Opinion
NOT TO BE PUBLISHED
APPEALS from a judgment and orders of the Los Angeles County Super. Ct. No. BC314667, Alice E. Altoon, Judge. Affirmed.
Glickfeld, Fields & Jacobson, Craig M. Fields; Pine & Pine and Norman Pine for Defendants and Appellants and for Cross-complainants and Appellants.
Palmieri, Tyler, Wiener, Wilhelm & Waldron, Michael H. Leifer, and Michael I. Kehoe for Plaintiffs and Respondents and Cross-defendants and Respondents.
SUZUKAWA, J.
INTRODUCTION
Plaintiffs Ismael Lopez, Pedro Vasquez, and Rodolfo Fonseca, who were doing business as Margarita Jones Restaurant, a California general partnership, entered a five-year lease of commercial property with Denmarst, Ltd. (Denmarst), not a party to this appeal. The lease gave plaintiffs the option to extend the lease for a second five-year term, and it gave Denmarst the option to terminate the lease during the second five-year term by buying plaintiffs out of the remaining lease term. If Denmarst exercised its buyout option, the buyout payment was to be based on plaintiffs’ “average net annual income” during “the two (2) years prior to the termination notice.”
The present appeal concerns the meaning of “two . . . years prior to the termination notice.” Plaintiffs contend that “two . . . years prior” refers to the 24 months immediately prior to termination, while defendant JPGR Housing LLC (JPGR), the successor to the lease, contends that it refers to the last two calendar years preceding termination. Based on the lease language and relevant evidence, the trial court concluded that plaintiffs’ interpretation was correct, a conclusion that we affirm. We also affirm the trial court’s order dismissing the cross-complaint filed by defendant Conquest Student Housing, striking defendants Conquest’s and Alan Smolinisky’s cost memoranda, amending the judgment to correct a clerical error, and awarding judgment and legal fees to the partnership plaintiff.
FACTS AND PROCEDURAL HISTORY
I. The Margarita Jones Lease
In early 1980, Denmarst, a general partnership whose partners are Marc Needleman, Dennis Needleman, and Steve Needleman, purchased property located at 3760 South Figueroa Street in Los Angeles (the property). Between 1980 and about 1985, Denmarst operated a restaurant called “Margarita Jones” on the property.
In 1997, Denmarst agreed to lease the property to Ismael Lopez, Pedro Vasquez, and Rodolfo Fonseca, who were doing business as Margarita Jones Restaurant, a California general partnership (collectively, plaintiffs). Before executing a written lease agreement, Denmarst and the plaintiffs had at least one meeting at which they discussed the term of the lease, rent, and Denmarst’s need for a provision that would allow it to terminate the lease if it decided to sell or build on the property. Those discussions are detailed more fully below. (See section IV.A, post.)
Denmarst and plaintiffs executed a written lease on May 22, 1997. The lease had two parts: (1) a standard-form portion, based on an American Industrial Real Estate Association form, and (2) an “Addendum to Lease,” created by Denmarst. It gave plaintiffs the right to lease the property for five years (July 1, 1997-June 30, 2002), plus an option to renew the lease for another five years after the original term expired (the option period). It further provided that plaintiffs would pay a minimum monthly rent of $6,000, plus additional annual rent based on sales revenues.
The present dispute concerns paragraph 51 of the addendum, which governed early termination of the lease. Under that paragraph, Denmarst could terminate the lease at any time during the option period (i.e., during the second five-year lease period) by buying plaintiffs out of the remaining lease term. The buyout payment would be calculated as follows: “In consideration for said termination, Lessor agrees to pay to Lessee within ten (10) days of Lessee’s surrender and vacation of the Premises, the amount as determined by the following: [¶] (1) The greater of (i) One Hundred Thousand ($100,000) Dollars; Or, (ii) the present value (using the then prevailing United States One Year Treasury Bill Rate as the discount factor) of the average net annual income of the two (2) years prior to the termination notice (as evidenced by Federal Income Tax returns) multiplied by the number of years and fractions thereof remaining on the option period after Lessee vacates the Premises.” Paragraph 51 included the following example of the application of the buyout formula: “For example, assume: *Lease is terminated and Premises vacated at end of second (2nd) year of option period. [¶] *Average Net Income for prior two (2) years = $100,000. [¶] *One Year Treasury Bill Rate = 5%. [¶] Then, the amount due to Lessee is: $100,000 x 2.72 (present value factor) = $272,000.”
II. The Sale of the Property to JPGR and Termination of Plaintiffs’ Lease
Denmarst transferred the property to CAST Real Estate Holdings (CAST), a real estate holding company owned by Steve and Kathy Needleman, sometime prior to 2002. The same year, plaintiffs exercised their option to extend the lease for an additional five years, to June 2007.
CAST began negotiating the sale of the property to Alan Smolinisky, a real estate developer, in late 2002. On January 23, 2003, CAST and Smolinisky executed a purchase and sale agreement. The agreement referenced the “existing restaurant lease” of which buyer “is fully aware,” and provided that the purchase was “contingent upon Buyer’s ability to terminate/buy out the existing lease.” Smolinisky subsequently formed JPGR, a limited liability company, to assume the purchase and development of the property.
On December 9, 2003, at JPGR’s request, CAST sent plaintiffs a termination notice drafted by JPGR. It stated that pursuant to paragraph 51 of the lease, CAST was exercising its election to terminate the lease as of June 7, 2004. It further stated that, “The new owners are prepared to pay you One Hundred Thousand Dollars ($100,000.00) within ten (10) days of your surrender and vacation of the premises. If, however, you believe that you would be entitled to a greater sum under the formula set forth in paragraph 51(a)(ii) of the lease, then please forward to us your Federal Income tax returns for the years 2001 and 2002. . . . [¶] Absent any correspondence from you by December 19, 2003, we will assume that the $100,000.00 payment will be due upon your surrender and vacation of the premises, and we will instruct the new owners accordingly.”
By a letter dated December 10, 2003, plaintiffs advised CAST that their “rough estimate” of the buyout amount, based on the partnership’s profits for December 2001, January to December 2002, and January to November 2003, was just over $868,000. They provided CAST with a copy of their 2002 tax return and with income statements for December 2001 and January to November 2003, and they stated that they would forward a copy of their 2003 tax return when it was completed.
In a December 15 letter drafted by Smolinisky, CAST responded that under paragraph 51, “[t]he only relevant periods are the two calendar years prior to the termination notice for which Federal Income Tax returns were filed — i.e. 2001 and 2002. Income for 2003 is irrelevant.” CAST requested a copy of plaintiffs’ 2001 tax return and stated that once it had reviewed the 2001 and 2002 returns, “we will inform you of the amount due you under paragraph 51 of the Lease.”
During the following several months, the parties attempted to resolve the dispute over the buyout amount, but they were not able to do so. In June 2004, escrow closed and the property was transferred from CAST to JPGR.
III. The Present Action
On April 29, 2004, Rodolfo Fonseca, doing business as Margarita Jones Restaurant, filed a verified complaint against CAST, Smolinisky, and Conquest Student Housing, a property management company (Conquest), for declaratory relief, breach of contract, anticipatory breach of contract, and anticipatory breach of the covenant of good faith and fair dealing. It sought a declaration of the parties’ rights under the buyout provision, a preliminary and permanent injunction prohibiting defendants from seeking to enforce the December 9, 2003 termination notice, and compensatory damages of $840,730.
On May 18, 2004, plaintiffs sought a temporary restraining order and preliminary injunction to prevent defendants from terminating the lease or requiring plaintiffs to vacate the property. The court denied a preliminary injunction, finding that plaintiffs had an adequate legal remedy. The following day, the parties signed a settlement agreement in which plaintiffs agreed to vacate the property and JPGR agreed to deposit into escrow $286,752.55, the amount JPGR believed it owed under paragraph 51. The parties “specifically reserve the issue of the actual amount owed under paragraph 51 of the Lease, and nothing contained herein waives any of the Parties’ rights, claims or defenses as to the actual amount owed, whether it is more or less than $299,543 or any other amount.”
On June 23, 2004, Conquest filed a cross-complaint seeking a declaration of its duties under the lease, including a determination of the correct buyout amount under paragraph 51. On June 28, 2004, plaintiffs dismissed CAST, and on August 4, 2004, they amended the complaint to add JPGR as a defendant. JPGR then filed a cross-complaint seeking the same declaratory relief sought by Conquest. We refer to JPGR, CAST, Smolinisky, and Conquest collectively as “defendants.”
IV. Trial
A. Plaintiffs’ Voluntary Dismissal of Conquest and Smolinisky and Request to Dismiss Conquest’s Cross-complaint
A four-day bench trial commenced June 15, 2005. Before the parties delivered their opening statements, plaintiffs filed a dismissal without prejudice of defendants Conquest and Smolinisky, and orally moved to dismiss Conquest’s cross-complaint. Conquest opposed the motion to dismiss and moved to set aside the dismissal of Conquest and Smolinisky.
The court declined to set aside the dismissal of Conquest and Smolinisky and, finding that there was no actual controversy between Conquest and plaintiffs, dismissed the cross-complaint. Defendants appealed these orders on August 11, 2005 (B185294).
B. Plaintiffs’ Case
Marc Needleman, a Denmarst partner, testified that the purpose of the buyout provision in paragraph 51 of the lease was “[t]o pay the tenant what we considered a fair market value for their business, the loss of their business.” Thus, he said, he intended to look at “the most recent time period” to determine the buyout amount. His testimony was as follows:
“Q: Did you express an intent to Margarita Jones as to what financial period would be used to determine the buy out period?
“A: Yes.
“Q: Was it the most recent — was it the period just before the notice of termination measured by two years?
“[Objections.]
“Q . . .: What was the period?
“A: It was two years prior to the termination notice.
“. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Q . . .: Did you discuss the buy out with the tenants?
“A: Yes.
“. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Q . . .: What was the purpose of the buy out, sir?
“A: To pay the tenant what we considered a fair market value for their business, the loss of their business.
“Q: And in order to do that, you’d look at the most recent time period, would you not?
“[Objections.]
“A: Yes.
“Q . . .: And the provision paragraph 51 [sic], it was your intent to effectuate the purpose of the buy out?
“[Objections.]
“A: Yes.”
Rodolfo Fonseca, a Margarita Jones partner, testified that he and his partners met with the Needlemans to discuss the lease terms in mid-1997. According to Fonseca, Marc Needleman said during those discussions that if Denmarst exercised its option to terminate the lease early, it would “pay on the two years with prior notice regarding the remaining of the contract in the second period of the lease.” Marc Needleman never suggested that the buyout calculation would be based on two full tax years or calendar years, and he never suggested that the buyout would be based exclusively on federal income tax returns. As a result, Fonseca said, when he and his partners entered the lease, they understood that if Denmarst exercised its option under paragraph 51, it “would have to pay, because of our recent earnings when they notified us two years prior, for whatever was remaining of the contract.”
Plaintiffs’ expert, David Hahn, testified that the objective of a lease termination payment would be to compensate the lessees for the income they would have earned if the lease had not been terminated. Such a payment is most accurately calculated using the most recent income information because “the most recent performance of a business enterprise is normally the best indicator of the future operations.” Thus, he opined, “I think in evaluating whether it’s reasonable to assume that the lease really meant the immediately preceding period of time, that supports that conclusion. It would be the most reasonable position to take to use the most recent period of time. The next statement is simply the corollary of that. It would be kind of illogical to ignore almost a full year of most recent operations in favor of including a period of time that’s like two years old in that calculation.” Hahn also testified that based on the plaintiffs’ income tax returns for 2001, 2002, and 2003, assuming a uniform daily income throughout each of these years, the buyout amount was $787,649.
C. Defendants’ Case
Mark Cohen, a CAST principal, testified for the defendants that he recalled only one face-to-face meeting between Denmarst and the plaintiffs before the lease was signed, and that to his knowledge the buyout provision was not discussed at that meeting. Further, he said, he participated in drafting paragraph 51 and understood that a buyout payment would be calculated on the basis of the two most recent calendar years preceding the buyout notice. He testified that he intended “annual” to have the same meaning in paragraphs 48 and 51 and that he intended the buyout amount to be calculable to the penny based on the lessee’s tax returns. However, he did not testify that he ever expressed either intention to the plaintiffs.
Paragraph 48 provided for minimum monthly rent of $6,000 per month, plus additional annual rent based on lessee’s sales revenue, as follows: “In addition to the payment of the guarantee minimum monthly rent, Lessee shall pay to Lessor annually . . . additional rent in the amount, if any, by which six (6%) percent of the annual gross sales, as hereinafter defined from all business conducted on the leased premises by or under Lessee during the term of this Lease, exceed the sum of the aggregate annual amount of all guaranteed minimum monthly rent payment paid to Lessor by Lessee. . . . The term ‘annual’ as used in this paragraph shall be synonymous with Lessee’s fiscal year, which for the purposes of this lease shall be January 1st of each year, and end December 31st of each year.” (Italics added.)
Alan Smolinisky testified that based on his understanding of paragraph 51—i.e., that the buyout amount was to be based on plaintiffs’ reported income for 2001 and 2002—the buyout amount was $299,717.
V. The Trial Court’s Ruling
On August 24, 2005, after the close of evidence, the court granted plaintiffs’ motion to amend the complaint to name Ismael Lopez, Pedro Vasquez, and Rodolfo Fonseca as additional plaintiffs.
After taking the case under submission, on October 13, 2005, the trial court ruled for the plaintiffs. In a six-page ruling (the October 13 ruling), the court stated that the central dispute between the parties concerned the meaning of “‘two years prior’ and the parenthetical ‘as evidenced by Federal Income tax returns,[’]” as used in paragraph 51 of the lease. The court noted that plaintiffs had introduced evidence of the intent and meaning of paragraph 51 through the testimony of two of the signatories to the original lease, Marc Needleman and Rodolfo Fonseca: “Mr. Needleman stated that the purpose of the buyout provision was to ‘pay the tenant what we considered a fair market value for their business, their loss of their business.’ He further testified that in order to effectuate that purpose one would look at the most recent period of performance. This intent was communicated to the Lessees at the meeting at the restaurant prior to drafting and executing the lease. Mr. Fonseca stated that it was never discussed that the exclusive evidence of net income would be two full tax years prior to the termination notice.”
The court also referenced the testimony of plaintiffs’ expert, David Hahn. Hahn testified that a formula projecting future income to value a business would normally consider the most recent representative period of the financial performance. Further, “one would consider the average monthly income statements for the relevant period and if the tax returns were available, one could reconcile those figures with that of the tax returns.” Accordingly, Hahn opined that “the proper buyout period under this lease would be from December 10, 2001 to December 9, 2003, representing the most recent performance period.”
The court noted that defendants also had introduced evidence of the purpose and intent of paragraph 51 through the testimony of Mark Cohen, Needleman’s accountant. According to the court, however, this testimony was “inconsistent . . . regarding the purpose and intent of paragraph 51.”
The court noted finally that, in contrast to paragraph 48, which defined “annual” for purposes of that paragraph as “‘synonymous with Lessee’s fiscal year which for the purpose of this lease shall be January 1st of each year and end December 31st of each year,’” paragraph 51 did not define “‘two (2) years prior to the termination notice.’” And, the court noted, under Civil Code section 1654, ambiguous contract language is to be interpreted “‘most strongly against the party who caused the uncertainty to exist’”—in this case, the lessors.
Based on this analysis, the court concluded that the proper buyout period under the lease was December 10, 2001 to December 9, 2003. Adopting the calculations prepared by plaintiffs’ expert, the court found that plaintiffs were entitled to $787,649, less the $299,717 already paid. The court further concluded that plaintiffs were entitled to prejudgment interest plus reasonable attorney fees and costs. The ruling provided that, “Th[is] ruling shall become the final judgment of the court unless counsel[] file an objection within ten days of Notice of Ruling.”
VI. Post-Ruling Proceedings
Defendants filed timely objections to the trial court’s ruling on October 24, 2005. Defendants also requested a statement of decision “explaining the legal and factual basis for its decision.”
Plaintiffs filed a proposed statement of decision, to which defendants filed objections. On December 16, 2005, the trial court overruled defendants’ objections to the proposed statement of decision. However, the court did not sign the proposed statement of decision, noting that “I thought I clearly explained [the court’s interpretation of paragraph 51 and its finding regarding the parties’ intent as to the meaning of paragraph 51] in my notice of ruling. That’s been done over and over again, actually we’re not going to do that ad infinitum.”
On November 4, 2005, Conquest and Smolinisky filed memoranda seeking costs of $1,922.78. Plaintiffs moved to strike the cost memoranda, asserting that they were untimely because they were filed more than 15 days after plaintiffs’ counsel served notice of Conquest’s and Smolinisky’s dismissal on June 15, 2005. As discussed more fully below (see section III, post), the trial court granted the motion and struck the cost memoranda.
Judgment for plaintiffs was entered on December 16, 2005. Defendants timely appealed from the judgment on December 30, 2005 (B188327). On February 15, 2006, the trial court entered an amended judgment nunc pro tunc that restated the award of prejudgment interest as a lump sum. Defendants timely appealed from the amended judgment on April 11, 2006 (B190399).
STANDARD OF REVIEW
In a nonjury trial, upon timely request of any party, the trial court is required to issue a statement of decision explaining “the factual and legal basis for its decision as to each of the principal controverted issues at trial.” (Code Civ. Proc., § 632.) If a statement of decision is timely requested, “[w]e review the trial court’s findings of fact to determine whether they are supported by substantial evidence.” (Westfour Corp. v. California First Bank (1992) 3 Cal.App.4th 1554, 1558.) In the absence of a statement of decision, we presume that the trial court made all factual findings necessary to support the judgment for which substantial evidence exists in the record. (Ibid.)
In the present case, appellants contend—without discussing the implications of this purported fact on the standard of review—that “the court never signed or entered any statement of decision.” Appellants indisputably are correct that the trial court did not sign any document captioned a “statement of decision.” However, as we have noted, on October 13, 2005, the trial court issued a “ruling” that set forth the factual and legal bases for the trial court’s decision as to the principal controverted issues at trial—namely, how the buyout amount was to be calculated under paragraph 51. Thus, notwithstanding its ambiguous nomenclature, the October 13 ruling arguably is a statement of decision.
Although appellants suggest that the trial court did not issue a statement of decision, they do not contend that the failure to do so constitutes reversible error. Thus, we do not consider that potential issue.
In any event, we conclude that whether or not the October 13 ruling is a statement of decision, it nonetheless constrains our review. As we have stated, the general rule is that in the absence of a statement of decision, the reviewing court must conclude that the trial court made all findings necessary to support the judgment under any theory which was before the court. (Slavin v. Borinstein (1994) 25 Cal.App.4th 713, 718.) “However, this rule is merely a corollary of the general rule that a judgment is presumed to be correct and must be upheld in the absence of an affirmative showing of error. This presumption applies only on a silent record. (Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 563; Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) In contrast, ‘When the record clearly demonstrates what the trial court did, we will not presume it did something different.’ (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379, 1384.)” (Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1550.)
Accordingly, to the extent that the October 13 ruling reveals the trial court’s factual findings, we will review those findings, rather than presume findings that are inconsistent with the court’s express analysis. If the October 13 ruling does not reveal the court’s factual findings, we will imply findings consistent with the judgment. We review the trial court’s legal conclusions de novo. (Urhausen v. Longs Drug Stores California, Inc. (2007) 155 Cal.App.4th 254, 267.)
DISCUSSION
I. The Trial Court Correctly Interpreted the Lease Buyout Provision
Defendants’ primary contention on appeal concerns the proper interpretation of the lease buyout clause contained in paragraph 51 of the addendum. Pursuant to that clause, if the lessors terminated the lease during the option period, they agreed to pay lessees “the present value . . . of the average net annual income of the two (2) years prior to the termination notice (as evidenced by Federal Income Tax returns) multiplied by the number of years and fractions thereof remaining on the option period after Lessee vacates the Premises.” The trial court concluded that “two . . . years” referred to the most recent 24-month period, and it thus awarded damages based on plaintiffs’ earnings between December 10, 2001 and December 9, 2003. Defendants disagree with the trial court’s interpretation, contending that “two . . . years” means two calendar years, and thus that the buyout payment should have been based on plaintiffs’ earnings in 2001 and 2002. For the reasons that follow, we conclude that the trial court’s interpretation is the correct one.
A. Rules of Contract Interpretation
The interpretation of a lease is governed by the same principles that govern contracts generally. (Golden West Baseball Co. v. City of Anaheim (1994) 25 Cal.App.4th 11, 21-22.) “‘“The fundamental rules of contract interpretation are based on the premise that the interpretation of a contract must give effect to the ‘mutual intention’ of the parties. ‘Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (Civ. Code, § 1636.)’”’” (TRB Investments, Inc. v. Fireman’s Fund Ins. Co. (2006) 40 Cal.4th 19, 27.) “The mutual intention to which the courts give effect is determined by objective manifestations of the parties’ intent, including the words used in the agreement, as well as extrinsic evidence of such objective matters as the surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties. (Civ. Code, §§ 1635-1656; Code Civ. Proc., §§ 1859-1861, 1864; Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791, 1814; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, §§ 688-689, pp. 621-623.)” (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.)
“When a dispute arises over the meaning of contract language, the court must decide whether the language is ‘reasonably susceptible’ to the interpretations urged by the parties. (Oceanside 84, Ltd. v. Fidelity Federal Bank (1997) 56 Cal.App.4th 1441, 1448.) ‘“. . . Whether the contract is reasonably susceptible to a party’s interpretation can be determined from the language of the contract itself [citation] or from extrinsic evidence of the parties’ intent [citation].”’ (Ibid., quoting Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 848.)” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 798.) “‘If the court decides the language is reasonably susceptible to the interpretation urged, the court moves to the second question: what did the parties intend the language to mean? (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)’” (Oceanside 84, Ltd. v. Fidelity Federal Bank, supra,56 Cal.App.4th at p. 1448.)
“Where the meaning of the words used in a contract is disputed, the trial court must provisionally receive any proffered extrinsic evidence which is relevant to show whether the contract is reasonably susceptible of a particular meaning. (Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 39-40; Pacific Gas & Electric Co. v. Zuckerman (1987) 189 Cal.App.3d 1113, 1140-1141.) Indeed, it is reversible error for a trial court to refuse to consider such extrinsic evidence on the basis of the trial court’s own conclusion that the language of the contract appears to be clear and unambiguous on its face. Even if a contract appears unambiguous on its face, a latent ambiguity may be exposed by extrinsic evidence which reveals more than one possible meaning to which the language of the contract is yet reasonably susceptible. (Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co., supra, 69 Cal.2d at p. 40 & fn. 8; Pacific Gas & Electric Co. v. Zuckerman, supra, 189 Cal.App.3d at pp. 1140-1141.)” (Morey v. Vannucci, supra, 64 Cal.App.4th at p. 912.) If, in light of the extrinsic evidence, the language is reasonably susceptible to the interpretation urged, then the extrinsic evidence is admitted to aid in interpreting the contract. (Wagner v. Columbia Pictures Industries, Inc. (2007) 146 Cal.App.4th 586, 589-590.)
“The trial court’s ruling on the threshold determination of ‘ambiguity’ (i.e., whether the proffered evidence is relevant to prove a meaning to which the language is reasonably susceptible) is a question of law, not of fact. (Madison v. Superior Court (1988) 203 Cal.App.3d 589, 598.) Thus the threshold determination of ambiguity is subject to independent review. (Equitable Life Assurance Society v. Berry (1989) 212 Cal.App.3d 832, 840.)” (Winet v. Price, supra, 4 Cal.App.4th at pp. 1165-1166; see also ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266-1267.) “When the competent parol evidence is in conflict, and thus requires resolution of credibility issues, any reasonable construction will be upheld as long as it is supported by substantial evidence. (Stratton v. First Nat. Life Ins. Co. (1989) 210 Cal.App.3d 1071, 1084.) However, when no parol evidence is introduced (requiring construction of the instrument solely based on its own language) or when the competent parol evidence is not conflicting, construction of the instrument is a question of law, and the appellate court will independently construe the writing. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865.)” (Winet v. Price, supra, 4 Cal.App.4th at p. 1166; see also ASP Properties Group, L.P. v. Fard, Inc., supra, 133 Cal.App.4th at pp. 1266-1267.)
B. Paragraph 51 Is Reasonably Susceptible of Both Plaintiffs’ and Defendants’ Interpretations
As noted, the principal issue in the present case is the meaning of paragraph 51, which gave the defendants the option to terminate the lease during the option period by paying plaintiffs the present value of “the average net annual income of the two (2) years prior to the termination notice (as evidenced by Federal Income Tax returns) multiplied by the number of years and fractions thereof remaining on the option period after Lessee vacates the Premises.”
Considered by itself, the phrase “two . . . years prior to the termination notice” is reasonably susceptible of both plaintiffs’ and defendants’ interpretations. According to the dictionary, a “year” is “the period of about 3651/4 solar days required for one revolution of the earth around the sun.” (Merriam Webster’s Collegiate Dict. (10th ed. 1995) p. 1371.) Alternatively, it is “a cycle in the Gregorian calendar of 365 or 366 days divided into 12 months beginning with January and ending with December” or “a calendar year.” (Ibid.) Thus, “year” is commonly understood to have both of the meanings the parties attribute to it.
The fact that “year” has more than one common meaning does not, of course, necessarily mean that the buyout provision is ambiguous. (See E.M.M.I. Inc. v. Zurich American Ins. Co. (2004) 32 Cal.4th 465, 472 [“Of course, the fact that a word carries multiple meanings does not by itself render it ambiguous”].) Under well-established principles of contract interpretation, “‘[t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.’” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1114, quoting Civ. Code, § 1641; see also Van Ness v. Blue Cross of California (2001) 87 Cal.App.4th 364, 372 [“[W]e read a contract as a whole in order to ‘give effect to every part, if reasonably practicable, each clause helping to interpret the other’”].) Thus, “year” is ambiguous only if it is susceptible of more than one meaning when considered in light of the lease as a whole.
When considered in the context of the lease, however, “year” appears more ambiguous, not less so. The plain language of paragraph 51 provides that the buyout amount—i.e., the “average net annual income of the two . . . years prior to the termination notice”—is to be “evidenced by [lessees’] Federal Income Tax returns.” As defendants correctly note, federal income tax returns report annual income, not monthly income. Thus, the income evidenced by plaintiffs’ tax returns is that earned during an entire calendar year, not a portion thereof. Plaintiffs’ income for a partial year can be estimated on the basis of the tax returns by, for example, multiplying net income for the entire calendar year by the fraction of the year at issue, but the number so derived will be an estimate only, not a precise computation of income earned during the relevant period.
We do not agree with defendants, however, that an estimate so derived violates paragraph 51’s directive that the buyout amount shall be based on lessees’ average net annual income for the two years “prior to” the termination notice, simply because some of the calendar year income on which the estimate is based was earned after the termination notice.
Further, because tax returns are prepared on a calendar-year basis, they cannot be prepared or submitted before the calendar year has ended. Paragraph 51, however, requires that the lessor make the buyout payment to the lessee no later than 190 days after written notice of termination. As defendants note, if notice of termination is given in the first half of a calendar year, the buyout payment will be due before the end of the calendar year and, thus, before current-year income tax returns are available. In that case, the only income that can be “evidenced by” federal income tax returns is that of prior tax years.
Under paragraph 51, lessor is required to give lessee written notice of termination 180 days before lessee will be required to surrender the leased premises, and is required to deliver the buyout payment to lessee “within ten (10) days of Lessee’s surrender and vacation of the Premises.” Thus, the buyout payment is due 190 days (180 days + 10 days) after notice of termination.
We do not agree with defendants that the definition of “annual” in paragraph 48 of the addendum supports defendants’ claim. Paragraph 48 provides for payment of additional rent “in the amount, if any, by which six (6%) percent of the annual gross sales, as hereinafter defined from all business conducted on the leased premises by or under Lessee during the term of this Lease, exceed the sum of the aggregate annual amount of all guaranteed minimum monthly rent payment paid to Lessor by Lessee.” (Emphasis added.) Paragraph 48 further provides that, “The term ‘annual’ as used in this paragraph shall be synonymous with Lessee’s fiscal year, which for the purposes of this lease shall be January 1st of each year, and end December 31st of each year.” While defendants are correct that the same word used in an instrument generally is given the same meaning, that principle does not apply here, where paragraph 48 is explicit that its definition applies only to “‘annual’ as used in this paragraph.” (See Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1352 [definition of “gross receipts” in one section of contract could not be imported into another section where “gross receipts” was not defined and term was “not even capitalized to suggest it has a special or limited meaning”].)
For both of these reasons, the reference in paragraph 51 to federal income tax returns suggests that “year” means “calendar year” or “tax year,” as defendants contend. Other provisions of the lease, however, suggest just the opposite. Under well-established rules of contract interpretation, “the same word used in an instrument is generally given the same meaning unless the [instrument] indicates otherwise.” (E.M.M.I. Inc. v. Zurich American Ins. Co., supra, 32 Cal.4th at p. 475; see also People ex rel. Lockyer v. R.J. Reynolds Tobacco Co. (2003) 107 Cal.App.4th 516, 526 [“identical phrase or word used in a contract be given the same meaning throughout the contract in the absence of anything in the contract suggesting otherwise”].) If “year” appears in other provisions of the lease, therefore, its usage is probative of what the parties intended it to mean in the relevant clauses of paragraph 51.
Our review of the lease reveals that “year” appears in several different places. Indeed, it appears three times in paragraph 51 itself. It appears first in the clause at issue in this case—“two (2) years prior to the termination notice.” (Emphasis added.) It also appears in a subsequent clause of the same sentence, which says that in the event of early termination, the buyout payment shall be calculated by multiplying lessees’ average net annual income by “the number of years and fractions thereof remaining on the option period after Lessee vacates the premises.” (Emphasis added.) If “years” means 12-month periods, then lessees would be entitled under this clause to be compensated for exactly the period of time that they are deprived of the use of the property. For example, if notice of termination were given on February 1, 2003, requiring lessee to vacate by August 1, 2003, then lessees would be compensated for the period August 1, 2003 to June 30, 2007. However, if “years” instead means “calendar years,” then lessees either would be entitled under this clause to compensation for months during which they had use of the property, or would be deprived of compensation for months when they did not have use of the property. That is, using the same example, lessees would be compensated either for the period January 1, 2003 to June 30, 2007, even though they had use of the leased premises from January 1 to August 1, 2003, or they would be compensated for the period January 1, 2004 to June 30, 2007, even though they did not have use of the premises after August 1, 2003.
This is precisely how defendants themselves interpreted “year” for these purposes when they calculated the buyout amount to which they believed plaintiffs were entitled. According to defendants, the proper buyout amount was plaintiffs’ average net annual income “times 2.9671 (the years remaining on the Lease Option period as of July 12, 2004).” (Italics added.) Absent the early termination, the lease term would have ended on June 30, 2007. Thus, as of July 12, 2004, only two full calendar years—2005 and 2006—remained on the lease. 2.9671 years remained on the lease only if “years” were interpreted to mean 365-day periods. (July 12, 2004-June 30, 2007 = two years and 353 days = 2.9671 years.)
“Year” also is used in the example in paragraph 51 of how the buyout formula works. The example assumes that (1) “Lease is terminated and Premises vacated at end of second (2nd) year of option period,” (2) “Average Net Income for prior two (2) years = $100,000,” and (3) the “One Year Treasury Bill Rate = 5%.” (Emphasis added.) In that case, the example says, the amount due to lessee is “$100,000 x 2.72 (present value factor) = $272,000.” The example thus assumes that the period remaining on the lease is three years, since three years discounted to present value is 2.72. Accordingly, “end of second . . . year of option period” must mean the end of the first 24 months of the option period—if it instead meant the end of the second calendar year, because the option period began July 1, 2002, the period remaining after termination would be only about two-and-a-half years (January 1, 2005-June 30, 2007).
1/(1+.05) + 1/(1+.05)2 + 1/(1/1+.05)3 = 2.72.
Elsewhere in the lease addendum the parties refer to “fiscal years” or “calendar years” when they intend to specify those periods of time. Paragraph 48, for example, refers to “Lessee’s fiscal year, which for the purposes of this lease shall be January 1st of each year, and end December 31st of each year.” (Emphasis added.) Similarly, paragraph 53 provides that if lessees assign or transfer their interest in the lease, the transferees’ rent shall be based on “total rent . . . paid by Lessee during any of the three (3) calendar years preceding the calendar year in which such assignment or subletting took place.” (Emphasis added.) Because parties are presumed to have used different words to mean different things (cf. In re J.N. (2006) 138 Cal.App.4th 450, 457-458, fn. 4 [“When the Legislature uses different words in the same statute, we must presume it intended a different meaning”]), these provisions suggest that in paragraph 51 the parties intended “year” to mean something different than “fiscal year” or “calendar year.”
For all of these reasons, neither plaintiffs’ nor defendants’ interpretations of “year” reconcile all of the relevant lease language. As in Falkowski v. Imation Corp. (2005) 132 Cal.App.4th 499, 508-509, therefore, both interpretations are “plausible, although . . . not a perfect fit[,] . . . both reasonable and incomplete.” We conclude, thus, that the buyout provision of the lease is ambiguous and we turn to resolving the ambiguity by “determining the meaning actually intended by the parties’ language, taking into account ‘“all the facts, circumstances and conditions surrounding the execution of the contract.”’” (Id. at p. 509.)
Defendants’ contention that plaintiffs made a “binding admission” when they “conceded in their sworn interrogatory answers that the Lease was not ambiguous” is based on a fundamental misunderstanding of the law. As we said in Kavruck v. Blue Cross of California (2003) 108 Cal.App.4th 773, 782, “Plaintiff[s’] assertion that the [contract] unambiguously favors [their] position does not concede an argument that if there is some ambiguity, it should be resolved against [them].”
C. Substantial Evidence Supports the Trial Court’s Conclusion That Plaintiffs’ Interpretation Best Embodies the Intent of the Parties
“If the court determines a contract is ambiguous, a party is entitled to introduce extrinsic evidence to aid the interpretation of the contract. (Appleton v. Waessil (1994) 27 Cal.App.4th 551, 554-555; Pacific Gas & Electric Co. v. Zuckerman, supra, 189 Cal.App.3d at pp. 1140-1141.) Where, as here, the interpretation of a contract turns on the credibility of conflicting extrinsic evidence, the trier of fact must determine the meaning of language in the contract. (Morey v. Vannucci[, supra,] 64 Cal.App.4th 904, 912-913.) If substantial evidence supports that interpretation, we will not overturn it on appeal. (Roden v. Bergen Brunswig Corp. (2003) 107 Cal.App.4th 620, 625.)” (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 847.)
Defendants are not correct that “the parol evidence rule bars use of extrinsic evidence to contradict, explain or supplement the terms of the fully integrated written agreement.” In fact, the parol evidence rule merely prohibits the introduction of extrinsic evidence to “‘vary, alter or add to the terms of an integrated written instrument.’” (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 343, italics added.) “The rule does not, however, prohibit the introduction of extrinsic evidence ‘to explain the meaning of a written contract . . . [if] the meaning urged is one to which the written contract terms are reasonably susceptible.’” (Ibid.) Accordingly, because plaintiffs’ extrinsic evidence was offered to explain the meaning of the lease, rather than to vary or alter its terms—and because we have concluded that the lease is reasonably susceptible of the interpretation suggested by plaintiffs’ extrinsic evidence—the extrinsic evidence was properly admitted.
Here, the parties introduced conflicting extrinsic evidence of the meaning of paragraph 51. Marc Needleman testified that the purpose of the buyout provision was “[t]o pay the tenant what we considered a fair market value for their business, the loss of their business.” Thus, he said, “in order to do that, you’d look at the most recent time period” to determine the buyout amount. He also testified that he discussed the “financial period [that] would be used to determine the buy out period” with the plaintiffs. Mark Cohen’s testimony was to the contrary: He testified that he intended “year” to mean “calendar year,” but that to his knowledge the parties never discussed the buyout provision before the lease was executed.
Defendants contend, without explanation, that Mr. Needleman’s testimony that one would “look at the most recent time period” was improperly admitted into evidence. We do not agree. The trial court properly overruled defendants’ objection to this testimony (“[t]he lease speaks for itself”)—because, as we discussed above, it is reversible error for a trial court to refuse to consider extrinsic evidence based on the trial court’s own conclusion that contract language appears to be unambiguous. “Even if a contract appears unambiguous on its face, a latent ambiguity may be exposed by extrinsic evidence which reveals more than one possible meaning to which the language of the contract is yet reasonably susceptible. [Citations.]” (Morey v. Vannucci, supra, 64 Cal.App.4th at pp. 912-913; see section IA, ante.) We also do not agree, as defendants contend, that Mr. Needleman “did not testify that he expressed his intent to anyone.” As the testimony quoted above makes clear, Mr. Needleman specifically testified that he discussed with the Margarita Jones partners “what financial period would be used to determine the buy out period.”
The trial court credited Needleman’s testimony and rejected Cohen’s, which the court characterized as “inconsistent.” Because Needleman’s testimony evidences “‘objective manifestations of the parties’ intent’” through “‘extrinsic evidence of such objective matters as the surrounding circumstances under which the parties negotiated or entered into the contract’” (People v. Shelton (2006) 37 Cal.4th 759, 767), it supports the trial court’s interpretation of paragraph 51.
Mr. Cohen’s testimony was, moreover, irrelevant to the interpretation of the lease because Mr. Cohen did not testify that he ever discussed his interpretation with any of the plaintiffs. (E.g., Winet v. Price, supra, 4 Cal.App.4th at p. 1172 [unexpressed subjective intent is irrelevant to contract interpretation].)
The trial court’s interpretation also is supported by the testimony of expert Hahn, who testified that the objective of a lease termination payment would be to compensate the lessees for the income they reasonably would have been expected to have earned if the lease were not terminated. Such a payment is most accurately calculated using the most current information because “the most recent performance of a business enterprise is normally the best indicator of the future operations.” Thus, he opined, “I think in evaluating whether it’s reasonable to assume that the lease really meant the immediately preceding period of time, that supports that conclusion. It would be the most reasonable position to take to use the most recent period of time.” This testimony, which the trial court credited, is relevant extrinsic evidence of the “object, nature and subject matter of the contract,” and thus also supports the trial court’s interpretation of the contract. (See Cedars-Sinai Medical Center v. Shewry (2006) 137 Cal.App.4th 964, 980 [“Extrinsic evidence can include the surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties.”].)
Finally, the trial court’s interpretation is supported by the interpretive principle set out in Civil Code section 1654: “In cases of uncertainty not removed by the preceding rules [discussing other principles of interpretation], the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.” Here, it was undisputed that the lessors, not the lessees, drafted the lease addendum. Accordingly, to the extent that the extrinsic evidence does not eliminate the ambiguity of paragraph 51, under Civil Code section 1654 it must be interpreted against the lessors.
Considered together, the testimony of Needleman and Hahn constitutes substantial evidence that the parties intended the buyout payment to be based on plaintiffs’ performance over the most recent 24-month period, rather than the last two full calendar years. Moreover, as we have stated, because lessors drafted the lease addendum, ambiguities must be interpreted against them, not the lessees. Accordingly, we affirm the trial court’s calculation of the buyout payment.
II. The Trial Court Did Not Err by Dismissing the Cross-complaint
Conquest contends that the trial court erred by dismissing its cross-complaint for declaratory relief, which sought a judicial determination of “the respective rights and duties of Conquest, on the one hand, and cross-defendants, on the other hand, under the Lease, including the correct buyout amount under paragraph 51 and other provisions of the Lease, and whether Conquest is in breach of the Lease as alleged by plaintiff.” We conclude that there was no error.
The appellant’s opening brief contends that the trial court erred both by dismissing Conquest from the primary action and dismissing its cross-complaint. The appellants’ reply brief, however, “abandons the portion of [the] appeal directed at the Court’s refusal to vacate and set aside the dismissal of the action as to Conquest.” Thus, we address only whether the trial court properly dismissed the cross-complaint.
Code of Civil Procedure section 1060 provides that any person “interested under a written instrument . . . or under a contract” may, “in cases of actual controversy relating to the legal rights and duties of the respective parties,” bring an original action or cross-complaint for a declaration of rights. Granting relief under this section is discretionary: Under Code of Civil Procedure section 1061, the trial court “may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.”
We conclude that the trial court did not abuse its discretion by dismissing Conquest’s declaratory relief action. To be entitled to a declaration of rights under a contract, a party must be “interested . . . under [the] contract.” (Code Civ. Proc., § 1060; Blank v. Kirwan (1985) 39 Cal.3d 311, 331 [plaintiff failed to state a cause of action for declaratory relief where he was not “legally interested in the contracts as to which he seeks a declaration of validity”].) In the present case, both parties agree that Conquest has no legal interest in the lease. In their motion to dismiss the cross-complaint, plaintiffs contended that “Conquest, by its own admission, lacks any cognizable legal interest in the Lease at issue.” Conquest concurred, asserting in opposition to the motion to dismiss that “It is Conquest’s position that it never was a party to the lease.” (Italics added.) Accordingly, it is undisputed that Conquest is not a “person interested” in the lease as required by Code of Civil Procedure section 1060.
Further, under the statute, declaratory relief is available only “in cases of actual controversy relating to the legal rights and duties of the respective parties.” (Code Civ. Proc., § 1060, italics added; see also City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79 [“‘The fundamental basis of declaratory relief is the existence of an actual, present controversy over a proper subject’”]; BKHN, Inc. v. Department of Health Services (1992) 3 Cal.App.4th 301, 308-310 [citing principle that court “‘“will not entertain an action which is not founded on an actual controversy”’”].) Here, there was an actual controversy as to whether Conquest had any liability under the lease when Conquest initially filed its cross-complaint, but the controversy had been resolved by the time the trial court dismissed the cross-complaint. By then, plaintiffs had voluntarily dismissed all of their own claims against Conquest and no longer was contending that Conquest was a party to the lease. Conquest agreed, asserting that it never was a party to the lease and, thus, “has no liability thereunder.” Accordingly, because there was no actual controversy concerning the parties’ legal rights and duties under the lease, the trial court did not abuse its discretion in dismissing the declaratory relief action.
Conquest contends finally that its cross-complaint should not have been dismissed because there remained a controversy over whether it was entitled to recover its attorney fees under Civil Code section 1717. However, Conquest cites no support for its contentions either that it was entitled to attorney fees or that a fee dispute would be a sufficient basis on which to maintain this declaratory relief action. Thus, we find no error.
III. The Trial Court Did Not Err in Striking the Cost Memoranda
After the conclusion of trial, on November 4, 2005, Conquest and Smolinisky filed cost memoranda. Plaintiffs moved to strike the memoranda, asserting that they were untimely because they were filed more than 15 days after plaintiffs served defendants with notice of dismissal of Conquest and Smolinisky on June 15, 2005. In support, plaintiffs filed the declaration of Attorney Michael Kehoe, who stated that before trial began on June 15, 2005, he “personally served on defense counsel, Craig Fields, the entry of dismissal of Alan Smolinisky and Conquest Student Housing as defendants to the complaint.” The Kehoe declaration attached a copy of the document served on defense counsel (Judicial Council Form 982(a)(5)), which reflected that plaintiffs requested dismissal of Conquest and Smolinisky without prejudice and that dismissal was “entered as requested on . . . June 15, 2005.”
Each memorandum sought costs of $1,922.78.
Conquest and Smolinisky opposed the motion to strike, contending that although they had requested and received a file-stamped copy of the dismissal order from the clerk on June 15, they were never properly served with notice of entry of that order. According to the declaration of Attorney Craig Fields, “It is my recollection that I was provided by plaintiff’s counsel, Mr. Kehoe, with an unfiled copy of the notice of dismissal of Smolinisky and Conquest, and that I requested and received a filed-stamped copy of the notice from the court clerk of Department 28 on June 15, 2005, immediately prior to the commencement of trial that morning.” Thus, they asserted, their cost memoranda were timely under California Rules of Court, rule 870(a)(1) (now rule 3.1700(a)(1)).
All undesignated rule references are to the California Rules of Court.
The trial court granted the motion to strike. It explained: “The opposition disputes that defendants were ever served with the dismissal. The court’s official file indicates otherwise. The attorneys for the defendants filed a document entitled ‘Conquest Student [H]ousing’s Opposition To Purported Dismissal Lodged On Or About June 14, 2005, and Motion To Set Aside And/Or Vacate The Dismissal’ on June 22, 2005. Attached to that document is a conformed copy of the dismissal. It is not a photo copy of the document with the official court stamp but the conformed copy stamp. This is clear evidence that defendants had a conformed copy of the dismissal by at least June 22, 2005. Therefore the memorandum of costs filed on November 4, 2005 is untimely.”
Conquest and Smolinisky contend on appeal that their cost memoranda were timely and that the trial court erred by striking them. For the reasons that follow, we disagree.
Pursuant to rule 3.1700(a)(1) (formerly, rule 870(a)(1)), a memorandum of costs is timely if it is filed “within 15 days after the date of mailing of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first.” (Italics added.) “‘The time provisions relating to the filing of a memorandum of costs, while not jurisdictional, are mandatory.’ (Hydratec, Inc. v. Sun Valley 260 Orchard & Vineyard Co. (1990) 223 Cal.App.3d 924, 929.)” (Sanabria v. Embrey (2001) 92 Cal.App.4th 422, 425-426.)
Whether the cost memoranda were timely filed turns on the disputed factual question of when (and if) Conquest and Smolinisky were served with notice of entry of dismissal. The Kehoe declaration constitutes substantial evidence supporting the trial court’s conclusion that defendants were served with notice of entry no later than June 22, 2005, and we will not substitute our judgment for the trial court’s. (E.g., In re Zamer G. (2007) 153 Cal.App.4th 1253, 1262-1263 [“‘If the trial court resolved disputed factual issues, the reviewing court should not substitute its judgment for the trial court’s express or implied findings supported by substantial evidence. [Citations.] When substantial evidence supports the trial court’s factual findings, the appellate court reviews the conclusions based on those findings for abuse of discretion.’”].)
Conquest and Smolinisky contend that the trial court failed to make a factual determination that they were served with notice of entry of the dismissal but, instead, concluded that “the mere fact that defendants’ counsel had ‘notice’ of the dismissal satisfied California Rules of Court, Rule 870(a)(1) (now Rule 3.1700).” We do not agree. The court’s December 16, 2005 order noted that Conquest and Smolinisky “dispute[] that [they] were ever served with the dismissal” but that “[t]he court’s official file indicates otherwise.” The court then noted that the copy of the dismissal order that defendants submitted to the court on June 22, 2005, was a conformed copy, not a copy of the filed original. (Ibid.) Thus, the court reasoned, plaintiffs’ version of events had to be correct: Had defendants procured a copy of the dismissal order from the court clerk, rather than from opposing counsel, the copy would have borne a “filed” stamp.
Conquest and Smolinisky also contend that the document plaintiffs’ counsel claims to have served on them did not constitute notice of entry of dismissal, and that counsel’s declaration is not substantial evidence of service. Again, we do not agree. Although the document that the trial court found was served on them was not captioned “Notice of Entry of Dismissal,” the document stated that dismissal was “entered as requested on . . . June 15, 2005” and bore a June 15, 2005 file stamp. This was sufficient. In a related context, our Supreme Court has held that written notice of entry of judgment “need not . . . be a separate document entitled ‘notice of entry of judgment.’” (Palmer v. GTE California, Inc. (2003) 30 Cal.4th 1265, 1277 [discussing form of notice of entry of judgment required to trigger 60-day period in which to file motion for new trial or for judgment notwithstanding the verdict].) Rather, “a file-stamped copy of the judgment suffices as ‘written notice.’” (Ibid.) We conclude that these principles apply equally here, and that service of a file-stamped copy of entry of dismissal triggered the 15-day period for filing a memorandum of costs.
For all of these reasons, we conclude that the trial court did not abuse its discretion by striking the cost memoranda as untimely.
IV. The Trial Court Did Not Err by Filing an Amended Judgment to Correct a Clerical Error
The trial court entered an original judgment on December 16, 2005. Defendants filed a notice of appeal on December 30, 2005. Subsequently, on January 24, 2006, plaintiffs moved pursuant to Code of Civil Procedure section 473, subdivision (d), to amend the judgment to correct a purported clerical error. The motion explained that the December 16 judgment awarded plaintiffs, among other things, “$487,932.00 . . . with pre- and post-judgment interest thereon at the legal rate of 10% per annum from July 12, 2004, a per diem rate of $133.68, until paid.” It further said that, although the prejudgment interest was calculable once judgment was entered, the clerk’s office would not issue an abstract of judgment that included the award of prejudgment interest unless prejudgment interest was awarded in the form of a lump sum. Accordingly, plaintiffs asked the court to amend the judgment to specify the total amount of prejudgment interest awarded as a lump sum.
Defendants opposed the motion, contending that the correction plaintiffs sought was judicial, not clerical, and thus not authorized by section 473, subdivision (d). Nonetheless, the trial court granted the motion and, on February 15, 2006, entered an amended judgment nunc pro tunc. The amended judgment awarded plaintiffs “$487,932.00 . . . along with pre- and post-judgment interest thereon at the legal rate of 10% per annum from July 12, 2004, a per diem rate of $133.68 per day, until paid[,] with prejudgment interest being a lump sum amount of $69,914.64.” (Italics added.)
Plaintiffs contend on appeal that the entry of the amended judgment was in excess of the trial court’s jurisdiction because (1) the amendment was made after defendants filed an appeal of the judgment, and (2) the amendment was not a clerical error, as required by Code of Civil Procedure section 473, subdivision (d). For the following reasons, we do not agree.
Pursuant to Code of Civil Procedure section 473, subdivision (d), the trial court “may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed.” This statutory authority codifies the court’s inherent power “‘after final judgment, and regardless of lapse of time, to correct clerical errors or misprisions in its records, whether made by the clerk, counsel or the court itself, so the records will conform to and speak the truth.’” (Ames v. Paley (2001) 89 Cal.App.4th 668, 672.) Where a mistake is clerical in nature, the filing of an appeal does not limit the trial court’s power under section 473, subdivision (d). (Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla Village Square Venture Partners (1997) 52 Cal.App.4th 867, 883-884 [“The perfection of plaintiff’s appeal did not deprive the court of its inherent power to remedy what was merely a clerical error by entering the omitted order nunc pro tunc [fn. omitted]”]; Roth v. Marston (1952) 110 Cal.App.2d 249, 251 [“In the absence of statutory limitation a court not only has the inherent power, but it is its plain duty, to remedy clerical errors. Ordinarily neither the power nor the duty is abrogated or suspended by the pendency of an appeal, nor are they lost through lapse of time.”].)
“A clerical error is not necessarily one made by the clerk; it may include an error made by the judge or the court.” (Young v. Gardner-Denver Co. (1966) 244 Cal.App.2d 915, 919.) “The difference between judicial and clerical error rests not upon the party committing the error, but rather on whether it was the deliberate result of judicial reasoning and determination.” (Rochin v. Pat Johnson Manufacturing Co. (1998) 67 Cal.App.4th 1228, 1238; see also Young v. Gardner-Denver Co., supra, 244 Cal.App.2d at p. 919 [same].) “It is primarily for the trial court to determine whether the error was an inadvertence, and its conclusion as to this issue will not lightly be set aside.” (McLellan v. McLellan (1972) 23 Cal.App.3d 343, 358.)
Technical changes in the judgment that are necessary to carry out the court’s intent generally have been permitted under section 473, subdivision (d). In Dorland v. Dorland (1960) 178 Cal.App.2d 664, for example, the trial court found that a decedent had been induced by defendant’s undue influence to transfer property out of her estate and it ordered defendant to convey that property to “the estate of” the decedent. (Id. at p. 667.) Defendant executed a quitclaim deed conveying real estate to “‘the estate of [deceased],’” but plaintiff later learned through his title insurer that the deed naming decedent’s estate as grantee was invalid because an estate is not a legal entity. (Ibid.) Plaintiff then made a motion, which the court granted, to amend the judgment to order the property conveyed to the estate’s administrator, rather than to the estate. (Id. at p. 668.)
Defendant appealed, contending that there was no clerical error in the rendition of the original judgment and the trial court was without power to amend or correct the judgment nunc pro tunc. (Dorland, supra, 178 Cal.App.2d at p. 669.) The Court of Appeal disagreed. It explained that while there was “an obvious formal mistake” in the language of the original judgment, “the true purpose, purport and effect of the original judgment were clear and unmistakable. Obviously, it was designed and intended to divest the defendant of title to, and of possession of, property which the decedent would have been entitled to recover on her own account had she survived.” (Id. at pp. 669-670.) As a result, the court said, the amended judgment “divested defendant of nothing that was not taken from her by the original judgment” and thus was within the trial court’s jurisdiction: “The corrections in the judgment here made by subsequent amendment stand on essentially the same footing as amendments to correct a misnomer. It long has been recognized that such mistakes may be corrected at any time on motion. [Citations.] Where, as in the instant case, ‘the amendment does not affect substantial rights of the defendant, but consists in the rectifying of a clerical mistake appearing on the face of the record,’ courts have consistently displayed liberality in permitting amendment. [Citation.] It would be a reproach to the efficiency of our legal system if it did not sensibly provide a summary method by which to correct obvious and formal mistakes of the character here involved.” (Id. at pp. 670-671.)
The present case is indistinguishable. As in Dorland, the purpose of the original judgment was clear: To allow plaintiffs to collect the damages, including prejudgment interest, to which they were entitled. As a result of a formal mistake in the wording of the judgment, however, plaintiffs were not able to obtain an abstract of judgment that reflected the award of prejudgment interest. The amended judgment corrected this mistake. As in Dorland, moreover, it “‘d[id] not affect substantial rights of the defendant’” because it “divested defendant[s] of nothing that was not taken from [them] by the original judgment.” (178 Cal.App.2d at p. 670.)
This was clear not only from the face of the original judgment, but also from the trial court’s statements at the hearing on the motion to amend. According to the court: “It was the intent of the court and the terms of the contract were that the person would get interest. The court allows interest. The fact that it wasn’t done in a lump sum up to that date should not preclude the prevailing party from getting their interest. It’s not a surprise to anybody and it does not prejudice anybody to have that bit of clerical work nunc pro tunc put into the judgment.”
Nguyen v. Los Angeles County Harbor/UCLA Medical Center (1995) 40 Cal.App.4th 1433, 1447, cited by defendants, is distinguishable. There, the jury awarded a medical malpractice plaintiff damages for past and future injuries and expenses. (Id. at p. 1440.) At plaintiff’s request, the judgment awarded damages for plaintiff’s past pain and suffering and economic losses in a lump sum, and awarded plaintiff’s future economic damages as periodic payments. (Id. at p. 1441.) Later, plaintiff’s attorney realized that the judgment did not provide for attorney fees, and he sought to amend the judgment to provide for a larger lump sum award and smaller periodic payments. (Id. at p. 1444.) The court rejected the request, concluding, among other things, that the amendment could not be justified as the correction of a clerical error in the judgment. (Id. at p. 1447.)
The Nguyen court did not explain its conclusion that the proposed change did not constitute the correction of a clerical error, but we note that there are at least two significant differences between Nguyen and the present case. First, in the present case the amended judgment did not change the amount of the prejudgment interest award, but merely expressed it in a different form. In Nguyen, in contrast, the proposed amendment would have completely changed the payout schedule, and would have done so years after the County had purchased an annuity for the purpose of making periodic payments and had been making such payments for five years. (40 Cal.App.4th at p. 1443.) Second, in the present case the amendment was necessary to carry out the court’s intention in rendering the original judgment, while in Nguyen the amendment would have awarded attorney fees not contemplated by the original judgment. Thus, the holding in Nguyen has no application here.
Defendants also claim that the amended judgment makes “substantive changes [that] are contrary to law”: (1) it “potentially (and improperly) makes defendants liable for post-judgment interest on pre-judgment interest,” and (2) it “purports to include a specific per diem amount for pre-judgment interest regardless of whether the judgment is partially paid.” We do not agree. With regard to defendants’ first claim, we find that nothing in the amended judgment suggests that defendants are responsible for postjudgment interest on prejudgment interest. Indeed, the only change it makes to the original judgment is the addition of the phrase “with pre-judgment interest being a lump sum amount of $69,914.64.” With regard to the second claim, while defendants are correct that the amended judgment includes a daily interest rate that does not account for partial payment of the judgment, that is not a substantive change from the original judgment. Like the amended judgment, the original judgment awarded plaintiffs “pre- and post-judgment interest thereon at the legal rate of 10% per annum from July 12, 2004, a per diem rate of $133.68 . . . .” Thus, if the phrasing of the daily interest rate is in error, the error was not introduced by the amended judgment.
V. Defendants’ Contentions That the Trial Court Erred by Awarding Judgment and Legal Fees to the Plaintiff Partnership Are Waived
Defendants contend finally that the trial court erred by awarding judgment and legal fees in favor of the plaintiff partnership because the partnership was not a party to the lease and was not joined as a plaintiff until shortly before trial. We conclude that we cannot evaluate the merits of this contention because defendants have not cited any legal authority in support. Accordingly, we treat these points as waived. (Badie v. Bank of America, supra, 67 Cal.App.4th at pp. 784-785 [“When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived”]; People v. Stanley (1995) 10 Cal.4th 764, 793 [“‘[E]very 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.’”].)
DISPOSITION
The orders and the judgment as amended are affirmed. Plaintiffs shall recover their costs on appeal.
We concur: EPSTEIN, P. J., WILLHITE, J.