Judge Teresa A. Beaudet, Case Number: 23STCP03468, Date: 2024-11-18 Tentative Ruling

On September 19, 2023, Petitioner Ken-Lar, LLC (“Ken-Lar”) filed a Petition to Correct Contractual Arbitration Award against Respondent Chestnut Holdings, Inc. The Petition alleges that “[t]he dispute arises from an agreement to purchase a mixed-use residential/commercial building. Buyer and Respondent Chestnut Holdings, Inc. alleges that Seller and Petitioner Ken-Lar, LLC kept a $1 million security deposit made by Respondent on the property after the deal fell through, in violation of the agreement.” (Petition, ¶ 5.) On June 14, 2023, an arbitration award was made requiring Ken-Lar to pay $1,438,218.64. (Pet., ¶ 8.) On May 3, 2024, the Court issued an Order in this action denying Ken-Lar’s petition to correct contractual arbitration award.

Chestnut Holdings, Inc. (herein “Chestnut Holdings”) now moves for an order awarding attorney fees in the amount of $26,317.00 against Ken-Lar. No opposition to the motion was filed.[1]

Chestnut Holdings states that the instant motion “is made on the grounds that the contract underlying this dispute contains an attorneys’ fee clause that entitles [Chestnut Holdings], as the prevailing party, to recover its reasonable attorneys’ fees, costs and expenses incurred in this litigation.” (Notice of Mot. at p. 1:7-9.)

Chestnut Holdings cites to Ajida Techs. v. Roos Instruments (2001) 87 Cal.App.4th 534, 552, where the Court of Appeal held that “a contract provision for recovery of attorney fees if a party is required to ‘bring suit’ is broad enough to include fees arising in arbitration proceedings…We now recognize the obverse: that a contract provision that permits the recovery of fees in arbitration is broad enough to include fees in related judicial proceedings, including an appeal from the judgment confirming the award.”

Pursuant to Code of Civil Procedure section 1032, subdivision (b), “[e]xcept as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” The Court notes that pursuant to Code of Civil Procedure section 1032, subdivision (a)(4), “prevailing party” includes “the party with a net monetary recovery, a defendant in whose favor a dismissal is 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 that defendant…” Chestnut Holdings notes that here, the Court denied Ken-Lar’s petition to correct the contractual arbitration award. Ken-Lar does not oppose the instant motion and thus does not dispute that Chestnut Holdings is the prevailing party in this action.

Chestnut Holdings argues that it and Ken-Lar “were parties to a purchase and sale agreement for the acquisition of real property (PSA),” and that “[u]nder the PSA, [Chestnut Holdings] is entitled to reimbursement of its reasonable attorney’s fees and costs incurred in successfully opposing the petition to correct the Award.” (Mot. at p. 1:3-9.)

As a threshold matter, the Court does not find that Chestnut Holdings has provided sufficient evidence demonstrating that it entered into the asserted purchase and sale agreement with Ken-Lar.

Chestnut Holdings submits the Declaration of Gregg A. Martin in support of the motion, who states that “[p]aragraph 34 of the PSA provides that as the prevailing party, Chestnut may recover ‘reasonable attorney’s fees and costs from the non-prevailing [party].’ Attached hereto as Exhibit B is a true and correct copy of the pertinent page of the PSA.” (Martin Decl., ¶ 18.)[3] But Chestnut Holdings does not provide any evidence indicating that it entered into the referenced “PSA” with Ken-Lar. Chestnut Holdings’ counsel solely refers to an unspecified “PSA” in paragraph 18 of the declaration. Moreover, Exhibit “B” to the Martin Declaration appears to be a one-page except from a “RESIDENTIAL INCOME PROPERTY PURCHASE AGREEMENT.” (Martin Decl., ¶ 18, Ex. B.) It is unclear whether this one-page excerpt is part of any purported agreement between Chestnut Holdings and Ken-Lar. (Ibid.)

In addition, paragraph 34 contained on Exhibit “B” provides, “34. ATTORNEY FEES: In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorneys fees and costs from the non-prevailing Buyer or Seller, except as provided in paragraph 31A.” (Martin Decl., ¶ 18, Ex. B.) Again, the entire agreement is not provided. Thus, it is unclear who “Buyer” or “Seller” refers to. In addition, the one-page excerpt contained in Exhibit “B” does not include the “paragraph 31A” referenced in paragraph 34. (Martin Decl., ¶ 18, Ex. B.) Thus, it is unclear what the exception set forth in paragraph 31A provides.

In light of the foregoing, the Court does not find that Chestnut Holdings has demonstrated that it is entitled to attorney’s fees against Ken-Lar here. Accordingly, the Court denies Chestnut Holdings’ request for attorney’s fees.

Based on the foregoing, Chestnut Holdings’ motion for attorney fees is denied.

[1]The Court notes that on November 8, 2024, Chestnut Holdings filed a “Response to Petitioner’s Memorandum of Points and Authorities in Opposition of Defendant’s Motion for Attorneys’ Fees.” However, the docket for this action does not show that any such opposition was filed.

[2]The Court notes that Chestnut Holdings cites to this Code section in its “response,” not in the motion.

[3]The Court notes that the first page of the “Declaration of Gregg A. Martin” states, inter alia, “I, Ira M. Steinberg, declare as follows:…” However, the declaration appears to contain a signature from Gregg A. Martin. (See Martin Decl., p. 6.) It is unclear whether the reference to “Ira M. Steinberg” was a typo.

KEN-LAR, LLC, Petitioner, vs. CHESTNUT HOLDINGS, INC., Respondent.	Case No.:	23STCP03468
	Hearing Date:	November 18, 2024
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: CLAIMANT CHESTNUT HOLDINGS OF NEW YORK, INC.’S MOTION FOR ATTORNEY FEES

Superior Court of California

County of Los Angeles

Department 50