Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. CGG-99-305809
SIMONS, J.
Appellants Eric W. Lien (Lien) and Pi-Ching Yen (Yen) (collectively, Lien/Yen) appeal from the trial court’s April 5, 2006 order determining prevailing party status and awarding attorney fees and costs. The court designated respondents (collectively, Woo) as the prevailing party in the underlying contract dispute, and awarded Woo $440,000 in attorney fees and $13,224.22 in costs. Lien/Yen contend that the court erred by (1) concluding that this court’s decisions in prior appeals in this matter limited the litigation proceedings the court could consider in determining the prevailing party, and (2) separating the litigation into two phases and determining a prevailing party for each phase. We agree with Lien/Yen’s contentions, and reverse and remand to the trial court to determine the prevailing party, if any, based on the final results of the litigation as a whole and to award appropriate attorney fees.
Respondents are Chin Teh Shih (also known as Jessie Woo), as trustee for the Woo Family 2000 Trust, and Lucky United Properties Investment, Inc.
BACKGROUND
This court previously addressed the merits of this case in an unpublished decision, Woo v. Lien (Oct. 2, 2002, A094960) (Woo I). The underlying case arose from a contract dispute between Woo and Lien/Yen, who jointly purchased real property on Joy Street in San Francisco (the Property). In late 1995 and early 1996, the parties executed agreements governing the purchase of the Property. Each agreement at the heart of the parties’ dispute contains an attorney fees clause.
On August 19, 1999, Woo sued Lien/Yen for breach of contract, declaratory relief, and specific performance, and on June 22, 2000, Woo filed an amended complaint which dropped a claim for specific performance and added claims for fraud, breach of fiduciary duty, and abuse of process. On January 6, 2000, Lien/Yen filed a cross-complaint against Woo, alleging causes of action for resulting trust, declaratory relief, specific performance, breach of contract, partition, violation of Business and Professions Code section 17200, and interference with prospective economic advantage.
On March 22, 2001, following a bench trial, the court issued judgment in favor of Lien/Yen as to all of the claims in both Woo’s complaint and Lien/Yen’s cross-complaint. The court also issued an order awarding Lien/Yen costs and attorney fees pursuant to Civil Code section 1717.
Woo separately appealed the judgment and the order awarding attorney fees. On October 2, 2002, in Woo I, we affirmed the judgment in part, reversed in part, and remanded for further proceedings. We affirmed the judgment as to Woo’s first five causes of action, concluding that Woo was not entitled to damages for breach of contract, declaratory relief regarding Yen’s status, fraud, abuse of process, or breach of fiduciary duty. We likewise affirmed the trial court’s determination that prior to Woo’s purported exercise of his right of first refusal, Woo owned a 37.5 percent interest in the Property, Lien owned a 37.5 percent interest in the Property, and Yen owned a 25 percent interest in the Property. However, we reversed as to Woo’s sixth cause of action for declaratory relief, which sought a determination that Woo had effectively exercised his right of first refusal. We concluded that the trial court erred in its determination that Woo did not validly exercise his right of first refusal in December 1999, and remanded to permit Lien to introduce additional evidence to establish any affirmative defenses to Woo’s purported exercise. We also reversed the trial court’s judgment on Lien/Yen’s cross-complaint, noting that the court’s rulings on the cross-complaint, and the relief granted, “were predicated on the determination that Woo did not validly exercise his right of first refusal. Because we conclude that that determination was erroneous, we necessarily reverse the trial court’s judgment for Lien and Yen and its order that the Property be partitioned.” At the conclusion of Woo I, we stated: “Because neither side is the prevailing party in this appeal, each side shall bear its own costs on appeal.”
On October 3, 2002, in Woo v. Lien (Oct. 3, 2002, A096145 [nonpub. opn.]) (Woo II), we reversed the trial court’s award of attorney fees and costs to Lien/Yen. We stated: “In our unpublished opinion in Woo I, we reversed in part the trial court’s judgment in favor of Lien and Yen. We held that there was no prevailing party. That reversal requires us to vacate the attorney fees and costs award as well. [Citation.]” (Fn. omitted.) We again ordered the parties to bear their own costs on appeal.
On December 12, 2005, following a bench trial on Lien/Yen’s affirmative defenses to Woo’s purported exercise, the trial court concluded that Woo had effectively exercised his right of first refusal in December 1999, and issued judgment in favor of Woo on his sixth cause of action for declaratory relief and on all claims in Lien/Yen’s cross-complaint. The court carried through the judgment in favor of Lien/Yen on the first five causes of action in Woo’s complaint.
Woo and Lien/Yen filed motions seeking to be declared the prevailing party and awarded attorney fees, based on the attorney fees clauses in the parties’ agreements. The parties also sought costs. Following a March 15, 2006 hearing on fees and costs, the court issued an order on April 5, 2006, declaring Woo the prevailing party for purposes of recovering costs and attorney fees. The order stated, “In the course of the March 15, 2006 hearing, the court placed on the record its construction of the directions of the Court of Appeal made in the opinions [in Woo I and II.] The court also stated on the record its reasoning in reaching that construction. The court concluded that it had no authority to determine prevailing party status for any purpose (costs or attorney fees) for any period prior to the issuance of the remittiturs in the appeals, that is, December 26 and December 30, 2002, nor did the court have any authority to consider matters occurring prior to the remittitur in determining who was the prevailing party following entry of judgment herein on December 12, 2005. The court further stated that if, in the event it was determined that this court did have discretion to award earlier incurred costs, it exercises that discretion to decline to make any award of such earlier incurred costs in consideration of the mixed results achieved by the parties. [¶] Considering only the proceedings occurring after issuance of the remittitur and through trial of the issues directed by the Court of Appeal to be tried, which trial commenced on November 1, 2005, and excluding further all writ and any other appellate proceedings filed after issuance of the remittitur, it is [¶] 1. ORDERED THAT Woo is the prevailing party for the purposes of recovering statutory costs and attorney fees.” The court awarded Woo $440,000 in attorney fees and $13,224.22 in costs.
At the March 15, 2006 hearing, the court stated:
Lien/Yen filed this timely appeal from the order declaring Woo the prevailing party and awarding attorney fees and costs.
DISCUSSION
I. Trial Court’s Authority to Consider Preremittitur Proceedings
Lien/Yen contend the trial court erred in interpreting our decisions in Woo I and II to bar it from considering preremittitur proceedings in determining the prevailing party under Civil Code section 1717. We agree.
Woo requested that we take judicial notice of documents filed in a related matter, Lien v. Lucky (Super. Ct. S.F. City and County, 2007, No. CGC-06-454501). Lien requested that we take judicial notice of additional documents filed in this same matter. A reviewing court has discretion to take judicial notice of court records, even if not judicially noticed in the trial court. (Evid. Code, §§ 452, subd. (d), 459.) We deny the requests for judicial notice because these records are not relevant to our decision.
“ ‘On appeal this court reviews a determination of the legal basis for an award of attorney fees de novo as a question of law.’ [Citation.]” (Butler-Rupp v. Lourdeaux (2007) 154 Cal.App.4th 918, 923 (Butler-Rupp).)
With respect to contractually based fee awards, a “party prevailing on the contract” is “the party who recovers a greater net relief in the action on the contract”; the trial court may also determine that there is no party prevailing on the contract. (Civ. Code, § 1717, subd. (b)(1).) “[I]n deciding whether there is a ‘party prevailing on the contract,’ the trial court is to compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources.” (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.) “In cases where Civil Code section 1717’s definition of ‘prevailing party’ applies, the identification of the party entitled to a fee award must be determined by the final result of the litigation, i.e., after conclusion of the appeal if an appeal is taken.” (Butler-Rupp, supra, 154 Cal.App.4th at p. 928, citing Hsu, supra, 9 Cal.4th 863, 876 [the prevailing party determination is to be made only upon final resolution of the contract claims].)
Even where the appellate court, in its remand order, orders the parties to bear their own appellate costs, the trial court retains discretion to award attorney fees incurred on appeal to the eventual prevailing party without any order from the appellate court. (Mustachio v. Great Western Bank (1996) 48 Cal.App.4th 1145, 1149-1150.) In Mustachio, the court rejected the appellant’s contention that by ordering each party to bear its own costs on appeal, the Court of Appeal had also determined that the parties should bear their own attorney fees on appeal. The court explained, “ ‘[I]t is well settled a party who prevails on appeal is not entitled under a [Civil Code] section 1717 fee provision to the fees he incurs on appeal where the appellate decision does not decide who wins the lawsuit but instead contemplates further proceedings in the trial court [citations]. . . . [¶] . . . [¶] . . . The provisions allowing costs on appeal [citations], however, are entirely separate from the contractual provision for fees and do not depend on the party winning the appeal being the ultimate prevailing party.’ [Citations.]” (Mustachio, at pp. 1149-1150; accord, Butler-Rupp, supra, 154 Cal.App.4th at p. 924.)
Our remand instructions in Woo I and Woo II had no bearing on the parties’ entitlement to attorney fees under Civil Code section 1717. Our decisions recognized the general rule that the prevailing party under section 1717 can only be determined by the final result of the litigation. (Hsu, supra, 9 Cal.4th at p. 876.) Our decisions contemplated further proceedings in the trial court, and, as a consequence, the designation of a prevailing party under section 1717 could not be made until those proceedings had concluded. The trial court erred in its conclusion that our opinions had stripped it of the “authority to determine prevailing party status for any purpose (costs or attorney fees) for any period prior to the issuance of the remittiturs in the appeals, that is, December 26 and December 30, 2002, nor did the court have any authority to consider matters occurring prior to the remittitur in determining who was the prevailing party following entry of judgment herein on December 12, 2005.”
II. Trial Court’s Separation of Litigation into Pre and Postremittitur Phases
Lien/Yen contend that the trial court likewise erred in its alternative finding that “in the event it was determined that this court did have discretion to award earlier incurred costs, it exercises that discretion to decline to make any award of such earlier incurred costs in consideration of the mixed results achieved by the parties.” Lien/Yen argue that the court incorrectly divided the litigation into two separate proceedings and made a prevailing party determination as to each one, rather than considering the parties’ relative success in the litigation as a whole. Woo responds that the court’s alternative finding was not in error, because it properly examined the entire litigation and concluded that Woo was the prevailing party.
The court’s order does not support Woo’s contention. In its order determining prevailing party status, the court stated that it exercised its discretion “to decline to make any award of such earlier incurred [preremittitur] costs in consideration of the mixed results achieved by the parties,” and further noted that it considered “only the proceedings occurring after issuance of the remittitur and through trial” in determining the prevailing party. We conclude that the court essentially divided the litigation into two separate phases and determined that in the first phase, through remittitur, the litigation results were mixed and there was no prevailing party, while in the second phase, after remittitur, Woo was the prevailing party.
Our interpretation of the court’s order is supported by the trial court’s separate decision to award Woo, as prevailing party, only those fees and costs incurred in postremittitur proceedings. If the court had determined that Woo was the prevailing party based on the final outcome of the litigation as a whole, it would have awarded fees to Woo based on Woo’s overall success on his sixth cause of action for declaratory relief, which included both pre and postremittitur activity. Instead the court awarded Woo fees and costs only for activity after the remittitur. This confirms that the trial court did not determine the prevailing party based on the final outcome of the litigation, as required under Hsu, supra, 9 Cal.4th at page 876, but instead divided the litigation into two distinct phases and determined prevailing party status for each phase.
DISPOSITION
The court’s order determining prevailing party status and awarding attorney fees and costs is reversed and remanded to the trial court with instructions to determine the prevailing party, if any, based on the final results of the litigation and to award attorney fees and costs, based on the litigation as a whole. Lien/Yen are entitled to their costs on appeal.
We concur. JONES, P.J., STEVENS, J.
Retired Associate Justice of the Court of Appeal, First District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
“I conclude, after reviewing in detail . . . the opinions and remittiturs in [Woo I and II], that the scope of what I am able to do is significantly limited. Of particular interest . . . is the statement in the opinion in [Woo II, the Court of Appeal] states, under the heading ‘discussion’: . . . ‘In our unpublished opinion in [Woo I], we reversed in part the trial courts’ judgment in favor of Lien and Yen. We held that there was no prevailing party. The reversal requires us to vacate the attorney’s fees and costs [a]ward as well.’ . . . Disposition, ‘trial court’s [order] awarding Lien and Yen attorney’s fees and costs is reversed. Each side shall bear its own [costs] on appeal.’ . . . [T]he remittitur on that appeal simply says ‘see decision for cost determination.’ The directions on remand in [Woo I] state, ‘However, we remand to afford Lien the opportunity to introduce additional evidence confined to establishing any affirmative defenses he may have to Woo’s purported exercise.’
“ ‘The judgment is affirmed in part and reversed in part, and remanded for further proceedings consistent with this opinion. Because neither side is the prevailing party in this appeal, each side shall bear its own cost on appeal.’
“Now, what those opinions tell me is that the Court of Appeal has limited this court’s ability to award fees and costs to that portion of the proceedings occurring after the remittitur, which was December, I think, 26th, 2002. The directions that I just quoted in both opinions appear plainly before close [sic], any award of costs or fees incurred in the appeals. Plainly but nonetheless definitively, any cost or fees incurred in the proceedings earlier than the remittitur, December 26th, 2002, that limitation has two aspects: One, it defines the scope of which proceedings are to be considered in determining who, if anyone, prevailed.
“Secondly, it limits the costs that can be awarded to those otherwise allowable, which were incurred after the date of the remittitur and these were services rendered after the remittitur. In my view -- in other words, the Court of Appeal said, up to the point of the remittitur, there is no prevailing party. And the scope of that court’s directions to this court, tell me that I have no right to evaluate or second guess that determination for any purpose. Moreover, I think it’s eminently reasonable to conclude, as of the remittitur, there was no prevailing party. I think that’s -- that is the decision of the Court of Appeal, but it makes total sense in light of all the facts which I’m aware.
“Therefore, it’s very easy to determine that Woo is the prevailing party in that aspect of the case that I’m charged with evaluating, because that part of the case is a total victory for Woo and a defeat for Lien.”