Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from a judgment and orders of the Superior Court of Stanislaus County. David G. Vander Wall, Judge. Super. Ct. Nos. 374894, 375050
Advocacy Center and Steven P. Cohn; Musacchio, Montanari & Lucia, R. Ernest Montanari and John Cesari for Plaintiffs and Appellants.
Law Offices of Michael Linn and Michael Linn for Defendants and Respondents.
OPINION
Levy, J.
Appellants, David Burdg and Erica Burdg, filed an unlawful detainer action against respondents, Carlos M. Gonzales and Ernestina Valladarez, alleging that respondents had failed to pay rent due under a monthly rental agreement. Respondents, however, denied the existence of both the monthly rental agreement and a landlord-tenant relationship.
At trial, appellants moved in limine to exclude evidence regarding title to the premises. Although the trial court granted this motion, the court nevertheless permitted evidence regarding the authenticity of the monthly rental agreement and respondents’ belief that they were purchasing the house as background for the possession issue. Appellants contend the trial court prejudicially erred and thus the jury verdict in respondents’ favor must be reversed. Appellants further argue that the attorney fee award was unreasonable.
As discussed below, the disputed evidence was relevant for the determination of whether respondents should maintain possession of the premises. Thus, the trial court did not err in admitting such evidence. Further, the amount of attorney fees awarded did not constitute an abuse of the trial court’s discretion. Accordingly, the judgment will be affirmed.
BACKGROUND
Carlos Gonzales entered into an agreement dated May 18, 2002, to purchase a house located at 2143 Orchard Creek Drive, Newman, from Gary and Kathy Thorne for $155,000. Erica Burdg signed the agreement as Gonzales’s real estate agent. However, Gonzales was unable to qualify for the loan because he was unemployed at that time. Thereafter, Erica Burdg added David Burdg as a new buyer through “CONTRACT ADDENDUM No. 1” dated May 24, 2002. A second “CONTRACT ADDENDUM No. 1,” also dated May 24, 2002, stated “Carlos M. Gonzales to be removed from purchase contract.” Gonzales was not a party to these addenda.
In July 2002, Gonzales paid David Burdg $22,481. According to Erica Burdg, Gonzales made this payment to enhance her chances of getting a loan for the purchase of the house. In mid-July, Gonzales and Valladarez took possession of the house. The deed transferring title from the Thornes to David Burdg was recorded on July 19, 2002.
In August 2002, Gonzales made the first mortgage payment of $1,283 payable directly to the lender. This practice continued for approximately one year until appellants instructed Gonzales to make the payments to David Burdg instead.
The last $1,283 payment Gonzales made to David Burdg was in April 2005. The next two payments were for $945 each and were tendered to David Burdg in August 2005.
On September 15, 2005, Erica Burdg served a three-day notice to pay rent or quit on respondents. The notice stated that $4,526 in rent was due to David Burdg. September 23, 2005, appellants filed a complaint for unlawful detainer against respondents. The complaint alleged that respondents had agreed to pay rent of $1,283 per month pursuant to a monthly rental agreement. This rental agreement, dated June 25, 2002, stated that the tenancy was to begin on July 1, 2002, and that the security deposit was $3,567.
In answering the unlawful detainer complaint, respondents denied the existence of the rental agreement. Respondents explained “The ‘MONTHLY RENTAL AGREEMENT’ relied upon by the Plaintiffs is a fabricated document[.] Said document was never presented to either of the Defendants for signature. The fabricated rental agreement bears a forged or ‘cut and paste’ signature of Defendant CARLOS GONZALES.” Respondents also filed their own complaint against appellants for specific performance, quiet title, breach of contract and fraud. In response, appellants filed a cross-complaint for ejectment, waste, and damages. In January 2006, the trial court consolidated the two actions pursuant to stipulation.
In September 2006, the parties stipulated to dismiss respondents’ complaint and appellants’ cross-complaint without prejudice. Thereafter, the case went to trial on the unlawful detainer action.
Respondents have requested this court to take judicial notice of the complaint and the first amended complaint filed in their renewed fraud and deceit action against appellants. These requests are denied on the ground that the documents are not relevant to the issues on appeal.
Appellants moved in limine to prevent the introduction of evidence regarding title to the property. The trial court agreed with appellants that the issue in the case was not title to the property but, rather was possession of the property. Nevertheless, the trial court explained that “the question about the original proposed purchase of the property is relevant to kind of background material as to how we got here in the first place. So I will permit some questioning.” Thereafter, the trial court elaborated on its ruling as follows:
“I know we had a motion in limine on title issues and sale, but the problem is that the reasons for [Gonzales] being in the house are so interwoven with this sale issue. Now, you know, when we talked a couple days on the motion in limine [defendants’ counsel] was proposing that the rental agreement was a forged document. And so my understanding was we were going to try the case based on this agreement.
“Now, it turns out from the document we have, you said you just learned this for the first time, Ms. Burdg, this is a pasted together document. Now, that may be appropriate with the rental agreements, I don’t know. It causes some suspicion to fall on it and not going to try to issue of title about as to why these people are in the house. They’re saying they’re purchasing the property and you’re saying they’re renting the property. That seems to be entirely relevant in this [un]lawful detainer kind of issue the whole time. I don’t see how we can get away from it.”
At the conclusion of the trial, the jury returned a verdict in respondents’ favor. The jury concluded that appellants were not entitled to possession of the house and that appellants should recover nothing based on the unlawful detainer complaint. The court entered judgment to this effect on November 30, 2006.
The trial court denied appellants’ motion for a new trial and awarded approximately $69,000 in attorney fees to respondent. These orders were filed on February 1, 2007. Additional posttrial attorney fees in the amount of $14,150 were awarded to respondents on February 22, 2007. Appellants’ notice of appeal was filed on March 2, 2007.
DISCUSSION
1. Appellants’ notice of appeal was timely filed.
When the unlawful detainer complaint was filed, it was classified as a limited civil case. In general, limited civil cases are those where the demand or value of the property in controversy amounts to $25,000 or less. (Code Civ. Proc., § 86.) This rule applies to proceedings in unlawful detainer where the whole amount of damages claimed meets the $25,000 threshold. (Code Civ. Proc., § 86, subd. (a)(4).) However, when the unlawful detainer was consolidated with respondents’ specific performance and fraud action against appellants, unlimited jurisdiction status was conferred on the entire case. (Emery v. Pacific Employers Ins. Co. (1937) 8 Cal.2d 663, 667.) Both parties designated the action as unlimited in their postconsolidation pleadings.
As discussed above, the parties dismissed both the specific performance complaint and the cross-complaint before the unlawful detainer was tried. Respondents contend that these dismissals automatically reclassified the unlawful detainer case as limited. If respondents are correct, the notice of appeal was untimely because it was filed more than 15 days after entry of the order denying the new trial motion. (Cal. Rules of Court, rule 8.752, subd. (a).) However, if the unlawful detainer remained an unlimited civil case, the appeal was timely, i.e., the notice was filed within 30 days of service of the order denying the new trial motion. (Cal. Rules of Court, rule 8.108, subd. (a).)
A case may be reclassified as necessary to comply with the jurisdictional amount. A party may file a motion for reclassification or the court, on its own motion, may reclassify a case at any time. (Code Civ. Proc., § 403.040.) Nevertheless, even if no hearing is held, before ordering reclassification, the court must afford the parties an opportunity to contest reclassification. (Stern v. Superior Court (2003) 105 Cal.App.4th 223, 230.) Reclassification may also take place through stipulation of the parties to the action. However, the stipulation must be filed with the court clerk before the reclassification occurs. (Code Civ. Proc., § 403.050.)
Here, shortly before trial, the unlawful detainer was part of an unlimited civil case. Following the dismissals, the unlawful detainer again stood alone. Nevertheless, contrary to respondents’ position, reclassification of the unlawful detainer back to limited status did not automatically take place. Rather, either the court would have had to order reclassification after affording the parties an opportunity to contest the reclassification or the parties would have had to file a stipulation with the court clerk. Since neither occurred, the case remained unlimited. Accordingly, the notice of appeal was timely filed. Respondents’ motion to dismiss is therefore denied.
2. The evidence regarding the title dispute and fraud claim was admissible in light of respondents’ challenge to the existence of a landlord-tenant relationship.
An unlawful detainer action is a summary proceeding, the primary purpose of which is to obtain possession of real property. (Union Oil Co. v. Chandler (1970) 4 Cal.App.3d 716, 721.) It provides a landlord with an expeditious way to get back the property when a tenant fails to pay the rent or refuses to vacate the premises at the end of the tenancy. (Nork v. Pacific Coast Medical Enterprises, Inc. (1977) 73 Cal.App.3d 410, 413.) Since the sole issue before the court is the right to possession, a general rule has emerged that neither cross-complaints nor affirmative defenses are admissible even though they arise out of the subject matter of the unlawful detainer action. (E. S. Bills, Inc. v. Tzucanow (1985) 38 Cal.3d 824, 830.)
However, there are exceptions to this general rule. (Vella v. Hudgins (1977) 20 Cal.3d 251, 255.) A defendant is not prohibited from interposing a defense, legal or equitable, that would, if successful, preclude removal of the defendant from the premises. (Ibid.) Thus, for example, it is proper for a defendant in an unlawful detainer action to challenge the existence of the landlord-tenant relationship. (Nork v. Pacific Coast Medical Enterprises, Inc., supra, 73 Cal.App.3d at p. 414.) Admissible defenses under this exception have included that there was no rental because the supposed tenant was really the purchaser of a life estate or that the supposed landlord and tenant were really partners. (Ibid.) Further, a fraud defense is permissible when the fraud, if shown, would demonstrate that the landlord-tenant relationship is nonexistent. (Knowles v. Robinson (1963) 60 Cal.2d 620, 626.) While there is a significant interest in preserving a speedy repossession remedy, that interest cannot justify the exclusion of matters that are essential to a just resolution of the possession question at issue. (Green v. Superior Court (1974) 10 Cal.3d 616, 636.) “‘Certainly the interest in preserving the summary nature of an action cannot outweigh the interest of doing substantial justice. To hold the preservation of the summary proceeding of paramount importance would be analogous to the “tail wagging the dog.”’” (Ibid.)
Appellants contend that, by admitting testimony and documentary evidence pertaining to Gonzales’s attempt to purchase the house, appellants’ purchase of the house, the structure of the arrangement between Gonzales and David Burdg, the amounts and payees for Gonzales’s payments, and the allegedly fraudulent monthly rental agreement, the trial court unfairly clouded the issues for the jury. According to appellants, this evidence was irrelevant in light of the summary nature of unlawful detainer proceedings and improperly permitted Gonzales, as the tenant, to dispute the title of his landlord. Appellants note:
[¶] “Without the evidence of Defendants’ title claim, the questions regarding the lease, default in payment, and amounts, if any, due, were close in terms of number of witnesses aligned on each side. Both Plaintiffs testified to execution of a valid lease; both Defendants testified that they had not signed any such agreement. The inference from the Defendants’ testimony was inescapable. Why would they pay rent or execute a lease if they considered themselves owners of the Premises? Evidence of the title dispute would have had no other effect than to tip the balance in favor of Defendants on the ultimate question, who was entitled to possession of the Premises.”
The above-quoted paragraph demonstrates why, contrary to appellants’ position, the disputed evidence was relevant and admissible. This evidence pertains to respondents’ defense that Gonzales was purchasing the house, i.e., no landlord-tenant relationship existed. Such a defense, if successful, precludes the defendant’s removal from the property. Therefore, this defense was admissible in the unlawful detainer action. Moreover, if it is shown that the landlord-tenant relationship is nonexistent, the alleged tenant is not estopped to deny the purported landlord’s title. (Knowles v. Robinson, supra, 60 Cal.2d at p. 626.) Accordingly, the trial court did not err in admitting evidence on the title dispute and fraud claim. Rather, if the trial court had ruled otherwise, it would have improperly excluded matters that were “essential to a just resolution of the question of possession at issue.” (Green v. Superior Court, supra, 10 Cal.3d at p. 636.)
3. The trial court did not abuse its discretion in awarding attorney fees.
In their motion for attorney fees, respondents requested almost $94,000. As noted above, the trial court awarded respondents approximately $69,000 in attorney fees.
The amount of an attorney fees award is a matter within the sound discretion of the trial court. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1096.) The trial court is the best judge of the value of professional services rendered in its court, and while its judgment is subject to review, the appellate court will not disturb that determination unless convinced that the trial court’s judgment is clearly wrong. (Id. at p. 1095.) Accordingly, the amount of an attorney fees award will not be reversed unless the amount is so large or small that it shocks the conscience and suggests that passion and prejudice influenced the determination. (Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1134.) Moreover, the trial court is not required to give a reasoned explanation for its award. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140.) The trial court’s order is presumed correct. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) “‘All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown.’” (Ibid.)
Appellants contend the trial court abused its discretion in making the attorney fees award. According to appellants, the majority of the requested fees pertained to respondents’ specific performance and fraud action and thus, were not related to the unlawful detainer issues. Appellants posit that had the court “not abused its discretion in allowing the admission of testimony and documentary evidence regarding title and ownership issues, there would not have even been a colorable argument that the matters for which [respondents] were making a claim of attorneys’ fees were validly related to the unlawful detainer, and were not attributable solely to the Specific Performance action.”
However, as discussed above, the trial court did not abuse its discretion in admitting evidence pertaining to the title dispute and fraud claim. This evidence was relevant to the issue of whether respondents could be removed from the house. Accordingly, hours attributable to the title and fraud issues are compensable here. This conclusion also applies to the disputed hours spent by paralegal Julie Davis and real estate consultant Kristi Borean.
As noted by the trial court, the work done to prepare the consolidated cases often overlapped and the discovery conducted was useful for both. Under these circumstances, the trial court was not required to formally allocate the hours. (Akins v. Enterprise Rent-A-Car Co., supra, 79 Cal.App.4th at p. 1133.) Rather, attorney fees are to be determined based on an objective standard of reasonableness. (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1098.) “‘“We do not want ‘a [trial] court, in setting an attorney’s fee, [to] become enmeshed in a meticulous analysis of every detailed facet of the professional representation.…’”’” (Ibid.)
Here, the trial court’s award of approximately $69,000 in attorney fees, a reduction from the requested $94,000, did not constitute an abuse of discretion. This amount neither shocks the conscience nor suggests that the court was influenced by passion and prejudice. Thus, there is no reason for this court to second-guess the trial court’s judgment as to the value of the professional services rendered by respondents’ attorney in its court.
Appellants further note that respondents requested various office expenses as attorney fees and argue that the recovery of such expenses in this manner is impermissible in this case. Respondents concede that appellants are probably correct. Nevertheless, there is no indication that the trial court in fact included these expenses in the attorney fees award. As noted above, the award was substantially reduced from respondents’ request. Further, the trial court’s award is presumed to be correct. Appellants have not affirmatively demonstrated error.
4. Sanctions.
Respondents have requested this court to impose sanctions on appellants and their attorneys for prosecuting a frivolous appeal. An appeal will be held frivolous only when it is either prosecuted for an improper motive or when it indisputably has no merit, i.e., when any reasonable attorney would agree that the appeal is totally and completely without merit. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) Respondents rely on the second ground. This appeal, however, as a whole, is not so utterly devoid of potential merit as to justify sanctions. Accordingly, respondents’ request is denied.
DISPOSITION
The judgment and orders are affirmed. Costs on appeal are awarded to respondents.
WE CONCUR: Harris, Acting P.J., Dawson, J.