Judge: Joseph Lipner, Case: 23STCV8232, Date: 2024-02-29 Tentative Ruling

Case Number: 23STCV8232    Hearing Date: February 29, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant New Era Escrow (“New Era”) moves to strike the demand for attorney’s fees in the Complaint filed by Plaintiff Rosalie Genus (“Plaintiff”).

The Court GRANTS New Era’s motion WITH LEAVE TO AMEND so that Plaintiff may demand attorney’s fees from the remaining defendants.  Plaintiff may amend within 20 days to assert an attorney’s fee claim against defendants other than New Era.

Background

This is a real property dispute. The following facts are taken from the allegations of the Complaint.

Plaintiff and Defendant Janet Haywood (“Haywood”) are sisters. Haywood owned the real property located at 10427 S. Denker Avenue, Los Angeles, California 90047 (the “Property”).

In 2007, Plaintiff moved into the Property as a tenant.

On January 27, Haywood formed the 8424 Western Plaza, LLC (“Western Plaza”). On April 7, 2017, Haywood transferred title to the Property to the Western Plaza.

On January 25, 2018, Plaintiff and Western Plaza entered a written agreement whereby Plaintiff would purchase the property from Western Plaza for $325,000.00. Plaintiff complied with the terms of the purchase agreement. Western Plaza, acting through Haywood, refused to sign the necessary documents to close escrow and thus transfer the property.

What followed was a series of lawsuits resulting in stipulated judgements, each of which provided that Defendants Haywood and Western Plaza would transfer the property to Plaintiff, and each of which Defendants Haywood and Western Plaza violated by refusing to sign the transfer documents.

Most recently, in Los Angeles Superior Court Case No. 19STCV39523, the Court ordered on November 29, 2022 that the court clerk would be appointed as an elisor to execute sale documents on behalf of Haywood and Western Plaza. Plaintiff brought an ex parte application on May 18, 2023 for an order directing the court clerk to sign the escrow instructions for the transfer (the “Escrow Instructions”), which the Court granted. The court clerk signed the Escrow Instructions.

Plaintiff provided the signed Escrow Instructions to the escrow officer, New Era.

Haywood and the Western Plaza contacted New Era and demanded that New Era refrain from closing escrow to allow Haywood and Western Plaza to appeal the judgment in Case No. 19STCV39523. The Escrow Instructions do not provide a grace period for appeal, nor do they permit a party to unilaterally cancel the agreement. Haywood and Western Plaza have not posted bond.

New Era refused to comply with the Escrow Instructions and close escrow.

Plaintiff filed this action on November 16, 2023, joining New Era as a defendant in addition to Western Plaza and Haywood, because New Era was not a party to the previous actions. Plaintiff seeks damages from Haywood and Western Plaza, and an order compelling New Era to comply with the Escrow Instructions and close escrow.

Request for Judicial Notice

The Court grants Defendant’s request for judicial notice.

Legal Standard

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

Discussion

Attorney’s fees cannot be awarded in a civil lawsuit unless authorized by (A) contract, (B) statute, or (C) other law. (Code Civ. Proc., § 1033.5.)

New Era seeks to strike Plaintiff’s demand for attorney’s fees.

Plaintiff argues that the Escrow Instructions provide that the prevailing party will be awarded attorney’s fees in any litigation to enforce the Escrow Instructions.

          New Era argues that it is not a party to the Escrow Instructions, and is therefore not subject to the attorney’s fees clause.

          The Escrow Instructions state, in relevant part:

IN THE EVENT ANY PARTY IS REQUIRED TO BRING OR DEFEND ANY ACTION AT LAW OR IN EQUITY AGAINST ANY OTHER PARTY TO ENFORCE ANY OF THE TERMS HEREOF, THE LOSING PARTY HEREBY AGREES TO PAY THE PREVAILING PARTY REASONABLE ATTORNEY’S FEES AS MAY BE FIXED BY THE COURT.

(Complaint, Ex. B at p. 8, ¶ 8.)

          The terms of the Escrow Instructions therefore limit awards of attorney’s fees to actions between parties to the instructions. Although New Era prepared the Escrow Instructions on its letterhead and, as the escrow holder, is bound by the instructions, that does not make it a party to the instructions. New Era is not a signatory to the Escrow Instructions, but the agent of the parties bound to carry them out.  Thus, the terms of paragraph 8 do not apply to New Era.

          However, Plaintiff’s demand for attorney’s fees against the other defendants still appears to be appropriate. Thus, the Court grants New Era’s motion to strike, but grants Plaintiff leave to amend so that she may demand attorney’s fees from the other defendants.