Judge William A. Crowfoot, Case Number: 24NNCV00949, Date: 2024-11-07 Tentative Ruling

Judge: William A. Crowfoot, Case: 24NNCV00949, Date: 2024-11-07 Tentative Ruling

This is a commercial unlawful detainer action filed by plaintiff Park Marino Convalescent Center, Inc. (“Plaintiff”). Defendant San Marino Gardens Wellness Center, LP (“Defendant”) moves for order awarding $64,522.50 in attorney fees and $42.15 in costs after the Court sustained its demurrer without leave to amend on June 10, 2024. In its order sustaining the demurrer, the Court held that Plaintiff’s notice was insufficient because it did not comply with Code of Civil Procedure section 1161(3) and inform Defendant that it had “three days’ notice, excluding Saturdays and Sundays and other judicial holidays” to cure the alleged breach or quit the premises. Instead, the notice stated that Defendant had “three court days” to perform certain purported obligations regarding the roof of the premises or quit.

Attorney fees are recoverable as costs if permitted under contract, statute, or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).) Civil Code section 1717(a) provides: “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. . . . Reasonable attorney's fees shall be fixed by the court, and shall be an element of the costs of suit.” “The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment.” (Civ. Code, § 1717, subd. (b)(1).) Other than in situations not applicable here, “the 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 for purposes of this section.” (Ibid.) Trial courts determine who is the prevailing party based on an evaluation of whether a party prevailed on a practical level. Among the factors the trial court should consider is the extent to which each party has realized its litigation objectives.

(Regency Midland Construction, Inc. v. Legendary Structures Inc. (2019) 41 Cal.App.5th 994, 1000, as modified on denial of reh'g (Nov. 26, 2019).) “If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees.” (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109.)

Defendant argues that it is entitled to attorney’s’ fees pursuant to Section 18.8 of the operative Sublease, which states:

“18.8. Attorneys’ Fees. In the event legal action is commenced arising from or related to, or to enforce or interpret, or for breach of any provision of this Lease, the prevailing party shall be entitled to recover from the losing party costs and expenses incurred, not limited to taxable costs, and reasonable attorneys’ fees incurred by the prevailing party, including those incurred in connection with any appeal, in addition to all other relief and remedies to which the prevailing party may be entitled . . . . The amount of the attorneys’ fees and expenses shall be determined by the court or arbitral tribunal.”

(Motion, Lockard Decl. ¶ 20, Ex. 1 at Ex. B.) Defendant argues it is the prevailing party in this unlawful detainer action because it remains in possession of the premises whereas Plaintiff sought eviction and failed. Defendant also seeks to recover fees for all work performed in analyzing the Sublease and the underlying sublease dispute, including work which predated the filing of the unlawful detainer complaint.

Plaintiff opposes the motion on the grounds that Defendant is not a “prevailing party” because the underlying contract claims relating to the Sublease (i.e., the dispute over which party is responsible for repairing and replacing the roof) are still being litigated in a related case, Case No. 24NNCV01000 (“Related Case”), which was filed by Defendant on April 16, 2024, one day after this unlawful detainer action was initiated. (Opp., pp. 8-9.) Plaintiff argues that since litigation of the parties’ underlying contractual obligations is ongoing, there is no prevailing party “on the contract” and hence, no basis for awarding attorney fees under Civil Code section 1717.

Plaintiff relies on Harris v. Rojas (2021) 66 Cal.App.5th 817, in which the Second Appellate District affirmed a trial court’s decision ruling that there was no prevailing party in a landlord-tenant dispute. In Harris, the tenant and landlord each filed their own action arising from the same lease and the two cases were assigned to different courtrooms because neither party filed a notice of related case. (Harris, 66 Cal.App.5th at p. 819.) The Harris court held that the trial court did not abuse its discretion when it determined that the tenant was not the “prevailing party” after considering his litigation objectives (which appeared to be purely monetary) and the fact that the jury only awarded the party $5-6,000 out of the $200,000 requested. (Id. at pp. 825-826.) Quantitative aspects aside, the court of appeal also referred to a “different analytical path” which “aggregate[d] the judgments from the two cases that should have been unified by a notice of related case” and considered the “net winner.” (Id., p. 826.) “When determining who prevailed, it is logical to combine the results from the two related but wrongly segregated cases.” (Harris, p. 827.) Plaintiff also relies on DisputeSuite.com, LLC v Scoreinc.com (2017) 2 Cal.5th 968 (“DisputeSuite”), in which the California Supreme Court held that a trial court correctly concluded that no party had prevailed on a contract where there were remaining contract claims to be resolved in another action, and where the party seeking fees had simply obtained a victory on an “interim motion” without disposing of the underlying contractual dispute. (DisputeSuite, supra, 2 Cal.5th at pp. 977, 981 [trial court properly considered that contract claims remained unresolved in Florida in determining that neither party had yet prevailed on the contract].)

On reply, Defendant argues that the dismissal of the unlawful detainer action on procedural grounds was not an “interim” victory but a definitive conclusion to Plaintiff’s attempts at eviction. Plaintiff cites to PNEC Corp. v. Meyer (2010) 190 Cal.App.4th 66 and Kandy Kiss of Cal. V. Tex-Ellent (2012) 209 Cal.App.4th 604, arguing that courts have found a prevailing party in spite of the prospect of pursuing the same claim in a different forum.

However, in accordance with DisputeSuite and Harris, the Court concludes that there is no prevailing party here for purposes of fees under Civil Code 1717. The substance of the Related Case which remains pending shows that Defendant’s ultimate litigation objectives have not been achieved. Indeed, Plaintiff’s basis for unlawful detainer was Defendant’s alleged obligation to repair or replace the roof. Even Defendant’s fee request of over $60,000 demonstrates that the scope of the litigation here is broader than this unlawful detainer and comprises of both this case and the Related Case. The fact that Defendant remains in possession at this time does not indicate that any of the substantive contractual disputes regarding the parties’ obligations regarding the roof have been definitively resolved. Therefore, Defendant’s motion for fees is DENIED. Defendant may still recover $42.15 in costs under section 1032, as the definition of “prevailing party” for purposes of costs includes “a defendant in whose factor a dismissal is entered.” (Code Civ. Proc., § 1032, subd. (a)(4).)

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.