Calande v. Surf and Sand CA6

Filed 11/19/15 Calande v. Surf and Sand CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
SIXTH APPELLATE DISTRICT
EUGENIA CALANDE et al., H038679
(Santa Cruz County
Plaintiffs and Respondents, Super. Ct. No. CV172147)
v.
SURF AND SAND, LLC et al.,
Defendants and Appellants.
Defendants Surf and Sand, LLC, and Ronald Reed who own and operate a mobile
home park in the City of Capitola (City), appeal the trial court’s denial of their motion
requesting attorney’s fees from plaintiffs Eugenia Calande, William Newman, Robert
Perkinson, Sandra Williams, Cassandra Williams, Roscoe Smith, Eleanor Skrondal,
Carolyn Hightower, Heidi Hoffacker, Mary Loubier-Ricca, Cynthia Loubier-Ricca,
Leslie Cone, and Shirley Hill (collectively, the Newman plaintiffs), who own mobile
homes in the park and rent lots from defendants. Defendants argue on appeal that the
trial court erred in denying them fees under Civil Code section 1942.5, subdivision (g)1
(retaliatory eviction) as well as section 798.85, the attorney’s fees provision of the
Mobilehome Residency Law (§ 798 et seq.; MRL). For the reasons stated here, we will
reverse the trial court’s decision, find that defendants are entitled to attorney’s fees and
costs, and remand for further proceedings consistent with this opinion.
1
Unspecified statutory references are to the Civil Code.
I. FACTUAL AND PROCEDURAL BACKGROUND
In March 2011, the City settled a lawsuit filed by defendants challenging the
City’s rent control ordinance. According to the Newman plaintiffs, the settlement
entitled them to rental prices set at a “fair market rent.” Defendants mailed lease offers to
the Newman plaintiffs in May 2011. The Newman plaintiffs “conditionally accepted” the
offers in June 2011 and requested a meeting with defendants pursuant to section 798.53
of the MRL to discuss allegedly illegal lease terms. The Newman plaintiffs then filed
suit against defendants in Santa Cruz County Superior Court (Newman I). The parties
settled Newman I in October 2011. The settlement agreement contained a release of all
liabilities related to or arising out of the Newman I complaint and subjected all future
disputes arising out of the agreement to arbitration.
Meanwhile, in September 2011, another group of tenants from defendants’ mobile
home park (the McClelland plaintiffs) filed their own complaint in Santa Cruz County
Superior Court (Newman II), alleging violations of local and state law. Eugenia Calande,
one of the Newman plaintiffs, was part of this September complaint, which included
claims arising out of the MRL. Though no specific cause of action in the September
complaint requested attorney’s fees, the prayer for relief requested reasonable attorney’s
fees and costs.
In December 2011, the McClelland plaintiffs filed a first amended complaint
(Complaint) in Newman II, which the Newman plaintiffs joined in part despite having
previously entered into a settlement agreement with defendants in Newman I. The first
and sixth causes of action in the Complaint were only alleged by the McClelland
plaintiffs. The sixth cause of action alleged that defendants violated section 798.18 of the
MRL by refusing to offer rental agreements for a term of at least 12 months. At the end
of that cause of action, the Complaint explicitly requests attorney’s fees and costs for the
alleged MRL violation.
2
The Complaint also contained causes of action alleged only by the Newman
plaintiffs that are relevant on appeal. The fourth and fifth causes of action allege that
defendants engaged in retaliatory eviction in violation of section 1942.5. The Newman
plaintiffs alleged that the retaliatory eviction occurred when defendants sent notices of
rent increases to the Newman plaintiffs in response to those plaintiffs’ attempts to obtain
the City’s assistance to address allegedly unlawful terms of defendants’ lease offers.
Importantly, the Complaint alleges these offers were illegal because, among other things,
they included terms that violated the MRL.
The Complaint’s seventh cause of action, alleged by all plaintiffs, claims
defendants violated the implied covenant of good faith and fair dealing inherent in their
tenancy agreements with plaintiffs. The eighth cause of action, alleged by most2 of the
Newman plaintiffs, asked the court for a declaration of the “ ‘fair market rent’ ” for the
rental properties and sought an injunction preventing defendants from making “exorbitant
rent demands ... .” Finally, the Complaint’s general prayer for relief requests reasonable
attorney’s fees and costs.
Defendants demurred to the Complaint, claiming the Newman plaintiffs3 failed to
state facts sufficient to constitute a cause of action because the settlement agreement in
Newman I foreclosed the filing of the Complaint. (Code Civ. Proc., § 430.10, subd. (e).)
Defendants concurrently filed a petition to compel arbitration of any issues related to the
subject matter of the settlement agreement, citing the arbitration clause of the settlement
agreement that ended Newman I.
The Newman plaintiffs opposed the demurrer and also sought leave to file a
second amended complaint (Proposed Complaint), which would have added a new
2
The eighth cause of action omits Newman plaintiffs Robert Perkinson, Sandra
Williams, Cassandra Williams, Mary Loubier-Ricca, and Cynthia Loubier-Ricca.
3
Defendants’ demurrer, as well as the trial court’s orders sustaining the demurrer
and compelling arbitration, all omit Newman plaintiff Shirley Hill.
3
nuisance and “failure to maintain” cause of action based on section 798.87 of the MRL.
Defendants opposed leave to amend, relying on the Newman I settlement agreement. In
April 2012, the trial court sustained the demurrer without leave to amend finding the
Newman plaintiffs “have entered into a valid Settlement Agreement releasing all of their
claims, including the claims raised in the [Complaint] and the [Proposed Complaint].”
The court also granted the petition to compel arbitration, stating that “[a]ny disputes
regarding the terms of the Settlement Agreement, or any other matters that fall within the
scope of the Arbitration Agreement, are subject to binding arbitration ... .”
In April 2012, defendants moved for attorney’s fees and costs from the Newman
plaintiffs. The McClelland plaintiffs later settled their claims with defendants, which was
memorialized in a notice of settlement filed in May 2012. Upon the filing of the notice of
settlement, all future court dates were taken off calendar, including a hearing on
defendants’ initial request for attorney’s fees and costs. Defendants then renewed their
motion requesting attorney’s fees and costs from the Newman plaintiffs, claiming
section 1942.5, subdivision (g) and the attorney’s fees provision of the MRL (§ 798.85)
entitled defendants to fees. This request also included fees related to the September 2011
complaint and the Proposed Complaint. The Newman plaintiffs opposed the request,
arguing that they did not allege any causes of action arising out of the MRL and that
defendants waived entitlement to fees by entering into a settlement agreement with the
McClelland plaintiffs.
In June 2012, the court denied the fee motion. Regarding defendants’ entitlement
to fees under the MRL, the court ruled that the only cause of action “brought directly
under the [MRL]” was the sixth cause of action, which was not joined by the Newman
plaintiffs. Regarding the eighth cause of action, the court found it did not arise out of the
MRL because it was “an equitable cause of action which does not allege any direct
violation” of the MRL. As for defendants’ claim that they were entitled to attorney’s fees
for the Proposed Complaint, the court disagreed because the Proposed Complaint “was
4
never allowed to be filed” and defendants, therefore, never obtained a judgment or a
dismissal for the proposed pleading’s MRL claims.
As to attorney’s fees under section 1942.5, subdivision (g), which provides for
fees to the prevailing party in a retaliatory eviction action “if either party requests
attorney’s fees upon the initiation of the action,” the trial court determined that
defendants were not entitled to fees because it was unclear “whether the [Complaint]
requested attorney fees for their retaliatory eviction claim or whether the prayer for fees
was based on the sixth cause of action [MRL violation] to which [the Newman plaintiffs]
were not a party.” In light of this ambiguity, the court denied the request for fees under
section 1942.5, subdivision (g).
II. DISCUSSION
We will address the parties’ contentions in the following order: (1) the Newman
plaintiffs’ argument that defendants waived any claim for fees against Newman plaintiff
Shirley Hill; (2) the Newman plaintiffs’ argument that defendants waived entitlement to
attorney’s fees as to all Newman plaintiffs; (3) defendants’ entitlement to attorney’s fees
pursuant to section 1942.5, subdivision (g); and (4) defendants’ entitlement to attorney’s
fees and costs pursuant to section 798.85 of the MRL.
A. WAIVER OF FEES AS TO NEWMAN PLAINTIFF SHIRLEY HILL
Defendants named Shirley Hill in their fee motion as one of the Newman plaintiffs
from whom they sought fees. The Newman plaintiffs note on appeal that defendants
omitted Hill from the demurrer to the Complaint. Additionally, the orders sustaining
defendants’ demurrer and granting defendants’ petition to compel arbitration -- both
drafted by counsel for defendants -- omitted Hill. The Newman plaintiffs argue these
omissions prevent defendants from recovering fees against Hill.
Defendants do not respond to the Newman plaintiffs’ contention, which we treat
as a concession of the issue. (DuPont Merck Pharmaceutical Co. v. Superior Court
(2000) 78 Cal.App.4th 562, 566; Westside Center Associates v. Safeway Stores 23, Inc.
5
(1996) 42 Cal.App.4th 507, 529.) Therefore, in any further proceedings in this matter,
defendants are not entitled to recover any attorney’s fees or costs from Newman plaintiff
Shirley Hill.
B. WAIVER OF FEES AS TO ALL NEWMAN PLAINTIFFS
The Newman plaintiffs argue that defendants’ voluntary actions related to the
settlement agreement with the McClelland plaintiffs waived entitlement to fees as to all
the Newman plaintiffs. The Newman plaintiffs rely on defendants’ request to remove all
pending hearing dates from the trial court calendar after their settlement with the
McClelland plaintiffs, which included the hearing on their initial motion for attorney’s
fees. According to the Newman plaintiffs, defendants’ actions following their settlement
with the McClelland plaintiffs constitute “ ‘conduct indicating an intent to relinquish’ ”
their entitlement to attorney’s fees. (Waller v. Truck Ins. Exchange, Inc. (1995)
11 Cal.4th 1, 31 (Waller).) Defendants respond that the Newman plaintiffs were neither
parties to nor beneficiaries of defendants’ settlement agreement with the McClelland
plaintiffs and that the request to vacate pending dates from the trial court calendar was
merely “a routine request to clear the trial and related motions in advance of trial from the
docket.”
“ ‘ “[W]aiver is the intentional relinquishment of a known right after knowledge of
the facts.” ’ ” (Waller, supra, 11 Cal.4th at p. 31.) A party claiming waiver must “prove
it by clear and convincing evidence that does not leave the matter to speculation, and
‘doubtful cases will be decided against a waiver’ [Citations.].” (Ukiah v. Fones (1966)
64 Cal.2d 104, 107–108; accord Waller, supra, at p. 31.) The Newman plaintiffs fail to
show an intentional relinquishment of entitlement to fees by clear and convincing
evidence. Indeed, a declaration by trial counsel for all plaintiffs indicated his
understanding that the settlement agreement with the McClelland plaintiffs extinguished
all outstanding claims, including those for attorney’s fees, “concerning the McClelland
plaintiffs.” (Italics added.) This declaration supports our conclusion that the settlement
6
agreement with the McClelland plaintiffs and counsel’s request to vacate future court
dates were solely concerned with the McClelland plaintiffs and did not waive any
remaining rights defendants had vis-à-vis the Newman plaintiffs.
C. ENTITLEMENT TO FEES AS TO RETALIATORY EVICTION CLAIMS (§ 1942.5)
Defendants contend that they are entitled to attorney’s fees as prevailing parties on
the fourth and fifth causes of action of the Complaint, which alleged retaliatory evictions
in violation of section 1942.5. The fee provision of section 1942.5 states: “In any action
brought for damages for retaliatory eviction, the court shall award reasonable attorney’s
fees to the prevailing party if either party requests attorney’s fees upon the initiation of
the action.” (§ 1942.5, subd. (g).) The trial court determined that defendants were not
entitled to fees because the only cause of action that specifically requested attorney’s fees
was the McClelland plaintiffs’ sixth cause of action, which requested attorney’s fees
pursuant to the MRL. The trial court found ambiguous the general request for reasonable
attorney’s fees and costs contained in the prayer for relief at the end of the Complaint and
determined that it did not constitute a request for attorney’s fees for the retaliatory
eviction causes of action.
Though we generally review orders granting or denying attorney’s fees for an
abuse of discretion, whether a party meets the statutory requirements for entitlement to
fees is a question of law we review de novo. (MHC Financing Limited Partnership Two
v. City of Santee (2005) 125 Cal.App.4th 1372, 1397 (MHC Financing); Goodman v.
Lozano (2010) 47 Cal.4th 1327, 1332.) When interpreting statutory language, we give
“the words their usual, ordinary meaning.” (People v. Canty (2004) 32 Cal.4th 1266,
1276.)
Because it is undisputed that the Complaint was an “action brought for damages
for retaliatory eviction,” the only question is whether the Newman plaintiffs “request[ed]
attorney’s fees upon the initiation of the action” by including a general prayer for fees.
(§ 1942.5, subd. (g).) The statute does not mandate that the request for attorney’s fees be
7
made in any specific form or location. Instead, the plain language suggests that a
prevailing party will be entitled to fees so long as a request for fees of some kind is made
by either party at the initiation of the action.
Applying this interpretation, we conclude that the Newman plaintiffs triggered the
fee provision by including a general prayer for attorney’s fees. The initial complaint
included a general request for attorney’s fees in its prayer for relief even though it alleged
neither retaliatory eviction nor MRL causes of action. The Complaint retained that same
general prayer for attorney’s fees. Nothing on the face of the Complaint indicates an
intention to narrow that general request for attorney’s fees to only the MRL cause of
action. Moreover, the Newman plaintiffs’ failure to argue this theory below suggests that
they did not consciously decide against requesting attorney’s fees for the retaliatory
eviction causes of action.
Our conclusion that, absent an indication to the contrary in a pleading, a general
prayer for attorney’s fees will trigger section 1942.5, subdivision (g), is consistent with
California’s liberal pleading requirements for attorney’s fees requests. For example,
where entitled to fees by law, a party can recover attorney’s fees on grounds different
than those pleaded in the complaint so long as the complaint contains a request for fees.
(Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 228
[affirming award of attorney’s fees pursuant to state law where complaint requested fees
pursuant to federal law].) A party can even recover attorney’s fees based on a statute
enacted after a complaint is filed. (Woodland Hills Residents Assn., Inc. v. City Council
(1979) 23 Cal.3d 917, 929–932 [applying Code Civ. Proc., § 1021.5 to case where
legislation adding that section did not become law until case was pending on appeal].)
Although section 1942.5, subdivision (g), unlike Code of Civil Procedure section 1021.5,
requires a request at the initiation of the action, nothing in the subdivision suggests an
intention to otherwise depart from California’s liberal pleading standard for attorney’s
fees.
8
Finally, the Newman plaintiffs’ claim that this result “would turn this tenant’s
shield into a landlord’s sword” is without merit. Section 1942.5, subdivision (g) allows
either party to request fees at the beginning of an action. Thus, a prevailing defendant is
entitled to fees if he or she requests them at the beginning of an action, regardless of any
pleading by a plaintiff.
Because the Newman plaintiffs requested attorney’s fees in the prayer to their
Complaint without indicating that their request was limited to only certain causes of
action, defendants are entitled to attorney’s fees as the prevailing party under
section 1942.5, subdivision (g).
D. ENTITLEMENT TO FEES AND COSTS UNDER THE MRL (§ 798.85)
Defendants assert that the trial court erred in denying them fees pursuant to
section 798.85 of the MRL, which provides, in relevant part: “In any action arising out of
the provisions of this chapter 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 … .” (§ 798.85.) We review
defendants’ statutory entitlement to fees de novo. (MHC Financing, supra,
125 Cal.App.4th at p. 1397.) Defendants claim they are entitled to fees based on the
initial September 2011 complaint, the Complaint, and the Proposed Complaint.
1. Initial Complaint
Eugenia Calande was the only Newman plaintiff who signed the September 2011
complaint, which indisputably included causes of action arising out of the MRL,
including the third cause of action, which alleged a failure to provide a rental agreement
for a term of more than 12 months, in violation of section 798.18 of MRL. In the
Complaint, however, Calande was no longer a named plaintiff regarding the 12-month
term cause of action, which was re-alleged as the sixth cause of action in the Complaint.
9
The filing of an amended complaint supersedes all prior complaints and a
reviewing court will look only to the amended pleading. (Foreman & Clark Corp. v.
Fallon (1971) 3 Cal.3d 875, 884.) While this general rule cannot be used to suppress
previously pleaded allegations that would preclude recovery on a cause of action,
defendants do not claim that Calande’s inclusion in the initial complaint would have had
such an effect. (Buchanan v. Maxfield Enterprises, Inc. (2005) 130 Cal.App.4th 418,
425.) Thus, the initial complaint cannot be used as a basis for an award of attorney’s
fees.
Defendants argue that the removal of Calande from certain causes of action in the
Complaint amounted to a voluntary dismissal in defendants’ favor, thus making them
prevailing parties for purposes of section 798.85. However, section 798.85 states that a
party prevails “where the litigation is dismissed in his or her favor.” (Italics added.) The
use of the word “litigation” suggests that a partial dismissal, such as Calande’s decision
to remove herself from certain causes of action, does not make a defendant a prevailing
party for purposes of section 798.85. (See Carver v. Chevron U.S.A., Inc. (2002)
97 Cal.App.4th 132, 151 [suggesting Code Civ. Proc., § 1717(b)(2), which discusses
contractual entitlement to attorney’s fees for voluntary dismissal of “an action,” precludes
a fee award when a plaintiff only voluntarily dismisses part of a case].) As Calande did
not leave the case completely, her partial dismissal does not entitle defendants to
attorney’s fees based on the initial complaint. (Cf. Spreckels v. Spreckels (1916)
172 Cal. 789, 790; Santisas v. Goodin (1998) 17 Cal.4th 599, 609.)
2. Complaint
Defendants point to three causes of action alleged by the Newman plaintiffs in the
Complaint as constituting claims “arising out of” the MRL, entitling them to attorney’s
fees and costs: the fifth, seventh, and eight causes of action. We will address each in turn
after discussing the scope of section 798.85.
10
In MHC Financing, the appellate court compared various statutes containing the
language “arising out of” and “relating to” and decided that the term “arising out of” in
section 798.85 is to be applied narrowly. (MHC Financing, supra, 125 Cal.App.4th at
p. 1398.) The court then reasoned that section 798.85 of the MRL “encompasses only
those actions directly involving the application of MRL provisions in specific factual
contexts addressed by the MRL, such as actions by mobile home park residents against
management for failing to maintain physical improvements in common facilities in good
worker order.” (Ibid.; see also SC Manufactured Homes, Inc. v. Canyon View
Estates, Inc. (2007) 148 Cal.App.4th 663, 675–676 (SC Manufactured Homes) [adopting
and applying MHC Financing definition to find that action by mobile home dealer
against park owners and other dealers related to, but did not arise out of, the MRL].)
Thus, to obtain attorney’s fees and costs under section 798.85, a party must show that the
action both arises in a context addressed by the MRL and involves the application of
MRL provisions.
a. Fifth cause of action
In the fifth cause of action, the Newman plaintiffs allege defendants sent proposed
lease agreements to the Newman plaintiffs that violated provisions of the MRL as well as
other laws. Counsel retained by the Newman plaintiffs formally requested a meeting
with defendants pursuant to section 798.53 of the MRL and also met with City Council
members “to gain assistance from the City in addressing the oppressive and unlawful
terms in the lease offerings.” The Newman plaintiffs attempted to conditionally accept
the leases, which defendants treated as a rejection. Defendants then sent the Newman
plaintiffs notices of rent increases in violation of section 798.17 of the MRL. These rent
increases were allegedly in retaliation for the Newman plaintiffs’ attempts to exercise
their state law and constitutional rights and constituted retaliatory evictions in violation of
section 1942.5.
11
Though this cause of action repeatedly references the MRL, to determine whether
it arises out of that statute we must look to what the Newman plaintiffs would have had
to prove to show a violation of section 1942.5. Section 1942.5 prohibits landowners
from, among other things, increasing rent in retaliation for a tenant’s lawful or peaceable
exercise of “any rights under the law.” (§ 1942.5, subd. (c).) In the fifth cause of action,
the Newman plaintiffs state that they met with City officials for help in addressing
unlawful terms in their lease offers and the only specific law they claim the lease offers
violated was the MRL. In essence, the fifth cause of action alleges that defendants
increased the Newman plaintiffs’ rents in retaliation for the Newman plaintiffs’ attempt
to exercise their rights under the MRL. Because these alleged MRL violations formed
the basis for the fifth cause of action, it meets the requirements of section 798.85 and
entitles the prevailing defendants to attorney’s fees and costs.
The two published cases denying attorney’s fees under the MRL are readily
distinguishable as they involved parties in different relationships. (MHC Financing,
supra, 125 Cal.App.4th at pp. 1377, 1398–1399 [denying fees under the MRL to mobile
home park owner who brought action against city asserting that MRL preempted city
ordinance]; SC Manufactured Homes, supra, 148 Cal.App.4th at pp. 666, 680 [denying
fees to prevailing mobile home park owner defendants in action brought by mobile home
dealer alleging a kickback scheme].)
b. Seventh cause of action
The seventh cause of action alleges a breach of the implied covenant of good faith
and fair dealing based on defendants’ existing rental agreements with the Newman
plaintiffs. Specifically, the cause of action states that defendants, “in acting or failing to
act as alleged above, breached the implied covenant of good faith and fair dealing.”
Defendants argue that by relating back to previous causes of action that arose under the
MRL, the seventh cause of action also arises under the MRL and triggers the fee
provision of section 798.85.
12
“ ‘ “Every contract imposes upon each party a duty of good faith and fair dealing
in its performance and its enforcement.” ’ ” (Carma Developers (Cal.), Inc. v. Marathon
Development California, Inc. (1992) 2 Cal.4th 342, 371–372.) The seventh cause of
action involves acts or omissions by defendants that allegedly violated an implied
covenant in their rental agreements with the Newman plaintiffs. It is irrelevant for
purposes of this cause of action whether these acts or omissions also violated the MRL.
It is questionable whether this cause of action even relates to the MRL, much less arises
out of it. Thus, the seventh cause of action does not entitle defendants to fees under the
MRL.
c. Eighth cause of action
The eighth cause of action, alleged by most of the Newman plaintiffs, seeks
declaratory and injunctive relief. The actual relief requested in this cause of action is
difficult to determine because it contains allegations by the McClelland plaintiffs as well
as separate allegations by the Newman plaintiffs. The cause of action begins by citing
sections 798.55 and 798.56 of the MRL regarding the special protection afforded to
owners of mobile homes in California due to the high cost of relocating a mobile home.
Paragraph 91 of the Complaint alleges that when defendants set rental rates at excessively
high levels, they constructively evicted the McClelland plaintiffs. The cause of action
continues that rent increases will effect a constructive eviction of “residents” and that
defendants are attempting to illegally convert the property to a different land use.
Paragraph 95, which presumably was meant to apply to the McClelland plaintiffs because
the cause of action had yet to reference the Newman plaintiffs, asks the trial court to
order defendants to comply with defendants’ settlement agreement with the City by
setting a “ ‘fair market rent’ ” for the mobile home lots. Paragraph 96 references the
Newman plaintiffs and seeks a declaration that the “ ‘fair market rent’ ” for the Newman
plaintiffs is as stated in an appraiser’s report prepared by the City. The cause of action
13
also seeks to enjoin defendants from increasing the plaintiffs’ rents, without
differentiating between the two sets of plaintiffs.
Defendants’ seize on the citations to the MRL in the eighth cause of action to
argue that it arises out of the MRL. But the eighth cause of action essentially asks the
court to interpret and apply a term of defendants’ settlement agreement with the City. It
does not involve the direct application of MRL provisions, nor can it be said to arise out
of the MRL.4
3. Proposed Complaint
Defendants contend that the trial court erred in denying them attorney’s fees for
opposing the Newman plaintiffs’ request for leave to file a Proposed Complaint. The
decision whether to allow the Proposed Complaint, as a second amendment to the
complaint, was left to the sound discretion of the trial court. (Code Civ. Proc., §§ 473,
subd. (a)(1), 576; Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007)
155 Cal.App.4th 525, 544.) The trial court denied the request to amend, determining that
the arbitration provision in the settlement agreement between defendants and the
Newman plaintiffs from Newman I precluded the claims of the Proposed Complaint.
When defendants later requested fees for opposing the Proposed Complaint, the court
denied the request, reasoning that because the Newman plaintiffs were not permitted to
file the Proposed Complaint, defendants never obtained a judgment or a dismissal of the
unfiled claims in that pleading.
We find no error in the trial court’s decision. The court denied plaintiffs’ request
to file the Proposed Complaint, meaning that the pleading never became operative.
Though defendants incurred legal fees associated with opposing the request for leave to
4
Because we find that neither the seventh nor eighth cause of action arose out of
the MRL, we need not determine whether they were foreclosed by the settlement
agreement, as defendants argue, or merely referred to arbitration, as the Newman
plaintiffs contend.
14
amend, they did not prevail for purposes of section 798.85 because the document was
never filed. Defendants’ argument that it would be entitled to attorney’s fees if it had
stipulated to allow plaintiffs to file the Proposed Complaint is unpersuasive. It is the trial
court, not defendants, who had the authority to determine whether to grant leave to
amend the complaint. (Code Civ. Proc., §§ 473, subd. (a)(1), 576.) Therefore the
Proposed Complaint did not provide a statutory basis for attorney’s fees.
III. DISPOSITION
The judgment is reversed. Defendants are entitled to attorney’s fees pursuant to
section 1942.5, subdivision (g) because attorney’s fees were requested in the Complaint.
Defendants are also entitled to attorney’s fees and costs under section 798.85 of the MRL
based on the fifth cause of action of the Complaint. Defendants may not recover any
attorney’s fees or costs from Shirley Hill.
We leave it to the trial court to determine the reasonableness of defendants’
attorney’s fees request, including the effect, if any, of the Newman plaintiffs’ financial
condition on the reasonableness of defendants’ request (Garcia v. Santana (2009)
174 Cal.App.4th 464, 470, 475–477 [consideration of losing plaintiff’s financial
condition during reasonableness analysis was not an abuse of discretion]; but see Walker
v. Ticor Title Co. of California (2012) 204 Cal.App.4th 363, 373). We also leave to the
trial court’s discretion whether defendants should be awarded fees for the causes of
action that did not arise out of the MRL or section 1942.5, subdivision (d) (Akins v.
Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133 [prevailing party should
generally recover fees only for causes of action where fees are permitted by law but court
may award fees for non-statutory causes of action if “issues are so interrelated that it
would have been impossible to separate them into claims for which attorney fees are
properly awarded and claims for which they are not”]; accord Amtower v. Photon
Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1603–1604).
Each party shall bear its own costs on appeal.
15
____________________________________
Grover, J.
WE CONCUR:
____________________________
Rushing, P.J.
____________________________
Márquez, J.
Calande et al v Surf and Sand, LLC et al.
H038679