Opinion
A097417.
7-29-2003
MOVING MEDIA, INC., Plaintiff and Appellant, v. SPECK CAB COMPANY, Defendant and Respondent.
Moving Media, Inc. (Moving Media), appeals from a post-judgment order denying its motion for recovery of attorney fees under Civil Code section 1717. Moving Media contends, principally: (1) the trial court lacked jurisdiction to deny its motion after entry of judgment; and (2) the court erred in concluding Moving Media was not the prevailing party, since Moving Media recovered a net greater amount than the defendant Speck Cab Company (Speck Cab).
I. FACTS AND PROCEDURAL HISTORY
Moving Media and Speck Cab entered into a contract by which Moving Media could display advertisements in the illuminated rooftop signs and rear window spaces on Speck Cabs taxis. In exchange, Moving Media was to pay Speck Cab $ 1,000 per month, increasing during the contracts three-year term to $ 5,000 per month. Speck Cab could terminate the contract if Moving Media failed to make its payments and failed to remedy the default after 60 days written notice. The contract also provided for an award of attorney fees, as follows: "In the event that litigation is necessary to enforce any provision of this Agreement, it is agreed that the prevailing party will be entitled to court costs and reasonable attorneys fees."
Moving Media failed a number of times to make payments according to the terms of the agreement. Without giving the 60-day notice, Speck Cab removed Moving Medias advertisements from its taxis.
Moving Media sued for breach of contract, seeking compensatory damages and injunctive relief. Speck Cab filed a cross-complaint, alleging breach of contract and seeking to recover for the payments Moving Media had not made. After trial, the court found that Moving Media had breached the contract, but Speck Cab had not. It awarded Speck Cab $ 31,500, plus costs of $ 1,912.55. In addition, as the "prevailing party" under the contract, the court awarded Speck Cab attorney fees of $ 19,819.50. (See Civ. Code, § 1717, subd. (a).)
Moving Media satisfied the judgment, including the attorney fees award, and appealed the judgment in this court (appeal No. A084045). We held the trial court had erred, because Speck Cab breached the contract by removing Moving Medias signs without giving the 60-day notice. We reversed the portion of the judgment denying Moving Media damages on its complaint, and affirmed the portion of the judgment awarding Speck Cab the back payments on its cross-complaint.
On remand, the parties tried the issue of damages only. Moving Media presented expert testimony as to the advertising revenue it lost and the profit it would have gained but for Speck Cabs termination of the contract.
The trial court entered judgment in favor of Moving Media and against Speck Cab in the amount of $ 106,454 (including prejudgment interest), plus post-judgment interest of $ 19.65 per day. The judgment figure apparently reflected a credit for Speck Cab based on its recovery on its cross-complaint in the first trial. The judgment also provided: "In addition, plaintiff shall recover its costs, expenses and attorneys fees from defendant in the amounts established by a memorandum of costs and post-judgment motion under California Rules of Court, Rules 870-870.2."
Following entry of the judgment, Moving Media filed a motion to fix the amount of its attorney fees, asserting that the judgment declared Moving Media was to recover such fees. Moving Media also sought an order directing Speck Cab to return the attorney fees Moving Media had paid after the first trial.
Speck Cab opposed Moving Medias request to fix the amount of attorney fees, on the grounds that (1) Moving Media had not brought a noticed motion for a determination of the "prevailing party" (Civ. Code, § 1717); and (2) Moving Media was not the "prevailing party" because Speck Cabs victory on the cross-complaint and Moving Medias victory on the complaint cancelled each other out.
At the hearing on the motion, the trial court observed that under Civil Code 1717 "neither side [was] a prevailing party in this set of actions on the contract, and therefore, [the court] denies the plaintiffs motion for fees." Because neither side was a prevailing party, the court also ordered Speck Cab to return the fees that Moving Media had paid to it as the prevailing party in the first trial. The court nevertheless awarded Moving Media its costs of suit under Code of Civil Procedure section 1032, because Moving Media had achieved a greater monetary recovery. The court thereafter issued its written order, in accordance with these rulings.
Speck Cab appealed from the judgment in appeal No. A096394. Moving Media brought the instant appeal, challenging only the denial of its motion to fix the amount of attorney fees. Pursuant to the parties subsequent partial settlement, Speck Cabs appeal from the judgment in appeal No. A096394 was dismissed.
II. DISCUSSION
In a contract action, if the contract provides that attorney fees shall be awarded to the prevailing party, then the party who prevails on the contract is entitled to recover for its reasonable attorney fees. (Civ. Code, § 1717, subd. (a).) The court must determine, on noticed motion, which party is the prevailing party. As relevant here, the party prevailing on the contract is the one who recovered "a greater relief" in the action on the contract. (Civ. Code, § 1717, subd. (b)(1).) However, in some instances the court has discretion to determine that there is no prevailing party. (Ibid.)
With this in mind, we address each of Moving Medias arguments: (1) the trial court lacked jurisdiction to deny recovery for attorney fees; (2) the court erred in concluding Moving Media was not the prevailing party; and (3) Moving Media is entitled to an award of attorney fees incurred in this appeal. None of its contentions are persuasive.
A. TRIAL COURT JURISDICTION
Moving Media argues the trial court lacked jurisdiction to deny its motion to fix attorney fees, because the judgment entered three months earlier had provided: "[Moving Media] shall recover its costs, expenses and attorneys fees from [Speck Cab] in the amounts established by a memorandum of costs and post-judgment motion under California Rules of Court, Rules 870-870.2." Because the judgment became final, Moving Media argues, the court could not subsequently decide that Moving Media would not recover attorney fees. Moving Media emphasizes the importance of the finality of judgments and notes that Speck Cab did not attack the judgment by a new trial motion, motion to vacate or set aside the judgment, or other statutory procedure. (See Ramon v. Aerospace Corp. (1996) 50 Cal.App.4th 1233, 1238 ["`After judgment a trial court cannot correct judicial error except in accordance with statutory proceedings."]; Rogers v. Hirschi (1983) 141 Cal. App. 3d 847, 850, 190 Cal. Rptr. 575 ["Once a judgment is entered, there can be no summary amendment by the court itself no matter how wrong in law the decision may be." (Italics omitted.)].)
By statute, Moving Media had no entitlement to recover any attorney fees unless the court first determined it to be the prevailing party on the contract. (Civ. Code, § 1717, subd. (a).) The judgment did not state that Moving Media was the prevailing party. Indeed, the determination of the "prevailing" party is made after noticed motion, which Moving Media never brought. (Civ. Code, § 1717, subd. (b)(1).)
The judgment merely provides that Moving Media shall recover its attorney fees in amounts established by a "post-judgment motion under California Rules of Court, Rules 870-870.2." (Italics added.) California Rules of Court, rule 870.2 (rule 870.2) sets forth the procedure by which a party must move the court to determine "entitlement to the fees," as well as the amount of fees to be awarded. Therefore, the judgment may be reasonably read to anticipate a motion by which the court would decide Moving Medias "entitlement to the fees"; that is, whether it was in fact the prevailing party.
At any rate, the judgment provided that Moving Media shall recover attorney fees only in amounts "established" by a rule 870.2 motion. The motion Moving Media subsequently brought under rule 870.2 did not "establish[]" it was entitled to any amount of attorney fees, as we discuss in the following section of this opinion. At bottom, the courts denial of Moving Medias motion to "fix" attorney fees was not inconsistent with, or barred by, the judgment previously entered.
B. DETERMINATION OF PREVAILING PARTY
We next consider whether the court erred in concluding that Moving Media was not, in fact, a "prevailing party" within the meaning of Civil Code section 1717. We review the courts decision for an abuse of discretion. (Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1158 (Sears).) In this regard, the trial courts discretion is quite broad. (Ibid.; see McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal. App. 3d 1450, 1456, 282 Cal. Rptr. 828 ["The trial courts determination that there was no prevailing party on the contract is an exercise of discretion. We will disturb it only if there has been a clear showing of an abuse of that discretion. [Citations]."].)
Moving Media contends we should review the trial courts decision de novo, because the court interpreted the term "prevailing party" in the underlying contract so as to permit denial of fees to a party who won the most money in the lawsuit. We disagree. There is no indication that the reference to "prevailing party" in the contract was intended to have any meaning other than the term "prevailing party" in Civil Code section 1717. Thus, the heart of the dispute is not what the term prevailing party means (which, as we shall explain, our Supreme Court has established), but whether the court abused its discretion in concluding that Moving Media was not, in fact, the prevailing party.
Moving Media argues it was the prevailing party because it recovered $ 98,954 on its complaint (for damages arising from Speck Cabs failure to terminate without notice), while Speck Cab recovered only $ 31,500 (for Moving Medias failure to make required payments under the contract). Recovering more money than the opponent, Moving Media claims, constitutes "prevailing" in "any ordinary business or street-level sense." Further, Moving Media points out, subdivision (b)(1) of Civil Code section 1717 provides that "the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract." Because the relief sought by both parties was money, Moving Media argues it recovered the "greater relief" in that its monetary recovery exceeded Speck Cabs monetary recovery.
Moving Media is incorrect. A determination of "prevailing party" under Civil Code section 1717, subdivision (b)(1), does not turn solely on the parties comparative monetary recoveries, but requires "`a comparison of the extent to which each party has succeeded and failed to succeed in its contentions." (Hsu v. Abbara (1995) 9 Cal.4th 863, 876, 891 P.2d 804 (Hsu), italics added.) If a party has an unqualified win (i.e., the defendant has defeated all the claims against him, as in Hsu), the trial court has no discretion to deny the party attorney fees as a prevailing party under Civil Code section 1717. (Hsu, supra, at p. 876.) But when a decision on a contract claim does not represent a "`simple, unqualified win" for either party, but is considered "`good news and bad news to each of the parties," the trial court has discretion to rule that neither party prevailed on the contract. (Id. at pp. 874, 877.) In deciding whether there is a party prevailing on the contract, the trial court must "compare the relief awarded on the contract claim or claims with the parties demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources." (Id. at p. 876.) Contrary to Moving Medias assertion, therefore, a prevailing party determination is not a simplistic comparison of one partys recovery to the other, but an examination of the extent to which each party obtained what it sought.
In the matter before us, neither party obtained a simple, unqualified victory, since each won on its own claim and lost on its opponents claim. The determination of the prevailing party was therefore left to the trial courts sound discretion. While Moving Media accomplished its litigation objective by recovering damages arising from the termination of the contract, Speck Cab also accomplished its litigation objectives by recovering for the payments Moving Media had failed to make under the contract. Although Speck Cab unsuccessfully argued that its termination of the contract was justified by Moving Medias anticipatory breach, both parties sought what they were owed under the contract, and both obtained what they would have received if the contract had been performed for the given period. And while we agree the trial court could have exercised its discretion to conclude that Moving Media was the prevailing party based on its net monetary recovery, it cannot be said that the trial courts conclusion to the contrary was so aberrant or arbitrary that it abused its discretion.
Moving Media refers us to a number of cases that do not persuade us to the contrary. Because Moving Media has in several instances miscast the holdings of these cases, we address them briefly.
As mentioned, Moving Media contends that when the litigation is about money, the party winning the most money is the one who prevails in the litigation. For this proposition it relies on Snyder v. Marcus & Millichap (1996) 46 Cal.App.4th 1099, 1102-1103 (Snyder). There, the plaintiff recovered $ 1,904,900 at trial for compensatory damages, emotional distress, and punitive damages. (Id. at pp. 1101-1102.) The Court of Appeal overturned the award for emotional distress and punitive damages, such that plaintiffs recovery was reduced to $ 834,900. (Ibid.) The defendant moved to recover attorney fees as the prevailing party, because it had attained a partial victory on appeal. The motion was properly denied: although the defendant had defeated some of the plaintiffs claims by virtue of the appeal, it had not prevailed on its own causes of action in the trial court. (Id. at p. 1102.)
Snyder is inapposite and unhelpful to our analysis. It did not involve a case of offset, where as here two parties each prevailed on their respective causes of action on the contract. Rather, the defendant merely defeated some of the plaintiffs claims, and the plaintiff was the only party to win any monetary recovery on a claim. Here, by contrast, Moving Media and Speck Cab each prevailed on their respective claims.
Moving Media also relies in this regard on Sears, supra, 60 Cal.App.4th 1136. There, the judgment had awarded plaintiff Sears $ 67,829.46 plus interest, while defendant Baccaglio received nothing on his cross-complaint. However, Baccaglio had previously been paid $ 112,000 by Sears, so that Baccaglia ended up getting more ($ 112,000) than Sears ($ 67,829.46). (Id. at p. 1141.) The court concluded that Baccaglia was deemed the prevailing party under Civil Code section 1717, but not because-as Moving Media contends-he attained a net monetary recovery. Rather, he was held the prevailing party because he had won the most important issue in the litigation. (Sears, supra, at p. 1141.) And even if Baccaglias net monetary victory contributed to his being the prevailing party, Sears merely held that the trial court was within its discretion in determining Baccaglia was the prevailing party. It did not hold that the party who wins more in litigation-here, Moving Media-must necessarily be a prevailing party. (See Id. at p. 1139 ["A party can fail to recover a net monetary judgment and yet prevail for purposes of collecting fees in an action founded in contract." (Italics added)].)
For the same reason, we find Moving Medias reliance on Biren v. Equality Emergency Medical Group, Inc. (2002) 102 Cal.App.4th 125 (Biren), unavailing. There, Biren had sued Equality Emergency Medical Group, Inc. (Equality) and others, and Equality had filed a cross-complaint against Biren. (Id. at pp. 134-135.) The trial court entered judgment for Biren, but offset his recovery by amounts Equality recovered on its cross-complaint. Equalitys motion for attorney fees under Civil Code section 1717 was denied. (Biren, supra, at pp. 135-136.) On appeal, the denial was upheld, because Equalitys recovery on the cross-complaint was merely to be applied as a credit against its greater liability to Biren. The appellate court concluded, "Equality did not prevail because Biren obtained a net recovery of more than $ 35,000 from Equality." (Biren, supra, at p. 139.) As applied here, Biren suggests that Speck Cab would not be a prevailing party under Civil Code section 1717; but it does not follow that Moving Media must be deemed the prevailing party.
Moreover, the court in Biren went on to note that the trial court could have inferred Equality did not prevail under Hsu because Equality obtained only a mixed result, recovering nothing on its $ 1 million breach of contract claim and $ 2 million dollar breach of fiduciary claim. (Biren, supra, 102 Cal.App.4th at p. 140.) Biren therefore affirmed the trial courts exercise of discretion in determining that Equality, who recovered less in the litigation (like Speck Cab) and lost on significant causes of action of its own was not a prevailing party. Again, nothing in Biren compels the conclusion that a party who lost on its opponents cross-complaint (Moving Media) must be the prevailing party simply because it had a greater net monetary victory.
Other cases on which Moving Media relies are inapposite, because the parties in those cases did not obtain a mixed result, as the parties did here. For example, in Pacific Custom Pools, Inc. v. Turner Construction Co. (2000) 79 Cal.App.4th 1254 (Pacific), defendant Turner was sued by Pacific Custom Pools, Inc. (PCP), for $ 2 million. In response to other claims asserted against it, Turner filed a cross-complaint against PCP for indemnity. Turner then obtained summary judgment on PCPs suit and, due to the expense of pursuing the indemnity cross-complaint, voluntarily dismissed it. (Id. at pp. 1270, 1272-1273.) The court held that Turner was entitled to recover its attorney fees from PCP under Civil Code section 1717: because Turner obtained summary judgment against PCPs cross-complaint, there was "no doubt that Turner obtained a `simple, unqualified win." (Pacific, supra, at p. 1272.) Furthermore, PCP greatly succeeded in achieving its litigation objectives of defeating PCPs claims, while PCP clearly failed to accomplish its own. Therefore, "one could not contend that the results are mixed." (Id. at p. 1273.)
Similarly distinguishable is Shaver v. Clanton (1994) 26 Cal.App.4th 568. There, the parties had obtained mixed results in the trial court. On appeal, however, the court reversed the trial courts ruling that a lease providing for perpetual options to renew was invalid. The Court of Appeal therefore remanded with instructions to award fees to the tenants who had "clearly prevailed." (Id. at p. 577.)
Other cases on which Moving Media relies predate Hsu and even the 1987 amendment to Civil Code section 1717 (see Stats. 1987, ch. 1080, § 1), which required the prevailing party to obtain "greater relief" and gave the court discretion to conclude there was no prevailing party. (Moss Construction Co. v. Wulffsohn (1953) 116 Cal. App. 2d 203, 205, 253 P.2d 483 [plaintiff was the prevailing party where it recovered $ 4,054.29 on its complaint while defendants recovered $ 1,400 on their cross-complaint]; Distefano v. Hall (1968) 263 Cal. App. 2d 380, 385-387, 69 Cal. Rptr. 691 [plaintiff awarded attorney fees where he recovered an amount in excess of defendants setoff].
Lastly, in Resolution Trust v. Midwest Fed. Sav. Bank (9th Cir. 1993) 36 F.3d 785 (Midwest ), the Resolution Trust Corporation (RTC) sued defendants to foreclose on a loan and collect on a personal guarantee. (Id. at p. 789.) One of the defendants, Orangegate Investors (Orangegate) filed a counterclaim seeking reformation of the loan agreement to include a nonrecourse provision based on the parties mutual mistake. (Id. at pp. 789-790.) The trial court found for RTC on its breach of contract claim, but also ruled that the terms of the contract should be reformed as Orangegate requested. (Id. at p. 790.) The Ninth Circuit ruled that the court properly denied Orangegates request for attorney fees as the "prevailing party." By succeeding in its claim for reformation, Orangegate "merely reduced its potential liability on the note from $ 8 to $ 9 million to $ 5 to $ 6 million." (Id. at p. 800.) Once again, the courts decision merely stands for the principle that the defendant who obtains an offset-as Speck Cab did here-is not entitled to recover its attorney fees as a prevailing party. It does not establish that Moving Media is entitled to recover its fees as a prevailing party.
None of the cases cited by Moving Media compels the result Moving Media urges. To the contrary, it remains clear that the trial court has discretion to determine who the prevailing party was-or whether there was a prevailing party-when both parties have accomplished some relief. The trial courts decision was within that discretion.
Moving Media argues that it won "92% of what it sought in this suit," while "Speck Cab won virtually nothing of consequence," because Moving Media had not denied it owed Speck Cab some offset for contract payments due but merely disputed the amount of the offset. Nevertheless, Moving Media certainly litigated the issue, and the trial court still had to determine the evidence in this regard. (See Biren, supra, 102 Cal.App.4th at p. 140.)
Finally, Moving Media asserts there is an overlap between the prevailing party standard for an attorney fee award under Civil Code section 1717 and the prevailing party standard for an award of costs under Code of Civil Procedure section 1032. Under Code of Civil Procedure section 1032, subdivision (a)(4), the term "prevailing party" expressly "includes the party with a net monetary recovery." As Moving Media concedes, however, courts have distinguished between these two standards, and a prevailing party determination under Code of Civil Procedure section 1032 does not establish who is the prevailing party under Civil Code section 1717. (Sears, supra, 60 Cal.App.4th at pp. 1142-1143.)
In the final analysis, Moving Media has failed to establish the trial court abused its discretion. We acknowledge that, had it been our decision, we likely would have deemed Moving Media the prevailing party in light of its greater recovery. Nevertheless, it has not shown the trial courts contrary conclusion to be erroneous.
C. ATTORNEY FEES IN THIS APPEAL
Moving Media requests us to grant it reasonable attorney fees on appeal, claiming the attorney fee clause in the parties contract extends to fees incurred on appeal. As we have concluded the lower court did not abuse its discretion in determining that Moving Media was not the prevailing party on the action on the contract, it is not the prevailing party on appeal. Its request is denied.
Moving Media filed a request for judicial notice of certain material on May 1, 2003. We deferred ruling on the request pursuant to People v. Preslie (1977) 70 Cal. App. 3d 486, 493-494, 138 Cal. Rptr. 828. In our consideration of the merits, we now grant the request.
III. DISPOSITION
The order is affirmed.
We concur. JONES, P.J., GEMELLO, J.