Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. RG-06-270859
Richman, J.
This is, as plaintiffs’ closing trial brief described it, “a very simple case.” Defendant owned a shopping center which consisted of three buildings, designated A, B, and C. Plaintiffs leased space in Building A in which they operated a Quiznos franchise where they sold sandwiches, under a lease that had an exclusivity provision. When plaintiffs learned that a tenant in Building B was also selling sandwiches, they complained to defendant, to no avail, and then sued, asserting claims for breach of contract, fraud, and negligent misrepresentation.
The fundamental issue at the court trial was whether the exclusivity provision applied to the other building. The court held that it did, and awarded plaintiffs $37,725 for breach of lease (substantially less than they claimed) and declaratory relief. The court rejected the fraud and misrepresentation claims. As prevailing parties, plaintiffs sought attorneys fees under the lease, seeking a total of $271,055, including $24,649 for the fee motion itself. The trial court awarded $85,537, omitting any reference to the amount sought in the fee motion.
Both sides appeal, defendant from the judgment, plaintiffs from the fee award. We reject defendant’s appeal, as none of its four arguments—two of which were not even made below—has merit. We reject most of plaintiffs’ appeal, as the trial court did not abuse its discretion, except to the limited extent it did not consider the fees sought in the motion itself. We thus remand for consideration of this limited issue.
THE BACKGROUND
Defendant Central Plaza-Union City LP is a partnership consisting of Amy Xia Mi Fan, Susan Chang, and Robert Chang (which, for consistency with the parties’ briefs, will be referred to as Landlord). In 2001 Landlord bought the Central Plaza Shopping Center (shopping center), acquiring it from U.C. Central, an Oregon Limited Liability Co.
The shopping center is located at Alvarado Niles Road and Central Avenue, Union City. It is divided into two sections: two buildings that form a strip of businesses in front, and a row of warehouse spaces in back. The two front buildings are designated Building A and Building B; the warehouse is Building C. Buildings A and B are divided by a small pedestrian walkway which allows people to access additional parking directly behind the buildings without having to walk around the entire shopping center. Building A is located to the left of the walkway, and is referred to as “retail”; Building B is to the right of the walkway, and is referred to as “office/showroom.” As will be seen, however, there is little distinction between the types of establishments that actually rent space in the two buildings.
Fortunato Enterprises was one of the tenants in Building A at the time Landlord bought the shopping center, operating a Quiznos franchise at which it sold sandwiches. Fortunato’s lease had an exclusivity, or exclusive use, provision, which reads as follows: “5. Exclusive. Throughout the Term, as it may be extended under the terms of this Lease, Tenant shall have the exclusive right in the Shopping Center to engage in the sale of delicatessen and submarine type sandwiches... As outlined on “Exclusive Use” on “Basic Lease Information—page 2.” “Exclusive Use” was defined as follows: “Excluding existing tenants, Landlord will not lease to similar business such as Blimpies, Subway, etc. Future tenant menus shall not include more than eight percent of their gross sales to be delicatessen or submarine type sandwiches.”
In mid-2003 Landlord was dealing with Manjinder Sandhu in connection with a possible lease of space in Building B, and in September 2003 signed a lease with Sandhu for that space. This lease originally said it would be for “computer services,” but in April 2004 Sandhu amended the “use” provision of the lease to “café (food, internet, music),” so he could open what became eMocha Café (eMocha). Robert Chang (Chang), the partner of Landlord who was its business manager, reviewed the architectural blueprints provided for the eMocha tenant’s improvements, which blueprints identified space and equipment for the sole purpose of making sandwiches, including a sandwich preparation area as well as a sandwich grill. Sandhu also discussed eMocha’s anticipated sandwich sales with Chang. After all this, Chang initialed the blueprints and authorized the change in tenant use.
eMocha began selling submarine sandwiches in October 2004, and would continue selling them until August 2006, when it closed. Some of the sandwiches sold at eMocha were similar to those sold at Quiznos, but cost less. And as germane to the exclusivity provision in issue here, eMocha’s gross profits from the sale of sandwiches exceeded 8 percent of its gross profits in November 2004, the first full month it sold sandwiches. Those gross profits quickly escalated to become 30-50 percent of eMocha’s total sales.
In December 2004 Fortunato sold the Quiznos franchise to plaintiffs Satinder and Harleen Garcha (the Garchas). Landlord expressly agreed to an “Assignment” of the lease. Nothing about eMocha was discussed with the Garchas when Landlord agreed to the lease assignment.
Mr. Garcha first learned that eMocha was selling sandwiches in September 2005, and on September 10, he complained to the Landlord’s property manager Helen Ng that these sales were in violation of the exclusivity provision. Ng promised to investigate, but Mr. Garcha heard nothing. Later, he called again, and this time Ng requested that Mr. Garcha send a written complaint to Landlord. He did, on November 9, asking Landlord to cure the breach. What Landlord—more accurately, Chang—did is set forth in detail below, as his conduct is relevant on the interpretation of the exclusivity provision. Suffice to say here that the Garchas received no satisfaction, and in May 2006 they filed suit.
The Garchas’ complaint sought damages and equitable relief, and asserted three causes of action: (1) breach of contract; (2) fraud; and (3) negligent misrepresentation. The first cause of action was against Landlord only; the other two were against Landlord’s three partners, Amy Fan, Susan Chang, and Chang.
The case was set for trial, originally to begin on August 24, 2007, but was continued to January 11, 2008. On January 7, 2008, the Garchas dismissed Amy Fan and Susan Chang, leaving remaining two defendants, Landlord and Robert Chang.
The matter proceeded as a court trial before the Honorable Marshall Whitley who, as any objective reading of the record will confirm, engaged himself thoroughly and conscientiously in all aspects of the trial, to the point where he would extensively question witnesses, apparently not satisfied that he was getting the entire story from the questioning by counsel.
Testimony was taken on four days, with the primary witnesses being Mr. Garcha, Chang (called by the Garchas under Evidence Code section 776), and Sandhu. The fundamental questions before Judge Whitley on the breach of contract claim was whether the exclusivity provision extended beyond Building A to include the eMocha café in Building B, and if so, the amount of damage for the breach. The Garchas also maintained their fraud and misrepresentation claims against Chang.
At the conclusion of the Garchas’ case in chief, both defendants moved for a non suit on all causes of action. The motion was granted as to the fraud cause of action only. After exhibits were admitted, the defendants rested their case in chief, with no evidence in rebuttal being offered. A briefing schedule was set, briefs were submitted, and the matter submitted for decision. Defendants filed a motion to reopen their case in chief, which was opposed by the Garchas, and the motion was denied on March 14, 2008.
Defendants had called, out of order in the course of plaintiffs’ case, one witness, Joan Malloy, Union City planning manager.
Landlord has filed a request for judicial notice of various resolutions and another document from Union City. The Garchas oppose the request, asserting that it is nothing more than an “end-run” around the trial court’s denial of the motion to reopen. Whether it is or not, the request for judicial notice is not well taken, and we deny it.
On April 30, 2008, Judge Whitley issued a comprehensive 10-page statement of decision. The decision addressed in great detail the evidence and the issues, and concluded as follows: “Pursuant to the foregoing, [Landlord’s] liability for [the Garchas’] Quiznos losses for the period December 1, 2005 through August 25, 2006 is $37,724.87. [¶]... [¶] Further, the court finds that all causes of action, claims for relief and affirmative defenses not specifically addressed in this decision are dismissed, denied, and rejected as not being adequately supported by the material and credible evidence. The fraud cause of action was previously dismissed and the negligent misrepresentation cause of action is denied and dismissed as set forth herein. [¶] Finally, [the Garchas] are the prevailing parties on their breach of contract cause of action and are entitled to costs and attorney fees as allowed by law.”
Landlord’s objections to the statement of decision were denied, and on April 30, 2008 judgment was entered for the Garchas, from which Landlord and Chang filed a timely notice of appeal.
Chang filed an abandonment of appeal on July 9, 2008.
As prevailing parties the Garchas moved for attorney fees under the lease, seeking over $270,000 in fees, including $24,649 for the fee motion itself. Judge Whitley issued a two-page order awarding the Garchas $85,537. The Garchas appeal from the fee award, claiming it is too low. The two appeals have been consolidated.
ANALYSIS
A. Landlord’s Appeal Has No Merit
1. Two of Landlord’s Arguments Were Not Made Below
Landlord makes four arguments on its appeal: (1) Landlord had no duty to police Sandhu’s compliance with the Garchas’ exclusive use provision; (2) Landlord is not “liable for damages caused by other tenants”; (3) Sandhu was an “existing tenant when Landlord” and the Garchas “entered into a new lease”; and (4) the “Lease defines ‘shopping center’ as the building where the Garchas’ restaurant is located.”
Landlord’s first two arguments were never made below, not at any time. These arguments were not in its motion for summary judgment; not in its trial brief; not in its posttrial brief; and not in its objections to the statement of decision.
Not that it is an excuse, but counsel for Landlord on appeal is not counsel who represented Landlord below, whose parting observation to the trial court was that Landlord intended to substitute new counsel in his stead. In fact, counsel on appeal is not the first subsequent counsel to become involved.
It is axiomatic that arguments cannot be raised for the first time on appeal. (Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1065-1066; Bardis v. Oates (2004) 119 Cal.App.4th 1, 13 14, fn.6; Lucich v. City of Oakland (1993) 19 Cal.App.4th 494, 498.) We apply that rule here, and do not consider Landlord’s first two arguments.
Thus two arguments remain: (1) the lease was not extended, and (2) the exclusivity provision did not extend to the eMocha Café in Building B. Given their relative prominence at trial, we discuss these issues in reverse order. Before we turn to that discussion, a word about the standard of review.
2. The Standard of Review
Landlord’s brief begins this way: “The standard of review on this appeal is de novo. This court is being asked to decide questions involving the interpretation of a written lease. Such a determination is purely a legal question that does not depend on the credibility of extrinsic evidence. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865; Quality Wash Group V, Ltd. v. Hallak (1996) 50 Cal.App.4th 1687, 1694.) ‘It is solely a judicial function to interpret a written contract, unless the interpretation turns on the credibility of extrinsic evidence, even when conflicting inferences may be drawn from uncontroverted evidence.’ (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 527.) Where there is extrinsic evidence, but it is not in conflict, the appellate court’s review of the trial court’s interpretation is de novo. (Medical Operations Management, Inc. v. National Health Laboratories, Inc. (1986) 176 Cal.App.3d 886, 891.)” We are non plussed.
To begin with, it was the Garchas’ position that the lease should be interpreted without the use of extrinsic evidence. Landlord’s counsel argued to the contrary. To shift 180 degrees from that position here is less than candid. Beyond that, to describe the evidence as “not in conflict” is incredible, as will be shown below. But that is not all that is improper about Landlord’s brief.
Following its claimed standard of review, Landlord proceeds to recite the evidence in a fashion favorably to it, as though Judge Whitley and his comprehensive, well reasoned, fact-based statement of decision did not exist. Such conduct is not to be condoned.
California Rules of Court, rule 8.204(a)(2)(C) provides that an appellant’s opening brief shall “[p]rovide a summary of the significant facts....” And the leading California appellate practice guide instructs appellants about this: “Before addressing the legal issues, your brief should accurately and fairly state the critical facts (including the evidence), free of bias, and likewise as to the applicable law. [¶] Misstatements, misrepresentations and/or material omissions of the relevant facts or law can instantly ‘undo’ an otherwise effective brief, waiving issues and arguments; it will certainly cast doubt on your credibility, may draw sanctions [citation], and may well cause you to lose the case!” (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2008) ¶ 9:27, p. 9-8, italics omitted.) Landlord’s brief does not measure up.
Landlord’s brief also ignores the precept that all evidence must be viewed most favorably to the Garchas’ and in support of the judgment. (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925-926; Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) This precept is equally applicable here, with its statement of decision: “Where statement of decision sets forth the factual and legal basis for the decision, any conflict in the evidence or reasonable inferences to be drawn from the facts will be resolved in support of the determination of the trial court decision.” (In re Marriage of Hoffmeister (1987) 191 Cal.App.3d 351, 358.)
What Landlord attempts here is merely to argue the “facts” as it would have them, an argumentative presentation that not only violates the rules noted above, but also disregards the admonition that Landlord is not to merely reargue facts or “merely reassert its position at... trial.” (Conderback, Inc. v. Standard Oil Co. (1966) 239 Cal.App.2d 664, 687; accord, Albaugh v. Mt. Shasta Power Corp. (1937) 9 Cal.2d 751, 773.) In sum, Landlord’s brief manifests a treatment of the record that disregards the most fundamental rules of appellate review. (See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal § 365, pp. 421-423, and § 368, pp. 425-426.)
Landlord is called on this improper recitation in the Garchas’ respondent’s brief, to the extent of asserting that “Landlord’s presentation of a misleading statement of facts constitutes a waiver of its objections to the trial court’s findings under the ‘substantial evidence’ standard.” The respondents’ brief goes on to cite authority (Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1028) that violation of this rule will cause any claim of error to be waived. Despite that chastisement, Landlord does not even respond in its reply brief, contenting itself with reargument of the facts, again set forth in improper fashion. With some reluctance, we will not treat the arguments as waived, and will address them—to conclude that neither argument has merit.
3. The Exclusivity Provision Applied to eMocha’s Café in Building B
Landlord’s fundamental argument below was that the exclusivity provision did not pertain to the eMocha café, because the provision only applied to competing businesses in Building A. This was the sole basis of landlord’s motion for summary judgment on the breach of lease claim. It was the focus of its entire trial brief. And the primary issue at trial was whether the exclusivity provision given to the Garchas in connection with their occupancy in Building A was breached by eMocha’s sale of sandwiches in Building B. Judge Whitley concluded that it was. That conclusion is supported by substantial—indeed, overwhelming—evidence. Such evidence includes the lease itself, the layout of the shopping center, the purpose of the provision—indeed, the conduct of Chang himself. Specifically:
As quoted above, the exclusivity provision read as follows: “5. Exclusive. Throughout the Term, as it may be extended under the terms of this Lease, Tenant shall have the exclusive right in the Shopping Center to engage in the sale of delicatessen and submarine type sandwiches... as outlined on ‘Exclusive Use’ on basic lease information—page 2.” So, the exclusivity provision applied “in the Shopping Center.” Several lease provisions define the “Shopping Center” to include all three buildings. For example, the basic lease information identifies the “Name and Location of Shopping Center: Central Plaza [¶] Alvarado Niles Road at [¶] Central Avenue [¶] Union City, CA 94587.” And “Shopping Center” is defined in 1.2 of the lease as follows: “The real property described in EXHIBIT B, situated in the location and commonly known by the name specified in the basic lease information.” Exhibit B is a “site plan” of the entire Central Plaza Shopping Center, which includes three buildings, a wrap-around parking lot, common area walkways, and landscaping. In addition to showing the site plan for all of Central Plaza, Exhibit B is described on the list of exhibits in the basic lease information as “Shopping Center.”
Moreover, the language of the exclusive use addendum provides, “In the event of any contradiction or inconsistency between the terms and provisions of this Addendum and the terms and provisions of the lease to which it is attached, the terms and provisions of this Addendum shall control and be interpreted in such a manner as to override any provision of the Lease which would prevent the spirit and letter of the terms and provisions of this Addendum from being given full force and effect.”
The exclusivity provision was inserted into the original lease by way of an addendum between the original landlord and original tenant, which read in pertinent part as follows: “This Addendum is attached to and made a part of that certain Lease (the Lease) by and between U.C. Central—Oregon Co. (Landlord) and Fortunato Enterprises [sic] (Tenant) for certain premises located at the Central Plaza Shopping Center in Union City, California. In the event of any contradiction or inconsistency between the terms and provisions of this Addendum and the terms and provisions of the Lease to which it is attached, the terms and provisions of this Addendum shall control and be interpreted in such a manner as to override any provision of the Lease which would prevent the spirit and letter of the terms and provisions of this Addendum from being given full force and effect. All defined terms not specifically defined in this Addendum shall be given the same meaning as the defined terms of the Lease.”
To honor the “spirit and letter” of the exclusivity provision, the term “Shopping Center” must be interpreted to apply to all three buildings. As Judge Whitley expressly recognized, to hold otherwise would undermine the “full force and effect” language of the exclusive use provision—i.e., to limit Quiznos’ competition in the shopping center—by permitting Landlord to lease space in Building B “to a competitor that could devastate the Garchas’ business, such as, for example, a Subway franchise.”
The purpose of an exclusivity provision is, of course, to protect a tenant by reducing the prospect of future competition within the same shopping center. (See 1 Harper, Shopping Center and Store Leases (2003) §9.01[1], at 9-10.)
Likewise supporting Judge Whitley’s conclusion is the physical layout of the shopping center and the signage for it. Several signs in front of the shopping center say its address is “Central Plaza 33300-33500 Alvarado Niles Road.” eMocha was located at 33456 Alvarado Niles Blvd., within this address.
Judge Whitley’s conclusion is also supported by the actual use of Buildings A and B. As alluded to above, the Exhibit B site plan described Building A as “retail” and Building B as “office/showroom,” a fact on which Landlord heavily relied below. The actual usage of the two buildings told a different story, as Chang himself admitted: both buildings contained a variety of businesses, both retail and offices. Thus, for example, Building B, the “office/showroom” building, had at least two retail stores, a Sign A Rama and a hardware store. Conversely, a dentist office is located in the retail building, as well as in the office building.
Finally, we note that the only lease provision to which Landlord points that actually contains express language that it claims supports it in fact does not. That provision is Paragraph 10, which provides in its entirety as follows: “Rentable Area of Shopping Center: 15,720 sq. ft. [¶] Note: Central Plaza is comprised of three separate buildings for a total GLA of 170,813 square feet; however, for purposes of properly and fairly calculating Tenant’s pro-rata share, the ‘Shopping Center’ is defined as the building where the premises is located.”
As the plain language indicates, this provision defines the term “Shopping Center” “for purposes of properly and fairly calculating tenant’s pro-rata share” of common area expenses, not for purposes of defining “Shopping Center”—a fact Chang admitted.
It is standard practice for commercial leases to pro-rate common area expenses in this way. (See 1 Harper, Shopping Center and Store Leases, supra, § 11.05[1] [3], pp. 1113-11-16.)
Were all the above not enough, Chang’s own words manifested his understanding that the exclusivity provision extended to Building B. Sandhu, the owner of eMocha, testified as to what he was told by Chang. It included these threats: you are “violating the Quiznos lease and your own lease”; I will “have to force you to stop selling sandwiches”; and “[h]ere’s the letter from Quiznos that you need to fix.” Chang also threatened to sue Sandhu, telling him that he “would have to force me to stop selling sandwiches.”
Chang denied all this, in testimony that is easily disbelieved, his lack of candor exemplified by the following exchange with the court concerning what he told Sandhu about the exclusive use provision in the Garchas’ lease:
Such statements are evidence, persuasive evidence, that Chang understood the exclusivity provision extended to Building B. (See, generally, City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 392-393.) As the Supreme Court has described this principle: “This rule of practical construction is predicated on the common sense concept that ‘actions speak louder than words.’ Words are frequently but an imperfect medium to convey thought and intention. When the parties to a contract perform under it and demonstrate by their conduct that they knew what they were talking about the courts should enforce that intent.” (Crestview Cemetery Assn. v. Dieden (1960) 54 Cal.2d 744, 754; also see CACI, No. 318 [Interpretation—Construction by Conduct].)
4. The Lease Was Extended
Landlord’s remaining argument is that the Garchas’ lease was not extended in mid-August 2005 but rather was a new lease, and thus the exclusivity provision did not apply. By way of background, the Garchas’ lease was to expire on August 15, 2005, and there was testimony about what occurred vis-à-vis extending it. And the Garchas’ position was that they extended the original lease on August 17. Landlord asserted that this was a new lease, an argument Judge Whitley rejected. We easily reject it as well, as Judge Whitley’s ruling is supported by substantial evidence.
It is probably enough to cite to Exhibit 3, a document prepared by Landlord and signed on its behalf. Exhibit 3 is entitled “Lease Extension.” (Italics added.) The “Lease Extension” expressly refers to the March 13, 2000 lease and says that, apart from the term of the lease (5 years) and the amount of rent (which was raised to $2,225.81 per month), [and] “[o]ther terms and conditions remain the same as stipulated in the original lease dated March 13, 2000.” The document further states that “If the above terms & conditions are agreeable, please sign below and fax it back to me. This letter will become an extension of the original lease.”
Other documentary evidence supporting this included Landlord’s lease log, which had the following entry: “Lease Extension = (8/14/2005-8/13/2010) [¶] Term: 5 years [¶] Signed 8/19/05.” Chang conceded that this lease log reflects the extension of the Garchas’ lease, testimony that could not have been clearer:
“Q: Now, direct your attention to the exhibit that has been premarked as Plaintiffs’ Exhibit 3. This document extended Plaintiffs’ lease for another five years, with all terms and conditions remaining the same as the original March 13, 2000 lease, except for rent and the term of the lease, correct?
“A: Yes, ma’am.”
B. Judge Whitley’s Ruling on the Attorney’s Fees Was, Except In One Particular, Not An Abuse of Discretion
1. The Proceedings Below
Paragraph 14-5 of the lease provides as follows: “If either party incurs any expense, including reasonable attorney’s fees, in connection with any action or proceeding instituted by either party by reason of any default or alleged default of the other party hereunder, the party prevailing in such action or proceeding shall be entitled to recover its reasonable expenses from the other party.”
The Garchas recovered $37,725 on their breach of contract claim, and Judge Whitley properly held that they “are the prevailing parties within the meaning of Code of Civil Procedure section 1032 only on their breach of contract cause of action.”
Acting pursuant to the above, and relying on California Civil Code section 1717, the Garchas filed a motion to fix attorneys fees. Their moving papers were lengthy (277 pages) and thorough, supported by a detailed memorandum of points and authorities and declarations from 11 attorneys. These declarations included one of each of the Garchas’ counsel. The other attorney declarations are described by the Garchas as follows:
Civil Code section 1717 provides in pertinent part: “(a) 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. [¶]... [¶] Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit....”
“A declaration from renowned fee expert, Richard M. Pearl, who attested to the reasonableness of plaintiffs’ counsel’s hourly rates ”;
“Declarations from numerous well-respected attorneys, including Anthony Sperber, Trudy Martin, Stacy W. Swor, Stephen Jaffe, and Jonathan W. Evans from the plaintiffs’ bar, and Catherine M. Fisher, Bert H. Deixler, and David R. Scheidemantle from the defense bar. All attested to the competence and skill of plaintiffs’ counsel and the reasonableness of their hourly rates for Bay Area attorneys of their skill and experience for similar work”;
“A declaration from Trudy Martin, an experienced plaintiff’s trial attorney who reviewed the case file and attested to the reasonableness of the hours expended in this case in light of the extensive law-and-motion work, voluminous discovery and correspondence, five-day trial (with two trial calls), and posttrial briefing.”
The supporting papers asserted that the Garchas’ counsel had spent 1026.9 hours on the case, which they used to establish a “Lodestar calculation” of $289,889, which counsel then reduced by a “counsel’s discount” of 15 percent, (approximately 145 hours totaling 43,483.” The asserted bases for the discount included “dismissed claims/unsuccessful at trial,” “potentially duplicative,” and “change in strategy.” With this reduction, the “total attorneys fees sought... were $246,406 plus the fees and costs associated with this motion.”
Apparently anticipating opposition as to the number of hours claimed, the Garchas offered explanations, including that Landlord’s “litigation tactics throughout this two year case resulted in heavy law-and-motion practice....” The Garchas also asserted that Landlord’s “[d]efense counsel routinely refused to meet and confer and repeatedly engaged in obstructionist tactics. (Wettig Decl., ¶19.) Despite plaintiffs’ counsel’s best efforts, relations between counsel were strained and combative at every turn, necessitating extensive letter-writing and frequent judicial intervention.” And, counsel concluded, “This case was labor-intensive, requiring two days for plaintiffs’ depositions, one day for Robert Chang’s deposition, one day for defendants’ expert’s deposition, extensive written discovery, a summary judgment motion, two trial calls (seven months apart), six motions in limine, appearances of eight trial witnesses (including one expert), five days of trial over a two-week period, a motion for non-suit, closing trial briefs, replies to closing briefs, a motion to re-open defendants’ case in chief.”
These were the facts cited in support of the “heavy” motion practice:
Landlord, represented by its second new counsel since the close of evidence, filed opposition to the fee request, asserting essentially four arguments: (1) counsel for the Garchas had duplicated fees between the “two adjacent law firms”; (2) the fee request “made no practical sense in light of the dollar results achieved”; (3) the Garchas had been unsuccessful against three of the four defendants and two of the three causes of action in the complaint; and (4) the motion did not include a copy of the fee agreement nor describe any actual payments.
The Garchas files 26 pages in reply.
On October 15, 2008, without oral argument, Judge Whitley issued a two page “Order Fixing Attorney Fees.” The order provides in its entirety as follows:
The Garchas apparently attribute the lack of argument to the fact that Judge Whitley failed to issue a tentative ruling in violation of a local court rule. As the Garchas’ brief describes it, “The morning before the scheduled hearing, plaintiffs’ counsel phoned the court clerk to request a tentative ruling. Later that afternoon, the trial court issued a written tentative ruling, indicating that, if all parties agreed, the trial court would take the motion under submission without oral argument. (There was neither a request for the parties to appear, nor any indication how the trial court intended to rule or why.) With no sense of the trial court’s intended ruling, nor any request for oral argument, plaintiffs felt that appearing only to re-argue the papers would be ill-advised. Both parties agreed to submit the matter on the papers, and the court posted a minute order indicating, ‘No appearances required. Matter submitted on the papers filed.’ ”
“Plaintiffs prevailed after trial on their breach of contract cause of action and obtained a judgment against defendant Central Plaza-Union City L.P. in the amount of $37,725. The remaining two causes of action alleging fraud and negligent misrepresentation against defendants were denied and dismissed. On the breach of contract cause of action the plaintiffs are entitled to recover attorney fees as costs in an amount that is reasonable and which bears a rational relationship to the substantive recovery. In this regard, plaintiffs have requested fees totaling $246,406. Defendant Central Plaza-Union City L.P. has objected to this amount and argues that an attorney fee in the amount of $51,778 reflects a reasonable amount.
“In determining a reasonable attorney fee in this case, the court has reviewed all the pleadings filed in support and in opposition to the attorney fee request, the documents in the court file, and the record at trial. In addition, the court has considered the following factors: the nature of the case; the amount at issue; the relative difficulty of the issues presented; the relative skill required and employed by the attorneys; the success/failure of the attorneys efforts; and the attorneys’ prior legal experiences.
“After consideration of all the foregoing, $85,537 is fixed as the reasonable attorney fee recovery to which the Plaintiffs are entitled. In determining this fee, the Court reviewed the detailed time sheets of attorneys Wettig and Bernston and reduced the overall time by duplicative time spent for which the Defendant should not be responsible. This left a total of 685.8 hours. The hourly billing rate for a portion of this time was $300. This billing rate began in 2007, more than seven months after commencement of the litigation. The court has adjusted this rate to the pre 2007 billing rate of $250, which the Court finds to be the reasonable rate under the circumstances of this case. The billing rate of $250 (and in the instances set forth on attorney Wettig’s timesheets, the rate of $210) was then applied to the above stated hours to arrive at a dollar amount. Finally, the resulting dollar amount was reduced by a 50 percent adjustment to arrive at a reasonable fee. The court believes that this adjustment is appropriate after application of the factors set forth above.
“Accordingly, it is the order of the court that plaintiffs are entitled to reasonable attorney fees from the defendant Central Plaza-Union City L.P. in the total amount of $85,537.”
The Garchas appeal, claiming that Judge Whitley’s ruling was an abuse of discretion in several particulars. We fundamentally disagree, except to the extent that Judge Whitley did not consider fees for the fee motion itself.
2. The Law Regarding Attorney’s Fees
Pearl, the Garchas’ own expert witness, begins his treatise by noting that in “the usual situation, in which the court awards an attorney fee as compensation, the goal is to reach a reasonable attorney fee.” (Pearl, Cal. Attorney Fee Awards (2d ed. 2008)§ 1.8, p. 6.) The Garchas do not contend that such is not the goal here.
It has been noted that a party seeking attorneys’ fees “is not necessarily entitled to compensation for the value of attorney services according to its own notion or to the full extent claimed by [it].” (Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 950 [inverse condemnation]; Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 813-814 [Song-Beverly Act].) As Levy went on to note, applying the terms of the statute applicable there, a party seeking fees has the “burden of showing the fees incurred were ‘allowable’ were ‘reasonably necessary to the conduct of the litigation,’ and were ‘reasonable in amount.’ ” (Levy v. Toyota Motor Sales, U.S.A., Inc., supra, 4 Cal.App.4th at p. 816.)
The governing law is extensively collected in PCLM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, a case, like that here, involving attorney fees on a contract claim: The requirement of Civil Code section 1717 of a “reasonable fee” “reflects the legislative purpose ‘to establish uniform treatment of fee recoveries in actions on contracts containing attorney fee provisions.’ (Santisas v. Goodin, supra, 17 Cal.4th at p. 616.) Consistent with that purpose, the trial court has broad authority to determine the amount of a reasonable fee. (International Industries, Inc. v. Olen [(1978)]21 Cal.3d [218] at p. 224 [‘[E]quitable considerations [under Civil Code section 1717] must prevail over... the technical rules of contractual construction.’] Beverly Hills Properties v. Marcolino (1990) 221 Cal.App.3d Supp. 7, 12 [‘the award of attorney fees under section 1717, as its purposes indicate, is governed by equitable principles’]; Montgomery v. Bio Med Specialties, Inc. (1986) 183 Cal.App.3d 1292, 1297 [trial court has ‘wide latitude in determining the amount of an award of attorney’s fees’ under Civil Code section 1717]; Vella v. Hudgins (1984) 151 Cal.App.3d 515, 522 [‘The amount to be awarded in attorney’s fees is left to the sound discretion of the trial court.’].) As we have explained: ‘The “experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong” ’—meaning that it abused its discretion. (Serrano v. Priest (1977) 20 Cal.3d 25, 49; Fed-Mart Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 228 [an appellate court will interfere with a determination of reasonable attorney fees ‘only where there has been a manifest abuse of discretion’].)” (PCLM Group v. Drexler, supra, at p. 1094-1095.)
The Supreme Court then explained how the fee setting inquiry “ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.... The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. (Serrano v. Priest, supra, 20 Cal.3d at p. 49.)... [¶] Thus, applying the lodestar approach to the determination of an award under Civil Code section 1717, the Court of Appeal in Sternwest Corp. v. Ash (1986) 183 Cal.App.3d 74, 77 explained: ‘Section 1717 provides for the payment of a “reasonable” fee. After the trial court has performed the calculations [of the lodestar], it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the section 1717 award so that it is a reasonable figure.’ [¶] ‘It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court.... [Citations.] The value of legal services performed in a case is a matter in which the trial court has its own expertise. [Citation.] The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. [Citations.] The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.’ (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623-624.) Although the terms of the contract may be considered, they ‘do not compel any particular award.’ (Vella v. Hudgins, supra, 151 Cal.App.3d at p. 520; All- West Design, Inc. v. Boozer (1986) 183 Cal.App.3d 1212, 1227 [trial court was not bound by contingency agreement in awarding fees under Civil Code section 1717]; Beverly Hills Properties v. Marcolino, supra, 221 Cal.App.3d Supp. at p. 12 [affirming an award of reasonable attorney fees for pro bono legal services].)” (PCLM Group v. Drexler, supra, 22 Cal.4th at pp.1095-1096.)
We added our own observation to all this in Thayer v. Wells Fargo Bank (2001) 92 Cal.App.4th 819, 834: “There is no hard-and-fast rule limiting the factors that may justify an exercise of discretion to increase or decrease a lodestar calculation.”
Applying those rules here leads to the conclusion that Judge Whitley did not abuse his discretion in awarding $85,537 for the work not including the fee motion itself.
3. Judge Whitley Did Not Abuse His Discretion, Except as to the Fee Motion Itself
To begin with, Judge Whitley did arrive at a lodestar: after deducting the hours he determined were duplicative, he then multiplied those hours (“reasonably expended”) times the hourly rate. He then reduced that lodestar, taking into account various factors, including the “nature of the case; the amount at issue; the relative difficulty of the issues presented; the relative skill required and employed by the attorneys; the success/failure of the attorneys’ efforts; and the attorneys’ prior legal experiences.” This, Judge Whitley was more than entitled to do.
There could well be good reasons for reducing the lodestar by 50 percent, including that as the Garchas had limited success overall. On the eve of trial, the Garchas dismissed two of the four defendants, Amy Fan and Susan Chang. This left two defendants, Landlord and Chang. And the Garchas lost their claims against Chang. Thus, the result was that the Garchas succeeded on one of three claims, against one of four defendants. And their recovery was for far less than they sought.
The Garchas’ pre-trial brief argued that their breach of lease damages exceeded $110,000. Their expert witness testified to breach of lease damages in that amount. But Judge Whitley awarded some one-third of that amount, and in doing so expressly rejected the Garchas’ claim they were entitled to damages beyond the time eMocha stopped selling sandwiches.
The contract provision here said that the prevailing party would receive fees for an action “instituted... by reason of any default... hereunder.” Such a provision is considered a “narrow fee” provision. (See Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 125, 129; Loube v. Loube (1998) 64 Cal.App.4th 421, 429 430.) And such narrow provision precludes recovery for tort claims. (See Gil v. Mansano (2004) 121 Cal.App.4th 739, 743 [“Where a contract authorizes an award of attorney fees in an action to enforce... the contract, tort claims are not covered”].) Or, as our Supreme Court has held, “Where a cause of action based on the contract providing for attorney’s fees is joined with other causes of action beyond the contract, the prevailing party may recover attorney’s fees under section 1717 only as they relate to the contract action.” (Reynolds Metals Co. v. Alperson, supra, at p. 129.) This case law is harmful to the Garchas.
So is Pearl, the Garchas’ own expert witness, who has two statements of legal principles pertinent here. The first is in section 6.28: “Work on contract claims. When claims based on a contract are combined with tort claims or other claims that are not fee claims, the prevailing party is entitled to fees only for work done on the contract claims... unless the claims for relief are so intertwined that it would be impracticable, if not impossible, to separate the attorney’s time into compensable and noncompensable units. [Citations.] The second is in section 12.17: “When claims for which fees may be awarded (fee claims) are joined with claims for which fees are unavailable (nonfee claims), the general rule is that compensation may not be awarded for work on the nonfee claims. [Citations.] However, when the attorney’s work on the nonfee claim is so closely related to the attorney’s work on the nonfee claim is so closely related to work on the fee claim that apportionment is impossible, the courts have awarded fees for the entire case. [Citations.]” (Pearl, Cal. Attorney Fee Awards, supra, §§ 6.28, p. 217 & 12:17, p. 348.)
Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231 (Sokolow) is illustrative. Sokolow was a sex discrimination case against a county sheriff’s department and a male-only private mounted patrol, brought under 42 U.S.C. § 1983 and the equal protection clauses of the federal and California constitutions. The trial court found that the significant involvement between the two defendants resulted in state discriminatory action, and issued an injunction ordering the county to sever its relationship with the patrol. However, the court refused the primary injunctive relief requested, which was to compel the mounted patrol to accept women members. As a result of the latter determination, the trial court denied plaintiffs attorney fees under the Civil Rights Attorneys’ Fees Act (42 U.S.C. § 1988) or the private attorney general doctrine, concluding that plaintiffs were not the prevailing parties. Plaintiffs appealed, and the Court of Appeal reversed the denial of attorneys’ fees, but with a holding adverse to the Garchas here.
The Court of Appeal first noted that “the degree or extent of appellants’ success in obtaining the results which they sought must be taken into consideration in determining the extent of attorney fees which it would be reasonable for them to recover.” (Sokolow, supra, 213 Cal.App.3d at p. 248.) And, the court added, “[A]ppellants may not be said to have obtained all the results they sought.” (Id. at p. 250.)
Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672 is to the same effect. Bell was a high school football coach who was terminated following a closed session of the school district and without notice to him. Bell brought an action against the school district and various officials for mandamus and injunctive relief, asserting four Brown Act claims and 11 other claims for tort damages. The trial court issued a temporary restraining order staying Bell’s termination, and on his mandamus claims ruled that the district had not provided notice required by the Brown Act, so that the action taken at that meeting was null and void. (Gov. Code, § 54957.) The court entered judgment in the mandamus action incorporating an award for attorneys’ fees and costs under the Brown Act, awarding Bell attorneys’ fees of $147,862. The parties subsequently settled the tort claims. (Id. at pp. 672, 681.)
The Court of Appeal reversed as to the attorneys’ fees, holding as follows: “The trial court thus abused its discretion in failing to apportion the requested fees and costs between those relating to the Brown Act violation and the remaining causes of action for damages. As summarized above, Bell is entitled to reasonable attorney fees and court costs attributable to his action under[Gov. Code] section 54960.1. However, he is not entitled to such fees and costs incurred as a result of prosecuting his claims for damages, which the parties later resolved by settlement, with Bell receiving $125,000 and a paid leave of absence.” (Bell v. Vista Unified School Dist., supra, 82 Cal.4th at p. 689.)
Our holding in Thayer v. Wells Fargo, supra, 92 Cal.App.4th 819 is also instructive, where we reversed a few award, accepting the bank’s argument that the amount of time spent on the case was unreasonable in the circumstances and unproductive. The same could be said here.
The Garchas assert that there was very “heavy motion practice.” To begin with, we question whether the motion practice was really “heavy” (see fn. 11 ante). In any event, that motion practice does not necessarily support the Garcha’s position. Two of the motions involved discovery matters, on both of which the Garchas were successful. The first was their own motion to compel, in connection with which they sought sanctions, asserting that the motion work required 40.5 hours, and for which they sought $10,125. An experienced law and motion judge awarded $1,000. Their second success was in opposing Landlord’s motion, for which the Garchas claimed 28.1 hours and sought $8,430 in sanctions. Another experienced law and motion judge awarded $540. In short, on both prior occasions the court awarded significantly less than the Garchas sought.
Finally, we note that one of the items Judge Whitley cited was “the relative skill required and employed by the attorneys.” As to this, we observe that Judge Whitley found himself questioning witnesses at length.
In sum, we conclude that Judge Whitley’s order on the fee issue was more than sufficient to support the amount awarded for fees up to the motion itself. As we said in Rebney v. Wells Fargo Bank (1991) 232 Cal.App.3d 1344, 1349: “The court’s statement of decision satisfied this minimal requirement, as it expressly stated that the court had awarded fees based on lodestar amounts, with further consideration of counsel’s contributions to the litigation. Nothing more was necessary. The court was not required to explain which of counsel’s hours were disallowed, or how or whether any hours were apportioned. On appeal, we must infer all findings on these points in favor of the prevailing parties. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)”
C. Judge Whitley Erred In Not Considering the Fees Incurred in Connection With the Fee Motion
California law holds that a prevailing party may recover attorneys’ fees for time spent preparing and litigating the fee application. (Serrano v. Unruh (1982) 32 Cal.3d 621, 638-639 [recoverable fees “include compensation for all hours reasonably spent, including those necessary to establish and defend the fee claim”]; City of Fresno v. Press Communications, Inc. (1994) 31 Cal.App.4th 32, 43 [fees on appeal].) The Garchas sought such fees here, expressly so stating in their moving papers. The final amount sought was $24,649.
As quoted above, Judge Whitley expressly stated that the Garchas were seeking $246,406 in attorney fees. This was the amount the Garchas were seeking for the work through the end of the trial-related proceedings. It did not include the fees for the motion itself, an amount that Judge Whitley did not even mention.
In Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 584, the Supreme Court said it would “generally presume the fee award was correct ‘ “ ‘on matters as to which the record is silent.’ ” ’ ” We could perhaps apply such a rule to uphold the fee award in its entirety. We are inclined otherwise, however, as our reading of the entire record leads us to conclude that, given how thorough and conscientious Judge Whitley was in all other aspects of his rulings, his lack of mention of this amount, combined with the express confirmation of the $246,406 sought, leads us to conclude that Judge Whitley simply overlooked this one item.
DISPOSITION
The matter is remanded for consideration of the limited issue of what amount, if any, of attorney fees the Garchas should receive for their fee motion.
In A122152, the judgment is affirmed. The Garchas shall recover their costs on this appeal.
In 123850, the order is remanded for the limited purpose discussed in this opinion. The order is affirmed in all other respects. Pursuant to our authority under rule 8.278(a)(5) of the California Rules of Court, we direct that the parties shall bear their own costs on this appeal.
We concur: Haerle, Acting P.J., Lambden, J.
An amended judgment to make clerical corrections was filed on June 25, 2008.
“A: Garcha’s conditional exclusive right does not apply to your building, so you don’t have to worry about it. [¶] However, being the same race, same countrymen, I said, ‘Why don’t you go settle this thing with Mr. Garcha’ because, you see, I never met Garcha. [¶] And another thing, I’m a very busy man, so I didn’t have time to fuss around with this little problem. So I said to Garcha—whoever tried to call me—I said, go and read your lease. [¶] But I said to Sandhu, I said, don’t you worry about it. This exclusive right provision does not affect your—your building—I mean, your business in Building B. So, therefore, don’t worry about it. But why don’t you go over and talk to your own people and settle down.
“The Court: And you told Mr. Sandhu not to worry about it, that the exclusive-use provision didn’t apply to his building in about November 2005?
“A: I swear on stack of bibles, I told him that, don’t you worry about it. I said, look, his exclusive right only refers to Building A. You’re located in Building B, which is not a shopping center, so you don’t have to worry about it. That’s what I told—”
Similarly:
“The Court: Why didn’t you tell them specifically that the exclusive only applied to building A and not to building E?
“Chang: Building B.
“The Court: The building in which eMocha was located when Garcha was claiming a problem existed. [¶] Why wouldn’t you tell Garcha that?
“Chang: Because, your Honor, we’re speaking of working in a different angle. And because of a different position. I treated this thing very lightly. It’s not a—it’s not a heaven fall? So I treat it very lightly. [¶] I say, ‘Hey, look, you go back to read your lease.’ And I talked to Sandhu. I said, “Hey, look. Don’t worry about it.’ You know, this is not a—it’s not a heaven fall, like I said. You know, how much is the whole lawsuit mean about it to all of us? So that’s why I treat it so lightly. I did not specifically say this and say that, because I told you, I’m a busy man. I am involved in hundreds of million dollars of investment. I swear to God. I’d never try to flatter myself nor I give you false statement. I’m not in the Papa/Mama business.”
“Plaintiffs were forced to bring a motion to compel further discovery responses, which the court granted, ordering defendants to pay $1,040 in sanctions.
Defendants also improperly interfered with plaintiffs’ efforts to obtain discovery from a third-party, bringing a motion to quash which the court dismissed sua sponte.
Defendants filed a motion to reclassify the case as a limited jurisdiction case, despite the court’s order that they refrain from doing so until after the parties’ mediation. After plaintiffs wrote to defendants asking that they take the motion off calendar to no avail, plaintiffs were forced to file opposition papers. The court ordered that defendants’ motion to reclassify be taken off-calendar pending the outcome of the parties’ mediation. Defendants then withdrew the motion at the scheduled oral argument.
Plaintiffs were forced to oppose a frivolous motion to compel brought by defendants. The court denied defendants’ motion in its entirety, and awarded plaintiffs $540 in sanctions for defendants’ misconduct.
Defendants filed a motion to re-open the case after trial, seeking to introduce additional testimony and documents—many of which they had pre-marked as exhibits at trial, and all of which had been in defendants’ possession well in advance of trial.”