Judge: Melvin D. Sandvig, Case: 21CHCV00605, Date: 2022-12-05 Tentative Ruling

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Case Number: 21CHCV00605    Hearing Date: December 5, 2022    Dept: F47

Dept. F-47

Date: 12/5/22

Case #21CHCV00605

MOTION FOR ATTORNEY FEES

Motion filed on 8/4/22. 

MOVING PARTY: Defendant Jan K. Tweed, individually and as Trustee of the J.K. Tweed  Revocable Trust

RESPONDING PARTY: Plaintiff Matthew Sanders

NOTICE: ok

RELIEF REQUESTED: An order awarding Defendant Jan K. Tweed, individually and as Trustee of the J.K. Tweed  Revocable Trust attorneys’ fees in the total amount of $30,117.00.

RULING: The motion is granted.    

FACTUAL SUMMARY & PROCEDURAL HISTORY

This action arises out of a loan agreement for the purchase of real property located at 17230 Osborne Street in Northridge, California (the Property).  Plaintiff Matthew Sanders (Plaintiff) and Defendant Jessica Sanders are married and are currently engaged in dissolution proceedings (LASC Case No. 20CHFL00167).  Defendant Jan K. Tweed, individually and as Trustee of the J.K. Tweed  Revocable Trust (Tweed) is Jessica Sanders’ mother. 

Tweed lent Plaintiff and Jessica Sanders money to purchase the Property as evidenced by a Promissory Note Secured by a Deed of Trust and Loan Agreement.  (FAC, Ex.A).  Plaintiff claims the loan was “not a real loan,” but rather a mechanism to avoid paying gift tax and that Tweed was really giving the Property to Plaintiff and Jessica Sanders.  Due to failure to pay interest payments due under the loan, Tweed foreclosed on the Property.  Plaintiff claims that the foreclosure was merely a method to deprive the community of the Property.  In May 2021, Plaintiff attempted to join Tweed in the family law proceedings; however, such motion was denied. 

On 8/11/21, Plaintiff filed this action against Tweed and Jessica Sanders for: (1) Breach of Fiduciary Duty, (2) Breach of Contract, (3) Promissory Fraud, (4) Breach of Implied Covenant of Good Faith and Fair Dealing, (5) Conspiracy to Commit Fraud, (6) Breach of Duty Re: Civil Code 2923.5 (only alleged against Tweed) and (7) Violation of Business & Professions Code 17200.  On 1/5/22, the Court’s tentative ruling was to sustain Tweed’s demurrer to the entire Complaint without leave to amend.  However, pursuant to Plaintiff’s counsel request at the hearing, Plaintiff was given the opportunity to amend.

On 1/31/22, Plaintiff filed the First Amended Complaint (FAC) which alleged causes of action for: (1) Breach of Fiduciary Duty and (2) Fraud against Tweed and Jessica Sanders.  On 5/10/22,   Tweed’s demurrer to the entire First Amended Complaint was sustained without leave to amend.  (See 5/10/22 Minute Order).  On 6/1/22, a judgment of dismissal was entered.  (See 6/1/22 Judgment of Dismissal).  On 6/7/22, Tweed filed and served Notice of Entry of Judgment of Dismissal.  (See 6/7/22 Notice of Entry of Judgment of Dismissal).  On 8/4/22, Tweed filed the instant motion which seeks an order awarding Defendant Jan K. Tweed, individually and as Trustee of the J.K. Tweed  Revocable Trust attorneys’ fees in the amount of $30,117.00.  Plaintiff has opposed the motion solely on the grounds that the motion is untimely and that the action does not fall within the attorney fee provision in the promissory note.  The Court finds Plaintiff’s arguments to be without merit.   

ANALYSIS

CRC 3.1702(b)(1) provides that “[a] notice of motion to claim attorney's fees for services up to and including the rendition of judgment in the trial court--including attorney's fees on an appeal before the rendition of judgment in the trial court--must be served and filed within the time for filing a notice of appeal under rules 8.104 and 8.108 in an unlimited civil case or under rules 8.822 and 8.823 in a limited civil case.”  The time to appeal a judgment of dismissal of an action following the sustaining of a demurrer without leave to amend is within 60 days of the notice of entry of the judgment or if no such notice is given, 180 days from the entry of judgment or dismissal, not the order sustaining the demurrer.  See CCP 904.1(a); CRC 3.1702; CRC 8.104; Singhania (2006) 136 CA4th 416, 425; Vibert (1966) 64 C2d 65, 67; De La Beckwith (1905) 146 Cal. 496, 500-501; Catlin Insurance Co. (2022) 73 CA5th 764, 781.

Here, notice of entry of judgment was served on 6/7/22 which is when the time to file the instant motion began to run.  The instant motion was filed and served* on 8/4/22, within the 60-day period.  (*The Court notes that the proof of service attached to the motion indicates that the motion was served on “July 4, 2022” which would have been impossible as the motion itself and supporting declaration were not signed until 8/4/22 and 8/2/22 respectively.  There seems to be no dispute that the motion was filed and served on 8/4/22 as Plaintiff’s untimeliness argument claims that the motion was required to be served on or before 7/16/22 and the 8/4/22 filing was too late.  (See Opposition, p.4:6-8)).

Based on the foregoing, the motion was timely filed.     

Where a contract provides that attorneys’ fees and costs shall be awarded to either one of the parties or to the prevailing party, then the party who is determined to be the prevailing party on the contract shall be entitled to recover reasonable attorney’s fees.  See Civil Code 1717; Hsu (1995) 9 C4th 863, 872; Walker (2012) 204 CA4th 363, 372.  Further, when a contract entitles a party to the attorney’s fees incurred in enforcing the contract, it applies to attorney’s fees incurred offensively or defensively.  See Turner (2009) 175 CA4th 974, 980.

The promissory note between Tweed, Plaintiff and Jessica Sanders includes an attorney fee provision which provides:

“Costs and Fees, Every maker and endorser of this Note and every person who assumes the obligation of this Note agrees to pay the reasonable costs of its collection including costs, expenses, and attorneys’ fees paid or incurred in connection with the collection, enforcement or sale of this Note or any part of it, whether or not suit is filed, and costs of suit and any such amount as a Court may adjudge as attorneys’ fees in any action to enforce payment of this Note or any part of it.”  (See First Amended Complaint, Ex.A p.2 ¶9).

In both the original complaint and First Amended Complaint, Plaintiff alleged that the Note was procured by fraud and that Tweed should be required to return all the funds paid on the loan.  Plaintiff challenged the validity of and sought to set aside the foreclosure actions taken to enforce the payment default on the loan.  Plaintiff sought relief in the form of “a judgment that none of the Defendants has any unencumbered legal interest in the note and deed of trust.”  (See Complaint, p.21:24-25).  Plaintiff also identified 50% of the equity of the property as his damages.  (FAC ¶19).  Because Plaintiff claimed the loan was illusory and did not really encumber the property, he believed the entire value of the property was equity.  Additionally, Plaintiff claimed Tweed breached the terms of the note and deed of trust.  Tweed’s response to Plaintiff’s claims, via the demurrers to the original and first amended complaints, was necessary to enforce Tweed’s rights under the loan.  As such, Tweeds conduct falls within the scope of the fee provision in the promissory note, regardless of the fact that that the First Amended Complaint did not include a cause of action for breach of contract.

Based on the Court’s sustaining of her demurrer to the First Amended Complaint without leave to amend and the subsequent entry of a judgment of dismissal, Tweed is the prevailing party in this action.

As noted above, the opposition does not challenge the reasonableness of the fees claimed.  (The Court notes that the notice of motion incorrectly indicates that Tweed is seeking to recover only $8,660.60 in attorney’s fees.  (See Notice of Motion, p.1:20-23).  However, the memorandum of points and authorities as well as the supporting declaration and evidence clearly indicate that the total amount of fees sought is $30,117.00.  (See Motion, p.3:9-13, p.6:11-21, p.7:14-17, p.7:19-21; Bailey Decl. ¶¶6-7 and Ex.A thereto).  Therefore, the Court finds that Plaintiff was notice of the amount of fees being sought by way of the instant motion and was not prejudiced by the mistake in the notice.).  Based on the lodestar method of calculation (reasonable number of hours spent multiplied by a reasonable hourly rate) the Court finds that the number of hours spent by Tweed’s counsel in defending against this action as well as the hours spent in relation to the instant motion were reasonable as is the hourly rate of $495.  See PCLM Group (2000) 22 C4th 1084, 1095; (Bailey Decl. and Ex.A thereto).

CONCLUSION

Based on the foregoing, Tweed is awarded $30,117.00 for the reasonable attorney's fees incurred in defending against Plaintiff’s claims.