not consider the issue for the first time on appeal. (Dimmick v. Dimmick (1962) 58 Cal.2d 417, 422.) That the trial court raised the issue sua sponte in its statement of decision does not relieve defendants of their forfeiture.
In any event, we do not construe the general allegation in paragraph 25 that plaintiffs had complied with their obligations as a judicial admission that plaintiffs had approved the condition of the aircraft. Plaintiffs alleged, “Plaintiffs had performed each and every one of their obligations required under the Agreement necessary for delivery and possession of the Aircraft as provided for in paragraph 6 of the Agreement[.]” The provision for the prepurchase inspection and approval of the aircraft, however, arguably was a right of plaintiffs subject to their waiver, not an obligation of plaintiffs subject to enforcement by defendants. Viewed in that light, the allegation was ambiguous and did not constitute a judicial admission that plaintiffs had approved the condition of the aircraft. (See Stroud v. Tunzi, supra, 160 Cal.App.4th at p. 384.) Moreover, the allegation, in effect, that plaintiffs were in compliance with the contract was an assertion involving a mixed question of law and fact, and thus did not constitute a judicial admission. (Id. at p. 385.) Finally, the general allegation that plaintiffs “had performed each and every one of their obligations” was immediately followed by a recitation of the obligations referred to—that is, that “Plaintiffs had paid the deposit of $320,000 towards the purchase; Plaintiffs had paid $10,000.00 for the pre-purchase inspection and an additional $18,000.00 actually owed by defendants for maintenance; obtained an aircraft insurance policy; arranged for financing of the Aircraft; executed a Storage Agreement at Las Vegas for delivery of the Aircraft; and, opened an escrow... in Oklahoma City.” Plaintiffs thus alleged that they had paid for a prepurchase inspection, not that one had been performed (consistent with the trial court’s findings). Notably absent from this list is a statement that plaintiffs had approved the condition of the aircraft. Defendants have failed to establish error.
C. Attorney Fees
1. Additional Background
Paragraph 17 of the Agreement provided in relevant part, “In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants or agreements or any inaccuracies in any of the representations and warranties on the part of the other party arising out of this Agreement, then in that event, the prevailing party in such action... whether by final judgment or out of court settlement, shall be entitled to have and recover of and from the other party all costs and expenses of suit, including actual attorneys’ fees.”
After the trial court rendered its statement of decision, plaintiffs each moved for an award of attorney fees pursuant to paragraph 17. Plaintiff Shepherd sought $32,668.10 for the case-related services of a former attorney, Richard Louis, and $192,520.18 in fees for Shepherd’s trial attorney, Arthur Hodge. Plaintiff Bates sought a total fee award of $167,337.99, which included $11,574.26 for services provided by his transactional attorney, Tina Alleguez; $32,668.10 for former attorney Richard Louis; and $123,100.63 for Bates’s trial attorney, Kenneth Freedman. Defendants opposed the motions.
Following a hearing, the trial court issued a lengthy written statement of decision on the fee issue. The trial court disallowed fees for Bates’s transactional attorney, Alleguez. The trial court reduced the total fees to attorney Richard Louis from approximately $66,000 to $25,000, and awarded half of that amount to each plaintiff. The trial court awarded reduced fees to Shepherd’s trial attorney, Hodges, of $131,250, and to Bates’s trial attorney, Freedman, of $87,750.
2. Analysis
Civil Code section 1717, subdivision (a), 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.” “California courts construe the term ‘on a contract’ liberally. ‘“As long as the action ‘involve[s]’ a contract it is ‘“on [the] contract”’ within the meaning of section 1717. [Citations.]” [Citations.]’ [Citation.]... Such fees are properly awarded under section 1717 ‘to the extent that the action in fact is an action to enforce—or avoid enforcement of—the specific contract.’ [Citation.]” (Turner v. Schultz (2009) 175 Cal.App.4th 974, 979-980.) “[T]he proper focus is not on the nature of the remedy, but on the basis of the cause of action. [Citation.]” (Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 347, italics added.)
The prevailing party is entitled to an award of reasonable attorney fees to be fixed by the court. (Civ. Code, § 1717, subd. (a).) “[T]he trial court has broad authority to determine the amount of a reasonable fee.” (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM Group).) “The first step involves the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer’s hourly rate. ‘The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.’ [Citation.] In short, after determining the lodestar amount, the court shall then ‘“consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the section 1717 award so that it is a reasonable figure.”’ [Citation.] The factors to be considered include the nature and difficulty of the litigation, the amount involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. [Citation.] The ‘necessity for and the nature of the litigation’ are also factors to consider. [Citation.] We will reverse a fee award only if there has been a manifest abuse of discretion. [Citation.]” (EnPalm, LCC v. Teitler (2008) 162 Cal.App.4th 770, 774, citing PLCM Group, supra, 22 Cal.4th at pp. 1094-1096.)
a. The Agreement Permitted the Fee Award
Defendants argue that no fee awards were permitted by the contract in this case because the fee provision covered only actions for “breach” of the contract, whereas this action “was essentially one for rescission... of the contract and for restitution of plaintiffs’ $320,000 deposit based on that rescission.” This argument is not meritorious. Plaintiffs pleaded a breach of contract; the trial court found that defendants breached the contract; and the trial court awarded breach of contract damages. It is of no consequence for purposes of the attorney fee provision that the contract damages awarded plaintiffs equaled their initial payment. In fact, plaintiffs sought in their complaint compensatory damages for breach of contract of $750,000, not merely restitution of the $320,000 initial payment. Moreover, plaintiffs also prevailed on the breach of contract claim asserted by defendants in their cross-complaint. The Agreement provided for an attorney fee award to plaintiffs in this case.
b. No Abuse of Discretion in Amount of Fee Award
Defendants argue the fee awards to plaintiffs’ trial attorneys, Hodges and Freedman, were excessive. Defendants have failed to establish an abuse of discretion.
Defendants do not challenge the amount of the fee award to attorney Richard Louis.
Defendants argue first that the fee awards were “simply too high” in comparison with the approved schedule of attorney fees set forth in Los Angeles Superior Court Local Rule 3.2(a) (rule 3.2(a)). That rule—which apparently has not been revised since 1998—provides that, “unless otherwise determined by the court,” the trial court should consider a reasonable fee in a contested contract case with a judgment in excess of $100,000 to be “$5,270 plus 2% of the excess over $100,000”—or, in this case, a total fee award for both plaintiffs of $9,670.
$5,270 + ($4,400 [$220,000 *.02]) = $9,670.
By its terms, however, the fee schedule in rule 3.2(a) is not mandatory. “[T]he rule allows the trial court to exercise its discretion to depart from the rule to award a higher fee award. The ‘unless otherwise determined by the court’ clause gives the trial court leeway to depart from the guidelines and to award a ‘reasonable’ fee award when warranted in a particular case.” (Cruz v. Ayromloo (2007) 155 Cal.App.4th 1270, 1275-1276 [approving fee award 39 times the amount provided for by rule 3.2(a) and that exceeded the total damage award]; see also Code Civ. Proc., § 1033.5, subd. (c)(5) [moving party bears the burden of proof on a claim for attorney fees “not based upon the court’s established schedule”].) Although this case was not particularly complex, it was not a simple contested collection case—plaintiffs asserted two causes of action and defendants asserted four, including tort claims for fraud and conversion. The trial consumed ten trial days and involved more than 80 exhibits. Plaintiffs submitted itemized billing statements and declarations from their attorneys and a law professor who opined that the fees were reasonable. The trial court did not abuse its discretion by departing from rule 3.2(a) and employing a lodestar method to calculate a reasonable fee.
Defendants argue that the fee awards to trial attorneys Hodges and Freedman “were in large measure duplicative.” The trial court, however, examined the itemized billing statements submitted by plaintiffs and reduced the number of hours awarded specifically to account “for some overlap and duplication of effort.” The trial court reduced the hours claimed by Hodges by 104.5 hours (374.5 to 270), and the hours claimed by Freedman by 171.6 hours (546.6 to 375). Defendants identify no particular services that were duplicative or unnecessary; they cite no authority to support their assertion that the billing descriptions provided to the trial court were inadequate to support the fee award; and they fail to explain how the trial court’s determination constituted an abuse of discretion.
Defendants complain that “[t]here was no reasonable need for plaintiffs to even have separate counsel.” But three attorneys appeared for defendants on the first day of trial. Defendants concede that plaintiffs were entitled to separate representation. Moreover, defendants may have been partially or wholly responsible for plaintiffs’ decision to retain separate counsel—in their cross-complaint, defendants asserted fraud and other claims again both plaintiffs, giving rise to a potential conflict of interest between them. Plaintiff Shepherd asserted in his fee motion that he engaged separate counsel “to avoid any actual or potential conflict of interest.” (See Cal. Rules of Professional Conduct, rule 3-310(C)(1); see also Rest.3d of The Law Governing Lawyers § 128, cmt. d(ii) [“Clients aligned as co-defendants also can have conflicting interests. Each would usually prefer to see the plaintiff defeated altogether, but if the plaintiff succeeds, each will often prefer to see liability deflected mainly or entirely upon other defendants. Indeed, a plaintiff often sues multiple defendants in the hope that each of the defendants will take the position that another of them is responsible, thus enhancing the likelihood of the plaintiff’s recovering. Such conflicts preclude joint representation, absent each co-defendant’s informed consent”].)
Defendants argue that the fee for Bates’s trial attorney, Freedman, was excessive because he “did almost nothing at trial....” Just because Freedman did not play an active role in examining witnesses at trial does not mean that he contributed nothing to the proceeding. In any event, the trial court was in a far better position than we are to assess Freedman’s contribution. Moreover, defendants concede that Bates was entitled to have separate counsel to represent his interests at trial. Regardless of whether that attorney took a lead or subordinate role in the proceeding, he or she would expect to be paid. As the prevailing party, Bates was contractually entitled to recover a reasonable fee for that attorney’s services.
Finally, defendants assert that the attorney fees were excessive because “the trial was simply too long.” But counsel’s personal opinion regarding the appropriate length of a trial is not a basis to reverse an award of attorney fees. The trial court’s statement of decision and its remarks during the hearing on the fee motions demonstrate that the trial court thoroughly considered the evidence submitted in support of the fee motions and carefully exercised its discretion to make appropriate adjustments to the fee awards. Defendants have failed to establish an abuse of discretion in connection with the award of attorney fees.
DISPOSITION
The judgment is affirmed. Plaintiffs Bates and Shepherd are to recover their costs on appeal.
We concur: KRIEGLER, J., WEISMAN, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.