Ha v. Yi

Filed 1/6/10 Ha v. Yi CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 SEVEN

APPEAL from an order of the Superior Court of Los Angeles County, Edward A. Ferns, Judge. Affirmed.

Law Offices of Mansfield Collins and Mansfield Collins for Cross-complainant and Appellant.

Law Offices of Larry Fabrizi, Larry Fabrizi and Christine Chung for Cross-defendants and Respondents.

_________________

INTRODUCTION

Cross-complainant James Ha (Ha) appeals from an order awarding attorneys fees to cross-defendants Hyon Mi Yi, Brian Choe, Hyon Sam Yi, Donna Lee Faure and Jonathan Kim (collectively respondents).^[1] We affirm.

BACKGROUND

In 2000, Ha, LYDC, respondents, and Nam Kyung Cho (Cho^[2]), as well as Maryann K. Lee who is not a party to this litigation, executed the Operating Agreement for 139 S. Occidental Boulevard LLC (Operating Agreement), thereby acknowledging that they were the initial members of a limited liability company known as 139 S. Occidental Boulevard LLC (the LLC^[3]). The Operating Agreement describes the LLCs general purpose as the development and sale of real property located at 139 S. Occidental Boulevard in Los Angeles. Per the terms of the Operating Agreement, Ha was elected the sole manager for a two-year term.

The Operating Agreement contained an attorneys fee provision. That provision states: In the event of a dispute arising out of or in connection with this Agreement, the party prevailing in such dispute shall be entitled to its reasonable costs and attorneys fees in addition to all other relief to which it may be entitled.

The record on appeal consists only of a clerks transcript, which is quite limited. As best as we can discern, this action was instituted in 2006 by the LLC against Ha and LYDC. Although the case summary describes the main action as a fraud case, the factual underpinnings of the action elude us, in that no documents relating to the main action are part of the record on appeal.

On June 9, 2008, after demurrers to Ha and LYDCs cross-complaint and first amended cross-complaint^[4]were sustained with leave to amend, Ha and LYDC filed a second amended cross-complaint against the LLC, respondents and Cho, alleging seven causes of action. The first cause of action for breach of contract, the second cause of action for intentional interference with prospective economic advantage and the third cause of action for conspiracy were stated against respondents and Cho. The fourth cause of action for trade libel was stated against respondents. The fifth cause of action for fraud was alleged against respondent Hyon Mi Yi. The sixth cause of action for breach of contract was alleged against the LLC, and the seventh cause of action for breach of contract was stated against Cho.

The LLC and respondents (but not Cho) demurred to the second amended cross-complaint. The trial court sustained the demurrer without leave to amend to the first through sixth causes of action, after which the LLC and respondents filed a motion to dismiss the second amended complaint as to them with prejudice. The Case Summary discloses that the trial court granted the motion to dismiss on October 8, 2009.

On October 21, 2008, respondents filed a motion to fix attorneys fees in the amount of $88,795 awardable as an item of costs against Ha and LYDC.^[5] Respondents claimed an entitlement to such fees as the parties prevailing on the relevant contracts. Ha and LYDC opposed the motion, arguing that respondents were not entitled to attorneys fees for prevailing on the first through fifth causes of action and that the amount of fees requested was excessive and unreasonable. Respondents filed a reply, which Ha did not include in the record on appeal. On December 19, 2008, the trial court called the attorneys fees motion for hearing.^[6] Following argument, the court granted the motion as follows:

The above named cross-defendants [specifically respondents] as the prevailing parties are entitled to recover attorney fees in the amount of $38,000.00.

First, even though cross-defendants are not signatories to the contract,^[[7]] they are entitled to recover fees under th[e] contract. In Reynolds Metal Co. v. Alperson (1979) 25 Cal.3d 124, 129, the court held that nonsignatories to an agreement could be prevailing parties under a contract. The court reasoned that Civil Code section 1717s purpose was to provide a reciprocal remedy. In the instant case, the moving cross-defendants were alleged to have failed to perform the Operating Agreement properly because they removed James Ha as the manager. In other words, the basis of this action was non performance of the agreement which contained the attorney fees provision of the partnership, and by the individual partners acting on behalf of the partnership. The court sustained the demurrer to the Second Amended Cross-Complaint because there was no third party agreement, rather, the cross-defendants were alleged to have breached the Operating Agreement, an agreement to which they were effectively parties.

Second, the language of the contract is sufficiently broad to permit cross-defendants to obtain attorney fees. In Santisas v. Goodin (1998) 17 Cal.4th 599, 608, the court held that attorney fees were available for contract and tort claims, including negligence and negligent misrepresentation claims, arising from a contract with an attorney fees provision because of the broad language of the provision. See, also, Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1341. The language of the attorney fees provision is broad enough to cover tort and contract suits against moving parties. The contract provides at section 11.15 that fees are available [i]n the event of a dispute arising out of or in connection with this Agreement[.] . . . The tort claims arose out of and in connection with the Operating Agreement.

The fees requested are excessive. Cross-defendants challenge to the pleadings did not require an expenditure of the requested sum. While some of the nondemurrer litigation costs might be appropriately apportioned to the individual cross-defendants, it is clear that the lions share of fees are attributable to the partnerships claims against the defendants.

Ha thereafter appealed from the order awarding attorneys fees.^[8]

DISCUSSION

Ha concedes that respondents are entitled to attorneys fees for the dismissal of his first and fourth causes of action for breach of the Operating Agreement and trade libel, respectively. In reliance on Civil Code section 1717, however, he contends that respondents were not entitled to attorneys fees for the dismissal of the second cause of action for intentional interference with prospective economic advantage, third cause of action for conspiracy and fifth cause of action for fraud, as these causes of action sound in tort not contract.

Has reliance on Civil Code section 1717 is misplaced. That statutory provision does not control the interpretation of the attorney fees provision in this case. [It] applies only to any action on a contract, where the contract specifically provides [for an award of] attorneys fees and costs, which are incurred to enforce that contract . . . .  . . . In such cases, the statute provides that the right of the prevailing party to attorney fees shall be reciprocal. (Xuereb v. Marcus & Millichap, Inc., supra, 3 Cal.App.4th at pp. 1341-1342, italics deleted.) Civil Code section 1717 does not supersede or limit the broad right of parties pursuant to Code of Civil Procedure section 1021 to make attorney fees agreements. (Xuereb, supra, at p. 1342.)

As observed in Xuereb v. Marcus & Millichap, Inc., supra, 3 Cal.App.4th at page 1341, Code of Civil Procedure section 1021 provides the basic right to an award of attorney fees. [Citation.] It states: Except as attorneys fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided. Under this statute, the allocation of attorney fees is left to the agreement of the parties. There is nothing in the statute that limits its application to contract actions alone. It is quite clear from the case law interpreting Code of Civil Procedure section 1021 that parties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract. [Citations.] Thus, case law makes clear, the test is not whether the cause of action sounds in tort or contract. Instead, the sole question is the intent of the parties: did they intend to authorize the prevailing party to recover its attorney fees for a tort cause of action. [Citations.] The answer to that question depends upon the language of the agreement. (Allstate Ins. Co. v. Loo (1996) 46 Cal.App.4th 1794, 1798.)

The attorneys fees provision in the Operating Agreement states: In the event of a dispute arising out of or in connection with this Agreement, the party prevailing in such dispute shall be entitled to its reasonable costs and attorneys fees in addition to all other relief to which it may be entitled. We agree with the trial court that the language of this provision is broad enough to encompass any action, whether based in contract or tort, arising out of or in connection with the Operating Agreement. (Allstate Ins. Co. v. Loo, supra, 46 Cal.App.4th at pp. 1798-1799; Lerner v. Ward (1993) 13 Cal.App.4th 155, 158-160; Xuereb v. Marcus & Millichap, Inc., supra, 3 Cal.App.4th at pp. 1340, 1342-1343.) The second cause of action of the operative cross-complaint alleged interference with prospective economic advantage Ha expected to achieve as a result of the Operating Agreement. The third cause of action alleged a conspiracy to remove Ha as the manager of the LLC contrary to the provisions of the Operating Agreement. The fifth cause of action alleged that respondent Hyon Mi Yi fraudulently induced Ha to enter into the Operating Agreement. Inasmuch as these causes of action clearly arise out of or in connection to the Operating Agreement, respondents were entitled to recover attorneys fees for defending them. (Allstate Ins. Co., supra, at pp. 1798-1799; Lerner, supra, at pp. 158-160; Xuereb, supra, at pp. 1340, 1342-1343.)

Ha next contends that respondents could not recover attorneys fees for the dismissal of the sixth cause of action. This contention rests upon a faulty premise. Respondents were not named as defendants in the sixth cause of action, and as such there is no basis for concluding that the court awarded them attorneys fees for defending that particular cause of action. The LLC was the only defendant named in the sixth cause of action, and the LLC was not a party to the attorneys fees motion. Moreover, the sixth cause of action alleged the breach of an agreement other than the Operating Agreement. Having determined that the trial court properly awarded respondents attorneys fees pursuant to the attorneys fees provision in the Operating Agreement, we turn to Has contention that the amount of fees awarded was excessive.

Respondents asked for attorneys fees totaling $88,795, supporting their request with a Total Billing Statement. This statement set forth in detail all the services provided by their attorney, who also represented the LLC.

Ha argues that respondents request for $88,795 was excessive. The trial court agreed with Ha. As previously noted, the trial court ruled: The fees requested are excessive. Cross-defendants challenge to the pleadings did not require an expenditure of the requested sum. While some of the nondemurrer litigation costs might be appropriately apportioned to the individual cross-defendants, it is clear that the lions share of fees are attributable to the partnerships claims against the defendants. Recognizing that the total billing statement contained charges for litigation costs pertaining to the main action to which respondents were not parties, the court cut the fees requested by more than $50,000 from $88,795 to $38,000.

Ha further takes issue with respondents failure to segregate out the costs attributable to opposing the demurrers to the original, first amended and second amended cross-complaints. Ha maintains that in the absence of an itemized billing statement exclusively limited to such costs, the trial courts award of attorneys fees was arbitrary and excessive. In the absence of any case authority supporting this assertion or the notion that respondents were only entitled to recover attorneys fees to legal services for opposing of the three demurrers, we conclude Ha has waived the issue. (Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 366, fn. 2; In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830.)

We further conclude that Ha has failed to demonstrate that the trial court manifestly abused its discretion in awarding respondents $38,000 in attorneys fees. (EnPalm, LCC v. Teitler (2008) 162 Cal.App.4th 770, 774 [We will reverse a fee award only if there has been a manifest abuse of discretion.].) Generalized assertions of unreasonableness and citations to general legal principles without any reasoned argument including an analysis of the evidence will not suffice. (People v. Stanley (1995) 10 Cal.4th 764, 793.) Has failure to provide this court with respondents reply to his opposition to the attorneys fee motion and the reporters transcript of the hearing on the attorneys fees motion is yet another reason precluding us from disturbing the award of fees. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295; Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416.)

DISPOSITION

The order is affirmed. Cross-defendants are awarded their costs of appeal.

JACKSON, J.

We concur:

WOODS, Acting P. J.

ZELON, J.

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^[1] The court ordered cross-complainants Ha and Louie Young Development Company, Inc. (LYDC) to pay respondents attorneys fees in the amount of $38,000. Although Ha and LYDC are listed as appellants on the opening brief, only Has name appears on the notice of appeal. Accordingly, we do not recognize LYDC as an appellant or a party to this appeal.

^[2] Cho is not a party to this appeal.

^[3] The LLC is not a party to this appeal.

^[4] Neither of these pleadings is in the appellate record.

^[5] The LLC was not a party to the motion for attorneys fees, in that its complaint against Ha and LYDC had yet to be adjudicated.

^[6] Ha did not designate the reporters transcript of the hearing for inclusion in the record on appeal.

^[7] To the contrary, the LLC, respondents and Cho did execute the Operating Agreement.

^[8] An order awarding attorneys fees is appealable as an order entered after an appealable judgment. (Code Civ. Proc.,  904.1, subd. (a)(2); Whiteside v. Tenent Healthcare Corp. (2002) 101 Cal.App.4th 693, 706.) Although the order awarding respondents attorneys fees was entered after the trial court granted the LLC and respondents motion to dismiss, Ha filed his notice of appeal from the attorneys fees award before the trial court entered a judgment of dismissal in conformance with Code of Civil Procedure section 581d, which provides that [a]ll dismissals ordered by the court shall be in the form of a written order signed by the court and filed in the action . . . .

On our own motion, we have augmented the record on appeal to include the judgment signed by the court and entered on November 30, 2009, dismissing with prejudice the second amended cross-complaint as against the LLC and respondents. (Cal. Rules of Court, rule 8.155(a)(1)(A).) We deem Has premature notice of appeal from the order awarding attorneys fees to have been filed immediately after entry of the judgment of dismissal. (Cal. Rules of Court, rules 8.100(a)(2), 8.104(e); cf. Los Altos Golf & Country Club v. County of Santa Clara (2008) 165 Cal.App.4th 198, 202-203.)