Lair v. Vinci

Filed 10/7/08 Lair v. Vinci CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEALS from a judgment of the Superior Court of San Diego County, John S. Meyer, Judge. Affirmed in part, reversed in part and remanded with directions. Motions to dismiss appeal and for sanctions denied.

In the second set of appeals in this case, plaintiffs and appellants Marc Lair, Equitable Medical Properties, LLC and The Equitable Group, Inc. appeal from a judgment entered after this court's remand with directions that the trial court enter judgment on the jury's special verdict awarding Lair $650,000 in quantum meruit damages against defendant Ronald Vinci, and awarding Vinci money damages on his causes of action for breach of an option agreement and two notes secured by specified property (Lair v. Vinci (Dec. 5, 2005, D043433) [nonpub. opn.].) The trial court's ensuing judgment states that "Lair[] shall have and recover . . . judgment in the sum of $650,000" against Vinci. The judgment further awards Vinci possession of a Beechcraft Baron airplane. The court found no party prevailed in the action for purposes of attorney fees and costs.

On appeal from the judgment, Lair contends (1) the trial court's exclusion of Equitable Medical Properties, LLC and The Equitable Group, Inc. from the quantum meruit judgment contravenes this court's prior opinion and the jury's special verdict; (2) Vinci's damage award under one of the notes (the "Lancair note") must be vacated due to Vinci's seizure and sale of the underlying security; and (3) the award to Vinci of possession of the Beechcraft Baron is unjust, punitive, and constitutes an improper double recovery.

Vinci also appeals from the judgment, contending: (1) he is entitled to an award of attorney fees and costs incurred on the note claims and also in defending against Lair's claims of an asserted joint venture; (2) the jury's quantum meruit award is without legal basis, inconsistent with the special verdict findings upholding the option agreement, excessive, and unsupported by substantial evidence; (3) the trial court prejudicially erred by refusing to instruct the jury as to Lair's willful suppression of evidence and duty to account to Vinci; and (4) the court erred by granting a nonsuit on Vinci's causes of action for negligent and intentional infliction of emotional distress.

We conclude the court erred in determining Vinci was not a prevailing party under Civil Code section 1717 with respect to his breach of contract cause of action on the Lancair note, and reverse that portion of the judgment awarding attorney fees and costs as to that cause of action with directions stated below. Otherwise, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Proceedings Before Remand

We detailed the underlying facts concerning the parties' various transactions in our prior unpublished opinion, Lair v. Vinci, supra, D043433, and need not repeat them in full here. It suffices to summarize that in 2001, Vinci loaned Lair certain sums of money as reflected in an installment note secured by an airplane hanger and helicopter (the May 2001 note) and a promissory note secured by a Lancair airplane (the Lancair note), which money was in part used by Equitable Medical Properties, LLC toward the purchase of a commercial building (the property). (Id. at pp. 3-4.) After Lair transferred all interest in the property to Vinci, he and Vinci entered into an "Exclusive Option to Purchase Property" (the option) in which Vinci granted Equitable Medical Properties, LLC an option, expiring in November 2002, to purchase the property at a specified price in exchange for specified monthly payments. (Id. at p. 4.) Thereafter, Lair spent time making and supervising improvements on the property, and collecting rents. (Id. at pp. 4-5.) As of 2003, Lair was delinquent in the option payments as well as on payments under both notes, resulting in a heated exchange between the men, after which Lair brought Vinci an executed bill of sale for another aircraft (a Bonanza, which was later sold and ordered substituted with a Beechcraft Baron). (Id. at p. 5.)

Lair (along with his related companies) and Vinci both filed suit against each other, culminating in a jury trial and special verdict awarding damages to both parties. The jury found Lair and Vinci intended to be bound by the option agreement; that Lair breached the option and owed Vinci compensatory damages of $97,317 under that agreement, under which Vinci agreed to defer Lair's option payments until November 2002 in exchange for the executed bill of sale to Lair's airplane. (Lair v. Vinci, supra, D043433, at pp. 8-9.) The jury further found Lair was entitled to be compensated $650,000 in quantum meruit damages for the value of his time, money and services on the property's behalf. (Id. at p. 8.) It awarded Vinci $214,000 in compensatory damages under the May 2001 note, $111,436.70 in damages under the Lancair note, and $19,000 for Lair's breach of fiduciary duties in connection with the property's management. (Id. at p. 9.)

On the parties' post trial motions, the trial court granted a new trial on the matter and denied the parties' motions for judgment notwithstanding the verdict, resulting in appeals from both Vinci and Lair. (Lair v. Vinci, supra, D043433, at pp. 10-12.) We affirmed the orders denying JNOV and reversed the new trial order, holding the jury's special verdict questions were not legally or factually inconsistent. (Id. at pp. 14-19.) We remanded the matter with directions that the court enter judgment on the special verdict. (Id. at p.29.)

Proceedings Post-Remand

Before the trial court entered judgment on the matter, Lair moved to dissolve a previously issued preliminary injunction so as to release the hanger, Lancair airplane and Beechcraft Baron, claiming he had received a net verdict in his favor that satisfied all of his secured debts. At about the same time, Vinci moved to modify the preliminary injunction to require Lair to deliver the Beechcraft Baron to a neutral third party pending final disposition of the matter. Vinci argued the Beechcraft Baron was not collateral but became his property as a result of the jury's special verdict; that his possessory rights vested upon Lair's failure to make option payments by November 2002. The court issued a tentative ruling releasing the hangar and Lancair airplane to Lair based on their status as collateral and Lair's net jury verdict.^[1] Thereafter, Vinci obtained a two-week continuance of both motions to February 10, 2006.

Before the February 10, 2006 hearing, Lair applied ex parte for an order preventing Vinci from taking any action to "possess, sell, encumber, or transfer" the Lancair. Lair's counsel averred that on January 23, 2006, after the court's tentative ruling releasing the Lancair to Lair, Vinci had served a "Notice of Disposition of Collateral" indicating he would sell the Lancair at a private sale on February 2, 2006. The court granted Lair's request, but its order was not entered until February 8, 2006. By that time, Vinci had already sold the Lancair to a third party for $300,000.

Later that month, the court entered a judgment that had been proposed by Vinci. In short order, Vinci obtained a writ of possession for the Beechcraft Baron and unsuccessfully attempted to obtain a turnover order. Lair thereafter moved to vacate the judgment, asserting he never received notice of Vinci's proposed judgment, and asked the court to deduct $111,436.70 from Vinci's verdict due to Vinci's extra-judicial sale of the Lancair. While Lair's motion to vacate the judgment was pending, the court ordered the Beechcraft Baron placed in the possession of a third party, Crown Air.

The parties eventually filed cross-motions for attorney fees and costs. On May 11, 2006, the court entered an order vacating the previous judgment, declining to reduce or setoff the judgment by $111,436.70 following the sale of the Lancair aircraft, and granting a stay of delivery of the Beechcraft Baron under Code of Civil Procedure section 918.5 without prejudice pending its determination of the prevailing party for purposes of attorney fees and costs. On the same day, the court entered judgment (1) awarding Lair judgment against Vinci (individually and as trustee of his family trust) in the amount of $650,000 plus interest at a rate of 10 percent per annum from November 14, 2003, until paid; (2) awarding Vinci judgment against Lair, Equitable Medical Properties LLC and Talon Aviation, LLC in the amount of $441,753.70 plus interest at a rate of 10 percent per annum from November 14, 2003, until paid; (3) awarding Vinci possession of the Beechcraft Baron; and (4) determining that no party prevailed for purposes of attorney fees and costs and ordering the parties to bear their own fees and costs.

The court later vacated the stay of enforcement of judgment and issued another stay conditioned on Vinci and Lair posting undertakings in the respective amounts of $392,645 and $345,806. It calculated Lair's undertaking in part by determining the value of the Beechcraft Baron to be $271,071.

Both Lair and Vinci appeal from the judgment.

DISCUSSION

I. Lair's Appeal

A. Standard of Review

Plaintiffs assert their appeal presents circumstances in which we need only apply the law to undisputed facts, warranting our independent review with no deference to the trial court's findings or rulings. Vinci responds that as to plaintiffs' challenge to the judgment awarding him possession of the Beechcraft Baron, we must apply the substantial evidence standard of review because in entering judgment, the trial court resolved a disputed question of fact.

Interpretation of the jury's factual findings on the special verdict presents a question of law for this court, and the trial court's (and our) function is to draw legal conclusions from those facts in view of the pleadings, evidence and instructions. (Code Civ. Proc.,  624;^[2]City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 682; Woodcock v. Fontana Scaffolding & Equipment Co. (1968) 69 Cal.2d 452, 456-457 [trial judge's function is to interpret the verdict " 'from its language considered in connection with the pleadings, evidence and instructions' "; if trial court's interpretation is incorrect, appellate court will interpret the verdict if it is possible to give a correct interpretation].) Hence, we undertake an independent review of the trial court's legal rulings and Lair's challenges to the propriety of the ensuing judgment.

B. Exclusion of Equitable Medical Properties, LLC and The Equitable Group, Inc. From Quantum Meruit Judgment

Lair contends the trial court erred by excluding, without explanation, Equitable Medical Properties, LLC and The Equitable Group, Inc. as parties to his $650,000 quantum meruit judgment. He argues the omission violates this court's directions to enter judgment on the jury's special verdict, and is contrary to the trial court's order denying Vinci's motion for JNOV as well as our prior opinion in which we noted that Equitable Medical Properties, LLC had deposited $500,000 in escrow toward the purchase price of the property. (Lair v. Vinci, supra, D043433, at p. 3.)

As for the latter point, our prior opinion's recitation of facts is not binding on this appeal. The doctrine of law of the case renders principles or rules of law determinative on the same parties to a subsequent appeal; it does not extend to the facts or to points of law that might have been but were not presented and determined on a prior appeal. (People v. Barragan (2004) 32 Cal.4th 236, 246; Steelduct Co. v. Henger-Seltzer Co. (1945) 26 Cal.2d 634, 644; see also 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal,  895, 912, pp. 928-930, 947.) Nor is there any indication the trial court materially departed from our directions on remand. In the prior appeal, we held the jury's answers to the special verdict questions were not legally or factually inconsistent and accordingly directed the trial court to enter judgment on the special verdict. Our opinion did not consider questions about the propriety of including Equitable Medical Properties, LLC and The Equitable Group, Inc. as parties to the $650,000 quantum meruit judgment, and thus our direction cannot be interpreted as directing the trial court to enter a particular judgment (e.g., Butler v. Superior Court (2002) 104 Cal.App.4th 979, 982) or more specifically as directing the court to enter the quantum meruit judgment in favor of those entities. Rather, it was for the trial court to draw from the jury's special verdicts conclusions of law so as to enter judgment accordingly. (Code Civ. Proc.,  624; City of San Diego v. D.R. Horton San Diego Holding Co., Inc., supra, 126 Cal.App.4th at p. 682.)

Further, we do not find support for Lair's assertion that Vinci made and lost his prior motion for JNOV "on these same grounds." Vinci did not argue in his JNOV motion that Equitable Medical Properties, LLC and the Equitable Group, Inc. were not proper parties to the quantum meruit verdict, only that the quantum meruit judgment was unsupported by substantial evidence. As stated, we did not address that point in our prior decision.

In our view, the pertinent question is whether the special verdict is correctly interpreted as awarding $650,000 in quantum meruit damages to Lair only. As stated, this is a question of law for this court on appeal. Courts will interpret verdicts in a manner that will uphold them and give them "the effect intended by the jury, as well as one consistent with the law and the evidence." (7 Witkin, Cal. Procedure, supra, Trial,  375, p. 427; e.g., Woodcock v. Fontana Scaffolding & Equipment Co., supra, 69 Cal.2d at pp. 456-457; Mixon v. Riverview Hospital (1967) 254 Cal.App.2d 364, 387-388.) Here, the judgment is prefaced with the following factual recitation: "It appearing by reason of said verdict that plaintiffs Marc D. Lair, Equitable Medical Properties,

LLC and The Equitable Group, Inc. were awarded the sum of $650,000 against defendants . . . ." The judgment proceeds to order, adjudge and decree that Plaintiffs Marc D. Lair, shall have and recover against defendants Ronald C. Vinci . . . judgment in the sum of $650,000 . . . " (Italics added.) Under the circumstances, we cannot say the trial court omitted Equitable Medical Properties, LLC or the Equitable Group, Inc. as parties to the quantum meruit judgment.

We note that when the parties' proposed their respective judgments, Vinci in a letter brief argued the entity plaintiffs should be excluded because it was only Lair who had provided services on the property's behalf, and further, that The Equitable Group, Inc. was a suspended corporation in California and thus was not permitted to obtain entry of judgment. The latter claim was merely an bare assertion of counsel. Vinci does not repeat these arguments on appeal; he only maintains there is no evidence those entities contributed money, and even if there is error it is harmless. He also argues Lair never objected and thus waived the claim of error. But Lair's counsel did respond to Vinci's position to the trial court, asserting when he submitted Lair's proposed judgment that it was not proper to exclude those entities because the special verdict did not differentiate between plaintiffs, and all were named plaintiffs in the complaint. Vinci provides no evidence or authority compelling us to conclude the special verdict cannot be interpreted as including Equitable Medical Properties, LLC or the Equitable Group, Inc. as parties to the quantum meruit judgment.

C. Jury Award on the Lancair Note

Lair contends we must vacate the jury's $111,436.70 award of damages under the Lancair note. Asserting Vinci sold the underlying security on that note the Lancair airplane without providing him notice, he argues Vinci elected remedies by seizing and selling the underlying security, thus barring him from also obtaining the benefit of the jury's verdict on the note. Lair maintains Vinci's lien sale nullified the jury award because under California Commercial Code section 9615, the $300,000 sale satisfied Lair's $111,436.70 obligation.

Vinci responds that he was entitled to simultaneously pursue extra-judicial foreclosure proceedings against the Lancair until satisfaction of the secured debt; that Lair never challenged the foreclosure sale in the trial court by proper means (including by seeking an acknowledgement of satisfaction of judgment under Code of Civil Procedure section 724.110), thus forfeiting any challenge to the sale's validity on appeal. Vinci further points out the Commercial Code provides separate judicial remedies for a debtor contending he or she is aggrieved by an improper foreclosure sale, which Lair did not pursue. Finally, Vinci argues he did not elect an exclusive remedy by pursuing the foreclosure of the Lancair.

The parties do not dispute that Vinci held a security interest in the Lancair plane under the Lancair note, on which Lair had defaulted. Lair's default permitted Vinci to act to enforce the rights and remedies provided by the notes as well as the security agreements within those notes. (Com. Code,  9601, subd. (c); Uniform Commercial Code com. 5, 23C West's Ann. Com. Code (2002 ed.) foll.  9601, p. 27;^[3]see Brunzell Construction Co., Inc. v. Smith (1988) 200 Cal.App.3d 617, 622-623.) Commercial Code section 9601 empowers a secured creditor to reduce his claim to judgment and to foreclose or otherwise enforce his security interests; "[t]hese remedies are cumulative and the creditor may pursue alternative remedies until the obligation is satisfied." (Brunzell Construction, at pp. 622-623 [addressing former California Commercial Code section 9501]; see also KMAP, Inc. v. Town & Country Broadcasters, Inc. (1975) 49 Cal.App.3d 544, 547 [defendant's failure to repay loan secured by radio equipment caused a breach of both the promissory note and the security agreement, resulting in "two separate wrongs which gave rise to several cumulative remedies"]; 4 Witkin, Summary of Cal. Law (10th ed. 2005) Secured Transactions in Personal Property,  171, pp. 730-731.) The trial court was squarely presented with Lair's request to set aside that portion of the judgment on the Lancair note but "decline[] to reduce or set aside the Judgment . . . without prejudice for plaintiffs and cross-defendants . . . to pursue rights and remedies under the California Commercial Code."

The trial court did not err in refusing to reduce or set aside the judgment, as Lair's remedy to deem the judgment partially satisfied lies in Code of Civil Procedure section 724.110, which sets out a procedure for obtaining an acknowledgement of partial satisfaction of judgment,^[4]or in an action under the Commercial Code if Lair seeks to challenge Vinci's compliance with the code's requirements and obtain damages for the "amount of any loss caused by a failure to comply with this division" or the loss of any surplus. (Com. Code,  9625, subds. (b), (d), Assembly Com. com (3), 23C West's Ann. Com. Code (2002 ed.) foll.  9625, pp. 288-289 [stating "[t]he exercise of this remedy is subject to the normal rules of pleading and proof" and noting that principles of tort law supplement this subdivision, but if tort damages compensate the debtor for the same loss, the debtor is entitled to only one recovery].)

We reject Lair's contention that Vinci made an improper election of remedies by selling the Lancair. As stated, Vinci was entitled to simultaneously reduce his claim to judgment and foreclose or otherwise enforce the security interest. Lair's other arguments do not convince us otherwise. Lair first asserts, citing Code of Civil Procedure section 666,^[5]that the net verdict in Lair's favor extinguished any debt owed to Vinci; that the Lancair note was fully satisfied by the jury's special verdict. Code of Civil Procedure section 666 is a statutory set off provision that requires the court to enter a set off judgment where a cross-complainant's recovery exceeds that of the plaintiff. (Garg v. People ex rel. State Bd. of Equalization (1997) 53 Cal.App.4th 199, 211-212, disapproved on other grounds in Agnew v. State Bd. of Equalization (1999) 21 Cal.4th 310, 333.) This statutory right, however, is subject to waiver by the parties. (Jess v. Herrmann (1979) 26 Cal.3d 131, 143 ["Amici have cited no case in which the statutory provisions have been interpreted to compel a trial court to set off corresponding judgments over the express objections of both parties"].) Here, the record indicates the parties had at some point agreed to retain separate money judgments rather than obtain a set off judgment. Lair provides no reasoned explanation how, under these circumstances, the set off statute compels a conclusion that the separately entered judgment against Lair on the Lancair note was satisfied.

Lair further points to a case relied upon by Vinci, Fleming v. Carroll Pub. Co. (D.C. 1993) 621 A.2d 829, for the proposition that a creditor's remedies cease upon satisfaction of the debt. In Fleming, the court noted that in the District of Columbia there remained some disagreement as to whether a secured creditor may seek repossession and judgment simultaneously (though the court held it plain from the D.C. code that those remedies were cumulative and that a secured creditor was free to pursue all available remedies until the debt was satisfied). (Id. at p. 834 & fn. 9.) Here, the California Commercial Code expressly resolves any such question in this state. Finally, the remaining authorities cited by Lair (Humes v. MarGil Venture, Inc. (1985) 174 Cal.App.3d 486 and Smith v. Golden Eagle Ins. Co. (1999) 69 Cal.App.4th 1371) recite general principles pertaining to election of remedies doctrine; neither case involves a secured transaction or application of California Commercial Code remedies. (Humes, at p. 493 [deciding whether a plaintiff irrevocably elected remedies by bringing a superior court action, estopping her from filing a petition with the Labor Commissioner]; Smith, at pp. 1375-1376 [deciding whether plaintiffs waived their right to enforce a contract by proceeding to trial on a tort cause of action].) These cases are inapposite.

Finally, Lair appears to challenge Vinci's compliance with California Commercial Code section 9615 pertaining to the application of proceeds following disposition of collateral. He argues Vinci improperly attempted to wrap in a subordinate lien for maintenance and improvements before satisfying the debt. But if Lair contends he is entitled to a surplus from sale of the Lancair or that Vinci did not comply with the provisions of the Commercial Code's provisions, his remedy, as stated above, is to sue Vinci for damages. (Com. Code,  9625, subds. (b), (d).)

D. Award of Possession of Beechcraft Baron Aircraft

By its special verdict on count three relating to the option agreement, the jury found that Lair breached the option agreement by failing to make payments and that Vinci was entitled to $97,317 in compensatory damages under that agreement. The verdict form continued:

"QUESTION NO. 27: Did Vinci agree to defer collecting payments under the Exclusive Option Agreement until November of 2002 in exchange for an executed Bill of Sale to Lair's airplane? [] . . . [] Answer: Yes [] . . . []

"QUESTION NO. 28: Did Lair agree to deliver his airplane if he failed to make the Option payments by November of 2002? [] . . . [] Answer: Yes[.]"

Thereafter, the trial court entered judgment providing that Vinci "shall recover possession of that certain 1984 Beechcraft Baron 58, Serial No. TH-1398, airplane."

Lair challenges the judgment to the extent it awards Vinci possession of the Beechcraft Baron aircraft. He first argues Vinci should be estopped from obtaining such a judgment by his filing of a motion for new trial after the jury's verdict but before the trial court had resolved all disputed issues, which Lair maintains constitutes an acknowledgment that the jury's special verdict resolved all disputed issues. Lair further argues the jury's verdict did not award Vinci possession of the Beechcraft Baron but rather affirmed the airplane was put up as security for his option payments. Relying on Code of Civil Procedure sections 627 and 667, as well as Civil Code provisions as to the proper measure of contract damages, he maintains Vinci cannot recover both money damages under the note and possession of the underlying security because it would amount to an unreasonable and improper double recovery. Vinci responds that substantial evidence supports the award of possession; that the evidence shows Lair promised to deliver the airplane "free and clear" if he did not meet his obligations, not merely as collateral for the option agreement.

Again, the question is whether, by entering judgment for possession of the Beechcraft Baron in Vinci's favor, the trial court reached the correct legal conclusion based on the jury's verdict findings, the pleadings, applicable law, and the evidence in the case. The verdict findings themselves are ambiguous in that they find only that Lair agreed to deliver his airplane in the event he did not make all of his option payments current by November 2002; the jury was not asked to decide whether the airplane was collateral for Lair's obligations under the option or whether it was the subject of an independent agreement for additional consideration or a modification of the option agreement. In his cause of action for breach of the option agreement, however, Vinci alleged the airplane was pledged by Lair as security for his obligations: "In addition to the monetary damages to which Plaintiff [Vinci] is entitled, Plaintiff is entitled to immediate delivery of the airplane which was pledged by Lair as security for his obligations, pursuant to the executed Bill of Sale. Plaintiff will seek a writ of possession compelling the delivery to Plaintiff of the airplane, and hereby notifies Lair of Plaintiff's intent to foreclose upon Lair and Talon's hangar as further security for defendant's obligations to Plaintiff." (Capitalization omitted, italics added.) Vinci also included a cause of action for claim and delivery demanding delivery for certain identified property including the Beech A26 aircraft, bearing United States Registration Number

N4157Q, which aircraft Vinci alleged "Lair pledged as security for his obligations to Plaintiff . . . ."^[6] Vinci made similar allegations in pleadings supporting his attempts to obtain a writ of possession of that aircraft ("Lair's promise to bring those [option] payments current by November of 2002 was secured, voluntarily, by Lair's delivery to Vinci of an executed Bill of Sale in July of 2002").

Vinci's factual allegations concerning the nature of the parties' agreement are binding judicial admissions. "An admission in a pleading is conclusive on the pleader. [Citation.] 'He cannot offer contrary evidence unless permitted to amend, and a judgment may rest in whole or in part upon the admission without proof of the fact.' " (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1272, second italics omitted, quoting 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, 415, p. 512.) Such an admission is "a waiver of proof of a fact by conceding its truth, and it has the effect of removing the matter from the issues." (4 Witkin, Cal. Procedure, supra, Pleading, 413, p. 511.)

The trial court's interpretation of the verdict as awarding Vinci possession of the Beechcraft Baron is neither inconsistent with Vinci's allegations that the plane was intended as security for Lair's modified option obligations, nor is it inconsistent with the evidence at trial and the jury's special verdict, which indicated only that Lair agreed to deliver the aircraft "free and clear" in the event he failed to make his option payments by November 2002. The evidence, and Vinci's judicial admissions, compel the conclusion that Lair's delivery of the aircraft's bill of sale to Vinci created a security agreement obligating Lair to surrender possession of the aircraft to Vinci upon his failure to become current on his option payments. (See Com. Code,  9609, subd. (a)(1) [After default, a secured party may take possession of the collateral] & subd. (c) [if so agreed, secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party that is reasonably convenient to both parties]; e.g. KMAP, Inc. v. Town & Country Broadcasters, Inc., supra, 49 Cal.App.3d at p. 547 [security agreement created an obligation on the defendant debtor, on default of a promissory note, to surrender possession of pledged equipment to the plaintiff secured creditor and also gave plaintiff the right to retain the property or sell it at private, public or judicial sale, apply the proceeds of the sale to the indebtedness, and sue the defendant for any deficiency]).

We thus conclude the trial court did not err in entering judgment of possession in Vinci's favor. However, Vinci has only those rights granted to him under the Commercial Code as a secured creditor; he is entitled to sell the collateral in a commercially reasonable manner as one alternative remedy to satisfy the debt under the option agreement (Com. Code.,  9610), or he may retain the collateral in full or partial satisfaction of the obligation if Lair consents. (Com. Code,  9620.) If Vinci sells the Beechcraft Baron, he is required to apply the cash proceeds of any such sale in keeping with section 9615 of the Commercial Code to Lair's indebtedness under the option, which the jury found was $97,317, and account for the surplus, if any. (Com. Code,  9615, subd. (d)(1).)

II. Vinci's Appeal

A. Motion to Dismiss Appeal

Lair has moved to dismiss Vinci's appeal on grounds Vinci's acceptance of the benefits of the judgment in particular, his actions in levying on and taking possession of the Beechcraft Baron aircraft prevent him from appealing the judgment.

The principles governing Lair's motion were discussed by the California Supreme Court in Lee v. Brown (1976) 18 Cal.3d 110, 114-115: "[A]s a general proposition, one who accepts the benefits of a judgment cannot thereafter attack the judgment by appeal.

. . . 'The right to accept the fruits of a judgment, and the right of appeal therefrom are not concurrent. On the contrary, they are totally inconsistent. An election to take one of these courses is, therefore, a renunciation of the other.' [Citation.] . . . [A]cceptance by the appellant of the benefits of a judgment constitutes an ' . . . affirmance of the validity of the judgment against him.' . . . [] . . . As is so often the case, however, application of the rule has generated a number of equitable exceptions. A waiver is not implied, for example, in those cases in which appellant is concededly entitled to the accepted benefits, and his right to them is unaffected by the outcome of the case on appeal. [Citation.] Stated another way, one may appeal from a portion of a severable and independent judgment while accepting the benefits of the unaffected remainder of the judgment." (Italics omitted and added; see also Lovett v. Carrasco (1998) 63 Cal.App.4th 48, 53; Epstein v. DeDomenico (1990) 224 Cal.App.3d 1243, 1246 ["[W]here the appellant's right to the accepted portion of the judgment is not disputed on appeal . . . the appeal as to the disputed portion may proceed, because a reversal will have no effect on the appellant's right to the benefit he or she has accepted"].) Other cases addressing this exception have stated it in the disjunctive. (See Schubert v. Reich (1950) 36 Cal.2d 298, 299 [waiver rule has no application "where the benefits accepted are such that appellant is admittedly entitled to them or would not be affected or put in jeopardy by the appeal," italics added]; Reitano v. Yankwich (1951) 38 Cal.2d 1, 2 [quoting Schubert].)

Vinci opposes Lair's motion on grounds his possession of the Beechcraft Baron falls within that above-mentioned exception; that he enforced a severable and independent portion of the judgment, which did not affect his appellate rights as to the balance. "As to severability, '[t]he test of whether a portion of a judgment appealed from is so interwoven with its otherprovisions as to preclude an independent examination of the part challenged by the appellant is whether the matters or issues embraced therein

are the same as, or inter-dependent upon, the matters or issues which have not been attacked.' " (Gudelj v. Gudelj (1953) 41 Cal.2d 202, 214-215.)

Lair argues the exception does not apply because he does not concede Vinci is entitled to possession of the Beechcraft Baron but rather the appeal directly involves the judgment for possession of that aircraft. But in a declaration in support of the motion to dismiss, Lair's counsel avers that after the court vacated the order staying execution of the judgment (an order that Lair does not challenge on appeal), Lair and Vinci stipulated that " 'all right title and interest in the [Beechcraft Baron] shall be and is hereby transferred from Talon Aviation LLC [Lair's company]

to . . . Vinci.' " Thus, it appears Lair did at some level concede possession of the aircraft.

Further, the waiver rule as to an appellant's election is grounded in the concept that an appellant cannot take inconsistent actions; accordingly, for purposes of the matter at hand, we look only to Vinci's appeal to determine whether he has renunciated his appellate contentions by accepting benefits that may be impacted if he obtains a reversal. (Heacock v. Ivorette-Texas, Inc. (1993) 20 Cal.App.4th 1665, 1670, fn. 3 ["In deciding whether the plaintiff's appeal is inconsistent with having accepted the benefits of the judgment, we focus solely on the relief sought by the plaintiff, not on arguments made by a cross-appealing defendant"].) We agree Vinci's appellate challenges to the judgment (as to the order denying attorney fees, the award of quantum meruit damages, the fraud and conversion judgments based on instructional error, and entry of nonsuit on his emotional distress causes of action) do not impact the judgment to the extent it awards possession of the Beechcraft Baron. Vinci is not appealing the judgment in its entirety or asking this court to reverse the entire judgment (which would impact the jury's award of the Beechcraft Baron), nor is he appealing the judgment to the extent it awards him damages under the option agreement, to which the jury's findings on the Beechcraft Baron relate. Thus, hisattack on certain portions of the judgment in his cross-appeal is not inconsistent with his accepting possession of the Beechcraft Baron. We proceed to Vinci's contentions.

B. Attorney Fees and Costs

As stated, the jury awarded Vinci compensatory damages on his causes of action for breach of both the May 2001 note and the Lancair note, though it found Lair did not breach the May 2001 note by failing to make payment on or before November 7, 2001. The trial court ruled Vinci was the prevailing party on the Lancair note as he was awarded $111,436.70. However, it found Lair was the prevailing party on the May 2001 note, reasoning that the jury award of $214,000 in compensatory damages "does not give Vinci a victory on this claim" in that Lair did not dispute the money was owed on that note, and Vinci did not prove all of the elements of a breach of contract claim and accordingly did not achieve his litigation objective. On this reasoning, the trial court concluded neither party was a prevailing party for purposes of attorney fees; that neither Lair nor Vinci achieved their litigation goals. Further, the court ruled that if it were to apply a strict "net monetary recovery" standard (Code Civ. Proc.,  1032) for purposes of costs, Lair would be the prevailing party. It declined to permit Vinci to rely on the award of possession of the Beechcraft Baron because no evidence had been presented and no judicial determination had been made as to its value. It concluded neither party prevailed for purposes of a cost award and ordered each party to bear their own fees and costs.

Vinci contends he is entitled to an award of attorney fees and costs by reason of the attorney fee clauses in the May 2001 and Lancair notes, his clear and unqualified victories on the note claims, and (as to costs) his status as the prevailing party with a net monetary recovery. The May 2001 note provides: "If action be instituted on this note I promise to pay such sum as the Court may fix as attorney's fees." The Lancair note provides: "If any payment obligation under this Note is not paid when due, the Borrower promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process."

Civil Code section 1717 authorizes an attorney fee award to a prevailing party "[i]n any action on a contract . . . to enforce that contract" if the contract provides for

an award of attorney fees. (Civ. Code, 1717, subd. (a).) "[T]he party prevailing on

the contract shall be the party who recovered a greater relief in the action on the contract

. . . ." (Civ. Code, 1717, subd. (b)(1).) The court has broad discretion "to determine who, if anyone, is the party prevailing on the contract." (Otay River Constructors v. San Diego Expressway (2008) 158 Cal.App.4th 796, 806; see Hsu v. Abbara (1995) 9 Cal.4th 863, 871 (Hsu); Acree v. General Motors Acceptance Corp. (2001) 92 Cal.App.4th 385, 400.) "[W]e will not overturn that determination 'absent a clear abuse of discretion.' " (Acree, at p. 400.)

In certain circumstances, a successful party is entitled to attorney fees as a matter of right, eliminating the trial court's discretion to deny attorney fees under Civil Code section 1717. (Hsu, supra, 9 Cal.4th at pp. 875-876.) When a party obtains an unqualified victory by completely prevailing on, or defeating, the contract claims in the action and the contract contains a provision for attorney fees, the successful party is entitled to recover reasonable attorney fees incurred in prosecution or defense of those claims. (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109 (Scott);^[7]see also Hsu, at

p. 876.) If neither party achieves a complete victory on the contract claims as where a party " 'receives only a part of the relief sought' " the trial court has discretion to determine which party, if any, prevailed on the contract. (Hsu, at p. 875; see Code Civ. Proc., 1032, subd. (a)(4); ComputerXpress, Inc. v. Jackson(2001) 93 Cal.App.4th 993, 1016.) "[I]n deciding whether there is a 'party prevailing on the contract,' the trial court is to compare the relief awarded on the contract claim or claims with the parties' demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. 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.' " (Hsu, at p. 876; see also Scott, at p. 1109.) Furthermore, "in determining litigation success, courts should respect substance rather than form, and to this extent should be guided by 'equitable considerations.' For example, a party who is denied direct relief on a claim may nonetheless be found to be a prevailing party if it is clear that the party has otherwise achieved its main litigation objective." (Hsu, at p. 877, italics omitted.)

When claims are brought on multiple contracts, the court must decide which party was the prevailing party with respect to each separate contract. "When an action involves multiple, independent contracts, each of which provides for attorney fees, the prevailing party for purposes of Civil Code section 1717 must be determined as to each contract regardless of who prevails in the overall action. [Citation.] The fact that a party 'obtained a higher net recovery in the lawsuit is irrelevant to the determination of which party prevailed on any particular action on a contract.' " (Arntz Contracting Co. v. St. Paul Fireand Marine, supra, 47 Cal.4th at p. 491; accord, Hunt v. Fahnestock(1990) 220 Cal.App.3d 628, 632 [action and cross action involved three independent, unrelated contracts and a different party prevailed on each].)

1. May 2001 Note

At trial, Lair conceded that he owed Vinci $265,000 under the May 2001 note. Vinci argued he was entitled to damages and interest of $335,400 as of November 13, 2003 plus daily interest thereafter (totaling $86,085) on that note. The jury found Lair did not breach the note by failing to make payment on or before November 7, 2001, but still awarded Vinci $214,000 on that note, well below what even Lair agreed was due.

Relying on Scott, supra, 20 Cal.4th 1103, Vinci argues that despite the jury's finding of no breach, he nevertheless recovered the "greater relief" on the May 2001 note and thus is the prevailing party entitled to recover attorney fees as a matter of right. According to Vinci, a finding of breach is not a prerequisite to a determination of prevailing party because the only inquiry is whether he obtained the greater recovery.

Vinci's reliance on Scott is unavailing. In Scott, unlike here, the trial court awarded the plaintiff attorney fees on its contract claim. (Scott, supra, 20 Cal.4th at pp. 1108-1109.) In reviewing the court's discretionary prevailing party determination, the California Supreme Court observed that while the plaintiff sought to prove more than $2 million in damages, it succeeded in establishing only about $440,000 in damages. (Id. at p. 1109.) Thus the court stated "plaintiff here did not achieve all of its litigation objectives, and thus is not automatically a party prevailing on the contract for purposes of [Civil Code] section 1717. . . " (Ibid., italics added.) Nevertheless, the high court held the trial court did not abuse its discretion in implicitly concluding that on balance, the plaintiff had prevailed on the contract. Thus, the Scott court acknowledged the trial court retained discretion to award plaintiff attorney fees as the prevailing party notwithstanding its partial recovery. Scott compels the conclusion that Vinci did not achieve all of his litigation objectives on this claim because he recovered only $214,000 after demanding over $400,000 in damages. In this instance, as in Scott,the trial court was vested with discretion to decide that Vinci was not a prevailing party on that contract. It did not abuse its discretion in determining Vinci did not achieve his litigation objectives, regardless of its reasoning. (Day v. AltaBatesMedicalCenter(2002) 98 Cal.App.4th 243, 252, fn. 1.)

2. Lancair Note

The trial court specifically found Vinci was the prevailing party on the Lancair note having obtained an award of $111,436.70, the full amount requested at trial. This was indeed a "simple, unqualified victory" on the note for Vinci, leaving the trial court without discretion to award him attorney fees as the prevailing party on that contract under Civil Code section 1717. (Hsu, supra, 9 Cal.4th at pp. 875-876.)

Where a party is successful on some of his claims but not on others, the trial court must also determine, in its discretion, whether to apportion the attorney fees between those claims as to which fees are allowed and those as to which they are not. (Abdallah v. United Sav. Bank (1996) 43 Cal.App.4th 1101, 1111.) That a prevailing plaintiff did not succeed on certain of his claims will not preclude him from recovering all of his attorney fees where such fees were "incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed." (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129-130.) Where claims share common factual or legal issues, an award of attorney fees is ordinarily warranted even as to those claims on which the plaintiff did not succeed. (Acree v. General Motors Acceptance Corp., supra, 92 Cal.App.4th at pp. 404-405 [claims arising out of the same contract and the same contractual relationship and challenging the same underlying conduct]; Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133.)

Vinci argues that on remand, the trial court should award him not only his attorney fees incurred in prosecuting the note claims, but also those fees incurred in defending against Lair's defensively asserted joint venture claim. We disagree. In Wagner v. Benson (1980) 101 Cal.App.3d 27, relied upon by Vinci, the court awarded attorney fees incurred on a bank's action to collect the balance due under promissory notes and also fees incurred in defending against a charge of fraud, because the "[d]efense of the charge of fraud was necessary in the Bank's efforts to collect the notes." (Id. at p. 37, see also Siligo v. Castellucci (1994) 21 Cal.App.4th 873, 878.) In Siligo, the court acknowledged that California law was settled that an obligation to pay attorney fees incurred in enforcing a contract " 'includes attorneys' fees incurred in defending against a challenge to the underlying validity of the obligation.' " (Siligo, 21 Cal.App.4th at p. 878.) But here, Lair did not challenge the validity of the underlying notes or the amount of his obligations, he only sought to have his debts paid out of the property sale proceeds per his asserted (but unsuccessful) joint venture theory.

Further, in moving for attorney fees and costs, Vinci's counsel broke down his fees relating to each of the May 2001 and Lancair notes, averring: "I personally added up the numbers to determine the amounts directly attributable to the various categories. After performing this allocation, I was able to determine that $50,709.70 in fees were incurred directly in pursuit of Vinci's note claims, as separate and distinct from other issues. The sum of $50,709.70 represents the fees that would have been incurred had no other issue unrelated to the fee claims been litigated through trial. Of that amount $4,509 in fees relate to the [May 7, 2001 note], but not the Lancair note." (Bold omitted.) We conclude that given the apportionable nature of the fees, Vinci shall recover only those reasonable attorney fees incurred to collect on the Lancair note.

The trial court on remand is best positioned to determine the amount of reasonable attorney fees Vinci incurred to collect on the Lancair note. (Wagner v. Benson, supra, 101 Cal.App.3d at p. 37.) Vinci's status as prevailing party on that note also entitle it to an award of attorney fees on appeal for the matters relating to that note. (Track Mortg. Group, Inc. v. Crusader Ins. Co. (2002) 98 Cal.App.4th 857, 871; Mackinder v. OSCA Development Co. (1984) 151 Cal.App.3d 728, 739.)

3. Costs

As for costs, we start with Code of Civil Procedure section 1032, which provides in part: "Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." (Code Civ. Proc.,  1032, subd. (b).) Under this language, Vinci is entitled to costs if he falls within the definition of a "prevailing party" absent an express statute to the contrary. (Chaparral Greens v. City of Chula Vista (1996) 50 Cal.App.4th 1134, 1151-1152.) "Code of Civil Procedure section 1032, subdivision (a)(4) states ' "[p]revailing party" includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.' The statute goes on to provide '[w]hen any party recovers other than monetary relief and in situations other than as specified, the "prevailing party" shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not . . . ' " (Chaparral Greens, at p. 1152.)
We conclude this is a situation where the trial court was entitled to exercise its discretion in awarding costs. Code of Civil Procedure section 1032 defines prevailing party differently from Civil Code section 1717, and "[c]ourts have consistently held the prevailing party for the award of costs under [Code of Civil Procedure] section 1032 is not necessarily the prevailing party for the award of attorney's fees in contract actions under [Civil Code] section 1717." (Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1142; McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456 ["We emphatically reject the contention that the prevailing party for the award of costs under [Code of Civil Procedure] section 1032 is necessarily the prevailing party for the award of attorneys' fees"].) The trial court was not required to grant prevailing party status under Code of Civil Procedure section 1032 to each party that succeeds on a separate contract.

Rather, the court found Lair had received the net monetary recovery having been awarded $650,000 in quantum meruit damages. Vinci contends the court had no discretion with regard to costs; that under Code of Civil Procedure section 1032, subdivision (a)(4) he must be deemed the party with a net monetary recovery because he was also awarded possession of the Beechcraft Baron. Vinci provides no support for the proposition that the award of possession of the aircraft constitutes a monetary recovery, and we decline to so hold. Rather, we uphold the trial court's finding there was no prevailing party, which was properly based on its conclusion none of the four separate circumstances warranting costs as a matter of right applied here. On these facts we cannot say the trial court erred in this determination. Nor did the court plainly abuse its discretion in denying an award of costs altogether. (See Lincoln v. Schurgin (1995) 39 Cal.App.4th 100, 105-106 [trial court did not abuse its discretion in declining to award costs where defendant was not entitled to costs as matter of right because of mixed result].)

C. Quantum Meruit Award

Vinci contends we must strike the quantum meruit award to Lair on grounds it is (1) without legal basis because it was the result of Lair's voluntary payment of money; (2) inconsistent with the special verdict's finding upholding the option agreement; (3) excessive; (4) unsupported by substantial evidence; and (5) inconsistent with the law provided to the jury. Vinci further argues he did not invite any error in the jury's quantum meruit award to Lair and the law of the case doctrine does not prevent him from raising these arguments. Lair has separately moved for reimbursement of his costs and attorney fees incurred in connection with Vinci's arguments to the extent they attempt to relitigate issues that we decided in our prior appeal, characterizing those arguments as frivolous.

We begin by addressing whether, as Lair urges, Vinci's challenges to the quantum meruit award (as well as his remaining arguments on appeal) are precluded because he did not previously file a protective cross appeal. (See Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 839.) "Normally, '[i]f the lower court gives a judgment or order, then vacates it, and an appeal is taken from the vacating order, reversal leaves the proceeding as if the order appealed from (the vacating order) had not been made; i.e., the original judgment comes back into full effect. [Citation.] The same is true of an order granting a new trial: Reversal leaves the judgment as if no such order had been made, i.e., as if the motion had been denied; the original judgment is restored to full force.' " (Davcon, Inc. v. Roberts & Morgan (2003) 110 Cal.App.4th 1355, 1366-1367.) Given this rule, when a party challenges an order granting a new trial on appeal, a protective cross-appeal is necessary to ensure the opposing party's right to appellate review of the original judgment. (Sanchez-Corea v. Bank of America, at p. 910; Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2007)

3:169, pp. 3-68 to 3-69.) Here, however, the trial court never entered judgment on the jury's special verdict, and thus there was no "original judgment" to be automatically revived. We are compelled to agree with Vinci that he was not required to file a protective cross-appeal under these circumstances.

Lair also argues Vinci's appellate challenges are barred under the doctrine of law of the case. " 'The doctrine of "law of the case" deals with the effect of the first appellate decision on the subsequent retrial or appeal: The decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.' " (Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 491, italics omitted, quoting 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, 895, p. 928.) The doctrine promotes finality and judicial economy by preventing the relitigation of issues decided previously. (People v. Stanley (1995) 10 Cal.4th 764, 786; Yu v. Signet Bank/Virginia (2002) 103 Cal.App.4th 298, 309.) It does not extend to points of law that might have been determined but were not decided in the prior appeal, but it does extend to questions implicitly determined because they were essential to the prior decision. (Yu, at p. 309.)

Vinci's first appeal in this case involved his contention that the trial court erred in denying his motion for partial JNOV on the quantum meruit judgment. Specifically, Vinci had argued the award was not supported by substantial evidence because there was no evidence of the reasonable value of Lair's purported services on behalf of the property and the parties' option agreement precluded any quantum meruit claim because it addressed Lair's compensation. In affirming the trial court's order, it was necessary to address (and reject) these claims on their merits. (Lair v. Vinci, supra, D043433, pp. 19-25.) We also addressed Lair's contentions challenging the t