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Hile v. Chevrolet

California Court of Appeals, Second District, Eighth Division
Sep 23, 2008
No. B196615 (Cal. Ct. App. Sep. 23, 2008)

Opinion


GARY HILE, Plaintiff and Appellant, v. CLIPPINGER CHEVROLET, Defendant and Respondent. B196615 California Court of Appeal, Second District, Eighth Division September 23, 2008

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Appeal from an order of the Superior Court of Los Angeles County, No. KC042154, Robert A. Dukes, Judge.

Law Offices of Jeffrey B. McMillen and Jeffrey B. McMillen for Plaintiff and Appellant.

Norman J. Hoffman, Inc., Norman J. Hoffman; Oldman, Cooley, Sallus, Gold, Birnberg & Coleman, Ronald Gold, Justin B. Gold and Jamie N. Gonzalez, for Defendant and Respondent.

COOPER, P. J.

Plaintiff Gary Hile appeals from a postjudgment order denying his motion for an award of attorney fees against defendant Clippinger Chevrolet, in an action for breach of contract, rescission, and revocation of acceptance. Plaintiff is entitled to recover those fees by virtue of Civil Code section 1717. (Undesignated section references are to that code.) We therefore reverse and remand for assessment and award of reasonable attorney fees.

FACTS

This case has been before us previously, and we take judicial notice of the record of the prior appeal, Hile v. Clippinger Chevrolet (May 23, 2006, B181523) [nonpub. opn.]. (Evid Code, §§ 452, subd. (d)(1), 459, subd. (a); Cal. Rules of Court, rule 8.1115(b)(1).)

In 2003 plaintiff, operator of a towing business, purchased a new model truck from defendant, by retail installment sale contract. The truck, which had been fitted out with a “tow body” by Golden West Towing Equipment, Inc. (Golden West), failed to function properly in towing automobiles. Repairs and modifications did not cure the problems, and plaintiff sued defendant, for breach of contract and for revocation of acceptance, under California Uniform Commercial Code section 2608, subdivision (1)(b). The complaint prayed for “attorney fees pursuant to the contract or statute as appropriate.” Defendant cross-complained against Golden West, for indemnity.

Golden West is not a party to this appeal. Plaintiff has not sought attorney fees from it.

After a nonjury trial, the superior court found that plaintiff was entitled to rescission of the contract, based on unilateral mistake, and revocation of acceptance. Plaintiff would receive all monies paid for the truck. Golden West was held obligated to indemnify defendant for the original cost of the tow body.

The judgment further provided that “Plaintiff Hile is awarded no attorneys’ fees or further monetary damages but shall recover his costs of suit . . . .” Plaintiff brought a motion to amend the judgment, and for attorney fees from defendant, under the contract and sections 1717 and 2983.4, an attorney fees provision of the Rees-Levering Motor Vehicle Sales and Finance Act, section 2981 et seq. The court denied the motion, on grounds only the trial judge could alter the judgment. Plaintiff appealed from the judgment insofar as it summarily denied attorney fees.

We reversed to that extent, and held that plaintiff had been and was entitled to a hearing on the question of attorney fees. On remand, plaintiff renewed his motion for fees, including those incurred in the appeal. The court denied the motion. With respect to liability for attorney fees under the contract, as made mutual by section 1717, the court ruled that the contract allowed fees only in connection with limited types of breaches, none of which was involved in the case. With respect to section 2983.4, the court followed Brown v. West Covina Toyota (1994) 26 Cal.App.4th 555, disapproved on another ground in Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 996, which held that the section did not provide for attorney fees for a suit for rescission and breach of warranty not based on a violation of the Rees-Levering act.

DISCUSSION

On this appeal, plaintiff no longer grounds his claim for attorney fees on the Rees-Levering act, which does not extend to contracts for vehicles purchased for business or commercial use. (§ 2981, subd. (k); San Jose Autocar White Co. v. Williamson (1967) 249 Cal.App.2d 619; 4 Witkin, Summary of Cal. Law (10th ed. 2005) Sales § 240, p. 219.) Plaintiff seeks reversal of the order denying attorney fees on the basis that they were recoverable under a provision of his sales contract with defendant, which applied reciprocally to plaintiff under section 1717.

There appears no basis for defendant’s assertion that plaintiff has also abandoned his claim for attorney fees for the prior appeal.

Defendant disputes plaintiff’s position, and contends, as the trial court held, that the contract allowed attorney fees only for a limited set of obligations, which were not those enforced in the present litigation. Because the issues presented involve the meaning of the contract and the application of section 1717, the scope of our review is de novo. (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.)

The contract’s provision for attorney fees states: “[¶] 3. IF YOU PAY LATE OR BREAK YOUR OTHER PROMISES” [¶] . . . [¶] c. You may have to pay collection costs. You will pay our reasonable costs to collect what you owe, including attorney fees, court costs, collection agency fees, and fees paid for other reasonable collection efforts. . . .” The preceding section of the agreement lists “[¶] 2. YOUR OTHER PROMISES TO US” as being to pay under the contract even if the vehicle is damaged or destroyed; to refrain from removing it from the United States or Canada, transferring it without written permission, or misusing it; to provide defendant a security interest in the truck, its insurance, and insurance proceeds, securing both payment of all amounts owed on the contract and plaintiff’s other agreements; and to provide described insurance.

The contract also provided for attorney fees if defendant incurred them in recovering the vehicle after exercising defendant’s right to rescind because unable to assign the contract. And fees would be deducted from the proceeds of selling the vehicle if plaintiff failed to redeem it after repossession.

Given these provisions, the court concluded, in the tentative ruling it adopted: “In the contract at issue in this case, the attorney’s fees provision is narrowly drawn to encompass only those situations where there is an action under the contract covering allegations the purchaser ‘pay late’ or ‘break . . . other promises’ (i.e. [listing some of the “other promises” in section 2 of the contract]). None of those issues were involved in this action. Plaintiff brought the action seeking revocation of the contract due to nonconformities exhibited in the truck. The language of the . . . contract does not extend to all disputes arising under the contract, such as product nonconformity. Rather, the attorney’s fees provision is only limited to specific breaches that are not present here.”

Although the trial court’s analysis was generally accurate, the conclusion that plaintiff therefore could not recover attorney fees was legally inconsistent with section 1717, subdivision (a). The first sentence of that subdivision provides that “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.” The second sentence, critical here, then provides: “Where a contract provides for attorney’s fees, as set forth above, that provision shall be construed as applying to the entire contract, unless each party was represented by counsel in the negotiation and execution of the contract, and the fact of that representation is specified in the contract.”

The second sentence of section 1717, subdivision (a) was intended to preclude the type of restricted application of attorney fee provisions that occurred below. This portion of the statute was enacted specifically to overrule Sciarotta v. Teaford Custom Remodling, Inc. (1980) 110 Cal.App.3d 444 (Sciarotta), a case much like the present one. In Sciarotta, a home-building contract provided that the contractor would receive attorney fees if it sued to recover the contract price. Alleging the home had been defectively constructed, the homeowners successfully sued the contractor for failure to construct in a workmanlike manner. A divided court of appeal affirmed the trial court’s ruling that the plaintiffs were not entitled to attorney fees under section 1717, holding that the statute “limits reciprocity to those specific provisions of the contract in which attorney’s fees are provided.” (110 Cal.App.3d at p. 446.) Again, the second sentence of section 1717, subdivision (a) was enacted to repudiate this holding and result. (Harbor View Hills Community Assn. v. Torley (1992) 5 Cal.App.4th 343, 348-349; Myers Building Industries, Ltd. v. Interface Technology, Inc. (1993) 13 Cal.App.4th 949, 970.)

The dissenting justice opined that “the majority’s construction of section 1717 to the instant case will revive the evils of the one-sided attorney fee clauses which were intended to be remedied by the statute.” (Sciarotta, supra, 110 Cal.App.3d at p. 457 [dis. opn.].)

Plaintiff was therefore entitled to recover his attorney fees, under section 1717. As summarized above, the contract provided for attorney fees to enforce it, in numerous respects. But the contract did not state, nor does the record indicate, that plaintiff was represented by counsel in its negotiation and execution. Under the statute, plaintiff was therefore entitled to the benefit of the attorney fees provision with respect to the entire contract. As the prevailing party on the contract (see Hastings v. Matlock (1985) 171 Cal.App.3d 826, 840-841), plaintiff was and remains entitled to his reasonable attorney fees.

DISPOSITION

The order denying attorney fees is reversed. The matter is remanded for determination and award to plaintiff of reasonable attorney fees for the litigation, including this appeal. Plaintiff shall recover costs.

We concur: RUBIN, J., FLIER, J.


Summaries of

Hile v. Chevrolet

California Court of Appeals, Second District, Eighth Division
Sep 23, 2008
No. B196615 (Cal. Ct. App. Sep. 23, 2008)
Case details for

Hile v. Chevrolet

Case Details

Full title:GARY HILE, Plaintiff and Appellant, v. CLIPPINGER CHEVROLET, Defendant and…

Court:California Court of Appeals, Second District, Eighth Division

Date published: Sep 23, 2008

Citations

No. B196615 (Cal. Ct. App. Sep. 23, 2008)