Dorsey v. Superior Court , 193 Cal. Rptr. 3d 834 ( 2015 )

Filed 10/22/15
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
MICHAEL DORSEY, as Trustee, etc., D067836
Petitioner, (Super. Ct. No. 37-2014-00305888-SC-
SC-CTL)
v.
THE SUPERIOR COURT OF SAN
DIEGO COUNTY,
Respondent;
JEFFREY CROSIER et al.,
Real Parties in Interest.
ORIGINAL PROCEEDING in mandate. Joel R. Wohlfeil, Judge. Petition
granted.
Law Offices of Randall S. Waier and Randall S. Waier for Petitioner.
No appearance for Respondent.
Tenants Legal Center and Christian A.M. Curry for Real Parties in Interest.
A defendant who loses in the small claims court can appeal to the superior court
and obtain a new hearing. Although (with limited exceptions) lawyers cannot take part in
the conduct or defense of a small claims trial, lawyers may represent parties in a small
claims appeal. (Code Civ. Proc., § 116.530.)1 Section 116.780(c) provides for an award
of attorney fees up to $150 in connection with a small claims appeal. Under section
116.790, the amount is increased up to $1,000 if the superior court finds the appeal was
"without substantial merit and not based on good faith . . . ."
The small claims court dispute here arises out of a condominium lease, which
contains a prevailing party attorney fee provision. After the superior court heard the
small claims appeal, it entered judgment in favor of the tenants, Jeffrey and Rebekah
Crosier (together, Crosier), against the landlord, Michael Dorsey as trustee of the Dorsey
Trust, in the principal amount of $1,560.
After judgment, Crosier sought $11,497.50 in attorney fees as the prevailing
parties under the attorney fee provision in the lease. Dorsey opposed the motion,
asserting section 116.780(c) trumped the contractual attorney fees provision, limiting any
award to $150. The superior court awarded Crosier $10,373.
The issue in this case of first impression is whether section 116.780(c) expressly,
or the policy of the statute implicitly, overrides the freedom to contract for a different
amount of attorney fees.
Small claims court exists so people with meritorious claims for small amounts
may have those claims adjudicated without spending more on attorney fees than the
1 Unless otherwise stated, all statutory references are to the Code of Civil
Procedure. When referring to statutory subparts within that code, the word "subdivision"
is omitted.
2
claims are worth. (City and County of San Francisco v. Small Claims Court (1983) 141
Cal.App.3d 470, 474.) Section 116.780(c) reflects a legislative determination that a small
claims appeal should require no more than minimal attorney time. The small claims
appeal procedure was intended to be integral to the legislative scheme for expeditious and
cost-effective resolution of small claims. Therefore, as we explain, section 116.780(c)
must be construed to override contractual attorney fee provisions and limit the attorney
fee award here to $150.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Petition's Allegations Are Deemed True
After the superior court granted Crosier's motion for attorney fees, Dorsey filed a
petition for a writ of mandate. We issued an order to show cause, inviting Crosier to file a
return.
When the Court of Appeal issues an order to show cause, the real party in interest
may file "a return by demurrer, verified answer, or both." (Cal. Rules of Court, rule
8.487(b)(1).) "The return must conform to the rules governing an answer in a civil
action, and the usual rules of pleading apply." (8 Witkin, Cal. Procedure (5th ed. 2008)
Extraordinary Writs, § 195, p. 1099.)
In response to the order to show cause, Crosier's return included neither an answer
nor a demurrer. Instead, the return contains a two-page "Procedural and Factual History"
verified by Rebekah Crosier and a memorandum of points and authorities.
In his traverse, Dorsey asks us to "strike" the return because it does not include a
verified answer or affirmative defenses. We decline to strike the return; however,
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Crosier's failure to answer or demurrer results in the factual allegations in Dorsey's
petition being deemed true. (Bank of America, N.A. v. Superior Court (2013) 212
Cal.App.4th 1076, 1084-1085.) These allegations comprise the facts stated below.
B. The Small Claims Litigation and Appeal
In October 2012 Dorsey and Crosier entered into a one-year written lease for a
condominium. After the lease terminated, disputes arose between the parties. Paragraph
40 of the lease contains an attorney fee provision, stating, "In any action or proceeding
arising out of this Agreement, the prevailing party between Landlord and Tenant shall be
entitled to reasonable attorney fees and costs."
In March 2014 Crosier filed a small claims court claim against Dorsey. Crosier
sought $10,000 for alleged breach of the rental agreement, breach of the implied
covenant of quiet enjoyment, wrongful retention of security deposit, retaliation, and
constructive eviction. Crosier claimed an additional $850 as "reasonable attorneys [sic]
fees."
Dorsey filed a "Defendant's Claim" in the small claims court. Dorsey alleged
Crosier was liable for holdover rent and other damages. Dorsey sought "attorney's fees of
$2,000."
The small claims court entered judgment in favor of Crosier on their claim for
$3,200 and in favor of Dorsey on his claim for $1,153—resulting in a net judgment
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favoring Crosier for $2,047. Dorsey appealed to the superior court.2 Both sides were
represented by counsel on the small claims appeal. The superior court found (1) Dorsey
breached the lease by not returning $1,560 of Crosier's security deposit, and (2) Crosier
did not breach the lease.
Crosier's attorney thereafter filed a motion seeking $11,497.50 in attorney fees
under the prevailing party attorney fee provision in the lease.
Dorsey filed opposition, asserting the $150 cap in section 116.780(c) governed all
attorney fee awards in small claims court appeals.
The superior court issued a tentative ruling stating that although "the Court would
be inclined to award Plaintiffs at or near the amount of attorney fees requested," section
116.780(c) limited the award to $150. However, after hearing argument, the court
reversed its tentative ruling and awarded Crosier $10,447.50. The superior court
concluded, "There is no indication that section 116.780 overrides the ability to contract
for a larger award. Instead, section 116.780 creates a different avenue to recovery in the
event there is no contractual right to an award for attorney fees."
Dorsey filed a petition for writ of mandate, asserting section 116.780(c) governs
the award of attorney fees in all small claims appeals. We issued an order to show cause
why the relief requested should not be granted.
2 In small claims court, an appeal is one in name only. The trial court's judgment is
not affirmed or reversed; rather, there is a trial de novo, a new hearing before a different
judge. (§ 116.770(a).)
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PROPRIETY OF REVIEW
The superior court's judgment on a small claims appeal is "final and not
appealable." (§ 116.780(a).) The Court of Appeal will also not entertain a writ petition
"merely to consider a claim the superior court erred" in deciding the small claims appeal.
(Linton v. Superior Court (1997) 53 Cal.App.4th 1097, 1099, fn. 2.)
However, if law is to be made settling a significant issue of small claims
procedure, "the appellate courts must have jurisdiction to entertain petitions for
extraordinary review in appropriate circumstances." (Houghtaling v. Superior Court
(1993) 17 Cal.App.4th 1128, 1131.) Writ relief is appropriate here to review this
significant issue in small claims law and to ensure uniform interpretation of the
governing statutes. (Universal City Nissan, Inc. v. Superior Court (1998) 65 Cal.App.4th
203, 205.)
DISCUSSION
I. Small Claims Procedures
"[The] small claims process was established to provide an inexpensive and
expeditious means to settle disputes over small amounts." (Pace v. Hillcrest Motor Co.
(1980) 101 Cal.App.3d 476, 478.) With limited exceptions, no attorney may take part in
the conduct or defense of a small claims action. (§ 116.530(a).) There are no formal
pleadings (§ 116.310), no pretrial discovery (§ 116.310), and no legal rules of evidence
(§ 116.510). There is no right to jury trial, and the court need not issue a statement of
decision. (Acuna v. Gunderson Chevrolet, Inc. (1993) 19 Cal.App.4th 1467, 1471.)
6
The small claims judge may "consult witnesses informally and otherwise
investigate the controversy with or without notice to the parties." (§ 116.520.) The
hearings are often "terminated in a short space of time" and the awards "are often based
on the application of common sense; and the spirit of compromise and conciliation
attends the proceedings." (Sanderson v. Niemann (1941) 17 Cal.2d 563, 573.)
A plaintiff who elects to file an action in small claims court has no right to appeal
that claim. (§116.710(a).) Upon appeal by a defendant, there is a "new hearing" before a
judge who did not hear the trial. (§116.770(a).) The appeal is to be conducted in the
same manner as the original hearing—informally, promptly, fairly, and inexpensively,
except that attorneys may participate in the appeal. (§§ 116.510, 116.770(b), (c).)
Pretrial discovery is prohibited; there is no right to jury trial, and no tentative decision or
statement of decision is required. (§116.770(b).) The superior court's judgment on the
appeal "is final and not appealable." (§ 116.780(a).)
For good cause and in the interest of substantial justice, the superior court may
award a party to an appeal reimbursement of attorney fees actually and reasonably
incurred in connection with the appeal up to $150. (§116.780(c).) If the court finds the
appeal was without substantial merit and not based on good faith, but intended to harass,
delay, or encourage the other party to abandon his or her claim, the court may award
attorney fees actually and reasonably incurred in connection with the appeal that do not
exceed $1,000. (§116.790.)
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The Judicial Branch of California website informs the public about such attorney
fees on a small claims appeal, stating:
"If you lose [the appeal y]ou may be ordered to pay up to $150 for
attorney fees . . . .[¶] And if the judge finds you filed your appeal in
bad faith, the court may award up to $1,000 in attorney fees . . . ."
(http://www.courts.ca.gov/1016.htm.)
This website contains no other reference to recovering attorney fees on a small
claims appeal.
The small claims court system "has been refined over hundreds of years with
recurring attention from the courts, legal commentators, and the Legislature." (City and
County of San Francisco v. Small Claims Court, supra, 141 Cal.App.3d at p. 475.) The
small claims procedures outlined above reflect the Legislature's understanding that
"'"only by escaping from the complexity and delay of the normal course of litigation
could anything be gained in a legal proceeding which may involve a small sum."'"
(Rosenberg v. Superior Court (1998) 67 Cal.App.4th 860, 865.)
From the outset, the Legislature and courts have acted to make small claims court
cost effective for litigants—so litigants may bring these claims to court "without
spending more money on attorney's fees and court expenses than the claims were worth."
(Zucker & Herr, The People's Court Examined: A Legal and Empirical Analysis of the
Small Claims Court System (2003) 37 U.S.F. L.Rev. 315, 321.) "Recognizing the goal of
providing justice in small matters at a reasonable cost, the courts of this state have upheld
provisions in the statutes governing small claims actions which restrict what are
recognized otherwise as substantial, even constitutional rights. Thus, the denial of any
8
right to appeal for a plaintiff has been sustained (Superior Wheeler Cake Corp. v.
Superior Court (1928) 203 Cal. 384, 387), as has the prohibition against representation
by counsel. (Prudential Ins. Co. v. Small Claims Court (1946) 76 Cal.App.2d 379, 383-
384 [Prudential].)" (Houghtaling v. Superior Court, supra, 17 Cal.App.4th at p. 1133.)
"If the small claims court is to be the 'People's Court,' it must not be encumbered with
rules and restrictions which can only frustrate and hinder the litigant who resorts to that
court in response to its promise of speedy and economical justice." (Id. at p. 1136.)
Small claims court is especially designed for cases where litigants may secure
redress for meritorious claims small in amount. "These cases are relatively of as great
importance to those litigants as those heard in our highest courts, but the expense of
employing an attorney and paying normal court costs is more than the cause will bear.
The solution to this problem . . . has been to create small claims [courts]." (Prudential,
supra, 76 Cal.App.2d at p. 383.)
The Legislature has declared the small claims process must "dispense justice
promptly, fairly, and inexpensively." (§ 116.510.) Small claims court is the great
equalizer. For many people, it embodies what the law and legal system is all about, the
People's Court. The Legislature had declared the small claims court is "a fundamental
element in the administration of justice and the protection of the rights and property of
individuals." (§ 116.120(c).) Keeping in mind the special nature and purpose of the
small claims court, we turn to the issue before us.
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II. Statutory and Contractual Attorney Fee Provisions
The introductory language in section 1021 provides: "Except as attorney's fees are
specifically provided for by statute, the measure and mode of compensation of attorneys
and counselors at law is left to the agreement, express or implied, of the parties . . . ."
Similarly, the introductory language in section 1032(b) is of the same effect, stating,
"Except as otherwise expressly provided by statute, a prevailing party is entitled as a
matter of right to recover costs in any action or proceeding." Under section
1033.5(a)(10), attorney fees are allowable as costs when authorized by contract, statute,
or law.
Here, Dorsey contends the $150 cap on attorney fees in section 116.780(c) is a
statutory exception within these introductory parts of sections 1021 and 1033.5. He
asserts that as a result, attorney fees incurred on appeal in a small claims case are
governed by section 116.780 and parties cannot contract otherwise.
Dorsey cites two cases that discuss the interplay between a statutory right to
attorney fees and a potentially conflicting contractual prevailing party attorney fee clause.
In Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132 (Carver), service station
franchisees brought an action against Chevron alleging, among other things, breach of
their gas station lease agreements and violations of the Cartwright Act (Bus. & Prof.
Code, § 16700 et seq.). The lease agreements contained an attorney fee clause. After the
franchisees lost on appeal, the trial court awarded Chevron more than $6 million in
attorney fees for defending both contract and Cartwright Act claims.
10
The Cartwright Act contains a unilateral fees clause, providing for an award of
fees to "any person who is injured" by enumerated statutory violations, but no reciprocal
right on the part of a prevailing defendant to any award incurred in successfully
defending the Cartwright Act claim. (Carver, supra, 97 Cal.App.4th at p. 144.) This
Court reversed and remanded for reduction of the amount of the attorney fee award
incurred in defending the Cartwright Act claims. We held the trial court's award of
defense fees for those claims under the contract was "erroneously attempting to override
the Legislature's intention to provide such one-sided recovery by statute." (Carver, at p.
145.)
The appellate court in County of Sacramento v. Sandison (2009) 174 Cal.App.4th
646 (Sandison) faced a similar legal issue, but in an entirely different statutory context
and reached the opposite result. There, the County of Sacramento and a property owner
entered into a settlement agreement with a stipulated injunction and a prevailing party
attorney fee clause. The county later sought to enforce the injunction, lost, and the owner
recovered $29,000 in attorney fees under the contract.
Government Code section 25845, subdivision (c), pertaining to abatement of a
nuisance, provided that in "no action . . . shall an award of attorneys' fees to a prevailing
party exceed the amount of reasonable attorneys' fees incurred by the county in the action
or proceeding." The county argued this statute limited recovery under the parties'
contractual prevailing party attorney fee clause. However, the Sandison court rejected
the argument because Government Code section 25845, subdivision (b) provided that
recovery of costs "pursuant to this section shall be in addition to and shall not limit any
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prevailing party's right to recover costs pursuant to Sections 1032 and 1033.5 of the Code
of Civil Procedure or any other provision of law." Thus, because recovery of costs under
Code of Civil Procedure section 1033.5(a)(10) includes attorney fees when authorized by
contract, Government Code section 25845, subdivision (b) itself provided that a recovery
of attorney fees authorized by contract was to be in addition to, and not limited by,
Government Code section 25845, subdivision (c). (Sandison, supra, 174 Cal.App.4th at
p. 651.)
The Sandison Court distinguished Carver and summarized the applicable rule as
follows:
"[T]he question is whether the statutory attorney fee provision
expressly, or the policy of the statute implicitly, overrides the
freedom to contract for a different outcome." (Sandison, supra, 174
Cal.App.4th at p. 651.)
Accordingly, our task is to interpret section 116.780(c) to determine if it expressly,
or the policy of the small claims statutes implicitly, overrides the freedom to contract for
a higher amount of attorney fees incurred in a small claims court appeal.
III. Statutory Interpretation
A. Standard of Review
"Construction and application of a statute involve questions of law, which require
independent review." (Murphy v. Padilla (1996) 42 Cal.App.4th 707, 711.)
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B. Rules of Statutory Interpretation
"'The Supreme Court reiterated the rules of statutory interpretation as follows:
'When we interpret a statute, '[o]ur fundamental task . . . is to determine the Legislature's
intent so as to effectuate the law's purpose. We first examine the statutory language,
giving it a plain and commonsense meaning. We do not examine that language in
isolation, but in the context of the statutory framework as a whole in order to determine
its scope and purpose and to harmonize the various parts of the enactment. If the
language is clear, courts must generally follow its plain meaning unless a literal
interpretation would result in absurd consequences the Legislature did not intend. If the
statutory language permits more than one reasonable interpretation, courts may consider
other aids, such as the statute's purpose, legislative history, and public policy.'"'"
(Bridges v. City of Wildomar (2015) 238 Cal.App.4th 859, 866.) In the end, we "'"must
select the construction that comports most closely with the apparent intent of the
Legislature, with a view to promoting rather than defeating the general purpose of the
statute, and avoid an interpretation that would lead to absurd consequences."'" (Torres v.
Parkhouse Tire Service, Inc. (2001) 26 Cal.4th 995, 1003.)
C. Statutory Language
Section 116.780(c) provides:
"For good cause and where necessary to achieve substantial justice
between the parties, the superior court may award a party to an
appeal reimbursement of (1) attorney's fees actually and reasonably
incurred in connection with the appeal, not exceeding one hundred
fifty dollars ($150), and (2) actual loss of earnings and expenses of
transportation and lodging actually and reasonably incurred in
13
connection with the appeal, not exceeding one hundred fifty dollars
($150)."
Unlike the Government Code statute at issue in Sandison, there is no express
provision in section 116.780(c) providing that the attorney fees allowed by section
116.780(c) are "in addition to and shall not limit any prevailing party's right" to
contractual attorney fees. Thus, Sandison is significantly distinguishable on its facts.
Interestingly, although neither the parties nor the superior court in its order
mentions it, by its own terms section 116.780(c) is not a pure "prevailing party" attorney
fee provision. Even if a party prevails in the small claims appeal on the only contract
claim in the action, the court cannot award any fees under section 116.780(c) without first
determining the award is "[f]or good cause" and "necessary to achieve substantial justice
between the parties."
In sharp contrast, where, for example, a trial court in an ordinary civil action
renders a simple unqualified decision in favor of a defendant on the only contract claim
in the action, the defendant is the prevailing party as a matter of law and therefore
entitled to reasonable attorney fees under a contractual fee provision. (David S. Karton,
A Law Corp. v. Dougherty (2014) 231 Cal.App.4th 600, 609.)
By expressly conditioning the right to recover attorney fees on a small claims
appeal to the superior court's discretionary consideration of "good cause" and
"substantial justice between the parties," the Legislature has expressed an intention that
equitable criteria—and not merely litigation victory—must be considered, and indeed
may be determinative, in an award of attorney fees in a small claims appeal. Such
14
considerations are entirely consistent with, and effectuate, the fundamental nature and
role of the small claims court, which the Legislature has expressed declared: "to resolve
minor civil disputes expeditiously, inexpensively, and fairly . . . ." (§ 116.120(b).)
Indeed, in discussing attorney fees in small claims appeals under section
116.780(c), the Consumer Law Sourcebook for Small Claims Court Judicial Officers:
Small Claims Court Law and Procedure, published by the State of California Department
of Consumer Affairs states, "Since small claims court is designed to be lawyer-free,
awards of attorney's fees probably should be extraordinary and never routine."
(Consumer Law Sourcebook (Dept. of Consumer Affairs 2005) § 15.5.8, p. 443, italics
added.)
Put simply, small claims court is significantly different from ordinary civil
litigation. For example, the Legislature gives a small claims judge the power to decide
cases based on his or her ex parte consultations with witnesses and the court's own
investigation (§ 116.520(c))—judicial acts prohibited in ordinary civil actions. The
reason is obvious: those powers allow the small claims court to resolve minor disputes
quickly, fairly, and inexpensively. Similarly here, the Legislature created a unique right
to attorney fees in a small claims appeal—a right that is not solely dependent on litigation
success, but instead includes fairness and equitable considerations that have a special
place in deciding small claims matters. As the court in Alturas v. Superior Court of
Modoc County (1940) 36 Cal.App.2d 457, 461 notes, the everyday users of small claims
court are often of "limited means and resources." Small claims litigants would all be but
15
locked out of the small claims appeal process if they could be liable for uncapped
attorney fees if they lost.
For these reasons, this case is like the attorney fee issue in Carver. There, we
determined the Legislature's intention in providing a unilateral right to recover attorney
fees under the Cartwright Act overrode a general prevailing-party attorney fee provision
in the parties' contract. Similarly here, by injecting equitable considerations into the
determination of a party's entitlement to recover any attorney fees in a small claims court
appeal, and by capping attorney fees at $150, section 116.780(c) is the type of "other
statutory provision" that will override a general litigation costs entitlement under section
1032. (Carver, supra, 97 Cal.App.4th at p. 147.)
D. Legislative History
The relevant legislative history confirms our interpretation of the statute's text.
The Small Claims Act was created in 1990 by legislation sponsored by the Department of
Consumer Affairs. (§ 116.110; Dept. of Consumer Affairs, Enrolled Bill Rep. on Sen.
Bill No. 2627 (1990 Reg. Sess.) Sept. 24, 1990.) As enacted in 1990, section 116.780(b)
provided, "[I]f the judgment is affirmed in whole or in part or the appeal is dismissed, the
superior court also may allow plaintiff the sum of fifteen dollars ($15) as an attorney's
fee." (Stats. 1990, ch. 1305, § 3, p. 5613.)
In 1991 the Department of Consumer Affairs sponsored amendments to the Small
Claims Act. These included amendments to section 116.780(c) in its present form. The
bill summary contains "Comments on Proposed Changes Small Claims Act" by the
16
Department of Consumer Affairs. (State and Consumer Service Agency, Bill Summary,
Senate Bill No. 771, as amended April 24, 1991.)3
The 1991 bill summary's comment on section 116.780(c), quoted post, is
significant in at least two respects. First and foremost, the bill summary expressly states
the $150 attorney fee is a "maximum" award. Second, regardless of any other
circumstances, the court cannot award any fees unless the award achieves substantial
justice. Clearly, this is no ordinary prevailing party attorney fee provision. The bill
summary states:
"This bill proposes to increase the maximum award of attorney's fees
against an appealing defendant who loses from $15 to $150, and to
also provide for reimbursement of any wage losses and
transportation expenses actually incurred by the plaintiff not
exceeding $150. The present amount ($15) has lost its deterrent
effect and gives losing defendants an unfair bargaining advantage
over prevailing plaintiffs. At the same time, the proposed ceilings
remain low enough not to deter losing parties from taking legitimate
appeals. Moreover, the superior court must both exercise discretion
and find that an award is 'necessary to achieve substantial justice'
before making an award under this section. The circumstances that
will justify an award under this section are many and diverse, and
may include such factors as the merits of the appeal and the relative
economic circumstances of the parties; but an award will not be
appropriate unless the result is to help achieve substantial justice."4
3 Courts have frequently referred to bill summaries when examining legislative
history to determine the meaning of a statute. (E.g., People v. Superior Court (Arthur R.)
(1988) 199 Cal.App.3d 494, 499-500; Mir v. Charter Suburban Hospital (1994) 27
Cal.App.4th 1471, 1484.)
4 We obtained the legislative history on our own initiative; however, we sent a copy
of the bill summary to counsel and invited supplemental briefs on the subject. Crosier
contends the bill summary is "the opinion of a third party and not the drafter" and "is
wrong." However, contrary to Crosier's assertion, the bill summary was prepared by the
Department of Consumer Affairs, which sponsored the legislation. (Department of
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E. Context and Policy
The Supreme Court has repeatedly stated we must protect the informal nature and
the simplicity of small claims procedures to preserve the nature of that forum as one that
yields speedy common justice without the need to resort to lawyers. (Sanderson v.
Niemann, supra, 17 Cal.2d at p. 573; Perez v. City of San Bruno (1980) 27 Cal.3d 875,
884; Crouchman v. Superior Court (1988) 45 Cal.3d 1167, 1171.)
The intermediate appellate courts have followed that mandate. For example, in
Pace v. Hillcrest Motor Co., supra, 101 Cal.App.3d at page 479, the court held that a
cause of action for malicious prosecution cannot be grounded on instituting a small
claims proceeding because to permit such an action would frustrate the policy behind the
small claims procedure.
In Eloby v. Superior Court (1978) 78 Cal.App.3d 972, 975-976, the court held the
Legislature intended, consistent with the purpose of the small claims law, to preclude all
motions for new trial after the new hearing on appeal in the superior court.
In Bruno v. Superior Court (1990) 219 Cal.App.3d 1359, the court held the
Legislature did not intend that formal discovery procedures should be permitted in either
the small claims action itself of the new hearing on appeal. In reaching that decision, the
Bruno court noted that formal discovery "would be completely inconsistent with the
goals and procedures of the small claims court and would impose an unacceptable burden
Corrections & Rehabilitation v. State Personnel Bd. (2013) 215 Cal.App.4th 1101, 1111
["We recognize 'statements by a bill's sponsor appearing in a committee report have been
quoted and relied upon by our Supreme Court in determining the meaning of a
statute.'"].)
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on unrepresented litigants. Discovery at the appeal level would also defeat the object of
speedy and inexpensive settlement of disputes, the object of the entire small claims
process." (Id. at p. 1363.)
Similarly here, our task is to interpret section 116.780(c) to give effect to the
Legislature's clearly stated intent to create an expeditious and inexpensive method of
resolving disputes and to avoid the complexity and delay of ordinary litigation. This
intent can be effectuated only if section 116.780(c) overrides any conflicting contractual
attorney fee provision.
In ordinary civil actions, litigation over attorney fees often takes on a life of its
own, becoming a major piece of litigation "sometimes rivaling or even exceeding the
amount involved on the merits." (International Billing Services, Inc. v. Emigh (2000) 84
Cal.App.4th 1175, 1186.) Attorney fee litigation can turn a simple civil case into two or
even more cases—the case on the merits, the case on the merits on appeal, the case for
fees, the case for fees for proving fees, and so on. (See Chambless v. Masters, Mates &
Pilots Pension Plan (2d Cir. 1989) 885 F.2d 1053, 1054 ["The attorney's fee issue
. . . has like Frankenstein's monster taken on a life of its own and threatens to become a
second major litigation."]; Leo Eisenberg & Co. v. Payson (1989) 162 Ariz. 529, 535
[785 P.2d 49, 55] ["[T]he attorneys' fees in this case have not simply become a case of
the tail wagging the dog; the attorneys' fees have become the dog."].) "'This wasteful
consumption of judicial resources and client money serves no public purpose and impairs
the image of the legal profession.'" (M. Perez Co., Inc. v. Base Camp Condominiums
Assn. No. One (2003) 111 Cal.App.4th 456, 464.)
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This case exemplifies why the Legislature intended to restrict small claims
attorney fees. Crosier recovered $1,560. The claimed "reasonable" attorney fees is over
$11,000 on a $1,500 recovery. Fights over attorney fees like this one, with almost a 10-
fold discrepancy between the result achieved and fee sought—amply demonstrate why
the Legislature would cap small claims appeals fees. As noted, small claims court exists
so people with meritorious claims for small amounts may have those claims adjudicated
without spending more on attorney fees than the claims are worth. (City and County of
San Francisco v. Small Claims Court, supra, 141 Cal.App.3d at p. 474.)
This result is particularly appropriate here because Crosier initiated the
proceedings in the small claims court. In so doing, they lost the right to enforce the
contractual attorney fee provision in the lease. "It is not uncommon in the practice of law
to sacrifice certain rights in order to obtain others. A litigant may effectively waive
certain constitutional and procedural rights by choosing an alternative forum that
provides an expeditious and inexpensive means of resolution of a case. [¶] The most
obvious examples are contractual agreements to use arbitration instead of the courts to
resolve disputes. (See Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1; Madden v. Kaiser
Foundation Hospitals (1976) 17 Cal.3d 699, 713.) Another example is the small claims
court where, in exchange for speedy, inexpensive procedures, a plaintiff waives his or her
right to discovery, right to an attorney, damages in excess of [the jurisdictional limit],
trial by jury, and appeal. (Jellinek v. Superior Court (1991) 228 Cal.App.3d 652, 656-
657; Parada v. Small Claims Court (1977) 70 Cal.App.3d 766, 769; Cook v. Superior
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Court (1969) 274 Cal.App.2d 675, 677-678.)" (Whitehouse v. Six Corp. (1995) 40
Cal.App.4th 527, 537.)
Here, Crosier sought out the small claims court procedure which is quick,
inexpensive, and efficient. Having elected to utilize the advantages of the small claims
procedure, Crosier must accept its disadvantages.5
IV. Judicial Estoppel Does Not Apply
As noted, both parties filed small claims court complaints seeking attorney fees.
Citing Michelson v. Camp (1999) 72 Cal.App.4th 955, Crosier contends Dorsey's attempt
to recover fees in its claim judicially estops Dorsey from challenging the fee award to
Crosier.
Dorsey is not barred by judicial estoppel from asserting section 116.780(c) limits
attorney fees in this case. Merely pleading a right to fees does not create an estoppel
where the pleader would not have actually been entitled to recover fees in the event he or
she had prevailed on the merits. (Eden Town Healthcare Dist. v. Eden Medical Center
(2013) 220 Cal.App.4th 418, 430.) "To visit a losing claimant's own demands upon him
might appeal to a sense of playground justice, but it has no basis in our law." (Blickman
Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 899.)
5 Our research discovered one published out-of-state case addressing a similar issue,
Snyder v. York (1999) 115 Nev. 327 [988 P.2d 793], which held a $15 statutory limit on
attorney fees in small claims court appeal trumped a prevailing-party contractual attorney
fee provision. The Snyder court commented, "It is clear that the legislature's intent is to
keep the costs and attorney's fees low in small claims cases" and "[i]t would be absurd to
award $11,932.50 in attorney's fees on a $2,500 small claims case." (Id. at p. 795.)
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The case Crosier cites, Michelson v. Camp, supra, 72 Cal.App.4th 955, is
inapposite; it does not apply judicial estoppel on an attorney's fee issue. "A prevailing
party is not entitled to fees simply because the opposing party requested them." (Hasler
v. Howard (2005) 130 Cal.App.4th 1168, 1171.)
V. No Remand for Further Proceedings Is Appropriate
As noted, section 116.790 provides for an attorney fee award of up to $1,000 in a
small claims appeal where the superior court finds "the appeal was without substantial
merit and not based on good faith, but was intended to harass or delay the other party, or
to encourage the other party to abandon the claim . . . ."
Crosier contends that even if attorney fees are capped at $150 under section
116.780(c), the matter should be remanded to the trial court to determine whether to
award additional amounts under section 116.790(c). Crosier asserts Dorsey acted in "bad
faith revealed only after the lower court order was made and the lower court should now
consider their actions in toto . . . ."
No remand is necessary. The original net judgment against Dorsey was $2,047.
After appeal, the net judgment was $1,560. It is difficult to conceive how the superior
court could conclude Dorsey's appeal was "without substantial merit" under section
116.790 when Dorsey did substantially better after the small claims appeal.
In any event, remand is unnecessary because Crosier waived the issue. In their
attorney fee motion in the small claims court appeal, Crosier could have sought an award
of attorney fees under section 116.790. In fact, Crosier cited the superior court to section
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116.790, but argued it was inapplicable, and that the contractual "prevailing party"
attorney fee provision controlled.
Having had a full opportunity to seek attorney fees under section 116.790 in the
trial court and having declined to do so, Crosier has waived or forfeited the issue on
appeal here. (City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126
Cal.App.4th 668, 685; Amato v. Mercury Casualty Co. (1993) 18 Cal.App.4th 1784,
1794.)
It is also unnecessary to remand for a determination of attorney fees under section
116.780(c). On March 13, 2014, the superior court, believing the attorney fee award was
governed and limited by section 116.780(c), awarded Crosier $150. Therefore, it is
unnecessary to remand, the court having already exercised its discretion under the correct
legal standard.
DISPOSITION
Let a writ issue commanding the superior court to vacate its March 17, 2015 order
granting attorney fees in the amount of $10,373, enter a new order granting
Crosier attorney fees in the amount of $150, and enter an amended judgment consistent
with such an award. Parties to bear their own costs in this writ proceeding.
NARES, Acting P. J.
WE CONCUR:
McDONALD, J.
McINTYRE, J.
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