Thomas v. Lin CA2/2

Filed 10/13/20 Thomas v. Lin CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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has not been certified for publication or ordered published for purposes of rule 8.1115.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 TWO
STEPHEN J. THOMAS et al., B291508
(c/w B292496)
Plaintiffs and Appellants,
(Los Angeles County
v. Super. Ct. No. KC068947)
TIM CHIH TING LIN,
Defendant and Appellant.
APPEALS from a judgment and order of the Superior Court
of Los Angeles County. Robert A. Dukes, Judge. Affirmed.
Landing Law Offices, Stephen J. Thomas; and Robert D.
Lipscomb for Plaintiffs and Appellants.
Klapach & Klapach, Joseph S. Klapach; and Timothy A.
Lambirth for Defendant and Appellant.
______________________________
Plaintiffs and appellants Stephen J. Thomas and Thomas
Business Law Group (collectively Thomas) appeal from the
judgment entered after the trial court granted summary
judgment in favor of defendant and appellant Tim Chih Ting Lin
(Lin). Lin appeals from the court’s order denying his motion for
attorney fees. Finding no error in either the judgment or the
denial of attorney fees, we affirm.
BACKGROUND
I. Lin Commits Professional Misconduct
In 2009, Lin was admitted to the State Bar of California
and hired by Thomas as an associate attorney. While employed
by Thomas, Lin committed numerous acts of professional
misconduct in several client matters. Lin’s employment was
terminated in early 2014, and he was disbarred in 2015.
II. Lin and Thomas Settle Four Malpractice Lawsuits
Four separate lawsuits against Lin and Thomas arising
from Lin’s professional misconduct were filed by former clients—
the Chu, Dong, Jao, and Li actions. A monetary settlement was
reached and a release executed in each action.
Of the four, the Chu settlement agreement contains the
broadest release language. It uses the term “Known Claimants”
to refer, collectively, to the plaintiffs in the Chu, Dong, Jao, and
Li actions, as well as to two other former clients. The agreement
includes a representation by Thomas that the Known Claimants
“are the only clients of Thomas that have presently made
mention that they may, might, did or do have a potential claim
against Thomas and/or Lin . . . .” (Emphasis omitted.) It further
provides, in relevant part, that “Thomas . . . release[s] and
forever discharge[s] Lin . . . from any and all past, present, or
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future claims, demands, obligations, actions, causes of action,
rights, damages, costs, expenses, and compensation, which
Thomas now has related to or in any way growing out of, or
which may be the subject of, the [pleadings in Chu] and all claims
and complaints for personal injury, physical injury, indemnity,
emotional distress, lost income, lost earnings, or lost profits,
property damage, and all related claims, and any other damages
pertaining to the alleged malpractice and wrongdoing involving
Lin’s actions and inactions related to the Known Claimants . . . .”
(Emphasis omitted.) The agreement also includes an express
waiver of Thomas’s rights under Civil Code section 1542 related
to unknown claims of the Known Claimants.1
The Dong, Jao, and Li agreements are more limited in
scope, but each includes a release of Thomas’s claims against Lin
arising from Lin’s representation of the respective plaintiff in
each case and a waiver of Civil Code section 1542.
The Dong agreement contains the following attorney fees
provision: “[I]f any action is brought to enforce or defend, the
terms, conditions, and provisions of this [a]greement, . . . the
prevailing party will be entitled to all reasonable costs and
attorney[] fees incurred in enforcing or defending any of the
terms, conditions, and provisions thereof.”
1 Civil Code section 1542 provides: “A general release does
not extend to claims that the . . . releasing party does not know or
suspect to exist in his or her favor at the time of executing the
release and that, if known by him or her, would have materially
affected his or her settlement with the . . . released party.”
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III. The Current Litigation
A. Thomas’s complaint
After the Chu, Dong, Jao, and Li actions were settled,
Thomas filed the complaint in the instant action. The first cause
of action alleges that Lin committed fraud and intentional
misrepresentation by making false promises regarding the
performance of his job duties in order to induce payment of his
salary. The second cause of action alleges that Lin committed
constructive fraud through his professional misconduct, which
was an abuse of the trust and confidence Thomas placed in him.
The third cause of action alleges that Lin engaged in fraud and
negligent misrepresentation by making false or misleading
statements about client matters. Finally, the fourth cause of
action alleges that Lin breached his employment contract, which
required him to provide competent legal representation to
Thomas’s clients.
As damages, Thomas claimed the loss of clients and the
costs associated with defending multiple professional negligence
lawsuits.
B. Lin’s answer and cross-complaint
In his answer to the complaint, Lin asserted the affirmative
defense that each cause of action was “barred as result of a
written release or several written releases, entered into by and
between [Thomas] and [Lin].” Lin also filed a cross-complaint, in
which he alleged causes of action for breach of contract,2 breach
of the covenant of good faith and fair dealing, negligent
2 The contract alleged to have been breached in this cause of
action is a 2009 oral employment agreement between Lin and
Thomas.
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misrepresentation, negligent infliction of emotional distress, and
an accounting.
C. Lin’s motion for summary judgment
Lin moved for summary judgment on the ground that the
Chu, Dong, Jao, and Li settlement agreements released Lin from
liability for all of Thomas’s damages arising from any wrong
perpetrated by Lin against the Known Claimants. Drawing
support from Thomas’s discovery responses, Lin argued that no
evidence existed that Thomas suffered damages as a result of any
act or omission by Lin not covered by the releases.
Thomas opposed Lin’s motion, contending that Lin
misinterpreted the settlement agreements and that his causes of
action were not released because they were “not related to the
Known Claimants. . . .”
The trial court granted Lin’s motion for summary
judgment, concluding that Lin satisfied his “initial burden of
production in establishing that [Thomas] executed a general
release that bars the current claims.” Thomas “failed to identify
damages ‘beyond those compensated for in the [four]
settlements[.]’” “[T]here were no triable issues of material fact
with respect to [Lin’s] defense that he had been released of
liability[.]” The court subsequently entered judgment in Lin’s
favor.3
D. Lin’s motion for attorney fees
Relying on the attorney fees provision in the Dong
settlement agreement, Lin filed a postjudgment motion seeking
$71,440 in attorney fees from Thomas. The trial court denied the
motion, pointing to the contractual language limiting recovery of
3 The cross-complaint was dismissed without prejudice upon
Lin’s request.
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attorney fees only “‘if any action is brought to enforce or defend,
the terms, conditions, and provisions of [the] agreement.’”
Thomas’s “original complaint was not a complaint enforcing the
agreement, nor . . . was [Lin’s] affirmative defense which raised
the agreement an ‘action’ brought to defend the agreement.”
E. Appeals
Thomas appealed from the judgment, and Lin appealed
from the order denying his motion for attorney fees. We
consolidated the two appeals.
DISCUSSION
I. Standard of Review; Rules of Contract Interpretation
Our review of the orders granting summary judgment and
denying attorney fees—which both turn on the interpretation of a
contract—is de novo. (People ex rel. Lockyer v. R.J. Reynolds
Tobacco Co. (2003) 107 Cal.App.4th 516, 520 [summary judgment
and contract interpretation not involving credibility of extrinsic
evidence]; Tabarrejo v. Superior Court (2014) 232 Cal.App.4th
849, 869 [legal basis for attorney fees award].)
We apply settled rules applicable to all contracts when
interpreting the terms of a settlement agreement. (Winet v. Price
(1992) 4 Cal.App.4th 1159, 1165 (Winet).) In doing so, our
“fundamental goal . . . is to give effect to the mutual intention of
the parties.” (Bank of the West v. Superior Court (1992) 2 Cal.4th
1254, 1264.) “Such intent is to be inferred, if possible, solely from
the written provisions of the contract. [Citation.] The ‘clear and
explicit’ meaning of these provisions, interpreted in their
‘ordinary and popular sense,’ unless ‘used by the parties in a
technical sense or a special meaning is given to them by usage’
[citation], controls judicial interpretation.” (AIU Ins. Co. v.
Superior Court (1990) 51 Cal.3d 807, 822.)
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II. The Trial Court Properly Granted Lin’s Motion for
Summary Judgment
Summary judgment is properly granted where “all the
papers submitted show that there is no triable issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) A
defendant moving for summary judgment can satisfy the initial
burden of establishing that a cause of action is meritless by
showing “that one or more elements of the cause of action . . .
cannot be established, or that there is a complete defense to the
cause of action.” (Id., § 437c, subd. (p)(2).) If such a showing is
made, the burden shifts to the plaintiff opposing summary
judgment to show by setting forth specific facts that a triable
issue of material fact exists as to the cause of action or defense.
(Ibid.)
The basis for Lin’s motion for summary judgment was that
the four settlement agreements—in particular, the Chu
agreement—released Lin from all damages sought by Thomas in
the complaint and, thus, negated each cause of action.
Under the clear and explicit terms of the Chu agreement,
Thomas released and discharged Lin from Thomas’s own claims
and damages “pertaining to the alleged malpractice and
wrongdoing involving Lin’s actions and inactions related to the
Known Claimants . . . .” (Emphasis omitted.) As defined in the
agreement, the Known Claimants are the plaintiffs in the Chu,
Dong, Jao, and Li actions, as well as two other former clients.
Thus, although Thomas himself is not a Known Claimant, he
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released his own claims to the extent that they “pertain[] to”4
Lin’s misconduct involving the Known Claimants.
Thomas’s causes of action—for fraud, constructive fraud,
negligent misrepresentation, and breach of contract—all arise
from Lin’s professional misconduct while employed by Thomas,
including failures to keep Thomas and clients informed, complete
discovery, prepare for trial, and file essential documents. As Lin
acknowledged in his motion, the complaint does not identify the
specific cases or clients affected by these failures. Nevertheless,
Thomas’s discovery responses demonstrate that his claims and
damages all “pertain[] to” Lin’s misconduct involving the Known
Claimants and are therefore barred.
Lin propounded a series of special interrogatories asking
Thomas to identify the “specific acts or omissions by Lin
(including, without limitation, the case on which Lin was working
when the act or omission occurred)” (emphasis omitted) for each
component of Thomas’s claimed damages. In response, Thomas
only identified specific acts or omissions by Lin in the Dong, Chu,
and Jao actions. Thomas’s claims and damages “pertaining to”
those acts and omissions were explicitly released. Lin thus
demonstrated that an element of each of Thomas’s causes of
action—compensable damages—could not be established. (See
Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821
[elements of breach of contract include damages]; Alliance
Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239, fn. 4
4 “Definitions of the term ‘pertain’ demonstrate its wide
reach: It means ‘to belong as an attribute, feature, or function’
[citation], ‘to have reference or relation; relate’ [citation], ‘[b]e
appropriate, related, or applicable to’ [citation].” (People v. Perry
(2019) 32 Cal.App.5th 885, 891.)
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[elements of negligent misrepresentation and constructive fraud
include damages]; Anderson v. Deloitte & Touche (1997)
56 Cal.App.4th 1468, 1474 [elements of actual fraud include
damages].)
We conclude that Lin satisfied his burden on summary
judgment and that the burden shifted to Thomas to demonstrate
a disputed material issue of fact. As correctly framed by Lin,
Thomas was required to produce evidence that he suffered
unreleased damages caused by Lin—that is, damages that did not
“pertain[] to” Lin’s misconduct involving the Known Claimants.
Thomas failed to meet his burden.
As evidence of his purportedly unreleased damages,
Thomas pointed to his own payment of “a $5,000 deductible for
each defrauded client and afterwards an increased cost of
insurance at six times the prior premiums and a deductible
increased five-fold, and at least 300 hours of [Thomas’s] attorney
time” to defend the malpractice lawsuits. But Thomas failed to
identify any evidence that these alleged damages were not
attributable to—or otherwise did not “pertain[] to”—Lin’s
wrongdoing involving the Known Claimants, which would render
them extinguished by the release.
Thomas also submitted a declaration in which he testified
that, during the settlement negotiations, “[he] insisted in each
case that whatever [they] did must not include a release of . . .
Lin from his general obligations to [Thomas] for damages
[Thomas] suffered resulting from [Lin’s] misconduct.” Thomas
cannot create a triable issue of material fact to avoid summary
judgment by simply declaring that he did not intend to agree to
the explicit, unambiguous terms of the Chu agreement, in which
he released his own claims as they “pertain[ed] to” Lin’s
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misconduct involving the Known Claimants. (See Jefferson v.
Department of Youth Authority (2002) 28 Cal.4th 299, 303 [“‘“The
general rule is that when a person with the capacity of reading
and understanding an instrument signs it, he is, in the absence of
fraud and imposition, bound by its contents, and is estopped from
saying that its provisions are contrary to his intentions or
understanding[]”’”]; Winet, supra, 4 Cal.App.4th at p. 1167 [“parol
evidence is admissible only to prove a meaning to which the
language is ‘reasonably susceptible’ [citation], not to flatly
contradict the express terms of the agreement”].)
We conclude that Thomas failed to satisfy his burden and,
therefore, summary judgment was properly granted in Lin’s
favor.
III. The Trial Court Properly Denied Lin’s Motion for
Attorney Fees
Each party to civil litigation must ordinarily pay its own
attorney fees. (Mountain Air Enterprises, LLC v. Sundowner
Towers, LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).) Parties
may, however, “‘“contract out” of the [general] rule’ by executing
an agreement that allocates attorney fees.” (Ibid.)
The parties here inserted an attorney fees provision in the
Dong agreement, which applies “if any action is brought to
enforce or defend, the terms, conditions, and provisions of th[e]
[a]greement” and allows “the prevailing party” to recover “all
reasonable costs and attorney[] fees incurred in enforcing or
defending” the agreement. (Italics added.) As we affirmed in the
preceding section, Lin is entitled to summary judgment in this
action based on the release provisions in the settlement
agreements, including the Dong agreement. Accordingly, there is
no question that he is the “prevailing party.” (See Black’s Law
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Dict. (9th ed. 2009) p. 1232, col. 2 [defining “prevailing party” as
“[a] party in whose favor a judgment is rendered”].) But whether
Lin is entitled to attorney fees is dependent on whether Lin’s
assertion of the affirmative defense of release constitutes an
“action . . . brought to enforce or defend” the Dong agreement.5
Applying the ordinary meaning of the terms in the
conditional clause of the attorney fees provision (see Civ. Code,
§ 1644), we conclude that the raising of an affirmative defense
does not satisfy the requirement that an “action is brought to
enforce or defend” the agreement. (See Black’s Law Dict. (9th ed.
2009) p. 219, col. 1 [defining “bring an action” as “[t]o sue;
institute legal proceedings”]; id. at p. 482, col. 2 [defining
“affirmative defense” as “[a] defendant’s assertion of facts and
arguments that, if true, will defeat the plaintiff’s . . . claim, even
if all the allegations in the complaint are true”].) “[W]hile an
affirmative defense is a ‘real part of any action’ [citation], it does
not, in and of itself, constitute an ‘action’ for purposes of
recovering attorney fees.” (Mountain Air, supra, 3 Cal.5th at
p. 753; see also Gil v. Mansano (2004) 121 Cal.App.4th 739, 741
(Gil) [“the assertion of a contractual defense to a tort action is not
an ‘action brought to enforce the contract’”]; Exxess Electronixx v.
Heger Realty Corp. (1998) 64 Cal.App.4th 698, 712 (Exxess
Electronixx) [declining to “equate raising a ‘defense’ with bringing
an ‘action’ or ‘proceeding[]’”].)
We recognize that when the parties entered into the Dong
agreement in October 2015, the California Supreme Court had
not yet decided Mountain Air, supra, 3 Cal.5th 744, and a split of
5 Lin does not contend that Thomas’s complaint or his own
cross-complaint were actions brought to enforce or defend the
Dong agreement.
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authority existed among the Courts of Appeal regarding whether
the assertion of an affirmative defense constituted an action in
the context of attorney fees provisions. (Compare Gil, supra,
121 Cal.App.4th at pp. 742–745 & Exxess Electronixx, supra,
64 Cal.App.4th at p. 712 with Windsor Pacific LLC v. Samwood
Co., Inc. (2013) 213 Cal.App.4th 263, 274–276 (Windsor Pacific),
disapproved of by Mountain Air, supra, 3 Cal.5th 744.)
Disagreeing with the narrower definition of action advanced by
Gil and Exxess Electronixx, Windsor Pacific held “that an
attorney fee clause providing for a fee award to the prevailing
party in ‘any action or proceeding to enforce or interpret’ a
contract applies not only where the plaintiff’s allegations in the
complaint seek to enforce or interpret the contract, but also
where the defendant seeks to do so by asserting an affirmative
defense raised in its answer.” (Windsor Pacific, at p. 266.) In so
holding, it “regard[ed] the word ‘action’ . . . as encompassing the
entire judicial proceeding, including any defenses asserted.” (Id.
at p. 276.)
Although the California Supreme Court, in Mountain Air,
resolved the split in favor of Exxess Electronixx and Gil and
explicitly disapproved Windsor Pacific’s contrary holding
(Mountain Air, supra, 3 Cal.5th at p. 756, fn. 3), Lin nevertheless
insists that, at the time of contracting, the parties to the Dong
agreement intended to adhere to Windsor Pacific’s broader
definition of action to encompass the assertion of an affirmative
defense.6 Lin contends that the language of the attorney fees
6 Because contracting “parties are presumed to have had
existing law in mind when they executed their agreement”
(Swenson v. File (1970) 3 Cal.3d 389, 394–395), “a contract is to
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provision demonstrates this intent because it only makes sense
when its conditional clause—“if any action is brought to enforce
or defend”—is interpreted “to refer broadly to the filing of any
‘action’ that seeks either to ‘enforce’ the release or that requires a
party to ‘defend’ the release through an affirmative defense.”
Lin’s position, however, is based on the false premise that
“[i]t is impossible . . . for a party to bring an ‘action’ to ‘defend’ a
release.” We have no trouble conceiving of such a situation. For
example, a party could file a complaint or cross-complaint for
declaratory relief to defend a release against claims that it is
invalid, unconscionable, or otherwise unenforceable. (See Code
Civ. Proc., § 1060 [“Any person interested . . . under a
contract . . . may, in cases of actual controversy relating to the
legal rights and duties of the respective parties, bring an original
action or cross-complaint in the superior court for a declaration of
his or her rights and duties in the premises, including a
determination of any question of construction or validity arising
under the . . . contract”]; River Garden Farms, Inc. v. Superior
Court (1972) 26 Cal.App.3d 986, 1003 [finding no reason why an
action for declaratory relief would not be an appropriate remedy
for a party to determine the validity of a settlement agreement].)
Such an action would be defensive in nature.
Lin’s argument suffers from another fundamental flaw. By
contending that the clause “if any action is brought to enforce or
defend” actually means “if an ‘action’ is brought ‘to enforce’ the
release or if an ‘action’ is brought that requires a party ‘to defend’
the release” (italics added), Lin asks us to insert words into, and
thus rewrite, the Dong agreement in order to confer a right that
be interpreted according to the law in force at the time of its
execution . . . .” (Flagg v. Sloane (1933) 135 Cal.App. 334, 336.)
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the parties did not bargain for. “That is not a proper judicial
function.” (Wolf v. Walt Disney Pictures & Television (2008)
162 Cal.App.4th 1107, 1129, fn. 13.) We may not “‘. . . read into
the contract words which it does not contain so as to change the
meaning of the words contained in the contract.’” (Estate of
Bodger (1955) 130 Cal.App.2d 416, 425 (Bodger).) Nor are we
“empowered to make for the parties a contractual arrangement
which they did not see fit to make themselves.” (Apra v. Aureguy
(1961) 55 Cal.2d 827, 830.) In short, “we do not rewrite any
provision of any contract . . . for any purpose.” (Certain
Underwriters at Lloyd’s of London v. Superior Court (2001)
24 Cal.4th 945, 968.)
Lin also argues that providing for attorney fees when a
party files a declaratory relief action to enforce a release but not
providing attorney fees if the release is only asserted as an
affirmative defense is illogical because it encourages rather than
discourages further litigation. This argument ignores that our
role is to “‘. . . give effect to the contract as made without regard
to its wisdom or folly . . . .’” (Bodger, supra, 130 Cal.App.2d at
p. 425, italics added.)7
7 The Supreme Court rejected a similar argument that,
because of the similarities between raising a claim in a complaint
or cross-complaint and asserting an affirmative defense, “there is
‘no logical reason’ why a party would ‘choose a form for raising its
argument that would foreclose any possible recovery of attorney
fees, when there is another form that would permit them.’”
(Mountain Air, supra, 3 Cal.5th at p. 756.) The court reasoned
that “a defendant who pleads an affirmative defense cannot be
liable for malicious prosecution, no matter how meritless the
defense [citation]; in contrast, a malicious prosecution action may
lie if a defendant seeks relief by filing a nonmeritorious cross-
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Finally, Lin argues that because Thomas’s complaint
included a request for attorney fees, Thomas is estopped from
disputing Lin’s entitlement to such fees. By failing to raise this
argument in the trial court, Lin has forfeited it. (Howard v.
County of San Diego (2010) 184 Cal.App.4th 1422, 1429.)
For these reasons, we conclude that Lin’s assertion of the
affirmative defense of release did not trigger the attorney fees
provision in the Dong agreement and his motion for attorney fees
was properly denied.
DISPOSITION
The judgment and order denying attorney fees are
affirmed. The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
_______________________, J.
ASHMANN-GERST
We concur:
________________________, P. J. ________________________, J.
LUI CHAVEZ
complaint [citation]. Thus, there may be certain situations where
a defendant would prefer not to raise a claim by way of a cross-
complaint, but instead raise such new matter by asserting an
affirmative defense. . . . [T]hese pleading alternatives do not
amount to an unusual arrangement requiring specific language
in an attorney fees provision [citation], much less constitute an
absurdity requiring [the rejection of] such an interpretation
[citation].” (Ibid.)
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