Levaton v. Levaton



Levaton v












Levaton v. Levaton

















Filed 9/24/10 Levaton v. Levaton CA2/1

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>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115 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
ONE


>






TAMAR LEVATON,



Plaintiff, Cross-defendant and

Appellant,



v.



JOE LEVATON et al.,



Defendants, Cross-complainants

and Respondents;



EGAL LEVATON,



Cross-defendant and Appellant.




B213730



(Los Angeles
County

Super. Ct.
No. PC034432)








APPEAL from
a judgment of the Superior Court
of Los Angeles
County, Barbara M. Scheper, Judge. Affirmed with directions.

Law Offices
of Rosario Perry, Rosario Perry and Jacqueline M. Fabe for Plaintiff,
Cross-defendant and Appellant.

Law Offices
of Jeffrey E. Lieber and Jeffrey E. Lieber for Defendants, Cross-complainants
and Respondents.

Law Offices
of Rosario Perry, Rosario Perry and Jacqueline M. Fabe for Cross-defendant and
Appellant.

——————————

Egal and Tamar Levaton appeal from an amended judgment
awarding attorney’s fees. After a
hearing, the trial court awarded Shoshana and Joseph Levaton $45,081.00 in
attorney’s fees and $5,973.52 in costs, as the prevailing parties in a lawsuit
between the family members which was the subject of a prior appeal.[1] We affirm the trial court’s conclusion that
the parties’ agreement authorized an award of attorney’s fees to the prevailing
parties.

BACKGROUND

We briefly
describe the litigation in which the parties incurred the attorney’s fees that
are the subject of this appeal. Our
decision in the parties’ prior appeal of the trial court’s judgment contains a
full account of the factual and procedural background, which we summarize
below. (Levaton v. Levaton (June
10, 2010, B211550) [nonpub. opn.]) (Levaton I).

I. Litigation in the Trial Court

On November 1, 1999, Egal, his
brother Joe, and Joe’s then-wife Shoshana signed a Purchase Agreement
(agreement) under which Egal was to purchase, from Joe and Shoshana, real
estate in Northridge, California and a Midas Muffler franchise on the
property. Egal subsequently sued Joe and
Shoshana in February 2004 for breach of contract (failing to tender a deed to
the property and failing to sign paperwork) and other claims. Joe and Shoshana then filed a cross-complaint
against Egal in April 2004, alleging that Egal had failed to pay the full
purchase price. After Joe and Shoshana
filed a motion for judgment on the pleadings or to dismiss the complaint in
August 2004, alleging that Egal had filed for Chapter 7 bankruptcy without
disclosing the Northridge real estate or the Midas franchise, the trial court
dismissed Egal from the action.

Subsequently,
in March 2005, Tamar, Egal’s daughter, filed a second amended complaint for
breach of contract and specific performance, alleging that Egal had assigned
the agreement to her in November 1999 (with Joe and Shoshana’s oral
permission), and that Joe and Shoshana had not signed a deed or paperwork to
transfer the business to her. (Tamar
also alleged that she had assigned the rights back to Egal in January 2004,
presumably to allow Egal to file the initial complaint against Joe and
Shoshana.) Joe and Shoshana filed a
first amended cross-complaint in April 2005, naming Egal and Tamar as
cross-defendants, and alleging (without conceding) that if Egal did assign his
rights under the agreement to Tamar, Tamar was responsible for all Egal’s
obligations under the contract.

After a
court trial, the court found in favor of Joe and Shoshana in a ruling on January 19, 2007. The court concluded that the alleged
assignment by Egal to Tamar was a sham and ordered rescission of the
contract. The court ordered an
accounting, selected a forensic accountant as the referee, and adopted the
referee’s findings in May 2008.

On August 15, 2008, the court issued its
statement of decision, which stated that the contract failed for lack of
consideration, and rescinded the contract.
The court ordered Joe and Shoshana to refund the purchase price to Egal,
and ordered Egal to return the property and business to Joe and Shoshana. The court also credited Egal with interest
from the date Joe and Shoshana demanded rescission, awarded an offset to Joe
and Shoshana for inventory and cash balance, and made Egal and Tamar
responsible for the amount Joe had paid in taxes on the property. The court awarded Joe and Shoshana fair
rental value for the property from November
1, 1999 (the date of the agreement) until the date of the
property’s return, adopting the referee’s determination of the fair rental
value amount.

In an amended judgment filed October 10, 2008, the trial court
ordered Egal and Tamar to return the property and the business to Joe and
Shoshana, and set the amount due to Egal and Tamar at $27,948.45.

II. The First Appeal (Levaton I)

Egal and
Tamar appealed on October 15, 2008. In Levaton
I,
we affirmed in part and reversed in part, remanding to the trial court
for trial on the issue of fair rental value.[2] We also directed the trial court to determine
anew, after the further proceedings on remand, whether Joe and Shoshana were
the prevailing parties for the purpose of awarding attorney’s fees at trial and
on appeal.

Our prior
opinion stated: “The agreement
provided: ‘In the event of any legal
problems, all legal fees shall be paid by Egal Levaton regarding this
transaction or any other problems.’ The
trial court held a hearing on attorney’s fees on December 17, 2008, and the amended judgment awarded Joe
and Shoshana $45,081 in attorney’s fees.
Joe and Shoshana request that we ‘remand the matter to the trial court
to award attorneys’ fees on appeal to Respondents.’

“‘In an
action to enforce the rescission of a written land sale agreement, containing a
clause for attorney’s fees which does not limit recovery of such fees to any
particular form of action involving the contract, the prevailing party is
entitled to an award of such fees.’ ( >Hastings v. Matlock (1985) > 171 Cal.App.3d 826, 841.) ‘[T]he “prevailing party” is “the party who
recovered a greater relief in the action on the contract.”’ (Zagami,
Inc. v. James A. Crone, Inc.
(2008) 160 Cal.App.4th 1083, 1097, fn.
omitted). The trial court found that Joe
and Shoshana were the prevailing parties, and consequently awarded them
attorney’s fees. In light of our limited
reversal of the judgment on the issue of fair rental
value . . . , however, ‘we conclude the trial court must
consider anew, at the conclusion of the [further proceedings on remand], the
prevailing party issue.’ ( >Ibid.)

“The trial
court must also determine whether Joe and Shoshana are entitled to attorney’s
fees on appeal. ‘[B]ecause further
proceedings are necessary on remand, the determination of whether attorney fees
should be awarded in connection with this appeal should be made by the trial
court at the conclusion of those proceedings.’
(Zagami, Inc. v. James A. Crone,
Inc.
, supra, 160 Cal.App.4th at
p. 1097.) At the conclusion of the proceedings
on remand, the trial court is to determine whether Joe and Shoshana are the
prevailing parties on appeal and thus entitled to attorney’s fees, and if so,
to determine the amount of fees and costs due.
(See ibid. [‘“The prevailing
party determination is to be made only upon final resolution of the contract
claims and only by ‘a comparison of the extent to which each party ha[s]
succeeded and failed to succeed in its contentions.’” [Citation.]’].)”

III. The Instant Appeal

Subsequent
to the filing of the appeal in Levaton I,
the trial court held a hearing regarding attorney’s fees on December 17, 2008 and amended the
judgment in an order dated January 8,
2009, awarding Joe and Shoshana $45,081 in attorney’s fees and
$5,973.52 in costs against Egal and Tamar.
Notice of entry of judgment was filed January 13, 2009.
On January 23, 2009,
while Levaton I was pending, Egal and
Tamar filed a notice of appeal from the trial court’s amended judgment. We address their argument that the attorney’s
fees provision does not apply to this litigation in the light of our holding in
Levaton I that on remand, the trial
court must determine the prevailing party for the purpose of awarding
attorney’s fees at trial and on appeal.[3]

ANALYSIS

The
agreement states: “In the event of any
legal problems, all legal fees shall be paid by Egal Levaton regarding this
transaction or any other problems.” Egal
and Tamar argue that this language allows attorney’s fees only for “‘this
transaction,’” which they define as “business issues” related to “the purchase
and sale of a business and real property,” and does not include the recovery of
attorney’s fees incurred in litigation.

The traditional “‘American
rule’” that each party to litigation must bear his or her own attorney’s fees
may be altered where, as here, the parties’ agreement provides for the payment
of attorney’s fees. (Kalai v. Gray (2003)
109 Cal.App.4th 768, 777.) Civil Code
section 1717, subdivision (a) (section 1717) states: “In any action on a contract, where the contract
specifically provides that attorney’s fees and costs, which are incurred to
enforce that contract, shall be awarded either to one of the parties or to the
prevailing party, then the party who is determined to be the party prevailing
on the contract, whether he or she is the party specified in the contract or
not, shall be entitled to reasonable attorney’s fees in addition to other
costs.” Section 1717 allows an award of
attorney’s fees “when a person sued on a contract containing a provision for attorney
fees to the prevailing party defends the litigation ‘by successfully arguing
the inapplicability, invalidity, unenforceability, or nonexistence of the same
contract.’ [Citation.]” (Santisas
v. Goodin
(1998) 17 Cal.4th 599, 611.)

The parties
have offered no extrinsic evidence to aid in the interpretation of the
agreement, and as a result we review de novo whether the attorney’s fees clause
entitles the prevailing party in litigation to attorney’s fees. (Kalai
v. Gray
, supra, 109 Cal.App.4th
at p. 777.) “‘Under statutory rules of
contract interpretation, the mutual intention of the parties at the time the
contract is formed governs interpretation.
(Civ. Code, § 1636.) Such intent
is to be inferred, if possible, solely from the written provisions of the
contract. ( >Id., §
1639.) 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” (id., § 1644), controls
judicial interpretation. ( >Id., §
1638.) . . . Thus, if the meaning a layperson would ascribe
to contract language is not ambiguous, we apply that meaning. [Citations.]’” (Santisas
v. Goodin
, supra, > 17 Cal.4th at p. 608.)

The clear
and explicit language of the attorney’s fees provision in the agreement,
interpreted in the ordinary sense as a layperson would understand contract
language, is that the parties intended to include attorney’s fees for
litigation. The agreement, drafted by
the parties,[4] states that fees will be paid “in the event of
any legal
problems . . . regarding this transaction >or any other problems.” (Italics added.) A layperson would understand a lawsuit to be
a legal problem. The transaction was the
sale of the property and the business, memorialized in the agreement. The litigation that was the subject of >Levaton I was undoubtedly “regarding
this transaction.” The parties’ lawsuit
thus falls within the commonly understood meaning of “legal
problems . . . regarding the transaction,” the agreement to
sell the property and the business.
Further, although it is not necessary to our conclusion, the catch-all
phrase providing for payment of fees in the event of “any other problems”
sweeps widely to include any problems
that might result in an obligation to pay attorney’s fees.

Egal and
Tamar argue that the agreement’s language is ambiguous, because it provided
that only Egal would pay attorney’s fees (and therefore that only Joe and
Shoshana could recover fees), and said nothing about paying fees to the
prevailing party. This does not place
the fees provision outside of the ambit of section 1717. Section 1717, subdivision (a) applies to a
contract which provides that fees “incurred to enforce that contract, shall be
awarded either to one of the parties or
to the prevailing party” (italics added).
Where a contract provides that only one party may be awarded attorney’s
fees, section 1717 makes the right reciprocal, so that the prevailing party
recovers fees whether or not he or she is the party specified in the
contract. (Pacific Custom Pools, Inc. v. Turner Construction Co. (2000) 79
Cal.App.4th 1254, 1268.) Therefore,
although the agreement provides “all legal fees shall be paid by Egal Levaton,”
this does not prevent Egal (or Tamar) from recovering attorney’s fees under the
agreement, should he (or she) prove to be the prevailing party. “The primary purpose of section 1717 is to
ensure mutuality of remedy for attorney fee claims under contractual attorney
fee provisions. [Citation.] . . . .
[¶] The first situation in which
section 1717 makes an otherwise unilateral right reciprocal, thereby ensuring
mutuality of remedy, is ‘when the contract provides the right to one party and
not the other.’ [Citation.] In this situation, the effect of section 1717
is to allow recovery of attorney fees by whichever contracting party prevails,
‘whether he or she is the party specified in the contract or not.’” (Santisas
v. Goodin
, supra, 17 Cal.4th at
pp. 610–611.)[5]

Egal and
Tamar argue for the first time in their reply brief that the attorney’s fees
provision in the agreement is an indemnity agreement. They did not make this
argument in their opening brief or in the trial court, thus doubly denying Joe
and Shoshana of an opportunity to address the issue. We do not consider arguments raised for the
first time in a reply brief, unless good reason is shown for the failure to
present them earlier. ( >Neighbours v. Buzz Oates Enterprises (1990)
217 Cal.App.3d 325, 335, fn. 8; Campos v.
Anderson
(1997) 57 Cal.App.4th 784, 794, fn. 3.) Egal and Tamar make no such showing.

We conclude
that the attorney’s fees provision in the agreement authorizes the award of
attorney’s fees to the prevailing parties in the litigation. Joe and Shoshana are the prevailing parties
in the instant appeal. We therefore
grant their request for attorney’s fees incurred in connection with this
appeal.

>DISPOSITION

The trial court’s
order awarding attorney’s fees is affirmed to the extent it holds that the
agreement authorizes an award of attorney’s fees to the prevailing party in the
litigation. We remand for a
determination of the amount of attorney’s fees due to respondents on
appeal. Respondents are to recover their
costs on appeal.

NOT TO BE PUBLISHED.



JOHNSON,
J.



We concur:



MALLANO, P. J.



ROTHSCHILD, J.





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id=ftn1>

[1] For ease of reference, we will refer to the
parties by their first names.

id=ftn2>

[2] We grant Joe and Shoshana’s unopposed request
for judicial notice of selected portions of the appellant’s appendix in >Levaton I.

id=ftn3>

[3] Egal and Tamar do not appeal the trial court’s
award of $5,973.52 in costs. Code of
Civil Procedure section 1032, subdivision (b), provides “[e]xcept as otherwise
expressly provided by statute, a prevailing party is entitled as a matter of
right to recover costs in any action or proceeding.” Joe and Shoshana’s right to an award of costs
will depend upon the trial court’s determination whether Joe and Shoshana are
the prevailing parties, after proceedings on remand pursuant to our decision in
Levaton I.

id=ftn4>

[4] Tamar testified at trial that Shoshana
dictated the agreement and Tamar typed it.
No party contends that an attorney was involved in drafting the
agreement’s language.

id=ftn5>

[5] Egal apparently believed that he was entitled
to attorney’s fees for this litigation when he included a request for fees in
his 2004 complaint. Tamar’s 2005 second
amended complaint also requested attorney’s fees, specifically stating that the
“contract contains a provision for attorney’s fees.”






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