Cubework.com v. Solo Trading CA2/1 ( 2024 )

Filed 6/6/24 Cubework.com v. Solo Trading CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
CUBEWORK.COM, Inc., B330959
Plaintiff, Cross-defendant (Los Angeles County
and Appellant, Super. Ct. No.
19STCV34873)
v.
SOLO TRADING,
Defendant, Cross-
complainant and
Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, Michael Small, Judge. Affirmed.
Park Law and Daniel M. Park for Plaintiff, Cross-
defendant and Appellant.
The Brinton Firm, Matthew L. Brinton, and Nickolas B.
Solish for Defendant, Cross-complainant and Respondent.
_______________________________
Cubework.com, Inc. (Cubework) appeals from a
postjudgment order awarding attorney fees to Solo Trading, Inc.
(Solo). Cubework has not demonstrated error, and we affirm the
order.
BACKGROUND
I. Cubework’s Complaint and Solo’s Cross-Complaint
At all times relevant to this action, Cubework “operated
commercial warehouse and office space at various properties
throughout the United States,” as stated in its complaint. Solo’s
“business involved buying and selling of merchandise including
clothing, toys, and other goods,” as stated in its cross-complaint.
On September 30, 2019, Cubework filed this action against
Solo, asserting causes of action for breach of contract and
trespass to real property. The action arises from an April 29,
2019 Occupancy License Agreement between these two parties
(the License Agreement), under which Cubework licensed
warehouse/office space to Solo to “be used for the purpose of
general warehousing and temporary storage of inventory in
connection with [Solo]’s business,” and Solo agreed to pay
Cubework $3,511 per month in license fees.
In its first cause of action for breach of contract, Cubework
alleged Solo breached the License Agreement by failing to pay
monthly license fees beginning in July 2019, leaving its “personal
possessions” at the licensed premises, and damaging Cubework’s
property. For these alleged breaches, Cubework sought damages
“in an amount that represents the reasonable value of the space
occupied by” Solo “and/or 200% of the license fee pursuant to the
License Agreement,” and compensation for damage to the
property.
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In its second cause of action for trespass to real property,
Cubework alleged Solo continued to occupy the licensed premises
and failed to remove its personal property after Cubework gave
Solo “written notice of default of the License Agreement and
directed [Solo] to remove its property within the time permitted.”
For the alleged trespass to real property, Cubework sought
damages under Civil Code section 3334 (value of the use of the
property, reasonable cost of repair, and costs of recovering
possession), a permanent injunction under Civil Code section
3422 mandating removal of Solo’s personal property, and
punitive damages.
In October 2019, Solo filed an answer to the complaint and
a cross-complaint asserting causes of action against Cubework for
(1) negligence, (2) breach of contract, (3) breach of the covenant of
good faith and fair dealing, (4) intentional interference with
contractual relations, (5) conversion, (6) trespass to chattels, (7)
violation of Business and Professions Code section 17200 (the
Unfair Competition Law), (8) fraud in the inducement, and (9)
constructive eviction.
Solo alleged in the cross-complaint, in pertinent part, that
in May 2019, it attempted to procure a business license from the
City of Santa Fe Springs (the City), a condition of its occupancy of
the subject premises under the License Agreement. In or around
June 2019, the City inspected the subject premises and cited
Cubework for code violations and unpermitted work at the
property. Shortly thereafter, the City determined Cubework did
not have a certificate of occupancy for the subject premises. The
City ordered the cessation of all operations at the property and
ordered everyone to exit the building until Cubework obtained
final permits. Around the end of July 2019, Cubework locked the
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door to the warehouse/office space Solo had leased, and Solo’s
personal property was locked inside. Solo sought damages from
Cubework for, among other things, “approximately $40,000 worth
of [Solo’s] merchandise” that Cubework converted; interference
with Solo’s relationships with vendors, who were unable to
purchase Solo’s merchandise after Cubework locked Solo out of
the licensed property; and “the collapse of [Solo]’s entire
business.” Solo also sought an award of reasonable attorney fees
under the License Agreement.
II. The Trial Court’s Statement of Decision After the
Bench Trial
After more than two years of litigation, the trial court
(Judge Steven J. Kleifield) held a bench trial from January 31
through February 4, 2022. The record before us does not include
the evidence presented at trial or the judgment entered
thereafter. Neither party appealed from the judgment. The
appellate record includes the August 26, 2022 statement of
decision issued after trial. We summarize the pertinent findings
in the statement of decision because the trial court (Judge
Michael Small) referenced these findings in granting Solo’s
motion for attorney fees—the matter at issue in this appeal.
Moreover, Cubework cites the findings in the statement of
decision in challenging the attorney fees award.
As set forth in the statement of decision, the trial court
found Solo breached the License Agreement in two ways: (1) it
defaulted in August 2019 after not paying monthly license fees;1
1 As the trial court noted in the statement of decision,
under the License Agreement, a default allowed Cubework “to
revoke the license and ‘enter upon the Licensed Premises and
4
and (2) it conducted a retail business at the subject premises,
although the License Agreement only permitted general
warehousing and temporary storage of inventory. The court also
found, however, that Solo’s obligation to pay monthly license fees
was excused by Cubework’s own breach of the License
Agreement: the failure to provide Solo with usable premises due
to code violations and lack of a certificate of occupancy.
Moreover, the “fact that Solo may have conducted unpermitted
activities on the premises did not relieve Cubework from its basic
obligation to provide premises that could be used.” For these
reasons, the court found against Cubework on its first cause of
action for breach of contract.
The trial court also found against Cubework on the only
other cause of action in its complaint, trespass to real property.
The court explained, “Solo did not remain in possession of the
premises. Cubework locked up the premises and made it
inaccessible to Solo.” The court added: “This had the effect of
keeping Solo out, but also the effect of keeping Solo’s ‘effects’ in.
While the parties submitted copies of emails between counsel
discussing return of items in early 2020 there was no explanation
as to why there wasn’t a prompt offer to Mr. Pastor [Solo’s owner]
to pick up his merchandise and other items. There was nothing
in the [L]icense [A]greement that permitted Cubework to keep
Solo’s property.” The court also found Solo did not receive value
for its June 2019 payment of license fees to Cubework ($3,511.50)
because the licensed premises were not usable.
expel or remove Licensee and Licensee’s effects without being
liable for any claim for trespass or damages therefore.’ ”
5
Based on the foregoing findings, the trial court found in
favor of Solo on its second cause of action for breach of contract,
its fifth cause of action for conversion, and its sixth cause of
action for trespass to chattels. The court found against Solo on
the other six causes of action asserted in the cross-complaint.2
The court awarded Solo $48,511.50 in damages: $45,000 for the
value of the merchandise Cubework converted, plus $3,511.50 for
the June 2019 license fees it paid. Cubework obtained no relief
on its complaint.
III. Solo’s Motion for Attorney Fees
In October 2022, around three years after Cubework filed
this action, Solo moved for attorney fees under an
indemnification provision of the License Agreement, providing:
“Licensor [Cubework] hereby agrees that Licensor shall
indemnify, defend and hold Licensee [Solo] harmless from and
against any and all costs, expenses and liabilities, including
reasonable attorney’s fees, incurred by Licensee which may arise
as a result of any damages or loss incurred by Licensee caused by
or resulting from Licensor’s gross negligent acts or willful
misconduct.”3 (See Civ. Code, § 2772 [“Indemnity is a contract by
which one engages to save another from a legal consequence of
2 The trial court rejected Solo’s claims that the License
Agreement was in fact a lease and Cubework’s characterization of
it as a license agreement was a “scam.”
3 Solo also moved for attorney fees under Civil Code section
1717. The trial court determined this statutory provision is
inapplicable because the License Agreement does not provide for
an award of attorney fees incurred to enforce the contract.
Neither party disputes this determination, and it is not at issue
in this appeal.
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the conduct of one of the parties, or of some other person”]. The
License Agreement also included a provision requiring Solo to
similarly indemnify Cubework.
Solo argued in the motion, “ ‘direct liability’ clauses (such
as this one) allow the contracting parties to seek attorneys’ fees
and costs from each other.” Solo further asserted the trial court
(Judge Kleifield) made factual findings in the statement of
decision demonstrating Cubework committed willful misconduct:
Cubework failed to provide usable premises to Solo; Cubework
failed to obtain a certificate of occupancy for the premises;
Cubework locked up the premises and made it inaccessible to
Solo; Cubework kept Solo’s property, although nothing in the
License Agreement allowed it to do so; and the trial court found
Cubework liable for conversion and trespass to chattels,
intentional and wrongful conduct.
After Solo’s counsel deleted around 90 entries from its
billings that might have been duplicative, Solo sought an award
of $225,894 in attorney fees for approximately 500 hours of work
over three years, at a rate of $450 per hour. Solo’s counsel
represented Solo on a contingency fee basis.
In its opposition to Solo’s motion for attorney fees,
Cubework argued, in pertinent part, that Solo is not entitled to
an award of attorney fees under the indemnification provision of
the License Agreement because Cubework did not commit gross
negligent acts or willful misconduct, as required for
indemnification. Cubework challenged the trial court’s findings
of fact and conclusions of law set forth in the statement of
decision after trial, although Cubework did not appeal from the
judgment. For example, Cubework asserted the trial court erred
when it concluded Cubework breached the License Agreement by
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failing to obtain a certificate of occupancy. Cubework argued it
had no such duty under the License Agreement. Cubework also
stated it “acted consistently with its understanding of” the
License Agreement when it deemed Solo’s personal property to be
abandoned (although the trial court found, “There was nothing in
the [L]icense [A]greement that permitted Cubework to keep
Solo’s property”). Cubework further asserted, “[T]he vast
majority of the rulings and factual findings in the statement of
decision were in favor of Cubework” (although Cubework
prevailed on none of its causes of action and Solo prevailed on
several). In support of these arguments, Cubework relied on the
evidence presented at trial (which is not included in the appellate
record before us); it did not present additional evidence or ask the
trial court to hold an evidentiary hearing on Solo’s motion.
Cubework also argued in its opposition, “If the court is
inclined to grant fees, it must apportion the fees” and award Solo
only fees related to the intentional tort causes of action on which
it prevailed (conversion and trespass to chattels), and exclude
work performed on behalf of Michael Pastor (Solo’s owner), who
was originally named as a defendant and cross-complainant but
was dismissed from the action before trial. Cubework complained
that the amount of attorney hours for which Solo sought
compensation (500 hours) was too high; that a “large amount of
hours” were “for communications as opposed to the performance
of legal work”; and that counsel’s billing rates were excessive.
Cubework did not suggest a revised dollar figure for Solo’s claim
or point to any particular billing entries that should be deleted.
On April 11, 2023, three and a half years after Cubework
filed this action, the trial court (Judge Small) held a hearing on
Solo’s motion for attorney fees and heard oral argument from the
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parties.4 The record before us does not include a reporter’s
transcript of this hearing. The same day, the court issued an
order granting the motion.
As set forth in the order, the trial court concluded Solo was
entitled to an award of attorney fees under the indemnification
provision of the License Agreement in accordance with Civil Code
section 2772. The court agreed with Solo that Cubework’s actions
in connection with the conversion of Solo’s personal property and
the trespass to Solo’s chattels constituted willful misconduct, and
Solo sustained damages as result of such willful misconduct.
Regarding the amount of attorney fees claimed, the court stated:
“The Court is cognizant of the fact that while Solo was awarded
only roughly [$]45,000 on its conversion and trespass to chattels
claim[s], it is seeking over $225,000 in attorney’s fees for work on
all of the claims that Solo brought. The Court has concluded,
however, that based on a review of the billing records of Solo’s
counsel, the claims for which fees are authorized and the claims
for which fees are not authorized are so intertwined that it would
be impractical to try to separate the hours that counsel spent on
compensable claims from the hours spent on noncompensable
claims. The Court also has concluded based on the review of the
billing records that the amount of fees sought is reasonable. The
billing rate of Solo’s attorney is consistent with market rates for
attorney[s] with similar skills and experience for the matters
raised in this litigation, and the number of hours that the
attorney spent strikes the Court as in line with the nature and
history of the litigation.” The court awarded Solo the amount it
sought in attorney fees, $225,894.
4 The trial judge (Judge Kleifield) had retired.
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DISCUSSION
I. Cubework Has Not Demonstrated the Trial Court
Erred in Finding Cubework Committed Willful
Misconduct, Entitling Solo to Indemnification
Cubework does not dispute that the License Agreement
requires it to indemnify Solo against reasonable attorney fees
Solo incurred as a result of damages or loss to Solo caused by or
resulting from Cubework’s gross negligent acts or willful
misconduct. Cubework contends the trial court (Judge Small)
erred in finding Cubework committed willful misconduct.
Cubework has not demonstrated such error.
At oral argument in this appeal, Cubework asserted the
fact that Solo prevailed on its intentional tort causes of action for
conversion and trespass to chattels does not, by itself, establish
Cubework committed willful misconduct. We agree. A wrongful
intent is not an element of either tort. (See Voris v. Lampert
(2019) 7 Cal.5th 1141, 1158 [conversion is a strict liability tort
that “does not require bad faith, knowledge, or even negligence,”
but only requires that “the defendant have intentionally done the
act depriving the plaintiff of his or her rightful possession”];
Taylor v. Forte Hotels International (1991) 235 Cal.App.3d 1119,
1124 [for conversion, the “act must be knowingly and
intentionally done, but a wrongful intent is not necessary”]; see
also Berry v. Frazier (2023) 90 Cal.App.5th 1258, 1271 [trespass
to chattels, “ ‘[t]hough not amounting to conversion,’ ” requires an
intentional act that interferes with the possession of personal
property].) To the extent the trial court implied in the order
awarding attorney fees that liability for conversion and trespass
to chattels necessarily establishes willful misconduct, this was
10
incorrect. But this was not the only basis for the court’s finding
of willful misconduct.
In its order granting Solo’s motion for attorney fees, the
trial court found that Cubework’s actions in connection with its
conversion of Solo’s property and its trespass to Solo’s chattels
constituted willful misconduct. Cubework attempts to challenge
the finding of willful misconduct by arguing that Solo abandoned
its personal property under the terms of the License Agreement,
so Cubework could not have engaged in willful misconduct when
it took actions with respect to Solo’s property. But the
determination of whether Solo abandoned its personal property
was already made—in Solo’s favor and against Cubework—at the
bench trial (held before Judge Kleifield). There, the court found
Cubework locked up the licensed premises, with Solo’s personal
property inside, and made the premises inaccessible to Solo; and
there was nothing in the License Agreement allowing Cubework
to take these actions. In this appeal, Cubework argues Judge
Kleifield’s “ruling that there was nothing in the agreement that
permitted Cubework to keep Solo’s property was made in error”
because Solo abandoned its personal property under the terms of
the License Agreement. Essentially, Cubework believes Judge
Small should have ignored the findings of fact and conclusions of
law in Judge Kleifield’s statement of decision issued after trial,
and evaluated the case anew in deciding Solo’s motion for
attorney fees. Cubework provides no authority for this novel
proposition. The time to appeal from the judgment has long
passed, and Cubework cannot now challenge the determinations
made at trial and set forth in the statement of decision. We could
not review Cubework’s challenge to the willful misconduct
finding on the merits in any event because the evidence
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presented at trial—the only evidence upon which Cubework
relied in opposing the motion for attorney fees—is not included in
the appellate record before us.
Cubework has not demonstrated the trial court erred in
finding Cubework committed willful misconduct, entitling Solo to
indemnification against reasonable attorney fees incurred as a
result of loss caused by such willful misconduct.
II. The Trial Court Did Not Abuse Its Discretion in
Awarding Attorney Fees to Solo
“We must affirm an award of attorneys’ fees absent a
showing that the trial court clearly abused its discretion.
[Citation.] An abuse of discretion is shown when the award
shocks the conscience or is not supported by the evidence.”
(Jones v. Union Bank of California (2005) 127 Cal.App.4th 542,
549-550.)
Cubework argues the trial court abused its discretion in
awarding attorney fees “to a party who prevailed on a minor
‘battle’ but who lost the ‘war’ ” at trial. In support of this
argument, Cubework cites Artesia Medical Development Co. v.
Regency Associates, Ltd. (1989) 214 Cal.App.3d 957, a case
involving an award of attorney fees under Civil Code5 section
1717. Here, the trial court did not award attorney fees to Solo as
a prevailing party on a contract within the meaning of section
1717, because there is no provision in the License Agreement
providing for an award of attorney fees incurred to enforce the
contract. Rather, the court awarded attorney fees under section
2772 and the indemnification provision in the License
Agreement. (See § 2772 [“Indemnity is a contract by which one
5 Undesignated statutory references are to the Civil Code.
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engages to save another from a legal consequence of the conduct
of one of the parties, or of some other person”].)
Cubework asserts, to the extent Solo is entitled to an award
of attorney fees under the indemnification provision based on a
finding of willful misconduct, Solo may only recover fees incurred
in connection with its causes of actions for conversion and
trespass to chattels—the causes of action to which the willful
misconduct relates. Cubework represents that these “torts
concerning personal property are only a small percentage of the
case that was tried.” We cannot credit this representation
because we do not have before us a record of the trial proceedings
or the evidence presented at trial. In granting the motion for
attorney fees, the trial court concluded that the claims involving
Cubework’s willful misconduct “are so intertwined” with the
claims that do not involve Cubework’s willful misconduct “that it
would be impractical to try to separate” the hours Solo’s counsel
spent on the various claims. Based on the statement of
decision—which is all we have to go on in the absence of the
evidence presented at trial—we have no cause to reject the
court’s conclusion.
Cubework further argues that an attorney fees award of
$225,894 constitutes an abuse of discretion because it “shocks the
conscience and is not supported by the evidence.” We reiterate
that pertinent “evidence” is not before us. The appellate record
does not include the motions filed or trial testimony given in this
action. Nor does it reveal the scope of the written discovery that
was conducted. Thus, we are unable to meaningfully review the
trial court’s conclusion that 500 hours of attorney time over three
years is reasonable given “the nature and history of the
litigation.” Moreover, although Cubework asks us to reduce the
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attorney fees award, Cubework does not suggest a dollar figure
for such a reduced award or point to any particular billing entries
that it believes should be excluded.
“ ‘A judgment or order of the lower court is presumed
correct. All intendments and presumptions are indulged to
support it on matters as to which the record is silent, and error
must be affirmatively shown.’ ” (Denham v. Superior Court
(1970) 2 Cal.3d 557, 564.) Cubework has not demonstrated the
trial court abused its discretion in granting Solo’s motion for
attorney fees.
DISPOSITION
The order is affirmed. Respondent is entitled to recover
costs on appeal.
NOT TO BE PUBLISHED
CHANEY, J.
We concur:
ROTHSCHILD, P. J.
BENDIX, J.
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