Judge: William D. Claster, Case: 17-00939294, Date: 2023-07-14 Tentative Ruling
Defendant Orange Coast Title Company of Southern California's Notice of Motion and Motion for Attorney Fees and Additional Costs ROA 1490
Defendant Orange Coast Title Company of Southern California’s (“OCTC”) motion for attorney’s fees is DENIED. Plaintiff ARC Retail 1, LLC’s (“ARC”) request to tax OCTC’s costs, made in its opposition memorandum, is DENIED.
I. Entitlement to Fees
OCTC is the prevailing party in this matter, having won its motion for summary judgment of ARC’s claims. It now seeks to recover its attorneys’ fees. Pursuant to Civil Code § 1717, it argues it may recover fees under section 18 of the underlying purchase contract between JVS and BTC. (Goldberg Decl., Ex. B.) That section provides, in full:
18. Attorneys’ Fees.
If any Party or Broker brings an action or proceeding (including arbitration) involving the Property 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. The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred.
As the Court reads the fee clause, it provides that (1) if a Party or Broker brings suit, then (2) the Prevailing Party in that suit may recover its fees. “Party,” “Broker,” and “Prevailing Party” are all defined terms.
Section 1.1 of the agreement provides in relevant part: “JVS Development, LLC (‘Buyer’) hereby offers to purchase the real property, hereinafter described, from the owner thereof (‘Seller’) (collectively, the ‘Parties’ or individually, a ‘Party’) . . . .” That is, the Buyer is JVS, the Seller is BTC, and the Parties are JVS and BTC. Section 7.1 of the agreement defines the “Brokers” as Newmark Grubb Knight Frank (“Seller’s Broker”) and Advance Estate Realty (“Buyer’s Broker”).
As ARC argues in opposition, OCTC is neither a “Party” nor a “Broker.” It also argues OCTC is not a “Prevailing Party” as defined. But as OCTC points out in reply, a Prevailing Party is “without limitation, a Party or Broker.” That is, according to OCTC, one need not be a Party or Broker to be a Prevailing Party. This interpretation is questionable in light of the subsequent language of the paragraph focusing only on the rights of the parties/brokers to the agreement, i.e., the statement that the “abandonment by the other Party or Broker of its claim or defense” is also a basis for a fee award. (Emphasis added)
OCTC reasons that because (1) a Prevailing Party need not be a Party or a Broker and (2) it indisputably prevailed, it is covered by the fee clause. The Court disagrees. In addition to the above-referenced apparent contradiction, this interpretation effectively reads the first sentence out of the clause. The attorney fees clause applies “[i]f any Party or Broker brings an action or proceeding . . . involving the Property.” This action was not brought by a Party or Broker. It was brought by ARC, a successor to a lender, against OCTC, an escrow or sub-escrow entity. As a result, the fee clause of the BTC-JVS contract does not apply, and OCTC cannot recover its fees. Accordingly, the motion is denied.
II. Attempt to Tax Costs
At the end of its opposition, ARC argues OCTC’s memorandum of costs includes about $20,000 in expert witness fees that are not recoverable by statute.
OCTC correctly responds that this is not the way to contest items on a memorandum of costs. Per CRC 3.1700, costs must be contested by noticed motion. The last paragraph of an opposition to an attorney’s fees motion is not a noticed motion as required by the Rules of Court, so the request to tax expert fees is denied.