Emery v. Marchick CA2/1 ( 2022 )

Filed 5/23/22 Emery v. Marchick CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
PATRICIA ANN EMERY, as B307999
Trustee, etc.,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. BC681619)
v.
JENNY MARCHICK,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los
Angeles County, Christopher K. Lui, Judge. Affirmed.
Summa and Megan A. Maitia for Defendant and Appellant.
June Babiracki Barlow, Neil Kalin and Jenny Li for
California Association of Realtors as Amicus Curiae on behalf of
Defendant and Appellant.
Ervin Cohen & Jessup, Michael C. Lieb and Andrew J.
Peterson for Plaintiff and Respondent.
_______________________
Defendant Jenny Marchick appeals from an order awarding
attorney fees to plaintiff Patricia Ann Emery as Trustee of the
Patricia Ann Emery and John H. Snyder IV Trust (Emery)
following a bench trial concerning a lot line dispute.
In 2012, Marchick offered to purchase a residential
property from Emery using a California Association of Realtors’
(CAR) Residential Purchase Agreement form (Purchase
Agreement). The Purchase Agreement’s attorney fee clause
required the parties to attempt to mediate disputes arising out of
the agreement or any resulting transaction before filing a
lawsuit. As part of her counter offer, Emery required Marchick to
agree to cooperate in effectuating a lot line adjustment
(Cooperation Agreement). The Cooperation Agreement included
a different attorney fees clause, which did not require mediation
before filing suit. Marchick agreed, the parties executed the
documents, and escrow closed on November 2, 2012.
Marchick failed to abide by the Cooperation Agreement,
and following unsuccessful negotiations between the parties’
counsel and bilateral threats to sue, Emery filed a complaint for
breach of the Cooperation Agreement against Marchick. The
trial court found Marchick breached the Cooperation Agreement,
entered judgment in favor of Emery in the amount of $285,000,
and awarded $196,231.50 in attorney fees to Emery as the
prevailing party.
Marchick’s sole contention on appeal is that the trial court
erred in awarding attorney fees to Emery because Emery failed to
pursue mediation before filing her complaint. Under principles of
contract interpretation, we conclude the fee provision under the
Cooperation Agreement, and not the Purchase Agreement,
applied to the parties’ dispute. The Cooperation Agreement was
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the later-negotiated document, drafted by the parties.
Notwithstanding the fee clause in the Purchase Agreement, the
parties chose to include another attorney fee clause in the
Cooperation Agreement. In construing the agreements, we
conclude the Cooperation Agreement’s fee clause supersedes that
of the Purchase Agreement. Thus, the trial court did not err in
awarding attorney fees to Emery. We affirm.
BACKGROUND
A. Factual Summary
1. The Agreements
In September 2012, Marchick viewed a residential property
for sale on Berkley Avenue in Los Angeles, California. Emery’s
realtor explained to Marchick that Emery also owned and resided
at an abutting property on Berkley Circle and that Emery used a
portion of the Berkley Avenue property as an extension of her
backyard (the Disputed Parcel). Emery intended to keep the
Disputed Parcel following any sale of the Berkley Avenue
property.
On September 24, 2012, Marchick used a CAR Purchase
Agreement form to extend an offer to buy the Berkley Avenue
property for $550,000. Paragraph 21 of the form provides for
attorney fees: “In any action, proceeding, or arbitration between
[b]uyer and [s]eller arising out of this [a]greement, the prevailing
[b]uyer or [s]eller shall be entitled to reasonable attorney fees
and costs from the non-prevailing [b]uyer or [s]eller, except as
provided in paragraph 26A.”
Paragraph 26 of the form governs disputes between the
parties and states in relevant part in subparagraph A:
“MEDIATION: Buyer and [s]eller agree to mediate any dispute
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or claim arising between them out of this [a]greement, or any
resulting transaction, before resorting to arbitration or court
action. . . . If, for any dispute or claim to which this paragraph
applies, any party (i) commences an action without first
attempting to resolve the matter through mediation, or (ii) before
commencement of an action, refuses to mediate after a request
has been made, then that party shall not be entitled to recover
attorney fees, even if they would otherwise be available to that
party in any such action. THIS MEDIATION PROVISION
APPLIES WHETHER OR NOT THE ARBITRATION
PROVISION IS INITIALED.” Paragraph 26 further states that
any dispute “not settled through mediation shall be decided by a
neutral, binding arbitration.”
On September 25, 2012, Emery counter-offered, using CAR
counter offer and addendum forms. The counter offer stated “The
terms and conditions of the [Purchase Agreement] are accepted
subject to the following: [¶] . . . [¶] [s]ee Addendum #1.”1
Addendum #1 listed six additional terms, including raising the
purchase price to $560,000 and requiring Marchick “to sign [the]
attached Cooperation Agreement.”
The Cooperation Agreement stated, “As a condition
precedent to the sale of [the Berkley Avenue] property, [Emery]
requires that the [b]uyer(s) agree(s) to cooperate, in all respects,
with the lot line adjustment that was or will be submitted to the
City of Los Angeles . . . .” “Buyer(s) agree(s) that, as part of the
agreement to purchase the [Berkley Avenue] property . . . to
1
The counter offer also stated, “The following attached
addenda are incorporated into this [c]ounter [o]ffer: . . .
Cooperation Agreement.”
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cooperate in good faith, in all respects, with the [l]ot [l]ine
[a]djustment. Buyer(s) also agree(s) that the purchase price of
this property reflects the consideration contemplated by the
[p]arties relating to this [a]greement.”
The Cooperation Agreement included an attorney fees
provision: “Attorney’s Fees and Costs. In the event a party is
required to enforce any of the rights granted under this
[a]greement, the other party shall be entitled to recover from the
breaching party the reasonable attorneys’ fees, costs and
expenses incurred as a result of such breach.”
The Cooperation Agreement also provided that it was
“jointly drafted by the [p]arties,” and included an integration
clause, stating, “[t]his [a]greement and other documents referred
to herein or delivered pursuant hereto contain and constitute the
entire agreement of the parties with respect to the transactions
contemplated hereby and supersede all prior negotiations,
commitments, agreements and understandings among them with
respect thereto.”
The parties executed the Purchase Agreement, counter
offer, addendum, and Cooperation Agreement.2 On November 2,
2012, escrow closed.
2 Marchick signed the Purchase Agreement on
September 24, 2012. Emery signed the counter offer and
addendum on September 26, 2012. Emery signed the
Cooperation Agreement on September 27, 2012, but the
Cooperation Agreement states that it was executed as of the
effective date, September 26, 2012. Marchick signed the counter
offer and addendum on September 28, 2012. Her signature on
the Cooperation Agreement is undated, but as noted previously,
is deemed to have been signed as of the effective date. Emery
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2. The Parties Are Unable to Negotiate a Resolution to
Their Dispute
Marchick failed to cooperate fully in effectuating the lot
line adjustment. As the trial court observed in its statement of
decision, “Marchick refuse[d] to execute documents [necessary] to
convey the Disputed Parcel back to Emery.” By November 2016,
both parties had retained counsel and unsuccessfully attempted
to negotiate a resolution to the dispute. On September 17, 2017,
Emery’s counsel stated by letter to Marchick’s counsel that the
dispute could not proceed beyond the five-year mark and that the
parties therefore needed to reach a resolution within the next 30
days.
Five weeks later, Emery’s counsel sent a proposed
settlement agreement to Marchick’s counsel and suggested the
parties execute a tolling agreement. On October 25, 2017,
Marchick rejected the settlement and tolling agreements and
threatened to sue to force Emery to remove a deck from the
Disputed Parcel. Marchick’s counsel offered to accept service of
Emery’s complaint. Neither party referred to the need or desire
to mediate prior to the initiation of litigation.
B. Procedural History
1. The Complaint, Motion to Compel Arbitration, and
Trial
On October 31, 2017, Emery filed a complaint, alleging
Marchick breached the Cooperation Agreement and seeking
specific performance or, in the alternative, damages. Emery also
named Marchick’s mortgage lenders, Prospect Mortgage, LLC
signed the Purchase Agreement on October 1, 2012, “subject to
attached counter offer.”
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(first lienholder)3 and Bank of America, N.A. (second lienholder)
(the Banks), as defendants “solely to provide [them] notice of a
proceeding as to real property which . . . they hold one or more
security interests.”
Marchick moved to compel arbitration. Emery opposed
arbitration on the basis that the Banks were not signatories to
the Purchase Agreement, and thus, not required to arbitrate.
After learning that the Banks opposed arbitration, the court
denied Marchick’s motion.
Following a five-day bench trial, the trial court found
Marchick breached the Cooperation Agreement. However, it
found specific performance was inappropriate and instead
awarded $285,000 in damages to Emery, subject to set off for
unreimbursed property taxes through the date of judgment. The
court retained jurisdiction to determine post-trial motions,
including Emery’s motion for attorney fees, and entered
judgment on March 16, 2020.4
2. Attorney Fees
On April 6, 2020, Emery moved for $204,386.50 in attorney
fees as the prevailing party against Marchick. Finding the
attorney fee clause in the Cooperation Agreement governed, the
trial court rejected Marchick’s argument that Emery forfeited
3
Prospect Mortgage assigned its loan to Nationstar
Mortgage, LLC.
4 The court found in Emery’s favor on all causes of action
alleged in Marchick’s cross-complaint, including declaratory
relief, trespass, and injunctive relief.
On May 14, 2020, Marchick appealed the judgment. (See
Emery v. Marchick, B305976.) Following a settlement between
the parties, that appeal was dismissed on November 30, 2021.
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such fees when she failed to attempt to mediate the dispute. It
granted attorney fees to Emery in the reduced amount of
$196,231.50.
Marchick timely appealed.
DISCUSSION
“ ‘The fundamental goal of contractual interpretation is to
give effect to the mutual intention of the parties.’ [Citations.]
‘Such intent is to be inferred, if possible, solely from the written
provisions of the contract.’ [Citations.] ‘If contractual language
is clear and explicit, it governs.’ [Citation.]” (State of California
v. Continental Ins. Co. (2012) 55 Cal.4th 186, 195.) In
ascertaining the intention of the parties, courts apply rules of
contract interpretation. (See Civ. Code, § 1637.)
“The ‘interpretation of a contract is subject to de novo
review where the interpretation does not turn on the credibility of
extrinsic evidence. . . .’ [Citations.]” (Brisbane Lodging, L.P. v.
Webcor Builders, Inc. (2013) 216 Cal.App.4th 1249, 1256.)
Additionally, we review the determination of the legal basis for
an award of attorney fees de novo as a question of law.
(Blackburn v. Charnley (2004) 117 Cal.App.4th 758, 767.)
Whether Emery is entitled to attorney fees depends on
which attorney fee clause applies to the parties’ lot line dispute.
Based on principles of contract interpretation, we conclude the
clause stated in the Cooperation Agreement prevails.
We begin with the principle that a counter offer supplants
the terms of the offer, and to the extent the parties’ final
agreement consists of terms from both the offer and counter offer,
inconsistencies are generally resolved in favor of the later-
negotiated terms. (See Civ. Code, § 1585 [“An acceptance must
be absolute and unqualified . . . [and a] qualified acceptance is a
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new proposal”]; Frangipani v. Boecker (1998) 64 Cal.App.4th 860,
863 [“Where there is an inconsistency between two agreements
both of which are executed by all of the parties, the later contract
supersedes the former”].)
Additionally, to the extent they are inconsistent, terms
negotiated by the parties prevail over form, boilerplate terms.
(See Civ. Code, § 1651 [“parts which are purely original control
those which are copied from a form”); Rest.2d Contracts, § 203(d)
[“separately negotiated or added terms are given greater weight
than standardized terms or other terms not separately
negotiated”]; 11 Williston on Contracts (4th ed. 2021) § 32:13
[observing added terms “ ‘represent an express manifestation of
the parties’ actual intentions and take precedence over any
inconsistent provisions in the printed form’ ”].)
Further, courts interpret contracts to give effect to every
part and avoid constructions that render terms surplusage. (See
Civ. Code, § 1641 [providing contracts should be interpreted “so
as to give effect to every part”]; Code Civ. Proc., § 1858 [“In the
construction of a[n] . . . instrument, the office of the [j]udge is
simply to ascertain and declare what is in terms or in substance
contained therein, not to insert what has been omitted, or to omit
what has been inserted; and where there are several provisions or
particulars, such a construction is, if possible, to be adopted as
will give effect to all” (italics added)]; Rice v. Downs (2016) 248
Cal.App.4th 175, 186 [“An interpretation that leaves part of a
contract as surplusage is to be avoided”].)
Applying these principles, it follows that the Cooperation
Agreement’s attorney fee clause superseded the Purchase
Agreement’s fee clause for purposes of the lot line dispute. The
Cooperation Agreement is the later-negotiated document, and
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Emery’s counter offer evidences her intention that it supplant
any inconsistent terms in the offer: “The terms and conditions of
the above referenced document [Purchase Agreement] are
accepted subject to . . . [¶] . . . [¶] . . . Addendum #1,” which, in
turn, referred to the Cooperation Agreement.5 (Italics added.)
Additionally, the Purchase Agreement is an eight-page form not
drafted by either party, but by CAR, and the attorney fee clause
therein is a standard portion of that form. In contrast, the
Cooperation Agreement is a unique document, drafted by the
parties. It is a reasonable inference that the parties’ actual
intention is better reflected in their negotiated agreement than in
a pre-printed form. (See 11 Williston on Contracts, supra,
§ 32:13.) Moreover, in drafting the Cooperation Agreement, the
parties chose to include an attorney fee clause notwithstanding
that the Purchase Agreement already contained one. While
paragraph 21 of the Purchase Agreement makes recovery of
attorney fees contingent upon compliance with paragraph 26A,
the attorney fees clause in the Cooperation Agreement does not.
We must endeavor to interpret the Cooperation Agreement’s fee
clause to give it some effect. Yet, Marchick’s interpretation in
which the Purchase Agreement’s attorney fee clause governs
impermissibly renders the Cooperation Agreement’s fee clause
mere surplusage. (See Rice v. Downs, supra, 248 Cal.App.4th at
5Marchick argues that because Emery signed the Purchase
Agreement last out of all the executed documents, it is the later
document. This characterization places form above substance.
The counter offer, including the Cooperation Agreement, was
made in the usual course, i.e., after Marchick made her offer via
the Purchase Agreement, and thus, is the later-negotiated
instrument.
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p. 186; see also Civ. Code, § 1641; Code Civ. Proc., § 1858.)
Accordingly, we conclude the fee clause in the Cooperation
Agreement prevails.6
Marchick argues the agreements’ attorney fees provisions
are not inconsistent and that the “resulting transaction”
language in the Purchase Agreement is sufficiently broad to
include the lot line adjustment. However, the attorney fee
clauses are not consistent in the critical respect that paragraph
21 of the Purchase Agreement requires mediation pursuant to
paragraph 26A before fees may be awarded, and the Cooperation
Agreement does not, simply allowing the prevailing party to
recover attorney fees relating to “enforce[ing] any of the rights
granted under this [a]greement.” Further, as explained above, to
interpret the Purchase Agreement’s clause to control the lot line
dispute (under the resulting transaction language or otherwise)
reduces the Cooperation Agreement’s clause to surplusage. We
decline to adopt such an interpretation.
Marchick contends Emery is judicially estopped from
arguing the Purchase Agreement does not control because she
“acknowledged that the Purchase[ ] Agreement’s [d]ispute
[r]esolution clause[, paragraph 26,] applied to the [lot line]
dispute when the parties litigated Marchick’s motion to compel
arbitration.” Yet, Emery did not admit the arbitration provision
was applicable; rather, she argued that because the Banks could
not be compelled to arbitration, the court should deny Marchick’s
motion to compel. Such a position is not “totally inconsistent”
6Our conclusion is further supported by Marchick’s
counsel’s threat to sue and his invitation to accept service of
Emery’s complaint without any reference to the mediation
requirement in the Purchase Agreement.
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with Emery’s argument that the Purchase Agreement’s dispute
resolution clause is inapplicable. (See Jackson v. County of Los
Angeles (1997) 60 Cal.App.4th 171, 183 [explaining that the
doctrine of judicial estoppel requires, inter alia, that “the two
positions are totally inconsistent”].)
Finally, Marchick and amicus CAR cite several opinions in
which appellate courts have held a party’s failure to comply with
the mediation provision in the Purchase Agreement barred that
party from seeking attorney fees. (See, e.g., Lange v. Schilling
(2008) 163 Cal.App.4th 1412, 1414 [“We agree with other courts
that the [mediation] agreement means what it says: plaintiff’s
failure to seek mediation precludes an award of attorney fees”];
Frei v. Davy (2004) 124 Cal.App.4th 1506, 1516 [“To recover
attorney fees under the [Purchase Agreement], a party cannot
commence litigation before attempting to resolve the matter
through mediation”].) Our opinion should not be taken to mean
that the CAR Purchase Agreement mediation provision is
otherwise not enforceable or that mediation is not a laudable
method of resolving disputes.7 However, those cases and the
7 In its amicus brief, CAR argues that the Purchase
Agreement routinely incorporates ancillary documents, such as a
seller finance addendum or home warranty plan. However, CAR
does not provide additional relevant facts relating to those
documents, including whether they contain separate attorney fee
provisions. Nevertheless, our opinion is limited to the facts
before us.
CAR also argues about the benefits of mediation, including
that the cost of mediation is minor compared to the costs of
litigation. In her response to CAR’s brief and in furtherance of
this argument, Marchick observes the litigation result, an award
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instant matter are distinguishable. Unlike the cited cases, this
matter involves a later-negotiated, party-drafted agreement that
also includes an attorney fee clause (without a mediation
requirement), incorporated into a counter offer, and the parties’
dispute arises from a failure to fulfill a specific obligation under
that agreement. The Purchase Agreement’s attorney fee clause,
and the mediation requirement stated therein, is thus
inapplicable.8
of damages rather than specific performance, is not what Emery
wanted and that the parties have since negotiated a post-trial
settlement. Marchick seeks to augment the record in support of
this position to include posttrial and postappeal documents
evidencing the parties’ negotiations, settlement, and
acknowledgment of satisfaction of judgment.
Marchick’s motion is denied. Except in extraordinary
circumstances, appellate courts do not consider evidence that was
not before the trial court at the time the court issued the order or
judgment being appealed. (See Vons Companies, Inc. v. Seabest
Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [“ ‘when reviewing
the correctness of a trial court’s judgment, an appellate court will
consider only matters which were part of the record at the time
the judgment was entered’ ”].) Such circumstances are not
present here.
8 Because we have concluded that the Cooperation
Agreement’s attorney fee provision prevails, we need not consider
Emery’s alternate arguments that Marchick is estopped from
relying on the Purchase Agreement or waived her right to do so
as a result of attempting to “run out the clock” on the statute of
limitations or to assert a claim of adverse possession.
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DISPOSITION
We affirm the trial court’s order granting attorney fees to
Emery. Emery is to recover her costs on appeal.
NOT TO BE PUBLISHED
MORI, J.*
We concur:
ROTHSCHILD, P. J.
CHANEY, J.
* Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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