Baker v. Oleander Corp.












Filed 11/8/10 Baker v. Oleander Corp. 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

CLAYTON BAKER, as Executor, etc., Plaintiff and Appellant, v. OLEANDER CORPORATION et al., Defendants and Respondents.

B221193 (Los Angeles County Super. Ct. No. SC081719)

APPEAL from a judgment of the Superior Court of Los Angeles County.
Terry Friedman, Judge. Affirmed.

The Bucklin Law Firm, Stephen L. Bucklin for Plaintiff and Appellant.

Lascher & Lascher, Wendy Lascher, Eric R. Reed for Defendants and Respondents.

___________________________________________________
Appeal is taken from a judgment following remand. Appellant Clayton Baker contends that he is entitled to recover additional contractual attorney fees. The trial court allowed Baker to recover fees from the corporation that is a party to the contract, but denied Clayton any recovery from the corporation’s president. We affirm.
FACTS
The Prior Judgment and Appeal
The facts underlying this appeal are described in our opinion in Baker v. Nawn (Jun. 1, 2009, B203315) (nonpub. opn.). We summarize them here. An elderly couple, William and Kathleen Wingen, wanted to build a home on landslide-prone property in Pacific Palisades (the Property). To that end, the Wingens entered a 1989 construction agreement (the Agreement) with Nawn, a Nevada corporation. Gary Mamian, a civil engineer and contractor, is president of Nawn. Nawn does not have a California contractor’s license.
Nawn agreed to build a house on one of the Wingens’ adjoining lots. The Agreement specifies that “upon completion” of the project, title to the Wingens’ second lot would transfer to Nawn. A cancellation clause in the Agreement allowed termination if the project was unfeasible due to soil or other conditions. In the event of cancellation, the parties agreed to divide any expenses or profits “on the basis of 50/50.” For 14 years, attempts were made to develop the Property; however, it was not possible to meet government safety requirements protecting upslope landowners, and no home was built.
William Wingen died in 2003. In 2004, Kathleen Wingen filed suit to quiet title to the Property. Nawn answered the complaint and filed a cross-complaint. After Kathleen Wingen died in 2005, her son Clayton Baker was substituted in as plaintiff.
Though not named in Mrs. Wingen’s lawsuit, Gary Mamian filed a cross-complaint. The trial court struck the cross-complaint because Mamian “has no claim to the property.” Undeterred by the trial court’s ruling, Mamian filed a new action against Baker, alleging the same causes of action that were in his stricken cross-complaint. Mamian’s complaint was not served until January 8, 2007. In February 2007, the trial court consolidated Mamian’s new action with Baker’s pending case. The trial court allowed Mamian to assert claims for breach of fiduciary duty; declaratory relief; unjust enrichment; and reformation of deed; however, the court bifurcated the claims made by Baker and Nawn, and tried them first.
After a bench trial conducted in March 2007, the trial court found in favor of Nawn, but did not reach the merits of Mamian’s claims. The court ordered the sale of the Property, with the proceeds divided 50/50. Mamian was not awarded fees. The trial court found that “Nawn was the prevailing party against Baker. That entitles Nawn to its attorney’s fees.”
We reversed the judgment because (1) Nawn contracted to build a house for the Wingens without having a California contractor’s license; therefore, it cannot recover in law or in equity on the Agreement; and (2) the trial court misinterpreted the cancellation clause of the Agreement, which mentions nothing about selling the Property and dividing the proceeds in the event that Nawn failed to build a house on the Property for the Wingens. We reversed the award of attorney fees to Nawn, finding that “Baker is now the prevailing party in this litigation. [¶] The case is remanded to the trial court to address the amount of attorney fees to be awarded to Baker for all litigation occurring in the trial court and for the fees incurred in this appeal.”
The Attorney Fees Award
On remand, the trial court took up the issue of attorney fees. Baker requested attorney fees of $274,615. Nawn and Mamian argued that (1) the appellate opinion does not prevent the trial court from considering the issues of reasonableness, entitlement, apportionment, and whether the fees were actually incurred; (2) no statute or contract allows Baker to recover attorney fees from Mamian; (3) Baker cannot recover attorney fees on claims that were voluntarily dismissed before trial; and (4) the fees claimed are excessive and unreasonable.
The court disposed of the motion for fees on November 24, 2009. The court wrote, “Mamian was not a party to the underlying Agreement . . . . Hence, the fees must be apportioned among Nawn and Baker to exclude the costs incurred in Baker litigating his claims against Mamian.” The court ordered that Nawn pay attorney fees of $186,040 to Baker.
DISCUSSION
Appeal is taken from the trial court’s order awarding attorney fees. (Code Civ. Proc., § 904.1, subd. (a)(2); Grant v. List & Lathrop (1992) 2 Cal.App.4th 993, 996.) Specifically, the issue is whether Baker is entitled to recover the attorney fees he incurred while defending against claims brought by Gary Mamian. The trial court excluded the fees attributable to Mamian’s claims.
The legal basis for an award of attorney fees is reviewed de novo. (Exarhos v. Exarhos (2008) 159 Cal.App.4th 898, 903; Chinese Yellow Pages Co v. Chinese Overseas Marketing Service Corp. (2008) 170 Cal.App.4th 868, 879.) Independent review is proper when the appeal “raises a pure issue of law regarding the entitlement to [attorney] fees” (Snyder v. Marcus & Millichap (1996) 46 Cal.App.4th 1099, 1102), or when the facts are undisputed. (Paul v. Schoellkopf (2005) 128 Cal.App.4th 147, 151.)
The fee award is based on Civil Code section 1717.^[1] “Where an attorney fee clause provides for an award of fees incurred in enforcing the contract, the prevailing party is entitled to fees for any action ‘on the contract,’ whether incurred offensively or defensively. [Citations.] Such fees are properly awarded under section 1717 ‘to the extent that the action in fact is an action to enforce—or avoid enforcement of—the specific contract.’” (Turner v. Schultz (2009) 175 Cal.App.4th 974, 980.)
The Agreement contains an attorney fees clause. It reads, “[I]f any action is brought by either party to enforce, protect, or establish any right or remedy, the prevailing party shall be entitled to recover from the other reasonable attorney’s fees actually incurred.” The parties to the Agreement are Nawn and the Wingens. As noted in our prior opinion, “Mamian is not the contracting party . . . .”
“As a general rule, attorney fees are awarded only when the action involves a claim covered by a contractual attorney fee provision and the lawsuit is between signatories to the contract.” (Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 379-380; Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 896 (Blickman).) In some instances, Civil Code section 1717 may apply even if the plaintiff is not a party to the contract. “Where a nonsignatory plaintiff sues a signatory defendant in an action on a contract and the signatory defendant prevails, the signatory defendant is entitled to attorney fees only if the nonsignatory plaintiff would have been entitled to its fees if the plaintiff had prevailed.” (Real Property Services Corp. v. City of Pasadena, supra, 25 Cal.App.4th at p. 382. Accord: Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671, 679.) Otherwise stated, if “the nonsignatory plaintiff would not have been entitled to fees had it prevailed, [then] the signatory defendant had no reciprocal right [to fees] under section 1717.” (Blickman, supra, 162 Cal.App.4th at p. 897.)
The Agreement allows fees to be awarded in litigation “brought by either party” to the Agreement. Mamian is not a “party” to the Agreement, nor does Baker claim that Mamian is a third party beneficiary of the Agreement, or that Mamian is the alter ego of Nawn. (Blickman, supra, 162 Cal.App.4th at pp. 896-897; Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129.) Mamian’s only relationship to the Agreement is as a shareholder and/or officer of the contracting party, Nawn. Because he was not a party to the Agreement, Mamian could not claim attorney fees if he prevailed against Baker. In the original judgment, which went against Baker, Mamian was not awarded attorney fees: If Mamian was not entitled to attorney fees before, then Baker is not entitled to attorney fees now, because the entitlement to fees is reciprocal. Baker is not entitled to fees merely because Mamian requested them in the prayer for relief portion of his complaint. (Blickman, supra, 162 Cal.App.4th at pp. 897-901; Sessions Payroll Management, Inc. v. Noble Construction Co., supra, 84 Cal.App.4th at pp. 681-682.)
The primary case relied upon by Baker is inapposite. There, it was “undisputed that [a nonsignatory plaintiff] would have been entitled to fees if he had been a prevailing party, [so] there is no question that he is liable for fees as a losing party.” (Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111, italics added.) Here, it is not “undisputed” that Mamian would have been entitled to fees had he prevailed.
Finally, we observe that the attorney fee award must be equitable. (Hunt v. Fahnestock (1990) 220 Cal.App.3d 628, 633.) Mamian’s complaint was served on Baker two months before trial. Baker seeks additional attorney fees of $88,575, even though Mamian’s claims were never tried. The trial court could reasonably find that it would be inequitable to award Baker attorney fees when Mamian’s complaint was belatedly filed and was not a factor at trial.
DISPOSITION
The judgment is affirmed. Respondent is awarded court costs only. No attorney fees incurred in this appeal may be recovered.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

BOREN, P.J.
We concur:

DOI TODD, J.

CHAVEZ, J.


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