Opinion
A146377
02-27-2018
FISCAL FUNDING CO., INC. et al., Plaintiffs and Appellants, v. ALAN DONES et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (City and County of San Francisco Super. Ct. No. CPF-10-510388)
Appellants Fiscal Funding Co., Inc. and Calvin Grigsby appeal from: (1) that portion of an order filed on September 11, 2015, in which the superior court denied appellants' request for a determination of their rights and liabilities for the payment of attorney fees and costs awarded to respondents Alan Dones and John Guillory under certain provisions of the parties' contract; and (2) an order filed on September 16, 2015, in which the superior court granted the motion of respondents for an award of attorney fees and costs incurred in defending against an appeal and in arbitration. We affirm.
In the absence of a showing of prejudice, we deem appellants' timely September 17, 2015, notice of appeal from an August 25, 2015, minute order to encompass the written order filed on September 16, 2015, memorializing the earlier minute order. (Cal. Rules of Court, rule 8.100(a)(2) [notice of appeal to be liberally construed].)
Appellants have also filed a notice of appeal from a September 3, 2015, order. And, in their opening brief, appellants ask us to take judicial notice of certain documents relative to their appeal from the September 3, 2015, order. However, for reasons stated in the text of this opinion, we dismiss the appeal from the September 3, 2015, order because it is not an appealable order. We deny the request for judicial notice as both improper in form (Cal. Rules of Court, rule 8.252(a)(1) ["[t]o obtain judicial notice by a reviewing court under Evidence Code section 459, a party must serve and file a separate motion with a proposed order"]) and moot in light of our dismissal of the appeal from the September 3, 2015, order.
FACTS
Much of this factual and procedural background section is taken from our opinions resolving prior appeals between the parties: Fiscal Funding Co., Inc. v. Dones (Dec. 15, 2014, A135451) [nonpub. opn.] (Dones I) and Fiscal Funding Co., Inc. v. Dones (Feb. 13, 2015, A140460) [nonpub. opn.] (Dones II). Respondents have also filed a request that we take judicial notice of certain documents that were filed in the previous appeals, as well as certain documents filed in Supreme Court Case No. S225410 relative to review of our decision in Dones II. We now grant the request for judicial notice. However, we have considered the documents only to the extent they are necessary to our resolution of these appeals.
I. Background
In 1998, Grigsby loaned $719,000 to Strategic Urban Development Alliance (SUDA), a real estate transaction management firm founded by respondents. In exchange, Fiscal Funding Co., Inc., an entity created and controlled by Grigsby, received a 20-percent interest in SUDA. In 2003, respondents and Grigsby, on behalf of Fiscal Funding, executed the SUDA Operating Agreement and appointed themselves as members and managers of SUDA. Among other things, the SUDA Operating Agreement provided that (1) any controversy arising out of the agreement shall be settled by arbitration in accordance with the rules of the American Arbitration Association (AAA); and (2) "[i]n the event that any dispute . . . among the Members should result in litigation or arbitration, the prevailing party in such dispute shall be entitled to recover from the other party all reasonable fees, costs, and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys' fees and expenses."
In March 2008, Fiscal Funding filed a demand for AAA arbitration against respondents and named SUDA as a nominal defendant. Fiscal Funding alleged, among other things, that it had been wrongfully frozen out of the management of SUDA and that respondents had misappropriated SUDA funds for their personal use. Fiscal Funding sought dissolution of SUDA and an award of damages for unlawful dividend distribution, breach of fiduciary duty, and breach of contract. At the arbitration, Fiscal Funding was initially represented by outside counsel. However, Grigsby, an attorney, eventually assumed legal representation of Fiscal Funding, resulting in respondents moving to disqualify him on the ground that he had a conflict of interest because he had acted as SUDA's counsel of record on many of the issues being litigated in the arbitration. The arbitrator granted the disqualification motion and found that respondents and SUDA were entitled to attorney fees incurred in connection with the motion.
Fiscal Funding then filed, in the superior court, a petition for a writ of mandate against respondents. The petition sought to mandate that the arbitrator reinstate Grigsby as Fiscal Funding's representative in arbitration pursuant to certain provisions of the SUDA Operating Agreement. Respondents filed a motion for judgment on the pleadings, arguing, among other things, that the superior court could not review the arbitrator's interlocutory order of disqualification. Respondents also filed a separate motion requesting attorney fees and costs under the attorney fees provision in the SUDA Operating Agreement, or in the alternative, under Code of Civil Procedure section 128.7. The superior court, having found it did not have jurisdiction to review the arbitrator's order of disqualification, granted respondents' motion for judgment on the pleadings, and thereafter, denied Fiscal Funding's motion for reconsideration. On March 22, 2012, the court entered judgment in favor of respondents and included a directive that Fiscal Funding pay respondents $55,698 in attorney fees and costs. Fiscal Funding filed an appeal, challenging the judgment and the award of attorney fees and costs on various grounds. (Dones I, supra, at p. 1.) We found no merit to Fiscal Funding's contentions and affirmed. (Id. at pp. 4-11.)
Although the petition designated counsel for respondents, the arbitrator, and AAA, as respondents, those individuals and entity are not parties to these appeals.
While the parties litigated the writ petition in superior court, the arbitration proceeding continued. However, the arbitrator ultimately suspended the proceeding due to the parties' failure to pay required fees. At a court hearing held on February 22, 2012, Fiscal Funding's representative Grigsby informed the court that the arbitration had been terminated due to lack of prosecution.
When respondents were unable to collect on the March 22, 2012, judgment from Fiscal Funding, they returned to the superior court and filed a motion to amend the judgment to add Grigsby as a judgment debtor on the ground that he was the alter ego of Fiscal Funding. Respondents also sought an award of additional attorney fees under the attorney fees provision in the SUDA Operating Agreement. Fiscal Funding alone opposed the motion, and filed a "cross-motion to amend judgment to strike award of costs and fees not based on statutory authority." The superior court granted respondents' motion and denied Fiscal Funding's cross-motion. On January 23, 2014, the court entered an amended judgment, adding Grigsby as a judgment debtor, and awarding respondents an additional sum of $13,067.50 for attorney fees and costs to be paid by both Fiscal Funding and Grigsby. Fiscal Funding alone filed an appeal from the January 23, 2014, amended judgment, challenging the inclusion of Grigsby as a judgment debtor and the additional award of postjudgment attorney fees and costs. (Dones II, supra, at p. 1.) We found no merit to Fiscal Funding's contentions and affirmed the amended judgment. (Id. at pp. 3-6.) Our Supreme Court denied Fiscal Funding's petition for review.
II. Current Trial Court Proceedings
Following our remittitur of Dones I, respondents filed a motion in the superior court seeking an additional award of attorney fees and costs incurred in defending the appeal in Dones I, under the attorney fees provision in the SUDA Operating Agreement. On July 1, 2015, the superior court granted respondents' motion and awarded an additional sum of $117,201.50 in attorney fees and costs, to be incorporated in a second amended judgment, with the direction that the award was recoverable from both appellants, "given that the Court has already determined that [Fiscal Funding] is a sham corporation and the alter ego of Calvin B. Grigsby."
On July 20, 2015, appellants filed a motion, under Code of Civil Procedure section 1008, seeking reconsideration of the July 1, 2015, order based on "new facts and law showing [the court's] lack of jurisdiction" to award attorney fees and costs. Alternatively, and if the court sustained its jurisdiction to award attorney fees and costs, appellants asked the court to make a determination that appellants were entitled to a "set-off" or reduction of the attorney fees and costs awarded by the court, pursuant to certain provisions in the SUDA Operating Agreement. On September 11, 2015, the superior court denied appellants' motion on the ground that appellants did not "persuasively assert the existence of new facts, circumstances, or law."
Following our remittitur of Dones II, respondents filed another motion for an award of attorney fees and costs incurred in defending the appeal in Dones II. Respondents also sought an award of attorney fees and costs incurred in defending the arbitration, which had been terminated several years earlier, in February 2012. In support of their request for attorney fees in defending the appeal in Dones II, respondents relied on Civil Code section 1717, arguing that under that statute, " 'where a written contract expressly provides for the award of attorney fees, the prevailing party in an action under or relating to the contract is entitled to recover its fees, whether incurred at trial or on appeal.' " With regard to their defense of the terminated arbitration, respondents contended they were entitled to their attorney fees and costs as prevailing parties because the arbitrator had terminated the arbitration based on Fiscal Funding's failure to prosecute the arbitration. In opposition, appellants, relying on Hsu v. Abbara (1995) 9 Cal.4th 863 (Hsu), Estate of Drummond (2007) 149 Cal.App.4th 46 (Drummond), and Frog Creek Partners, LLC v. Vance Brown, Inc. (2012) 206 Cal.App.4th 515 (Frog Creek), argued, among other things, that respondents were not entitled to attorney fees incurred in defending the appeal in Dones II or in the arbitration proceeding because the parties' underlying contract dispute had not been finally resolved at that time. According to appellants, Fiscal Funding's "entire complaint [was] still subject to arbitration." On August 25, 2015, the superior court granted respondents' motion for attorney fees and costs, which ruling was embodied in a written order entered on September 16, 2015. The September 16, 2015, order awarded respondents the additional sum of $364,463.19 in attorney fees and costs, payable by appellants.
Respondents filed a reply, requesting that the superior court strike appellants' opposition as untimely. However, in its written order, the superior court indicated it had reviewed and considered the papers submitted by the parties, without otherwise explicitly ruling on respondents' motion to strike appellants' opposition. While a hearing was held on respondents' motion on August 25, 2015, appellants have not submitted a copy of the reporter's transcript of that hearing. Accordingly, it is unclear from the record whether the superior court considered appellants' opposition. In all events, as we explain in our discussion, even if we considered appellants' opposition, it would not result in a different outcome.
Lastly, on September 1, 2015, appellants filed an ex parte application titled "Notice of Motion and Ex Parte Motion to Stay Execution of All Judgments Under Code of [Civil Procedure] §473 and Further Proceedings Because of Fraud on the Court and Petitioners; and Motion [to] Compel Enforcement of Sections 5.1 and 5.5 of Operating Agreement Requiring Production of All Tax Returns, Bank Statements, Financial Records and Other Evidence of Revenues Received by Strategic Urban Development Alliance or Dones or Guillory or by Companies or Businesses Controlled by Dones or Guillory for the Period January 1, 2005 to August 31, 2015." In its application, appellants sought "a stay of all proceedings, judgments and executions in this case until the full extent of the apparent financial fraud may be sorted out through discovery," as well as an order compelling production of various financial records of SUDA, respondents, and any other company controlled by respondents. On September 8, 2015, respondents filed a notice indicating that on September 3, 2015, the superior court made an oral ruling denying appellants' ex parte application without comment.
On September 17, 2015, appellants filed three separate notices of appeal, seeking review of the following orders: (1) the August 25, 2015, order (later embodied in a written order filed on September 16, 2015), awarding respondents attorney fees and costs in defending the appeal in Dones II and incurred in the arbitration proceeding; (2) the September 3, 2015, oral ruling denying Fiscal Funding's ex parte application for various relief; and (3) the September 11, 2015, order denying Fiscal Funding's motion for reconsideration or alternative relief.
DISCUSSION
In their briefs, appellants, in large measure, seek reconsideration of our earlier opinions in Dones I and Dones II, contending the decisions were issued in error. However, as we now explain, we see no merit to their claims of error.
In Dones I, we recognized that Fiscal Funding's writ petition sought a court ruling that the SUDA Operating Agreement allowed Grigsby to represent Fiscal Funding in arbitration, and, therefore, the arbitrator's order disqualifying Grigsby should be set aside and the matter returned to arbitration with Grigsby representing Fiscal Funding. In addressing this issue, we found that once the matter was submitted to arbitration, it was for the arbitrator, not the court, to decide questions of "procedure," which included the representational issue raised in the writ petition. (Dones I, supra, at p. 5.) We also acknowledged there were "statutory safeguards for arbitration awards resulting from procedural irregularities . . . ." (Id. at p. 7.) Nonetheless, we found there had been no showing that the arbitrator exceeded his authority by denying Fiscal Funding's request to designate Grigsby as the company's counsel or authorized representative in arbitration. (Id. at pp. 7-8.)
Appellants argue that the Supreme Court's recent decision in Sandquist v. Lebo Automotive, Inc. (2016) 1 Cal.5th 233 (Sandquist) supports their contention that it was for the court, and not the arbitrator, to decide the issue of who should represent Fiscal Funding in arbitration. Sandquist states, "When construing arbitration provisions, we must consider the parties' likely expectations about allocations of responsibility. [Citation.] 'Typically, those who enter into arbitration agreements expect that their dispute will be resolved without necessity for any contact with the courts.' [Citation.] In the many cases where the parties agree an underlying dispute is arbitrable and thus begin with a filing before an arbitrator, to resolve the 'who decides' question in favor of a court would contravene that expectation and impose substantial additional cost and delay, requiring the parties to stay matters before the arbitrator, proceed to a courthouse for a construction of their arbitration agreement, perhaps continue through appellate review of that construction, and only then return back to arbitration for further dispute resolution. . . ." (Id. at pp. 246-247.) Thus, " '[o]n the one hand, courts presume that the parties intend courts, not arbitrators, to decide . . . disputes about "arbitrability," ' e.g., whether there is an enforceable arbitration agreement or whether it applies to the dispute at hand. [Citations.] 'On the other hand, courts presume that the parties intend arbitrators, not courts, to decide disputes about the meaning and application of particular procedural preconditions for the use of arbitration.' [Citations.] [¶] . . . [¶] [Consequently,] [o]nce gateway questions of arbitrability have been settled, . . . ' " 'procedural' questions which grow out of the dispute and bear on its final disposition" are presumptively not for the judge, but for an arbitrator, to decide.' [Citation.]" (Id. at pp. 251-252.)
In our view, and contrary to appellants' position, Sandquist confirms our position in Dones I that the question of Fiscal Funding's representation in arbitration concerns " ' neither the validity of the arbitration clause nor its applicability to the underlying dispute between the parties.' [Citation.] It does not touch on any threshold matter necessary to establish as a condition precedent an agreement to arbitrate, but rather entails 'what kind of arbitration proceeding the parties agreed to.' [Citation.] The question involves 'contract interpretation and arbitration procedures. Arbitrators are well situated to answer that question.' [Citation.]" (Sandquist, supra, 1 Cal.5th at pp. 252-253; see R.J. Corman Derailment Services v. Intern. Union (7th Cir. 2003) 335 F.3d 643, 650-651 ["after a court ascertains that the subject matter of a particular dispute is covered by the parties' arbitration agreement, any procedural questions—such as whether the arbitration procedures were properly followed—are reserved for the arbitrator"].) Additionally, "under state law as under federal law, when the allocation of a matter to arbitration or the courts is uncertain, we resolve all doubts in favor of arbitration. [Citations.] All else being equal, this presumption tips the scales in favor of allocating" the question of Fiscal Funding's representation to the arbitrator. (Sandquist, supra, at p. 247.)
Appellants also argue that if the superior court lacked jurisdiction to adjudicate Fiscal Funding's writ petition, then the superior court also lacked jurisdiction to determine whether respondents were prevailing parties entitled to attorney fees and costs. We disagree. As recently held by our Supreme Court, a superior court's dismissal of a plaintiff's claim for "lack of subject matter jurisdiction [is no] bar to awarding attorney's fees and costs" to a prevailing defendant. (Barry v. State Bar of California (2017) 2 Cal.5th 318, 326.) "This conclusion is consistent with the conclusions of federal courts that have held that a court that lacks jurisdiction to determine the merits of an action may nevertheless consider 'collateral issues' such as whether the prevailing party should be awarded its litigation expenses or whether sanctions should be imposed for a litigant's abuse of the judicial process. [Citations.]" (Id. at pp. 326-327; see Citizens for a Better Environment v. Steel Co. (7th Cir. 2000) 230 F.3d 923, 926 ["a court may lack authority to resolve the merits of a claim yet have jurisdiction to award costs and attorneys' fees to the prevailing party"].)
Appellants also ask us to reconsider our decision in Dones II, which affirmed the January 23, 2014, amended judgment. According to appellants, the superior court erred in adding Grigsby as a judgment debtor on the ground he was the alter ego of Fiscal Funding. However, neither appellant may challenge the superior court's alter ego ruling at this time. First, as we noted in Dones II, Fiscal Funding lacks standing to challenge the alter ego ruling because it affected only Grigsby. (Dones II, supra, at pp. 1, 3-5.) Secondly, we are jurisdictionally barred from considering Grigsby's separate challenge to the alter ego ruling because Grigsby's status as Fiscal Funding's alter ego was resolved by the superior court when it issued its January 23, 2014, amended judgment, which awarded respondents attorney fees and costs to be paid by both appellants. Because the amended judgment was an appealable judgment, Grigsby, as an aggrieved party, was required to " 'file a timely appeal or forever lose the opportunity to obtain appellate review. [Citations.]' " (Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 46.) Grigsby, however, did not file a timely notice of appeal from the amended judgment, as we noted in Dones II, and his time to do so has now expired and cannot be extended. (See Cal. Rules of Court, rule 8.104(a), (b) [setting forth times to appeal and noting that "no court may extend the time to file a notice of appeal"]; Silverbrand v. County of Los Angeles (2009) 46 Cal.4th 106, 113 (Silverbrand) [" '[u]nless the notice [of appeal] is actually or constructively filed within the appropriate filing period, an appellate court is without jurisdiction to determine the merits of the appeal' "].) Because Grigsby failed to file a timely appeal from the amended judgment, he cannot now obtain review of the alter ego ruling. (Dakota Payphone, LLC v. Alcaraz (2011) 192 Cal.App.4th 493, 509 [" '[a] party who fails to take a timely appeal from a decision or order from which an appeal might previously have been taken cannot obtain review of it on appeal from a subsequent judgment or order' "].)
Lastly, we see no merit to appellants' arguments challenging our earlier decisions in Dones I and Dones II, in which we upheld awards of attorney fees and costs under the attorney fees provision of the SUDA Operating Agreement. (Dones I, supra, at p. 10 & fn. 11; Dones II, supra, at pp. 5-6.) Despite appellants' arguments to the contrary, our decisions are not called into question by the superior court's failure to explicitly state that respondents were prevailing parties or by the fact that respondents also requested attorney fees as sanctions under Code of Civil Procedure section 128.7. Even though the superior court did not make explicit prevailing party determinations in its orders, which we reviewed in the earlier appeals, as an appellate court we can presume that the court "made such implied findings as" would support the judgments. (Hall v. Municipal Court (1974) 10 Cal.3d 641, 643.) Additionally, "[i]f [an] appealed judgment or order is correct on any theory, then it must be affirmed regardless of the trial court's reasoning, whether such basis was actually invoked. [Citations.] As the California Supreme Court stated long ago . . . : 'No rule of decision is better or more firmly established by authority, nor one resting upon a sounder basis of reason and propriety, than that a ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason. If right upon any theory of the law applicable to the case, it must be sustained regardless of the considerations which may have moved the trial court to its conclusion.' [(Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329.)] [¶] Even if the record demonstrates that the trial court misunderstood or misapplied the law, the ruling must be affirmed if it is supported by any legal theory. [Citation.] 'Because we review the correctness of the order, and not the court's reasons, we will not consider the court's oral comments or use them to undermine the order ultimately entered.' [Citation.] If the decision itself is correct, there can be no prejudicial error from incorrect logic or reasoning. [Citation.]" (Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1201.) Based on these principles of law, we see no reason to change our earlier rulings in Dones I and Dones II, in which we upheld awards of attorney fees and costs to respondents as prevailing parties under the attorney fees provision in the SUDA Operating Agreement, or our decision not to reach the issue of whether the attorney fee awards were sustainable under Code of Civil Procedure section 128.7. (Dones I, supra, at p. 10 & fn. 11; Dones II, supra, at pp. 5-6.)
We now turn to and address appellants' challenges to the orders under review in the current appeals.
I. September 3, 2015, Oral Ruling
While appellants filed a notice of appeal from a judgment or order entered on "September 3, 2015," their appendix contains no written order or judgment entered on that date. The only reference in appellants' appendix to any court activity on September 3, 2015, is a document filed by respondents on September 8, 2015, in which they gave "NOTICE that on September 3, 2015, the Court heard oral argument on [appellants'] Ex Parte Motion to Stay Execution of All Judgments . . . and Further Proceedings . . . ," and "[b]y oral ruling, the Court denied the Ex Parte Motion in its entirety." And, in their civil case information statement filed in this court, appellants acknowledge that the document they seek to appeal is respondents' filed notice of the superior court's oral ruling on September 3, 2015. However, respondents' filed notice of the superior court's oral ruling does not constitute a court order from which an appeal will lie. "[I]t is the court's written order that constitutes the ruling. ' "An oral . . . opinion by a trial judge, . . . purporting to decide the issues, . . . is merely an informal statement of his views. . . . [I]t is not itself the decision of the court or a judgment." ' [Citation.]" (Diaz v. Professional Community Management, Inc. (2017) 16 Cal.App.5th 1190, 1206; see Code Civ. Proc., § 1003 ["[e]very direction of a court or judge, made or entered in writing, and not included in a judgment, is denominated an order" (italics added)]; Jablon v. Henneberger (1949) 33 Cal.2d 773, 775 ["an order is ineffective unless filed with the clerk or entered in the minutes"]; Jackson v. Thompson (1941) 43 Cal.App.2d 150, 152 ["[t]hat no appeal can be taken from an order or judgment until it is formally entered in the minutes, is and for a long time has been the unquestioned law of this state"].) Because we lack jurisdiction to consider an appeal from a nonappealable order, we must dismiss the appeal from the September 3, 2015, order. (Woodman v. Ackerman (1967) 249 Cal.App.2d 644, 646-647 (Woodman) [court on its own motion must dismiss appeal from a nonappealable order].)
In their civil case information statement filed in this court, appellants describe the order from which they are appealing in the following manner: "Motion to Stay Execution of All Judgments Under Code of [Civil Procedure §] 473 and Further Proceedings Because of Fraud on the Court and Petitioners; and Motion to Compel Enforcement of Sections 5.1 and 5.5 of Operating Agreement," "Hearing and Ruling of September 3, 2015," and "Notice of Entry of Oral [R]uling Denying Motion [¶] September 8, 2015."
II. September 11, 2015, Order
In their opening brief, appellants assert they are appealing from so much of the order filed on September 11, 2015, in which the superior court denied appellants' request for a determination of their rights and liabilities for the payment of attorney fees and costs awarded to respondents under certain provisions of the SUDA Operating Agreement. According to appellants, the award of attorney fees should be "set-off" or reduced by the amount of "distributions due to [Fiscal Funding] for net receipts which should have been distributed but based on the limited abstracts from the IRS were misappropriated by [respondents] . . . ." However, appellants present no cogent argument or citation to authority in support of their apparent contention that the superior court abused its discretion in denying the requested relief of a set-off against or reduction of the award of attorney fees. "An appellate brief 'should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.' [Citation.]" (In re Marriage of Schroeder (1987) 192 Cal.App.3d 1154, 1164; see Murphy v. Murphy (2008) 164 Cal.App.4th 376, 405 ["failure to cite pertinent legal authority is enough reason to reject . . . argument"].) Accordingly, we deem appellants' arguments waived, and we see no reason to further address the contentions.
The superior court's September 11, 2015, order, also denied appellants' motion for reconsideration of the court order filed on July 1, 2015, which awarded respondents attorney fees and costs in defending the appeal in Dones I. In their reply brief, appellants argue that both the July 1, 2015, order and the September 11, 2015, order are properly before us for review because they filed a notice of appeal within the time frames allowed by California Rules of Court, rule 8.108(e), which extends the time to file a notice of appeal from an appealable order that is subject to a valid motion for reconsideration. However, the record before us reflects that appellants did not file a notice of appeal from the July 1, 2015, order, and their time to do so has now expired. Moreover, appellants' argument ignores the fact that an order denying reconsideration is not separately appealable. (Code Civ. Proc., § 1008, subd. (g).) Rather, "the denial of the motion for reconsideration is reviewable" only as part of an appeal from the order that was the subject of the motion for reconsideration (ibid.), and, as noted, appellants did not appeal from the July 1, 2015, order. And, given the specificity of the notice of appeal, which mentions only the September 11, 2015, order, we cannot construe the notice as encompassing the earlier July 1, 2015, order. "The policy of liberally construing a notice of appeal in favor of its sufficiency (Cal. Rules of Court, rule 8.100(a)(2)) does not apply if the notice is so specific it cannot be read as reaching a judgment or order not mentioned at all. [Citations.]" (Filbin v. Fitzgerald (2012) 211 Cal.App.4th 154, 173.) We therefore are jurisdictionally barred from reviewing either the July 1, 2015, order, or that portion of the September 11, 2015, order, as denied the motion for reconsideration of the July 1, 2015, order. (See Silverbrand, supra, 46 Cal.4th at p. 113; Woodman, supra, 249 Cal.App.2d at pp. 646-647.) Accordingly, we cannot and do not address appellants' arguments challenging either the July 1, 2015, order or that portion of the September 11, 2015, order as denied appellants' motion for reconsideration of the July 1, 2015, order.
III. September 16, 2015, Order
Lastly, appellants appeal from the September 16, 2015, order awarding respondents, as prevailing parties, their attorney fees and costs incurred in defending against the appeal in Dones II and in arbitration, under the attorney fees provision of the SUDA Operating Agreement. Specifically, appellants argue the superior court abused its discretion in making a prevailing party determination because the parties' dispute had not been finally resolved in arbitration. We disagree. Since our last decisions in this matter, our Supreme Court has had the opportunity to address the issue of the superior court's discretion to award attorney fees to a prevailing party arising in the procedural context "in which a party has won a procedural victory ending the contract litigation in one court but the litigation has continued or could continue in a different forum." (DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 974 (DisputeSuite).)
In DisputeSuite, supra, 2 Cal.5th 968, the Supreme Court considered whether the superior court had abused its discretion in denying a motion for attorney fees under Civil Code section 1717 filed by a defendant in an action for breach of contract and fraud after defendant had obtained a dismissal on the ground of forum selection clauses in the parties' agreements. (Id. at pp. 971-972.) The Supreme Court held, "In the circumstances of this case, we conclude the trial court did not abuse its discretion in finding that defendants were not prevailing parties for purposes of section 1717. Considering that the action had already been refiled in the chosen jurisdiction and the parties' substantive disputes remained unresolved, the court could reasonably conclude neither party had yet achieved its litigation objectives to an extent warranting an award of fees. [Citations.]" (Id. at p. 971.)
All further unspecified statutory references are to the Civil Code.
In explaining its ruling, the DisputeSuite court started out by setting forth both section 1717 and the pertinent portions of its decision in Hsu in the following manner: "Section 1717, subdivision (a), provides in 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.' Subdivision (b)(1) of the statute 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) [relating to voluntary dismissals and settlements], 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.'
"The trial court ruling on a motion for fees under section 1717 is vested with discretion in determining which party has prevailed on the contract, or that no party has. [(Hsu, supra, 9 Cal.4th at p. 871.)] '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.' [Citation.] As we explained in Hsu, a party who obtains an unqualified victory on a contract dispute, including a defendant who defeats recovery by the plaintiff on the plaintiff's entire contract claim, is entitled as a matter of law to be considered the prevailing party for purposes of section 1717. (Hsu, supra, at p. 876.) But 'when the results of the [contract] litigation are mixed,' the trial court has discretion under the statute to determine that no party has prevailed. (Ibid.)
"In Hsu, the trial court granted the defendants' motion for judgment on the complaint for breach of contract but denied the defendants' motion for fees under section 1717. (Hsu, supra, 9 Cal.4th at pp. 868-869.) The plaintiffs contended the trial court could properly conclude neither party had prevailed, and deny the fee request, because the defendants had acted inequitably in the disputed transaction. (Id. at pp. 869, 871.) [The Supreme Court] rejected the plaintiffs' interpretation of section 1717, holding that when one party has achieved an unqualified victory on the only disputed contract claim, that party has prevailed; the trial court may not invoke equitable considerations unrelated to litigation success as grounds to deny fees under the statute. (Hsu, supra, at pp. 876-877.)
"[The Supreme Court] articulated [its] general holding in Hsu, that the prevailing party determination depended on success vis-à-vis the disputed contract claim or claims, as follows: 'Accordingly, we hold that in 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." ' (Hsu, supra, 9 Cal.4th at p. 876.)" (DisputeSuite, supra, at pp. 973-974.)
In applying Hsu to the case before it, the DisputeSuite court found the trial court there had acted within its discretion in determining that the defendant "had not 'prevail[ed] on the contract' within the meaning of section 1717, subdivision (b)(1), by moving the litigation [from California] to Florida. While [the defendant] had succeeded in enforcing the forum selection clauses in two of its agreements with DisputeSuite, it had not defeated DisputeSuite's breach of contract and related claims. Because none of those claims had yet been resolved and the litigation was still ongoing in Florida, the California trial court was in no position to 'compare the relief awarded on the contract claim or claims with the parties' demands on those same claims and their litigation objectives'; that comparison could be made only 'upon final resolution of the contract claims.' (Hsu, supra, 9 Cal.4th at p. 876.) [The defendant] was therefore not the prevailing party as a matter of law, and the trial court could reasonably decide that at the time fees were sought 'neither party [had] prevailed sufficiently to justify an award of attorney fees.' [Citation.]" (Id. at p. 974.) In so concluding, however, the Supreme Court agreed "that an award of fees under section 1717 should not require a victory on the merits of the contractual dispute, as opposed to a victory on procedural grounds." (Id. at p. 981.) Nor did the Supreme Court hold that fees may never be awarded for obtaining a dismissal on grounds of improper forum, acknowledging that "[a] procedural victory that finally disposes of the parties' contractual dispute, such as an involuntary dismissal with prejudice and without any likelihood of refiling the same litigation in another forum, may merit a prevailing party award of fees under section 1717." (Ibid.) But, in the case before it, the DisputeSuite court found that the defendant's claim to be the prevailing party was not denied because its victory in California was procedural, but because its victory "was not dispositive of the contractual dispute. By the time of the trial court's decision on fees, that dispute was already being litigated in a Florida court." (Ibid.)
As part of its discussion in DisputeSuite, the Supreme Court took the opportunity to discuss a number of Courts of Appeal cases that addressed the applicability of section 1717 "in related procedural contexts" (DisputeSuite, supra, 9 Cal.5th at p. 974), including Drummond, Lachkar v. Lachkar (1986) 182 Cal.App.3d 641 (Lachkar), and Frog Creek.
In Drummond, supra, 149 Cal.App.4th 46, "a testator's children engaged an attorney to contest their father's will, but eventually fired the attorney and disputed his claim for payment of fees. (Id. at pp. 48-49.) After the children filed a civil action against the attorney for fraud and breach of faith, the attorney petitioned successfully in probate court for the disputed fees (id. at p. 49), but the Court of Appeal held the attorney's claim should instead have been filed as a cross-complaint in the children's civil action; hence, on remand, the probate petition was dismissed and the attorney filed a cross-complaint for his fees in the civil action. (Ibid.) The children then sought their own attorney fees incurred in defending the probate petition, which the probate court denied. (Id. at pp. 49-50.)
"The Court of Appeal affirmed. The court held the fees were properly denied under section 1717 because the testator's children had 'obtained only an interim victory, based on [the attorney] having attempted to pursue his claims in the wrong forum.' (Drummond, supra, 149 Cal.App.4th at p. 51.) Put another way, the children had 'at no time won a victory "on the contract." They [had] only succeeded at moving a determination on the merits from one forum to another.' (Id. at p. 53.) The trial court's denial of fees was thus consistent with Hsu's direction that the prevailing party determination be made only after ' "final resolution of the contract claims." ' (Drummond, supra, at p. 51, quoting Hsu, supra, 9 Cal.4th at p. 876.)
"The Drummond court did not rule out the possibility a defendant might prevail on the contract within the meaning of section 1717 by winning a purely procedural dismissal. If refiling in another forum would be legally barred—by the statute of limitations, for example—or would be otherwise impossible or impracticable, the defendant might be deemed the prevailing party without obtaining a resolution on the merits. (Drummond, supra, 149 Cal.App.4th at p. 53.) In Drummond, however, the attorney had already refiled his contractual claim in the civil action. 'The dismissal of his petition in the probate matter did not defeat his contract claims; it merely deflected or forestalled them.' (Ibid.)" (DisputeSuite, supra, 2 Cal.5th at pp. 974-975.)
In Lachkar, supra, 182 Cal.App.3d 641, the court "reached a similar conclusion in the arbitration context. After granting the plaintiffs' petition to compel arbitration of a dispute arising from a contract for sale of a business (without any civil action on the contract having yet been filed), the trial court awarded the plaintiffs their attorney fees expended on the petition to compel under the sale agreement's attorney fee provision. (Id. at pp. 643-645, 647.) The appellate court reversed. Applying the then-current version of section 1717, which defined the prevailing party as ' "the party who is entitled to recover costs of suit," ' the court reasoned the statute required a 'final disposition of the rights of the parties' and a reckoning by the trial court of the ' "net success of the respective parties," ' which could not be ascertained ' "until the final termination of the suit." ' (Id. at pp. 648-649.) In ordering the dispute to arbitration, the trial court had not determined the parties' substantive rights; no party had yet prevailed within the meaning of section 1717. [Citations.]
"Although decided under an earlier version of section 1717, Lachkar's conclusion accords with Drummond's: A party does not become the prevailing party under the statute merely by obtaining a forum for resolution of the contractual dispute or by moving it from one forum to another. Lachkar's view that the prevailing party cannot be determined until the contractual dispute reaches a final disposition and the parties' respective achievements can be compared prefigured [the Supreme Court's] direction that the trial court should decide which party, if either, has prevailed '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." ' (Hsu, supra, 9 Cal.4th at p. 876)." (DisputeSuite, supra, 2 Cal.5th at pp. 975-976.)
Frog Creek, supra, 206 Cal.App.4th 515, "also an arbitration case, followed Lachkar and Drummond in denying fees for prevailing on an interim motion that did not resolve the parties' substantive dispute. In Frog Creek, a property owner filed a civil action against a builder for breach of an agreement to construct improvements on the property; the builder cross-complained. The defendant builder twice petitioned to compel arbitration under the contract. The trial court denied the first petition but, pursuant to an appellate court order, granted the second. In arbitration, the defendant won a substantial award. (Frog Creek, supra, at pp. 521-523.) At issue on appeal was the propriety of awarding the plaintiff, rather than the defendant, attorney fees incurred opposing [the defendant's] first, unsuccessful, petition to compel arbitration. (Id. at p. 523.)
"The Frog Creek court held that under section 1717, attorney fees for the first petition to compel should have been awarded to the defendant, who prevailed on the contract dispute as a whole, rather than to the plaintiff, who won only an interim victory on the first petition. That victory did not make the plaintiff the prevailing party on the contract because denial of the petition to compel arbitration 'did not resolve the parties' contract dispute; instead, the merits of that dispute remained before the court in [the plaintiff's] complaint and [the defendant's] cross-complaint.' (Frog Creek, supra, 206 Cal.App.4th at p. 546.) That dispute was ultimately resolved in the defendant's favor through arbitration. The defendant was thus the prevailing party on the contract and, under prior appellate decisions, was 'entitled to all of its fees, including fees incurred during the lawsuit in proceedings where it did not prevail.' (Ibid.)" (DisputeSuite, supra, 2 Cal.5th at pp. 976-977.)
Unlike the factual situations in DisputeSuite, Drummond, Lachkar, and Frog Creek, which concerned interim awards of attorney fees in ongoing contractual disputes, we have before us an award of attorney fees that was made after the resolution of the parties' contract dispute in arbitration. At the time it issued the September 16, 2015, order, the superior court here was in a position and acted well within its discretion in determining that respondents had prevailed on the contract within the meaning of section 1717, thereby justifying an award of attorney fees incurred by respondents in defending the appeal in Dones II and in arbitration. We are not persuaded by appellants' argument that at the time respondents sought attorney fees in August 2015 there had not been a final resolution of the matter. According to appellants, they may refile the arbitration "at any time," "[i]t is contemplated that the arbitration will be refiled as soon as this appeal is finalized," and no attorney fees are payable except at the conclusion of the arbitration. However, whether appellants were likely to reinstate the arbitration in the future was a question for the superior court. The record shows that at the time of the entry of the first judgment awarding attorney fees in March 2012, the arbitration had already been terminated due to Fiscal Funding's lack of prosecution and failure to pay required arbitration fees. By the time respondents made their latest request for attorney fees in August 2015, the arbitration had been terminated for three years and during that time Fiscal Funding had made no attempt to reinstate the arbitration. Under these circumstances, the superior court could reasonably find respondents had shown they had achieved " '[a] procedural victory that finally dispose[d] of the parties' contractual dispute,' "—namely, the termination of the arbitration without any likelihood that the arbitration would be reinstated in the future. (DisputeSuite, supra, 2 Cal.5th at p. 981.) "In reviewing a trial court's exercise of discretion to determine the prevailing party under section 1717," as an appellate court, we " 'are required to uphold a reasonable ruling even if we might not have ruled the same way and a contrary ruling would also be sustainable.' " (Id. at p. 979, quoting In re Tobacco Cases I (2013) 216 Cal.App.4th 570, 578, italics added by DisputeSuite court.) By their argument, appellants are attempting "to reargue" a factual issue "decided adversely to" them, which is "contrary to established precepts of appellate review." (Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 398-399.) Accordingly, we conclude appellants' challenge to the September 16, 2015, order fails.
In their responsive brief, respondents request an award of attorney fees incurred in litigating these appeals. Because such fees must be sought in the superior court in the first instance, we deny the request without prejudice. (City of Crescent City v. Reddy (2017) 9 Cal.App.5th 458, 468; see Cal. Rules of Court, rule 3.1702(c).) Respondents also request, in their responsive brief and in a separate motion to dismiss these appeals, that we impose a monetary sanction on appellants, to be payable to the clerk of the court, for filing frivolous appeals. In light of our determination of these appeals, we deny respondents' motion to dismiss as moot. We also decline to impose a monetary sanction for the filing of frivolous appeals. However, we take this opportunity to admonish appellants that we are confident we have now definitively and conclusively addressed their myriad of issues challenging the superior court's orders resolving this litigation. If appellants attempt to again raise the same issues in subsequent appeals, we will consider imposing monetary sanctions if warranted by the circumstances.
DISPOSITION
The appeal from the September 3, 2015, order is dismissed. The order filed on September 11, 2015, and the order filed on September 16, 2015, are affirmed. Respondents are awarded costs on appeal.
/s/_________
Jenkins, J. We concur: /s/_________
McGuiness, Acting P.J. /s/_________
Siggins, J.
Retired Presiding Justice of the Court of Appeal, First Appellate District, Division Three, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.