Judge: Armen Tamzarian, Case: 19STCV30789, Date: 2024-01-10 Tentative Ruling
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Case Number: 19STCV30789 Hearing Date: January 10, 2024 Dept: 52
Edward J. Chong, Esq.’s
Motions to Be Relieved as Counsel for Defendants Thomas Kim and Global Lien
Services
Attorney Edward J. Chong,
Esq. moves to be relieved as counsel for defendants Thomas Kim and Global Lien
Services. The motions meet all requirements
under California Rules of Court, rule 3.1362.
Attorney Edward J. Chong,
Esq.’s motions to be relieved as counsel for defendants Thomas Kim and Global
Lien Services are granted. The
court will sign the proposed orders on Judicial Council form MC-053. The
orders will be effective upon filing proof of service of the signed orders on defendants
Thomas Kim and Global Lien Services.
Plaintiffs Young Sook Kim and Boo Kon
Kim’s Motion for Attorney Fees
Plaintiffs/cross-defendants Young
Sook Kim and Boo Kon Kim move for attorney fees from
defendants/cross-complainants Thomas Kim and Global Lien Services. A prevailing party may only recover
attorney fees when authorized by contract, statute, or other law. (CCP § 1033.5(a)(10).)
Plaintiffs rely on a contractual
attorney fee provision in a document titled “Promissory Note Secured by Deed of
Trust.” (Y.S. Kim Decl., Ex. 1.) The Note provides that plaintiffs Young Sook
Kim and Boo Kon Kim are the “note holder[s]” and the borrower is “Chul Heay
Shin, manager of 3832 West Sixth Street, LLC.”
(Id., p. 1.) The
borrower’s signature is dated May 24, 2017.
(Id., p. 4.) The Note
includes the following fee provision: “13.21. Attorneys’ Fees: In the event of
any litigation or arbitration arising under, with respect to, related to, or in
connection with this Note, the prevailing party shall be entitled to attorneys’
fees and court costs incurred therein.”
(Ibid.)
Defendants/cross-complainants Thomas Kim and Global Lien Services are
not parties to the Note.
The Promissory Note’s fee provision
does not apply to this action against defendants/cross-complainants Thomas Kim
and Global Lien Services. Neither side
brought a cause of action arising under the Note. Generally, a contractual fee provision applies
to a nonsignatory who “ ‘ “stands in the shoes of a party to the contract.” ’ ” (Apex LLC v. Korusfood.com (2013) 222
Cal.App.4th 1010, 1017–1018.) “In that
situation, the nonsignatory party is liable for attorney fees if it would have
been entitled to fees if it prevailed.”
(Id. at p. 1018.) “[A]
nonsignatory defendant, sued on a contract as if he were a party to it” may
recover attorney fees “when a plaintiff would clearly be entitled to attorney’s
fees should he prevail in enforcing the contractual obligation against the defendant.” (Reynolds Metals Co. v. Alperson
(1979) 25 Cal.3d 124, 128 (Reynolds).)
For example, when a plaintiff
alleges a nonsignatory defendant is liable under a contract as a signatory’s
alter ego, the defendant “would have been liable for attorney’s fees pursuant
to the fee provision” if the plaintiff prevailed. (Reynolds, supra, 25 Cal.3d at p.
129.) A defendant who prevailed on the contract
because the trial “court rejected the ‘alter ego’ theory” (id. at p.
127) is entitled to attorney fees even though it successfully defended itself by
proving it was not a party (or the alter ego of a party) who signed the
contract (id. at pp. 128-129).
Here, plaintiffs did not allege
defendants were liable under the Promissory Note. In their cross-complaint, Thomas Kim and
Global Lien Services did not allege plaintiffs Young Sook Kim and Boo Kon Kim
were liable under the Promissory Note. The
Note is ancillary to this action. This
litigation concerned a separate contract under which defendants agreed to
assist plaintiffs in conducting a nonjudicial foreclosure on the property
secured by the Note. The Note’s only
role in this action is that it supplied plaintiffs’ underlying right to
foreclose on the subject property—which was never disputed. Regardless of who prevailed, neither side would
be entitled to attorney fees under the Note.
The facts in Wilson’s Heating
& Air Conditioning v. Wells Fargo Bank (1988) 202 Cal.App.3d 1326 are
analogous. There, prevailing plaintiffs
sought attorney fees based on a “building loan agreement” with a fee
provision. (Id. at p. 1331.) But that contract “was not itself the basis
for any cause of action or defense” (ibid.) and “was not the contract
actually being enforced” (id. at pp. 1334-1335). The same reasoning applies here. Neither side sued for any cause of action nor
presented any defense arising from the Promissory Note. This action arises from a separate agreement
under which defendants assisted plaintiffs in conducting a nonjudicial
foreclosure sale of the property secured by the Promissory Note.
Plaintiffs’ reliance on Jones v.
Drain (1983) 149 Cal.App.3d 484 is misplaced. There, the court applied the reciprocity
principle discussed above: “The critical issue to be addressed in this case is
whether or not the plaintiff, Bob Jones Realty, clearly would have been
entitled to attorney’s fees had it prevailed in enforcing the contract against
the defendants Drains.” (Id. at
p. 487.) The plaintiff sued the Drains “for
breach of a written contract containing an attorney’s fees provision.” (Ibid.) After the Drains prevailed on that cause of
action, plaintiff opposed the Drains’ motion for attorney fees on the basis
that plaintiff “was not a party to or a beneficiary of the contract.” (Id. at p. 488.) The court concluded, “[A] prevailing
defendant sued for breach of contract containing an attorney’s fees provision
and having had to defend the contract cause of action, is entitled to recover
its own attorney’s fees and costs therefor, even though the trial court finds
no contract existed.” (Id. at p.
490.) Jones v. Drain would only
apply here if defendants/cross-complainants sued plaintiffs/cross-defendants
for breaching the Promissory Note. They
did not.
Plaintiffs also rely on Brusso
v. Running Springs Country Club, Inc. (1991) 228 Cal.App.3d 92. There, the defendants “were sued on contracts
containing attorney’s fees provisions and were forced to defend the contract
causes of action.” (Id. at p.
110.) The court applied Reynolds’s
equitable principle of reciprocity. The
prevailing defendants were entitled to recover fees “from the nonsignatory
plaintiffs under the mutuality theory of Civil Code section 1717” because “had
plaintiffs prevailed, they would have been entitled to attorney’s fees pursuant
to the substantial benefit doctrine.” (Id.
at p. 111.)
Plaintiffs offer no argument why,
if defendants had prevailed, they would be entitled to recovery attorney fees
under the Promissory Note’s fee provision.
The reciprocity rule does not apply because neither side brought a cause
of action on the Promissory Note. Plaintiffs
present no valid basis for recovering attorney fees against these defendants
who are not parties to the Promissory Note, were not sued for any cause of
action arising from the Note, and did not bring any cause of action arising
from the Note in their cross-complaint.
Disposition
Plaintiffs
Young Sook Kim and Boo Kon Kim’s motion for attorney fees is denied.