Stooksberry v. El Rovia Mobile Home Park CA2/1 ( 2024 )

Filed 5/29/24 Stooksberry v. El Rovia Mobile Home Park CA2/1
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
FRANKLIN STOOKSBERRY, B329202
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 21STCV35351)
v.
EL ROVIA MOBILE HOME PARK,
LLC,
Defendant and Appellant.
APPEAL from an order of the Superior Court of
Los Angeles County, Richard L. Fruin, Jr. Judge. Reversed.
FisherBroyles, Pierson Ferdinand and Paul J. Beard II for
Defendant and Appellant.
Neighborhood Legal Services of Los Angeles County and
Dehsong Matheu for Plaintiff and Respondent.
____________________________
El Rovia Mobile Home Park, LLC (El Rovia) appeals from
an order denying its request for attorney fees under Civil Code
section 798.85, a provision of the Mobilehome Residency Law
(Civ. Code, § 798 et seq.; MRL). El Rovia sought those attorney
fees after one of its residents, respondent Franklin Stooksberry,
voluntarily dismissed a complaint alleging, inter alia, El Rovia
had charged fees for late payment of rent in violation of the MRL.
The trial court found that Stooksberry’s third cause of action
implicated Civil Code section 798.85, but denied the attorney fees
request because, during the pendency of the lawsuit, El Rovia
refunded Stooksberry’s late fees and rescinded its late fees policy.
On appeal, El Rovia argues it was the prevailing party for
purposes of attorney fees under Civil Code section 798.85 by
virtue of the dismissal in its favor, and it is immaterial that it
had refunded Stooksberry’s money and rescinded the challenged
late fees policy. El Rovia further argues the trial court erred in
finding Civil Code section 798.85 applicable to just the third
cause of action.
We agree the trial court erred. We conclude two of
Stooksberry’s causes of action arose under the MRL, thus
implicating Civil Code section 798.85—the third, which expressly
invoked the MRL, and the second, which alleged a violation of the
Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.;
UCL) premised in part on the MRL.
We further hold El Rovia is the prevailing party under Civil
Code section 798.85, which deems a party prevailing “where the
litigation is dismissed in his or her favor.” In light of this
language, Stooksberry’s voluntary dismissal in El Rovia’s favor
renders El Rovia the prevailing party, without regard for whether
2
Stooksberry dismissed the suit after achieving his litigation
objectives.
Accordingly, we reverse and remand for the trial court to
determine the amount of attorney fees to award.
BACKGROUND
1. Complaint
On September 24, 2021, Stooksberry filed a complaint
against El Rovia. In the general allegations preceding the causes
of action, the complaint alleged El Rovia had violated Penal Code
section 396, subdivision (e) by raising Stooksberry’s rent by more
than 10 percent during a state of emergency declared by the
Governor. The complaint further alleged El Rovia had imposed
fees for late payment of rent in violation of Civil Code
section 798.31, a provision of the MRL.
The first cause of action asserted claims under Penal Code
section 396, subdivision (e) and the UCL for the allegedly
unlawful rent increases.
The second cause of action also asserted violations of the
UCL, reiterating the allegedly illegal rent increase under the first
cause of action and adding the allegedly illegal imposition of late
fees. Stooksberry did not reference Civil Code section 798.31
under this particular cause of action. Stooksberry alleged
entitlement to attorney fees under Code of Civil Procedure
section 1021.5 and Civil Code section 798.85.
The third cause of action alleged violation of the MRL, and
specifically section 798.31, again based on the allegedly illegal
imposition of late fees.
The fourth cause of action alleged the imposition of late
fees was void under Civil Code section 1671, subdivision (d),
3
which concerns the validity of liquidated damages provisions in
contracts for, inter alia, rental of real property.
The complaint prayed for an injunction against the rent
increases and imposition of late fees, return of overpaid rent,
general and specific damages, punitive damages, statutory
damages under Civil Code section 798.86, attorney fees “as
allowed by law,” and costs.
2. Demurrer
On February 28, 2022, El Rovia demurred to the complaint.
El Rovia contended the causes of action concerning late fees were
moot because El Rovia had rescinded its late fees policy in
November 2021 and refunded the late fees Stooksberry had paid.
To the extent the issue was not moot, El Rovia further contended
Civil Code section 798.31 did not govern late payment charges at
mobilehome parks. As for the rent increases, El Rovia argued El
Monte’s rent control law superseded Penal Code section 396, and
Stooksberry had not exhausted his administrative remedies or
joined El Monte as an indispensable party. El Rovia also moved
to strike the prayer for punitive damages.
In support of its demurrer, El Rovia requested judicial
notice of, inter alia, a November 4, 2021 letter from “Harmony
Communities”1 to Stooksberry’s counsel stating, “Management
has decided to permanently modify its late-fee policy from a
percentage fee to a flat fee. Accordingly, we are enclosing a
refund of your client’s late fees . . . in the amount of $229.59.
Those late fees are hereby cancelled. Further, while
management works to develop its new policy, no late fees will be
1
The record does not indicate what relationship Harmony
Communities has with El Rovia.
4
applied to tenants, including your client, for November and
December. Once finalized, the new late-fee policy will be properly
noticed as required by law.” The letter expressly disclaimed any
admission or concession that the rescinded late fee policy was
illegal or improper.
Stooksberry opposed the demurrer, motion to strike, and
request for judicial notice. He argued, inter alia, the request for
judicial notice of the letter purportedly rescinding the late fees
policy did not comply with the Evidence Code and was an
improper attempt to introduce facts at the demurrer stage. He
contended he had adequately stated a claim under Penal Code
section 396, and, because he had not alleged a violation of El
Monte’s rent control law or challenged any decisions by El Monte,
the city was not an indispensable party. He claimed to have
adequately pleaded entitlement to punitive damages.
The trial court overruled the demurrer on March 24, 2022.
It rejected the mootness challenge to the late fees claims, ruling it
could not take judicial notice of the purported communication
from El Rovia rescinding the late fees policy. It also rejected
El Rovia’s argument that Civil Code section 798.31 does not
prohibit late fees. The court further found the arguments
concerning the interrelation of El Monte’s rent control law and
Penal Code section 398 “goes beyond matters pleaded and
judicially noticeable.” The court, however, granted the motion to
strike the prayer for punitive damages.
3. First amended complaint, dismissal, and motion for
attorney fees
On April 7, 2022, Stooksberry filed a first amended
complaint. Although the complaint added allegations regarding
the state of emergency and Stooksberry’s payment of rent, and
5
omitted the prayer for punitive damages, it otherwise was largely
identical to the original complaint. Stooksberry continued to
allege illegal rent increases and imposition of late fees, and
asserted the same four causes of action as the original complaint,
virtually unchanged.
El Rovia answered the first amended complaint on May 12,
2022. On August 4, 2022, the parties filed a stipulation to
continue trial in which they informed the trial court they
intended to file cross-motions for summary judgment. On
November 1, 2022, the parties filed another stipulation to
continue trial, this time stating the parties “may[ ]be filing
motions for summary adjudication or summary judgment.”
On December 9, 2022, Stooksberry filed a request for
dismissal without prejudice, and the clerk dismissed the case.
The record does not reveal why Stooksberry requested dismissal.
El Rovia then filed a motion for attorney fees under Civil
Code section 798.85. El Rovia argued Stooksberry’s lawsuit
“arises predominantly out of the provisions of the MRL,”
referencing in particular the second and third causes of action
and the prayer for statutory damages under Civil Code
section 798.86. El Rovia contended it was the prevailing party
under Civil Code section 798.85 because the complaint had been
dismissed in its favor prior to trial.
El Rovia’s counsel submitted a supporting declaration
indicating $20,678.40 in attorney fees.
Stooksberry opposed the motion, arguing the first and
second causes of action alleged price gouging in violation of the
Penal Code, and did not arise from the MRL. He contended the
same was true for the third and fourth causes of action—the
fourth cause of action was based on a statutory bar to liquidated
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damages unrelated to the MRL, and because of that bar, the trial
court never would have had to reach the MRL issue in the third
cause of action. Stooksberry further argued El Rovia was not the
prevailing party in any event, because Stooksberry “achieved
[his] full legal objective” as to the MRL claim because El Rovia
rescinded its late fees policy and refunded his money. Finally,
Stooksberry contended El Rovia’s attorney fees were
unreasonable.
The trial court denied the request for attorney fees. The
court found fees recoverable only as to the third cause of action
for violation of the MRL. “However, [El Rovia] after the suit was
filed refunded to [Stooksberry] the unauthorized fees, so the third
cause of action was filed based on [El Rovia’s] statutory violation.
[Stooksberry’s] other causes of action do not support a claim for
attorneys’ fees.”
El Rovia timely appealed from the denial of its fees request.
STANDARD OF REVIEW
“ ‘An order granting or denying an award of attorney fees is
generally reviewed under an abuse of discretion standard of
review; however, the “determination of whether the criteria for
an award of attorney fees and costs have been met is a question
of law” ’ ” “subject to de novo review.” (MHC Financing Limited
Partnership Two v. City of Santee (2005) 125 Cal.App.4th 1372,
1397.)
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DISCUSSION
On appeal, El Rovia argues the trial court erred in two
ways: first, by limiting application of Civil Code2 section 798.85
to the third cause of action, and second, by ruling El Rovia
was not entitled to fees under that provision. We conclude
section 798.85 applies to the second and third causes of action,
and El Rovia is entitled to attorney fees on both.
A. The Second and Third Causes of Action Arise Under
the MRL
Section 798.85 provides, “In any action arising out of the
provisions of this chapter [i.e., the MRL] the prevailing party
shall be entitled to reasonable attorney’s fees and costs. A party
shall be deemed a prevailing party for the purposes of this section
if the judgment is rendered in his or her favor or where the
litigation is dismissed in his or her favor prior to or during the
trial, unless the parties otherwise agree in the settlement or
compromise.”
For purposes of section 798.85, “an action arises out of the
MRL when the ‘foundation of the case [is] grounded in [any
portion of] the MRL.’ [Citation.] This is the case where the
claims or defenses in the action ‘directly involv[e] the application
of MRL provisions in specific factual contexts addressed by the
MRL.’ [Citations.] Put differently, an action arising out of the
MRL ‘includes all proceedings, at least to the time of judgment,
which are required to perfect the rights [created by the
MRL].’ [Citation.]” (Canyon View Ltd. v. Lakeview Loan
2 Further undesignated statutory citations are to the Civil
Code.
8
Servicing, LLC (2019) 42 Cal.App.5th 1096, 1113–1114 (Canyon
View).)
The parties debate in their briefing whether the
“ ‘foundation’ ” of this case is “ ‘grounded’ ” in the MRL. (Canyon
View, supra, 42 Cal.App.5th at p. 1113.) To the extent these
arguments suggest that entitlement to fees under section 798.85
depends on a determination that an entire complaint is or is not
grounded in the MRL, we disagree. Rather, the correct approach
is to determine whether a particular cause of action arises from
the MRL so as to implicate section 798.85. (See Akins v.
Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133
[“When a cause of action for which attorney fees are provided by
statute is joined with other causes of action for which attorney
fees are not permitted, the prevailing party may recover only on
the statutory cause of action.”].) To the extent claims subject to
section 798.85 are “separate and distinct” from claims that are
not, the trial court must “attempt to apportion fees and costs
consistent with the statutory mandate.” (See Bell v. Vista
Unified School Dist. (2000) 82 Cal.App.4th 672, 688 (Bell).)
In this case, the third cause of action arises from the MRL
because it alleges El Rovia’s imposition of late fees violated
section 798.31, a provision of the MRL. Stooksberry does not
dispute this on appeal.
The second cause of action arises from the MRL in part.
The second cause of action alleges a violation of the UCL
premised on the rent increases and late fees. The UCL
“ ‘ “ ‘borrows’ violations of other laws and treats them as unlawful
practices” that the [UCL] makes independently actionable.
[Citation.]’ [Citations.]” (SC Manufactured Homes, Inc. v.
Canyon View Estates, Inc. (2007) 148 Cal.App.4th 663, 672, fn. 8
9
(SC Manufactured Homes).) When the borrowed violation
supporting a UCL cause of action is a violation of the MRL, the
cause of action “necessarily” involves “ ‘a specific factual situation
addressed by the MRL’ ” (Canyon View, supra, 42 Cal.App.5th at
p. 1117, fn. 16), thus implicating the right to attorney fees under
section 798.85.
Stooksberry’s second cause of action alleges an unlawful
business practice under the UCL by borrowing the purported
prohibition on late fees under section 798.31. Although the
second cause of action does not expressly refer to section 798.31,
it expressly incorporates all previous paragraphs of the
complaint, which include the general allegation that the late fees
violated section 798.31. Also, Stooksberry asserts under the
second cause of action an entitlement to attorney fees under
section 798.85, reinforcing our conclusion that the cause of action
is premised on a violation of section 798.31, without which he
could not seek fees under section 798.85.
Stooksberry argues the second cause of action does not
allege a violation of the MRL, but rather is “based in violation of
contract law.” We presume Stooksberry is referring to the
contract claim raised in the fourth cause of action, which alleges
the late fee provision is void under section 1671—the complaint
otherwise asserts no contractual basis to challenge the late fees.
Section 1671 prohibits liquidated damages provisions in real
estate rental contracts absent certain circumstances. (§ 1671,
subds. (c)(2), (d).) Although within the Civil Code, it is not part of
the MRL.
Stooksberry’s argument ignores the fact that the second
cause of action 1) expressly incorporates all prior allegations,
including the allegation the late fees violate the MRL, and
10
2) invokes the MRL’s attorney fee statute. The first time the
original or first amended complaints mention section 1671 is in
the fourth cause of action, after the allegations pertaining to the
UCL. The complaint cannot be read to premise the UCL claim on
section 1671, at least not exclusively. The trial court erred in
ruling the second cause of action does not implicate
section 798.85.
The first and fourth causes of action, however, do not arise
from the MRL. The first cause of action is premised on alleged
excessive rent increases in violation of Penal Code section 396
during a state of emergency. The fourth cause of action, again, is
based on section 1671. Neither cause of action requires
application of the MRL to resolve.
El Rovia appears to argue that the first and fourth causes
of action arise from the MRL because the complaint’s prayer
seeks statutory damages under section 798.86. That section
allows a homeowner who prevails in an action to enforce rights
under the MRL to recover statutory damages of up to $2,000 “for
each willful violation of [the MRL] by the management.”
(§ 798.86.)
We reject this argument. El Rovia cites no authority that a
prayer for statutory damages implicates all causes of action in a
complaint, even those for which statutory damages are
unavailable as a matter of law, or that general invocation of
section 798.86 converts all causes of action to MRL claims. The
more reasonable reading of the complaint is that Stooksberry
seeks statutory damages solely for the alleged MRL violations.
B. El Rovia is the Prevailing Party on the MRL Claims
To recap, section 798.85 grants attorney fees to a
“prevailing party” in an MRL action. A party is deemed
11
prevailing “if the judgment is rendered in his or her favor or . . .
the litigation is dismissed in his or her favor prior to or during
the trial, unless the parties otherwise agree in the settlement or
compromise.” (§ 798.85.)
A defendant is entitled to attorney fees under
section 798.85 even if the plaintiff dismisses the complaint
voluntarily. (See Del Cerro Mobile Estates v. Proffer (2001)
87 Cal.App.4th 943, 948–949 (Del Cerro); SC Manufactured
Homes, supra, 148 Cal.App.4th at pp. 671, 675.) In Del Cerro, a
mobilehome park sued a tenant for, inter alia, public nuisance
under the MRL. (Id. at p. 946.) The park later dismissed the suit
without prejudice, and the trial court awarded the tenant
$8,153.65 in attorney fees. (Ibid.)
The Court of Appeal held the trial court did not err in
awarding attorney fees under section 798.85 on the nuisance
claim. (Del Cerro, supra, 87 Cal.App.4th at p. 949.) The court
noted that the “express language” of section 798.85 allows for
attorney fees in the event of a dismissal in a defendant’s favor,
and there was no “showing that the parties agreed otherwise.”
(Id. at pp. 948–949.) The court rejected the argument that the
trial court should have “use[d] ‘a pragmatic approach’ ” to
determine who was the prevailing party, noting that cases
advocating such an approach addressed statutory attorney fee
provisions that, unlike section 798.85, do not define “prevailing
party” or “the effect of a pretrial dismissal.” (Id. at p. 949; see
Coltrain v. Shewalter (1998) 66 Cal.App.4th 94, 101–102
[although “[t]he vast majority of attorney’s fee statutes do not
explicitly provide for the event of a voluntary dismissal,” “the
Legislature has headed the issue off at the pass by specifying in
12
the applicable statute whether a voluntary dismissal makes the
defendant the prevailing party,” including in § 798.85].)
SC Manufactured Homes cited Del Cerro to conclude that
defendants dismissed by the plaintiff were prevailing parties
under section 798.85. (SC Manufactured Homes, supra,148 Cal.App.4th at pp. 671, 675.)
Here, as in Del Cerro, Stooksberry voluntarily dismissed
his MRL claims against El Rovia, and the record does not
indicate the parties agreed in settlement or compromise to alter
the “prevailing party” definition under section 798.85. El Rovia
thus is entitled to attorney fees on the claims arising from the
MRL.
Stooksberry argues El Rovia cannot be the prevailing party
because El Rovia revoked its late fees policy and refunded his
money, leaving him “in a superior position with regard to his
MRL claim,” a fact not present in El Cerro. Stooksberry quotes
Santisas v. Goodin (1998) 17 Cal.4th 599 (Santisas), in which our
Supreme Court stated, “[I]t seems inaccurate to characterize the
defendant as the ‘prevailing party’ if the plaintiff dismissed the
action only after obtaining, by means of settlement or otherwise,
all or most of the requested relief, or if the plaintiff dismissed for
reasons, such as the defendant’s insolvency, that have nothing to
do with the probability of success on the merits.” (Id. at p. 621.)
The trial court appears to have agreed with Stooksberry, finding
El Rovia was not entitled to attorney fees because “after the suit
was filed” El Rovia “refunded to [Stooksberry] the unauthorized
fees.”
Santisas is not instructive, however, because that case
addressed contractual attorney fee provisions under Code of Civil
Procedure section 1717 that neither defined “prevailing party”
13
nor expressly authorized or barred fees upon dismissal of the
case. (Santisas, supra, 17 Cal.4th at p. 622.) In that
circumstance, “a court may base its attorney fees decision on a
pragmatic definition of the extent to which each party has
realized its litigation objectives, whether by judgment,
settlement, or otherwise.” (Ibid.) Santisas did not hold that a
court may engage in this “pragmatic” approach when the relevant
attorney fee provision defines “prevailing party”—indeed, the
Supreme Court stated courts must “examin[e] the terms of the
contract at issue, including any contractual definition of the term
‘prevailing party’ and any contractual provision governing
payment of attorney fees in the event of dismissal.” (Ibid.)
Our holding does not conflict with Santisas.
Further supporting our holding is section 798.85’s implicit
recognition that a dismissal may follow a settlement, a
circumstance in which a plaintiff may in fact have obtained “most
of the requested relief.” (Santisas, supra, 17 Cal.4th at p. 621.)
Yet section 798.85 provides that, even when the dismissal results
from a settlement, the defendant is deemed the prevailing party
“unless the parties otherwise agree in the settlement or
compromise.” Under this language, a plaintiff who dismisses
MRL claims after obtaining a favorable settlement, even one that
largely achieves his or her litigation goals, nonetheless is not the
prevailing party absent agreement of the parties. The
Legislature therefore contemplated the circumstance presented
here, in which a defendant is the prevailing party by virtue of a
14
voluntary dismissal irrespective of whether a party achieved its
litigation goals.3
Stooksberry argues awarding El Rovia attorney fees “would
reward El Rovia for violating the law and then correcting its
behavior only after [Stooksberry] was forced to sue it for its
unlawful behavior.” There has been no determination that
El Rovia engaged in unlawful behavior—Stooksberry dismissed
his claims before the trial court could adjudicate them, and
El Rovia has never admitted wrongdoing. Thus, assuming
arguendo El Rovia’s wrongdoing would override its entitlement to
fees under section 798.85, Stooksberry has failed to prove any
wrongdoing.
C. The Trial Court May Decide in the First Instance the
Amount of Attorney Fees To Award
El Rovia contends the amount of attorney fees it requested
below is reasonable and Stooksberry’s arguments to the contrary
3 In Employers Mutual Casualty Co. v. Philadelphia
Indemnity Ins. Co. (2008) 169 Cal.App.4th 340, the Court of
Appeal interpreted a settlement granting the plaintiffs
$3 million, including $1.8 million in attorney fees, to establish the
plaintiffs as prevailing parties for purposes of section 798.85,
although the settlement did not expressly so state. (Employers
Mutual Casualty Co., at p. 351.) “To conclude otherwise,” the
court held, “would be to exalt form over substance.” (Ibid.) We
have no cause to dispute that a settlement expressly granting
attorney fees to the plaintiff impliedly waives the defendant’s
entitlement to fees under section 798.85. Those circumstances
are not present here, where Stooksberry dismissed his MRL
claims without settlement, and El Rovia never agreed to pay his
attorney fees.
15
are unfounded. El Rovia asks that we direct the trial court to
grant its attorney fees motion with interest.
We decline to do so. There are questions the trial court has
yet to address, including the reasonableness of El Rovia’s
requested fees, and whether and how to apportion them given
that not all of Stooksberry’s claims arise under the MRL. These
questions normally are left to the trial court’s discretion, and we
see no reason to deviate from that approach. (Cortez v. Bootsma
(1994) 27 Cal.App.4th 935, 938 [determination of reasonable
attorney fees “is a matter vested in the sound discretion of the
trial court”]; Bell, supra, 82 Cal.App.4th at p. 687 [whether and
how to apportion attorney fees “rests within the sound discretion
of the trial court”].)
El Rovia further asks we award it attorney fees on appeal.
Del Cerro held it was proper to award attorney fees on appeal
under section 798.85: “ ‘ “[I]t is established that fees, if
recoverable at all—pursuant either to statute or parties’
agreement—are available for services at trial and on appeal.” . . .
Indeed, appellate courts have consistently permitted a successful
party to recover attorney fees incurred on appeal when a statute
expressly permits such an award in the trial court or other lower
tribunal.’ [Citation.]” (Del Cerro, supra, 87 Cal.App.4th at
p. 951.) Stooksberry raises no arguments specific to appellate
attorney fees. We therefore award El Rovia its reasonable
attorney fees in this appeal “in an amount to be determined by
the superior court.” (Ibid.; Moore v. Teed (2020) 48 Cal.App.5th
280, 299 [“ ‘Although this court has the power to fix attorney fees
on appeal, the better practice is to have the trial court determine
such fees.’ ”].)
16
DISPOSITION
The order denying attorney fees is reversed, and the matter
remanded for further proceedings consistent with this opinion.
El Rovia Mobile Home Park, LLC is awarded its costs and
attorney fees on appeal in an amount to be determined by the
trial court.
NOT TO BE PUBLISHED.
BENDIX, Acting P. J.
We concur:
CHANEY, J.
WEINGART, J.
17