Post Apple LLC v. Acrew Management CA1/2 ( 2015 )

Filed 10/29/15 Post Apple LLC v. Acrew Management CA1/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication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
FIRST APPELLATE DISTRICT
DIVISION TWO
POST APPLE LLC et al.,
Plaintiffs, Cross-defendants and
Appellants, A142859 & A143832
v.
(Alameda County
ACREW MANAGEMENT LLC et al., Super. Ct. No. RG12621598)
Defendants, Cross-complainants
and Appellants.
These are two consolidated appeals following a court trial of a slander of title
action, the one cause of action remaining after a court-supervised settlement conference
resolved all other issues between and among the interested parties. The winner in the
slander of title action was Acrew Management, LLC (Acrew). The losers were Post
Apple, LLC (Post Apple) and Abraham Farag (Farag). Post Apple and Farag (sometimes
when referred to collectively, plaintiffs) appeal from the judgment finding them liable for
slander of title.
Farag, a sophisticated real estate investor, was a significant player here:
a 49 percent owner of Post Apple; a principal in two other involved entities; and the
person who caused to be recorded, and then testified falsely about, several documents
that caused the slander of title—documents, it turned out, that had been post dated.
Following five days of trial, the court found for Acrew and against Post Apple and
Farag, in a detailed, comprehensive statement of decision, a statement that, among other
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things, recited Farag’s various misdeeds. Despite all that, plaintiffs filed an opening brief
whose “Factual Summary” is all of one page, a bland recitation that ignores all of Farag’s
machinations—and his perjury. That brief makes three arguments: (1) slander of title
was not proper; (2) Farag was not personally liable; and (3) the $92,054 damages
awarded were not supported. We reject the arguments and affirm.
Following the judgment in its favor, Acrew moved for attorney fees, based on an
attorney fee provision in a document to which neither Acrew nor its adversaries was a
party. The trial court denied Acrew fees, and it appeals from the order on that denial.
We affirm that order as well.
BACKGROUND
The Property, the Pleadings, and the Settlement
This appeal involves property located at 2390 Sacramento Street, Berkeley (the
property), and arises out of a complaint and cross-complaint filed in 2012, in Alameda
County Superior Court, Action No. RG 12621598 (the action). The action was not the
first action involving the property or the parties, however, which was an unlawful
detainer action filed in 2011, which action will be discussed in detail below. Suffice to
say here that it was not a run-of-the-mill unlawful detainer case. Rather, it involved
issues of title, numerous pleadings, extensive discovery and discovery-related motions,
several court appearances and conferences, all culminated by a defense motion for
summary judgment/adjudication supported by a declaration from Farag, whose testimony
in that declaration caused the landlord to dismiss the case—a declaration, it would
develop, that was false.
The unlawful detainer dismissed, the action followed.
On March 16, 2012 Post Apple filed the action. It alleged one count, for partition,
and named two defendants: Acrew, alleged to own 75.8622 percent of the property;
and A and R Laundries, LLC (A and R), alleged to be the sole tenant of the property.
Acrew answered and also filed a verified cross-complaint naming five cross-
defendants: Post Apple; A and R; Develop R2 LLC; Kenneth Mariani; and Farag. The
cross-complaint alleged 10 causes of action, styled as follows: (1) declaratory
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relief; (2) breach of fiduciary duty; (3) partition; (4) ouster; (5) ejectment; (6) quiet title;
(7) accounting; (8) slander of title; (9) cancellation of instruments; and (10) violation of
California Business and Professions Code section 17200.
Post Apple and Farag filed separate verified answers to the cross-complaint.1 The
verification to Post Apple’s answer was by Farag, “a manager of Post Apple.”
The action was assigned for all purposes to the Honorable Ioana Petrou. The
action generated a seven-page register of actions, the particulars of which are not in the
record before us. What we do know is that in June 2013 the parties attended a
court-supervised settlement conference, the upshot of which was a “settlement on the
record,” memorialized in a two-page settlement statement. There, the parties agreed to
settle all claims between and among them except Acrew’s slander of title claim against
Post Apple and Farag, as to which the settlement statement provided as follows: “The
issue of Abraham Farag’s and Plaintiff Post Apple LLC’s liability for any damages for
slander of title, including without limitation, attorneys’ fees and punitive damages, shall
be submitted to Judge Petrou for a court trial. Each party waives his/her/its right to a jury
trial on this issue.”
Farag signed the signature page on the settlement statement in three separate
places, on behalf of three separate entities: (1) “Post Apple LLC, A California limited
liability corporation,” signed as Managing Member; (2) “A and R Laundries LLC,
A California limited liability corporation,” signed as Authorized Agent; and (3) “Develop
R2 LLC, A California limited liability corporation,” signed as Managing Member.
The Trial
The slander of title claim proceeded to a five-day court trial before Judge Petrou,
beginning on September 30, 2013, and concluding on October 7. There was no court
reporter. The parties filed proposed statements of decision, to which the other side filed
objections. The matter was submitted on November 7. On December 20 Judge Petrou
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The record does not reveal the pleadings, if any, filed on behalf of A and R,
Develop R2 LLC, or Mariani. However, as indicated below, they remained involved, at
least as interested parties.
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filed her intended tentative ruling and proposed statement of decision, to which Post
Apple and Farag objected yet again.
On January 28, 2014, Judge Petrou filed her statement of decision finding for
Acrew and against Post Apple and Farag. Judge Petrou’s statement began with the
preliminary observation that she “did not find Mr. Farag to be credible,” and from there
went on with a comprehensive six-page analysis of “facts” and “findings,” followed by a
“Judgment” and an indication of damages to be later ascertained.
Since there is no reporter’s transcript, we quote extensively from Judge Petrou’s
well-written Statement to set forth the pertinent facts:
“A. GENERAL BACKGROUND
“This case presents an issue regarding the real property located at
2930 Sacramento Street in Berkeley, California (hereinafter ‘the Property’).
“In 2007, the Property was owned by Daniel Dumas and Annabelle Constantin,
who operated a Laundromat on the premises (Sparkle Clean Wash and Dry). In
2007, Dumas executed a $725,000 note in favor of Geneva Real Estate Investments, Inc.
The note was funded by a group of investors, including Ken Marinai, who had a
24.1378% interest in the note. In 2009, Abraham Farag and an associate founded
A and R Laundries LLC to purchase the Laundromat business operating on the Property.
They did so, and leased the property from Mr. Dumas as of January 1, 2010. Dumas
began to default, failing to pay property taxes and the payments to Geneva. The note was
taken over by Medallion Servicing, LLC in late 2010 or early 2011. Mr. Farag on behalf
of Post Apple made several unsuccessful attempts to purchase the note.
“A foreclosure sale was scheduled for April 14, 2011, and then continued to April
21, 2011. A few days before the sale, Farag on behalf of Post Apple purchased Marinai’s
interest in the Dumas note. Medallion purchased the Property at the April 21 foreclosure
sale.
“On May 5, 2011, Farag executed a Lease Non Subordination Agreement
(hereinafter ‘LSNDA’) between and on behalf of both Post Apple and A&R. The
LSNDA and a Lease Memorandum, both dated April 21, 2011, were recorded on
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May 6, 2011. The Trustee’s Deed Upon Sale was recorded June 20, 2011. The
remaining investors to the Medallion purchase of the Property granted their 75+% interest
to Acrew LLC. That Grant Deed was recorded June 29, 2011.
“Acrew filed an unlawful detainer action against A&R, naming Post Apple as an
involuntary plaintiff. Post Apple and A&R moved for summary judgment. On
February 28, 2012, Acrew filed a motion for leave to convert the unlawful detainer to an
unlimited civil case for damages, which Post Apple and A and R Laundries opposed.
The motion was taken under submission pending the Motions for Summary Judgment.
Acrew dismissed the unlawful detainer action without prejudice thereafter, claiming they
were forced to do so by Farag’s alleged false testimony as to the LSDNA and Lease
Memorandum preceding the trustee sale.
“Post Apple then filed this complaint for partition. Acrew also filed a cross-
complaint against Farag, Post Apple, A and R Laundries, Develop R2, and Marinai,
seeking partition, quiet title, cancellation of instruments, accounting, and damages for
ouster, ejectment, breach of fiduciary duty, slander of title, and violations of Business and
Professions Code 17200.
“After settlement conferences with the Honorable Evelio Grillo, the parties
resolved all of their disputes other than Acrew’s claim for slander of title against Post
Apple and Farag, which they agreed would go to court trial.
“B. FINDINGS
“The Court considered the one cause of action for slander of title that is being
asserted by Acrew Management nominally holding the interests of Barton A. Brown,
James R. Christensen, Paul Danzig, Gilbert Gregory, Winton E. Mather, IRA/First
Regional Bank, Ofra Weiss, Gary L. Willer, Phoenix 1 Fund, and Kenneth P. Marinai
under a note and a deed of trust. These investors, together with Kenneth P. Marinai
(collectively, ‘initial investors’) were owners of the deed of trust (Ex. 1) executed by
Daniel Dumas that pledged the Property to secure payment of a note (Ex. 2) in the
amount of $725,000.
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“Farag is an individual who owned 49% of A and R Laundries. In December
2009, A and R Laundries became a tenant at the Property (Ex. 3). Farag, in connection
with his efforts to purchase the business, sought an agreement with all of the initial
investors to subordinate the deed of trust to the Dumas―A and R Laundries lease to
create non-disturbance rights.
“Farag knew that the mortgage payments due from Dumas on the first trust deed
were larger than the payments received under the lease. Therefore there was a significant
risk of default. Therefore Farag wanted the benefits of a subordination non-disturbance
agreement (LSNDA).
“Farag was told by James Kroetch, acting on behalf of the initial investors, that the
initial investors were not willing to give a non-disturbance agreement. The initial
investors wanted the property to be unburdened by the lease. This would give the initial
investors most flexibility should they become owners by foreclosure.
“On April 18, 2011, Farag negotiated and completed the acquisition by Post Apple
of an interest in the note by buying 24% from Ken Marinai. On April 21, 2011 the deed
of trust went through a foreclosure sale. All of the beneficiaries became owners together
at that time. The actual recordation of the deed did not occur until June 20, 2011, but, the
legal effect of the trustees sale is to vest title to the foreclosing beneficiaries at the time
the sale is conducted.
“At the time of the sale, Farag was present and bid $600,000. Farag did not at that
time indicate any assertion that his company, A and R Laundries, had rights as a tenant
that were enhanced by and [sic] LSNDA or other agreements.
“On May 5 Farag signed the LSNDA (Ex. 7) and also a memo of lease (Ex. 8).
Both of these documents were acknowledged before a notary on May 5. However, the
LSNDA and Lease Memorandum were purported to be executed on April 20 and
21, 2011, i.e. prior to the foreclosure sale.
“The documents created the appearance of rights in A and R Laundries, the tenant,
to stay in the property despite the foreclosure. In fact, these rights did not exist.
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“The lease rights in fact were subordinate to the rights of the foreclosing owners
and the lease was in fact extinguished by the foreclosure. However, because of the
recorded documents it appeared that the lessee’s rights were greater than they in fact
were. This created the appearance that all the interests in the property were burdened by
the lease and option.
“If it was apparent that the lease had been extinguished by sale (as it had been)
then there would have been a clear and known right to evict a tenant and the property
owners could have proceeded to sell or lease the property at their choosing.
“In connection with defending his company, A and R Laundries, from eviction
Farag swore under oath (in declarations) that the recorded documents were in fact dated
prior to the sale (see Ex. 11). He swore to false facts because they created a different
legal effect. See in Ex. 15 Post Apple’s unlawful detainer trial brief recitation on
page 5, line 2 (‘in the instant case Post Apple while it was a lender validly executed a
Memorandum of Lease and an LSNDA which contains a subordination, a non-
disturbance agreement and an attornment clause whereby the Lessee upon foreclosure,
subject to the nondisturbance provisions shall attorn to such new owner and the Lease
automatically becomes a lease between the Lessee and the new owner.’)
“Effectively these recorded documents, if truthful, allowed significant potential
defenses to the unlawful detainer and increased the cost of litigation increased [sic]. The
unlawful detainer litigation was replaced with this action, all of the claims which were
designed to eliminate the false documents and their legal effect. However, the Court does
not find that all of the claims were necessary to eliminate the false documents and their
legal effect. Counsel are to focus on what litigation was required in their request for
damages (see section D., below).
“C. JUDGMENT
“On the cause of action of Slander of Title, the Court finds for Acrew and against
both Post Apple and Abraham Farag. The Court notes that Mr. Farag took the actions
and is personally liable for the slander of title he performed. The Court does not find for
Acrew on its request for punitive damages as it has not, by clear and convincing
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evidence, proven that Farag engaged in the relevant conduct with malice, oppression, or
fraud.
“CACI 1730 Slander of Title sets forth the elements for proving slander of title
and the Court finds that all of the elements have been met. Farag and Post Apple and
A and R Laundries made a statement, i.e. recorded a Lease Memorandum and LSNDA
(Ex. 7 and 8) both of which became a public record. Those statements were untrue.
They purported to pre-date a foreclosure, which was false. The LSNDA purported to
recite an option to purchase the property which was not a valid right. That option to
purchase was purporting to bind all of the property owners including the seven original
investors.
“Farag knew that these statements were false. He knew he was trying to acquire
non-disturbance rights that he was not able to acquire with respect to the remaining nine
original investors. Farag, because he was a sophisticated real estate broker, knew it
would create the appearance of an option and would create the appearance of lease
survival rights which would cause the need to clear title of this cloud.
“The Court notes that Guy Puccio, Post Apple and Farag’s expert, testified that
any damages to Acrew were the result of the conduct of others. However, Mr. Puccio
also testified that the recording of the Lease Memorandum was a cloud on title and that
the option to purchase clouded title for as long as it was in existence. This cloud on title
had nothing to do with the action of any others and the cloud on title is what necessitated
subsequent legal proceedings.
“In regards to the duration of the cloud on title, the duration of the option to
purchase was unclear from the Lease Memorandum itself. In fact, Acrew as a nominee
for the original seven investors did in fact suffer financial harm because they needed to
incur legal fees to eliminate the purported rights created by these false documents. Farag,
Post Apple and A and R Laundries conduct was a substantial factor in causing harm
because they signed the documents and caused them to be recorded. Post Apple and
Farag did not prove that there were clear offers to purchase that would have made Acrew
Management whole.
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“Further, financial harm was clearly demonstrated as plaintiff’s attorney fees and
costs necessary to clear title constitute actual harm or injury to the plaintiff proximately
caused by the tort. Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC,
205 Cal.App.4th 999, 1032 (2012).
“Farag and Post Apple have not met their burden of establishing that the recording
of the LSNDA or the Lease Memorandum was privileged as those documents contain
statements that are plainly false, and not simply legally inconsistent. Fundamentally,
(1) Farag signed the LSNDA and Lease Memorandum on May 5, 2011, (2) on documents
bearing an April 21, 2011 signature date, and (3) Farag and Post Apple relied on this false
signature date’s legal effect to defeat the unlawful detainer. Farag’s trial testimony that
he misremembered was devoid of any credibility.
“In regards to personal liability, Farag has taken the new position that he is not
personally liable, citing generally in post-trial briefing to the principle that LLC members
are not liable for any debt or judgment against an LLC solely by reason of being a
member of the LLC. However, the ‘[Limited Liability Company Act] does not relieve a
member from liability arising from . . . the member’s tortious conduct’ and in this case it
is precisely Farag’s own conduct that is at issue. People v. Pacific Landmark, LLC,
(2005) 129 Cal.App.4th 1203, 1212. This issue was not previously raised though all
parties were aware that Farag’s own conduct was at issue. For example, Post Apple and
Farag filed a successful Third Motion in Limine to preclude evidence of Farag as the alter
ego of Post Apple or A and R Laundry or Develop R2 LLC.
“D. DAMAGES
“A Plaintiff in asserting a slander of claim title may recover (1) the expense of
legal proceedings necessary to remove the doubt cast by the disparagement, (2) financial
loss resulting from the impairment of vendibility of the property, and (3) general damages
for the time and inconvenience suffered by plaintiff in removing the doubt cast upon his
property.
“Acrew does not seek damages based upon impairment of vendibility or for
general damages. Instead, Acrew seeks fees and costs, which is appropriate since
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‘[w]here title was disparaged in a recorded instrument, attorney fees and costs necessary
to clear title or remove the doubt cast on it by defendant’s falsehood are, by themselves,
sufficient pecuniary damages for purposes of a cause of action for slander of title.’
Sumner Hill Homeowners’ Assn., Inc., 205 Cal.App.4th at 1031. v. Rio Mesa Holdings,
LLC, [sic] 205 Cal.App.4th 999, 1031 (2012).
“Acrew’s fact and expert witness James Kroetch testified that $247,467.62 in legal
fees was required to clear title. For Post Apple and Farag, expert witness Andrew Wiegel
testified that only 20.8 hours of the attorney billing was clearly tied to efforts to expunge
the title issues and testified that an extraordinary amount of time was spent determining
fundamental legal issues.”
Judge Petrou went on to observe that she did not find either side’s arguments to be
compelling and requested further briefing on the issue of damages.
Following that further briefing, Judge Petrou issued another Tentative Ruling and
Proposed Statement of Decision, to which plaintiffs filed objections. On July 1, 2014,
Judge Petrou issued her Statement of Decision Regarding Damages, again a thorough,
detailed analysis. This statement began with various findings, some of which repeated
the history of the litigation described above. Judge Petrou then turned to the substance:
“Attorney Rates
“As a preliminary matter, the Court finds that the billing rates as set forth on page
one of the Declaration of Jing Cherng in Support of Acrew’s Request for Fees . . . are
reasonable and notes that there has been no objection raised to any of these rates.
“Impact of Settlement Agreement
“The Court rejects Post Apple’s argument that since there was a settlement
agreement for all claims other than slander of title that Acrew cannot recover fees spent
on any other causes of action. This is incorrect as the settlement agreement clearly
excluded slander of title, including damages relating to same, and it is clear that the
slander of title action is inextricably intertwined with other causes of action. As set forth
within the settlement agreement, the ‘issue of Abraham Farah’s [sic] and Plaintiff Post
Apple LLC’s liability for any damages for slander of title, including without limitation,
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attorneys’ fees and punitive damages, shall be submitted to Judge Petrou for court trial.’
Settlement at paragraph 3. The parties could have agreed that any attorney fees incurred
after the date of execution of the settlement agreement would be ineligible for a potential
award. Instead, they agreed that damages in the form of attorney fees could be pursued
‘without limitation.’
“Post Apple’s argument that awarding attorney’s fees as damages post-settlement
undermines the public policy encouraging settlements is inapposite as this settlement
specifically carved out damages, including fees, relating to the slander of title cause of
action.
“However, as more fully set forth below, the Court does find that damages in the
form of fees other than to enforce the settlement agreement were cut off at the time the
parties entered into the settlement agreement because at that point the parties agreed on
the sale. While the settlement was not executed for a number of months, it was the
settlement—not the trial regarding slander of title—that caused title to be cleared.
“Mitigation of Damages
“Post Apple complains that Acrew did not file a declaratory relief action.
However, it is not the role of the Court to determine whether the litigation was the best,
most effective litigation possible under the circumstances but rather to determine whether
it was reasonable, fair and proper.
“Attorney Fees Incurred During Unlawful Detainer Proceeding
“Acrew elected to commence the litigation with an unlawful detainer action,
which it voluntarily dismissed. As set forth in the Court’s prior orders, the Lease
Subordination and Nondisturbance Agreement (LSNDA) and the Lease Memorandum
slandered titled [sic] to the property at issue and Post Apple and Farag used these
documents as the basis for their affirmative defenses in the unlawful detainer action.
“While the Court cannot normally award fees to a party that voluntarily dismissed
an action, Acrew has provided persuasive authority that Code of Civil Procedure
section 1021 does not apply to compensatory damages in the form of attorneys’ fee as an
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award of fees as damages is distinguishable from an award of fees as fees, and only the
latter is directly covered by section 1021.
“However, the Court declines to award the full amount requested for a number of
reasons. First, a billing rate of $550/hour is not customary for an unlawful detainer
action in Alameda County. Further, while this was a more complicated unlawful detainer
action than typical, the amount of work done was truly extraordinary. In addition,
Acrew’s fee request inappropriately includes requests for vague entries such as ‘attention
to discovery responses’ and for time spent in settlement discussions and ‘communicate re
settlement.’ There was also significant work done in that action not related to quieting
title and some duplication of work in the billings provided regarding the unlawful
detainer action and the instant action.
“Having gone through the detailed billings as there was no task based billing
summary, the Court finds that the application of a .6 multiplier, an award of $64,360, is a
reasonable and appropriate fee.
“Attorney Fees Incurred During Instant Action
“The LSNDA and Lease Memorandum were at the heart of Acrew’s causes of
action for slander of title, quiet title, ouster, ejectment, partition, and the prior unlawful
detainer action and attorney fees do not need to be apportioned between related causes of
action. Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC (2012)
205 Cal.App.4th 999, 1035–36. The Court finds that the fees, in fact, should not be
apportioned between these causes of action as there was not work done on these causes of
action separate and apart from what needed to be done in regards to the slander of title
cause of action. Work related to the breach of fiduciary duty, accounting, and
Section 17200 claims did not implicate title and should not be awarded in damages.
“However, upon further review f [sic] the case law and general jurisprudence, the
Court concludes that Seeley held a plaintiff was entitled to recover fees reasonably
necessary to remove the cloud on the title but not those ‘incurred merely in pursuit of
damages against . . . defendants’ or ‘in negotiations with third parties over sale or lease of
the property.’ Seeley v. Seymour (1987) 190 Cal.App.3d 844, 865–866. Once counsel
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has succeeded in clearing title, which in this case was accomplished in principle at the
time of the settlement agreement entered into on June 18, 2013, the ability to recover
attorney fees is cut off. Prior to that date, it is impracticable, if not impossible, to
separate the attorney’s time into compensable and noncompensable units given how
interrelated the causes of action for slander of title, quiet title, ouster, ejectment, and
partition are and how they all center upon the documents that clouded title. Bell v. Vista
Unified School Dist. (2000) 82 Cal.App.4th 672, 687.
“After the date of the settlement, it unfortunately took some number of months for
title to actually be cleared and the Court awards $5,000 as a reasonable fee for the work
that needed to be done post-settlement in order to actually effectuate the settlement.
“The Court recognizes and appreciates the substantial exercise of billing judgment
performed by counsel for Acrew, as well as the thought put into proper and appropriate
delegation of tasks as reflected in the Declaration of Jing Cherng, setting forth the request
for $136,487.63 it requests as damages in the form of fees related to this action
subsequent to the unlawful detainer action.
“Subtracting from the $136,487.63 the fees expended after settlement and giving
credit for $5,000 for fees related to the settlement after June 18, 2013, the Court awards
$92,054 in fees as damages incurred after the unlawful detainer action.
“JUDGMENT
“On the cause of action of Slander of Title, the Court previously found for Acrew
and against both Post Apple and Abraham Farag. The Court now finds that Acrew is
entitled to a total of One Hundred Fifty Six Thousand Four Hundred and Thirteen Dollars
($156,413) in damages as against Post Apple and Abraham Farag.”
Post Apple and Farag filed a timely appeal from the judgment.
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DISCUSSION
Post Apple’s and Farag’s Appeal Has No Merit:
Judge Petrou’s Decision is Fully Supported
Plaintiffs’ brief is separated into two parts: Part I, entitled “Slander of Title,”
asserts claims of error as to the slander of title decision; Part II, entitled “Attorneys’
Fees,” asserts claims of error in the damages awarded. We address them in turn.
Before doing so, we begin with the observation that plaintiffs’ brief essentially
ignores all of Farag’s misdeeds—indeed, essentially ignores Farag himself, who as
plaintiffs described him below, had done “hundreds of purchase and sale transactions and
bid at many foreclosure sales.” Plaintiffs’ brief also ignores numerous facts relied on by
Judge Petrou, including that the LSNDA contained false statements; that Post Apple was
not the lender on the entire note; that A and R’s supposed right to purchase the property
was false; that the April 21, 2011 signature date was false; that the lease memorandum
was false; and that Post Apple and Farag knew that members of the public might act in
reliance on the statements.
Plaintiffs’ first argument is that slander of title “was legally impossible against
Post Apple, LLC, as it was a joint owner of the property.” The argument fails, both
procedurally and substantively.
Procedurally, the argument fails because it was not made below. There was no
pleading indicating that Post Apple has taken any position that slander of title was
“legally impossible.” So, no such issue was before Judge Petrou, no issue that Acrew had
to be prepared to address with appropriate evidence. Similarly, after trial Post Apple did
not raise the argument in its opposition to Acrew’s proposed statement of decision, or
even allude to it in its own statement of decision. Post Apple is foreclosed from asserting
it here.
The leading California appellate treatise describes the rule this way:
“[8:229] New Theories Not Reviewable on Appeal: As a general rule, theories
not raised in the trial court cannot be asserted for the first time on appeal; appealing
parties must adhere to the theory (or theories) on which their cases were tried. This rule
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is based on fairness—it would be unfair, both to the trial court and the opposing litigants,
to permit a change of theory on appeal; and it also reflects principles of estoppel and
waiver ([¶] 8:244 ff.). [¶] . . . [¶]
“(2) [8:231] New theory of defense: Likewise, a defendant-appellant cannot
assert a new theory of defense (nonliability) for the first time on appeal.” (Eisenberg
et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2015) 8:229,
8:231, p. 8-167 to 8-168; accord, Giraldo v. Department of Corrections and
Rehabilitation (2008) 168 Cal.App.4th 231, 251.) But even assuming Post Apple were
not foreclosed from making the argument, it has no merit.
To begin with, plaintiffs cite to no case that supports their position, citing only to
several cases that do talk of “land of another,” all in the context where the slander of title
was to the land of another.
Many other cases set out the elements of a slander of title claim without requiring
that the property involved be that of another, but rather another’s “interest” in the
property. Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC (2012)
205 Cal.App.4th 999 (Sumner Hill) is illustrative. There, in a scholarly, comprehensive
discussion of the law, Justice Kane began as follows: “Slander or disparagement of title
occurs when a person, without a privilege to do so, publishes a false statement that
disparages title to property and causes the owner thereof ‘ “some special pecuniary loss
or damage.” ’ [Citation.] The elements of the tort are (1) a publication, (2) without
privilege or justification, (3) falsity, and (4) direct pecuniary loss. [Citations.] If the
publication is reasonably understood to cast doubt upon the existence or extent of
another’s interest in land, it is disparaging to the latter’s title. [Citation.]” (Sumner Hill,
supra, 205 Cal.App.4th at p. 1030.) So, it is another’s interest in land, not another’s land.
Our discussion in Seeley v. Seymour (1987) 190 Cal.App.3d 844, 858 (Seeley),
describing the Supreme Court case of Gudger v. Manton (1943) 21 Cal.2d 537, makes the
point: “[Gudger v. Manton] . . . supports our conclusion that a recorded document may
have no effect on title yet still give rise to a slander of title cause of action. There,
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defendant obtained a judgment against plaintiff’s wife and recorded a writ of execution
upon all the interest she had in a certain property belonging to plaintiff. The property
was entirely plaintiff’s separate property and thus the writ had no effect on plaintiff’s
title. In plaintiff’s suit for slander of title the California Supreme Court rejected the
notion that a legal cloud must be created in order to give rise to the action. ‘The essence
of the matter is that there has been an actionable dispargement of title if the plaintiff has
been proximately damaged thereby . . . . If the matter is reasonably understood to cast
doubt upon the existence or extent of another’s interest in land, it is disparaging to the
latter’s title where it is so understood by the recipient. (Rest., Torts, § 629.)’ ”
(190 Cal.App.3d at pp. 858–859.)
To the same effect, see Appel v. Burman (1984) 159 Cal.App.3d. 1209, 1214:
“ ‘One who publishes a false statement harmful to the interests of another is subject to
liability for pecuniary loss resulting to the other if (a) he intends for publication of the
statement to result in harm to interests of the other having a pecuniary value, or either
recognizes or should recognize that it is likely to do so, and (b) he knows that the
statement is false or acts in reckless disregard of its truth or falsity.’ ” Likewise Witkin,
who states the law this way: “Slander of title is a false and unprivileged disparagement,
oral or written, of the title to real or personal property, resulting in actual pecuniary
damage. [Citations.] ¶ The statement is disparaging if it throws any doubt on the
ownership of the property. The disparagement may occur not only by complete denial of
the title, but also by claim of some interest in it. Thus, filing or recording a document
that appears to claim an interest or to cast doubt on the title may furnish the basis for an
action. [Citations.]” (5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 642,
p. 947.)
Plaintiffs next argue that “Slander of title was legally impossible because of the
Dumas Lease attornment provision prevented the foreclosure from extinguishing the
lease.” This argument, too, is foreclosed by the “theory of trial” rule, as no such position
was asserted below, no claim or defense of “impossibility.” The argument also fails on
the merits.
16
To begin with, the argument ignores the numerous false statements recorded by
Farag, including that the nonsubordination agreement falsely stated that A and R had an
option to purchase the property, and also represented to the public that Post Apple owned
the entire note not to mention had a false, backdated signature. The argument also fails
as it is based on claimed facts that are unsupported. There is simply no evidence before
us that supports plaintiffs’ assertion that Acrew failed to object to plaintiffs’ actions, or
that checks were introduced for the purpose of showing that A and R paid rent, or any
evidence showing that this rent was “accepted.”
Plaintiffs’ third argument, set forth in three short paragraphs in less than a page,
contends that “Acrew’s purchase of the Property after the LSNDA and Lease
Memorandum were recorded shows there were no damages to the Property caused by
these documents, and without damages, Acrew’s slander of title claim fails.”
Sumner Hill is dispositive. There, as here, appellants argued that “the pecuniary damage
element of the [slander of title] . . . is only satisfied by evidence of actual loss to salability
of the property, and that expenditure of attorney fees and costs by themselves are
insufficient.” (205 Cal.App.4th at p. 1029.) And “in order for attorney fees and costs to
be recoverable as damages in a slander of title cause of action, there must also be
pecuniary damage to the salability of the property itself.” (Id. at p. 1031.) The Court of
Appeal rejected the contention, concluding as follows, “We do not agree that a plaintiff
must always show specific harm to vendibility, such as through proof of a lost sale or
diminished value. Rather, we hold that at least in cases such as this one where title was
disparaged in a recorded instrument, attorney fees and costs necessary to clear title or
remove the doubt cast on it by defendant’s falsehood are, by themselves, sufficient
pecuniary damages for purposes of a cause of action for slander of title.” (Ibid.)
Plaintiffs’ fourth slander of title argument contends that Farag could not be liable
individually because he was “protected by the corporate shield available to members of
limited liability companies.” Hardly.
Plaintiffs acknowledge Farag could be liable; as they put it: “A limited liability
member can be personally liable for his own tortious acts. People v. Pacific Landmark
17
(2005) 129 Cal.App.4th 1203 1216 (no individual liability for ‘[w]rongs committed by
the company merely because of their status as managers, but may be personally liable for
their participation in those wrongs.’).” And indeed he was. Judge Petrou found Farag
liable because he committed the tortious conduct that resulted in the slander of title: he
signed the Lease Memorandum; he signed the LSNDA; and he made the decisions to sign
and record the documents. And then he lied about it. In sum, Farag personally
participated in the tortious conduct at issue here. In Acrew’s words, he was “the
mastermind behind the wrongful acts that gave rise to this dispute.”
Moreover, Farag’s contention that he is not personally liable is wholly inconsistent
with his position taken below, in the third motion in limine—his successful
motion—where he prevailed by arguing that an alter ego theory of liability would be
redundant. His argument was that “Acrew has alleged that Farag has committed acts in
his own right that would make him liable to Acrew. Adding another theory of liability is
unnecessary.”
Our comments in Levin v. Ligon (2006) 140 Cal.App.4th 1456, 1468, are apt:
“Judicial estoppel, sometimes referred to as the doctrine of preclusion of inconsistent
positions, ‘ “ prevents a party from ‘asserting a position in a legal proceeding that is
contrary to a position previously taken in the same or some earlier proceeding.’ ” ’
(Daar & Newman v. VRL International (2005) 129 Cal.App.4th 482, 490–491 (Daar &
Newman).) The dual purposes for applying this doctrine are ‘ “ ‘to maintain the integrity
of the judicial system and to protect parties from opponents’ unfair strategies.’ ” ’
(Aguilar v. Lerner (2004) 32 Cal.4th 974, 986.) Judicial estoppel ‘is intended to prevent
litigants from “ ‘ “ ‘playing “fast and loose with the courts.” ’ ” ’ [Citation.]” [Citation.]
It is an “ ‘extraordinary remed[y] to be invoked when a party’s inconsistent behavior will
otherwise result in a miscarriage of justice.’ ” ’ (Daar & Newman, supra, at
pp. 490–491.)”
In sum, plaintiffs attack on Judge Petrou’s slander of title decision has no merit.
Likewise their attack on damages.
18
As noted, Judge Petrou awarded as damages three items: (1) $5,000 incurred in
connection with enforcing the settlement; (2) $64,360, representing a portion of the fees
incurred during the unlawful detainer case; and (3) $92,054 in fees in the action before
her, including the $5,000 to enforce the settlement agreement, but excluding all other fees
incurred post-settlement.
Part II of plaintiffs’ brief is entitled “Attorneys’ Fees,” and raises issues about
three specific components of the amount awarded by Judge Petrou, describing the issues
with these questions: “(1) Were attorneys’ fees awarded after the settlement
impermissible? (2) Were attorneys’ fees wrongly awarded for causes of action other than
slander of title? (3) Was the Trial Court authorized to award attorneys’ fees for the
separate unlawful detainer action?” We answer all three questions adversely to plaintiffs.
Damages recoverable in a slander of title action include “(1) the expense of legal
proceedings necessary to remove the doubt cast by the disparagement, (2) financial loss
resulting from the impairment of vendibility of the property, and (3) general damages for
the time and inconvenience suffered by plaintiff in removing the doubt cast upon his
property.” (Seeley, supra, 190 Cal.App.3d at p. 865.) In fact, Sumner Hill held that
“where title was disparaged in a recorded instrument, attorney fees and costs necessary to
clear title or remove the doubt cast on it by defendant’s falsehood are, by themselves,
sufficient pecuniary damages for purposes of a cause of action for slander of title.”
(Sumner Hill, supra, 205 Cal.App.4th at p. 1031.)
We thus look to the legal proceedings here, which were two: (1) the unlawful
detainer case—the highly contested, scorched-earth defended, unlawful detainer case
dismissed because Farag swore falsely under oath; and (2) the action, which generated an
seven-page register of actions. And it was for those litigations that Acrew sought
damages. Judge Petrou thoughtfully analyzed Acrew’s request, specifically noted “the
extensive evidentiary record,” and found Acrew’s request to reflect “substantial exercise
of billing judgment.” In sum, Judge Petrou undertook a detailed analysis of Acrew’s
papers, and made factual findings supporting her award of damages to Acrew. That
award was correct.
19
Turning first to the unlawful detainer case, we begin by noting that plaintiffs
concede that fees in that case could be properly recoverable, but argue they should not be
because the action was dismissed. As plaintiffs put it, “Yes, Acrew could have proven
title in the unlawful detainer action under Code of Civil Procedure § 1161a(b), and
attorneys’ fees and costs incurred in clearing title in a slander of title action are
recoverable as damages. [Citation.] [¶] But Acrew did not prove title. It dismissed the
unlawful detainer. Had Acrew prosecuted the unlawful detainer to a successful
conclusion in which it proved its title, then it would have a legitimate claim to recovering
its fees in that separate action because those fees would have been incurred in clearing
title. . .[¶] . . . [¶] There is no legitimate reason why Post Apple (and Mr. Farag who was
not even a party to the unlawful detainer) should be required to pay for Acrew’s
abandoned litigation strategy.” This is a most simplistic—and less than
candid—description of the unlawful detainer case.
In 2011 Acrew filed the unlawful detainer action against A and R as the tenant,
which action included Post Apple as an involuntary plaintiff. It was hardly a run of the
mill unlawful detainer action, to be disposed of quickly and efficiently.
To the contrary, it was pled under Code of Civil Procedure section 1061a, which
made title an issue. And it quickly became much more complicated—and expensive.
After Acrew filed the unlawful detainer complaint, Post Apple filed two motions to strike
and two demurrers. After Acrew successfully dealt with those motions, Post Apple then
answered and asserted numerous affirmative defenses based upon the Nonsubordination
Agreement. Post Apple also alleged that Acrew lacked title to the property. Acrew
propounded discovery to Post Apple and A and R, seeking the basis in their assertions
that A and R had a valid claim of possession to the property. A and R failed to respond,
necessitating a motion to compel.
In addition, there were several appearances for trial and settlement conferences,
including the first trial date, which turned into an impromptu settlement conference. This
led to two more days in court while the parties attempted to settle the dispute. They did
not. And then came Post Apple and A and R’s motion for summary judgment. There, as
20
Judge Petrou expressly found, Farag swore to false facts because they created a different
legal effect—and led to the unlawful detainer action being dismissed. In her words:
“Effectively these recorded documents, if truthful, allowed significant potential defenses
to the unlawful detainer and increased the cost of litigation increased [sic]. The unlawful
detainer litigation was replaced with this action, all of the claims which were designed to
eliminate the false documents and their legal effect.”
Judge Petrou found that the action was a continuation of the same dispute that
drove the unlawful detainer. She also found that the unlawful detainer issues were
inextricably intertwined with the slander of title issues and could not be apportioned.
“Inextricably intertwined” disposes of plaintiffs’ argument as to the fees awarded here, as
held in many cases.
Sumner Hill is one, a slander of title action. There, the Court of Appeal affirmed a
jury instruction that said attorney fees necessary to clear title are recoverable as damages;
that attorney fees were not recoverable in other causes of action; “ ‘However, attorney’s
fees and litigation costs need not be apportioned when incurred for representation on an
issue common to both a cause of action for which attorney’s fees and costs are awardable
and for which they are not allowed. [¶] If you find that non-fee claims are inextricably
interrelated with fee claims, you may award attorney’s fees and costs incurred in
connection with those inextricably related claims.’ ” (Sumner Hill, 205 Cal.App.4th
at p. 1035.)
Numerous other cases make the point, where courts have affirmed attorney fee
awards where the claims were so “intertwined as to make it impracticable, if not
impossible, to separate the attorneys’ time.” Maxim Crane Works, L.P. v. Tilbury
Constructors (2012) 208 Cal.App.4th 286 is illustrative (Maxim). Maxim arose when a
construction worker sued Maxim, a crane company, for personal injuries arising from a
worksite incident. Maxim filed a cross-complaint against the injured worker’s employer,
Tilbury, seeking indemnity. The cross-complaint failed, as the trial court enforced an
unfavorable choice-of-law provision in the contract written by Maxim, and found the
indemnity agreement inapplicable to the employee’s claim. The trial court thereafter
21
awarded Tilbury its full attorney fees, accepting “Tilbury’s contention that defense
against Maxim’s indemnity cross-complaint was ‘inextricably intertwined’ with Tilbury’s
defense against Gorski’s tort suit. . . .” (Id. at p. 297.) The Court of Appeal affirmed.
After beginning with the observation its scope of review was “narrow,” Maxim
then concluded with this:
“The California Supreme Court has stated that, ‘Attorney’s fees need not be
apportioned when incurred for representation on an issue common to both a cause of
action in which fees are proper and one in which they are not allowed.’ (Reynolds Metals
Co. v. Alperson (1979) 25 Cal.3d 124, 129–130; see Abdallah v. United Savings Bank
(1996) 43 Cal.App.4th 1101, 1111.)
“Further, ‘Apportionment is not required when the claims for relief are so
intertwined that it would be impracticable, if not impossible, to separate the attorney’s
time into compensable and noncompensable units.’ (Bell v. Vista Unified School Dist.
(2000) 82 Cal.App.4th 672, 687; see Drouin v. Fleetwood Enterprises (1985) 163
Cal.App.3d 486, 493 [‘Attorneys fees need not be apportioned between distinct causes of
action where plaintiff’s various claims involve a common core of facts or are based on
related legal theories.’].)” (Maxim, supra, 208 Cal.App.4th at p. 298.) As Judge Petrou
found here, the facts were “inextricably intertwined.”
Finally, plaintiffs attack the $5,000 awarded by Judge Petrou for the expense
involved in enforcing the settlement agreement. To no avail.
The settlement was signed in June, 2013. Acrew was compelled to bring a motion
to enforce it, which Post Apple and Farag opposed. The motion was ultimately granted
in September 2013. Despite this, title was not cleared until December 2013. In short,
Acrew’s title remained clouded from June until December. The expended $5,000 to
enforce the settlement was properly awarded.
Acrew’s Appeal Has No Merit: It Was Not Entitled to Attorney Fees
Following the judgment in its favor, Acrew filed a “Motion to Determine
Prevailing Party and for Attorney’s Fees.” The motion was made under Civil Code
22
section 1717,2 on the claimed grounds “that Acrew is entitled to fees against Post Apple
under the lease it invoked as a defense, and had Post Apple prevailed, Acrew would have
been liable for its fees under that same document.” The motion sought “an additional
$76,978.63 in fees.”
Post Apple and Farag filed opposition, Acrew a reply, and the motion came on for
hearing on October 22, 2014, prior to which Judge Petrou had issued a tentative ruling
against Acrew. Acrew contested that ruling, and Judge Petrou heard argument. She then
filed her order denying Acrew attorney fees, an order that well explained the basis for her
holding. It read as follows: “Acrew’s fee request is based on a lease between Daniel
Dumas and Annabelle Constantin, as lessors, and A and R Laundries LLC as lessee.
Although Acrew was not a signatory to that lease, it argues that it is nevertheless entitled
to attorneys’ fees under the lease, because Post Apple would have been entitled to fees
against Acrew if Post Apple had prevailed in this case. The Court does not understand
why Post Apple would have been entitled to any attorneys fees against Acrew based on
the lease if Post Apple had prevailed in this case. Post Apple has asserted in this case
that it was a party to the lease and/or assignee of the lessors’ rights under the lease. But
Acrew does not demonstrate that Post Apple ever asserted—at any time before it filed its
opposition to this Motion—that Acrew was a party to the lease, or a third party
beneficiary of the lease, or that Acrew would be liable for Post Apple’s attorneys’ fees
pursuant to the lease if Post Apple had prevailed against Acrew. A nonsignatory
claiming entitlement to attorneys’ fees pursuant to a contract to which it is not a party
must show that the signatory party actually would have been entitled to receive attorneys’
fees if it has been the prevailing party. (See Leach v. Home Savings & Loan Assn.
(1986) 185 Cal.App.3d 1295, 1307.) Acrew fails to make that showing.”
As noted, Acrew appealed from the order denying it fees, an appeal that asserts
three arguments: (1) the action was “on a contract”; (2) the attorney fees clause in the
2
Actually, the motion stated it was made under “Code of Civil Procedure §§ 1717,
1032, and 1033.5.” The first citation is obviously an error, and the other two sections
were not even mentioned in the memorandum.
23
lease is broadly written and applies to torts, including slander of title; and (3) Acrew is
entitled to attorney’s fees because had Post Apple prevailed, Acrew would have been
“found to be either a party to the lease or a [sic].”3 None of the arguments has merit.
“ ‘Except as attorney’s fees are specifically provided for by statute, the measure
and mode of compensation . . . is left to the agreement, express or implied, of the
parties . . . .’ ” (Code Civ. Proc., § 1021.) This section is the California version of the
“American rule,” under which each party must pay its own legal fees. (Trope v. Katz
(1995) 11 Cal.4th 274, 278–279.)
The issue is whether there is some agreement that changes the American rule.
And in answering that issue, the court’s “analysis begins and ends with the language of
the attorney fee clause on which [defendants] rely. [Citations.]” (People ex rel. Dept. of
Corporations v. Speedee Oil Change Systems, Inc. (2007) 147 Cal.App.4th 424, 429.)
The Supreme Court has synthesized the applicable principles—there, in the context of
“prevailing party”—this way: “ ‘ “Under statutory rules of contract interpretation, the
mutual intention of the parties at the time the contract is formed governs interpretation.
(Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written
provisions of the contract. (Id., § 1639.) The ‘clear and explicit’ meaning of these
provisions, interpreted in their ‘ordinary and popular sense,’ unless ‘used by the parties in
a technical sense or a special meaning is given to them by usage’ (id., § 1644), controls
judicial interpretation. (Id., § 1638.) Thus, if the meaning a layperson would ascribe to
contract language is not ambiguous, we apply that meaning. [Citations].” [Citation.]” ’ ”
(Santisas v. Goodin (1998) 17 Cal.4th 599, 608.) As the Civil Code succinctly puts it,
“The language of a contract is to govern its interpretation, if the language is clear and
explicit, and does not involve an absurdity.” (Civ. Code, § 1638.)
Judge Petrou’s responsibility was to apply the language of the attorney fee
provision to the proceeding before her, to determine if the proceeding was within the
language. And in doing so, she was―and we are―governed by one more principle: the
3
A fourth argument is that Acrew was a prevailing party, an issue not really in
dispute.
24
“[s]cope of [the] [p]rovision [is] [s]trictly [c]onstrued.” (7 Witkin, Cal. Procedure
(5th ed. 2008) Judgment, § 168, p. 712.)
The attorney fee provision in the lease provides in applicable part as follows: “If
any Party or Broker brings an action or proceeding involving the Premises whether
founded in tort, contract or equity, or to declare rights thereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorney’s fees . . . . The term ‘Prevailing Party’ shall include, without
limitations, 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.” That provision does not support attorney
fees to Acrew here.
First, Acrew was not within the terms of the attorney fee provision. The provision
begins: “If any Party or Broker brings an action. . . .” The lease defines who the
‘Parties’ to it are, using a capitalized ‘Party’ or ‘Parties’ wherever the lease refers to the
specific parties of the lease (Trial Exhibit #3, ¶1.1, at 014), indicating it is being used as a
defined term, i.e., a ‘Party’ must be the Broker or a party to the lease. Beyond the broker,
there were only three such parties: the two landlords and the tenant, A and R. Not
Acrew.
Second, Acrew’s motion was based on Civil Code section 1717, which provides in
pertinent part as follows: “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.”
Acrew asserts in point blank fashion that the action was “on the contract,” going
on to assert the claimed reason why: Post Apple’s “only defense involved the Dumas
lease, which contained a broad contractual fee-shifting clause.” Passing over Acrew’s
unsupported claim that the provision was “broad,” its case was not “on the contract.”
25
The case was for slander of title, a tort. (Truck Ins. Exchange v. Bennett (1997)
53 Cal.App.4th 75, 84.) As to this, what the Court of Appeal held in Exxess
Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698—a case, not incidentally,
that included an action to declare rights under a lease (p. 710)—is apt: “Civil Code
section 1717 does not apply to tort claims; it determines which party, if any, is entitled to
attorneys’ fees on a contract claim only. As to tort claims, the question of whether to
award attorneys’ fees turns on the language of the contractual attorneys’ fee provision,
i.e., whether the party seeking fees has ‘prevailed’ within the meaning of the provision
and whether the type of claim is within the scope of the provision. This distinction
between contract and tort claims flows from the fact that a tort claim is not ‘on a contract’
and is therefore outside the ambit of section 1717.” (64 Cal.App.4th at p. 708, internal
citations omitted.)
Maybe Post Apple’s defense implicated the Dumas lease. Maybe not. But even if
it did, it is of no consequence. Numerous cases have upheld denial of attorney fees to
nonsignatories in cases where agreements were in some way implicated. Three examples
are:
CytoDyn of New Mexico, Inc. v. Amerimmune Pharmaceuticals, Inc. (2008)
160 Cal.App.4th 288, where attorney fees had been awarded to successful defendants in a
case involving misappropriation of trademarks and patents. The Court of Appeal
reversed. After rejecting defendants’ arguments based on an indemnification clause in an
agreement between the parties, the court concluded as follows: “Defendants assert they
are entitled to attorney fees under the attorney fees clauses of several other agreements.
They are mistaken in each case. None of the defendants is a party to those agreements,
and in two cases neither is CytoDyn. The mere mention of an agreement in a complaint
does not mean, as defendants seem to believe, that the lawsuit has been brought to
enforce those agreements. Moreover, even if defendants were parties to the agreements,
the attorney fees clauses in most instances do not cover this lawsuit.” (Id. at p. 301.)
Super 7 Motel Associates v. Wang (1993) 16 Cal.App.4th 541: Fees denied to
nonsignatory real estate broker in the successful defense of fraud action arising from real
26
estate transactions, even though the underlying contract between the buyer and the seller
contained a broad fee clause.
Clar v. Cacciola (1987) 193 Cal.App.3d 1032: Action between holders of
competing deeds of trust, both of which contained attorney fee clauses; fees denied to
prevailing defendant under either deed, based on the complete lack of privity between the
competing trustees as to the fee clauses.
Acrew last asserts, however cursorily, that had Post Apple prevailed, Acrew would
have been liable for attorney fees. Judge Petrou said she did “not understand” the claim.
Neither do we. Simply, Acrew failed below, and fails here, to demonstrate how Acrew
would have been entitled to recover fees under the lease if Post Apple had prevailed on
the slander of title cause of action.4
DISPOSITION
The judgment in favor of Acrew is affirmed, as is the order denying Acrew
attorney fees. Each side shall bear its respective costs on appeal.
4
Acrew’s brief notes that Post Apple prayed for attorney fees. This does not mean
that the opposing party is entitled to fees, as many cases have held. (See, for example,
Sweat v. Hollister (1995) 37 Cal.App.4th 603, 616–617; and Sessions Payroll
Management, Inc. v. Noble Construction. Co. (2000) 84 Cal.App.4th 671, 681–82.)
27
_________________________
Richman, Acting P.J.
We concur:
_________________________
Stewart, J.
_________________________
Miller, J.
A142859 & A143832; Post Apple LLC et al. v. Acrew Management LLC et al.
28