Opinion
A127892
04-04-2011
HENRY CHU et al., Plaintiffs and Appellants, v. HUEY P. MADISON, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. RG08413696)
Introduction
Henry and Tammy Chu (collectively referred to as the Chus) appeal from a postjudgment order denying their motion for contractual attorney fees. They contend the order denying them fees is irreconcilable with the trial courts judgment stating they were the "prevailing parties" in this civil action. They further contend they were, indeed, the prevailing parties and the trial court erred in ruling otherwise in its postjudgment order. We affirm.
Background
We summarize here only the facts germane to the attorney fees issues raised on appeal.
On October 7, 2008, the Chus, who own and operate a restaurant in Oakland, filed a verified complaint against defendant Huey Madison, who owns an adjoining medical office building. The Chus asserted four causes of action. The first, for damages for breach of contract, alleged Madison was violating recorded easement agreements and deed restrictions. The second, for permanent injunctive relief, sought to prevent Madison from interfering with the easements and violating the deed restrictions. The third, for trespass, alleged Madison was occupying and had damaged the Chus property and sought damages, punitive damages, and injunctive relief. The fourth, for quiet title, sought a prescriptive easement on Madisons property for a natural gas line and gas meter that services the Chus property.
When they filed their complaint, the Chus also sought a preliminary injunction prohibiting Madison from interfering with and obstructing the easements and from further trespassing on their property. The trial court denied an ex parte application for a temporary restraining order, but issued an order to show cause as to why preliminary injunctive relief should not be granted. After receiving opposition from Madison, and a reply from the Chus, the court issued a preliminary injunction on January 6, 2009, prohibiting Madison from interfering with the easements and requiring him to remove posts from and repair damage he had done to the Chus property.
The following month, on February 11, 2009, Madison filed a cross-complaint against the Chus alleging they were trespassing and interfering with his possessory rights, and causing a continuing private nuisance. He also sued the prior owner of his property claiming fraud in the sale to him (Madison), and sued Farmers Insurance Exchange and The Dentists Insurance Company claiming they were obligated to provide a defense to the Chus complaint.
The claims between the Chus and Madison were tried to the court, and on September 30, 2009, the court issued an extensive ruling from the bench. It ruled against the Chus on their breach of contract claim and claim for injunctive relief. While the court found the written easement agreements were valid, it found the Chus were not entitled to enforce them because they were in material breach of the agreements by not maintaining insurance and not keeping the easement areas in a clean and safe condition. The court therefore dissolved the preliminary injunction it had granted earlier. The court found in favor of the Chus, however, on their cause of action for trespass and awarded them $1 in nominal damages and $15,000 in punitive damages. It also found in favor of the Chus on their cause of action for a prescriptive utility easement. It additionally found in favor of the Chus on Madisons cross-claims. The court further stated: "I do find that the plaintiffs in this case are the prevailing party.... [¶]... [¶] I would like to put the case over so that the plaintiffs can submit a proposed judgment in the case. I anticipate, based on what Mr. Steffan [the Chus attorney] said, that there will be a motion for attorneys fees and costs, and we can hear the motion on that date." The docket indicates a "General Civil Court Trial Judgment for Plaintiff" was entered that same day.
On October 13, 2009, the Chus filed a motion seeking $57,834 in attorney fees. Madison opposed the motion on the ground the Chus did not prevail on either of the causes of actions based on the written easement agreements on which they based their claim for contractual attorney fees. Nor, asserted Madison, were the two causes of action and the cross-claims on which the Chus did prevail related to their contract-based claims.
Madison also raised procedural objections to the motion, which the trial court rejected and which are irrelevant to the issues on appeal.
Two weeks later, on October 30, 2009, the trial court heard the fee motion. Clearly, the trial court was concerned about whether the Chus had prevailed on any claims that could support a fee award pursuant to the attorney fees provisions in the easement agreements. The court did not rule from the bench, but took the motion under submission. The court and the parties then discussed the status of the written judgment. The Chus counsel indicated Madisons counsel had submitted a proposed judgment that omitted the monetary award to the Chus, and he had sent a letter to the court asking that the proffered judgment not be signed. The court responded it had received the Chus letter and not signed Madisons proposed judgment. The Chus counsel then stated: "What I will do now is I will await your ruling on the attorneys fees, and if you grant attorneys fees, I will submit a new judgment with the amount that you grant, and if you dont, then [court interrupts and tells counsel to submit any order or judgment to opposing counsel for review]."
Despite this exchange, and before issuing any ruling on the fee motion, the court signed and filed on December 21, 2009, a "Judgment After Trial by Court." This judgment was apparently prepared by the Chus attorney before the hearing on the fee motion since the footer on the document indicates it was prepared on October 6, 2009. This judgment states in the final paragraph the Chus "are the prevailing party in this action and are entitled to reasonable attorneys fees and costs as provided in the Easements." As we have recounted above, the trial court did not in fact make any such ruling at the close of trial, but stated only that the Chus were "the prevailing party" and the court "anticipated," based on counsels comments, that the Chus would be filing a fee motion.
Three weeks later, on January 11, 2010, the trial court issued a written order on the Chus fee motion. The court denied the motion on the ground the Chus had not prevailed on any claim based on, or related to, the written easement agreements on which they grounded their claim for contractual attorney fees. "[A]lthough plaintiffs were clearly prevailing parties for purposes of a cost award, plaintiffs cannot be said to have prevailed on any claim under the easements." (Fn. omitted.) Notice of entry was given January 21, 2010, and the Chus filed a timely notice of appeal on March 12, 2010.
Discussion
The Chus make basically two arguments on appeal. First, they contend the courts "judgment" declared them to be the prevailing parties and entitled them to fees, and since there was no appeal from the judgment, it is final and conclusive as to their entitlement to fees. Second, they contend the trial court erred in concluding they were not prevailing parties for purposes of a fee award pursuant to the fee provisions in the easement agreements.
The "Judgment" Was Not Final As to Attorney Fees
The Chus identify the courts ruling from the bench at the end of the trial as the final and conclusive "judgment" entitling them to attorney fees. They insist the court adjudged they were both the prevailing parties and entitled to attorney fees. As we set forth above, however, the court stated only that the Chus were "the prevailing party" and it "anticipated," based on counsels comments, they would be filing a motion for attorney fees. Accordingly, regardless of whether the courts bench ruling suffices as any kind of final judgment, it was not a final judgment as to any issue regarding attorney fees.
For the first time in their reply brief, the Chus assert the courts December 21, 2009, formal "Judgment After Trial by Court" "unambiguously" declared they were entitled to a fee award. We generally do not consider matters raised for the first time in a reply brief. (See Holmes v. Petrovich Development Company LLC (2011) 191 Cal.App.4th 1047, 1064, fn. 2 [argument forfeited where raised for the first time in a reply brief without showing of good cause]; American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453 ["Points raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument."].)
Furthermore, as to attorney fees, the December 21 judgment was not a final and conclusive adjudication. (See P R Burke Corp. v. Victor Valley Wastewater Reclamation Authority (2002) 98 Cal.App.4th 1047, 1053-1054.) As the court explained in P R Burke Corp., "if a judgment determines that a party is entitled to attorneys fees but does not determine the amount, that portion [pertaining to entitlement] is nonfinal and nonappealable." (Id. at p. 1053.) In other words, until both entitlement to and the amount of fees are determined, there is no "final" adjudication as to fees. (Id. at p. 1054.) Here, the December 21 judgment said nothing about the amount of any fee award. Accordingly, the trial court was not constrained with respect to attorney fees by any "final" judgment.
Finally, given the record in this case, the December 21 judgment can only be read as providing for fees to the extent allowed by the easement agreements. The trial court duly examined and decided that question in connection with the Chus fee motion, as set forth it its order denying fees.
The Trial Court Correctly Denied the Motion for Attorney Fees
Whether a party has prevailed for purposes of a contractual fee award may be determined as a matter of law when there is a "simple, unqualified win" by one party. (Hsu v. Abbara (1995) 9 Cal.4th 863, 875-876.) In such a case, the trial court has no discretion to deny a claim for contractual attorney fees under Civil Code section 1717. (Hsu v. Abbara, at pp. 875-876.) But in other cases, the trial court has discretion: "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 explain, in this case, the Chus suffered an unqualified loss on their contract claims. Accordingly, as a matter of law they were not entitled to a contractual fee award.
Civil Code section 1717, subdivision (a), provides: "In any action on a contract, where the contract specifically provides that attorneys 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 attorneys fees in addition to other costs...." (Civ. Code, § 1717, subd. (a).) Subdivision (b)(1), in turn, provides: "The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section." (Civ. Code, § 1717, subd. (b)(1), italics added.)
"[I]n deciding whether there is a party prevailing on the contract, the trial court is to compare the relief awarded on the contract claim or claims with the parties demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims and only by a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions. [Citation.]" (Hsu v. Abbara, supra, 9 Cal.4th at p. 876.)
Here, the Chus recovered no relief on their contract claims. As the trial court explained in its ruling from the bench, while the easement agreements were valid, the Chus were in material breach of the agreements by failing to maintain insurance and failing to keep the easement areas in a clean and safe condition. Accordingly, the court ruled against them on their causes of action for breach of contract and for injunctive relief, and for that reason also dissolved the preliminary injunction it had granted earlier. At oral argument, counsel for the Chus asserted they sought, and obtained, a declaration that the easement agreements were valid and enforceable, and therefore prevailed on a critical contract claim. However, the Chus did not assert a cause of action for declaratory relief. Rather, they asserted a claim for breach of contract seeking damages (their first cause of action), and a claim for injunctive relief seeking to permanently enjoin Madison from interfering with the easements and violating the deed restrictions (their second cause of action). The trial court ruled against them on both claims. Accordingly, the Chus ultimately did not prevail on their claims based on the easement agreements.
Even if it could be said the Chus succeeded in some minor degree, for example by obtaining preliminary injunctive relief, the trial court did not abuse its discretion in ultimately determining they were not entitled to a fee award. (See Ritter & Ritter, Inc. Pension & Profit Plan v. The Churchill Condominium Assn. (2008) 166 Cal.App.4th 103, 126 [courts prevailing party determination is an exercise of discretion which should not be disturbed on appeal absent a clear showing of abuse].)
The fact they prevailed on their claims for trespass and to quiet title to a prescriptive easement does not entitle them to attorney fees based on the easement agreements. As the trial court explained, the trespass was not on the easement areas. Nor did their claim of a prescriptive easement for the gas line and meter that services their property involve the easement agreements. Accordingly, the trespass and quiet title claims were entirely independent of their contract claims, and the Chus cannot use their success on these noncontract claims to boot strap a recovery of contractual attorney fees.
Disposition
The order denying the Chus motion for attorney fees is affirmed.
Banke, J.
We concur:
Marchiano, P. J.
Margulies, J.