Opinion
C073684
07-03-2017
VINCENT A. MUZZI et al., Plaintiffs and Respondents, v. BEL AIR MART, 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NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 34200900066922CUBCGDS)
This lawsuit seeks coercive relief to enforce a declaratory judgment obtained in a prior lawsuit.
In the prior declaratory relief action, commercial landlords of a shopping center sought a declaratory judgment that their tenant, defendant Bel Air Mart, was violating the lease by keeping in the common area behind the store, racks, bins, carts (operational equipment) for loading and unloading merchandise and trash. The trial court found such use permissible. In a prior appeal, we disagreed and held the lease allowed loading and unloading but precluded Bel Air from "commandeer[ing]" the common area "for its own storage purposes" beyond loading and unloading. (Muzzi v. Bel Air Mart (2009) 171 Cal.App.4th 456, 466-467 (Muzzi I).) On remand, the trial court issued an amended declaratory judgment that the lease did not allow "storage" in the common area beyond loading and unloading.
A dispute arose as to whether Bel Air was complying with the declaratory judgment. Bel Air interpreted Muzzi I as allowing it to "stage" (leave) operational equipment in the common area continuously during "regular" receiving hours beginning at 6:00 a.m. and ending at either 11:00 a.m. or 1:00 p.m. (depending on the evidence).
Hence this second lawsuit for damages and injunctive relief by the landlords -- plaintiffs Vincent A. Muzzi, an individual, and Faust Silvestri and Olga M. Silvestri as Trustees of the Olga M. and Faust Silvestri 1999 Family Trust. A jury found Bel Air violated the contract but plaintiffs were not harmed, and the trial court entered judgment in favor of Bel Air on the breach of contract claim. However, the jury found Bel Air committed trespass that harmed plaintiffs. Though the jury awarded $0 in damages, the parties stipulated to nominal damages of $1.00. The court then held a bench trial and issued judgment and a permanent injunction prohibiting Bel Air from placing any items in the affected area beyond the time associated with actual loading and unloading. The court awarded costs and attorney fees to plaintiffs.
Bel Air appeals from the judgment and postjudgment order for costs and attorney fees. Bel Air contends the court erred in excluding as settlement negotiations (Evid. Code, § 1154) evidence that plaintiffs (supposedly) agreed to Bel Air's interpretation of Muzzi I. Bel Air also argues (a) the verdicts on contract and trespass were fatally inconsistent; (b) the permanent injunction contradicts express factual findings, is vague, and misinterprets the lease; and (c) the court improperly awarded costs and attorney fees to plaintiffs instead of Bel Air.
We affirm the judgment and postjudgment orders. We refer to defendant as Bel Air, as do the parties, though Raley's acquired Bel Air in 1992. (Muzzi I, supra, 171 Cal.App.4th at p. 459.)
We deny Bel Air's March 23, 2015, request for judicial notice (filed with its reply brief and opposed by the landlord) of an order granting attorney fees to the landlord in the prior lawsuit. That order has no relevance to this appeal, as explained post.
FACTS AND PROCEEDINGS
In 1987, Bel Air entered into a lease with the then-owners of a planned shopping center for approximately 43,000 square feet of space to be used as a grocery store. (Muzzi I, supra, 171 Cal.App.4th at p. 459.) Bel Air had input in the design of the store, including its parking and loading configuration, and retained the right to reject the final plans. The shopping center was built, and Bel Air began its operations. (Ibid.)
Since this lawsuit seeks to enforce a declaratory judgment obtained in prior litigation, we begin with the prior litigation.
The Prior Litigation
After plaintiffs purchased the Promenade Shopping Center in 2001, a dispute arose because Bel Air appropriated for itself exclusive use of the common area behind the store, including parking spaces, for various purposes. The purpose relevant to the current appeal is that Bel Air left "operational equipment" (rolling racks/bins/carts, etc.) in the common area all the time, even when they were not being used for loading and unloading. The same equipment was not always there (items rotated in and out as new deliveries and pickups occurred), but racks/bins/carts/etc. were always present. (Muzzi I, supra, 171 Cal.App.4th at p. 465.) Other issues not pertinent to this appeal included: Bel Air left broken shopping carts and display racks in the common area awaiting pick-up by a repair company that came once every 60 days; they left as a permanent fixture an oil recycling bin that was emptied once a month; and during certain seasons they left refrigerated trailers in the common area continuously as, for example, to hold frozen turkeys at Thanksgiving time.
The lease provides in Section 9.2 that "the Common Area shall be used for parking, pedestrian, vehicular purposes, access, placement of signs as elsewhere provided in this Lease, maintenance and repair, loading and unloading (subject to reasonable rules as adopted in accordance with the provisions of Section 9.2(f) below), underground utility lines and facilities, and such other reasonable purposes customarily undertaken in common areas in quality shopping centers within the Sacramento metropolitan area." (Italics added.) Section 9.2(f) says the landlord shall enforce "rules and regulations which shall be reasonable and necessary for the proper operation and maintenance of the Common Area as initially approved by Tenant and as revised from time to time with Tenant's approval, which approval shall not be unreasonably withheld." There was no evidence of any such rules or regulations for Bel Air.
Plaintiffs filed an action for declaratory relief. The trial court found Bel Air's long-standing practice of continuously leaving operational equipment for loading/unloading in the common area, without objection, was evidence that the lease permitted such practice. (Muzzi I, supra, 171 Cal.App.4th at p. 462.) As to the seasonal storage containers, however, the trial court concluded they resulted in improper, exclusive occupation of the common area for extended periods in violation of the lease, which authorized such use only for "loading and unloading" (Muzzi I, at p. 461.)
In the prior appeal of the declaratory judgment, we agreed seasonal occupation violated the lease, but we held "the trial court erred in finding that Bel Air's storage of bread racks and other items in parking spaces was permissible under lease provisions that allow the loading and unloading of merchandise." (Muzzi I, supra, 171 Cal.App.4th at p. 459.) The evidence was clear that items were left in the parking spaces far beyond any time associated with the actual loading and unloading of merchandise. "Rolling carts were left in the parking spaces to await the next delivery. All of the witnesses, for both plaintiffs and Bel Air, agreed that carts were always in the parking spaces. The same carts were not there (they rotated in and out as new deliveries were made), but carts were always present." (Id. at p. 465.) Bel Air asserted this system was necessary to maximize operational efficiency. (Ibid.)
We said the continuous use exceeded the "loading and unloading" permitted under the lease. Bel Air appropriated parking spaces to the exclusion of anyone else. That few cars parked in that area did not matter. Under the lease, Bel Air had the right to nonexclusive use of these parking areas; it had no authority "to commandeer these spaces for its own storage purposes." (Muzzi, supra, 171 Cal.App.4th at p. 466.)
On July 20, 2009, after Muzzi I, the trial court on remand issued a "JUDGMENT AND ORDER AFTER TRIAL AND APPEAL" stating:
"ORDERED, ADJUDGED AND DECREED as follows:
"The second amended complaint sought a declaration that 'Bel Air has no contractual right to place storage containers in the common area.' The Court enters judgment as follows:
"1. The Court grants Plaintiffs' request for a declaration that the lease grants Defendant no right to place large seasonal storage containers in the defined common areas.
"2. Bel Air's storage of bread racks, bins, broken shopping carts, milk boxes, an oil recycling bin, pallets and similar items in the common area parking stalls or parking spaces is impermissible under the lease provisions that allow loading and unloading of merchandise in the common areas of the shopping center.
"3. Any request for a declaration of rights beyond that described above is denied."
The Current Litigation
After Muzzi I, Bel Air modified its use of the common area. It "staged" (kept) operational items in the common area continuously, but only throughout daytime delivery hours. At the end of the delivery day around 1:00 p.m., Bel Air moved everything back into the warehouse. Bel Air claims this practice complied with Muzzi I. Plaintiffs disagree.
In early December 2009, plaintiffs sent letters complaining that Bel Air was still leaving racks, trash, etc., in the common area as shown in attached photographs, in violation of the lease and Muzzi I, and asking that the items be removed to avoid legal action to enforce the Muzzi I judgment. The trial court allowed the letters into evidence for the limited purpose of showing notice to Bel Air.
On December 18, 2009, plaintiffs filed a new lawsuit for damages and injunctive relief for breach of contract and trespass (and a nuisance claim that plaintiffs dismissed). The complaint quoted the declaratory judgment and alleged that, since that judgment was entered in July 2009, Bel Air has breached the lease by keeping operational equipment (racks, bins, carts, etc.) and debris in the common area including the parking area. The trespass claim alleged Bel Air's placement of operational equipment and debris was without plaintiffs' consent and constituted an exclusive occupation of the common area in violation of the declaratory judgment. Plaintiffs alleged damages or alternatively nominal damages for trespass in the amount of $1.00 pursuant to Civil Code section 3360. The pleading sought punitive damages on the ground that Bel Air maliciously violated the declaratory judgment from the prior litigation.
The complaint also sought a permanent injunction.
The parties engaged in discussions to try to resolve the dispute, evidence of which was excluded over defense objection, as we discuss post.
At plaintiffs' request, the trial court in March 2011 issued a preliminary injunction prohibiting Bel Air from "storing" operational equipment in the common area pending final resolution of the matter, but allowing equipment in the common area for up to 30 minutes before and after deliveries: "This injunction shall not prohibit Bel Air Mart from using the Affected Area for legitimate loading and unloading purposes during the process of delivering items to the store or picking items up for repair or recycling. In no event, however, shall [Bel Air] schedule and/or otherwise accomplish its loading and unloading activities so that racks, debris, pallets, products, shopping carts and any other items involved in the loading and unloading process are placed in the Affected Area more than 30 minutes prior to the arrival of the [vehicles for pick-up or delivery], and such items shall not remain in the Affected Area for more than 30 minutes following the departure of the [vehicles]."
Bel Air says it had already changed its practice in January 2011 (when plaintiffs filed their motion for preliminary injunction) and stopped leaving operational equipment in the common area, even though this new practice caused hardship.
The jury trial took place in May 2012. The court excluded evidence about the preliminary injunction and told the jury the case was limited to conduct between July 2009 and January 2011. Bel Air presented evidence of its practices during that time period. In 2010, they left operational equipment in the common area during regular receiving hours but put everything away at night. The warehouse receiver testified direct delivery trucks (DSD) come before 11:00 a.m., while other deliveries may occur "whenever," but most deliveries occur by 1:00 p.m. In 2010, they started to "scoot" everything closer to the door and make it neater so it did not take up as many of the parking spaces. In early 2011, they stopped continuous use of the common area Operations are difficult because the store and warehouse are small, and sometimes operations get congested with as many as five or six trucks at one time, with drivers trying to get in and out.
The jury returned a special verdict on the breach of contract claim, finding (1) plaintiffs and Bel Air entered into a contract; (2) plaintiffs performed; (3) all conditions required for Bel Air's performance occurred; (4) Bel Air did "something that the contract prohibited it from doing;" but (5) plaintiffs were not harmed. The jury accordingly left blank the question of damages which offered the jury the choice of reasonable rental value or nominal damages. (See, Civ. Code, § 3360; Sweet v. Johnson (1959) 169 Cal.App.2d 630, 632 [nominal damages may be awarded for breach of contract].) The trial court entered judgment in favor of Bel Air on the contract claim.
On the trespass claim, the jury returned a special verdict finding (1) plaintiffs leased the property; (2) Bel Air intentionally or negligently entered plaintiffs' property; (3) Bel Air exceeded plaintiffs' permission to enter plaintiffs' property; (4) Bel Air's conduct was a substantial factor in causing actual harm to plaintiffs; but (5) for the next question on damages, plaintiffs gave zero damages for reasonable rental value and zero nominal damages. By stipulation of the parties, the final verdict said the reasonable rental value or benefit to Bel Air as a measure of damages for wrongful occupation was zero, but awarded $1.00 for nominal damages.
The jury found no oppressive, fraudulent, or malicious conduct to warrant punitive damages.
The court discharged the jury.
At the bench trial on plaintiffs' request for a permanent injunction, Bel Air operations district manager Bruce MacDonald testified to the current practice, as directed by the preliminary injunction, of keeping items in the common area only for 30 minutes before and after a delivery or pick up. They follow this practice to the best of their ability but "it's impossible" and difficult, and "My direction is, during the receiving hours [¶] . . . you could stage stuff in that area during receiving hours; and then those staged items would be things that would be going out on the next truck. But if we left all that stuff in our warehouse for that whole receiving time, we couldn't get the products in the warehouse." Regular receiving hours are 6:00 a.m. to 1:00 or 2:00 p.m. MacDonald offered the example that the grocery store generates a lot of cardboard which is picked up by the distribution center (DC), and if the DC truck is coming at 9:00 a.m. but the milk delivery is coming earlier than that, they have to get the cardboard out of the warehouse and stage it in the common area in order to make room in the warehouse for the milk delivery.
The trial court issued a tentative decision to allow operational equipment in the common area one hour before arrival of a truck and one hour after the truck's departure.
Bel Air objected on multiple grounds, including that the one-hour limit was an improper judicial modification of the lease.
On September 28, 2012 -- after a proposed statement of decision and the parties' various proposals and objections -- the trial court issued a 38-page "STATEMENT OF DECISION ON PERMANENT INJUNCTION" indicating it would grant a permanent injunction that would prohibit permanent "storage" in the common area but would allow Bel Air reasonable use of the common area during regular receiving hours of 6:00 a.m. to 11:00 a.m.
The injunction would "prohibit[] [Bel Air] from . . . storage of any items in the Affected Area [adjacent to the loading dock] beyond a reasonable time associated with the actual loading and unloading of merchandise, pick up of empty containers, trash, debris, crates, recycling materials or items scheduled for repairs. Bel Air's storage of bread racks, bins, broken shopping carts, milk boxes and crates, pallets and similar items in the Affected Area is impermissible under the Lease provisions that allow loading and unloading of merchandise in the Affected Area. [¶] This injunction does not prohibit Bel Air from using the Affected Area for loading and unloading purposes during a reasonable time associated with the delivery of groceries and merchandise and the pick up of empty containers, trash, debris, crates or recycling materials or items for scheduled repairs; those activities occurring during receiving hours between 6:00 a.m. and 11:00 a.m. necessitate the use of Common Area parking stalls for store operations. Use of the parking stalls during those receiving hours is associated with loading and unloading permitted by the Lease. Any other uses of those parking stalls outside of receiving hours must be reasonably associated with actual loading and unloading and close in time to arrival and departure of vehicles involved in that process. This injunction does not apply to Bel Air employees who park their vehicles in the Affected Area during their shifts."
The court prepared a proposed judgment. Plaintiffs filed objections and a motion for reconsideration of the statement of decision. Plaintiffs viewed the injunction language as overbroad and maintained a half hour before and after actual loading/unloading was workable for Bel Air.
Bel Air opposed reconsideration and any particular time limit before or after loading/unloading, as a judicial rewriting of the lease. Bel Air wanted the court to allow Bel Air unrestricted use during regular receiving hours but no storage use of the area outside those hours except for loading and unloading.
The court recognized the limits of reconsideration but said it would entertain modifications and "figure out" if it needed to vacate the statement of decision.
Both sides proposed changes to the injunction language, and plaintiffs sought changes to the statement of decision.
After further hearing, the trial court in a January 2013 order declined to change the statement of decision but amended the permanent injunction language to delete the references to (1) regular receiving hours, (2) "reasonable" time, and (3) "storage" being impermissible under the lease.
As amended, the permanent injunction prohibits Bel Air "from placing any items in the Affected Area ('Affected Area' is defined as the Common Area, parking stalls, as shown [on attached map]), beyond the time associated with the actual loading and unloading of merchandise and groceries and the pick up of empty containers, trash, debris, crates, recycling materials, or items scheduled for repairs. The injunction does not apply to Bel Air employees who park their vehicles in the Affected Area during their shifts."
The trial court entered judgment on the jury verdict, in favor of plaintiffs on the trespass claim but in favor of defendant on the contract claim. The judgment orders, adjudges, and decrees the permanent injunction. (See, Katenkamp v. Superior Court of Santa Barbara County (1940) 16 Cal.2d 696, 698-700 [a judgment that orders, adjudges and decrees a permanent injunction constitutes the injunction itself].)
The court awarded plaintiffs costs and attorney fees, as we discuss post.
Bel Air appeals from the judgment and postjudgment orders.
DISCUSSION
I
Exclusion of Evidence
Bel Air claims the trial court improperly excluded evidence of a series of communications between party representatives -- beginning a month after plaintiffs filed the second lawsuit -- that (supposedly) would show plaintiffs consented to Bel Air's continuous occupation of the common area during regular receiving hours. The trial court excluded the evidence as inadmissible settlement communications under Evidence Code sections 1154, which provides: "Evidence that a person has accepted or offered or promised to accept a sum of money or any other thing, act, or service in satisfaction of a claim, as well as any conduct or statements made in negotiation thereof, is inadmissible to prove the invalidity of the claim or any part of it." This statute thus refers to a plaintiff's acceptance or promise to accept an offer and, when such settlement falls apart, makes the acceptance and negotiations inadmissible against the plaintiff. Evidence Code section 1154, by rendering settlement discussions inadmissible, is intended to encourage settlement by facilitating the candid discussions that may lead to settlement. (Carney v. Santa Cruz Women Against Rape (1990) 221 Cal.App.3d 1009, 1023.)
The trial court also excluded the evidence under section 352.
A. Background
The trial court granted plaintiffs' motion in limine number four to exclude evidence of communications between the parties' representatives on the grounds that settlement discussions are inadmissible and Bel Air failed to show any limited purpose for admissibility. (Evid. Code, § 1154.)
The specific evidence argued by Bel Air on appeal is of a January 2010 on-site meeting (after the December 2009 filing of the second lawsuit) between Bel Air's operations manager Bruce MacDonald and Bel Air's vice president of real estate Kent Haggerty and plaintiffs' property manager and attorney Stephen Robertson. MacDonald's "understanding" after that meeting, based on what Robertson said, was that Bel Air could leave operational equipment in the common area continuously during regular receiving hours. Plaintiffs disputed MacDonald's version. The parties continued to engage in discussions to try to resolve the dispute.
Bel Air opposed the motion to exclude the evidence, arguing the communications were not settlement discussions or, even if they were, the evidence was admissible for different purposes -- to prove affirmative defenses of estoppel and waiver and to disprove allegations of malice for punitive damages.
The trial court ruled to exclude the evidence during the jury trial because the communications were settlement negotiations, as reflected in the parties' stipulations to extend the time to answer the complaint, and Bel Air proposed to use the evidence to try to invalidate all or part of plaintiffs' claims. The court further ruled that, if it allowed the defense to adduce evidence about the settlement communications, the court would have to allow plaintiffs to tell the jury about the preliminary injunction -- which the defense did not want to happen and which the court had already ruled was inadmissible, which would create significant prejudice and confusion under Evidence Code section 352.
In the jury trial, plaintiffs adduced evidence, including photographs, showing Bel Air continued to leave operational equipment in the common area after Muzzi I. This practice stopped after the trial court issued the preliminary injunction in the second lawsuit, but no evidence about that injunction was presented to the jury.
At the bench trial on the permanent injunction, the judge heard evidence of the settlement discussions, which the court still considered inadmissible settlement negotiations, for the limited purpose of determining whether or not the evidence should have any bearing on the equitable relief of a permanent injunction. MacDonald testified his "understanding" of the January 2010 meeting with Robertson was that Bel Air could keep "all of that staged stuff" in the common area "until this dispute was -- was handled or was finished," but just had to use as little space as Bel Air possibly could. MacDonald said this is what Robertson said. MacDonald -- who was an operations manager who visited this store two or three times a month -- had no role in negotiations, which was the purview of Bel Air's real estate department. In January 2011, Linda Kelley from Bel Air's real estate department told MacDonald "to keep everything inside the warehouse when we were not receiving." MacDonald "was reluctant to do that. It's a challenge operationally. But talking with Linda, she just felt it would be the right thing to do right now as we're working through this dispute."
B. Standard of Review
We apply an abuse of discretion standard to the trial court's exclusion of evidence under Evidence Code section 1154. (Caira v. Offner (2005) 126 Cal.App.4th 12, 32.)
Bel Air instead urges us to apply de novo review (Zhou v. Unisource Worldwide (2007) 157 Cal.App.4th 1471, 1476 (Zhou)) on the grounds that (1) this appeal turns on a question of law as to whether the statute applies at all, and (2) exclusion of the evidence completely deprived Bel Air of a defense. Bel Air is wrong on both points.
C. Evidence Code Section 1154 Applies
The second lawsuit was already pending at the time of the January 2010 meeting in which plaintiffs supposedly consented to Bel Air's continuous occupation of the common area during regular receiving hours.
Bel Air nevertheless argues Evidence Code section 1154 is inapplicable because the discussions related to the first lawsuit, which was no longer pending. Bel Air cites Zhou, supra, 157 Cal.App.4th 1471, which held the trial court erred in excluding from evidence as settlement negotiations two letters written by injured motorist Zhou to an insurance company concerning a later, separate vehicle accident in which he was involved which was unrelated to the collision at issue in the appeal.
Bel Air argues exclusion of the evidence of the January 2010 meeting was improper, because "if the Meeting concerned any legal proceeding at all, it was Muzzi I, not Landlords' new suit. At the time that the Meeting took place, the parties were in the process of resolving their dispute with respect to Muzzi I, which held that Bel Air's storage of various items in the Common Area was not permitted under the Lease. . . . While it was clear that Bel Air was precluded from storing various items in the Loading Area, it was not clear what that meant in light of the Lease terms allowing Bel Air to use the Common Area, and precisely what 'storage' meant with respect to Bel Air's loading and unloading operations. . . . Notably, as Landlords' own correspondence reflects, it was taking issue with Bel Air's conduct on the grounds that it violated the Muzzi I Judgment." Bel Air continues, "the parties (without their attorneys) met in January 2010 to discuss Bel Air's business operations and on-going use of the Loading Area in light of the judgment in Muzzi I. The Meeting therefore had nothing to do with the settlement of this lawsuit." (Orig. italics.)
This argument is unconvincing because the two lawsuits were related, and any attempted settlement discussions related to both. The second lawsuit sought coercive relief to enforce the declaratory judgment entered in the first lawsuit.
"Under the [Declaratory Judgment] Act [Code Civ. Proc., § 1060 et seq.], a party may ask the court for a declaration of rights or duties and the court may make a binding declaration of these rights. [Code of Civil Procedure [s]ection 1060 provides in pertinent part: 'Any person interested under a . . . contract . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action . . . in the superior court . . . for a declaration of his or her rights and duties . . . , including a determination of any question of construction or validity arising under the . . . contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. [T]he declaration shall have the force of a final judgment. . . .' " (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897-898 (Mycogen).) "Unlike coercive relief (such as damages, specific performance, or an injunction) in which a party is ordered by the court to do or to refrain from doing something, a declaratory judgment merely declares the legal relationship between the parties." (Ibid.)
"While declaratory judgments are issue preclusive, they are not necessarily claim preclusive. The Act provides an exemption from the bar of res judicata for declaratory judgments, stating: 'The remedies provided by this chapter are cumulative, and shall not be construed as restricting any remedy, provisional or otherwise, provided by law for the benefit of any party to such action, and no judgment under this chapter shall preclude any party from obtaining additional relief based upon the same facts.' ([Code of Civ. Proc.,] § 1062.)" (Mycogen, supra, 28 Cal.4th at p. 898.) Where a party seeks only declaratory relief in a first action, that party will not be barred from seeking coercive relief by further proceedings in a separate and independent suit subsequently filed. (Id. at pp. 897-904; Lortz v. Connell (1969) 273 Cal.App.2d 286, 300; accord, Southern Counties Gas Co. v. Ventura Pipeline Constr. Co. (1971) 19 Cal.App.3d 372, 382.)
That is what happened here. The first lawsuit sought only declaratory relief. The second lawsuit sought coercive relief (injunctive relief and damages) to enforce rights declared in the first lawsuit.
We accordingly reject Bel Air's argument that the communications had to do only with Muzzi I and therefore were not settlement negotiations for this second lawsuit. This renders immaterial Bel Air's request for judicial notice of an award of attorney fees to plaintiffs in the prior lawsuit, which Bel Air claims as proof that the communications related to the prior lawsuit but not the current lawsuit.
D. Deprivation of Defense
Bel Air fails to show any abuse of discretion in the trial court's evidentiary ruling.
Bel Air argues exclusion of the evidence presents a question of law because it deprived Bel Air of a fair trial and the opportunity to put on its defense that plaintiffs' consented to the occupation as depicted in plaintiffs' photographs of operational equipment being left in the common area after Muzzi I. However, Bel Air had no right to put on a defense of consent predicated on settlement negotiations.
Nor did exclusion of evidence of purported consent completely deprive Bel Air of a defense, as it suggests. Bel Air's defense was that Muzzi I gave it the right to conduct its operations as it did. Bel Air had full opportunity to present, and did present, its defense that its conduct was permissible under Muzzi I. The trial court merely precluded the defense from using any purported consent by plaintiffs during settlement negotiations to argue plaintiffs could not prove the essential element of trespass that defendant's conduct was without plaintiffs' consent. This is exactly what Evidence Code section 1154 is supposed to do. It also served its purpose by precluding the defense from asserting that plaintiffs waived or should be estopped from any complaint about Bel Air's conduct because plaintiffs consented to that conduct during settlement negotiations. Bel Air notes the trial court commented that as a general proposition the court would not ignore one party changing its position based on something the other party said. But Bel Air did not claim it changed its position based on what plaintiffs said. Rather, Bel Air claims its position was endorsed by Muzzi I.
Bel Air cites Fergus v. Songer (2007) 150 Cal.App.4th 552, 570, which did not involve Evidence Code section 1154. It said the granting of a motion in limine that completely disposes of a cause of action is functionally equivalent to granting a nonsuit That case has no bearing here.
Bel Air argues the court's error in excluding evidence was "particularly harmful" because the court allowed plaintiffs to adduce "settlement" evidence. However, the court did not err, and we therefore have no need to address the contention that error was prejudicial. Second, plaintiffs did not adduce "settlement" evidence. Rather, Bel Air complains of the photographs we have already discussed, which plaintiffs did not present as settlement evidence. Bel Air simply claims the photographs are evidence of its own " 'settlement' conduct"
Bel Air fails to show evidentiary error under Evidence Code section 1154.
We need not address Bel Air's argument that the trial court abused its discretion in also excluding the evidence as more prejudicial than probative under Evidence Code section 352.
II
Consistency of Jury Verdict
Bel Air contends the jury's special verdict on breach of contract and trespass are fatally inconsistent, because the jury found on the same evidence that plaintiffs were not harmed by Bel Air's violation of the lease but were harmed by Bel Air's trespass. The failure to object in the trial court does not forfeit the issue of fatal inconsistency on appeal. (Behr v. Redmond (2011) 193 Cal.App.4th 517, 530.) Bel Air demands that we vacate the judgment and remand for a new trial. We conclude there is no fatal inconsistency.
A. Legal Principles and Standard of Review
"A special verdict is inconsistent if there is no possibility of reconciling its findings with each other. [Citation.] If a verdict appears inconsistent, a party adversely affected should request clarification, and the court should send the jury out again to resolve the inconsistency. [Citations and fn. omitted.] If no party requests clarification or an inconsistency remains after the jury returns, the trial court must interpret the verdict in light of the jury instructions and the evidence and attempt to resolve any inconsistency. [Citations.]
"On appeal, we review a special verdict de novo to determine whether its findings are inconsistent. [Citation.] With a special verdict, unlike a general verdict or a general verdict with special findings, a reviewing court will not infer findings to support the verdict. [Citations.] ' " 'Where the findings are contradictory on material issues, and the correct determination of such issues is necessary to sustain the judgment, the inconsistency is reversible error.' " [Citations.]' [Citation.] 'The appellate court is not permitted to choose between inconsistent answers. [Citations.]' (Ibid.) The proper remedy for an inconsistent special verdict is a new trial. [Citation.]" (Singh v. Southland Stone U.S.A., Inc. (2010) 186 Cal.App.4th 338, 357-358.)
B. No Fatal Inconsistency
Bel Air cites authority that inconsistent jury findings "especially when based on the very same evidence" are against the law. (E.g., Oxford v. Foster Wheeler LLC (2009) 177 Cal.App.4th 700, 720 [jury's finding that defendant was negligent for failure to warn of product defect was inconsistent with finding that product was not defective with respect to its warnings].)
According to Bel Air, plaintiffs presented identical facts, evidence, and argument for both the contract claim and the trespass claim and argued their harm under both claims was identical (harm to their rights to possess the property) and was based on identical conduct by Bel Air.
On the contract claim, the jury found Bel Air did "something that the contract prohibited it from doing," but plaintiffs were not harmed by that failure.
On the trespass claim, the jury found Bel Air intentionally or negligently entered plaintiffs' property and exceeded plaintiffs' permission to enter plaintiffs' property, and Bel Air's conduct was "a substantial factor in causing actual harm to Plaintiffs[,]" but plaintiffs' damages -- reasonable rental value or benefit to defendant or nominal damages -- were zero. The parties stipulated to $1.00 nominal damages.
These are not fatally inconsistent, because the jury received different instructions and argument for the two claims.
For breach of contract, the court instructed the jury that, "To recover damages for any harm, plaintiffs must prove that when the contract was made, both parties knew or could reasonably have foreseen that the harm was likely to occur in the ordinary course of events as a result of the breach of the contract." Bel Air argued to the jury that Bel Air's people did not foresee harm since no one ever parked in the parking spaces that Bel Air appropriated for its operational equipment and no other tenant in the shopping center ever complained.
In contrast, the jury instructions for trespass did not require proof that Bel Air knew or could reasonably have foreseen harm, but instead said "compensation [for harm] is called 'damages.' The amount of damages must include an award for each item of harm that was caused by Bel Air Mart's wrongful conduct, even if the particular harm could not have been anticipated." (Italics added.) Plaintiffs sought damages for loss of reasonable rental value or nominal damages. For loss of use, plaintiffs must prove the reasonable rental value or benefits obtained by defendant. If Bel Air committed a trespass but plaintiffs did not suffer damages, "you must still award plaintiffs nominal damages, such as one dollar."
Bel Air argues the jury's failure to award nominal damages for the trespass (which was corrected by stipulation of the parties) demonstrates the verdicts are inconsistent. We disagree.
Defense counsel in closing argument urged the jury to put "zero" in the verdict for damages to teach plaintiffs a lesson for overreaching in claiming despicable conduct to try to get punitive damages. Counsel argued in response to plaintiffs' request for nominal damages: "I'll tell you what, I would like you -- we talked about punitive damages, to punish and deter. I would like you to send a message to Mr. Muzzi. Don't give him a dollar. Put zero in there. Put zero. If you get that far. . . . [I]f you get down to the damages, what I want you to do is I want you to put in no, zero to send him a message, stop badgering his -- his tenant who has paid him four-and-a-half-million dollars of rent in the last 11 years, who is just trying to operate a supermarket."
In rebuttal, plaintiffs' attorney argued the despicable part was ignoring the appellate court opinion in Muzzi I.
We conclude the verdict findings are not inconsistent
III
Permanent Injunction
Bel Air views the permanent injunction as deficient on the grounds that it (1) contradicts the court's express findings and is unsupported by evidence, (2) is too vague to enforce, and (3) misinterprets the lease.
A permanent injunction is a determination on the merits that a plaintiff has prevailed on a cause of action against a defendant and that equitable relief is appropriate. (DVD Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009) 176 Cal.App.4th 697, 721.) A decision whether to issue, and how to phrase, a permanent injunction is essentially discretionary but, like any judgment, a permanent injunction must be sufficiently supported by the evidence in the record. (Ibid.)
Here, of course, the trial court was not writing on a clean slate but rather was fashioning an injunction to coerce enforcement of the prior declaratory judgment in accordance with our decision in Muzzi I.
The permanent injunction states: "[Bel Air and its agents] are prohibited from placing any items in the Affected Area ('Affected Area' is defined as the Common Area parking stalls, as shown [on attached map] adjacent to the Bel Air loading dock in the rear of [the store]), beyond the time associated with the actual loading and unloading of merchandise and groceries and the pick up of empty containers, trash, debris, crates, recycling materials, or items scheduled for repairs. This injunction does not apply to Bel Air employees who park their vehicles in the Affected Area during their shifts."
A. Background
The trial court's statement of decision stated that "activities occurring during receiving hours between 6:00 a.m. and 11:00 a.m. necessitate the use of Common Area parking stalls for store operations." The statement of decision also said: "The chaotic pace of deliveries of merchandise and retrievals of items, such as milk crates, and curtailed floor space for moving items in and out of the warehouse during receiving hours occurring between 6:00 a.m. and 11:00 a.m., necessitate the use of Common Area parking stalls for store operations [though the court also said the witness appeared prone to exaggeration]. Use of the parking stalls during those receiving hours is associated with loading and unloading permitted by the Lease. The unpredictability of arrivals and departures of delivery trucks and other vehicles make it impractical to roll racks and carts and other items for a specified time limit and plaintiffs did not present sufficient evidence to prove a minimum time limit an item associated with loading and unloading processes that would trigger the Lease's exclusive use limits. Any other uses of those parking stalls outside of receiving hours must be reasonably associated with loading and unloading."
The court then filed a PROPOSED JUDGMENT tracking the statement of decision, but plaintiffs objected and asked the trial court to reconsider, which it did. Any party may object to a proposed judgment. (Code Civ. Proc., § 634; Cal. Rules of Court, rule 3.1590(j).) It is the judgment that constitutes the decision of the trial court. (Rule 3.1590(l).)
In the subsequent hearing that led the trial court to amend the injunction's language, the trial court indicated any revision of the language of the injunction would likely be based on the statement of decision, "but I also have some leeway because the judgment is not final yet."
Plaintiffs' attorney pointed out that the proposed language allowing staging during receiving hours was authorizing expanded use "that is unauthorized by the appellate court . . . ." Counsel also noted that, contrary to Bel Air's protestations of impossibility, the 24/7 surveillance video (installed by Bel Air mostly for security reasons) was in evidence and showed that Bel Air had indeed been able to comply with the preliminary injunction without staging operational equipment in the common area throughout receiving hours. The defense agreed there had been no problem for almost two years since issuance of the preliminary injunction but argued the permanent injunction had to be based on the evidence at trial. As indicated, the preliminary injunction prohibited Bel Air from "storing" operational equipment in the common area pending final resolution of the matter, but "[t]his injunction shall not prohibit Bel Air Mart from using the Affected Area for legitimate loading and unloading purposes during the process of delivering items to the store or picking items up for repair or recycling. In no event, however, shall [Bel Air] schedule and/or otherwise accomplish its loading and unloading activities so that racks, debris, pallets, products, shopping carts and any other items involved in the loading and unloading process are placed in the Affected Area more than 30 minutes prior to the arrival of the [vehicles for pick-up or delivery], and such items shall not remain in the Affected Area for more than 30 minutes following the departure of the [vehicles]."
Plaintiffs also argued Bel Air has to deal with having a small store, "And they negotiated a lease that didn't allow them as much space as they would like . . . [but] [y]ou can't just expand out into the parking spaces to compensate for the fact that your store is not optimally set up. That's not our problem. [¶] And the fact that there's going to be some inconvenience is not a justification for a modification or an input into this injunction, because the injunction is necessary because they refused to comply with the dictates of this court . . . ."
Additionally, in response to Bel Air's objection to the proposed judgment on the ground it conflicted with the statement of decision (and the lease and Muzzi I), the trial court said it found no conflict, and "In fact, to add the language that Bel Air requests [allowing Bel Air to determine what is a reasonable time to keep equipment in the common area] would do exactly what it claims the Court cannot do, which is add terms to the Lease or take away existing rights. However, Bel Air has no express contractual right to use the contested space for placement of personalty for a 'reasonable time' awaiting pickup or reception. Those terms do not exist anywhere in the Lease. The injunction simply compels what the parties expressed in their own words. Of course, the parties are also free to adopt rules and regulations to give more clarity to the question, but they have failed to do so for decades." The court also stated, "Bel Air wants to stage its personalty on the site at all times of day, for periods of undefined length, up to but not including occupation of the contested space that would constitute storage. Bel Air would like to be the arbiter of what is a reasonable time based upon its own preferences and requirements, which it alone dictates in its discretion. Bel Air would also dictate what is not reasonable or constitutes storage under Muzzi I. That conduct is what led to the current dispute. Bel Air's unilateral monopoly upon what is reasonable and what is storage is not reasonable."
B. Evidentiary Support
Bel Air argues the permanent injunction is not supported by substantial evidence, because the injunction (prohibiting equipment in the common area beyond the time for loading/unloading) cannot be reconciled with the court's factual findings in its statement of decision, which the trial court declined to amend, that use of the common area during the "chaotic pace" of regular receiving hours was associated with loading and unloading permitted by the Lease.
The purpose of a statement of decision is to provide an explanation of the factual and legal basis for the court's decision. (Code Civ. Proc., § 632; Onofrio v. Rice (1997) 55 Cal.App.4th 413, 425.)
However, the trial court was not making findings of fact that leaving racks in the common area from 6:00 a.m. to 11:00 a.m. was allowed by the lease or by Muzzi I. Rather, the court was construing the scope of the lease and Muzzi I. Thus, the court stated under the heading "Scope of Injunctive Relief:"
"Between July 20, 2009, and January 11, 2011, Bel Air allowed carts, racks, milk crates, bins, recycling materials and other items to remain in the Common Area parking stalls beyond a reasonable time associated with the actual loading and unloading of merchandise. (See Muzzi, supra, at 465.) Likewise, Bel Air's storage of bread racks, bins, broken shopping carts, milk boxes and crates, pallets and similar items in the Common Area parking stalls or parking spaces is impermissible under the Lease provisions that allow loading and unloading of merchandise in the Common Areas of the shopping center. [Citation.] Consequently, Bel Air is enjoined from continuing those impermissible uses.
"Those restrictions on use must be balanced against the evidence of permissible use of Common Area parking spaces for loading and unloading merchandise and other activities, as explained by [witnesses]. The Court of Appeal determined that Bel Air's usage of racks, bins, and carts for loading and unloading 'at some point' during the process of delivering items to the store or picking items up for repair or recycling 'was proper under the lease provisions and essential to the operation of the supermarket.' [Citation.]
"The chaotic pace of deliveries of merchandise and retrievals of items, such as milk crates, and curtailed floor space for moving items in and out of the warehouse during receiving hours occurring between 6:00 a.m. and 11:00 a.m., necessitate the use of Common Area parking stalls for store operations. Use of the parking stalls during those receiving hours is associated with loading and unloading permitted by the Lease. The unpredictability of arrivals and departures of delivery trucks and other vehicles make it impractical to roll racks and carts and other items for a specified time limit and plaintiffs did not present sufficient evidence to prove a minimum time limit an item associated with loading and unloading processes that would trigger the Lease's exclusive use limits. Any other uses of those parking stalls outside of receiving hours must be reasonably associated with loading and unloading." (Italics added.)
Contrary to Bel Air's position, the statement of decision does not make factual findings that staging (keeping) operational equipment in the common area continuously for five hours is permissible activity associated with loading/unloading. Additionally, the fact that the trial court changed the language of the injunction while declining to amend the statement of decision shows the court did not view the amended injunction language as conflicting with the statement of decision.
Bel Air argues there is no evidence in the record suggesting that "loading and unloading" under the lease should be interpreted to include only "actual loading and unloading." However, the injunction does not limit use of the common area to actual loading/unloading but instead prohibits such use "beyond the time associated with" actual loading/unloading.
Bel Air's evidentiary challenge to the permanent injunction fails.
C. Certainty
Bel Air argues the permanent injunction is too vague and uncertain to enforce in any future contempt proceeding. (Pitchess v. Superior Court of Los Angeles County (1969) 2 Cal.App.3d 644, 651 [injunction must be sufficiently clear that person of common intelligence can understand its terms].) Applying de novo review (People ex rel. Lockyer v. R.J. Reynolds Tobacco Co. (2004) 116 Cal.App.4th 1253, 1267), we disagree.
The permanent injunction draws directly from Muzzi I. That Bel Air unreasonably misinterprets Muzzi I as allowing "staging" in the common area during "regular receiving hours" does not mean that Muzzi I was vague or ambiguous or uncertain. To the contrary, that is exactly the conduct that we disapproved in Muzzi I, i.e., when a delivery arrived, rolling racks "were wheeled into the store, the food was unloaded, and the empty racks were wheeled back into the parking area, and kept there until the next delivery." (Muzzi I, supra, 171 Cal.App.4th at p. 459; italics added.) We disapproved of the practice where "items were left in the parking spaces far beyond any time associated with the actual loading and unloading of merchandise" -- specifically, that "[r]olling carts were left in the parking spaces to await the next delivery. . . . [C]arts were always in the parking spaces. The same carts were not there (they rotated in and out as new deliveries were made), but carts were always present." (Id. at p. 465.) We disapproved such use despite defense evidence that using the parking spaces for "storage" was necessary to maximize operational efficiency. (Ibid.) And we reversed the trial court's approval of "temporarily leaving and rotating racks, containers and carts for the delivery and exchange of the subject products." (Id. at p. 462.)
We did indicate that placing items in the common area "a reasonable time" before they were picked up would constitute a use involving loading and unloading as contemplated by the lease. (Muzzi I, supra, 171 Cal.App.4th at p. 466.)
That the trial court declined to set a specific time does not render the injunction uncertain. The parties viewed as problematic the initial language about a "reasonable" amount of time. Bel Air's attorney noted Bel Air now has video surveillance of the area 24/7, mostly for security, but it also allows for tracking of use of the common area, and Bel Air intended to post placards for employees to follow, and Bel Air's trial counsel thought "it was pretty straightforward, what the placard was going to look like. Telling them no storage. Put stuff out there only when you expect to have it picked up or delivered. And if it looks like it's going to be out there for too long, get it out of there and put it back in the warehouse. Very simple."
Additionally, Bel Air was able to comply with the preliminary injunction and its attorney acknowledged there were no problems for the two years that preliminary injunction was in effect.
The record thus undercuts the argument of Bel Air's appellate counsel that "Bel Air does not know how to conduct its operations in light of the vague and uncertain language contained in the Permanent Injunction."
D. Consistency with Lease
Bel Air claims the injunction is inconsistent with the lease, because the trial court "essentially" interpreted the lease as permitting only "actual" loading and unloading, whereas the lease gives Bel Air a nonexclusive right to use the area for loading and unloading, "among other things," subject to rules and regulations that do not exist. However, the injunction does not prohibit the use of the area except for "actual" loading and unloading. Rather, it prohibits leaving items there "beyond the time associated with" actual loading and unloading.
The injunction is not inconsistent with the lease.
As noted by Bel Air, its lease with the original landlord was a "build-to-suit" lease whereby the original landlord agreed to build the supermarket to suit Bel Air's grocery operations. Bel Air does not contend the original landlord breached this promise, which means Bel Air poorly planned how much space it would need, with the result that there is not enough storage space inside the warehouse to accommodate pickups and deliveries without annexing part of the outdoor common area for those purposes.
We conclude Bel Air fails to show any defect in the permanent injunction.
IV
Attorney Fees and Costs
Bel Air argues the trial court improperly awarded attorney fees and costs to plaintiffs based on Civil Code section 1717 and the court's misapplication of Code of Civil Procedure section 1032. Bel Air also argues the court erred in concluding that Bel Air's Offer to Compromise (Code Civ. Proc., § 998) was invalid and therefore denying Bel Air an award. We see no basis for reversal.
A. Background
Section 38 of the lease provides: "Should either party institute any court action or proceedings to enforce any provisions hereof or for a declaration of such party's rights or obligations hereunder or for any other remedy in relief in connection with the Lease, the prevailing party shall be entitled to receive form [sic] the losing party such amounts as the court may adjudge to be reasonable attorneys' fees for services rendered to the party prevailing in any such action or proceeding, and such fees shall be deemed to have accrued on the commencement of such action or proceeding and shall be enforceable whether or not such action or proceeding is prosecuted to judgment."
After judgment, both sides filed motions for attorney fees. Plaintiffs argued they were prevailing parties under Civil Code section 1717 because they recovered the greater relief (the permanent injunction) and because the attorney fee clause was broad enough to encompass the tort claim.
Bel Air argued it was the prevailing party on the contract claim and was also entitled to attorney fees because plaintiffs declined to accept Bel Air's Offer to Compromise under Code of Civil Procedure section 998, and failed to achieve a result more favorable than the Offer.
Bel Air's offer to compromise offered to pay plaintiffs $1,500 plus any statutory costs awarded by the court, in exchange for dismissal of suit, with no admission of liability by Bel Air, and offered to agree to issuance of a permanent injunction enforcing (an implied) lease provision prohibiting "storage" of operational equipment in the common area, but the injunction could not prohibit Bel Air's rights under the lease including but not limited to rights as described by Muzzi I that " '[t]here is no question that the racks, bins, and carts were used for loading and unloading at some point during the process of delivering items to the store or picking items up for repair or recycling. That usage was proper under the lease provisions and essential to the operation of the supermarket.' " The offer cited Muzzi I, supra, 171 Cal.App.4th at page 465, but omitted our next sentence: "However, the evidence is equally clear that these items were left in the parking spaces far beyond any time associated with the actual loading and unloading of merchandise." (Ibid.)
In opposition, plaintiffs argued Bel Air's offer was not a valid section 998 offer because it was ambiguous and in any event plaintiffs did obtain a more favorable result. Reference to (an implied) lease provision prohibiting "storing" equipment in the common area created ambiguity because no lease provision expressly prohibits "storage"; rather the lease does not authorize storage in the common area. And Bel Air's offer mischaracterized Muzzi I in service of Bel Air's position that "staging" equipment in the common area for extended periods of time during receiving hours was not equivalent to impermissible "storage" -- an issue that was the "core of the parties' dispute" as noted by plaintiffs. Additionally, plaintiffs obtained a more favorable result that, among other things, did not allow extended staging and did not require plaintiffs to release all future claims.
After hearing argument, the trial court on July 3, 2013, issued its minute order (later expressly incorporated into the judgment denying Bel Air's motion for attorney fees, granting plaintiffs' motion and awarding plaintiffs the full $324,533.50 in attorney fees. The court found (1) the contractual provision for attorney fees was broad enough to cover the tort claim; and (2) plaintiffs were the prevailing parties under Code of Civil Procedure section 1032 because they obtained a net monetary recovery and obtained the greatest relief from the action. The trial court denied Bel Air's motion for attorney fees under Code of Civil Procedure section 998 because it concluded both that Bel Air's Code of Civil Procedure section 998 offer to compromise was invalid and that plaintiffs did obtain a more favorable result.
B. Analysis
We review an award of attorney fees for abuse of discretion but apply de novo review to questions of law as to whether the statutory criteria for an award have been met. (Salawy v. Ocean Towers Housing Corp. (2004) 121 Cal.App.4th 664, 669.) We presume the order is correct and indulge all intendments and presumptions to support it; we resolve all conflicts in the evidence in favor of plaintiffs; and the trial court's resolution of factual disputes is conclusive. (Apex, LLC v. Korusfood.com (2013) 222 Cal.App.4th 1010, 1017.) If the relief obtained was purely equitable, the trial court has discretion whether to award costs and attorney fees. (United States Golf Assn. v. Arroyo Software Corp. (1999) 69 Cal.App.4th 607, 625.)
1. Code of Civil Procedure Sections 1021, 1032 and Civil Code Section 1717
"Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." (Code Civ. Proc., § 1032, subd. (b).) Costs include attorney fees when authorized by contract, statute or other law. (Code Civ. Proc., § 1033.5, subd. (a)(10).)
Civil Code section 1717 authorizes contractual provisions for attorney fees but in subdivision (b)(1) calls for the trial court to determine who is the party "prevailing on the contract." Code of Civil Procedure section 1021 broadly provides that "the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . ." In such a case, " '[p]revailing party' includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the 'prevailing party' shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034 [prejudgment costs and costs on appeal]." (Code Civ. Proc., § 1032, subd. (a)(4); italics added; Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984, 989-995 (Maynard).)
Where a contract clause authorizes recovery of attorney fees and is broad enough to entitle the party prevailing on a tort claim to recover attorney fees, the court may award attorney fees to a plaintiff prevailing on a tort theory even though the defendant prevailed on the contract theory. (Maynard, supra, 216 Cal.App.4th at pp. 989-995.) It is appropriate for the court to determine which party achieved a greater net recovery in the sense of accomplishing its litigation objectives, and in determining litigation success the court should respect substance rather than form and be guided by equitable considerations. (Id. at p. 992.)
Here, Bel Air agrees it was appropriate for the court to determine prevailing party under Code of Civil Procedure section 1032, but Bel Air inaccurately claims the trial court "relied exclusively" on the "net monetary recovery" standard for prevailing party and improperly presumed without analysis that an award in favor of plaintiffs was mandatory since they recovered $1.00 in stipulated nominal damages. Bel Air wants the matter remanded for the trial court to determine which party achieved its litigation objectives.
The contention fails because the trial court already determined that plaintiffs achieved their litigation objectives. The trial court's minute order, which was incorporated in the judgment, shows the trial court found plaintiffs to be prevailing parties not only based on the jury's verdict but also on their success in obtaining injunctive relief:
"The Court finds: (1) Paragraph 38 of the parties' Lease does provide for an award of reasonable attorneys' fees for tort claims, such as trespass, if such claims seek a remedy in relief in connection with the Lease; (2) plaintiffs' trespass claim was 'on the contract' for purposes of determining whether Civil Code section 1717 applies; (3) an award of attorneys' fees is available under Civil Code section 1021 on the trespass claim under the Lease, and Muzzi I does not compel a contrary ruling by this Court; (4) plaintiffs were the prevailing party in light of the jury's verdict and [italics added] injunctive relief in their favor; and (5) defendant's settlement offer pursuant to Code of Civil Procedure section 998 does not impact the attorneys' fees award determination in this matter because plaintiffs received a more favorable result and the offer was otherwise invalid for purposes of Section 998."
The court's order then provides detailed analysis, including citation of Maynard, supra, 216 Cal.App.4th 984.
We accordingly reject Bel Air's challenge to the prevailing party determination.
2. Code of Civil Procedure Section 998
Code of Civil Procedure section 998 provides in part: "(c)(1) If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer. . . ."
Bel Air complains the trial court erred in denying its motion for attorney fees and costs under this statute because the court supposedly rejected the motion "[w]ithout any analysis . . . . Instead, the trial court simply adopted Landlords' arguments as set forth in their opposition" to the motion. Bel Air cites no authority compelling the trial court to craft its own analytical language where the court concludes the opposing party got it right.
Bel Air argues its offer was valid, because even though its proposed injunction misrepresented that the lease expressly prohibited "storage," Muzzi I prohibits "storage." Bel Air argues there was nothing wrong with using the word "storage" in the offer even though the word does not appear in the lease. Fair enough, but the offer was still ambiguous because Bel Air offered an injunction prohibiting "storage" while still maintaining a right to "stage" operational equipment in the common area for hours at a time.
We conclude Bel Air fails to show grounds for reversal of the posttrial orders regarding costs and attorney fees.
DISPOSITION
The judgment and postjudgment orders regarding costs and attorney fees are affirmed. Plaintiffs shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a).)
HULL, J. We concur: NICHOLSON, Acting P. J. RENNER, J.