Opinion
C077751
07-10-2018
SCOTT M. LABERTEW et al., Plaintiffs and Respondents, v. NORA JEAN WHITELEY, Defendant and Appellant.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 34201100113367CUCOGDS)
Appellant Nora Jean Whiteley (Whiteley) appeals from an order entered by the trial court denying her motion for attorney fees after she prevailed in an action brought against her by respondents Scott M. and Mala Labertew (the Labertews). She also appeals the court's order directing her to file an amended abstract of judgment and to take all necessary steps "to lift the lien" on the Labertew's property that was recorded in reliance on the erroneous abstract of judgment. We affirm the trial court's orders.
FACTS AND PROCEEDINGS
No party takes issue with the statement of facts adopted by the trial court in its decision on the dispute underlying this appeal. We set forth those facts as follows:
"Whiteley obtained ownership of [certain property located in Elk Grove] (the Property) in 1997. On April 5, 2000, she entered into a 20-year written lease with Verizon concerning an 8' x 10' segment of the property on which a PG&E transmission tower sits. [(fn. omitted)] . . . The lease allows Verizon to operate and maintain cables, conduits, and pipes on the tower. Under the lease, Verizon is to pay Whiteley $4,800 in rent annually, payable in monthly increments. The amount of rent increases by 20% every five years. . . . The . . . annual rent [at the time of trial was] $6,912. The lease specifies that 'This lease shall run with the Property and shall be binding on and inure to the benefit of the parties, their respective successors, personal representatives and assigns.' . . . .
"A memorandum of lease was recorded in the Sacramento County Clerk Recorder's Office on May 31, 2000 which evidences the 20-year lease, the parties, the property, and the subject matter. . . . The recording also specifies that the Landlord shall not cause or permit any use of the . . . Property which interferes with or impairs the quality of communications services being rendered by [Verizon]. [Whiteley] agree[d] that no other antenna(s) [could] be erected upon any portion of [her] property without [Verizon]'s prior written consent. . . . .
"During Whiteley's ownership of the property, she also entered into a similar lease with Sprint, and leased space on her property to billboard companies for the placement of billboards.
"On June 27, 2003, Whiteley sold the property to Jennifer English, including Whiteley's interest in the Sprint and billboard leases. During the negotiations, English and her husband Michael English agreed to relinquish any interest they might have in the Verizon lease. On August 12, 2003, the Englishes and Whiteley signed an 'assignment of rights' which provides:
" 'Jennifer English and Michael English hereby relinquish all rights to and assign all terms and benefits of the contract between Nora J. [Whiteley] and Verizon/Air Touch Cellular for the use of the [the Property] for its power facility. Any and all benefits will be for the benefit of Nora J. Whiteley and/or her estate, and all monthly (or any) payments will be made to Nora J. Whiteley or her assigns for the entire length of said contract or any extension or renewal thereof.' "
"Consistent with the assignment of rights, Whiteley continued to receive the monthly rent payments from Verizon following her sale of the property to [the Englishes].
"On May 31, 2011, [the Englishes] sold the property to the Labertews. Prior to the sale, the escrow disclosure documents notified the Labertews of the Verizon lease and that Whiteley was receiving payments from Verizon under that lease. The Labertews asked [the Englishes] to transfer both the Sprint and Verizon leases to them as part of the real estate transaction. [The Englishes] agreed to transfer the Sprint lease to them, but did not transfer the Verizon lease (presumably because [the Englishes] had relinquished any interest in that lease). The Labertews decided to proceed with the property purchase while preserving their rights to investigate and contest Whiteley's interest in the [Verizon] lease."
Thereafter, the Labertews filed an action against Whiteley seeking a declaration that the landlord's interest in the Verizon telecommunications lease had passed from Whiteley to the third party and then on to the Labertews. This complaint alleged that neither deed transferring the land had any reservation of any interests concerning the telecommunications lease and was a "complete conveyance." It requested declarations confirming these conveyances included the landlord's interest in the telecommunications lease and that the Labertews were the owners of the landlord's interest in that lease.
After a bench trial, the trial court ruled Whiteley retained the landlord's interest in the telecommunications lease for the duration of that lease. It further ordered the Labertews to pay certain attorney's fees awarded to the telecommunications provider in an interpleader action on the lease, and that a judgment should issue reflecting that order. Thereafter, on May 9, 2014, a judgment was entered in accordance with the trial court's decision. That judgment was not appealed.
On June 6, 2014, Whiteley filed a form entitled "Memorandum of Costs (Summary)" in Department 53 of the Sacramento Superior court noting that she would, by motion, ask for attorney fees in the amount of $34,286.50.
On July 22, 2014, Whiteley filed a motion for attorney fees in the civil law and motion department.
The following day, a court clerk made handwritten notations on the judgment for "Costs Posted" in the amount of $34,753.
On August 4, 2014, while Whiteley's motion for fees was still pending, Whiteley filed an abstract of judgment that included, in part, an amount for Whiteley's unadjudicated request for attorney's fees. Whiteley recorded this abstract on August 11, 2014, creating a lien against the Labertew's real property in the amount of $40,580.11, notwithstanding that as of this date the only sum awarded to Whiteley in the judgment was $5,827.11.
On August 27, 2014, the trial court denied Whiteley's motion for attorney's fees without prejudice to re-filing before the trial judge. Whiteley filed her amended request for attorney's fees before the trial judge on September 16, 2014. The Labertews opposed the motion, highlighting the erroneous abstract of judgment and the impropriety of the clerk's notation on the judgment of costs yet to be determined.
In reply, Whiteley's attorney, Jeff Klink, claimed he made an "innocent mistake" by including an amount for attorney fees on the cost memorandum but all parties are now bound by the cost memorandum because the Labertews failed to file a timely motion to strike or tax costs, and after the time has passed for a motion to strike or tax costs, "the clerk must immediately enter the costs on the judgment." (Cal. Rules of Court, rule 3.1700(b)(1) & (4).) Mr. Klink filed a declaration stating he is unfamiliar with the law regarding attorney fee awards; he consulted his practice guide and believed his client had a right to attorney fees as a cost; he directed his assistant to include fees in the cost memorandum intending to file the motion for attorney fees; and he signed the cost memorandum without reading the Judicial Council language on the form: "Attorney fees (enter here if contractual or statutory fees are fixed without necessity of a court determination; otherwise a noticed motion is required)." Opposing counsel later brought this language to Klink's attention. Klink said he did not ask the clerk to post costs on the judgment but, when Klink learned the clerk had done so, Klink researched the issue and concluded that amounts claimed in a cost memorandum became final because there was no timely motion to strike or tax costs.
Thereafter, on October 22, 2014, the trial court denied Whiteley's motion for attorney's fees and ordered Whiteley to "immediately file an amended abstract of judgment without the claimed attorney's fees she sought in this motion and take all further steps necessary to lift the lien against [respondents] that was recorded in reliance on the erroneous abstract of judgment." Whiteley appeals.
DISCUSSION
I
Attorney Fees
Appellant argues the trial court erred in denying her request for attorney's fees expended in defending the Labertews' declaratory relief action because the Labertews controlled the underlying litigation and claimed to be her successor in interest under the telecommunications lease.
We review whether Appellant had a legal basis for an award of attorney's fees de novo. (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 237 (Douglas).)
The default in California is that each party to a lawsuit must bear its own attorney fees "unless a contract or statute or other law authorizes a fee award." (Douglas, supra, 211 Cal.App.4th at p. 237.)
Civil Code section 1717 provides: "In any action on a contract, where the contract specifically provides that attorney's [sic] 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 [sic] fees in addition to other costs." (Civ. Code, § 1717, subd. (a).) Put more simply, where a contract provides for an award of attorney fees, whichever contracting party prevails is entitled to an award of fees. (See, Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962, 966.)
Commendably, the trial court entered a detailed ruling on Whiteley's motion for fees which included a discussion of those situations where a nonsignatory to a contract that includes an attorney fees provision may be awarded fees after prevailing in an action on that contract. But we need not go that far.
After discussing why the Labertews, as nonsignatories to the lease could not have been awarded fees under the lease's attorney fees provision had they prevailed in their action, the trial court found:
"In addition, the attorney fee provision itself does not authorize the recovery of fees against the Labertews in this case. The provision only authorizes the recovery of attorney fees '[i]f either party institutes' a court action or proceeding. The Labertews instituted this action, but the parties to the lease are Verizon and Whiteley. Second, the fee provision only applies to actions 'to enforce any provision of this Lease, or . . . for damages for any alleged breach of any provision of this Lease.' But the Labertews were not seeking to enforce the lease or recover damages arising from any breach by Whiteley. Rather, they sought a judicial declaration that they obtained the landlord interest when they purchased the real property on which the leased premises is located. The case turned on principles of real property law."
We agree with the trial court's assessment of the issue. This was an action sounding in property law, that is, an action to determine which of the parties had the right to the proceeds from the lease. It was not an action instituted by a party to the lease to enforce a provision of the lease, nor was it an action alleging a breach of a provision of the lease. It was not, in the words of section 1717 of the Civil Code an "action on a contract" but was instead an action to gain the benefits of the contract, that is, the intact lease, after considering the deeds and agreements between successive owners of the property that was subject to the lease. There was no error.
II
The Order to Amend the Abstract Judgment
Appellant argues that the ancillary orders concerning the abstract of judgment are erroneous because the original abstract reflected the judgment, and appellant's claimed costs were not objected to prior to their entry in the abstract. Putting aside the absurd implications of this argument that would encourage parties to inaccurately complete memoranda of costs to include not-yet-awarded attorney fees in the hopes that opposing counsel might fail to object to them, a classic example of a "gotcha," Whiteley offers no supporting authority.
She cites California Rules of Court, rule 3.1700(b), that a party objecting to a cost memorandum must file a timely motion to strike or tax costs (which was not done in this case), and after the time has passed without such objection, "the clerk must immediately enter the costs on the judgment." She also cites case law that has no bearing on this appeal. Douglas v. Willis (1994) 27 Cal.App.4th 287, held that costs did not constitute a default or judgment entitling the appellant to mandatory relief from forfeiture under Code of Civil Procedure section 473. (Id. at pp. 290-291.) Davis Lumber Co. v. Hubbell (1955) 137 Cal.App.2d 148, addressed timing of cost bills and objections.
Here, the cost memorandum specifically stated with respect to attorney fees, "Noticed motion to be filed." A noticed motion was filed; respondents filed opposition; and the trial court decided the matter on its merits. Whiteley's attorney argued he made an "innocent mistake" by including attorney fees in the cost memorandum, yet claimed everyone was now bound by the cost memorandum because respondents failed to file a timely motion to strike or tax costs. The trial court was not persuaded. Whiteley offers no legal authority mandating forfeiture under these circumstances.
Whiteley argues that the trial court did not have the authority to enter these orders absent a noticed motion and the opportunity of Whiteley to oppose the orders. Whiteley says she has never been "put on any notice . . . which to [sic] justify the trial court's sua sponte action in vacating the judgment. . . ." Whiteley's counsel acknowledges that he did not specifically object on these grounds at the time the trial court entered its order.
"The doctrine of inherent judicial power—that is, the existence of power vested in courts by their creation, and independent of legislative grant—developed early in English common law 'along two paths, namely, . . . punishment for contempt of court and of its process, and . . . regulating the practice of the court and preventing the abuse of its process.' (Jacob, The Inherent Jurisdiction of the Court (1970) 23 Current Legal Problems 23, 25.) American courts embraced the doctrine as part of their common law heritage. As early expressed by the United States Supreme Court, courts possess powers that 'necessarily result . . . from the nature of their institution,' powers that 'cannot be dispensed with . . ., because they are necessary to the exercise of all others.' (United States v. Hudson (1812) 11 U.S. [(7 Cranch)] 32, 34 ; see Meador, Inherent Judicial Authority in the Conduct of Civil Litigation [73 Texas Law Review 1805, 1806, 1815-1816 (1995)].)
"From their creation by article VI, section 1 of the California Constitution, California courts received broad inherent power 'not confined by or dependent on statute.' (Walker v. Superior Court (1991) 53 Cal.3d 257, 267 ; see also Civ. Code[,] § 22.2; [fn. omitted] Ferguson v. Keays (1971) 4 Cal.3d 649, 654-655 . . . [California courts possess inherent powers enjoyed by English common law courts, except for those precluded by Civ. Code, § 22.2].) This inherent power includes 'fundamental inherent equity, supervisory, and administrative powers, as well as inherent power to control litigation.' (Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 967 [(Rutherford)].)" (Stephen Schlesinger, Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 758.)
We need not linger here for very long. Where a trial court has denied a motion for attorney fees and has been informed that the moving party has already included the claimed fees in an abstract of judgment and has, further, recorded a lien against the opposing party's real property in an amount that includes the fees that the trial court has denied, the trial court having "fundamental inherent equity, supervisory, and administrative powers, as well as inherent power to control litigation" (Rutherford, supra, 16 Cal.4th at p. 967) had the authority to order the abstract of judgment amended to strike the attorney fees from the judgment and to order the lien against the Labertew's property lifted forthwith and without further proceedings. Equity required nothing less.
The filing of the abstract which included an award of attorney fees that had not yet been awarded and the recording of a lien based thereon is most troubling.
As noted, on August 4, 2014, the attorney for Whiteley, Jeff Klink, filed a civil abstract of judgment which represented that a judgment was entered for Whiteley on May 9, 2014, in the amount of $40,580.11, an amount that included attorney fees of $34,286.50, fees that were the subject of the then-pending but still unresolved motion for fees. Thereafter, on August 11, 2014, attorney Klink recorded the abstract of judgment with the Sacramento County Recorder's office, thus placing a lien on the Labertew's real property. These two filings were made by attorney Klink on behalf of Whiteley some 72 business days and 94 calendar days before the trial court ruled on - and denied - the motion for attorney fees that he had filed on behalf of Whiteley.
We affirm the trial court's order of October 22, 2014, directing Whiteley to file an amended abstract of judgment that does not include an award of attorney fees to Whiteley in the amount of $34,286.50 and to "lift the lien" that had been placed on the Labertew's real property.
DISPOSITION
The trial court's orders are affirmed. The trial court shall modify the judgment to strike the handwritten notation of $34,753 in costs and substitute the correct amount. Respondents are entitled to their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)
Pursuant to Business and Professions Code section 6086.7, subdivision (a)(2), which states "[a] court shall notify the State Bar . . . . [¶] . . . [¶] [w]henever a modification . . . of a judgment in a judicial proceeding is based in whole or in part on the misconduct, incompetent representation, or willful misrepresentation of an attorney," the clerk of this court is directed to forward to the State Bar a copy of this opinion. (People v. Rogers (2016) 245 Cal.App.4th 1353, 1369, fn. 11 [matter reported to State Bar where judgment modified due to counsel's failure to object to amendment adding new criminal charges after defendant waived preliminary hearing].) Further, pursuant to subdivision (b) of the same statute, the clerk of this court shall notify Whiteley's attorney, Jeff Klink, that the matter has been referred to the State Bar.
HULL, J. We concur: RAYE, P. J. MURRAY, J.