Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. PC031332, Holly E. Kendig, Judge.
Travis R. Jack and Travis R. Jack for Plaintiffs and Appellants.
MacGregor & Berthel, Gregory Michael MacGregor, Deborah A. Berthel and Joshua N. Willis for Defendant and Respondent.
ARMSTRONG, J.
Between March of 2001 and March of 2002, Richard and Kristin Rowsey and their young children (hereinafter, "the Rowseys") lived in a house which they rented from defendant John Tesh. After mold was discovered in the house, the Rowseys filed suit, alleging that exposure to mold had caused them to suffer a number of serious health problems. The complaint brought causes of action for negligence, premises liability, breach of the covenant of habitability, fraudulent concealment, and loss of consortium.
The children are Alexys Rowsey, Kylee Rowsey, and Dylan Rowsey. They sued through their guardian ad litem, Richard Rowsey.
In brief, the Rowseys' case was that long before mold was visible, there were indications that the plumbing was going to leak, causing mold to develop, and that the indications were pointed out to Tesh, who did not take adequate steps to address the problem. Specifically, the Rowseys contended that Tesh should have acted when rusty water in the bathtub was pointed out to him in June 2001, and when he was shown moist wallboard in the kitchen, on January 16, 2002. (Mold became visible on January 25, 2002. Tesh sought expert advice and began remediation. He was told that the house was habitable during remediation and the Rowseys remained in the house during that period.)
Judgment was entered in Tesh's favor after his motion for summary judgment or summary adjudication was granted. The Rowseys appealed, and in B174941 we found that as a matter of law, Tesh did not breach his duty when the Rowseys showed him the rusty water in June, but that there was a triable issue of fact on breach of duty in January. We thus reversed the judgment.
The case was remanded to the trial court, which found that under our opinion, the only issue which could be raised at trial was breach of duty after January 16, 2002. Tesh then moved in limine to exclude all evidence of negligence prior to that date. The court granted the motion. The Rowseys then informed the court that they could not prove that they were harmed by the exposure to mold they suffered after January 16, 2002, and consented to nonsuit to facilitate an appeal. Judgment was entered in Tesh's favor, and he was awarded attorney's fees under the fees clause in the lease.
The Rowseys appealed the judgment and the fees order, and Tesh cross-appealed, contending that the court erred by denying certain fees and costs. We ordered the cases consolidated.
Tesh has briefed an additional issue, contending that the trial court erred in overruling his objections to the Rowseys' proposed opening statement, which was submitted in writing as part of the litigation on the motion for nonsuit. Given that we affirm the judgment, we need not consider the argument. Nothing we said about those rulings could make any difference to anyone.
We affirm all the orders appealed from.
The Rowseys' Appeal
1. The nonsuit
Nonsuit was granted based on the doctrine of law of the case. That is, the trial court ruled that because we held that as a matter of law that Tesh's conduct prior to January 16, 2002 was not negligent, no evidence of negligence prior to that date could be introduced at trial. The Rowseys' sole argument on appeal is we should decline to adhere to that doctrine.
When an appellate court has rendered an opinion which includes a statement of a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to in all subsequent proceedings in the same action. (Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 491.) That rule describes this case. We earlier said that as a matter of law, Tesh did not breach his duty prior to January 16, 2002. As the trial court correctly found, that became law of the case, and the trial court rulings limiting evidence was thus correct, as was nonsuit.
It is true that courts may decline to adhere to the law of the case doctrine "where its application would result in an unjust decision, e.g., where there has been a manifest misapplication of existing principles resulting in substantial injustice, or where the controlling rules of law have been altered or clarified by a decision intervening between the first and second appellate determinations. The unjust decision exception does not apply when there is a mere disagreement with the prior appellate determination." (Morohoshi, supra, 34 Cal.4th at pp. 491-492.) The Rowseys do not point to any misapplication of principles of law resulting in substantial injustice, or to any change in relevant rules of law, and we see none. We see no reason why the law of the case doctrine should not apply.
2. Fees
The Tesh-Rowsey lease included a clause which read, "In any legal action brought by either party to enforce the terms hereof or relating to the demised premises, the prevailing party shall be entitled to all costs incurred in connection with such action, including reasonable attorney's fees." Based on that clause, Tesh sought fees of $125,614. The court awarded $93,000.
The Rowseys contend that the court erred in awarding any fees, reasoning that the fees were paid by Tesh's insurer, Allstate, so that Tesh did not "incur" fees other than his insurance premium. They then contend that because the contract provides for recovery of fees "incurred" Tesh should not have been awarded fees.
The first problem with this argument is that we cannot see that the Rowseys presented the trial court with anything which established that Allstate paid the attorney's fees or that Tesh was without obligation for the fees. The attorney declaration in support of the fees motion refers to Tesh as the client, and to fees incurred by Tesh. "To 'incur' a fee, of course, is to 'become liable' for it (Webster's New Internat. Dict. (3d ed. 1961) p. 1146), i.e., to become obligated to pay it." (Trope v. Katz (1995) 11 Cal.4th 274, 280.) We cannot say that Tesh did not incur the fees. (See International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175, 1193 [party liable for fees "incurred" even though that party was not the first source responsible for payment.)
Our record includes the Rowseys' Certificate of Interested Entities or Persons (Cal. Rules of Court, rule 8.208) asserting that Allstate is an interested entity in that it paid Tesh's attorney fees, but we cannot say that the Certificate establishes the fact.
Moreover, we believe that even if an insurer has paid the bills, recovery of fees is proper. Civil Code section 1717 provides in relevant part as follows: "In any action on a contract, where the contract specifically provides that attorney's fees and costs . . . 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, . . . shall be entitled to reasonable attorney's fees in addition to other costs. . . ."
Our Supreme Court has examined the statute and "rejected the contention . . . that attorney fees 'incurred' means only fees a litigant actually pays or becomes liable to pay from his own assets. ([PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084] at p. 1097.)" (Lolley v. Campbell (2002) 28 Cal.4th 367, 374.) Civil Code section 1717, which "reflects the legislative purpose 'to establish uniform treatment of fee recoveries in actions on contracts containing attorney fee provisions and to eliminate distinctions based on whether recovery was authorized by statute or by contract.' [Citation.]" (PLCM, supra, 22 Cal.4th at pp. 1090-1091.) Given that purpose, "'Equitable considerations must prevail over . . . the technical rules of contractual construction.' [Citation.]" (Id. at p. 1095.)
In Lolley v. Campbell, supra, 28 Cal.4th 367, the Supreme Court similarly interpreted "incurred" in a fees provision of the Labor Code. In that case, the Labor Commissioner represented an indigent employee at a court hearing. (Lab. Code, § 98.4.) The Labor Code allows for recovery of "attorney's fees incurred by the other parties to the appeal," and in recognition of the provision, the employee assigned rights to any attorney fees to the Labor Commissioner. (Id. at p. 372, Lab. Code, § 98.2.) The employee was later awarded fees. On the employer's appeal, the court held that use of the word "incur" did not prevent recovery of fees, holding that, "In practice, it has been generally agreed that a party may 'incur' attorney fees even if the party is not personally obligated to pay such fees. 'A party's entitlement to fees is not affected by the fact that the attorneys for whom fees are being claimed were funded by governmental or charitable sources or agreed to represent the party without charge.' (Cal. Attorney Fee Awards (Cont.Ed.Bar 2d ed. 1999) § 3.3, p. 48 (rev. 11/01).)" (Id. at p. 373.)
Under PLCM and Lolley, the lease cannot be construed technically, and read to mean that Tesh did not incur the fees unless he actually paid them. Tesh was sued, and was obliged to defend the case one way or another. If the Rowseys had won, they would have been able to recover fees. They did not, and under Civil Code section 1717, they must pay them. Further, "we can perceive of no reason why plaintiffs should profit from [the defendants'] foresight in obtaining insurance coverage. Plaintiffs were not entitled to avoid their contractual obligation to pay reasonable attorney fees based on the fortuitous circumstance that they sued a defendant who obtained insurance coverage providing a defense." (Staples v. Hoefke (1987) 189 Cal.App.3d 1397, 1410.)
Nor do we see that, as the Rowseys suggest, Tesh will receive a windfall. If Allstate paid the fees, we have no doubt that it will seek reimbursement from Tesh.
The Rowseys also argue that no attorney's fees could be awarded because they did not bring contract claims. However, "'An action by a tenant alleging a breach of the warranty of habitability is an action on the contract that authorizes the recovery of fees pursuant to an attorney fee provision in the rental agreement.' (9 Miller & Starr, Cal. Real Estate (2001 supp.) § 30:17, p. 383.)" (Fairchild v. Park (2001) 90 Cal.App.4th 919, 924-925.)
Tesh's Appeal
Tesh moved for, and was awarded, attorney's fees and costs before judgment was first entered in his favor, and after judgment was entered after remand. As to fees, on judgment after remand, Tesh sought $125,614, and was awarded $93,000. He contends that the court erred by failing to award the full amount requested, but makes no argument on the issue. Accordingly, we do not consider the point. (In re Marriage of Ananeh-Firempong (1990) 219 Cal.App.3d 272, 278.)
As to costs, on judgment after remand, Tesh sought costs of $19,273. Our record does not include any accompanying motion, but it does include Tesh's opposition to the Rowseys' motion to tax costs, and some of the litigation concerning Tesh's earlier motion regarding costs. The litigation concerned Tesh's costs for messengers and photocopies, and expert witness fees pursuant to Code of Civil Procedure section 998. In his brief, Tesh informs us that only $1,222 was awarded in costs, but our record does not include any ruling or order of the court concerning costs. Tesh contends that the court erred in denying his expert witness fees, and costs of messengers and photocopies. He has not provided us with a record which establishes error, and we thus find none.
Disposition
The judgment is affirmed, as are the orders awarding fees and costs. The parties to bear their own costs on appeal.
We concur: TURNER, P. J. KRIEGLER, J.