Opinion
F072379
10-03-2017
CENTRAL VALLEY YOUNG MEN'S CHRISTIAN ASSOCIATION, INC., Plaintiff, Cross-defendant and Respondent, v. THE SEQUOIA LAKE CONFERENCE OF YOUNG MEN'S CHRISTIAN ASSOCIATIONS, Defendant, Cross-complainant and Appellant.
Sagaser, Watkins & Wieland, William M. Woolman, Howard A. Sagaser, Christopher M. Rusca and Allie E. Wieland for Defendant, Cross-complainant and Appellant. Whelan Law Group, Walter W. Whelan, Lucas C. Whelan; Dowling Aaron and Stephanie Hamilton Borchers for Plaintiff, Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 10CECG00746)
OPINION
APPEAL from an order of the Superior Court of Fresno County. Mark W. Snauffer, Judge. Sagaser, Watkins & Wieland, William M. Woolman, Howard A. Sagaser, Christopher M. Rusca and Allie E. Wieland for Defendant, Cross-complainant and Appellant. Whelan Law Group, Walter W. Whelan, Lucas C. Whelan; Dowling Aaron and Stephanie Hamilton Borchers for Plaintiff, Cross-defendant and Respondent.
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Defendant and cross-complainant, Sequoia Lake Conference of Young Men's Christian Associations (SLC), appeals from the postjudgment order awarding plaintiff, Central Valley Young Men's Christian Camping Association (Central Valley; formerly Central Valley Young Men's Christian Association, Inc.), attorney fees and costs as the prevailing party. We conclude the trial court abused its discretion in making its award, in that some of the findings on which the award was based are not supported by substantial evidence and the trial court misinterpreted and misapplied case law in ruling on the matter. Accordingly, we reverse and remand to the trial court for a redetermination of the parties' competing motions for attorney fees.
FACTUAL AND PROCEDURAL BACKGROUND
Central Valley brought suit against SLC, alleging in its first amended complaint six causes of action: declaratory relief, injunction, violation of Corporations Code sections 5341 and 7341, slander of title, breach of third party beneficiary rights, and unjust enrichment. The first amended complaint alleged SLC, a nonprofit public benefit corporation, was formed in 1922 and consisted of four constituent Young Men's Christian Association (YMCA) organizations, including Central Valley's predecessors. SLC is the owner of the Sequoia Lake real property, where five recreational camps have been built and operated by the members of SLC. Since the 1970's, the three members of SLC have been represented by four directors each on the board of directors of SLC. When Central Valley experienced financial difficulties, the national YMCA organization revoked Central Valley's charter so it could no longer operate as a YMCA. In 2009, the SLC board voted to expel Central Valley as a member of SLC, purportedly because it was no longer a YMCA. Central Valley alleged it had an equitable possessory interest in the entire Sequoia Lake property. It also alleged it contributed significant personal property to the camps it operated, worth approximately $200,000, that more than offset the $144,000 in camp usage fees SLC claimed Central Valley owed.
A seventh cause of action was alleged against other parties, but was dismissed from the action prior to trial.
Two of the original members merged to become Central Valley.
SLC cross-complained against Central Valley, alleging in its first amended cross-complaint (cross-complaint) that the Sequoia Lake property was developed into five camps, two of which were traditionally operated by Central Valley in exchange for payment of an annual conference fee, which was applied to maintenance and operational expenses of the Sequoia Lake property. Central Valley experienced financial problems and became delinquent in payment of its annual conference fees. As of July 30, 2008, Central Valley owed $144,526. In July 2008, the parties negotiated an oral agreement, later committed to writing, that if Central Valley would make payment in a specified amount by September 30, 2008, SLC would forgive the remainder of the debt. Otherwise, Central Valley would be excluded from use of the Sequoia Lake property until its debt was paid in full. Central Valley did not make any payment by September 30, 2008, so SLC was entitled to the full amount owed, $144,526, and Central Valley was barred from using the property unless it paid the amounts owing and prepaid the 2009 annual fee. In December 2008, Central Valley acknowledged owing $114,526 in conference fees and tendered payment of $20,000; its acknowledged outstanding balance was then $94,526. SLC later learned the $20,000 payment actually came from money accepted by Central Valley as deposits from campers for the 2009 camping season, to which SLC claimed to be entitled on other grounds, so the payment should not have reduced the debt on the conference fees. The cross-complaint alleged causes of action for breach of contract, quantum meruit, and account stated.
The pleading refers to the fees as "yearly utilization," "usage," or "rental" fees. In later litigation and in the judgment, the parties and the trial court referred to the annual fees as "conference fees." For clarity and consistency, we will use that designation.
The slander of title cause of action of the first amended complaint was disposed of in SLC's favor by demurrer. Summary adjudication of the causes of action for declaratory relief and breach of third party beneficiary rights was granted in SLC's favor. The trial court denied SLC's motion for summary adjudication of the account stated cause of action in its cross-complaint, finding Central Valley's opposition raised triable issues of material fact regarding whether Central Valley was entitled to damages on its complaint exceeding the amount sought by SLC.
The case went to trial on the remaining three causes of action of the first amended complaint (violation of Corp. Code, §§ 5341 & 7341, unjust enrichment, and the request for injunction, which was based on claims the parties were participants in a joint venture and Central Valley, as a joint venturer, was entitled to possession and use of SLC's real property) and on the causes of action of the cross-complaint. SLC was awarded a total of $102,780, plus prejudgment interest, on two of the contract claims in its cross-complaint. It was denied recovery on the two others. On the claims in Central Valley's first amended complaint, the results were mixed; Central Valley was awarded some of the relief it sought, but was denied relief on other claims.
The request for an injunction was tried to the court separately after the jury trial.
After judgment, both parties sought an award of attorney fees and costs, each contending it was the prevailing party on the contract. The trial court determined Central Valley was the party prevailing on the contract, found the issues involved in the contract claims were inextricably intertwined with the issues litigated pursuant to the first amended complaint, and awarded Central Valley all of its attorney fees in the case without apportionment. SLC appeals from the order awarding attorney fees and costs to Central Valley.
DISCUSSION
I. Standards for Awards of Attorney Fees
Civil Code section 1717 provides: "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." (§ 1717, subd. (a).) The section defines "party prevailing on the contract" as "the party who recovered a greater relief in the action on the contract," and adds that "[t]he court may also determine that there is no party prevailing on the contract for purposes of this section." (§ 1717, subd. (b)(1).)
All further statutory references are to the Civil Code unless otherwise indicated.
Under section 1717, the trial court's determination of which party was the prevailing party, or that neither party prevailed, is an exercise of discretion, which will not be disturbed on appeal absent a manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence. (Silver Creek, LLC v. BlackRock Realty Advisors, Inc. (2009) 173 Cal.App.4th 1533, 1539; Hilltop Investment Associates v. Leon (1994) 28 Cal.App.4th 462, 466.) "The abuse of discretion standard is not a unified standard . . . . The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted.)
When a party obtains a "'simple, unqualified win'" by completely prevailing on or defeating the contract claims in the action, that party is the prevailing party as a matter of law, eliminating the trial court's discretion to deny fees under section 1717. (Hsu v. Abbara (1995) 9 Cal.4th 863, 876 (Hsu).) "If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees." (Scott Co. of California v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109 (Scott Co.).) "[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.) Further, "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." (Id. at p. 877, italics omitted.)
II. Award of Attorney Fees
The trial court granted Central Valley's motion for attorney fees. It found there were two contracts in issue that contained attorney fee provisions: a July 30, 2008, agreement that was attached to the cross-complaint and a February 2009 agreement referred to as the "whereas agreement," which was introduced at trial. Each authorized an award of attorney fees in the event SLC sought "legal action to collect all amounts outstanding" under the contract.
Although the contracts, by their terms, authorized recovery of attorney fees only by SLC, section 1717 makes the right to recover attorney fees reciprocal. (§ 1717, subd. (a) ["the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees"].) The party prevailing on the contract "is entitled to attorney's fees even when it wins on the grounds that the contract is inapplicable, invalid, unenforceable or nonexistent, so long as the party pursuing the lawsuit would have been entitled to attorney's fees had it prevailed." (Rainier National Bank v. Bodily (1991) 232 Cal.App.3d 83, 86.)
Under the first contract, SLC sought recovery of $144,526 for nonpayment of Central Valley's annual fees for 2007 and 2008. The second contract reflected a balance of $94,526 for annual conference fees; under that contract, SLC also sought to recover payment of a propane bill SLC had paid on Central Valley's behalf in the amount of $8,254.21 and payment of $82,757 in camper deposits Central Valley had collected in advance for the 2009 camping season. In its answer, Central Valley denied generally the allegations of the cross-complaint; it asserted as affirmative defenses that the contract was unenforceable, and that Central Valley was entitled to an offset against any damages based on SLC's misappropriation of Central Valley's personal property and based on lost profits SLC equitably owed it for fees and dues Central Valley would have earned but for its ousting from SLC.
The jury determined SLC was entitled to payment of $94,526 in conference fees and $8,254 for the propane bill. It found, however, that the parties did not agree camper deposits that Central Valley collected for the 2009 camping season would be paid to SLC. Thus, it awarded SLC a total of $102,780 on the cross-complaint. On Central Valley's claim that its contract debt was offset by its unjust enrichment claims against SLC, the jury found SLC was not unjustly enriched by profits it received from its operation of the camps Central Valley had previously operated, after Central Valley's ouster. It found SLC was unjustly enriched by not compensating Central Valley for its personal property, but it awarded no damages on that claim. Therefore, the only monetary award on the contract claims and defenses was $102,780 awarded to SLC.
SLC also sought payment of a debt Central Valley allegedly owed to a third party, that SLC claimed had been assigned to it. The jury found the third party did not assign the debt to SLC. There was no allegation by either party that the debt was associated with any contract containing a provision for recovery of attorney fees. Thus, it apparently was not considered by the trial court in determining which party prevailed on the contractual claims alleged in the cross-complaint.
A. "Uncontested" claims
Central Valley argued that the debts for the conference fees and the propane bill were uncontested and therefore should not be considered in determining which party prevailed on the contract. In support it cited National Computer Rental, Ltd. v. Bergen Brunswig Corp. (1976) 59 Cal.App.3d 58 (National). The trial court agreed, stating: "The court finds that [Central Valley] is the prevailing party on the cross-complaint, despite SLC's net monetary recovery. The two items on which SLC prevailed, the conference fees and propane bill, were not contested in this litigation. [Central Valley] prevailed on the remaining item, the camper deposits, which was contested. Accordingly, [Central Valley] is considered the prevailing party." The trial court also cited National.
Initially, we observe Central Valley's response to the cross-complaint was an answer denying liability, asserting the alleged contract was unenforceable, and asserting Central Valley was entitled to offsets against "any relief claimed . . . for amounts owed." In discovery responses, Central Valley denied the validity of the July 30, 2008, contract.
Central Valley opposed SLC's motion for summary adjudication of the account stated cause of action of the cross-complaint, which was based in large part on a December 9, 2008, letter in which Central Valley's president acknowledged it owed SLC $114,526, indicated it was able to make a partial payment of $20,000 at that time, and stated Central Valley was in the process of securing a loan to pay the balance of $94,526. In its response to SLC's separate statement of undisputed material facts, Central Valley disputed that the letter acknowledged Central Valley owed SLC $114,526, but did not dispute that Central Valley paid $20,000 toward the $114,526 debt. Central Valley also disputed that it promised to pay SLC the amount it owed. It stated that its president had, on several occasions, "affirmed that the actual debt owed" would be paid, but asserted "there is a dispute concerning what that debt is, particularly given that 1) SLC has retained possession of personal property valued in excess of $200,000 . . . and 2) revenue generated from SLC's operation of the Gaines and Sequoia Camps in 2009 was never returned to [Central Valley] as payment for [Central Valley's] debt which was contemplated by the parties." The trial court denied the motion for summary adjudication, based on triable issues of fact about Central Valley's defense that it was entitled to offsets against the conference fees. Thus, Central Valley contended the "actual" amount of the debt it owed to SLC for conference fees depended upon the offsets it claimed it was entitled to, which it asserted exceeded the conference fees owed. Essentially, Central Valley claimed it owed SLC nothing because of the offsets.
We have not been directed to anything in the record indicating that Central Valley acknowledged it owed SLC the amount it paid for the propane debt. In closing argument, Central Valley's counsel was ambivalent at best about whether it should be required to pay the propane debt. He stated it was a debt Central Valley actually owed, but it "sticks in the craw" to be asked by SLC to pay it. "One of the elements that they have to show is that we benefitted from their conduct. . . . They paid for the propane claim, not to benefit us, but to benefit them so they could operate their camps. If they kick us out, make it impossible for us to operate our campgrounds and to make money to pay our debts, then it's on them. That's how we see it."
Prior to trial, the parties entered into a stipulation containing 61 items (stipulated facts or agreements that specified documents were admissible in evidence). Central Valley did not stipulate that it owed the propane debt or the conference fees, in any amount, to SLC. The jury was asked whether SLC was entitled to repayment of the amount it paid on the propane debt. It was also asked to determine the amount of conference fees Central Valley failed to pay, to which SLC was entitled as of July 2009. The jury found in favor of SLC on the propane bill and set the amount of conference fees owed at $94,526. Central Valley was denied all of its claimed offsets.
Throughout the litigation, Central Valley took the position that its obligation to SLC was reduced or eliminated by the amount it was entitled to on claims it asserted against SLC. While it may have admitted that the balance of unpaid conference fees as of July 2009 was $94,526, it consistently disputed that it was liable to pay that amount to SLC.
Central Valley and the trial court relied on National in concluding the conference fees and propane debts were uncontested. In National, the plaintiff sued the defendant for three items of recovery: unpaid rent, taxes, and an early termination fee all allegedly due under a written equipment lease. (National, supra, 59 Cal.App.3d at pp. 60-61.) "Defendant admitted the first two items, but denied obligation for the fee." (Id. at p. 61.) After a court trial, the plaintiff was granted judgment on the first two items, but not on the termination fee. (Id. at pp. 61-62.) The defendant was awarded its attorney fees. The plaintiff appealed. (Id. at p. 62.) In a brief opinion, the court concluded the defendant was the prevailing party on the contract under section 1717 and affirmed the attorney fee award. (National, at p. 63.)
We find National to be distinguishable. The version of section 1717 in effect at the time defined " ' "prevailing party" ' " as " 'the party in whose favor final judgment is rendered.' " (National, supra, 59 Cal.App.3d at p. 70.) The court nonetheless concluded: "Defendant prevailed on the only issue in the case; it is the 'prevailing party' within the meaning of section 1717, even though plaintiff nominally holds a judgment for an amount never disputed and never litigated." (Id. at p. 63.) The facts leading to the court's conclusion the plaintiff's judgment was for "an amount never disputed and never litigated" are not clear. Prior to trial, the defendant "had, in conformity with section 998 of the Code of Civil Procedure, duly tendered the unpaid rent and that tender had been rejected because plaintiff was demanding the other two items of its claim. Liability for the unpaid rent and the taxes was never litigated at the trial, which proceeded only on the termination fee issue." (Id. at p. 63.) While the court's recitation of the facts states that the defendant admitted the unpaid rent and taxes (id. at p. 61), it does not indicate whether that statement was based on an express admission made in the defendant's pleadings or discovery responses, or whether the court reached that conclusion based on the defendant's Code of Civil Procedure section 998 settlement offer or on the parties' presentations at trial. Most importantly, the defendant in National did not raise any claim that the plaintiff's right to collect on any of the three items was offset by amounts the plaintiff allegedly owed to the defendant. Under the circumstances of that case, the National court concluded two of the three items were not litigated at trial.
Here, Central Valley denied the existence and the enforceability of the written contracts on which SLC's claim to conference fees was based. It consistently denied liability for the unpaid conference fees that admittedly had accrued, by asserting offsetting claims it contended reduced or entirely eliminated its liability for the amount owed. We have not been pointed to anything in the record that indicates Central Valley ever offered to pay or tendered payment of the assertedly undisputed amount of conference fees. Nothing in the record indicates Central Valley made a Code of Civil Procedure section 998 offer to settle the conference fee claim for the assertedly uncontested amount. The amount Central Valley was required to pay to SLC for delinquent conference fees was litigated at trial. The jury was required to find both the amount of the conference fees owed and whether Central Valley was entitled to any offsets.
No substantial evidence supports the trial court's finding that Central Valley's obligation to SLC on the conference fees and the propane debt was uncontested. We conclude the trial court improperly disregarded SLC's success on two of the three debts alleged in its cross-complaint, and on Central Valley's offset claims, on the ground the debts were uncontested.
"[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 by 'a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.' " (Hsu, supra, 9 Cal.4th at p. 876.) Here, SLC succeeded on two of its contract claims: the conference fees and the propane bill. It lost on its claim for camper deposits. Central Valley defeated SLC's claim for camper deposits, but was unsuccessful on all of its offset claims. Because the trial court found the conference fees and propane bill claims to be uncontested, it failed to take into account in its prevailing party determination both that SLC was successful on those claims and that it achieved its success on those claims in part by defeating all of Central Valley's claims of entitlement to offsets against those debts.
Central Valley argues that, although it lost on its claim for offsets by failing to obtain a monetary award on its unjust enrichment claims, it nonetheless achieved its main litigation objective of being reinstated to membership in SLC and allowed to run the camps. The relevant consideration in determining which party is entitled to contractual attorney fees, however, is the parties' relative success on the contract claims. Success on the noncontract claims asserted in the first amended complaint is not a proper consideration. (See Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 358.) Thus, Central Valley's success in obtaining reinstatement is not a relevant consideration.
The attorney fee order does not reflect that the court fully considered each party's demands, successes and failures, and litigation objectives, on the contract claims alone, in determining which party was the prevailing party on the contract. Because of this, we must remand the matter for the trial court to redetermine, based on the considerations outlined here, "which party prevailed on the contract [claims] or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees." (Scott Co., supra, 20 Cal.4th at p. 1109.)
B. Inextricably intertwined claims
"Once a trial court determines entitlement to an award of attorney fees, apportionment of that award" between claims covered by the attorney fee provision and those that are not "rests within the court's sound discretion. (Carver v. Chevron U.S.A., Inc. (2004) 119 Cal.App.4th 498, 505; Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111.) "Where a cause of action based on the contract providing for attorney's fees is joined with other causes of action beyond the contract, the prevailing party may recover attorney's fees under section 1717 only as they relate to the contract action. . . . A litigant may not increase his recovery of attorney's fees by joining a cause of action in which attorney's fees are not recoverable to one in which an award is proper. . . . [¶] Conversely, plaintiff's joinder of causes of action should not dilute its right to attorney's fees. Attorney's fees need not be apportioned when 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 (Reynolds).) "Apportionment is not required when the claims for relief are so intertwined that it would be impracticable, if not impossible, to separate the attorney's time into compensable and noncompensable units." (Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 687 (Bell).)
After finding Central Valley was the prevailing party on the contract, the trial court addressed whether Central Valley could "recover attorneys' fees for all work done in the litigation, despite the narrow scope of the claims for which there is authority to award attorneys' fees." It declined to apportion the attorney fees between contract claims, for which attorney fees were recoverable, and noncontract claims, for which no award of attorney fees was authorized. Instead, it awarded Central Valley all of its attorney fees incurred in litigating the claims raised in both the first amended complaint and the cross-complaint, based on Central Valley's argument that the issues were so inextricably intertwined that the attorney fees could not be apportioned.
Neither party contends the contractual attorney fees provisions authorize attorney fees for any claims other than claims on the contract. Nonetheless, the trial court awarded Central Valley all of its attorney fees incurred in prosecuting the three noncontract causes of action that were disposed of adversely to Central Valley prior to trial. There was no showing that litigation of Central Valley's causes of action for declaratory relief, slander of title, and breach of third party beneficiary rights involved the same issues as SLC's contract claims, or that those claims were so inextricably intertwined with the contract claims that it was impracticable or impossible to apportion the attorney fees between the compensable and noncompensable claims. Accordingly, counsel and the trial court should have attempted to exclude from the fee award attorney fees incurred in litigating those claims.
Likewise, there was no showing Central Valley's claim that it was wrongly excluded from SLC, because SLC failed to follow the statutory requirements for expulsion of a member, was inextricably intertwined with the contract claims raised in the cross-complaint. Attorney fees for litigating the expulsion claim should also have been excluded from the award.
Central Valley asserts that, in order to prevail on SLC's claim for camper deposits, it was required to prove that the relationship between the parties was that of joint venturers. It argues its "theory was that they were 'owners in the business [SLC],' and had 'control over the business [SLC]' and had the right as part of the joint venture 'to possess and to manage' their two campgrounds. . . . Such a right necessarily implies the right to collect and keep camper deposits." Central Valley made similar arguments in the trial court. In support of its motion for attorney fees, Central Valley argued it had to prove, in order to defeat SLC's claim to the camper deposits, that the relationship between the parties was that of joint venturers, and not landlord and tenant. "If Central Valley was merely a tenant, it would [not] have any entitlement to keep camper deposits that it was legally entitled to keep as a joint venture/owner member of SLC." Central Valley argued the "crossover" issue of joint venture was so inextricably intertwined with SLC's contract claims, that Central Valley should recover all of its attorney fees incurred in the prosecution and defense of the case.
We reject Central Valley's assertion that SLC, as landlord, would have been entitled to recover the camper deposits from its tenant. Central Valley has cited no legal authority, in this court or in the trial court, for the proposition that a landlord, upon evicting a tenant, would be entitled to monies collected by the tenant from its customers as prepayment of services to be rendered in the future. Normally, when the landlord evicts a commercial tenant for nonpayment of rent, the landlord is not entitled to take over the tenant's business; it is not entitled to usurp to itself the good will of its tenant's business, or its customer lists, or the proceeds of prepaid services the tenant has yet to perform.
The trial court agreed, finding that "[i]t was necessary for [Central Valley] to prevail on the joint venture / landlord-tenant issues in order to defend SLC's claim to recoup $82,757 in camper deposits under the 'Whereas Agreement.' If it was merely a tenant, [Central Valley] would not have any entitlement to keep camper deposits that it was legally entitled to keep as a joint venture/owner member of SLC."
SLC's claim for camper deposits, however, was predicated on contract, on the February 2009 "whereas agreement," which was one of the two contracts containing attorney fee provisions that provided the basis for both parties' attorney fee requests. A claim for breach of contract requires proof of a contract, performance by the plaintiff or excuse for nonperformance, a breach by the defendant, and resulting damages. (First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745.) Whether the parties were joint venturers or landlord and tenant was not a relevant consideration in determining whether they entered into an agreement concerning the handling of the 2009 camper deposits. Their relationship might have been relevant to determining who was entitled to the camper deposits in the absence of a contract, but it was not relevant to whether the contract existed and bound the parties. The issue of the parties' relationship with respect to the Sequoia Lake property was not raised by SLC's claim under the whereas agreement, which contained the attorney fees provision.
That issue was not presented by the complaint or cross-complaint.
Central Valley argues: "Given the interrelated nature of the contract and non-contract claims, it was not possible for the court to precisely separate whether [Central Valley's] success fell within the defense of a contract claim (i.e., [Central Valley] did not have to pay camper deposits to SLC because there was no contract) or within an affirmative claim for relief (that [Central Valley] and SLC were joint venturers—and thus did not have to pay camper deposits to SLC.)" (Fn. omitted.) The jury, however, was not asked to determine whether the joint venture had any effect on the issue of camper deposits. It was only asked to determine whether the parties agreed that the camper deposits would be paid to SLC. It determined they did not agree.
The contract issue presented by the camper deposit claim was whether the parties agreed that Central Valley would pay to SLC the amount it collected as camper deposits. The joint venture relationship between the parties would not have defeated the contract claim if the parties had entered into a contract requiring Central Valley to pay the camper deposits to SLC. Central Valley has cited no authority that joint venturers cannot enter into contracts that have the effect of varying the terms of their relationship, or that their relationship as joint venturers somehow invalidates any contracts between them. Thus, merely proving that a joint venture relationship existed between the parties would not have defeated the contract claims.
In Bell, supra, 82 Cal.App.4th 672, the plaintiff was awarded approximately $147,000 in attorney fees based on statute. (Id. at pp. 680-681.) Attorney fees were awardable on only four of the complaint's 15 causes of action. (Id. at p. 687.) The court found neither the plaintiff nor the trial court made a serious, good faith attempt to apportion the plaintiff's attorney fees between the statutory causes of action on which fees could be awarded and the other causes of action. (Id. at p. 688.) Even when the plaintiff's attorney acknowledged that all or a majority of time spent on certain tasks related to nonstatutory claims, the trial court did not exclude any attorney fees from the award. (Id. at p. 689.) The court stated: "As to the submitted billing, we agree with [the defendant] that the blocked-billing entries render it virtually impossible to break down hours on a task-by-task basis between those related to the [statutory] violation and those that are not. If counsel cannot further define his billing entries so as to meaningfully enlighten the court of those related to the [statutory] violation, then the trial court should exercise its discretion in assigning a reasonable percentage to the entries, or simply cast them aside." (Ibid.)
Nothing in the record indicates counsel for Central Valley made any attempt to segregate the attorney fees it incurred between the contract claims and the noncontract claims. Accordingly, if, on remand, the party determined to be the prevailing party is unable or unwilling to meaningfully separate the attorney fees incurred in litigating contract claims from the attorney fees incurred in litigating noncontract claims, the trial judge, in his discretion, may use his experience and his knowledge of the case that was litigated before him to apportion a percentage of the attorney fees to the contract claims, to otherwise assign an appropriate monetary amount to the contract attorney fees, or to determine no fees should be awarded.
" 'When the record is unclear whether the trial court's award of attorney fees is consistent with the applicable legal principles, we may reverse the award and remand the case to the trial court for further consideration and amplification of its reasoning.' " (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 149.) Here, it appears at least some of the claims adjudicated in this action did not involve issues in common with the contractual claims, or "claims for relief . . . so intertwined [with the contractual claims] that it would be impracticable, if not impossible, to separate the attorney's time into compensable and noncompensable units," so that apportionment was not required. (Bell, supra, 82 Cal.App.4th at p. 687; Reynolds, supra, 25 Cal.3d at p. 129.) For this reason also, we remand for redetermination of which party, if any, prevailed and the amount of contractual attorney fees to which that party is entitled, if any.
III. Costs
In its briefs, SLC did not challenge the award of litigation costs to Central Valley. Accordingly, our opinion does not affect that award.
We note that the party prevailing for purposes of an award of contractual attorney fees is not necessarily the same as the party prevailing for purposes of litigation costs. (McLarand, Vasquez, Inc. & Partners v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456.) Therefore, the award of litigation costs may stand, regardless of which party recovers attorney fees. --------
DISPOSITION
The July 7, 2015, order awarding attorney fees in the sum of $293,487.50 to Central Valley and denying SLC's motion for attorney fees is reversed and remanded to the trial court for redetermination of which party, if any, was the prevailing party on the contract, for purposes of an award of contractual attorney fees under Civil Code section 1717 and the amount of attorney fees to which that party is entitled, if any. SLC is entitled to its costs on appeal.
/s/_________
HILL, P.J. WE CONCUR: /s/_________
LEVY, J. /s/_________
DETJEN, J.