Opinion
H047357 H047368
05-28-2020
PATTERSON FROZEN FOODS, INC. et al., Plaintiffs and Appellants, v. CALIFORNIA VALLEY LAND COMPANY, INC. et al., Defendants and Respondents. PATTERSON FROZEN FOODS, INC. et al., Plaintiffs and Appellants, v. TRAINA PACIFIC, LLC et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Stanislaus County Super. Ct. No. 684866)
These two appeals arise from the action that plaintiffs and appellants Patterson Frozen Foods, Inc. and Vegetables International, Inc. (collectively, PFF) brought following the sale of PFF's vegetable packing business to defendant Patterson Vegetable Company, LLC (PVC). In the verified fifth amended complaint asserting contract and tort causes of action, PFF alleges that defendants and respondents California Valley Land Co., Inc. and Woolf Vegetables Company are the alter egos of PVC, and defendant and respondent Stuart P. Woolf is a general partner of Woolf Vegetables Company. Additional defendants include respondents Traina Pacific, LLC, Traina Pacific Water Company, LLC, Sire Westside Investment, LLC, Eagle Valley Investments, Valley Property and Equipment Rental, Inc., and Sierra Pacific Refrigerated Services. For consistency with the parties' appellate briefing and the trial court's usage, we will refer to these additional respondents collectively as the Traina Group Defendants.
The two appeals were originally filed in the Court of Appeal, Fifth Appellate District, which granted PFF's unopposed motion to consolidate them. The Fifth Appellate District thereafter requested that the California Supreme Court transfer the appeals to another appellate court, pursuant to California Rules of Court, rule 10.1000(a)(1)(c). The request was granted, and on September 19, 2019, the California Supreme Court ordered transfer of both appeals to this court.
Defendant PVC is not a party to either appeal.
In case No. H047357, PFF appeals from the July 5, 2018 judgment after court trial providing that plaintiffs shall take nothing from defendants California Valley Land Co., Inc., Woolf Vegetables Company, and Stuart P. Woolf as to all causes of action in the fifth amended complaint and entering judgment in their favor. PFF argues the trial court committed evidentiary error in excluding evidence related to PFF's claims of fraud. PFF also maintains the trial court erred by applying Delaware law rather than California law when adjudicating PFF's claims that defendants California Valley Land, Woolf Vegetables Company, and Stuart P. Woolf were the alter egos of PVC. For the reasons stated below, we determine that PFF's contention that the trial court erred in excluding PFF's evidence of fraud lacks merit, and we therefore need not reach PFF's argument that the trial court erred in analyzing the alter ego question under Delaware law.
In case No. H047368, PFF contends that the trial court erred in awarding contractual attorney fees under Civil Code section 1717 to the Traina Group Defendants because there was no legal basis for the award, and, alternatively, the amount of the award was excessive. As we will explain, we conclude that contractual attorney fees were properly awarded under section 1717, and the trial court did not abuse its discretion in determining the amount of attorney fees.
All statutory references are to the Civil Code unless otherwise indicated.
We consider each appeal separately, beginning with case No. H047357.
I. CASE NO. H047357
A. Background
1. The Fifth Amended Complaint
The operative pleading in this appeal is the fifth amended complaint, filed on June 7, 2017. According to its allegations, plaintiff PFF is a Delaware corporation headquartered in Stanislaus County. Defendant PVC is a Delaware limited liability company also headquartered in Stanislaus County. Defendants Woolf Vegetables Company and California Valley Land Company, Inc. are business entities with principal places of business in Fresno, California and are allegedly the alter egos of defendant PVC. Defendant Stuart P. Woolf is a general partner of Woolf Vegetables Company.
PFF's business included vegetable packing and growing crops. Both parts of PFF's business required water, which PFF obtained from its water rights and wells. PFF also installed an elaborate water recycling system of pipelines and reclamation ponds, which was based on a large well on its property. Water was pumped from the large well for crop irrigation and vegetable packing, and the recycling system allowed waste water from the vegetable packing operation to be reclaimed for crop irrigation.
In the mid-2000's PFF decided to sell the vegetable packing side of its business to PVC due to PFF's deteriorating financial condition. PVC's purchase of the vegetable packing business was memorialized in an asset purchase agreement executed by PFF and PVC on June 11, 2007. The asset purchase agreement included an easement and waste water discharge agreement, which memorialized an agreed-upon easement. The easement allowed PVC to use and maintain the waste water recycling pipelines and ponds on PFF's land, in order to dispose of the waste water from PVC's vegetable packing operation. The easement and waste water agreement also included an option for PFF to buy back the waste water recycling system under specified circumstances. A copy of the recorded easement and waste water agreement was attached to the fifth amended complaint as exhibit 2. PVC's purchase of real property from PFF was memorialized in a recorded grant deed, attached as exhibit 1 to the fifth amended complaint.
In 2008, PFF and PVC entered into a settlement agreement resolving issues that had arisen after the 2007 sale of PFF's vegetable packing business to PVC. The settlement agreement included three promissory notes made by PVC to PFF. PVC later ceased making payments on the notes to PFF.
After purchasing PFF's vegetable packing business, PVC sold certain real property it had purchased from PFF to defendants Traina Pacific, LLC and Traina Pacific Water Co., LLC (collectively, Traina). According to PFF, PVC and Traina failed to maintain the waste water recycling system and deliver water to PFF for crop irrigation, as required by the easement and waste water agreement.
Based on these and other allegations, in its complaint PFF asserted numerous causes of action for breach of contract, breach of the covenant of good faith and fair dealing, intentional interference with contract, inducement to breach contract, intentional and negligent interference with prospective economic relations, fraudulent conveyance, and quiet title. In January 2018, a few months before trial on the fifth amended complaint was scheduled to begin, PFF filed a motion for leave to file a sixth amended complaint.
2. PFF's Motion for Leave to File a Sixth Amended Complaint
The proposed sixth amended complaint included several new causes of action for fraud, false promise, and bilateral and unilateral mistake. The new causes of action were pleaded against defendants California Valley Land Co., Inc., Woolf Vegetables Company, Patterson Vegetable Company, LLC, and Stuart P. Woolf.
All of the new causes of action were based on the allegation that defendants either intentionally or by mistake had recorded different versions of the grant deed and the easement and waste water discharge agreements than those PFF had approved as part of the 2007 asset purchase agreement. In a supporting declaration, PFF's counsel stated that PFF's president, Angelo Ielmini, had previously testified that the wrong grant deed and the easement and waste water discharge agreement were recorded, and his "testimony that the defendants are using the 'wrong' deed and [easement and waste water discharge agreement] can now be explained through the documents PFF has obtained through discovery."
The proposed sixth amended complaint expressly alleged that (1) "defendants switched out the approved grant deed for one without the Well property being a part of the option on or about June 19, 2007, however, PFF did not discover the switched grant deed until 2017"; and (2) "on or about June 19, 2007, [defendants] switched out the approved wastewater discharge agreement for one without the right to use the Well and caused it to be recorded. PFF discovered the switched out wastewater discharge agreement in 2017." PFF claimed that defendants accomplished the switch by attaching the previously notarized signature pages to the "wrong" versions of the grant deed and easement and waste water discharge agreement that were recorded.
According to PFF, the "true" version of the easement and waste water discharge agreement (which were never recorded) contain a much longer Section 11(D) than the "false" recorded version of the easement. Among other differences, the "true" version contained the following language, omitted from the recorded version: "To the extent that PVC fails or is otherwise unable to deliver Irrigation Water to the Servient Property in accordance with the terms hereof, Patterson shall provide written notice to PVC (the 'Water Delivery Notice'). If PVC does not resume delivery of irrigation Water to the Servient Property within five business (5) days of receipt the Water Delivery Notice, Patterson shall have the right, at PVC's sole cost and expense, to enter upon the Dominant Property and/or operate the Facilities or any wells on the Dominant Property for the purpose of causing the delivery of the Irrigation Water to the Servient Property as contemplated herein . . . ."
The trial court denied PFF's motion for leave to file a sixth amended complaint. The February 8, 2018 minute order states in part: "This matter was filed on June 20, 2013, and is scheduled to go to trial on May 8, 2018 - only a few weeks before the five- year time limit for bringing the case to trial. . . . [¶] From June 2013, Plaintiffs have repeatedly alleged, in verified complaints that the documents recorded in 2007 reflect the 'extent' of the parties' agreement - but do not reflect the Plaintiffs' 'intent' as 'recalled' by Mr. Angelo Ielmini, who was a 50% owner of Plaintiffs at the time of the sale and who 'approved' the documents as part of the closing of the sale. [¶] On their face, these complaints show that Plaintiffs have long had 'notice' of the fact the recorded documents did not, in fact, express the 'extent' of the parties' 2007 Agreement and that they were 'incorrect'. [¶] To suddenly make the opposite claim, at this stage of the proceedings, changes the entire dynamic of the case and results in severe prejudice to the Defendants, who have relied upon Plaintiffs' continued judicial admissions that the recorded documents were the 'right' documents and whose discovery has been focused on showing that the recorded documents do not support Plaintiffs' claim to a 'right to receive' water and a right to re-purchase the downtown parcels under certain circumstances."
In their briefing in this court, appellants expressly state that they do not seek appellate review of the order denying their motion for leave to file a sixth amended complaint.
3. Bifurcated Court Trial on the Alter Ego Issue
After denying plaintiffs' motion to file a sixth amended complaint, the trial court granted defendants' motion to bifurcate the issue of whether defendants California Valley Land, Woolf Vegetables Company, and Stuart P. Woolf were the alter egos of PVC. The matter proceeded to a 12-day court trial in May 2018 solely against defendants California Valley Land, Woolf Vegetables Company, and Stuart P. Woolf on the alter ego issue.
The pretrial motions for the court trial on alter ego included PFF's motion in limine No. 6, which sought an order "permitting them to have the person who approved the transaction, their president Angelo Ielmini, testify about the events described in the 'fraud causes of action' that the plaintiffs attempted to amend into their complaint." The trial court denied the motion.
On May 30, 2018, the trial court issued its tentative decision on the alter ego issues. Applying Delaware law for determining alter ego, the trial court concluded that "1. None of the actions of PVC or any Woolf Defendants [Woolf Vegetables Company and California Valley Land Co.] can be characterized as fraudulent or bringing about any injustice to [PFF]. [¶] 2. PVC was not ever, and is not, the alter ego of [Woolf Vegetables Company] and [California Valley Land Co.]. [¶] 3. The Woolf Defendants are not liable on an alter ego basis for PVC's debts or liabilities." No party requested a statement of decision.
4. Entry of Judgment
On May 31, 2018, PFF and PVC stipulated to the entry of judgment solely against PVC on the fifth amended complaint in the total amount of $4,051,644. The July 5, 2018 judgment entered after the court trial provided that plaintiffs shall take nothing from defendants California Valley Land Co., Inc., Woolf Vegetables Company, and Stuart Woolf as to all causes of action in the fifth amended complaint, and entered judgment in their favor. The amended judgment after court trial filed on October 26, 2018, included a nunc pro tunc amendment awarding defendants attorney fees and costs in the amount of $720,355.48.
B. Discussion
On appeal, PFF asserts evidentiary error and choice of law error in the court trial involving defendants California Valley Land Co., Inc., Woolf Vegetables Company, and Stuart Woolf. In its challenge to the trial court's evidentiary rulings, PFF contends the trial court committed prejudicial error in excluding the testimony of Angelo Ielmini that defendants fraudulently switched the grant deed and the easement and waste water discharge agreement that PFF had approved. PFF argues that this evidence of fraud was relevant to proving the fraud element of alter ego under California law. With respect to choice of law, PFF argues that it would have prevailed at trial had the trial court not erroneously applied the narrower Delaware standard for alter ego to exclude the evidence.
See, e.g., Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 [application of California alter ego doctrine requires evidence of wrongdoing]; Wallace ex rel. Cencom Cable Income Partners II, Inc., L.P. v. Wood (1999) 752 A.2d 1175, 1184 [the alter ego theory in Delaware requires a showing that that the corporate structure caused fraud or similar injustice].)
We observe that PFF's evidentiary and choice-of-law arguments are interrelated. The prejudice PFF identifies as flowing from the trial court's Delaware choice-of-law error is the admissibility under California alter ego law of Ielmini's testimony about the alleged switching of the recorded documents. PFF argues that "while [PFF's] evidence of Defendants' fraudulent recording of documents relating to the purchase agreement was not relevant under Delaware law, it was highly relevant and material under California law." Therefore, if the trial court did not err in excluding the evidence related to fraud, then PFF has not established prejudicial error —a prerequisite to reversal of the judgment (see Cal. Const., art. VI, § 13; F.P. v. Monier (2017) 3 Cal.5th 1099, 1107-1108)—in the trial court's decision to apply Delaware law to the alter ego question.
We begin our review by considering the issue of whether the trial court erred in excluding Ielmini's testimony regarding fraud, since we find this evidentiary issue to be dispositive.
1. Motion in Limine No. 6
During the court trial, PFF brought motion in limine No. 6 seeking an order "permitting them to have the person who approved the transaction, their president Angelo Ielmini, testify about the events described in the 'fraud causes of action' that the plaintiffs attempted to amend into their complaint." PFF argued that "Mr. Ielmini should be permitted to testify about these issues because they are relevant to the issue of unfairness which plaintiffs must prove under Delaware alter ego law. That is, one factor of unfairness claimed by the plaintiffs is that the Woolf defendants agreed to a deal involving water, but then instructed that written documents without that benefit of the bargain be recorded."
Defendants opposed motion in limine No. 6, contending that PFF was bound by its judicial admission in the pleadings that the correct grant deed and easement and waste water discharge agreements were recorded; the proposed testimony was irrelevant since the complaint did not include a fraud cause of action; and the allegedly fraudulent switching of documents was irrelevant to the alter ego determination since the alleged fraud did not involve use of the corporate form.
The trial court reasoned as follows in denying motion in limine No. 6: "[I]'m making that decision for a number of reasons. [¶] One, I've already made decisions . . . including the denial of a motion to amend and other motions. That plus the judicial admissions that plaintiff and their attorneys . . . have made in this case plus the fact that Mr. Ielmini was fully represented during all times—during the negotiations and execution of the documents, all of these things have led me to believe that it would be totally inconsistent to allow him at this time to testify as to his current perceptions as to fraud. And so that's the basis of my ruling for the motion."
2. Analysis
Where, as here, the order in limine does not have the effect of granting a motion for nonsuit or a motion for judgment on the pleadings, the standard of review is abuse of discretion. (Osborne v. Todd Farm Service (2016) 247 Cal.App.4th 43, 51.) " 'A trial court's exercise of discretion in admitting or excluding evidence is reviewable for abuse [citation] and will not be disturbed except on a showing the trial court exercised its discretion in an arbitrary, capricious, or patently absurd manner that resulted in a manifest miscarriage of justice.' " (Christ v. Schwartz (2016) 2 Cal.App.5th 440, 446-447.)
Respondents contend that under the doctrine of judicial admissions, the trial court did not abuse its discretion in denying motion in limine No. 6 and excluding PFF's evidence that the recorded grant deed and easement and waste water discharge agreement that PFF had previously attached to all of the complaints filed in this matter were not true and accurate copies of the parties' agreements. We agree.
As this court has stated, " ' "[a] judicial admission in a pleading . . . is not merely evidence of a fact; it is a conclusive concession of the truth of a matter which has the effect of removing it from the issues." ' " (Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 218 (Addy).) Thus, " '[w]hen allegations in a complaint are admitted by the answer (a) no evidence need be offered in their support; (b) evidence is not admissible to prove their untruth; (c) no finding thereon is necessary; (d) a finding contrary thereto is error.' " (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271 (Valerio).)
The decision in Valerio is instructive. In Valerio, the trial court found there was no written contract between the parties, which were a general contractor and a subcontractor. (Valerio, supra, 103 Cal.App.4th at p. 1267.) The appellate court determined that this finding was error, because the trial court had failed to give conclusive effect to the subcontractor's judicial admission in its answer to the cross-complaint that a written contract existed. (Ibid.) The appellate court stated that "[b]ecause an admission in the pleadings forbids the consideration of contrary evidence, any discussion of such evidence is irrelevant and immaterial." (Id. at p. 1271.) Similarly, in Vita Planning & Landscape Architecture, Inc. v. HKS Architects, Inc. (2015) 240 Cal.App.4th 763, the allegation in the complaint of a written contract with a " 'true and correct copy' " of the contract attached to the complaint constituted a binding judicial admission of the existence of the contract. (Id. at p. 772.)
The Valerio court rejected the argument the trial court has "the inherent or equitable power to fashion a remedy that would avoid an unjust result" from the judicial admission. (Valerio, supra, 103 Cal.App.4th at pp. 1271-1272.) "An admission in a pleading is conclusive on the pleader. [Citation.] 'He [or she] cannot offer contrary evidence unless permitted to amend, and a judgment may rest in whole or in part upon the admission without proof of the fact.' [Citation.] [A] court has inherent power to relieve a party from the effects of judicial admissions by amendment to the pleadings (Code Civ. Proc., § 473)." (Id. at p. 1272.) Since the subcontractor in Valerio had failed to take any procedural steps to obtain relief from its judicial admission of the existence of a written contract, the admission was deemed conclusive. (Id. at p. 1274.)
We reach a similar result in the present case. Here, the verified fifth amended complaint included the following allegations regarding the grant deed and the easement and waste water discharge agreement: "On June 11, 2007, PVC on the one hand and [PFF] on the other, executed a written Asset Purchase Agreement ('APA') memorializing the sale of the packing business. The APA transferred certain real and personal property from [PFF] to PVC, purportedly including 20 parcels of real property. [¶] As part of the APA, PFF and PVC then executed the 'Easement and Waste Water Discharge Agreement' ('WWDA') which memorialized the agreed upon easement . . . . Attached hereto as exhibit 2 is a true and correct copy of the WWDA. [¶] . . . [¶] . . . Attached hereto as exhibit 1 is a copy of the recorded grant deed." In their verified answers to the fifth amendment complaint, defendants did not dispute that exhibit 1 was a true and correct copy of the recorded grant deed or that exhibit 2 was a true and correct copy of the recorded easement and waste water discharge agreement.
Accordingly, based upon the express allegations in PFF's fifth amended complaint regarding the recorded grant deed and the recorded easement and waste water agreement, and attachment of copies of these documents as exhibits 1 and 2 to the complaint, we determine that PFF is bound by its judicial admissions. The effect of these judicial admissions is that PFF has conclusively conceded that the grant deed and easement and waste water agreement attached as exhibits to the fifth amended complaint are true and correct copies of those documents, and no evidence to the contrary was admissible at trial. (See Addy, supra, 44 Cal.App.4th at p. 218; Valerio, supra, 103 Cal.App.4th at p. 1271.)
We are not persuaded by PFF's argument that the doctrine of judicial admissions does not apply due to mistake or inadvertence, based on PFF's assertion that it did not obtain a "true" copy of the easement and waste water discharge agreement in discovery until shortly before the May 2018 court trial. To begin with, PFF has not obtained relief from its judicial admissions, since the trial court denied PFF's motion for leave to file a sixth amended complaint alleging that the grant deed and easement and waste water discharge agreement attached to the fifth amended complaint are false or fraudulent, and PFF does not seek appellate review of that order. (See Valerio, supra, 103 Cal.App.4th at p. 1272 [pleader "cannot offer contrary evidence unless permitted to amend"].)
Moreover, the decisions which PFF relies on for the proposition that the doctrine of judicial admissions does not apply in this case are inapplicable. In Jackson v. Pacific Gas & Electric Co. (1949) 95 Cal.App.2d 204, 213-214, the issue was whether the trial court erred in denying leave to amend the second amended complaint and had improperly considered allegations in a complaint that had already been amended; no issue regarding judicial admissions was raised. The doctrine of judicial admissions was also not raised in Jogani v. Jogani (2006) 141 Cal.App.4th 158, which considered the application of judicial estoppel where a party had taken "totally inconsistent positions in separate judicial proceedings." (Id. at p. 171.) This court in Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437 rejected the application of the doctrine of judicial admissions to allegations in pleadings that, unlike here, had been superseded by amendments. (Id. at p. 456.)
For these reasons, we conclude that the trial court did not abuse its discretion in denying PFF's motion in limine No. 6 and excluding Angelo Ielmini's testimony regarding his claim that the grant deed and easement and waste water discharge agreement attached to the fifth amended complaint are false or fraudulent. The only prejudicial error PFF identifies as flowing from the trial court's application of Delaware law with respect to alter ego liability is the exclusion of evidence related to this purported fraud. As we have determined the trial court did not abuse its discretion in excluding this evidence, we need not address the choice of law issue raised by PFF. We therefore affirm the trial court's judgment.
II. CASE NO. H047368
A. Background
The original complaint filed in 2013 named, among other defendants, the "purchaser defendants," which included some members of the Traina Group Defendants. PFF alleged that on November 7, 2012, PVC sold the parcels that PVC had purchased from PFF to defendants Traina and Patterson Las Palmas, and these parcels were subject to the easement set forth in the easement and waste water discharge agreement. PFF further alleged that Traina and Patterson Los Palmas were successors in title to PVC "and thereby assumed each and every responsibility PVC previously held pursuant to the Easement" and that they had refused to deliver water to PFF "as called for under the Easement."
Relevant here, the causes of action asserted against the defendants in the original complaint included (1) the first cause of action for breach of contract-water; (2) the sixth cause of action for declaratory relief-easement; (3) the seventh cause of action for declaratory relief-license; and (4) the eighth cause of action for declaratory relief-Regional Water Quality Control Board order. Each cause of action alleged that members of the Traina Group Defendants were successors in title to PVC and bound by the easement and waste water agreement to PVC's former responsibilities and obligations.
The first amended complaint added two additional breach-of-contract causes of action against the Traina Group Defendants, including the second cause of action for breach of contract (maintenance) and the third cause of action for breach of contract (repair). PFF again alleged that members of the Traina Group Defendants were liable as successors in title to PVC's responsibilities and obligations under the easement and waste water discharge agreement.
Thereafter, PFF filed a verified third amended complaint and a verified fourth amended complaint that included the same causes of action for breach of contract and declaratory relief against the Traina Group Defendants. The trial court granted the Traina Group Defendants' motion for judgment on the pleading as to the first, second, third, sixth and seventh causes of action asserted against the Traina Group Defendants in the fourth amended complaint without leave to amend. The court ruled that the easement and waste water agreement and grant deed did not describe the property owned by the Traina Group Defendants, and therefore the easement and waste water agreement (1) did not create a contract between PFF and the Traina Group Defendants; (2) did not create an easement attached to the Traina Group Defendants' property that required the delivery of water; and (3) did not create a covenant running with the land.
After further motion practice, all causes of action asserted against the Traina Group Defendants in the verified fourth amended complaint and the subsequent verified fifth amended complaint were adjudicated in their favor. The trial court denied PFF's motion for leave to file a sixth amended complaint that included eight new causes of action arising from the grant deed and easement and waste water discharge agreement, including unilateral and bilateral mistake.
The judgment entered on May 2, 2018, ordered, among other things, that PFF take nothing by reason of its complaint against the Traina Group Defendants, and awarded them costs "in an amount to be determined based upon an application, motion and/or memorandum of costs to be filed herein." A nunc pro judgment entered on June 1, 2018, included the same orders.
1. Motion for Attorney Fees and Litigation Expenses
The Traina Group Defendants filed a postjudgment motion for recovery of attorney fees and litigation expenses in which they sought an award of $1,378,541.29 in attorney fees. In their points and authorities, the Traina Group Defendants argued that they were entitled to an award of attorney fees as the prevailing party pursuant to the attorney fees provision in the easement and waste water discharge agreement.
In opposition, PFF argued that the Traina Group Defendants were not entitled to an award of attorney fees because they were not signatories to any agreement with PFF that contained an attorney fees clause. Alternatively, PFF contended that no attorney fees were recoverable after the trial court terminated the easement and waste water discharge agreement in 2015; attorney fees were not recoverable for work related to certain causes of action; the hourly rates charged by the Traina Group Defendants' Bay Area attorneys from the law firm of Miller Starr Regalia were excessive because the rates exceeded the prevailing hourly rate in the community; and no attorney fees should be awarded for work related to the expungement of the lis pendens.
2. Trial Court's Order and Judgment
The trial court granted the Traina Group Defendants' motion for attorney fees and litigation expenses, as stated in the July 6, 2018 minute order: "[T]he Court finds that the moving defendants are entitled to recover attorneys' fees based on the provisions of the WWDA [easement and waste water discharge agreement]. (Civ. Code §1717.) Specifically, the Court finds that the subject causes of action were based on Plaintiffs' theory that the moving defendants 'stood in the shoes' of PVC as its successors-in interest, and if Plaintiffs had prevailed on such causes they would have been entitled to seek attorney's fees from Defendants herein under the contractual provisions."
The amended nunc pro tunc judgment entered on July 12, 2018, includes an order awarding the Traina Group Defendants attorney fees of $1,359,928.29 and costs in the amount of $40,267.71. PFF filed a timely notice of appeal of the order awarding attorney fees.
A postjudgment order awarding attorney fees is a separately appealable order. (See Code Civ. Proc., § 904.1, subd. (a)(2); Building a Better Redondo, Inc. v. City of Redondo Beach (2012) 203 Cal.App.4th 852, 869-870.)
B. Discussion
On appeal, PFF's primary contention is that the trial court erred in awarding attorney fees because the Traina Group Defendants were not entitled to contractual attorney fees under section 1717. Alternatively, PFF contends that the award of attorney fees is excessive because the hourly rates charged by Miller Starr Regalia attorneys exceed the prevailing hourly rate in the relevant community, i.e., Stanislaus County.
1. Standard of Review
" ' "On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law." ' In other words, 'it is a discretionary trial court decision on the propriety or amount of statutory attorney fees to be awarded, but a determination of the legal basis for an attorney fee award is a question of law to be reviewed de novo.' " (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751, citations omitted (Mountain Air).)
We begin our evaluation of PFF's contentions with the threshold issue of the legal basis for the trial court's award of attorney fees to the Traina Group Defendants. We apply the de novo standard of review to this question. (Mountain Air, supra, 3 Cal.5th at p. 751.)
2. Contractual Attorney Fees Under Section 1717
Under the "American rule," each party to a lawsuit ordinarily pays its own attorney fees. (Mountain Air, supra, 3 Cal.5th at p. 751.) Section 1021 allows for parties to alter this rule by contract: " 'Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . .' . . . Thus, ' "[p]arties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract." ' " (Mountain Air, at p. 751; Code Civ. Proc., § 1021.)
Section 1717, in turn, restricts the application of the Code of Civil Procedure section 1021. Section 1717, subdivision (a) provides that "[i]n any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." (Italics added.)
"The primary purpose of section 1717 is to ensure mutuality of remedy for attorney fee claims under contractual attorney fee provisions." (Santisas v. Goodin (1998) 17 Cal.4th 599, 610 (Santisas).) If a contract provides the right to attorney fees to one party, but not to the other party, "the effect of section 1717 is to allow recovery of attorney fees by whichever contracting party prevails, 'whether he or she is the party specified in the contract or not' (§ 1717, subd. (a))." (Id. at p. 611.)
Thus, "[i]t is now settled that a party is entitled to attorney fees under section 1717 'even when the party prevails on grounds the contract is inapplicable, invalid, unenforceable or nonexistent, if the other party would have been entitled to attorney's fees had it prevailed.' " (Hsu v. Abbara (1995) 9 Cal.4th 863, 870 (Hsu).) Otherwise, "[t]he statute would fall short of this goal of full mutuality of remedy if its benefits were denied to parties who defeat contract claims by proving that they were not parties to the alleged contract or that it was never formed." (Ibid.)
3. The Traina Group Defendants' Entitlement to Contractual Attorney Fees Under Section 1717
On appeal, PFF contends that the Traina Group Defendants are not entitled to an award of attorney fees under section 1717. PFF reasons that the Traina Group Defendants were not signatories to the easement and waste water discharge agreement that contains the attorney fees provision on which their claim for fees is based and, by its terms, the attorney fee clause in the agreement is limited to signatories to the contract. The agreement's attorney fee provision states: "If any legal action or other legal proceeding relating to the enforcement of any provision of this Agreement is brought against any party to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and disbursements (in addition to any other relief to which the prevailing party may be entitled)."
PFF also contends that the Traina Group Defendants, as nonsignatories, are not entitled to attorney fees under section 1717's provision for mutuality of remedies since PFF would not have been entitled to contractual attorney fees had it prevailed. Although PFF acknowledges that it alleged that the Traina Group Defendants were successors in interest to PVC, PFF asserts that "there was no evidence that Traina succeeded to PVC's contractual rights in the WWDA. Plaintiffs contended that Traina was a successor to PVC's property interests, not an assignee of PVC's contractual rights and obligations." PFF argues that the "gravamen" of its claim against the Traina Group Defendants was a property claim—specifically a "quest for a water easement"—not a contract claim.
The Traina Group Defendants disagree, asserting that PFF's allegations in its complaints and arguments in motion practice show that PFF maintained a breach of contract theory until judgment was entered. They further assert that if PFF had prevailed, "it would have to have been because contractual obligations under the WWDA and other documents comprising a single agreement were found to be enforceable against Traina."
PFF responds that "[w]e contend only that in the narrow circumstance where the party never adequately alleged a valid claim for breach of a contract containing an attorneys fee provision, [section] 1717 does not apply." (Italics omitted.) We understand PFF to thereby argue that because it did not adequately allege a viable claim for breach of contract against the Traina Group Defendants, PFF could not have prevailed and been entitled to contract attorney fees under the easement and waste water discharge agreement.
We are not persuaded by PFF's arguments. PFF has provided no authority for the proposition that mutuality of remedy under section 1717 requires a viable contract claim or an evidentiary showing that PFF could have prevailed on a contract claim. To the contrary, "whether a party would have been entitled to attorney fees under a contractual attorney fee provision does not depend on whether that party effectively prosecuted its claim under that contract or whether a jury was asked to reach a verdict on the facts underlying that claim. Rather, the pertinent inquiry for purposes of Civil Code section 1717 is whether that party would have been entitled to attorney fees in a hypothetical situation in which that party did prevail on its claim." (Mepco Services, Inc. v. Saddleback Valley Unified School Dist. (2010) 189 Cal.App.4th 1027, 1047.)
Moreover, the California Supreme Court has emphasized that "it has been consistently held that when a party litigant prevails in an action on a contract by establishing that the contract is invalid, inapplicable, unenforceable, or nonexistent, section 1717 permits that party's recovery of attorney fees whenever the opposing parties would have been entitled to attorney fees under the contract had they prevailed." (Santisas, supra, 17 Cal.4th at p. 611.) Here, the trial court ruled that the easement and waste water discharge agreement did not apply to the Traina Group Defendants, who therefore prevailed on the contract as party litigants within the meaning of section 1717 by defeating PFF's contract claims. (See Hsu, supra, 9 Cal.4th at pp. 870-871.)
It is sufficient under section 1717 that PFF's allegations in its complaint constituted an action on a contract. "The term 'on a contract' in section 1717 'does not mean only traditional breach of contract causes of action. Rather, "California courts 'liberally construe "on a contract" to extend to any action "[a]s long as an action 'involves' a contract and one of the parties would be entitled to recover attorney fees under the contract if that party prevails in its lawsuit." ' " ' " (In re Tobacco Cases I (2011) 193 Cal.App.4th 1591, 1601.) This court has stated: "The requirement under Civil Code section 1717 that the action be ' "on a contract" ' has been liberally construed. [Citation.] . . . . 'An action (or cause of action) is "on a contract" for purposes of section 1717 if (1) the action (or cause of action) "involves" an agreement, in the sense that the action (or cause of action) arises out of, is based upon, or relates to an agreement by seeking to define or interpret its terms or to determine or enforce a party's rights or duties under the agreement, and (2) the agreement contains an attorney fees clause.' " (Orozco v. WPV San Jose, LLC (2019) 36 Cal.App.5th 375, 407-408 (Orozco).) Thus, in a declaratory relief action, when "the parties seek a determination of their respective rights and duties under a contract . . . , the action is ' "on a contract" for purposes of section 1717.' " (Mitchell Land & Improvement Co. v. Ristorante Ferrantelli, Inc. (2007) 158 Cal.App.4th 479, 489.)
Having reviewed the record, we agree with the Traina Group Defendants that PFF alleged in its complaints several causes of action that sought either enforcement of the easement and waste water discharge agreement or a determination of the Traina Group Defendants' duties under the agreement. As we have discussed, the causes of action for breach of contract in all of PFF's complaints expressly alleged that members of the Traina Group Defendants were liable as successors in title for PVC's obligations under the easement and waste water discharge agreement.
The causes of action in the fourth amended complaint exemplify PFF's contract claims. The first cause of action for breach of contract (water) alleges in part: "The defendants are now bound by the WWDA [easement and waste water discharge agreement] and Grant Deed as they are successors in title to the Dominant Property. [¶] After being apprised of their obligation to deliver water pursuant to the WWDA and Grant Deed, all the defendants . . . failed and refused to so deliver water and said refusal is a material breach of the agreement. [¶] As a direct and proximate consequence of the defendants' breach, the plaintiffs have suffered damages . . . , in addition to attorneys' fees and costs authorized by the contract." The second cause of action for breach of contract (maintenance) in the fourth amended complaint is similar, alleging that "defendants . . . breached the terms and conditions of the agreement by failing to inspect and maintain the Facility Property" and seeking "attorneys' fee and costs authorized by the contract." The sixth cause of action for declaratory relief in the fourth amended complaint provides another example of PFF's contract allegations. That cause of action states in part: "PFF desires a judicial determination of the parties' rights and duties as to the WWDA . . . and a declaration as to the binding effect of the WWDA and Grant Deed on the Purchaser Defendants, their responsibility for the delivery of water."
We therefore determine, as did the trial court, that PFF's action was based on PFF's theory that the Traina Group Defendants stood in the shoes of PVC as PVC's successors in title to the waste water discharge and easement agreement. It is well established that "[a] nonsignatory will be bound by an attorney fees provision in a contract when the nonsignatory party ' "stands in the shoes of a party to the contract." ' " (Apex LLC v. Korusfood.com (2013) 222 Cal.App.4th 1010, 1017-1018 (Apex).)
Moreover, each complaint included allegations sufficient to trigger the application of section 1717 since they demonstrate that the gravamen of PFF's action was contractual. Specifically, PFF alleged throughout the litigation that the Traina Group Defendants had breached the waste water discharge and easement agreement by failing to deliver water to PFF or comply with other terms set forth in the agreement " 'An action is more likely to be found "on a contract" for purposes of [section 1717] if . . . the main thrust of the litigation is based on the contract.' " (Orozco, supra, 36 Cal.App.5th at p. 409.)
Since PFF sought to enforce the terms of the easement and waste water agreement against the Traina Group Defendants, if PFF had prevailed on its contract claims it would have been entitled to seek attorney fees from the Traina Group Defendants under the attorney fees provision in the agreement. That the trial court rejected PFF's contract claims against the Traina Group Defendants does not defeat their recovery of attorney fees under section 1717. (Santisas, supra, 17 Cal.4th at pp. 610-611.) Accordingly, we conclude that the trial court did not err in ruling that the Traina Group Defendants were entitled to an award of attorney fees pursuant to section 1717 as the prevailing party.
The decisions on which PFF relies do not compel a contrary conclusion. This court's decision in Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858 is distinguishable because in that case the appellant's claim for contractual attorney fees was denied because the appellant was a nonsignatory third party beneficiary of the contract who did not "stands in the shoes" of a signatory to the contract. (Id. at pp. 897, 900; see also Sessions Payroll Management, Inc. v. Noble Constr. Co. (2000) 84 Cal.App.4th 671, 682 [nonsignatory suing as a third party beneficiary not entitled to contractual attorney fees].) Similarly, in Leach v. Home Savings & Loan Assn. (1986) 185 Cal.App.3d 1295 the appellant's claim for contractual attorney fees was denied because the opposing party was "not a signatory's successor in interest; she is a beneficiary of a trust, the assets of which the signatory, acting as trustee, has encumbered." (Id. at p. 1306.)
PFF's reliance on the decision in Vons Cos., Inc. v. Lyle Parks Jr., Inc. (2009) 177 Cal.App.4th 823 is also misplaced. The decision in Vons is distinguishable because the warranty at issue did not include an attorney fees provision, and therefore the party prevailing on its breach of warranty claim was not entitled to contractual attorney fees. (Id. at pp. 834-835.) Finally, we note that the decision in Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124 does not stand for the proposition that a nonsignatory must be an assignee to recover contractual attorney fees under section 1717. Our Supreme Court in Reynolds instructed that "[i]ts purposes require section 1717 be interpreted to further provide a reciprocal remedy for a nonsignatory defendant, sued on a contract as if he [or she] were a party to it, when a plaintiff would clearly be entitled to attorney's fees should he prevail in enforcing the contractual obligation against the defendant." (Reynolds, at p. 128.) Here, as we have discussed, PFF sued the Traina Group Defendants as if they were parties to the easement and waste water discharge agreement, and PFF would have been entitled to contractual attorney fees if it had prevailed in enforcing the agreement's obligations.
Having concluded that the trial court did not err in finding that there was a legal basis under section 1717 for an award of contractual attorney fees to the Traina Group Defendants, we turn to PFF's contention that the amount of the award was excessive.
4. Reasonableness of Attorney Fees Awarded
PFF contends that the trial court abused its discretion in awarding an excessive amount of attorney fees at the higher "out-of-town" hourly rates charged by the Miller Starr Regalia attorneys, asserting that the Traina Group Defendants did not make the required showing that local counsel were unavailable or unable to handle the case.
The Traina Group Defendants' motion for attorney fees was supported by the declarations its attorneys Amy Matthew and Lewis Soffer, both shareholders at Miller Starr Regalia, a law firm located in Mill Valley, California. In her declarations, Matthew stated that she had expertise in real property law and she had billed at an hourly rate of $425, which was discounted from her usual hourly rate of $500 to $550. Soffer stated in his declaration that his longtime practice was real estate-related litigation and he had billed at a discounted hourly rate of $400. Soffer's supplemental declaration included a chart with the hours billed by all Miller Starr Regalia attorneys (including a third attorney who billed $385 per hour) and staff in this matter and their hourly billing rates, which showed that Miller Starr Regalia had billed a total amount of $1,335,374.00.
Attorney Robert P. Fores stated in his declaration that he also represented the Traina Group Defendants and he is a partner at the Modesto law firm Fores Macko with a specialty in trial work, including real estate litigation. The hourly billing rate for Fores and his partner was $300. The total amount billed by the Fores Macko firm in this matter for attorney fees and "non-fee charges" was $154,077.47.
In opposition, PFF's attorney Graham Scott stated in his declaration that he was an experienced civil litigation trial attorney who charged an hourly rate of $250 to $300 in this matter, and he believed his hourly rate was consistent with similarly experienced attorneys in Stanislaus County.
The Traina Group Defendants' motion for judicial notice of records from the California State Bar regarding PFF's attorneys and the transcript of a March 5, 2019 trial court proceeding is denied. "Reviewing courts generally do not take judicial notice of evidence not presented to the trial court. Rather, normally 'when reviewing the correctness of a trial court's judgment, an appellate court will consider only matters which were part of the record at the time the judgment was entered.' " (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3.) No exceptional circumstances exist in this case that would justify deviating from this principle.
The July 6, 2018 minute order sets out the trial court's rulings regarding the amount of attorney fees: "Having reviewed the declarations and evidence submitted with the moving papers, as well as the supplemental declarations of Lewis Soffer, Amy [Matthew], and Robert P. Fores, the Court finds that the evidence supports the lodestar amount for each biller as reflected in the Supplemental Declaration of Lewis Soffer (at page 3) and the Supplemental Declaration of Robert P. Fores (at page 3). However, the Court finds that the total fees reflected in Mr. Fores' Supplemental Declaration should be reduced by $2,527, as these amounts were not reflected in the initial moving papers. Moreover, the Court declines to award the amount of $18,613 claimed by the Fores Macko firm as 'non-fee charges,' as Defendants have not sufficiently substantiated such charges or their entitlement to recover the same. [¶] Therefore, the Court finds that the moving Defendants are entitled to recover $1,359,928.29."
PFF's request for judicial notice of the trial court's June 26, 2018 tentative ruling requesting additional declarations in support of the motion for attorney fees is granted. (Evid. Code, § 452, subd. (d)(1) [state court records].)
Our review of the trial court's order is guided by the well-established rules governing an award of reasonable attorney fees under section 1717. "[S]ection 1717 provides that '[r]easonable attorney fees shall be fixed by the court.' . . . [T]his requirement reflects the legislative purpose 'to establish uniform treatment of fee recoveries in actions on contracts containing attorney fee provisions.' [Citation.] Consistent with that purpose, the trial court has broad authority to determine the amount of a reasonable fee." (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1094-1095 (PLCM).)
"[T]he fee setting inquiry in California ordinarily begins with the 'lodestar,' i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. 'California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award.' [Citation.] The reasonable hourly rate is that prevailing in the community for similar work. [Citations.] The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. [Citation.] Such an approach anchors the trial court's analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary." (PLCM, supra, 22 Cal.4th at p. 1095.)
Our Supreme Court has also stated the standard of review: " 'It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court. . . . [Citations.] The value of legal services performed in a case is a matter in which the trial court has its own expertise. [Citation.] The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. [Citations.] The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.' " (PLCM, supra, 22 Cal.4th at p. 1096.)
We also apply the normal rules of appellate review to an order granting attorney fees: "[T]he order is presumed correct, all intendments and presumptions are indulged to support the order, conflicts in the evidence are resolved in favor of the prevailing party, and the trial court's resolution of factual disputes is conclusive." (Apex, supra, 222 Cal.App.4th at p. 1017.) " 'Fees approved by the trial court are presumed to be reasonable, and the objectors must show error in the award.' " (Laffitte v. Robert Half Internat., Inc. (2016) 1 Cal. 5th 480, 488.)
PFF contends that the trial court abused its discretion in awarding attorney fees at the Miller Starr Regalia attorneys' higher hourly rates because the Traina Group Defendants failed to meet their burden to show that hiring local counsel was impracticable. PFF further argues that the reasonable hourly rate was $300, which local attorney Fore stated in his declaration was the hourly rate he and his partner charged in this matter. PFF requests this court to reduce the attorney fees award by $327,429.50, based on reducing the hourly rate of all Miller Starr Regalia attorneys who billed in excess of $300 to an hourly rate of $300.
The Traina Group Defendants respond that the trial court did not err because the "court simply exercised its discretion, and at least impliedly found that the rates charged by Miller Starr Regalia were consistent with Stanislaus County rates for a case of this nature, so there was no need for a showing that higher-than-market rates were justified." Additionally, the Traina Group Defendants argue that "[u]nder the rule that fact findings necessary to the trial court's decision will be presumed to have been made in favor of the prevailing party, it must be presumed that [the trial court] found the Miller Starr Regalia rates to have been consistent with local rates for this level of legal work." The Traina Group Defendants also maintain that the decisions requiring a showing of inability to obtain local counsel concerned public interest or public entities, and are therefore inapplicable.
Appellants have not persuaded us that the trial court's award of attorney fees constitutes an abuse of discretion because the award used the Miller Starr Regalia attorneys' hourly rates in excess of $300 in calculating the lodestar. (PLCM, supra, 22 Cal. 4th at p. 1095.) In PLCM, the California Supreme Court stated the general rule with respect to the hourly rate for attorney fees awarded under section 1717: "[t]he reasonable hourly rate is that prevailing in the community for similar work." (Ibid.) Applying this rule, the court determined that "the [Los Angeles County] superior court based the award of attorney fees to the prevailing party, PLCM, on the number of hours expended by counsel multiplied by the prevailing market rate for comparable legal services in San Francisco, where counsel is located. No error appears. The superior court used a proper standard in calculating the fees." (Id. at p. 1096.)
Thus, our Supreme Court in PLCM upheld an award of attorney fees under section 1717 where the reasonable hourly rate was determined to be the prevailing market rate for comparable services in the community where the prevailing party's attorney was located. (Id. at pp. 1096, 1098.) The decision in PLCM does not support PFF's position that the relevant community for purposes of determining the reasonable hourly rate for an award of attorney fees under section 1717 is the community where the trial court is located.
PFF relies on several appellate court decisions to support its contention that an award of attorney fees under section 1717 may not use a higher hourly rate for nonlocal attorneys unless a showing is made that hiring local counsel was impracticable. However, those decisions are inapplicable since the attorney fees in each case were awarded pursuant to different fee-shifting statutes involving the public interest. In Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, the plaintiff settled her claims of intentional tort and violation of the Fair Employment and Housing Act (FEHA) and sought an award of attorney's fees under the fee-shifting provisions of FEHA. (Id. at p. 1236.) The appellate court concluded that "[u]se of a fee multiplier to compensate for the higher rates of out-of-town counsel requires a sufficient showing—which plaintiff failed to make in this case—that hiring local counsel was impracticable." (Id. at p. 1233.)
The other decisions on which PFF relies are similarly inapplicable, including Save Our Uniquely Rural Community Environment v. County of San Bernadino (2015) 235 Cal.App.4th 1179, 1183, 1184 [award of attorney fees under the California Environmental Protection Act (CEQA)]; Rey v. Madera Unified School Dist. (2012) 203 Cal.App.4th 1223, 1235 [attorney fees awarded under California Voting Rights Act of 2001 (Elec. Code, § 14030)]; Environmental Protection Information Center v. Department of Forestry & Fire Protection (2010) 190 Cal.App.4th 217, 223 [entitlement to an award of attorney fees under Code of Civil Procedure section 1021.5]; and Horsford v. Board of Trustees of Cal. State University (2005) 132 Cal.App.4th 359, 393 [challenge to award of attorney fees under FEHA (Gov. Code, § 12965, subd. (b)].
PFF has not provided any authority for the proposition that an award of contractual attorney fees under section 1717 may not use a higher hourly rate for nonlocal attorneys in calculating the lodestar unless a showing is made that hiring local counsel was impracticable. As an intermediate court, we follow the prevailing precedent of the California Supreme Court in PLCM, supra, 22 Cal.4th 1084. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.) As we have discussed, the decision in PLCM upheld an award of attorney fees under section 1717 where the lodestar was calculated using the hourly rate prevailing in the community where the prevailing party's attorney was located—not the community where the litigation took place. (PLCM, at p. 1096.)
Moreover, our Supreme Court in PLCM emphasized that " '[t]he "experienced trial judge is the best judge of the value of professional services rendered in his [or her] court, and while his [or her] judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong"—meaning that it abused its discretion.' " (PLCM, supra, 22 Cal.4th at p. 1095.) PFF has not met its burden on appeal to show that the trial court abused its discretion in awarding attorney fees under section 1717 to the Traina Group Defendants because the award included the hourly rates of the Miller Starr Regalia attorneys.
Having concluded that the trial court did not err in finding that the Traina Group Defendants were entitled to an award of attorney fees under section 1717 and PFF did not meet its burden to show that the amount of the award was excessive, we affirm the amended nunc pro tunc judgment entered on July 12, 2018, that includes an order awarding the Traina Group Defendants attorney fees of $1,359,928.29.
5. Attorney Fees on Appeal
The Traina Group Respondents have requested attorney fees for this appeal. " 'Although this court has the power to fix attorney fees on appeal, the better practice is to have the trial court determine such fees.' " (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1267.) Thus, upon an appropriate motion, the trial court is to consider whether attorney fees incurred on appeal should be awarded and, if so, in what amount. (See ibid.; In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 320.)
III. DISPOSITION
In case No. H047357, the judgment is affirmed. In case No. H047368, the judgment is affirmed. Costs in each appeal are awarded to respondents.
/s/_________
Danner, J. WE CONCUR: /s/_________
Elia, Acting P.J. /s/_________
Bamattre-Manoukian, J.