Judge Holly J. Fujie, Case 19STCV34550 2023-04-24 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Defendants Jane’s Management Systems, LLC (“JMS”) and John Ko (“Ko”) (collectively, “Moving Defendants”)

This action arises out of a landlord/tenant relationship. On November 17, 2020, the Court sustained Moving Defendants’ demurrer (the “Demurrer”) to Plaintiffs’ second amended complaint (the “SAC”) without leave to amend and dismissing Moving Defendants from the action.[1] On March 13, 2023, Moving Defendants filed a motion for attorney’s fees (the “Motion”) on the grounds that they are entitled to recover reasonable attorney’s fees as the prevailing party pursuant to the lease agreement (the “Agreement”) that set forth the terms of Plaintiffs’ tenancy.

Unless authorized by either statute or agreement, attorney’s fees ordinarily are not recoverable as costs. (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 128.) The party moving for attorney’s fees has the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1320.) Civil Code section 1717, subdivision (a) provides for an award of attorney’s fees and costs to a prevailing party in any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, 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, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs. (Civ. Code § 1717, subd. (a).) The party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. (Civ. Code § 1717, subd. (b)(1).)

Because Civil Code section 1717 only applies to an action “on a contract,” the statute and its reciprocity rules do not apply to claims for fees for tort or other non-contract claims. (Hom v. Petrou (2021) 67 Cal.App.5th 459, 465.) For such claims, the question of whether to award attorney’s fees turns on the language of the contractual attorney’s fee provision, i.e., whether the party seeking fees has “prevailed” within the meaning of the provision and whether the type of claim is within the scope of the provision. (Id.) The language of the contract containing the attorney’s fee provision should be examined to determine whether nonsignatories may recover fees. (Id. at 470.) Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (Santisias v. Goodin (1998) 17 Cal.4th 599, 608.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. (Id.) The clear and explicit meaning of these provisions, interpreted in their ordinary and popular sense, unless used by the parties in a technical sense or a special meaning is given to them by usage, controls judicial interpretation. (Id.)

“If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term ‘Prevailing Party’ shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.” (Complaint, Exhibit A at 14.)

The Lease Agreement defines its “Parties” as Kim as the lessee and Defendant Cuil Investment LLC as the lessor. (SAC, Exhibit A at 1.) Magic Properties, Inc. and David Yoo are identified as brokers. (See Complaint, Exhibit A at 17.)

Moving Defendants argue that they are entitled to recover attorney’s fees as nonsignatories to the Lease Agreement because the attorney’s fee provision defines the prevailing party as including “a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense.” The Court does not agree with Moving Defendants’ expansive interpretation of this provision. In context, the “without limitation” language is reasonably interpreted to mean that any Party or Broker may be the prevailing party in an action brought by another Party or Broker, rather than any individual involved in litigation regarding the leased property. The provision is limited to particular entities that do not include Moving Defendants. Moving Defendants do not assert alternative grounds for their request for attorney’s fees. The Court therefore DENIES the Motion.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] The SAC alleged tort claims against Moving Defendants. The Court’s November 17, 2020 order provided for Moving Defendants’ dismissal, no separate order of dismissal was entered and the Court’s records do not show that Moving Defendants were in fact dismissed.