Herrera v. A&P Auto Sales CA4/3 ( 2014 )

Filed 2/24/14 Herrera v. A&P Auto Sales CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
FOURTH APPELLATE DISTRICT
DIVISION THREE
CARLOS HERRERA,
Plaintiff and Appellant, G048290
v. (Super. Ct. No. 30-2011-00522752)
A&P AUTO SALES et al., OPINION
Defendants and Respondents.
Appeal from a postjudgment order of the Superior Court of Orange County,
David R. Chaffee, Judge. Affirmed.
Liberty & Associates, Louis A. Liberty and Ian Otto for Plaintiff and
Appellant.
Law Offices of Kevin O’Connell & Associates, Kevin O’Connell and
Heather Duro for Defendants and Respondents A&P Auto Sales and Paul Nguyen.
Coleman & Horowitt, Darryl J. Horowitt and Jennifer T. Poochigian for
Defendant and Respondent Wells Fargo Dealer Services.
Carlos Herrera appeals from the trial court’s order denying his attorney fees
motion. He asserts the terms of a settlement agreement he reached with A&P Auto Sales
(A&P), its owner Paul Nguyen, and Wells Fargo Bank (WFB), permitted him to file a
motion for attorney fees after the case was dismissed. He complains the court erred in
interpreting Herrera’s express waiver of fees, contained in his request for dismissal of the
case, as grounds to deny his subsequent motion for attorney fees. We find the contention
lacks merit and affirm the postjudgment order.
I
Because the appeal does not concern the underlying lawsuit, our summary
of the facts need not be detailed. Suffice it to say, Herrera purchased a severely frame
damaged 2006 Toyota Tundra from a used car dealership (A&P), and obtained financing
from WFB. Herrera filed a lawsuit after he discovered A&P concealed the vehicle had
been in an accident, the twisted frame needed to be replaced, the vehicle was a total loss,
and it was unsafe to be operated on the public road.
Before trial. the parties reached an agreement to settle the dispute. On
November 24, 2012, A&P, Nguyen, and WFB entered into a settlement agreement (the
Agreement) with Herrera, containing the following provisions: In the “recitals” section,
the parties stated the defendants “deny each of the allegations” alleged in the complaint.
It also noted Herrera was seeking the identity of 16 owners of vehicles purchased from
A&P.
In the Agreement, the parties stated they desired to resolve their dispute “in
the interest of avoiding the adverse cost, expense and publicity of litigation.” However,
the Agreement also specified, “This agreement shall not be treated as an admission of
liability or wrongdoing by any party, its subsidiaries or affiliates, or any directors,
officers, agents, employees, or attorneys thereof, or any of them.”
As part of the Agreement, Herrera received rescission damages ($7,110.70)
and A&P paid off WFB’s lien ($11,104.74). A&P agreed to, “Stipulate to an injunction
2
pursuant to which [A&P] will agree to abide by all laws and regulations relating to the
advertising of used vehicles, including, but not limited to AB1215 and disclosure of
frame damage, in all future vehicle[] sales and advertising.”
Herrera agreed to, “Waive any and all claims he may have against [A&P,
Nguyen, and WFB], save and except [Herrera’s] claim to reimbursement of attorney[]
fees and costs; [¶] . . . [¶] . . . [and] cause to be filed with the Orange County Superior
Court, a [r]equest for [d]ismissal, with prejudice” of the action.
With respect to the issue of attorney fees, the parties agreed the prevailing
party in any action brought to enforce or interpret the terms of the Agreement would be
entitled to recover attorney fees and costs. In addition, the parties clarified, “Nothing
contained herein shall constitute a determination that either party is the ‘prevailing party’
as such term is defined in Code of Civil Procedure section 1032[, subdivision] (a)(4).
Notwithstanding this fact, [Herrera] may, at his option, file a motion for attorney[] fees
within the statutory time set forth in California Rules of Court, [r]ule 3.1702; [WFB]
agrees it will not seek recovery of attorney[] fees. In the event such motion is filed,
[A&P, Nguyen, and WFB] may, at their option, oppose any such motion on all grounds
available to them. [¶] [] The parties agree that notwithstanding the dismissal that may be
filed . . . the [c]ourt shall retain jurisdiction to hear any motion for attorney[] fees that is
timely filed, as contemplated herein.”
As contemplated by the Agreement, Herrera filed a request for dismissal
after being paid the agreed upon damages. On December 17, 2012, Herrera filed Judicial
Council form CIV-110, requesting the action be dismissed. Herrera checked three boxes
on the form. He checked box number “1” indicating the matter should be dismissed with
prejudice. He checked box number “5” stating the request was for dismissal of all the
parties and all causes of action. He also checked box number “6” titled “Other
(specify)[.]” Here, Herrera added the typewritten sentence, “Each party to bear their own
attorney[] fees and costs[.]”
3
Approximately one month later, Herrera filed a motion seeking an award of
attorney fees, arguing he was the prevailing party. His counsel, Louis Liberty, filed a
supporting declaration, stating, “I am seeking $79,734.50 for hours worked and am
asking for a multiplier of 2.0 for a total demand, exclusive of costs of $159,469.00 and a
cost reimbursement of $12,847.20. The total request is $172,316.20.”
A&P and Nguyen filed an opposition, arguing the following points: (1) the
Agreement states there was no prevailing party in the action; (2) the motion was
untimely; (3) an earlier rejected settlement offer in 2011 barred recovery of attorney fees;
(4) counsel engaged in fraudulent conduct; and (5) the fees sought were not reasonable.
They also filed a motion to strike or tax costs, essentially raising the same arguments.
Herrera filed a reply and opposed the motion to strike or tax costs. He also filed
evidentiary objections.
WFB also filed an opposition to the motion seeking attorney fees and costs.
It argued the motion was “improper” in light of Herrera’s request for dismissal that
expressly stated each party must bear their own attorney fees and costs. WFB argued the
motion to recover fees and costs “are thus contrary to the dismissal, which is a court
order that [Herrera] is bound by and controls here.” In addition, WFB argued the motion
was untimely filed and served, Herrera was not the prevailing party in the action, there
was no basis for the award of fees against WFB, and Herrera failed to establish the fees
requested were reasonable. WFB noted Herrera failed to timely serve a memorandum of
costs. WFB separately filed objections to Liberty’s declaration.
The court considered oral argument as well as several supplemental
declarations. On the record, the court stated, “[I]t pains me to say this, but I think this is
one of those unfortunate life lessons. The paper filed with the court on December 17 is
clear enough that each party thereby agrees to bear their own attorney[] fees and costs.
That supersedes the language of the Agreement of November 24.”
4
On March 15, 2013, the court filed a minute order stating it rejected
Herrera’s argument “that it is clear from other terms in the settlement agreement that the
parties intended that [Herrera’s] right to attorney[] fees would survive execution of the
settlement agreement . . . [and] therefore . . . [the] argument regarding waiver is
inequitable.” The court explained the Agreement’s paragraph regarding attorney fees
contained “no requirement for [Herrera] to include a fee-and-cost-waiving clause in the
request for dismissal.” The court noted there were other problems and irregularities with
the motion for fees and costs, however, the court did not consider them in light of
Herrera’s waiver. The court denied the motion for attorney fees and costs and granted
A&P and Nguyen’s motion to strike the request for costs.
II
A. Application of Waiver Doctrine
Herrera first argues the trial court wrongly implied from his dismissal
request that he intended to waive his right to seek attorney fees. In other words, Herrera
asserts the court erred by applying the legal doctrine of waiver. He cites case authority
setting forth the general rule that a waiver can only be found when there is an “intentional
relinquishment of a known right,” and there must be “clear and convincing evidence” of a
waiver. (Citing Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31;
DRG/Beverly Hills, Ltd. v. Chopstix Dim Sum Café & Takeout III, Ltd. (1994)
30 Cal.App.4th 54, 60 (DRG); Brookview Condominium Owners’ Assn. (1990)
218 Cal.App.3d 502, 513.) He concludes the court erred because there is no evidence of
intent to waive his right to seek reimbursement of attorney fees because the Agreement
establishes a contrary intent. He is wrong.
“All case law on the subject of waiver is unequivocal: ‘“Waiver always
rests upon intent. Waiver is the intentional relinquishment of a known right after
knowledge of the facts. [Citations]. The burden, moreover, is on the party claiming a
waiver of a right to prove it by clear and convincing evidence that does not leave the
5
matter to speculation, and “doubtful cases will be decided against a waiver.”’
[Citations.]” (DRG, supra, 30 Cal.App.4th at p. 60.)
Herrera asserts the parties’ intent regarding attorney fees is clearly
demonstrated in the language of the Agreement. He focuses on two sections of the
Agreement. First, there is the paragraph stating Herrera agreed to waive all claims
“except” his claim for reimbursement of attorney fees and costs. Second, the parties
agreed the court would retain jurisdiction following the dismissal “to hear any motion for
attorney[] fees.” We agree it clearly can be inferred from these two provisions that
Herrera intended to file a motion for attorney fees when he executed the Agreement.
But this was not all the evidence contained in the Agreement regarding the
parties’ intent. Herrera’s right to file a motion seeking reimbursement of attorney fees
was not supported by any written guarantees the motion would be successful. To the
contrary, the Agreement expressly provided there was no admission of liability and no
determination “that either party” was the prevailing party. More importantly, the
Agreement stated “notwithstanding” the lack of a determination of a prevailing party,
Herrera “may, at [his] option” file a motion seeking reimbursement for attorney fees.
Thus, the Agreement merely gave Herrera the choice to file a postjudgment motion with
the burden of having to convince the court he was the prevailing party entitled to fees.
The provisions cited by Herrera support this interpretation. Those
provisions simply insured Herrera would not be restricted in the future from attempting to
recover attorney fees, and the court would retain jurisdiction if Herrera decided to file a
postjudgment motion. The Agreement also contemplated that if Herrera decided to seek
fees, his motion could be vigorously opposed, providing, “In the event such a motion is
filed, Defendants may, at their option oppose any such motion on all grounds available to
them.”
Based on all the relevant provisions contained in the Agreement (and not
just the two sentences cited by Herrera) we can infer the parties disputed the issue of
6
attorney fees and merely agreed to have the matter resolved by the trial court at a later
date. It is important to recognize the Agreement did not mandate resolution of this
dispute. Rather the parties intended to give Herrera the future option of filing a motion.
Because A&P and Nguyen refused to admit liability or concede Herrera was the
prevailing party, it was uncertain whether Herrera would expend the money and
resources to pursue the motion. Thus, contrary to Herrera’s argument, the only intent that
can be inferred from the Agreement is the intent to delay resolution of the attorney fees
dispute.
After executing the Agreement, Herrera filed a request to dismiss the entire
action and his counsel inserted the text “[e]ach party to bear their own attorney[] fees and
costs.” As noted by the trial court, the Agreement did not mandate this language be
added. By its clear and ordinary meaning, the language in the dismissal request indicated
there would be no motion for attorney fees. The trial court could reasonably interpret
Herrera’s actions and statement as abandoning any prior intent to seek fees and an
express waiver of this right.
Without supporting authority, Herrera maintains parties “commonly and
routinely” add this language to CIV-110 forms. Even if this were true, Herrera does not
assert “routine” was the reason he voluntarily inserted this language onto the pre-printed
form. Indeed, he offers no explanation as to why the language was included. His
observation such language is commonly used seems to suggest Herrera perhaps made a
mistake by including the waiver and he never intended to pay his own attorney fees.
However, if Herrera believed he made a mistake, or there was a clerical error, he could
have petitioned the trial court to set aside or modify the dismissal. But he did not do so.
Consequently, the trial court had no reason to assume Herrera did not intend to comply
with or abide to what he intentionally and voluntarily submitted to the court.
7
Thus, contrary to Herrera’s contention on appeal, the Agreement is not the
sole measure of his intent. To accept this theory we would be required to rewrite the
Agreement. Specifically, we would have to modify the provision giving Herrera the
option of filing a motion for attorney fees to a provision mandating that Herrera shall file
a motion for attorney fees after the case’s dismissal, and the trial court shall determine
this disputed issue. This we cannot do. (Kwok v. Transnation Title Ins. Co. (2009)
170 Cal.App.4th 1562, 1571 [“‘[W]e do not rewrite any provision of any contract . . . for
any purpose’”].)
Simply stated, the Agreement gave Herrera a provisional right to seek
attorney fees, and required further action on Herrera’s part. For this reason, Herrera’s
right could be waived by subsequent contradictory actions or words. For example, after
receiving the settlement money Herrera could have let the time pass for filing a motion
seeking fees. He could have informed the court he had a change of heart and no longer
wished to pursue a fee motion. This could have been accomplished orally in court, or by
what occurred in this case—Herrera submitted to the court a request to dismiss the case
in which he also expressly agreed to bear his own fees and costs. We conclude the trial
court correctly recognized Herrera’s request for dismissal contained an express waiver,
and qualified as a “intentional relinquishment of a known right.” (DRG, supra,
30 Cal.App.4th at p. 60.) We find no error in the court’s legal determination that the
dismissal, which Herrera never claimed was filed by mistake, was an express waiver of
his right to later petition for the reimbursement of fees.
B. No Modification
Herrera argues the trial court erred in holding the request for dismissal
superseded or modified the terms of the Agreement. He states that under basic rules of
contract interpretation, the court could not ignore the Agreement’s provision mandating
any modification be in writing and signed by “all parties.” This contention misconstrues
the court’s ruling and the record.
8
There is no evidence suggesting the court ruled the Agreement was
modified. The court’s tentative ruling, the reporter’s transcript of the hearing, and the
minute order do not contain any language from which it can be inferred the court applied
the legal theory of contract modification. We recognize that at one point the court stated
the waiver superseded the Agreement. However, the court was referring to the timing of
the waiver. Specifically, rights outlined in the Agreement were contradicted and
superseded by a subsequent express waiver. We have carefully reviewed the record, and
it clearly shows the trial court applied and relied only on the legal doctrine of waiver
when making its ruling.
III
The postjudgment order is affirmed. Respondents shall recover their costs
on appeal.
O’LEARY, P. J.
WE CONCUR:
RYLAARSDAM, J.
THOMPSON, J.
9