Pacific Western Bank v.
Filed 6/17/13 Pacific Western Bank v. Prospect Village CA4/3
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opinion has not been certified for publication or ordered published for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
FOURTH
APPELLATE DISTRICT
DIVISION THREE
PACIFIC WESTERN BANK,
Plaintiff and Respondent,
v.
PROSPECT VILLAGE
L.P. et al.,
Defendants and Appellants.
G045790, G046274, G046276,
G046646, G046652, G046995,
G047079
(Super. Ct. No. 30-2010-00376213)
O P I
N I O N
Appeal from a judgment
of the Superior Court of
County, Jamoa A. Moberly, Judge.
Affirmed.
Enterprise Counsel
Group, Patrick D. Flannery and James S. Azadian for Defendants and Appellants.
Hodel Brigss Winter,
Matthew A. Hodel and Ashley Merlo for Plaintiff and Respondent.
* * *
Plaintiff and Respondent
Pacific Western Bank (PWB or the bank) made a commercial loan to Prospect
Village L.P. (Prospect Village) to build a commercial project. John Tillotson, Jr.,
and Daniel Howse signed the promissory note on behalf of Prospect Village’s
general partner, Pelican Tustin LLC, and signed commercial guaranties,
individually and as trustees of the Tillotson Family Trust and the Howse Family
Trust, respectively. John’s wife,
Haydee, also signed a commercial guaranty as a trustee of the Tillotson Family
Trust. The commercial venture failed to
cover the unpaid amount of the loan. PWB
sued Prospect Village on the promissory note and sued Howse and the Tillotsons
on their guaranties. According to PWB’s
evidence, the outstanding amount due on the loan (with interest) was over $1.7
million.
The
jury found in favor of PWB in the amount of $1,491,064.57 and against Prospect
Village on the promissory note,
against Howse and John on their personal guaranties, and against the Tillotson
Family Trust and the Howse Family Trust.
(See Portico Management Group, LLC
v. Harrison (2011) 202 Cal.App.4th 464, 473 (Portico) [a trust cannot be a judgment debtor, i.e., “‘the person
against whom a judgment is rendered’†per Code of Civil Procedure section
680.250].) The court subsequently
amended the judgment to delete the Tillotson Family Trust as a judgment debtor
and placed in its stead John and Haydee in their representative capacities as
trustees of the family trust.
Prospect
Village, John, and Haydee appeal
name="_ftnref2" title="">[2]
and contend the evidence does not support the jury’s verdict, reasoning that
the jury must have compromised, given the fact the jury awarded less damages
than PWB claimed; the court erred in failing to instruct the jury pursuant to
Civil Code section 2819; the court erred in amending the judgment to make John
and Haydee judgment debtors in their representative capacities as trustees of
the Tillotson Family Trust; and the trial court erred in awarding PWB
additional attorney fees for time and effort in amending the judgment to make
John and Haydee judgment debtors in their representative capacities as trustees
of the Tillotson Family Trust. According
to John and Haydee, the reason the jury found against the Tillotson Family
Trust—which cannot be judgment debtor (Portico,
supra, 202 Cal.App.4th at p. 473)—is
because PWB’s attorneys drafted the jury verdict form.
I
FACTS
AND PROCEDURAL BACKGROUND
The
jury below found in favor of PWB. We
summarize the facts with a view to the evidence in support of the
judgment. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053.)
On
March 1, 2007, PWB agreed to make an $11,200,000 construction loan to Prospect
Village, a single entity business. Under
the terms of the promissory note, Prospect Village agreed to pay off the
principal and any unpaid accrued interest in one payment on September 1,
2008. Because a single entity business
owns no other assets, PWB required the loan to be guaranteed by others.
Howse
and John, the two members of Pelican Tustin, LLC, signed the promissory note as
members of Pelican Tustin LLC, the general partner of Prospect Village. At the same time, John signed commercial
guaranties as an individual and as trustee of the Tillotson Family Trust. Howse signed commercial guaranties as an
individual and as trustee for the Howse Family Trust. Haydee also signed a commercial guaranty as
trustee of the Tillotson Family Trust.
John and Howse understood the guaranties were required to guard against
possible changes in the economy and against fluctuations in the real estate
market.
The
loan was to fund the construction of 12 live/work units and one commercial
building in Tustin. Howse and John spent
seven years on the Prospect Village project, starting in 2003. They formed a limited partnerhip to build
Prospect Village and purchased the land from the City of Tustin before taking
out the loan with PWB.
Once
the loan funded, the bank disbursed funds based on requests for draws by the
borrower, Prospect Village. The requests
had to be made in writing and were reviewed by bank personnel. Over the course of time, PWB disbursed $10.6
million of the loan funds.
PWB
did not allow or agree to any oral changes to the loan documents. Any request for a modification of the terms
of the loan had to be made in writing and approved by the executive
vice-president manager of the real estate industries group of PWB, the credit
administrator, the chief officer, and the senior credit officer.
Prospect
Village completed the project with disbursements from the loan. Construction on the live/work units was
completed in 2008, and the units were offered for sale in May 2008. The commercial building was not offered for
sale until about January 2009. Prospect
Village had trouble selling the properties and requested PWB to extend the due
date on the loan from December 2008 to March 2009. PWB knew of the difficulty Prospect Village
was having and granted the extension.
PWB granted other extensions as well, the last one to May 5, 2010.
Escrow
on the first live/work unit did not close until the end of March 2009, nine
months after it was placed on the market.
The commercial building closed escrow in January 2010. Although it had originally been hoped the
project would make Howse and John approximately a $3.5 million profit, in
February 2009, it appeared likely the sales would be insufficient to pay off
the loan. In February 2010, after all 13
properties—the collateral on the loan—had been sold, approximately $1.2 million
plus interest remained due on the loan.
In
May 2009, Howse and John signed a forbearance and modification document
acknowledging Prospect Village and the guarantors were in default on the loan
and the guaranties, respectively. Howse
and John signed the forbearance and modification on behalf of the borrower,
Prospect Village, as individual guarantors, and as trustees of their respective
family trusts. Haydee also signed the
forbearance and modification as trustee of the Tillotson Family Trust. A modification to the forbearance and
modification agreement was subsequently signed by Howse, John, and Haydee.
Howse
said he wrote to the bank four or five times, asking to be relieved of his
guaranty. Shortly after the close of
escrow on the last building, Howse received a letter from PWB stating there was
a deficiency on the loan and the loan was set to mature on May 5, 2010. The maturity date came and went without
Prospect Village or the guarantors paying off the deficiency. At that time, the outstanding loan balance,
including interest, was $1,635,660.43.
By the time of trial, PWB asked the jury to award it $1,774,603.84 as
against each defendant.
PWB
sued Prospect Village for failure to repay the loan, Howse and John on their
personal guaranties and as trustees on their respective family trusts, and
Haydee on her guaranty as trustee for the Tillotson Family Trust. PWB did not name either family trust as a
defendant. The matter was tried to a
jury. During argument to the jury,
defense counsel made the following statement: “If you find against Prospect Village any
amount to fulfill their full obligation, then Prospect Village has to pay
[PWB]. If Prospect Village is obligated to pay [PWB], then these guarantors
aren’t obligated to pay it back.â€
(Italics added.) PWB’s counsel
immediately objected that defense counsel’s statement was an incorrect
statement of the law. The court called a
recess for the lunch hour and directed defense counsel to return to court with
any authority he had supporting his statement to the jury. Defense counsel said he “will try.â€
When
the parties returned to court after the lunch recess, defense counsel cited
Civil Code section 2819 and argued modification of the loan agreement
exonerated the guarantors. PWB responded
that the statute did not support defense counsel’s statement to the jury. The court denied defense counsel’s request to
instruct the jury in the terms of Civil Code section 2819, because the jury had
already been instructed, there had been no motion to amend the answer to the
complaint to allege the loan had been modified without the guarantors’ consent,
and the guarantors signed a forbearance and modification, as well as a
modification of the forbearance and modification admitting their obligation. The court also instructed the jury to
disregard defense counsel’s statement quoted above.
The
court granted PWB’s motion for a directed verdict as to the following
defenses: Equitable estoppel, waiver,
accord and satisfaction, novation, unclean hands, fraud, PWB caused its own
damages, failure to mitigate, and setoff.
On June 17, 2011, the jury returned a nine-to-three verdict in favor of
PWB and against Prospect Village, Howse, the Howse Family Trust, John, and the
Tillotson Family Trust in the amount of $1,491,064.57. The court entered its judgment on July 22,
2011, along with a provision finding PWB was entitled to costs and attorney
fees.
Prospect
Village, John, Haydee, and Howse filed their motions for a new trial and
judgment notwithstanding the verdict on August 1, 2011. A week after that, the court denied without
prejudice PWB’s motion to amend the judgment.
PWB contended the judgment should be modified to correct a clerical
error, arguing the judgment should be amended because it “could be construed to
be inconsistent with the pleadings and proof in this case insofar [as] it might
suggest the judgment is entered against the Tillotson Family Trust, rather than
the defendant trustees in their representative capacities.†The defense took the position that the
judgment was correct and “[t]he jury verdict makes no doubt John and Haydee’s
liability is in their representative capacity
. . . .â€
On
November 1, 2011, the trial court partially granted PWB’s motion for attorney
fees, awarding PWB $467,643 in attorney fees.
On December 6, 2011, the superior court amended the judgment. The amended judgment reflected postjudgment
interest, the award of $467,643 in attorney fees, and an award of more than
$18,000 in costs and disbursements to PWB.
Ten days later, on December 16, 2011, the court denied appellants’
motions for reconsideration of its motions for a new trial and judgment
notwithstanding the verdict.
On
March 1, 2012, the trial court granted PWB’s ex parte application for entry of
a second amended judgment. This version deleted
the language of the jury’s verdict wherein the jury found in favor of PWB and
against the Tillotson Family Trust and the Howse Family Trust. The second amended judgment stated, in
pertinent part: “IT IS ORDERED,
ADJUDGED, AND DECREED that plaintiff [PWB] shall recover from defendants
Prospect Village L.P., John . . . individually and as Trustee for the Tillotson
Family Trust, and Haydee . . . as Trustee for the Tillotson Family Trust, these
additional sums: . . . .â€
The
court subsequently awarded PWB more than $19,000 in additional attorney fees
based on the work performed on the ex parte motion and PWB’s motion for
additional fees. Appellants filed a
total of seven appeals from the judgment, the first amended judgment, the
second amended judgment, the third amended judgment, and orders the superior
court made after judgment. We ordered
the appeals consolidated.
II
DISCUSSION
A. Compromise
Verdict and Sufficiency of the Evidence
PWB
took the position at trial that there remained an unpaid balance of
$1,774,603.84 on the loan. Although the
jury found in PWB’s favor, it awarded PWB $1,491,064.57 as against Prospect
Village, Howse and John on their personal guaranties, and against the Howse
Family Trust and Tillotson Family Trust.
It should be noted that the party “aggrieved†by the less than desired
amount awarded by the jury was PWB, not appellants.
Appellants
argue that based on the evidence and the defense presented in this matter, the
jury either had to find in favor of PWB in the amount of $1,774,603.84, or find
in favor of the defense and against PWB.
Appellants maintain the jury’s decision “to award PWB its claimed
damages less interest accruing after a certain date†demonstrates the jury
compromised, requiring reversal. They
also argue the same evidence demonstrates the jury’s verdict is not supported
by the evidence.
1. Compromise
Verdict
“[T]he question as to
the amount of damages is a question of fact.
In the first instance, it is for the jury to fix the amount of damages,
and, secondly, for the trial judge, on a motion for a new trial, to pass on the
question of adequacy.†(
(1961) 191 Cal.App.2d 723, 733.) We
begin with the presumption the jury acted properly. (People
v. Cruz (2001) 93 Cal.App.4th 69, 73.)
An
improper compromise verdict occurs when jurors cannot agree on the issue of
liability, but those who believe the defendant is liable consent to returning
an award providing inadequate damages in exchange for the votes of jurors who
believe the defendant is not liable. (
607.) An indication that the verdict is
the result of an improper compromise occurs when the jury provides for
p. 606.) For example, a verdict awarding
the plaintiff $200 for the loss of an eye “was a conclusive indication that the
jury had compromised the issues of liability and damages.†(Ibid.) A new trial on all issues is required when a
verdict is reached through compromise. (
121 Cal.App.4th 353, 371.)
In support of their
motion for a new trial, appellants submitted the declaration of one of their
attorneys concerning a conversation he had with the foreperson of the jury. According to that declaration, (1) the
foreperson did not believe the defendants were liable and (2) other jurors were
divided on the amount of damages to be awarded PWB. Some of the jurors believed the defendants
were liable for the full $1.7 million-plus amount sought by PWB and others felt
PWB should recover less because it had not “dealt properly†with appellants,
although those same jurors recognized that under the promissory note and the
guaranties, Prospect Village and the guarantors were liable to PWB. These jurors felt appellants were liable for
the unpaid principal, but not all the interest sought by PWB. The jury then reached a middle ground,
concluding the amount of damages should be limited to the amount owed at the
time the last unit was sold and that PWB should not receive interest on the
amount thereafter.
The attorney’s
declaration was inadmissible hearsay. (Burns
v. 20th Century Ins. Co. (1992) 9 Cal.App.4th 1666, 1670-1672;
1268, 1318 [“‘a jury verdict may not be impeached by hearsay
affidavits’â€].) Even were the attorney’s declaration admissible, the
showing was inadequate. According to the
declaration, the dispute among the jurors who voted in favor of finding
liability was not about whether
appellants should be found liable. The
dispute was over the amount of damages to be awarded. The foreperson, one of the three jurors to
vote in favor of the defense, did not claim any juror changed his or her vote
on the issue of liability because other jurors agreed to award PWB less
damages.
Moreover, as the amount
of damages awarded was not grossly inadequate, the award of approximately $1.4
million instead of the approximately $1.7 million claimed by PWB, fails to
indicate—conclusively or otherwise—that the verdict was the result of an
improper compromise. (
Cal.App.2d 159, 167 [$22,300 awarded in general damages was substantial and no
indication the award was the result of a compromise].) Thus, appellants failed to offer any evidence
in their original motion for a new trial to support their contention that the
jury compromised on the issue of liability.
When appellants filed
their motion for reconsideration months after the court denied their motion for
a new trial, appellants offered the affidavit of another juror. That affidavit merely stated the juror
accurately set forth in an e-mail to one of appellants’ attorneys his recollection
about how the jury reached agreement on the amount of damages. A copy of the e-mail exchange was attached to
the juror’s declaration. According to
the juror, the jury believed PWB was entitled to a judgment in its favor, but
the jury decided to not award the bank any interest after the due date on the
last extension granted by the bank.
The trial court denied
the motion for reconsideration because it was untimely and did not contain new
facts. (Code Civ. Proc, § 1008.) Appellants do not contest the trial court’s
decision denying the motion.
name="_ftnref3" title="">[3] We therefore do not consider the
affidavit. Were we to consider it, the
result would be the same. The affidavit
did not demonstrate a compromise on the issue of liability; only that the
jurors who returned the verdict in favor of PWB did so because the law and
facts required it, but they reduced the damages based on the banks performance
in this matter.
Accordingly, we conclude
the jury’s verdict was not the result of an improper compromise. That “the damages of $1,491,064.57 were
inadequate compared to PWB’s ostensibly proven all-or-nothing damages of over
$1.7 million†may mean PWB did not get the verdict it desired, but that fact
does not mean appellants are entitled to a new trial.
2.
Insufficient Evidence
Appellants
also allege substantial evidence does not support the “inadequate†amount
awarded by the jury, while conceding the evidence would support an award for
the more than $1.7 million sought by PWB.
Because the evidence would support an award in excess of $1.7 million,
it necessarily supports the verdict in this matter—i.e., the evidence is not
of damages. As the jury did not reach an
improper compromise, it was PWB’s ox that was gored by the jury’s “inadequateâ€
award, not appellants’. (See
419, 421-422 [“we fail to see how defendant has been injured because plaintiff
has accepted a verdict for something less than he could have hadâ€].) Reversal requires the objecting party to have
been prejudiced. (Cal. Const., art. I, §
13.) But when the amount awarded the
plaintiff is less than the evidence would otherwise support and the award is
on the issue of liability, the defendant is not entitled to relief since he or
she has not been prejudiced by the award.
We therefore reject appellants’ contention that the evidence does not
support the judgment.
B. Jury
Instruction Issue
After
the jury was instructed and PWB argued its case to the jury, appellants’
counsel told the jury that if it found “Prospect Village is obligated to pay
[PWB], then these guarantors aren’t obligated to pay it back.†As a consequence of PWB’s objection to that
statement, the trial judge directed appellants’ counsel to bring to court
authority for the objected to proposition.
Counsel did not return with any,
but instead cited Civil Code section 2819 and requested the jury be instructed
in the terms of the statute.
name="_ftnref5" title="">[5]
The
court denied the request, noting the jury had already been instructed without
the defense proposing such an instruction, a fact defense counsel
conceded. PWB’s attorney argued that
permitting the defense to introduce “a brand-new legal argument†after the jury
had been instructed, and after he had already argued his case, would be
extremely prejudicial to PWB. The court
also observed that the guarantors signed a forbearance and modification
agreement and a modification of the forbearance agreement. Appellants contend the trial court’s refusal
to instruct on Civil Code section 2819 denied them a fair trial, because the
promissory was modified without their consent.
We disagree.
As
the language of section 607a of the Code of Civil Procedure makes evident, a
request for an instruction made during closing argument is untimely (
607, 613 [instruction requested after first witness had been sworn was
untimely]), but the court has discretion to give additional instructions at
that point. Absent an abuse of
discretion in denying a belated request for a particular instruction, the trial
court’s decision must be upheld. (
Appellants have not demonstrated an abuse of discretion.
Contrary
to appellants’ argument, the court did not reject the proposition that the jury
could find Prospect Village liable on the promissory note while finding
appellants were not liable on the guaranties.
Ignoring the timeliness issue, the court at most correctly held defense
counsel misstated the law in arguing the guarantors were not liable on their
guarantees if Prospect Village was
liable on the promissory note. After
all, the guaranty was of the borrower’s performance of all obligations under
the promissory note and related documents.
The borrower’s default triggers the guarantors’ obligation.
Additionally,
the evidence did not support the instruction.
Appellants argue the modification of the price release schedule was the
modification that would, pursuant to Civil Code section 2819, exonerate the
guarantors from their guaranties.
However, the guaranties waived any such defense. Under the guaranties, the guarantors waived
all rights and defenses arising by reason of “any modification or change in
terms of the indebtedness, whatsoever . . . .â€
Accordingly, we conclude the trial court did not err in refusing to
instruct the jury in the terms of Civil Code section 2819.
C.
Reference to the Family Trusts as Judgment Debtors
“On
Plaintiff [PWB’s] claim for breach of guaranty against Defendant Tillotson
Family Trust,†the jury found in favor of PWB and “against Defendant Tillotson
Family Trust.†The Tillotson Family
Trust was not a party to this lawsuit.
PWB sued John and Haydee in their representative capacities as trustees
of the trust.
A
trust cannot be a judgment debtor because it is not a person. (Portico,
supra, 202 Cal.App.4th at p.
473.) “‘A claim based on a contract
entered into by a trustee in the trustee’s representative capacity, . . . may
be asserted against the trust by proceeding against the trustee in the
trustee’s representative capacity . . . .’
(Prob. Code, § 18004.)†(
Thus, for a judgment to be enforceable against trust property, judgment
should be “entered against those who held title to such property—the
trustees.†(Id. at p. 474.)
Less than a month after the original
judgment, PWB brought a motion to amend the judgment to provide: “The above judgment is corrected only to
clarify the following: All references to
the Tillotson Family Trust shall mean and refer to John . . . and Haydee . . .
as trustees for the Tillotson Family Trust.
Accordingly, as the judgment pertains to the Tillotson Family Trust,
judgment is entered against each John . . . and Haydee . . . as trustees for
the Tillotson Family Trust in the amount of $1,491,064.57.â€
John
and Haydee opposed the proposed amendment, arguing it was “an attempt to try to
create an ambiguity that would allow [PWB] to attempt to proceed against
[Haydee’s] personal assets.†A judgment
entered against a trustee in her representative capacity as trustee does
trustee’s part. (Prob. Code, § 18000
[“[u]nless otherwise provided in the contract or in this chapter, a trustee is
not personally liable on a contract properly entered into in the trustee’s fiduciary
capacity in the course of administration of the trust . . . .â€]) John and Haydee argued the original judgment
was proper and did not need
correction: “[W]e think it makes sense
that in the normal course of events if [PWB] seek[s] to levy or writs of
execution, that people are going to understand that you can go after a trustee
in its representative capacity.†They
argued PWB could satisfy the judgment by “going to . . . accounts that are held
by the trustee in its representative capacity, because . . . a trustee has to
hold legal title to the trust assets . . . .â€
They further argued, “The jury
verdict makes no doubt John and Haydee’s liability is in their representative
capacity and extends to trust assets only, not to their personal estates.†(Italics added.) The trial court apparently agreed with the
Tillotsons’ argument and denied PWB’s request, although it did so without
prejudice to PWB renewing the motion.
Eventually
the court amended the judgment at PWB’s request and over appellants’ objection. The second amended judgment stated the
judgment in favor of PWB was “against defendants Prospect Village L.P., John .
. . individually and as Trustee for the Tillotson Family Trust, Haydee . . . as
Trustee for the Tillotson Family Trust, and Daniel S. Howse, individually and
as Trustee for the Howse Family Trust . . . .â€
In
Portico, the trustees of the Harrison
Children’s Family Trust agreed to sell Portico a building held by the trustees
in trust. (Portico, supra, 202
Cal.App.4th at p. 466.) When the sale
fell through, Portico sued the Harrisons as trustees for the trust. (Id.
at pp. 466-467.) The matter went to
arbitration and the arbiter entered an award in favor of Portico and against
arbitration award. (Id. at p. 467.) “Portico did
not seek to correct or modify either the arbitration award or the judgment to
indicate the arbitration award and judgment were properly against the trustees;
nor did Portico appeal from the judgment against the trust. Instead, years of protracted litigation
ensued. Portico sought to enforce the
judgment by levying on funds generated by the apartment building [held in trust]
and to add as judgment debtors the successor trustees of the [trust] . . . .†(Ibid.) The court held Portico waited too long to
have the judgment modified, although it had several remedies available when
faced with the arbitration award. (
Unlike
the situation in Portico, where the plaintiff
waited years after receiving the arbitrator’s award against the family trust
and did not seek to amend the judgment before attempting to levy on property
held by the trustees for the benefit of the Harrison Family Trust (
present case stated: “It appearing by
reason of said verdict that plaintiff [PWB] is entitled to judgment against
each and all of the defendants.â€
When
a jury returns an ambiguous verdict, the party adversely affected should
request a “‘more formal and certain verdict’†(Hathaway v. Spiro (1985) 164 Cal.App.3d 359, 366),
verdict has been accepted and the jury discharged, “the duty devolves upon the
trial judge to interpret the verdict from its language, taking into account the
pleadings, evidence and instructions.†(
“‘[A]n appellate court will interpret the verdict if it is possible to
give a correct interpretation,’ but will reverse if the verdict is ‘hopelessly ambiguous.’ [Citation.]â€
(Roby v. McKesson Corp. (2009)
47 Cal.4th 686, 705.) The jury’s verdict
in this matter was ambiguous to the extent it found in favor of PWB as against
the Tillotson Family Trust instead of against the trustees of the trust.
However,
given the complaint, the evidence, and the jury instructions, the only way the
jury could possibly return a verdict against the Tillotson Family Trust—other
than because they were provided a faulty verdict form—was as a result of jurors
concluding PWB proved John and Haydee breached the guarantee they signed as
trustees of the family trust. The jury
impliedly found in favor of PWB on every fact essential for PWB to prevail on
the breach of guaranty claim. (
Cal.3d 663, 673.) The jury also found in
favor of PWB and against John and Howse on their individual guaranties. The guaranty signed by John and Haydee as
trustees of the Tillotson Family Trust was identical in all important respects
to those signed by Howse and John as individuals. Furthermore, the forbearance and modification
was signed John and Haydee in their representative capacities. Accordingly, it appears beyond dispute the
jury found the John and Haydee breached the guaranty they signed as trustees
and that breach was the basis for naming the trust as a judgment debtor in the
verdict. The trial court did not,
therefore, err when it entered the second amended judgment against John and
Haydee as trustees for the Tillotson Family Trust. The second amended judgment does not
contravene the verdict.
The
amendment did not violate John and Haydee’s right to due process. John and Haydee’s personal property is not
subject to satisfying the judgment in connection with their guaranties as
trustees of the Tillotson Family Trust; only the property held in the trust is
subject to satisfying the judgment against them as trustees. (Prob. Code, § 18000, subd. (a).)
Although
Portico holds a trust cannot be a
judgment debtor (Portico,
it does not go so far as to hold a judgment naming a trust as a judgment debtor
cannot be amended. Tellingly, if
amendment of such a judgment was prohibited, the Portico court would not likely have noted “Portico did not seek to
correct or modify either the arbitration award or the judgment to indicate the
arbitration award and the judgment were properly against the trustees . . .
.†(Id.
at p. 467.) What is more, the Portico court remanded the matter to the superior court to consider
whether one of the defendants should be added to the judgment as a judgment
debtor. (Id. at p. 479.)
D. Award
of Attorney Fees
A contract may contain a
provision providing for attorney fees in enforcing the contract. When the contract contains such a provision,
the court must fix reasonable attorney fees as an element of the costs of the
lawsuit. (Civ. Code, § 1717, subd. (a);
Code of Civ. Proc., § 1033.5, subd. (a)(10)(A).) The promissory note and the guaranties each
contained an attorney fees clause. The
trial court initially awarded PWB $474,548 in attorney fees. It later granted PWB’s request for an
additional award of $6,925 in attorney fees incurred in responding to the
appellants’ motion for reconsideration of the motions for new trial and judgment
notwithstanding the verdict, and noted there was no dispute on the amount of
the additional award. PWB then attempted
to have appellants stipulate to a second amended judgment reflecting the
additional attorney fees awarded by the court.
According to PWB’s ex parte motion to amend the judgment, defense
counsel objected to the form of the proposed second amended judgment, asserting
for the first time that judgment had been entered against the Tillotson Family
Trust, not against John and Haydee in their capacities as trustees of the
trust. After PWB successfully obtained
the second amended judgment, the court awarded PWB further attorney fees in the
amount of $19,139.
title="">[7] The latter award, reflected in the third
amended judgment, was for attorney fees incurred in successfully litigating the
ex parte motion.
Appellants
argue the trial court erred in awarding PWB additional attorney fees incurred
in correcting the verdict. Appellants
reason that as the jury’s verdict in favor of PWB and against the Tillotson
Family Trust, which cannot sue or be sued (Portico,
supra, 202 Cal.App.4th at p. 473),
must be laid at the feet of PWB’s attorneys who submitted the jury verdict form
and as a result, the fees incurred by PWB in correcting the problem caused by
its attorneys were not reasonable. In
other words, appellants contend it is unreasonable to make one party to a
contract pay for the attorney fees incurred by the other party to correct that
party’s mistake.
An
appeal from a “postjudgment award of attorney fees is separately appealable as
an order after judgment. (Code of Civ.
Proc., § 904.1, subd. (a)(2); Citizens
Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213,
223.)†(Building a Better Redondo, Inc. v.
City of Redondo Beach (2012) 203 Cal.App.4th 852, 869-870, fn.
omitted.) We review the trial court’s
award of attorney fees for an abuse of discretion. (Serrano
v. Stefan Merli Plastering Co., Inc. (2011) 52 Cal.4th 1018, 1025-1026.)
“The
‘experienced trial judge is the best judge of the value of professional
services rendered in his court, and while his judgment is of course subject to
review, it will not be disturbed unless the appellate court is convinced that
it is clearly wrong.’ [Citations.]†(Serrano
v. Priest (1977) 20 Cal.3d 25, 49.)
“‘It is well established that the determination of what constitutes
reasonable attorney fees is committed to the discretion of the trial court . .
. . [Citations.] The value of legal services performed in a
case is a matter in which the trial court has its own expertise. [Citation.]
The trial court may make its own determination of the value of the
services contrary to, or without the necessity for, expert testimony. [Citations.]
The trial court makes its determination after consideration of a number
of factors, including the nature of the litigation, its difficulty, the amount
involved, the skill required in its handling, the skill employed, the attention
given, the success or failure, and other circumstances in the case.’ [Citation.]†(PLCM
Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1096. Thus, the trial court has broad authority in
determining a reasonable amount of attorney fees (id. at p. 1095) and we uphold a trial court’s award absent an abuse
of discretion. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.)
Appellants’
contention has a certain surface appeal.
After all, had PWB’s attorneys simply submitted a verdict form
indicating verdicts against the Tillotsons in their representative capacities
as trustees, rather than against the Tillotson Family Trust, there would have
been no need to interpret the verdicts.
However, had not the Tillotsons defeated PWB’s original attempt to
correct the patent yet explainable ambiguity in the verdict by arguing there
was no need to amend the original judgment because the judgment
representative capacities as trustess to the family trust, and subsequently
changed their position, maintaining the original judgment was void to the extent
the jury found against the trust itself instead of against its trustees, all
the time and expense incurred by PWB in obtaining the second amended judgment
would not have been necessary. By
originally taking the position the jury’s verdict clearly was against the
Tillotsons in their representative capacities, and subsequently switching
positions, the Tillotsons forced PWB to litigate further, consistent with the
trial court’s finding in originally awarding $474,548 in attorney fees: “Defendants took an all or nothing
approach.†The fees incurred in bringing
a motion for a second amended judgment are more directly attributable to the
Tillotsons’ change in position than they are to the original error in drafting
the jury verdict form.
We cannot say on this
record the trial court abused its discretion in awarding PWB the additional
$19,139 in attorney fees.
III
DISPOSITION
The
judgment is affirmed. PWB shall recover
its costs on each appeal.
MOORE,
J.
WE CONCUR:
O’LEARY, P.
J.
IKOLA, J.
Haydee Tillotson, are both appellants and share their last name, we refer to
each by their given names for ease of reading.
No disrespect is intended.
superior court, Howse petitioned for protection in the bankruptcy court and
proceedings in this matter were stayed as to Howse and his family’s trust. Consequently, Howse and the Howse Family
Trust are not before us on these appeals.
