Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Fresno County No. 03CECG03206. M. Bruce Smith, Judge.
Henry D. Nunez for Plaintiffs, Cross-defendants and Appellants.
Hargrove & Costanzo and Neal E. Costanzo for Defendants, Cross-complainants and Respondents.
No appearance for Cross-complainant and Respondent.
OPINION
DAWSON, J.
This dispute involves real property that was owned by appellants and acquired by respondents through a nonjudicial foreclosure sale under a deed of trust. Appellants sued respondents for breach of contract, fraud, and interference with prospective economic advantage based on allegations that respondents conducted the trustee’s sale sooner than they said they would.
The matter was tried to the court, and the superior court found that respondents held the trustee’s sale in accordance with the terms of their oral agreement with appellants. Judgment was entered in favor of respondents, and the superior court awarded attorney fees to respondents.
Appellants seek reversal, claiming the superior court’s statement of decision failed to resolve all of the material issues of fact presented, contained procedural error, and contained findings that were not supported by substantial evidence. Appellants also claim the superior court erred by failing to apportion attorney fees between the contractual and noncontractual claims and by holding a corporate officer personally liable for the attorney fees.
We conclude that appellants forfeited their objections to omissions in the statement of decision and, therefore, the substantial evidence rule applies to the superior court’s express and implicit findings of fact. Furthermore, substantial evidence supports the superior court’s findings of fact.
With respect to the award of attorney fees, appellants failed to establish reversible error because they failed to show that the superior court could have segregated attorney services attributable solely to the tort claims from the services rendered on the contract claims. Also, because the corporate officer was named as an obligor in promissory notes that contained attorney fees provisions, the superior court did not err in holding him personally liable for attorney fees.
Accordingly, judgment is affirmed.
FACTS
Appellants in this case are Cagsi International, Inc., a Nevada corporation, and Gilbert Servin, an individual residing in Fresno County who is the president and sole shareholder of Cagsi International, Inc.
Respondents in this case are I-5 Social Services Corporation, Inc., a California nonprofit corporation (I-5 Services), and Alex Valdez. Mr. Valdez resides in Fresno County and is the executive officer of I-5 Services.
Golden Castle Development, LLC is a limited liability company formed by Alex Valdez. Appellants did not name this company as a defendant, but it joined respondents in their cross-complaint against appellants to collect promissory notes.
Appellants owned real property located in Fresno. In October 2000, appellants agreed to sell the real property to respondents for $310,000. The parties signed a written contract titled “Real Property Purchase Agreement.” Escrow instructions were prepared and signed by the parties. The sale transaction was not completed and, in September 2001, the parties mutually agreed to terminate the agreement and escrow instructions.
On March 20, 2002, appellants and respondents established a new escrow for the sale of the real property. The real property purchase agreement of October 2000 was among the documents the parties presented to the escrow officer to reflect their renewed agreement.
Difficulties arose in completing the sale of the real property. I-5 Services had trouble obtaining financing. A loan secured by a second deed of trust against the real property went into default. The deed of trust was held by Mid Valley Financial Services (Mid Valley). Appellants entered into a series of forbearance agreements with Mid Valley. Respondents helped fund the forbearance fees and debt payments secured by the first and second deeds of trust by loaning money to appellants. The loans resulted in the execution of a series of promissory notes.
In October 2002, the parties amended the escrow instruction to extend the closing date to November 30, 2002, and increased the purchase price to $375,000.
The sale transaction did not close in November and, in early December 2002, I-5 Services obtained a loan. It used the loan proceeds to purchase the debt and second deed of trust held by Mid Valley.
On December 6, 2002, the parties entered into an oral agreement. The parties dispute what terms were included in that agreement. Conflicting evidence was presented at trial.
Appellants alleged that respondents agreed to purchase the secured loan held by Mid Valley, agreed not to proceed with the trustee’s sale until March 31, 2003, and agreed to extend the date for the close of escrow.
Respondents admit that they agreed to acquire the secured loan from Mid Valley. In contrast to appellants’ understanding of the oral agreement, respondents assert that they agreed to extend the escrow on the sale of the real property only until March 21, 2003 (not the 31st), and did not agree to postpone the foreclosure under the deed of trust acquired from Mid Valley.
The trial court resolved the conflict about the terms of the oral agreement by determining that “[appellants] failed to prove by a preponderance of the evidence the claim that the oral agreement was to extend escrow to March 31, 2003, or that there was any oral agreement to postpone the foreclosure sale to or after March 31, 2003.”
In February 2003, respondents instructed the entity conducting the foreclosure proceeding under the second deed of trust to postpone the trustee’s sale from February 18, 2003, to March 25, 2003.
The trustee’s sale was held on March 25, 2003, and I-5 Services acquired the real property by making a credit bid. As a result of the nonjudicial foreclosure sale, appellants’ ownership interest in the property was extinguished.
Alex Valdez testified that he did not take steps to close escrow by March 21, 2003, because he knew appellants could not deliver marketable title to the real property. In particular, Alex Valdez testified that he learned Julian Chapa and the City of Huron held recorded liens against the real property that he believed made it impossible to obtain clear title by completing the purchase agreement.
PROCEEDINGS
Appellants’ third amended complaint alleged that respondents wrongfully foreclosed on the real property. The complaint set forth causes of action for breach of contract, fraud, and intentional interference with prospective economic advantage.
Respondents filed an answer to the third amended complaint that contained a general denial and 19 affirmative defenses. The ninth affirmative defense asserted the statute of frauds and the 17th affirmative defense asserted respondents’ conduct was privileged under Civil Code section 47, subdivision (c).
Respondents also filed a cross-complaint against appellants that alleged they failed to pay on five promissory notes.
Notes in the amount of $12,500 and $9,725 were dated October 21, 2002. A preprinted form was used for these notes, and the line for the entity that promised to pay was filled in with “Cagsi International, a California Corporation.”
Notes in the amount of $15,000 and $20,000 were dated December 6, 2002. The preprinted form used for these notes contained a line for the entity or entities that promised to pay and it was filled in with “Cagsi International/Gilbert Servin, a California Corporation.”
The most recent of the five promissory notes was dated December 20, 2002. The text of the note stated that the “undersigned” agreed to pay to the order of Alex Valdez $3,000. The signature block identified the borrower as Gilbert Servin and contained his handwritten signature. All five notes contained an attorney fee provision.
The matter was tried to the court. Evidence was taken during November and December of 2005. The parties submitted posttrial briefs.
The superior court issued a tentative ruling on February 10, 2006. Within two weeks, appellants filed a written request for a statement of decision that listed various issues appellants wanted addressed.
The tentative decision directed counsel for respondents to prepare a proposed statement of decision in the event that appellants made a timely request. As a result, respondents submitted and served a proposed statement of decision and a proposed judgment on March 6, 2006.
The superior court signed and filed the proposed statement of decision and the proposed judgment on March 13, 2006.
In May 2006, respondents filed a motion for attorney fees that asserted they were entitled to recover $96,156.67. Appellants opposed the motion on a number of grounds.
The superior court granted the motion for attorney fees and issued a written order. Cagsi International, Inc. was held liable for $24,335 in fees incurred by respondents before they began being billed for the prosecution of the cross-complaint to collect the promissory notes. Both Cagsi International, Inc. and Gilbert Servin were held jointly and severally liable for the remaining balance of $71,821.67. The superior court found that appellants’ three causes of action were all interrelated such that apportionment would not be possible.
Appellants filed timely notices of appeal contesting the March 2006 judgment and the subsequent order awarding attorney fees to respondents.
DISCUSSION
I. Failure of Statement of Decision to Address Specific Issues
A. Parties’ Contentions
Appellants contend that the trial court failed to address issues that appellants raised in their request for statement of decision and that this failure constitutes reversible error because those omitted issues were material to the outcome of the case.
Respondents address appellants’ contention on two grounds. First, respondents argue that appellants failed to object to the trial court’s alleged omissions and, therefore, they cannot raise the objection on appeal. Second, respondents argue that any omitted issues were not material to the outcome because other determinations set forth in the statement of decision eliminated the need to address those issues.
Appellants’ reply brief contends their lack of objections to the trial court’s failure to address the issues they raised did not result in a forfeiture of those objections. Appellants argue no forfeiture occurred because the trial court violated California Rules of Court, former rule 232 by signing its statement of decision before the end of the period allowed for objections. Appellants further contend that they have demonstrated actual prejudice from the violation of former rule 232 and, therefore, reversal is required.
In accordance with the guidance provided by the California Supreme Court, we will refer to the loss of the right to raise the issue on appeal as forfeiture (instead of waiver) because that term refers to the legal consequences resulting from the failure to object or invoke a right. (In re Sheena K. (2007) 40 Cal.4th 875, 881, fn. 1.)
All further references to rules are to California Rules of Court. Effective January 1, 2007, former rule 232 was revised slightly and renumbered rule 3.1590. We will refer to the former version of this rule because it was the version in effect at the time the statement of decision and judgment in this case were prepared and filed.
B. Issues Presented
Based on the contentions of the parties, we will address the following issues: (1) Did the trial court violate former rule 232 by signing the proposed statement of decision too soon? (2) If there was a violation of former rule 232, did that violation result in actual prejudice to appellants?
C. Former Rule 232 Was Violated
Former rule 232(d) provided that “[a]ny party affected by the judgment may, within 15 days after the proposed statement of decision and judgment have been served, serve and file objections to the proposed statement of decision or judgment.”
Former rule 232(e) provided that the “court shall, within 10 days after expiration of the time for filing objections to the proposed judgment, … sign and file its judgment.”
These provisions of former rule 232 have been interpreted to mean that the trial court must not sign the proposed statement of decision and judgment before the time for filing objections has expired. (See Heaps v. Heaps (2004) 124 Cal.App.4th 286, 292 [premature signing of proposed statement of decision by trial judge]; In re Marriage of Steiner & Hosseini (2004) 117 Cal.App.4th 519, 524-525 [trial judge committed error by signing proposed judgment two days after receiving it].)
In this case, the proposed statement of decision and the proposed judgment prepared by counsel for respondents was served on March 6, 2006. On March 13, 2006, just seven days later, the trial court signed and filed the proposed statement of decision as well as the proposed judgment.
Clearly the trial court violated former rule 232 by signing and filing the proposed statement of decision and the proposed judgment before the 15 days provided by former rule 232 for objecting to those document expired. Accordingly, we proceed to the question whether this violation was harmless error.
D. The Violation of Former Rule 232 Was Not Prejudicial
The premature signing of documents in violation of former rule 232 is not reversible error unless prejudice is shown. (In re Marriage of Steiner & Hosseini, supra, 117 Cal.App.4th at p. 524.)
Appellants argue that they have shown actual prejudice because they “face the impairment of their rights on appeal due to the procedural flaws in the manner in which the [statement of decision] was signed.”
Appellants’ argument appears to be based on the contention that they could not object to the failure of the statement of decision to address the issues raised in their request for statement of decision once the trial court signed and filed the statement of decision and the judgment.
This contention is not correct because appellants had other opportunities to raise their objections in the trial court. Code of Civil Procedure section 634 permits any party to bring an omission to the attention of the trial court “either prior to entry of judgment or in conjunction with a motion under Section 657 or 663.” Section 657 contains the standards and procedures for motions for new trial, and section 663 sets forth the grounds on which a motion to vacate a judgment may be granted. (SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 465, fn. 7.)
Therefore, in accordance with Code of Civil Procedure section 634, appellants could have raised their objections in postjudgment motions. As a result, the trial court’s premature signing of the statement of decision and the judgment did not operate to foreclose other avenues of bringing the omissions to the attention of the trial court. In their attempts to establish prejudice, appellants have not explained why the postjudgment motions did not present an adequate way for them to present their objections to the trial court. Without an explanation of why the postjudgment motions were an inadequate way to present the objections, we cannot conclude that appellants have shown actual prejudice resulted from the premature signing of the statement of decision and judgment.
In summary, the procedural error in the way the trial court handled the statement of decision and judgment does not require a reversal and remand to the trial court to issue a more extensive statement of decision. The legal consequences of appellants’ failure to object to the purported omissions from the statement of decision are that (1) the trial court did not commit reversible error by not explicitly addressing certain issues raised in appellants’ request for a statement of decision and (2) “the appellate court will imply findings to support the judgment.” (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1134; see Code Civ. Proc., § 634.)
Those issues included (1) whether the December 6, 2002, oral agreement provided that appellants would not be required to make any payments on the promissory notes secured by the deed of trust on the real property, (2) whether any waiver of payments cured the default and reinstated the promissory note secured by the deed of trust on the real property, and (3) whether the doctrine of equitable estoppel applied.
II. The Ruling Regarding the Statute of Frauds
In its tentative ruling, the trial court stated that, even if it were to find the existence of an oral agreement to extend the foreclosure until March 31, 2003 (instead of Mar. 21, 2003), the alleged agreement would fall within the statute of frauds. In addition, the trial court stated that it found there was insufficient consideration or performance to render the alleged agreement enforceable under Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665 and Civil Code section 1698. These rulings were adopted in the statement of decision signed by the trial court.
Appellants challenge the trial court’s determination regarding the applicability of the statute of frauds to the alleged oral agreement to extend the foreclosure until March 31, 2003. In particular, appellants contend that the alleged oral agreement is enforceable because (1) it was executed within the meaning of Civil Code section 1698, subdivision (b), and (2) it was supported by new consideration as specified in Civil Code section 1698, subdivision (c).
Civil Code section 1698 provides in part: “(b) A contract in writing may be modified by an oral agreement to the extent that the oral agreement is executed by the parties. [¶] (c) Unless the contract otherwise expressly provides, a contract in writing may be modified by an oral agreement supported by new consideration. The statute of frauds (Section 1624) is required to be satisfied if the contract as modified is within its provisions.”
Respondents contend that the trial court did not err in determining the statute of frauds precluded the enforcement of the alleged oral agreement to extend the foreclosure until March 31, 2003. Moreover, respondents contend that rulings regarding the statute of frauds need not be reached by this court because the trial court’s finding that the oral agreement was to extend the escrow to March 21, 2003 (not postpone the foreclosure sale until Mar. 31, 2003) was supported by substantial evidence.
We agree with respondents that challenges to the trial court rulings regarding the statute of frauds will not identify reversible error because of the trial court’s finding that respondents agreed to extend the escrow on the sale of the real property to March 21, 2003, and did not agree to postpone the foreclosure sale until March 31, 2003. The trial court’s findings of fact are supported by substantial evidence.
During the trial, counsel for appellants examined Alex Valdez. During that examination, Valdez testified that the date the escrow for the purchase of the real property was to close was not March 31st. Valdez also testified that on December 6th, he and Servin talked about March 21st as the date for closing escrow. The testimony of Valdez is substantial evidence in support of the trial court’s finding that the oral agreement was to extend the escrow on the sale of the real property to March 21, 2003, particularly in light of the trial court’s explicit finding that the testimony of Servin regarding the oral contract was less credible than the testimony of Valdez.
Therefore, under the substantial evidence standard of review, this court must accept the trial court’s finding of fact that the oral agreement was to extend the escrow on the sale of the real property until March 21, 2003. Because this finding does not contain reversible error, we need not address the alternate basis for the trial court’s decision that concerned the application of the statute of frauds.
III. Fraud and Deceit
Appellants’ opening brief states that the respondents misrepresented that “they would refrain from foreclosing on the subject real property and extend the sales escrow to March 31, 2003.”
Because the trial court found that the oral agreement of the parties was to extend the close of escrow until March 21, 2003 (not Mar. 31, 2003), and this finding is supported by substantial evidence, appellants failed to establish the facts necessary to their claim for fraud and deceit. Also, appellants have failed to demonstrate on appeal that the trial court committed legal error in concluding that appellants did not prove their claim.
IV. Intentional Interference With Prospective Economic Advantage
The trial court found that appellants “have not proven by a preponderance of the evidence the cause of action for intentional interference with prospective economic advantage.” Among other things, the trial court determined that appellants did not prove that respondents engaged in any wrongful conduct designed to disrupt the economic relationship between appellants and the City of Huron. Specifically, the trial court stated that the exercise of the right to foreclose on the real property was an insufficient basis for finding respondents engaged in wrongful conduct.
This claim, like appellants’ fraud claim, is premised on respondents foreclosing on the real property sooner than agreed. The trial court found that respondents did not foreclose earlier than they had orally agreed, and this finding is supported by substantial evidence. Accordingly, appellants have not demonstrated that the trial court committed error in rejecting their claim for intentional interference with economic advantage.
V. Apportionment of Attorney Fees
A. Parties’ Contentions
Appellants argue the trial court erred by (1) denying their request to apportion attorney fees between the contract claims and the tort claims and (2) finding Servin jointly and severally liable for all of the attorney fees incurred by respondents after respondents filed their cross-complaint.
Respondents contend that there was no basis for apportioning attorney fees because the tort claims were related to the contract claim and, regardless of the scope of the attorney fees provisions in the applicable contracts, the issues common to the contractual and tort claims committed the apportionment question to the discretion of the trial court. Respondents also contend that Servin was personally liable because it appeared that he executed documents containing attorney fees provisions in his individual capacity.
In their reply brief, appellants assert that the identification and segregation of attorney fees between the contract and tort claims was both possible and appropriate. With respect to the liability of Servin, appellants assert that (1) the “parties understood that Gilbert Servin was an officer of Appellant Cagsi International, Inc.”; (2) Servin signed the various contracts as a corporate officer and not in his individual capacity; and (3) there was no substantial evidence indicating that Servin was intended to be personally liable for the promissory notes.
B. Scope of Attorney Fees Provisions
The first step in analyzing the contentions of the parties concerns the scope of the language used in the contractual provisions that addressed the recovery of attorney fees.
1. Text of attorney fees provisions
The parties’ oral agreement did not provide for the recovery of attorney fees. The escrow documents did not contain an attorney fees provision. Instead, the potentially applicable attorney fees provisions were contained in various promissory notes and the real property purchase agreement of October 2000.
Four of the five promissory notes contained a provision for the award of attorney fees that stated: “Should suit be commenced to collect this note or any portion thereof, such sum as the Court may deem reasonable shall be added hereto as attorney’s fees.” The fifth promissory note (dated Dec. 20, 2002, and in the principal amount of $3,000) identified only Servin as the borrower and included the following provision regarding attorney fees: “In the event this note shall be in default and placed for collection, then the undersigned agree to pay all reasonable attorney fees and costs of collection.”
Paragraph 12 of the real property purchase agreement of October 2000 included the following provision regarding attorney fees: “If an action is commenced to enforce any provision of this Agreement, then, for each such action: [¶] … The prevailing party as determined by a final court judgment shall be entitled to recover from the other party such reasonable attorney’s fees and costs incurred in the action as the court may award.”
The trial court determined that the real property purchase agreement of October 2000 was relevant to the attorney fees request because the oral agreement of December 2002 attempted to modify that written agreement. The trial court also relied on the attorney fees provisions in the promissory notes as a basis for awarding attorney fees.
2. Timing for application of the attorney fees provisions
The trial court regarded appellants’ filing of their complaint as an action commenced to enforce the terms of the written real estate purchase agreement, albeit as modified by the parties’ oral agreement. As a result, the attorney fees provision in that agreement became applicable at the start of this litigation.
In contrast, the attorney fees provisions in the promissory notes did not become applicable until respondents pursued their cross-complaint to collect the promissory notes. The language of those provisions required that a suit be commenced to collect all or part of the promissory notes, and the trial court determined the pursuit of the cross-complaint met this requirement.
Based on the difference in the wording of the attorney fees provisions, the trial court divided respondents’ request for attorney fees into two distinct periods of time. The first period concerns the attorney fees that respondents incurred before they filed the cross-complaint seeking to collect the promissory notes. This period is covered only by the attorney fees provision contained in the real estate purchase agreement. The second period concerns the fees incurred after respondents’ cross-complaint was filed. The second period is covered both by the attorney fees provision contained in the real estate purchase agreement and by the attorney fees provisions contained in the promissory notes.
3. Types of claims covered
Some attorney fees provisions are drafted broadly and authorize the recovery of attorney fees attributable to both contract and tort claims. (Santisas v. Goodin (1998) 17 Cal.4th 599, 607-608.) Other attorney fees provisions are drafted more narrowly, to cover fees for an action brought to enforce the terms of the parties’ agreement; these provide no recovery of attorney fees for services on noncontractual claims. (E.g., Loube v. Loube (1998) 64 Cal.App.4th 421, 430; Wegner et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2007) ¶ 17:161.6, p. 17-121.) Here, the trial court recognized and respondents do not dispute that the contractual attorney fees provisions are of the narrow variety that cover contractual claims and do not cover tort claims. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶¶ 1:226 to 1:232, pp. 1-33 to 1-35 [overview of claims covered by narrow and broad contractual attorney fees provisions].)
C. Apportionment of Attorney Fees to Tort Claims
Under narrow attorney fees provisions like the ones in this case, “attorney’s fees incurred solely for … defending against the tort causes of action are not recoverable.” (Reynolds Metals Co. v. Alpern (1979) 25 Cal.3d 124, 129.) Conversely, attorney fees need not be apportioned when incurred for services on an issue common to both a cause of action for which fees are proper and a cause of action for which fees are not authorized. (Id. at pp. 129-130.) In other words, attorney fees for time spent on overlapping aspects of the two types of claims may be recovered. (Pearl, Cal. Attorney Fee Awards (Cont.Ed.Bar 2d ed. 2007) Attorney Fee Awards Based on Contract, § 6.28.) Thus, an attorney’s services fall into three categories: (1) services solely attributable to the contract claim (recoverable); (2) services attributable to both the contract and the tort claims (recovery committed to the trial court’s discretion); and (3) services solely attributable to the tort claim (not recoverable). “Apportionment of a fee award between fees incurred on a contract cause of action and those incurred on other causes of action is within the trial court’s discretion .…” (Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111 [trial court did not abuse its discretion in failing to apportion fees between contract cause of action and causes of action for tort and RICO violation].) A trial court abuses this discretion when its determination regarding apportionment exceeds the bounds of reason in view of the circumstances of the case. (Ibid.)
An appellate court will rule a trial court did not abuse its discretion when the trial court could reasonably find that the contractual and noncontractual claims were inextricably intertwined, making it impracticable, if not impossible, to separate the multiple conjoined activities into compensable and noncompensable time units. (Abdallah v. United Savings Bank, supra, 43 Cal.App.4th at p. 1111.)
1. Appellants’ contentions
Appellants may establish that the trial court abused its discretion by showing that it awarded attorney fees for time expended solely in defending against the tort claims. (Reynolds Metals Co. v. Alpern, supra, 25 Cal.3d at p. 129.) In other words, the trial court’s finding that appellants’ two tort causes of action were interrelated with the contract claim such that apportionment would not be possible must be shown to be incorrect to establish reversible error.
Appellants attempt to establish reversible error by arguing that there was a clear division between the cause of action for breach of contract and the cause of action for intentional interference with economic advantage. The only illustration of this division provided in appellants’ opening brief is the following: “Respondent Valdez at one point testified that he was not aware that the Men of Promise was interested in purchasing the property or any other effort Appellant made to sell the property to this entity.” Valdez’s testimony about his knowledge is relevant to the second element of the intentional interference claim identified below and is not relevant to any of the four elements of the breach of contract claim.
The elements of a cause of action for intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) the defendant’s intentional and wrongful conduct designed to interfere with or disrupt this relationship; (4) interference with or disruption of this relationship; and (5) economic harm to the plaintiff proximately caused by the defendant’s wrongful conduct. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153-1154.)
“A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.)
Notwithstanding the potential for overlap between the tort element concerning a defendant’s wrongful conduct and the contract element concerning the defendant’s breach, it is clear that there are elements to a tort claim for intentional interference with prospective economic advantage that do not overlap with a breach of contract claim.
Appellants’ argument in this case can be structured as follows. First, as a general proposition, certain elements of the cause of action for intentional interference with prospective economic advantage do not overlap with the elements of a breach of contract claim. Second, in the context of this litigation, certain elements of appellants’ claim for intentional interference with prospective economic advantage involve factual and legal issues that do not overlap with the factual and legal issues involved with appellants’ breach of contract claim. Third, the record on appeal establishes that attorney fees were incurred on matters solely related to the tort claims and that time can be separated from the time spent on overlapping matters.
Based on these contentions, appellants conclude that the trial court erred in failing to apportion the fees and that the proper remedy is to remand the issue to the trial court so that the trial court may identify and segregate the attorney time expended solely on the tort claim.
After reviewing each of appellants’ contentions, we conclude that the first contention is an accurate statement of law and the second contention is an accurate application of that law to the facts of this case. We do not agree with appellants’ third contention.
2. Attorney time expended before cross-complaint was filed
Our analysis of appellants’ third contention regarding the attorney fees incurred will be divided, like the trial court’s (see part V.B.2., ante), into two distinct time periods—before and after respondents began pursuing their cross-complaint to collect the promissory notes.
With respect to the time respondents’ attorneys expended before the cross-complaint was filed, appellants’ briefs failed to reference a single place in the appellate record that shows work was done on a matter related solely to a tort claim. On our own initiative, we reviewed the monthly billing statements that respondents’ attorneys prepared from the beginning of their involvement in January 2004 through July 2004 when the cross-complaint was filed and were unable to identify an entry in those billing statements that related only to the tort claim for intentional interference with prospective economic advantage. Furthermore, the appellate record contains few documents that were produced before the cross-complaint was filed. Of those few documents, appellants have pointed to none that shows respondents’ attorneys worked on an issue related solely to a noncontractual claim.
For example, the record does not show respondents’ attorneys (1) generated a demurrer that contained one or more grounds solely related to the tort claims or (2) propounded requests for discovery that targeted information relevant to an element of the tort claims that did not overlap with the breach of contract claim.
Because appellants have failed to show respondents’ attorneys performed services related solely to the noncontractual claims, they have failed to establish that the trial court erred in declining to apportion fees incurred prior to the filing of the cross-complaint.
3. Attorney time expended after cross-complaint was filed
With respect to the award for attorney time expended after the cross-complaint was filed, we conclude that the trial court did not abuse its discretion by failing to apportion any of the attorney fees incurred in that period. The trial court rationally could have concluded that the defense against appellants’ noncontractual claims was necessary to successfully collect the promissory notes. It appears that appellants conceded liability on some of the notes but had not paid them because they felt their claims more than offset the liability represented by the promissory notes. Under these circumstances, respondents were placed in the position of defeating appellants’ three causes of action before they could collect the notes. (See Siligo v. Castellucci (1994) 21 Cal.App.4th 873, 879 [recovery of attorney fees incurred on noncontractual claims turns on “whether a defense against the noncontractual claim is necessary to succeed on the contractual claim”]; Finalco, Inc. v. Roosevelt (1991) 235 Cal.App.3d 1301 [plaintiff who prevailed on action to enforce note containing a fee clause was entitled to attorney fees for time spent defending against cross-complaint because defeat of cross-complaint was essential to recovery on promissory note]; Wagner v. Benson (1980) 101 Cal.App.3d 27 [under attorney fees provision in promissory note, trial court abused its discretion by apportioning fees between tort claims and contractual claim to collect note].)
VI. Personal Liability of Gilbert Servin for Attorney Fees
The trial court’s written ruling on the motion for attorney fees stated: “The promissory notes, however, ‘fail to unambiguously show that they were intended to bind only Cagsi or Servin,’ and so Cagsi and Servin are jointly and severally liable for the payment on those notes. (Statement of Decision at 9:6—9.)” Based on this ruling, the trial court determined that appellant Servin also was jointly and severally responsible for the attorney fees incurred after respondents began pursuing the cross-complaint to enforce the promissory notes. Accordingly, the trial court ruled that both appellants were responsible for $71,821.67 of attorney fees and that only appellant Cagsi International, Inc. was responsible for the first $24,335 of attorney fees incurred by respondents in the litigation.
Appellants contend this court should “reverse the lower court’s ruling to the extent that it determines that … Servin is personally liable for Respondents’ attorneys fees.” Appellants contend error was committed because “[t]here is no substantial evidence that indicates that … Servin was intended to be personally liable for the promissory notes.”
A. References to Gilbert Servin in Promissory
Two of the five promissory notes referenced in respondents’ cross-complaint were dated December 6, 2002, and were documented using a preprinted form titled “STRAIGHT NOTE.” The preprinted form included the following text: “for value received, [blank] promise to pay to [blank], or order, at [blank] the sum of [blank] Dollars, with interest ….”
The blanks in this portion of the preprinted form were completed as follows for the $20,000 note: “for value received, Cagsi International/Gilbert Servin, a California Corporation promise to pay to Golden Castle Development, LLC, or order, at … Fresno, CA 93704 the sum of Twenty Thousand Dollars 00/100 Dollars, with interest .…” (Italics added.) The words italicized here were typed into the preprinted form using a sans serif font that was not italicized.
The signature block on the left margin of the $20,000 note included a blank line for a handwritten signature. That line was signed by Gilbert Servin. Immediately underneath this line was typed “Cagsi International/Gilbert Servin” and the phrase “a California Corporation” was typed underneath the line containing these names. Nowhere in the body of the note or in the signature block was Servin’s title or position with the corporation stated.
The $20,000 note contained a second signature block, which was located on the right margin directly opposite of the borrower’s signature block. Immediately underneath the line containing Alex Valdez’s handwritten signature was typed “Golden Castle Development Corporation” and immediately below that line was typed “Alex P. Valdez, President.”
The $15,000 note dated December 6, 2002, was completed in the same fashion as the $20,000 note except that (1) it was made payable to “Alex P. Valdez” instead of Golden Castle Development, LLC, and (2) the two lines under the signature block on the right side that bore Alex Valdez’s handwritten signature stated “An Individual” and “Alex P. Valdez.”
B. Interpretation of the Promissory
Whether a contract is ambiguous, i.e., reasonably susceptible to more than one interpretation, is a question of law subject to an appellate court’s independent review. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.) Furthermore, the interpretation of an ambiguous written instrument is a question of law for the courts unless the interpretation turns on the credibility of extrinsic evidence, in which case the issue of credibility and interpretation should be resolved by the trier of fact. (The Lundin/Weber Co. v. Brea Oil Co., Inc. (2004) 117 Cal.App.4th 427, 433.)
Here, we conclude that the two promissory notes dated December 6, 2002, were ambiguous. We further conclude that the proper interpretation of those two promissory notes is that Cagsi International, Inc. and Gilbert Servin agreed to pay and, therefore, are jointly and severally liable for those notes.
The text in the body of the promissory notes stated that “Cagsi International/Gilbert Servin, a California Corporation promise to pay .…” The use of a virgule (/) was unusual. The virgule typed between the corporation’s name and Gilbert Servin could be interpreted to mean “and” or it could be interpreted to mean that for purposes of the note the corporation and Servin are a single entity, i.e., alter egos. In either event, the liability created would be joint and several. The alternate interpretations of the virgule are less reasonable or likely. For instance, it is unlikely that the parties intended the virgule followed by Servin’s name to mean (1) “by its officer Gilbert Servin” or (2) “but not Gilbert Servin in his individual capacity.” Furthermore, there was no reason to type Servin’s name on the blank line in the body of the preprinted form unless it was intended that he was a co-obligor.
Servin was jointly and severally liable on the two December 6, 2002, promissory notes and he was the sole borrower on the $3,000 promissory note dated December 20, 2002, and made payable to Alex Valdez. We note that the two promissory notes dated October 21, 2002—one in the principal amount of $12,500 and the other in the principal amount of $9,725—listed only one person or entity on the blank line prior to the phrase “promise to pay.” That entity was “Cagsi International, a California Corporation.” Therefore, the two October 21, 2002, promissory notes unambiguously identified the only entity or person agreeing to pay as the corporation. As a result, we conclude that Servin was not liable for attorney fees pursuant to the attorney fees provisions contained in these notes. The trial court, however, was not required to divide the attorney fees award among the five notes because it appears that the efforts to collect the notes were too intertwined to make segregation practicable. In other words, the trial court reasonably could have determined that respondents would have gone to just as much effort to collect the two notes with joint obligors as they did to collect all five notes.
Therefore, the trial court did not err in ruling that Servin also was liable for the attorney fees incurred by respondents after they filed their cross-complaint to collect the notes.
DISPOSITION
The judgment signed and filed on March 13, 2006, and the postjudgment order awarding attorney fees to respondents are affirmed. Respondents shall recover their costs on appeal.
WE CONCUR: VARTABEDIAN, Acting P.J., CORNELL, J.