Judge: Donald F. Gaffney, Case: Alhanjour v. Cue, Date: 2022-12-21 Tentative Ruling
TENTATIVE RULING:
For the reasons set forth below, Defendant’s Motion to Vacate/Set Aside Judgment pursuant to CCP §663 is DENIED.
A. Legal Standard to Vacate under Section 663:
Code of Civil Procedure section 663 states:
A judgment or decree, when based upon a decision by the court, or the special verdict of a jury, may, upon motion of the party aggrieved, be set aside and vacated by the same court, and another and different judgment entered, for either of the following causes, materially affecting the substantial rights of the party and entitling the party to a different judgment:
1. Incorrect or erroneous legal basis for the decision, not consistent with or not supported by the facts; and in such case when the judgment is set aside, the statement of decision shall be amended and corrected.
2. A judgment or decree not consistent with or not supported by the special verdict.
(Code Civ. Proc., § 663.) The procedural notice requirements for a motion to vacate are set forth in Code of Civil Procedure § 663a.
“Code of Civil Procedure section 663 permits the court to vacate its judgment if it determines the judgment is ‘[i]ncorrect or erroneous’ as a matter of law or inconsistent with or unsupported by the facts.” (Glen Hill Farm, LLC v. California Horse Racing Bd. (2010) 189 Cal.App.4th 1296, 1302 (Glen Hill Farm).) “‘It is designed to enable speedy rectification of a judgment rendered upon erroneous application of the law to facts which have been found by the court or jury or which are otherwise uncontroverted.’ [Citations.]” (Garibotti v. Hinkle (2015) 243 Cal.App.4th 470, 476-477 (Garibotti).) “The motion to vacate under section 663 is speedier and less expensive than an appeal and is distinguished from a motion for a new trial, to be used when, e.g., the evidence is insufficient to support the findings or verdict.” (Simac Design, Inc. v. Alciati (1979) 92 Cal.App.3d 146, 153.)
“‘[A] motion to vacate lies only where a “different judgment” is compelled by the facts found. [Citation.] A motion to vacate under section 663 may only be brought when “the trial judge draws an incorrect legal conclusion or renders an erroneous judgment upon the facts found by it to exist.”’ [Citation.]” (Garibotti, supra, 243 Cal.App.4th at p. 477; Glen Hill Farm, supra, 189 Cal.App.4th at p. 1302; see County of Alameda v. Carleson (1971) 5 Cal.3d 730, 738 (County of Alameda).)
“In ruling on a motion to vacate the judgment the court cannot ‘in any way change any finding of fact.”’ [Citation.]” (Glen Hill Farm, supra, 189 Cal.App.4th at p. 1302; Garibotti, supra, 243 Cal.App.4th at p. 477.)
Here, Defendant’s motion primarily argues that the Court committed an error of law by finding that there is no prevailing party. Defendant argues that he is the prevailing party under both section 1032 (for costs) and 1717 (for attorneys’ fees and costs on a contract). As such, the court sets forth the different “prevailing party” standards under section 1032 and 1717 below.
B. Prevailing Party under Section 1032
Code of Civil Procedure Section 1032, subdivision (b), provides, “Except as otherwise provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Attorney fees are recoverable as costs under this section when authorized by contract (§ 1033.5, subd. (10)(A)) or by statute (§ 1033.5, subd. (10)(B)).
Section 1032, subdivision (a)(4), defines “prevailing party” to include four different circumstances:
· the party with a net monetary recovery
· a defendant in whose favor a dismissal has been entered
· a defendant “where neither plaintiff nor defendant obtains any relief” and
· a defendant as against those plaintiffs who do not recover any relief against the defendant.
(Code Civ. Proc. § 1032 (a)(4).)
Under Section 1032, if a party falls within one of the statutory definitions of prevailing party, a court is without discretion to declare no prevailing party for purposes of costs. See Charton v. Harkey (2016) 247 Cal.App.4th 730, 737-738 [“The trial court has no discretion to deny prevailing party status to a litigant who falls within one of the four statutory categories in the first sentence of [Section 1032(a)].”] However, in any other situations other than these four categories, the court has discretion to determine the “prevailing party,” may allow costs or not, and/or may apportion costs between the parties. (Code of Civ. Proc. 1032(a)(4).)
C. Prevailing Party under Section 1717
Civil Code section 1717, subdivision (b)(1), provides, “[T]he party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract.” (See Hsu v. Abbara (1995) 9 Cal.4th 863, 876 [prevailing party determination is to be made by comparing the parties’ relative degrees of success “upon final resolution of the contract claims”].) “‘[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.’” (DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 974; accord, Hsu v. Abbara, supra, 9 Cal.4th at p. 876.) Section 1717 grants the trial court broad discretion to determine if there was a prevailing party or not. (Blue Mountain Enterprises, LLC v. Owen (2022) 74 Cal.App.5th 537, 558; see also Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1152 [section 1717 contains an express provision allowing the court to find that no party prevailed.])
Even when no party receives a net recovery, a party may prevail under section 1717. (Sears, supra, 60 Cal. App. 4th at p. 1152.) “[W]here there is evidence of other success, such as in this case by collection of a portion of the funds at issue, whether by settlement or through a collateral action, the court is entitled to take such recovery into account when calculating which side prevailed.” (Id. at p. 1156.)
D. The Interplay between Prevailing Party under Section 1032 and 1717
“‘[C]ourts have consistently held the prevailing party for the award of costs under [Code of Civil Procedure] section 1032 is not necessarily the prevailing party for the award of attorney's fees in contract actions under [Civil Code] section 1717.’” (Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 438.) Although a necessary predicate for an award of attorney fees as costs, the finding a defendant is the prevailing party under section 1032 is not determinative of whether the defendant is also the prevailing party entitled to recover reasonable attorney fees under section 1717. (Zintel Holdings, at p. 438; accord, David S. Karton, A Law Corp. v. Dougherty (2014) 231 Cal.App.4th 600, 607; see DeSaulles v. Community Hospital of Monterey Peninsula (2016) 62 Cal.4th 1140, 1147 [“[t]he definition of ‘prevailing party’ in section 1032 is particular to that statute and does not necessarily apply to attorney fee statutes or other statutes that use the prevailing party concept”].) As one court held: “We emphatically reject the contention that the prevailing party for the award of costs under section 1032 is necessarily the prevailing party for the award of attorneys' fees. Civil Code section 1717 declares the party recovering a greater relief in the action on the contract is the prevailing party. But it further provides the trial court may ‘determine that there is no party prevailing on the contract for purposes of [section 1717].’” (McLarand Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456.)
“The most obvious difference between the statutes is section 1717 's option of finding no party prevailed in the action” whereas a party is entitled to costs as a matter of right if it falls under one of the four definitions of “prevailing party” under section 1032(a)(4). (Sears, supra, 60 Cal. App. 4th at p. 1156.)
Under the above legal standards, the court finds that the court did not make a legal error in finding that there was no prevailing party, either under section 1032 or 1717.
E. Defendant is not Prevailing Party under Section 1032
Under section 1032, Defendant argues that it is entitled to costs as a matter of right because it falls under one of the four circumstances of section 1032(a)(4)—namely a defendant “where neither plaintiff nor defendant obtains any relief.” According to Defendant, because neither party obtained any relief, the court was without discretion to deny Defendant costs under 1032. Defendant cites to Building Maintenance Service Co. v. AIL Systems, Inc. (1997) 55 Cal.App.4th 1014 for the proposition that “a defendant who defeats the plaintiff's claim on a complaint, but who recovers nothing on his cross-complaint against the plaintiff, is nevertheless a prevailing party entitled to its costs.” (Id. at 1025.) Building Maintenance explains that, because plaintiff is the one who initiated the lawsuit, a defendant’s filing a cross-complaint is a response to that lawsuit such that even if the defendant does not prevail on the cross-complaint, it is still the prevailing party if it defeats plaintiff’s claims. (Ibid.) The court held that the phrase ‘“defendant where neither plaintiff nor defendant obtains any relief' compels the conclusion that a defendant in this context does not include the plaintiff as a cross-defendant.” (Id. at 1026.)
In this case, however, Plaintiff did, in fact, prevail on one of his causes of action—the first cause of action for reformation. This is not a situation where Defendant defeated all of Plaintiff’s claims and both parties received nothing; instead, Plaintiff received reformation of the contract, as it requested. Defendant argues that this is hardly a win given that the parties essentially stipulated to reformation. However, even if Plaintiff were to gain any partial success whether by settlement agreement or otherwise, “the court is entitled to take such recovery into account when calculating which side prevailed.” (Sears, supra, 60 Cal. App. 4th at pp. 1155-1156.) Here, the facts do not squarely fall under “defendant where neither plaintiff nor defendant obtains any relief”, as plaintiff did obtain some relief. As such, Defendant is not entitled to costs as a matter of right under section 1032(a)(4).
Thus, this case is an “other situation” than the four categories set forth in section 1032(a)(4) such that this court has discretion to determine that there is no prevailing party and not allow costs. Taking the totality of the record into account, the court uses such discretion to disallow costs to either party.
F. Defendant is not Prevailing Party under Section 1717
Similarly, the court finds that it did not make a legal error in finding that there is no prevailing party under CCP Section 1717. While Defendant argues that only Plaintiff’s second and third causes of action are “on the contract,” as the court has found on the record, all of Plaintiff’s and Defendant’s claims relate and arise from the same contracts. As such, the court finds that all claims are “on the contract.” After balancing and weighing the outcomes of both parties on each of their competing claims related to the leases at issue, the court, again, uses the discretion that it is expressly provided under 1717 to find that there is no prevailing party.
G. The Record Establishes No Evidence or Proof of Damages.
Finally, having held phase 1 of trial on liability, and the parties’ having elected not to proceed with phase 2 on damages, the court finds that it did not make a legal error in finding that defendant did not prove his damages for his fraud in the inducement claim. As the record stands, there is no evidence whatsoever of defendant’s damages. Defendant points to no such evidence.
For these reasons, Defendant’s motion is DENIED.