Nash v. Aprea ( 2023 )

Filed 10/3/23
CERTIFIED FOR PUBLICATION
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not been certified for publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION SEVEN
THOMAS NASH et al., B322796
Plaintiffs and (Los Angeles County
Respondents, Super. Ct. No. 21STCV28570)
v.
NINON APREA,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Armen Tamzarian, Judge. Affirmed.
Sigelman Law Corp. and Paul Sigelman for Defendant and
Appellant.
Linzer Law Group and Kenneth A. Linzer for Plaintiffs and
Respondents.
_________________________
Thomas Nash and Bo O’Connor sued Ninon Aprea for
breach of contract in connection with their rental of Aprea’s
home. Aprea failed to file an answer, and the trial court entered
a default judgment for $59,191. The judgment included $1,000 in
attorneys’ fees pursuant to a provision in the parties’ lease
agreement authorizing attorneys’ fees to the prevailing party not
to exceed $1,000. Aprea appealed, and we affirmed. (Nash v.
Aprea (Mar. 13, 2023, No. B319309) [nonpub. opn.].)
While the appeal was pending, the trial court granted in
part Nash and O’Connor’s motion under Code of Civil Procedure1
section 685.080, subdivision (a), for an order allowing their costs
of enforcing the judgment. The court awarded $27,721 in
attorneys’ fees under section 685.040, which allows as an award
of costs attorneys’ fees incurred in enforcing a judgment “if the
underlying judgment includes an award of attorney’s fees to the
judgment creditor pursuant to subparagraph (A) of
paragraph (10) of subdivision (a) of Section 1033.5.”
Section 1033.5, subdivision (a)(10)(A), in turn, provides that
attorneys’ fees may be awarded as costs where authorized by
contract.
In this appeal, Aprea contends the trial court erred in
awarding over $1,000 in attorneys’ fees for enforcing the
judgment because the lease authorized attorneys’ fees “not to
exceed $1,000.” However, once the judgment was entered, the
terms of the lease, including the $1,000 limitation on fees, were
merged into and extinguished by the judgment. Because the
judgment included an award of attorneys’ fees authorized by
1 Further undesignated statutory references are to the Code
of Civil Procedure.
2
contract, section 685.040 allowed an award of reasonable
attorneys’ fees incurred in enforcing the judgment. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Lawsuit and Judgment
Nash and O’Connor filed this lawsuit against Aprea in
August 2021. Their complaint alleged causes of action for breach
of written contract, breach of oral contract, breach of the
covenant of good faith and fair dealing, and bad faith retention of
a security deposit in violation of Civil Code section 1950.5. As
alleged, Nash and O’Connor entered into a written residential
lease agreement (lease) with Aprea to rent her Los Angeles home
for six months beginning in August 2020 for $8,000 per month,
and they paid her $64,000 ($48,000 in rent plus a $16,000
security deposit). During their tenancy they discovered mold on
the premises, and they reached an agreement with Aprea to
receive an $8,000 credit. However, after they vacated the home
in February 2021, Aprea did not pay the credit, return their
security deposit, or identify claimed deductions from the deposit.
Nor did Aprea respond to a June 2021 demand letter seeking the
credit and deposit.
The complaint attached and incorporated the lease.
Paragraph 36 of the lease, which utilized a form published by the
California Association of Realtors, was titled “Attorney Fees” and
stated, “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, collectively
not to exceed $1,000 . . . .” Nash and O’Connor’s prayer for relief
sought compensatory damages of at least $24,000, statutory
3
damages under Civil Code section 1950.5, prejudgment interest,
reasonable attorneys’ fees, and costs.
On September 2, 2021 Nash and O’Connor filed a proof of
service of the summons and complaint by substituted service at
Aprea’s house. Aprea did not file an answer, and Nash and
O’Connor filed a request for entry of default, which the court
clerk entered on September 22. Nash and O’Connor
subsequently filed a request for entry of default judgment in the
amount of $59,191, comprising $56,000 in damages, $1,533 in
prejudgment interest, $1,000 in attorneys’ fees, and $658 in costs.
In a supporting declaration, Nash and O’Connor’s attorney stated
the $1,000 requested in attorneys’ fees was “as provided for and
fixed by paragraph 36 of the Lease.” On November 10, 2021 the
trial court entered a default judgment against Aprea for $59,191,
including $1,000 in attorneys’ fees and $658 in costs.2
On November 29, 2021 Aprea filed a motion to vacate entry
of default and default judgment. The trial court denied the
motion, and a later motion for reconsideration, finding service
was proper and Aprea had actual notice in time to defend the
action. On April 8, 2022 Aprea appealed from the judgment and
the order denying her motion for reconsideration; we affirmed in
Nash v. Aprea, supra, No. B319309.
2 Because paragraph 36 of the lease limited attorneys’ fees
and costs collectively to $1,000, the award of $1,000 in fees plus
$658 in costs exceeded the contractual limit. However, Aprea did
not challenge the award in her appeal from the judgment.
4
B. The Motion for Order Allowing Costs of Enforcing the
Judgment
On May 20, 2022 Nash and O’Connor filed a motion for an
order allowing their costs of enforcing the judgment pursuant to
sections 685.040 and 685.080 (cost motion). They argued Aprea
had failed to satisfy the judgment, refused reasonable settlement
offers, and filed unsuccessful motions to vacate the judgment,
causing them “to undertake substantial post-judgment efforts in
enforcing the judgment and collecting the amount owed.”
(Capitalization omitted.) The cost motion listed several cost
items recoverable under the Enforcement of Judgments Law
(EJL; § 680.010 et seq.), including fees related to the issuance
and recording of the abstract of judgment, issuance of a writ of
execution, notice of a judgment lien, and filing fees and expenses,
totaling less than $500. The motion also sought postjudgment
interest of $3,534.
The lion’s share of the requested costs was for $58,068 in
attorneys’ fees that had been or were expected to be incurred in
postjudgment litigation. Nash and O’Connor argued the fees
were allowable as costs under section 685.040 because the default
judgment included an award of attorneys’ fees authorized by the
lease, but the $1,000 cap on fees in the lease did not limit the
award because the judgment extinguished the lease. The motion
utilized a lodestar analysis, multiplying the attorneys’ rates by
the hours the attorneys claimed had been expended to enforce the
judgment.3
3 The declaration of Nash and O’Connor’s attorney filed in
support of the motion is not part of the record on appeal.
However, Apria does not challenge the amount of the fees
5
In her opposition and supplemental memorandum, Aprea
argued (as she does on appeal) that because section 685.040
authorizes attorneys’ fees for enforcement only if the underlying
judgment includes attorneys’ fees pursuant to section 1033.5,
subdivision (a)(10)(A), which in turn only allows recovery of
attorneys’ fees as costs when authorized by contract, Nash and
O’Connor were not entitled to any additional fees for enforcement
of the judgment because the lease limited attorneys’ fees to
$1,000. Thus, Aprea argued, the statutory scheme “trumps [the]
merger doctrine” and “does not authorize collections above the
$1,000 limit incorporated by reference.”
After a hearing, on June 16, 2022, the trial court granted
the cost motion in part. The court allowed the cost items relating
to the abstract of judgment, judgment lien, writ of execution, and
filing fees, totaling $481, but denied the request for postjudgment
interest. The court found that Nash and O’Connor were entitled
to attorneys’ fees, but most of the claimed fees were incurred in
opposing Aprea’s motions to vacate and for reconsideration, not to
enforce the judgment. The court allowed Nash and O’Connor to
recover $27,240 in attorneys’ fees for the time spent litigating the
cost motion.
The trial court rejected Aprea’s argument that the $1,000
fee limitation in the lease barred Nash and O’Connor from
recovering additional attorneys’ fees. The court relied on the
holding in Globalist Internet Technologies, Inc. v. Reda (2008)
167 Cal.App.4th 1267, 1273-1274 (Globalist) that a plaintiff’s
right to postjudgment fees is based on an award of fees in the
awarded on appeal, arguing only that the $1,000 limit should
have applied.
6
judgment, not the original contract. Therefore, the trial court
held, “the contract’s $1,000 limit does not apply to judgment
creditors’ fees incurred enforcing the judgment. The judgment
includes some amount of contractual attorney fees, [and]
therefore judgment creditors may recover attorney fees as costs
under CCP § 685.040.”
On July 25, 2022 the trial court entered an amended
judgment for $86,912, combining the amount of the original
judgment ($59,191) plus the $27,721 in enforcement costs allowed
in the June 16, 2022 order. Aprea timely appealed.4
DISCUSSION
A. Recovery of Attorneys’ Fees as Enforcement of Judgment
Costs Under Section 685.040
Section 685.040 states, “The judgment creditor is entitled
to the reasonable and necessary costs of enforcing a judgment.
Attorney’s fees incurred in enforcing a judgment are not included
in costs collectible under this title [the EJL] unless otherwise
provided by law. Attorney’s fees incurred in enforcing a
4 Aprea’s August 12, 2022 notice of appeal states she is
appealing from the trial court’s June 16, 2022 order as a
postjudgment order appealable under section 904.1,
subdivision (a)(2). Because the July 25 amended judgment
incorporated the amount of costs awarded in the June 16 order,
we liberally construe Aprea’s appeal as one taken from the
amended judgment. (Cal. Rules of Court, rule 8.100(a)(2).)
However, we do not consider the documents included in the
parties’ appendices relating to motions for additional costs of
enforcement filed after Aprea’s notice of appeal, including Nash
and O’Connor’s request for a second amended judgment.
7
judgment are included as costs collectible under this title if the
underlying judgment includes an award of attorney’s fees to the
judgment creditor pursuant to subparagraph (A) of
paragraph (10) of subdivision (a) of Section 1033.5.”
Section 1033.5, subdivision (a)(10)(A), provides, “The following
items are allowable as costs under Section 1032 . . . [¶] . . .
Attorney’s fees, when authorized by . . . [¶] . . . Contract.”
“Thus, there are two requirements before a motion for an
award of postjudgment attorney fees may be awarded as costs:
(1) the fees must have been incurred to ‘enforce’ a judgment; and
(2) the underlying judgment had to include an award for attorney
fees pursuant to Code of Civil Procedure section 1033.5,
subdivision (a)(10)(A), which provides that attorney fees may be
awarded when authorized by contract.” (Jaffe v. Pacelli (2008)
165 Cal.App.4th 927, 935 (Jaffe); accord, Guo v. Moorpark
Recovery Service, LLC (2021) 60 Cal.App.5th 745, 750 (Guo);
Cardinale v. Miller (2014) 222 Cal.App.4th 1020, 1025
(Cardinale); Globalist, supra, 167 Cal.App.4th at p. 1275.)
“[T]he award of postjudgment attorney fees is not based on
the survival of the contract, but is instead based on the award of
attorney fees and costs in the trial judgment. [Citation.] This is
in accord with the extinction by merger analysis providing that
postjudgment rights are governed by the rights in the judgment
and not by any rights arising from the contract.” (Jaffe, supra,
165 Cal.App.4th at p. 935; accord, Gray1 CPB, LLC v. SCC
Acquisitions, Inc. (2015) 233 Cal.App.4th 882, 890 (Gray1);
Cardinale, supra, 222 Cal.App.4th at p. 1026; Globalist, supra,
167 Cal.App.4th at pp. 1273-1274.) As the Jaffee court explained,
“[W]hen a judgment is rendered on a case involving a contract
that includes an attorney fees and costs provision, the ‘judgment
8
extinguishes all further contractual rights, including the
contractual attorney fees clause.’” (Jaffe, at p. 934; accord,
Cardinale, at p. 1026.) Accordingly, “we look to the judgment
rather than the contract itself when determining a party’s
entitlement to fees.” (Guo, supra, 60 Cal.App.5th at p. 751.)5
Under section 685.080, a judgment creditor may claim costs
of enforcement, including allowable attorneys’ fees, by filing and
serving on the judgment debtor a motion describing the claimed
costs, supported by an affidavit of a knowledgeable person, upon
which the court must make “an order allowing or disallowing the
costs to the extent justified under the circumstances of the case.”
(§ 685.080, subd. (c).)6
5 In 1992 the Legislature added the last sentence of
section 685.040 (providing for attorneys’ fees in enforcing a
judgment) to abrogate the holding in Chelios v. Kaye (1990)
219 Cal.App.3d 75 that under the merger doctrine, “the statute
did not authorize awarding a judgment creditor attorney fees for
enforcement despite an underlying judgment allowing such fees
pursuant to a contract provision.” (Conservatorship of McQueen
(2014) 59 Cal.4th 602, 609; accord, Gray1, supra, 233 Cal.App.4th
at p. 890.) Notably, “[t]he amendment did not abrogate Chelios’s
holding that contractual rights merge into the judgment. Rather,
the amendment provided for the inclusion of postjudgment
attorney fees as costs when the contract provided for attorney
fees and attorney fees were initially included in the judgment.”
(Gray1, at p. 890.)
6 A judgment creditor may alternatively claim the costs of
enforcement by filing and serving a memorandum of costs, in
which case the judgment debtor must timely file a motion to tax
costs. (§ 685.070, subds. (a)-(d).) Nash and O’Connor filed both a
memorandum of costs and their cost motion. Although Aprea did
not file a motion to tax costs in response to the memorandum of
costs, the trial court found “[i]t would be unfair and unnecessary
9
Although we generally review an award of attorneys’ fees
for an abuse of discretion (Guo, supra, 60 Cal.App.5th at p. 749;
Jaffe, supra, 165 Cal.App.4th at p. 934), where, as here, “‘the
issue is whether the trial court had the authority pursuant to
section 685.040 to issue such an award,’” we review the legal
issue de novo. (Guo, at pp. 749-750; accord, Jaffe, at p. 934.)
B. The Trial Court Did Not Err in Allowing Attorneys’ Fees as
Enforcement Costs
The trial court’s award of attorneys’ fees met both
requirements for allowing postjudgment attorneys’ fees under
section 685.040, as set forth Jaffe, supra, 165 Cal.App.4th at
page 935 and its progeny. As to the first requirement, Aprea does
not dispute that the $27,240 in attorneys’ fees awarded by the
trial court—which included only those fees incurred in connection
with litigating the cost motion—were fees “incurred to ‘enforce’ a
judgment.” With respect to the second requirement that “the
underlying judgment had to include an award for attorney fees
pursuant to Code of Civil Procedure section 1033.5,
subdivision (a)(10)(A)” (Jaffe, at p. 935), Aprea argues the
attorneys’ fees included in the judgment were not authorized by
contract because the judgment (on Judicial Council form JUD-
100) did not mention the lease, and the complaint likewise only
sought reasonable attorneys’ fees without mentioning the lease.
However, the lease was attached to the complaint, and Nash and
O’Connor’s motion for entry of default judgment likewise
attached the lease and stated in a supporting declaration that the
requested $1,000 in attorneys’ fees was “as provided for and fixed
to require [Apria] to file both a motion to tax costs and oppose the
motion to fix costs.” Nash and O’Connor do not argue otherwise.
10
by paragraph 36 of the Lease.” Accordingly, the trial court’s
award of $1,000 in attorneys’ fees in the default judgment was an
award of attorneys’ fees pursuant to section 1033.5,
subdivision (a)(10)(A).
Aprea contends that because section 1033.5,
subdivision (a)(10)(A), only allows attorneys’ fees when
authorized by contract, and the lease only authorized fees not to
exceed $1,000, this limited authorization was necessarily
incorporated into an award allowed in enforcement proceedings
pursuant to section 685.040. Apria’s argument has superficial
appeal: If Nash and O’Connor were authorized as prevailing
parties in the underlying action to recover only $1,000 in
attorneys’ fees pursuant to section 1033.5, subdivision (a)(10)(A),
why can they now recover almost 30 times as much as judgment
creditors in enforcing the judgment based on section 685.040,
which expressly references section 1033.5?
The answer lies in the statutory language—as discussed,
section 685.040 provides that attorneys’ fees are allowed “if the
underlying judgment includes an award of attorney’s fees to the
judgment creditor pursuant to subparagraph (A) of paragraph
(10) of subdivision (a) of Section 1033.5.” Thus, there need only
be an award of contractually authorized fees to open the door to
recovery of postjudgment fees as enforcement costs. We decline
Aprea’s invitation to read into section 685.040 an additional
requirement that there not only be an award of attorneys’ fees in
the judgment “pursuant to” section 1033.5, subdivision (a)(10)(A)
(that is, the judgment awarded fees based on an attorneys’ fees
provision in a contract), but that any enforcement fees also be
expressly authorized by the underlying contract. (See McHugh v.
Protective Life Ins. Co. (2021) 12 Cal.5th 213, 227 [When
11
interpreting a statute, “[w]e first consider the words of the
statutes, as statutory language is generally the most reliable
indicator of legislation’s intended purpose. [Citation.] We
consider the ordinary meaning of the relevant terms, related
provisions, terms used in other parts of the statute, and the
structure of the statutory scheme.”].)
Our interpretation of the language in section 685.040 is
consistent with the merger doctrine, which recognizes that
“[u]pon entry of judgment, all further contractual rights are
extinguished, and the plaintiff’s rights”—and in this case, the
limitation on plaintiff’s rights—“are thereafter governed by the
rights on the judgment, not by any rights which might have been
held to have arisen from the contract.” (Tomaselli v.
Transamerica Ins. Co. (1994) 25 Cal.App.4th 1766, 1770; accord,
Guo, supra, 60 Cal.App.5th at p. 751; Globalist, supra,
167 Cal.App.4th at p. 1274; Jaffe, supra, 165 Cal.App.4th at
p. 935.) As discussed, the Legislature in drafting the current
version of section 685.040 did not intend to abrogate the merger
doctrine, but rather, to ensure that a judgment creditor could
obtain attorneys’ fees incurred in enforcing a judgment
notwithstanding termination of their contractual rights by
merger into the judgment. (Conservatorship of McQueen (2014)
59 Cal.4th 602, 609-610; Gray1, supra, 233 Cal.App.4th at
p. 890.)7 The Legislature could easily have specified that
7 Apria relies on language in a Senate Judiciary Committee
report in connection with the 1992 amendments to
section 685.040 that stated “the proposed amendment would
‘assure that contract provisions which provide for attorneys’ fee[s]
are enforceable regardless of whether they are incurred in
enforcing the judgment or in an appeal of the judgment.’”
(Conservatorship of McQueen, supra, 59 Cal.4th at p. 610,
12
contractual limitations on attorneys’ fees apply in enforcement
proceedings. It did not.
Although Apria is correct that most appellate courts that
have considered section 685.040 have not addressed whether
contractual limits on attorneys’ fees survive merger, we find
persuasive the reasoning in Cardinale, supra, 222 Cal.App.4th
pages 1025 to 1026. There, Noreen Cardinale won a money
judgment against Daniel Miller based on breach of contract,
fraud, and other claims arising from an abusive loan scheme. (Id.
at pp. 1022-1024.) The judgment against Miller included an
award of contractual attorneys’ fees. (Id. at p. 1025, fn. 8.)
Cardinale subsequently sued Miller and the brokers who engaged
in a refinancing scheme with him for fraudulent transfer and
conspiracy, alleging they conspired to prevent satisfaction of
Cardinale’s judgment. Cardinale prevailed at trial, and the trial
court awarded nearly $300,000 in attorneys’ fees against the
brokers under section 685.040. (Id. at p. 1025.)
quoting Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2616
(1991-1992 Reg. Sess.) as amended Aug. 12, 1992, p. 5.) Apria
argues this language shows the merger doctrine did not remove
the contractual limit on attorneys’ fees. However, as the
Supreme Court explained in McQueen, the legislative purpose of
the amendment was to ensure the availability of attorneys’ fees
arising from a contract at the enforcement phase despite the
merger doctrine (not to preserve the specific terms of the
contract). (See McQueen, at pp. 609-610 [the “committee report
noted that the contrast between the Chelios result—contractually
authorized fees could not be recovered for enforcement of the
judgment—and the settled rule that such fees could be recovered
in an appeal”].)
13
The Court of Appeal affirmed the attorneys’ fees award,
concluding as to the brokers that although they were not parties
to the underlying contract, the two requirements for an award of
postjudgment attorneys’ fees articulated by Jaffe, supra,
165 Cal.App.4th at page 935 had been met. (Cardinale, supra,
222 Cal.App.4th at p. 1025.) The court explained, “While in the
usual scheme of things the target of a fee motion under
section 685.040 is presumably the original judgment debtor, the
Legislature did not so restrict the provision’s scope.” (Id. at
p. 1025.) The court continued, “Nor is it critical here that the
[brokers] were not parties to the contractual fee provision
between Miller and Cardinale. As Jaffe explains, ‘[g]enerally,
when a judgment is rendered in a case involving a contract that
includes an attorney fees and costs provision, the “judgment
extinguishes all further contractual rights, including the
contractual attorney fees clause.”’ [Citation.] . . . [The brokers’]
status as strangers to Cardinale’s contract with Miller does not
immunize them from liability under section 685.040.” (Id. at
p. 1026.)
Although we have reservations whether section 685.040
supports an attorneys’ fees award against a nonparty to a
contract, that question is not before us. But we agree with
Cardinale’s reasoning that under the merger doctrine the specific
limitations of the contract (including the $1,000 limit here) no
longer apply once the judgment is entered, and instead, the
operative question in considering whether fees are available as
enforcement costs under section 685.040 is simply whether the
judgment included attorneys’ fees awarded pursuant to a contract
because the “‘“judgment extinguishes all further contractual
14
rights, including the contractual attorney fees clause.”’”
(Cardinale, supra, 222 Cal.App.4th at p. 1026.)8
DISPOSITION
The amended judgment is affirmed. Nash and O’Connor
are to recover their costs on appeal.
FEUER, J.
We concur:
PERLUSS, P. J. SEGAL, J.
8 Aprea’s argument that claim preclusion bars Nash and
O’Connor from recovering additional attorneys’ fees without
“‘actual litigation’” of their right to recover attorneys’ fees over
$1,000 fails to address the law under section 685.040 that prior
contract terms are merged into the judgment. Aprea’s reliance on
Sukut Construction, Inc. v. Cabot, Cabot & Forbes Land Trust
(1979) 95 Cal.App.3d 527, 529-531 to support her argument is
misplaced. In Sukut, the Court of Appeal concluded that claim
preclusion applied to bar the plaintiff’s action to foreclose a
mechanic’s lien against parcels of property because the claim was
“encompassed” by a prior foreclosure action. (Id. at p. 531.)
Sukot involved only claim preclusion (that the action to enforce
the lien reasserted a right litigated in a prior action), not the
EJL. Apria’s final argument that Nash and O’Connor waived
their right to attorneys’ fees over $1,000 fares no better, simply
recycling her argument the lease survives the judgment.
15