Akopyan v. Karamanoukian
Filed 6/25/12 Akopyan v. Karamanoukian CA2/7
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
SEVEN
VICTORIA AKOPYAN,
Plaintiff and Respondent,
v.
ARA KARAMANOUKIAN,
Defendant and Appellant.
B233224
(Los Angeles
County
Super. Ct.
Nos. BC356977
and BC415376)
APPEAL from
a judgment of the Superior Court
of
County, Mark V. Mooney, Judge. Reversed and remanded.
Ervin Cohen
& Jessup, Karina B. Sterman, Rodney C. Lee and Kevin J. Pavlik for
Defendant and Appellant.
Law Office
of Lawrence P. House and Lawrence
P. House for Plaintiff and Respondent.
_________________________
Ara Karamanoukian appeals from the judgment entered after
the trial court granted a motion for summary
adjudication in favor of Victoria Akopyan in this action for
FACTUAL AND PROCEDURAL BACKGROUND
1.
and the Second Action for Breach of the Settlement Agreement
In July 2006 Karamanoukian and his
business partner, Alan Baronian, purchased a majority interest in a corporation
that operates an adult daycare center from Akopyan, its sole shareholder. Immediately after the purchase a dispute
arose between Karamanoukian and Baronian, on one hand, and Akopyan and her
then-boyfriend Hovik Krboyan, on the other hand. In August 2006 Akopyan filed an action
against Karamanoukian, Baronian and others; Karamanoukian and Baronian filed a
cross-complaint against Akopyan and Krboyan.
In February 2008 the parties
settled the action. The settlement
agreement did not require the payment of money at that time. Rather, because the parties believed McGuire
Woods LLP, the law firm representing Karamanoukian and Baronian in connection
with the stock purchase, had committed misconduct
that provoked the underlying dispute, the settlement agreement provided
Karamanoukian and Baronian (or either one of them alone) would pursue a legal
malpractice action against McGuire Woods and share half of any recovery with
Akopyan.
with the malpractice action, the settlement agreement provided, “[T]he first
$50,000 [] in fees and/or costs of bringing and prosecuting the anticipated
malpractice action shall be born[e] equally 50/50 by Hovik Krboyan, on the one
hand, and Karamanoukian . . . , on the other hand. Should the fees and/or costs of bringing and
prosecuting the [a]nticipated [m]alpractice [a]ction exceed $50,000, Hovik
Krboyan shall be solely responsible for paying such fees and/or costs. Any attorney(s) engaged for the purpose of
prosecuting the [a]nticipated [m]alpractice [a]ction shall be instructed to []
bill the parties accordingly.â€
The settlement agreement also
provided Karamanoukian would pay Akopyan $100,000 if the malpractice action was
not “initiated or prosecuted†to judgment, settlement or award unless one of
four exceptions were met: “(1) after
diligent search, no attorney can be found to take on the [m]alpractice
[a]ction; (2) the prosecuting attorney, after initiating the [m]alpractice
[a]ction, elects to withdraw from the action; (3) this Agreement is not
fully executed until after the statute of
limitations has expired; or (4) Hovik Krboyan fails to pay his share
of the costs/fees associated with the [m]alpractice [a]ction.â€
The malpractice action was not
filed before the statute of limitations on the claims had expired. On June
9, 2009 Akopyan filed a complaint for breach of contract and
declaratory relief against Karamanoukian, alleging he was required to pay her
$100,000 because he had failed to timely initiate the malpractice action.
2.
and Summary Judgment
a.
In September 2010 Akopyan moved in
the alternative for summary judgment or summary adjudication. In October 2010 Karamanoukian filed a
cross-motion for summary judgment or summary adjudication, arguing he was
excused from paying the $100,000 because Krboyan had refused to pay his share
of the retainer fee required to initiate the malpractice action.
In a declaration filed in support
of his motion, Karamanoukian explained he had consulted with four attorneys
before finding one who would take the case.
Although Art Kalantarian had agreed to represent Karamanoukian, he
required a $50,000 retainer and execution of an engagement agreement by both Karamanoukian
and Krboyan. Karamanoukian called
Krboyan five or six times in an attempt to collect Krboyan’s 50 percent share
of the retainer and obtain his signature, but Krboyan never answered the
telephone or attempted to call Karamanoukian back. Because Karamanoukian could not reach Krboyan
and the statute of limitation was going to expire soon, Karamanoukian’s
attorney sent a letter to Ali Taheripour, the attorney who had represented
Krboyan in the underlying action, and Lawrence House, counsel for Akopyan,
requesting they contact Krboyan.
The letter dated June 25, 2008
stated, “This letter is to inform you that Mr. Karamanoukian has been
trying to contact Mr. Krboyan for the past three to four weeks regarding the
payment and retention of an attorney to commence the [a]nticipated [m]alpractice
[a]ction. However, as of the date of
this letter, Mr. Krboyan has not returned any of Mr. Karamanoukian’s phone
calls. [¶] Accordingly, we are requesting that one of
you contact Mr. Krboyan and inform him that the retainer agreement and payment
must be received by Mr. Karamanoukian in a sufficient amount of time to allow
the complaint to be filed before the expiration of the statute of
limitations. . . . By our
estimation, the controlling statute of limitations will expire on July 5, 2008. Therefore, Mr. Krboyan will most likely need
to pay his half of the $50,000 retainer and sign the fee agreement by no later
than June 30, 2008.†In his declaration, Karamanoukian stated
Krboyan called him a few days after the letter was sent and said he did not
know Kalantarian and would not sign the engagement agreement or pay any share
of the retainer.
In opposition to Karamanoukian’s
motion, Akopyan argued the settlement agreement only required Krboyan to pay 50
percent of legal fees billed to him by an attorney after the fees had been
incurred, not to advance any portion of fees required to initiate the action,
which, she contended, was Karamanoukian’s obligation. Akopyan further argued, supported by
declarations from Krboyan and Taheripour, that Krboyan had never received any
telephone calls from Karamanoukian; Krboyan had not been told about the June
25, 2008 letter to Taheripour because Taheripour no longer represented Krboyan
and did not know how to contact him; Krboyan did not speak to Karamanoukian after
the letter had been sent; and it was suspicious that Karamanoukian had failed
to attach the proposed engagement agreement from Kalantarian to his moving
papers or produce it in discovery.
b.
The trial
court’s order
After a hearing on February 9, 2011 the trial court denied Akopyan’s motion
for summary judgment but granted summary adjudication in favor of Akopyan on
the cause of action for breach of contract.
agreement . . . has nothing in there that requires anyone to advance
fees. It’s an agreement where they are
going to split the fees as they are . . . billed, essentially, that the
parties’ settlement agreement obligates the defendants to either commence the
anticipated malpractice action or pay the $100,000 within 30 days. Well, they did not commence the action. [T]hey were the ones who had to get the ball
rolling on this. And whether or not they
could find an attorney who could do it for a contingency and not put anything
out front, but pay only fees as they come up, whether they found someone who
had to, who was going to charge a retainer, that is not spelled out in the
settlement agreement. . . .
What is spelled out, though, is that defendants were to begin this
action. That didn’t happen. So then they’re obligated to pay the $100,000
within 30 days. The agreement itself did
not obligate Hovik, Mr. Krboyan to advance costs or to sign any representation
agreement. . . . He did
not have a legal malpractice claim. He
was not represented by the Woods firm. So,
you know, there is no reason for him to even sign a representation agreement,
nor was that a condition precedent to initiate this action.â€
With respect to the claim for
declaratory relief, the court treated Karamanoukian’s motion as a motion for
judgment on the pleadings and granted it.
The court found the claim did not present a controversy for which
declaratory relief could be issued because there was no continuing obligation
between the parties.
name="_ftnref3" title="">[3] The court’s rulings on the cross-motions
resolved all claims in the action.
Judgment was entered on February
22, 2011. Karamanoukian
filed a timely notice of appeal.
DISCUSSION
1.
Standard
of Review
A
motion for summary judgment or summary adjudication is properly granted only
when “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).) We
review a grant of summary judgment or summary adjudication de novo and decide
independently whether the facts not subject to triable dispute warrant judgment
for the moving party as a matter of law.
(Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348.) We view the evidence in the light most
favorable to the opposing party, liberally construing the opposing party’s
evidence and strictly scrutinizing the moving party’s. (O’Riordan v. Federal Kemper Life
Assurance Co. (2005) 36 Cal.4th 281, 284.)
2.
in Favor of Akopyan
a.
interpretation
Absent
conflicting extrinsic
evidence, the interpretation of a written contract is a question of law. (City of Hope Nat. Medical Center v.
Genentech, Inc. (2008) 43 Cal.4th 375, 395; Parsons v. Bristol
Development Co. (1965) 62 Cal.2d 861, 865.)
The fundamental goal of contract
interpretation
is to give effect to the mutual intention of the parties as it existed at the
time they entered into the contract. (Bank of the
West v. Superior Court (1992) 2 Cal.4th 1254, 1264; Parsons, at
p. 865; see also Civ. Code, § 1636.)
That intent is interpreted according to objective, rather than
subjective, criteria. (Wolf v. Walt
Disney Pictures & Television
(2008) 162 Cal.App.4th 1107, 1126.)
When the contract is clear and explicit, the parties’ intent is
determined solely by reference to the language of the agreement. (Civ. Code, §§ 1638 [“language of a
to govern its interpretation,
if the language is clear and explicit, and does not involve an absurdityâ€];
1639 [“[w]hen a contract is reduced to writing, the intention of the parties is to
be ascertained from the writing alone, if possibleâ€].)
The
words in a contract are to be understood “in their ordinary and popular senseâ€
(Civ. Code, § 1644), and the “whole of [the] contract is to be taken together,
so as to give effect to every part, if reasonably practicable, each clause
helping to interpret the other.†(Civ.
Code, § 1641.) An interpretation that
renders part of the instrument surplusage should be avoided.
(City of El Cajon v. El Cajon Police Officers’ Assn. (1996) 49 Cal.App.4th 64,
71.) Finally, “[a] contract must receive
such an interpretation as will make it lawful, operative, definite, reasonable,
and capable of being carried into effect, if it can be done without violating
the intention of the parties.†(Civ.
Code, § 1643; see Bill Signs Trucking, LLC v. Signs Family Limited
Partnership (2007) 157 Cal.App.4th 1515, 1521 [“‘[i]nterpretation of a contract “must be fair and reasonable,
not leading to absurd conclusionsâ€â€™â€].)
b.
The
contract obligated Krboyan to pay 50 percent of any retainer required to
initiate the action
Akopyan contends the parties
intended Krboyan pay 50 percent of litigation fees and expenses that had been
incurred, not share the cost of any deposit or retainer required to initiate
the action, and argues this intention is made clear by the absence in the
settlement agreement of an express requirement that Krboyan advance costs. Instead, the agreement provides “any
attorney(s) engaged for the purpose of prosecuting the [a]nticipated
[m]alpractice [a]ction shall be instructed to [] bill the parties
accordingly.†To be sure, the settlement
agreement is silent on how the parties are to proceed under the circumstances
that actually occurred. Nevertheless,
reading the contract as a whole, it is unreasonable to conclude the parties did
not intend Krboyan would be responsible for 50 percent of a retainer required to
initiate the action. Even if they did
not contemplate this precise situation, such an implied term is required to
make the contract reasonable in light of the general intent gleaned from the
express provisions. As such, it is
properly considered part of the parties’ agreement. (See
Civ. Code, §§ 1655 [“[s]tipulations which are necessary to make a contract
reasonable . . . are implied, in respect to matters concerning which
the contract manifests no contrary intentionâ€], 1656 [necessary incidents
implied including covenant of good faith and fair dealing].)
The settlement agreement expressly
placed the responsibility on Karamanoukian to do all the work associated with
initiating and maintaining the malpractice action—that is, to find an attorney
willing to take the case and to participate in the prosecution—while limiting
his financial exposure to $25,000 in fees and costs. To ensure his financial exposure would be
limited, the agreement provided “[T]he first $50,000 . . . in fees
and/or costs of bringing and
prosecuting the anticipated malpractice action shall be born[e] equally 50/50â€
by Krboyan and Karamanoukian and Krboyan would be “solely responsible†for
paying any “fees and/or costs of bringing
and prosecuting†the matter in excess of $50,000 (italics added). Just as this operative provision does not
expressly address an advance of fees, it also does not expressly limit the
obligation to pay fees to those for services already rendered or costs actually
incurred.
Moreover, to interpret the contract
to exclude a requirement Krboyan share in the payment of a retainer would
ignore the repeated use of the word “bring,†one of the definitions of which is
to “initiate (legal action) against someone.â€
(Oxford Dictionaries Online
2012).) A retainer is simply “[a]n
advance payment of fees for work that the lawyer will perform in the futureâ€
(see Black’s Law Dict. (9th ed. 2009) p. 1430), often required before an
attorney will file an action on behalf of a new client or do any work
whatsoever. Akopyan’s focus on the
additional requirement that “[a]ny attorney(s) engaged . . . shall be
instructed to bill the parties accordingly†is misplaced because that provision
presupposes an attorney has been engaged.
Here, Kalantarian would not take the case—that is, the action could not
be initiated—unless and until the retainer fee was paid
both the client and the person partially responsible for paying the fees.
participate in the payment of that fee; and his failure to do so excused any
obligation Karamanoukian had to pay the $100,000 penalty.
c.
There are disputed issues of fact
regarding notice to Krboyan
Akopyan finally argues, even if
Karamanoukian’s interpretation of the settlement agreement is correct, he was
not excused from paying her the $100,000 penalty—and the judgment in her favor
should be affirmed—because there was no evidence Krboyan was aware of
Karamanoukian’s attempts to contact him before the statute of limitations on
the malpractice claim had expired. That
argument is belied by the record:
Karamanoukian presented a declaration asserting he had spoken with Krboyan
a few days after the June 25, 2008 letter was sent by his counsel and
Krboyan refused to pay his share of the retainer. That evidence is sufficient to defeat
Akopyan’s motion.
For his part, Karamanoukian
contends not only did the trial court err in granting Akopyan’s motion for
summary adjudication of the breach of contract cause of action but also it
improperly denied his own motion directed to that claim. But Karamanoukian’s evidence regarding his
conversation with Krboyan was contradicted by Krboyan’s declaration stating the
conversation did not occur. That factual
dispute may not be material if the June 25, 2008 letter from Karamanoukian’s
attorney to Krboyan’s former attorney, which no one disagrees was, in fact,
sent and received, was sufficient notice to Krboyan under principles of
agency. (See Civ. Code, §§ 2317
[ostensible authority], 2355 [means of termination of agency].) However, neither party has addressed this
issue on appeal, and we are unable to determine whether additional evidence
relating to it exists or if the parties had an adequate opportunity to present
the evidence or conduct discovery on the issue.
(Cf. Code Civ. Proc.,
§ 437c, subd. (m)(2).)
Accordingly, it must be resolved in the first instance in the trial
court, either by further motion practice or at trial. (See generally Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6
[“[a]lthough our review of a summary judgment is de novo, it is limited to
issues which have been adequately raised and supported in [appellant’s]
briefâ€]; Kim v. Sumitomo Bank (1993)
17 Cal.App.4th 974, 979.)
DISPOSITION
The
judgment is reversed, and the matter remanded for further proceedings not
inconsistent with this opinion.
Karamanoukian is to recover his costs on appeal.
PERLUSS,
P. J.
We
concur:
WOODS,
J.
JACKSON,
J.
name="_ftn1" title="">[1] Because
Baronian is not a party to this action, we will not continue to refer to him.
name="_ftn2" title="">[2] The
court denied Karamanoukian’s summary judgment motion and motion for summary
adjudication with respect to Akopyan’s breach of contract cause of action.
