Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County, No. BC373739 Ronald M. Sohigian, Judge.
Krane & Smith and Jeremy D. Smith for Defendant and Appellant.
No appearance for Plaintiff and Respondent.
CROSKEY, J.
Krikorian Investment Services, Inc. (Krikorian Investment), appeals a postjudgment order awarding Iman Eshaghyan $22,500 in attorney fees pursuant to a contractual attorney fee clause. Krikorian Investment contends the fee clause only provides for the recovery of attorney fees incurred in connection with an arbitration, and no such fees were incurred in this action. We agree and reverse the order.
FACTUAL AND PROCEDURAL BACKGROUND
Eshaghyan and Krikorian Investment entered into a Broker-Salesperson Agreement in February 2005. The agreement included an arbitration clause, stating:
The written agreement attached to the complaint was signed by Eshaghyan, but was not signed by Krikorian Investment. The jury found that the parties entered into a contract, but did not specify whether the contract was oral or written. We will assume for the purpose of argument that the trial court impliedly found that both parties entered into the written agreement and that substantial evidence supports that finding.
“Any action to enforce or interpret this Agreement or to resolve disputes between the Members or by or against any Member shall be settled by arbitration in accordance with the rules of the American Arbitration Association. Any party may commence arbitration by sending a written demand for arbitration to the other parties. Such demand shall set forth the nature of the matter to be resolved by arbitration. Arbitration shall be conducted at Los Angeles (city), California. The substantive law of the State of California shall be applied by the arbitrator in the settlement of the dispute. The parties shall share equally all initial costs of arbitration. The prevailing party shall be entitled to reimbursement of attorney’s fees, costs, and expenses incurred in connection with the arbitration. All decisions of the arbitrator shall be final, binding, and conclusive on all parties. Judgment may be entered upon any such decision in accordance with applicable law in any court having jurisdiction thereof.”
The Broker-Salesperson Agreement also stated that Eshaghyan agreed to comply with the Policies and Procedures Manual. The Policies and Procedures Manual included a provision stating that each sales agent would be liable for a proportionate share of any expenses, including attorney fees, incurred by the firm in connection with a legal dispute arising from a transaction in which the agent was involved. The provision included the following language:
“Further, under the circumstances where the dispute arises over the payment or nonpayment of a commission, or any other situation where the conduct of the Agent has given rise to a legal dispute, including litigation, the share of any expenses incurred by the firm shall be borne by the Agent prorata to the total commission percentage payable to the Agent at the time the conduct giving rise to the legal dispute allegedly occurred.”
Eshaghyan filed a complaint against Krikorian Investments and others in July 2007, alleging breach of contract and other counts. No party moved to compel arbitration, and there was no arbitration. The jury returned a verdict finding in favor of Eshaghyan on the count for breach of contract and awarding him $245,281.25 in damages. The trial court entered a judgment accordingly in June 2009.
Eshaghyan moved for an award of attorney fees pursuant to the attorney fee clause in the Broker-Salesperson Agreement, seeking $155,372.50 in fees. He also argued that he was entitled to fees under the Policies and Procedures Manual. Krikorian Investment opposed the motion, challenging both his entitlement to and the amount of fees. The trial court granted the motion in part, awarding $22,500 in fees against Krikorian Investment in a minute order dated September 4, 2009. The court did not clearly indicate either in its order or in its comments at the hearing which contract it found supported the fee award. Krikorian Investment timely appealed the order.
CONTENTION
Krikorian Investment contends the Broker-Salesperson Agreement provides for attorney fees only in connection with an arbitration.
DISCUSSION
Attorney fees can be awarded as costs to the prevailing party if authorized by contract. (Code Civ. Proc., §§ 1021, 1033.5, subd. (a)(10); Santisas v. Goodin (1998) 17 Cal.4th 599, 607, fn. 4.) Whether the Broker-Salesperson Agreement provides for the recovery of attorney fees in this action is a question of contract interpretation. We interpret a contract de novo if the interpretation does not turn on the credibility of extrinsic evidence, as here. (City of Manhattan Beach v. Superior Court (1996) 13 Cal.4th 232, 238; Kalai v. Gray (2003) 109 Cal.App.4th 768, 777.)
We interpret a contract so as to give effect to the mutual intention of the contracting parties at the time the contract was formed. (Civ. Code, § 1636.) We ascertain that intention solely from the written contract if possible, but also consider the circumstances under which the contract was made and the matter to which it relates. (Id., §§ 1639, 1647.) We consider the contract as a whole and interpret its language in context so as to give effect to each provision, rather than interpret contractual language in isolation. (Id., § 1641.) We interpret words in accordance with their ordinary and popular sense, unless the words are used in a technical sense or a special meaning is given to them by usage. (Id., § 1644.) If contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs. (Id., § 1638.)
The attorney fee clause in the Broker-Salesperson Agreement appears in a paragraph expressly dealing exclusively with arbitration. The paragraph begins by stating that any dispute must be resolved by “arbitration, ” and then discusses a “written demand for arbitration, ” the venue for an “[a]rbitration, ” the substantive law that the “arbitrator” must apply, and the “costs of arbitration.” It then states, “The prevailing party shall be entitled to reimbursement of attorney’s fees, costs, and expenses incurred in connection with the arbitration.” (Italics added.) It then discusses the “decisions of the arbitrator” and the entry of judgment upon “any such decision.”
In our view, these repeated references to arbitration throughout the paragraph, and particularly the language italicized above, leave no doubt that the parties intended to provide for the recovery of attorney fees by the prevailing party only in the event of an arbitration and that only fees incurred in connection with an arbitration are recoverable. Absent any arbitration, or fees incurred in connection with an arbitration, the attorney fee clause in the Broker-Salesperson Agreement does not authorize an attorney fee award.
Our inquiry does not end here. We must affirm the order if it is correct on any ground, regardless of the trial court’s rationale. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980-981; Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 269.) We therefore must decide whether the provision in the Policies and Procedures Manual quoted above supports the fee award.
The provision in the Policies and Procedures Manual appears in a section entitled “Agent’s Responsibilities with Regard to Legal Disputes and Litigation.” In our view, that section relates exclusively to an action by a third party against the firm arising from a transaction involving the sales agent. It states that the agent will be liable to the firm for “a proportionate share” of the firm’s expenses, including attorney fees, incurred in such an action regardless of whether the agent is personally named in the lawsuit, that the agent must cooperate with the firm to assure that the firm’s interests are protected, and that the firm has the exclusive right to determine the terms of any settlement. Regarding a proportionate share, it states, “The proportion of such expenses to be paid by the Agent shall be equal to the prorata share of the total commission payable to the Agent with regard to the particular transaction giving rise to the dispute or litigation, as determined by then currently applicable Commission Schedule.” It also states that if the agent retains independent counsel, the agent will have sole responsibility to pay his or her legal fees and the firm will have no responsibility to pay such fees.
We believe that all of these provisions in the Policies and Procedures Manual were intended to apply in the event of litigation between the firm and a third party. These provisions, and particularly the provision in the manual first quoted above, cannot reasonably be interpreted to apply to an action between the firm and an agent.
DISPOSITION
The order is reversed. Krikorian Investment is entitled to recover its costs on appeal.
We Concur: KLEIN, P. J., ALDRICH, J.