Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from an order of the Superior Court of Los Angeles County. Raul A. Sahagun, Judge, No. VC049155
Law Offices of Steven C. Kim & Associates, Steven C. Kim and S. Calvin Myung for Plaintiffs and Appellants.
Freedman & Taitelman, Michael A. Taitelman and Bradley H. Kreshek for Defendants and Respondents.
ROTHSCHILD, Acting P. J.
Buyers of commercial property appeal an order awarding real estate brokers attorneys’ fees and costs entered after the buyers voluntarily dismissed the brokers from the action. We affirm.
BACKGROUND
Seemyun Kymm and Ock Ja Kymm, individually and as trustees of the Seemyun and Ock Ja Kymm Family Trust (collectively “the Kymms”), purchased a commercial building from Dragon Property, Inc. (“Dragon”). Dragon’s broker was Tom O’Loughlin of Lee & Associates Commercial Real Estate Services, Inc. – City of Industry (collectively “the Brokers”).
For purposes of this background section, we rely on the undisputed facts as stated in the operative complaint.
The Kymms and Dragon executed a standard form purchase and sale agreement (purchase agreement). The purchase agreement contained an attorney fee clause as follows: “If any Party or Broker brings an action or proceeding (including arbitration) involving the Property whether founded in tort, contract, or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term ‘Prevailing Party’ shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense....”
On January 9, 2007, the Kymms entered into an agency agreement with the Brokers to lease the property. The standard form agency agreement contained an attorney fee clause which provided as follows: “In the event of litigation or arbitration between or among Owner, Agent, a Cooperating Broker, a buyer, prospective buyer, lessee, or prospective lessee of the Property, or any of them, arising under or relating to this Agreement or the Property, the prevailing party shall be paid its attorney’s fees and costs by the losing party. The term ‘Prevailing Party’ shall include, without limitation, one who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other party of its claim or defense....”
On January 16, 2007, the Kymms entered into a lease with one of the seller’s companies, Dragonfly Clothing, Inc., arranged by the Brokers. The standard form commercial lease contained an attorney fee clause which provided: “Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, ‘Prevailing Party’ shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense....”
On July 26, 2007, the Kymms filed suit against the seller, Dragon, its individual principals, the tenant, Dragonfly Clothing, Inc., and the Brokers alleging that Dragonfly Clothing, Inc. had breached the lease by failing to pay rent, the actual square footage of the property was considerably less than represented and that as a consequence the Kymms overpaid for the property, lost a prospective new tenant, and suffered damages.
On May 9, 2008, the Kymms filed a third amended complaint after the trial court sustained the Brokers’ previous demurrers with leave to amend. The third amended complaint asserted four tort causes of action against the Brokers: fraud, negligent misrepresentation, breach of fiduciary duty, and negligence.
On May 23, 2008, the Kymms voluntarily dismissed the Brokers from the action.
The Brokers filed a motion for attorneys’ fees and costs, asserting that because the Kymms voluntarily dismissed them from the action they were the prevailing parties in the Kymms’s action against them and, as such, entitled to an award of costs and fees under the contracts. The Brokers requested $34,575 in attorneys’ fees and $1,187.18 in costs and supported their request with invoices to substantiate the amounts requested. The Kymms filed opposition arguing that the Brokers were not entitled to an award of fees and costs under the contracts, but if the Brokers had a contract right to attorneys’ fees and costs, the fees requested were excessive.
On August 6, 2008, the trial court heard oral argument and took the matter under submission. Later that day the court issued a minute order granting the Brokers’ request for attorneys’ fees, but in the reduced amount of $21,456.52. On August 27, 2008, the court signed and filed a written order denominated a “judgment” awarding the Brokers $21,456.52 in attorneys’ fees and $1,187.18 in costs. The Kymms appeal from the August 27, 2008, “judgment.”
The Kymms filed a notice of appeal on October 7, 2008, from the “judgment” entered on August 27, 2008. The Brokers moved to dismiss the appeal as untimely on the ground that in their appellate briefs the Kymms challenged only the attorneys’ fees order of August 6, 2008, and made no separate argument regarding the August 27, 2008, signed “judgment” awarding the Brokers both attorneys’ fees and costs. Accordingly, the Brokers argue that the Kymms’s appeal must be dismissed as untimely because the Kymms could have appealed from the August 6, 2008, order as an order made after entry of an appealable judgment. (Code Civ. Proc., § 904.1, subd. (a)(2).)
DISCUSSION
Standard of Review
“An order granting or denying an award of attorney fees is generally reviewed under an abuse of discretion standard of review; however, the ‘determination of whether the criteria for an award of attorney fees and costs have been met is a question of law.’ (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169, quoting Ramos v. Countrywide Home Loans, Inc. (2000) 82 Cal.App.4th 615, 621.)” (Salawy v. Ocean Towers Housing Corp. (2004) 121 Cal.App.4th 664, 669.) Whether the Brokers were entitled to attorneys’ fees and costs under the contract provisions at issue in this case is a question of law we review de novo.
The Language of the Attorney Fee Clause Controls in Tort Actions
An action involving contract claims is an action “on a contract” and Civil Code section 1717 governs entitlement to contractual attorneys’ fees. When an action “on a contract” is voluntarily dismissed, Civil Code section 1717, subdivision (b)(2) directs that “there shall be no prevailing party for purposes of this section.”
If, however, the action voluntarily dismissed does not concern contract claims, but only tort causes of action (or other noncontract claims), then it is not an action “on a contract” and Civil Code section 1717 does not control. (Santisas v. Goodin (1998) 17 Cal.4th 599, 617.) In this situation, the determination whether a dismissed party is a “prevailing party” entitled to an award of attorneys’ fees under a contractual attorney fee provision depends on the language of the contract’s attorney fee clause. As the Supreme Court explained, “If the voluntarily dismissed action also asserts causes of action that do not sound in contract, those causes of action are not covered by [Civil Code] section 1717, and the attorney fee provision, depending upon its wording, may afford the defendant a contractual right, not affected by [Civil Code] section 1717, to recover attorney fees incurred in litigating those causes of action.” (Ibid.)
The Kymms’s operative complaint asserted only tort claims against the Brokers. Because Civil Code section 1717 was inapplicable in this situation, it did not present a bar to the Brokers’ claim of prevailing party status and entitlement to an award of contractual attorney fees once the Kymms voluntarily dismissed them from the action. Whether the Brokers were entitled to an award of fees instead turned on the language of the agreements’ attorney fees clauses.
Broker as Party to the Purchase and Lease Agreements’ Attorney Fees Clauses
The Kymms argue that the Brokers were not entitled to fees under the contracts’ attorney fee provisions because the Brokers failed to demonstrate that (1) they were signatories to the purchase and lease agreements containing the attorneys’ fees clauses on which the trial court relied in awarding fees, and (2) that the Brokers were “prevailing parties.” We disagree.
Because this case involved only tort claims, we consider the specific wording of the attorney fee clauses in the contracts, as Santisas v. Goodin, supra, 17 Cal.4th at page 617 directs, to determine whether they would permit the Brokers an award of fees. Here, the wording of the clauses in the purchase and lease agreements expressly included “brokers” as being entitled to, or liable for, an award of fees. The Kymms do not dispute that the Brokers acted as the broker for the purchase agreement as well as for the lease agreement. Thus, the term “broker” in these contractual provisions referred to the Brokers, and under the unambiguous wording of these contractual attorney fee provisions, the Brokers were included within the clauses as a “party” either entitled to, or liable for, attorneys’ fees.
The Kymms assert that because a professional organization of real estate brokers prepared these standard form contracts their terms should be construed against the Brokers. This principle of contract interpretation applies only in the case of ambiguity. (Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263, 269-272; Gamer v. duPont Glore Forgan, Inc. (1976) 65 Cal.App.3d 280, 286.) The Kymms do not specify which terms they consider ambiguous, nor specify which terms require interpretation or construction against the Brokers. Accordingly, the Kymms have not shown that the principle of construing ambiguous terms against the contracts’ drafter has any application here.
Our conclusion is supported by the decision in Pacific Preferred Properties, Inc. v. Moss (1999) 71 Cal.App.4th 1456 (Pacific Preferred). There the sellers of real property successfully defended a cross-action by a real estate broker and its successor in interest. The sellers then sought an award of attorneys’ fees against the broker. The trial court denied an award of fees and the appellate court reversed. The form real estate purchase contract contained an attorneys’ fees provision stating: “‘In any legal action, proceeding or arbitration arising out of this agreement, whether instituted by or against the Buyer or Seller, or the Brokers named herein, the prevailing party(s) shall be entitled to reasonable attorney’s fees and costs.’” (Id. at p. 1460.) The appellate court found that this attorney fee clause “unambiguously includes the broker within the ambit of its benefit provisions and its performance obligations. There can be no claim ‘the prevailing party,’ as used in the attorney’s fees provision, is not intended to apply to the broker. The trial court attempted to evade the implication of party status arising from this salient consideration by characterizing the broker as an intended third party beneficiary of the buyer-seller contract. However, that ascription does not fit; the attorney’s fees provision is not, of necessity, a benefit.” (Id. at p. 1462.)
The Pacific Preferred court concluded that the broker became a party to the buyer and seller’s contract for purposes of the attorney fee clause. “When a broker supplies a contract document to the buyer and seller containing a clause of this kind, the broker manifests an intention to pay attorney’s fees in ensuing litigation if the broker does not prevail.... [¶] When the buyer and the seller execute the document they manifest assent to the reciprocal attorney’s fees right and obligation.... In these circumstances, a tripartite contract concerning the award of attorney’s fees is formed between buyer, seller and broker. [Citation.]” (Id. at p. 1464.)
As in Pacific Preferred, the Brokers in this case became parties to the attorney fee provisions of the contracts by virtue of the wording of the attorney fee clauses. This language entitled the Brokers to the provisions’ benefits and bound the Brokers to the provisions’ obligations as well.
The Kymms reliance on Topanga and Victory Partners, LLP v. Toghia (2002) 103 Cal.App.4th 775, for the proposition that only signatories and parties to the contract containing an attorneys’ fees clause are entitled to attorneys’ fees, is misplaced. There the fee provision only mentioned the “landlord,” “tenant,” “other party,” “prevailing party,” or “losing party.” (Id. at pp. 778-779.) Because the individual attempting to secure an award of fees was none of these, but was instead the alleged alter ego of the tenant, the court held that he was not a party to the contract entitled to an award of fees under the attorney fee clause. (Id. at pp. 786-787.) Here, in contrast, brokers are specifically mentioned in the attorney fee provisions as either entitled to, or liable for, attorneys’ fees under the purchase and lease agreements.
The decisions in Super 7 Motel Associates v. Wang (1993) 16 Cal.App.4th 541 and Sweat v. Hollister (1995) 37 Cal.App.4th 603 also do not assist the Kymms. In both decisions, brokers were denied a contractual fee award because, unlike the clause in the present case, the attorney fee clauses in those cases entitled only the “prevailing party” to an award of fees. Because the real estate brokers were not parties to the purchase agreements (and were not mentioned in the attorney fee clauses), the courts found the brokers could not be a “prevailing party.” The decisions in Super 7 and Sweat have no application here where the attorney fee provisions expressly provided that brokers are entitled to prevailing party status.
Agency Agreement Attorney Fee Provision
There is no dispute that the Brokers were signatories and parties to the agency agreement in which the Kymms engaged the firm to lease the property. That contract also contained an attorney fee clause which covered all matters “arising under or relating to this Agreement or the Property.” Courts have held that attorney fee clauses containing this general language are sufficiently broad that they cover tort claims as well. (See Lerner v. Ward (1993) 13 Cal.App.4th 155, 160-161; Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1342-1343.) Thus, to the extent the litigation concerned matters pertaining to this agency, the agreement also entitled the Brokers to an award of attorney fees as the prevailing parties.
The Kymms contend that because Tom O’Loughlin signed the contracts as an officer of the brokerage firm, he personally was not a party to, nor the broker for, any of the contracts, and thus was not personally entitled to attorneys’ fees under the attorneys’ fees provisions of those contracts. The Kymms did not present this theory of defense to the trial court for consideration and resolution, but has raised this defense for the first time on appeal. We decline to exercise our discretion to consider this new theory of defense for the first time on appeal. (See Ward v. Taggart (1959) 51 Cal.2d 736, 742 [“the opposing party should not be required to defend for the first time on appeal against a new theory that ‘contemplates a factual situation the consequences of which are open to controversy’”]; Cinnamon Square Shopping Center v. Meadowlark Enterprises (1994) 24 Cal.App.4th 1837, 1844 [an appellant may not change its theory of recovery or relief on appeal].)
Prevailing Party
The Kymms contend that the Brokers were nevertheless ineligible for an award of fees because, regardless of the contract considered, each attorney fee clause required proof that the action was “abandoned.” The Kymms assert that because they voluntarily dismissed the Brokers “without prejudice” they retained the right to refile their action against the Brokers and for this reason have not “abandoned” their claims.
The common definition of “abandon,” is “[t]o desert, surrender, forsake,... cede... relinquish” (Black’s Law Dict. (4th ed. 1951) p. 9, col. 1) or to “give up” (Webster’s 9th New Collegiate Dict. (1986) p. 43, col. 2). In dismissing the Brokers, the Kymms relinquished their right to proceed with their action against the Brokers. That they might later possibly be entitled to resurrect their action does not change the result.
Indeed, the Kymms concede that they made a tactical decision not to pursue the litigation against the Brokers, “to minimize legal expenses and to use very limited resources against the seller.” Nothing in the record suggests that they intend to change tactics.
The Kymms nevertheless argue that the Brokers cannot be considered “prevailing parties” because the Kymms may still recover all damages sought as against the remaining defendants in the action. This may be so, but it is also immaterial to the query whether under the attorney fee clauses, because of the Kymms’s voluntary dismissal, the Brokers “substantially” “defeat[ed] the relief [the Kymms] sought” as against them. We think it plain that as a result of the dismissal of the Brokers from the action and their release from potential liability, the Brokers substantially defeated the relief the Kymms sought from them in this action and, as between them, were “prevailing parties” within the definition of the attorney fee clauses.
Excessive Fees
After analyzing the supporting documents, the trial court awarded the Brokers approximately $21,000 of the more than $34,000 they requested in attorneys’ fees. The Kymms contend that the trial court failed to consider all relevant factors in determining a reasonable fee award, and that the fees awarded were excessive in this case which had not progressed beyond the pleading stage. The Kymms, however, have not supported their argument through facts or law to show that the trial court considered insufficient relevant factors. Nor have they shown through specific factual arguments, or otherwise, in which manner the court abused its discretion in determining a reasonable fee. We therefore have no basis for reversing the award as excessive.
DISPOSITION
The order is affirmed. Respondents are awarded their costs on appeal.
We concur: CHANEY, J., JOHNSON, J.
We disagree the notice of appeal was untimely. The court’s August 6, 2008, minute order addressed only the propriety of and amount of attorneys’ fees. This order was not final for appeal purposes because it was only a partial ruling on the Brokers’ motion which requested both fees and costs. The “judgment” entered on August 27, 2008, included costs and was therefore the final order. The Kymms’s notice of appeal filed October 7, 2008, and within 60 days of the date of that written order, was timely. (Cal. Rules of Court, rule 8.104(a).)
The decisions on which the Brokers rely in contending that the Kymms’s appeal is untimely are inapposite because they concerned attempted review of appealable orders entered after the judgment from which the appeals had been taken. Here, in contrast, the appeal concerns a partial order entered before the appealable “judgment” from which the Kymms timely appealed. (See, e.g., Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 46 [appellate court had no jurisdiction to review the post judgment order for costs and fees entered after the judgment from which the appeal was taken]; Fish v. Guevara (1993) 12 Cal.App.4th 142, 147 [plaintiffs filed their notice of appeal before the court’s decision permitting the defendants to recover their expert witness fees; because such post judgment order was separately appealable it could not be reviewed in the appeal from the earlier appealed judgment]; DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43-44 [appellate court lacked jurisdiction to review the post judgment order awarding attorneys’ fees because the notice of appeal stated only that the plaintiffs were appealing from the judgment].) We accordingly deny the Brokers’ motion to dismiss the appeal.