Filed 5/18/23 Boyd v. Freeman CA2/4

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California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

PAULA BOYD,

Plaintiff and Appellant,

v.

DAVID FREEMAN,

Defendant and 

Respondent.

 B316753

 (Los Angeles County

 Super. Ct. No. BC588216)

APPEAL from a judgment and order of the Superior Court 

of Los Angeles County, Daniel S. Murphy, Judge. Affirmed.

Paula Boyd, in pro. per.; Pollak, Vida & Barer, Daniel P. 

Barer, Hamed Amiri Ghaemmaghami for Plaintiff and Appellant.

The Jamison Law Firm, Guy E. Jamison and Chelsea M. 

Clayton for Defendant and Respondent.
2

In late 2005, respondent attorney David Freeman loaned 

$425,000 to appellant Paula Boyd, his then-client. Boyd 

defaulted on the loan in 2007, at which point Freeman initiated 

foreclosure proceedings against the real property that secured the 

loan. He later ceased the foreclosure proceedings pursuant to a 

settlement agreement with Boyd. The settlement agreement 

modified various terms of the loan, including the term and 

interest rate. Boyd subsequently defaulted on the modified loan, 

and Freeman reinitiated foreclosure proceedings in 2012. 

Freeman purchased the property by tendering a full credit bid at 

a trustee sale and has been in possession of the property ever 

since. 

Boyd filed the instant action against Freeman, asserting 

causes of action for wrongful foreclosure, to set aside trustee sale, 

to void or cancel trustee’s deed upon sale, unjust enrichment, and 

to quiet title. Freeman filed cross-claims for equitable and 

declaratory relief. After a bench trial, the trial court issued a 

statement of decision finding, among other things, that the 

interest rate on the initial loan exceeded 10 percent, the 

settlement agreement purged the usury, Freeman did not commit 

any unlawful conduct or act in bad faith, and Boyd’s claims based 

on post-settlement conduct were barred by res judicata. The 

court entered judgment in favor of Freeman and later awarded 

him $206,637.50 in attorney fees pursuant to a fee provision in 

the settlement agreement. 

Boyd now contends the court erred in ruling in Freeman’s 

favor and awarding him attorney fees. She argues that public 

policies against usury and unfair attorney-client transactions 

invalidate the original loan and everything flowing from it, 

including the foreclosure, and preclude the settlement agreement 
3

from purging the usury. She further argues the fee award must 

be reversed, because the action was not brought to enforce or 

interpret the settlement agreement or the rights or obligations of 

the parties thereunder. We reject her contentions and affirm. 

FACTUAL BACKGROUND

We draw the factual background from the facts and 

evidence in the record and the trial court’s statement of decision. 

To the extent Boyd requested factual findings on specific 

controverted issues, we limit application of the doctrine of 

implied findings. (See Code Civ. Proc., § 634; SFPP, L.P. v. 

Burlington Northern & Santa Fe Railway Co. (2004) 121 

Cal.App.4th 452, 462.)

Original Loan

Boyd is a sophisticated businesswoman with a master’s 

degree in accounting. In 2005, she owned a 16-unit apartment 

building located in Glendale (“the property”). Freeman is a 

sophisticated businessman with a law degree. In early 2005, 

Boyd retained Freeman to represent her in connection with an 

unrelated matter. Freeman represented her in that matter 

throughout 2005 and early 2006. Boyd was also represented by 

another attorney, Eugene Alkana, around this time. Alkana was 

a licensed real estate broker as well as an attorney. 

In late 2005, Freeman agreed to loan Boyd $425,000 to 

purchase a coin-operated laundry business. Boyd discussed the 

loan with Alkana, who reviewed documents related to the 

transaction and explained that certain disclosure statements 

would exempt the loan from usury. Alkana did not advise Boyd 

“on the propriety or wisdom of making this loan.” Freeman had a 

good faith belief that Alkana provided Boyd with independent 

legal representation regarding the loan. 
4

The loan was effectuated pursuant to a written promissory 

note secured by a deed of trust on the property. The note 

provided that Boyd would make monthly, interest-only payments 

for 12 months beginning on February 1, 2006, at an annual 

interest rate of 10 percent, followed by a balloon payment of the 

principal amount. Boyd paid Freeman a loan fee of $8,500, which 

was deducted from the loan proceeds, as well as $582.19 in 

interest for the period of December 27, 2005 to January 1, 2006. 

When the loan fee and additional interest payment were factored 

into the loan amount, the annual percentage rate of interest 

exceeded 12 percent. 

The final version of the note stated that the note had been 

“made and arranged by a Real Estate Broker – Mortgage 

Options.” Earlier drafts of the note did not include that 

language. Mortgage Options is a licensed real estate broker and

was paid $500.00 for preparing disclosure documents for the loan. 

No one from Mortgage Options ever spoke to Boyd. 

Boyd made some payments but defaulted on the loan on 

January 1, 2007. Freeman initiated proceedings to foreclose on 

the property. Boyd retained attorney David Epstein to represent 

her. On June 29, 2007, Epstein sent a letter to Freeman in which 

he expressed concerns that the note was usurious and Freeman 

was representing Boyd when the loan was made. Epstein also

disputed the accuracy of the assertion that Mortgage Options had 

“arranged” the loan. Boyd was aware of Epstein’s concern that 

the loan was possibly usurious. 

Settlement Agreement and Modified Loan

Epstein and Freeman subsequently negotiated a settlement 

agreement, which both Boyd and Freeman executed on 

September 12, 2007. The settlement agreement recited, and the 
5

trial court found, that it was the result of an arm’s length 

negotiation between the parties. The trial court also expressly 

found that the settlement agreement “was the parties’ good faith 

attempt to resolve their disputes” and “was not the result of 

fraud, undue influence, or any unfair advantage.” 

Pursuant to the settlement agreement, the parties 

acknowledged that the principal balance of the loan remained 

$425,000. The interest rate on the principal balance between 

December 1, 2006 and March 31, 2007 remained 10 percent, with 

unpaid interest to accrue at that rate and be added to the 

principal. From April 1, 2007 forward, however, the interest rate 

was lowered to seven percent. When the $8,500 loan fee and 

previous payments of 10 percent interest were included, the

resultant effective interest rate was 7.86 percent per year. The 

settlement agreement also extended the term of the loan to 48 

months, with a balloon payment of any remaining accrued 

interest and principal due on September 30, 2011. The 

settlement agreement expressly stated that it superseded and 

amended the original note, though it provided the deed of trust 

on the property “shall remain in place and shall be acknowledged 

as valid security for payment of all sums owing as recited above.”

The settlement agreement included a mutual release of any

and all past and current claims, “including but not limited to any 

claims arising out of or relating to the Note, Trust Deed, or 

Foreclosure sale.” It also included a mutual and specific release 

of “any and all rights provided in California Civil Code Section 

1542.”

1 Freeman agreed to cancel the foreclosure proceedings 

and waive all late fees and penalties “assessed to date.” 

1 Civil Code section 1542 provides, “A general release does 

not extend to claims that the creditor or releasing party does not 
6

The settlement agreement also included the following 

provision concerning attorney fees: “If any action is brought to 

enforce or interpret any provision of this Agreement, or the rights 

or obligations of any Party thereunder, the prevailing Party shall 

be entitled to recover, as an element of such Party’s costs of suit 

and not as damages, all reasonable attorneys’ fees, costs and 

expense incurred or sustained by such prevailing Party in 

connection with such action, including, without limitation, legal 

fees and costs. The ‘prevailing party’ shall be the Party who is 

entitled to recover his/her/its costs of suit, whether or not the suit 

precedes [sic] to final judgment.” 

Default and Foreclosure 

Boyd made several payments on the loan before again 

falling behind. Freeman recorded a notice of default on or about 

March 21, 2012. The notice identified the defaulted obligation as 

arising out of the settlement agreement and advised that a 

trustee sale would occur on July 16, 2012. The notice 

inaccurately stated the amount of the default and the address of 

the property. 

On July 16, 2012, Freeman purchased the property at the 

trustee sale by tendering a full credit bid in the amount of 

$591,397.64. 

PROCEDURAL HISTORY

Previous Litigation

In June 2012, Boyd filed a complaint against Freeman in 

which she asserted causes of action for legal malpractice, breach 

know or suspect to exist in his or her favor at the time of 

executing the release and that, if known by him or her, would 

have materially affected his or her settlement with the debtor or 

released party.” (Civ. Code, § 1542.)
7

of contract, breach of fiduciary duty, fraud, and declaratory relief. 

(See Boyd v. Freeman (May 19, 2015, B253500) [nonpub. opn.].) 

As here, Boyd’s claims “were predicated on allegations that after 

Boyd hired Freeman to represent her in a matter, he made a 

‘usurious’ loan to her secured by a deed of trust for property in 

Glendale,” then “‘continued to use his legal status and his 

usurious loan terms to try to take the property illegally and 

wrongfully from [Boyd].’” (Boyd v. Freeman, supra, B253500.) 

After Freeman’s demurrer was sustained with leave to amend, 

Boyd filed a first amended complaint asserting causes of action 

for breach of fiduciary duty and restitution under the unfair 

competition law. The trial court sustained Freeman’s demurrer 

without leave to amend on statute of limitations grounds, and we 

affirmed. 

Current Litigation 

Boyd filed her original complaint in this action on July 16, 

2015, and filed the operative first amended complaint (FAC) on 

November 10, 2015. In the FAC, Boyd asserted causes of action 

for wrongful foreclosure, to set aside trustee sale, to void or 

cancel trustee’s deed upon sale, unjust enrichment, and to quiet 

title. She did not mention the settlement agreement. 

Freeman demurred to the FAC, asserting Boyd’s causes of 

action were barred by the doctrine of res judicata in light of the 

previous litigation between the parties. The trial court agreed 

and sustained the demurrer. Boyd appealed, and we reversed 

after concluding that the previous dismissal of Boyd’s claims on 

timeliness grounds was not a judgment on the merits. (Boyd v. 

Freeman (2017) 18 Cal.App.5th 847, 850.)

On remand, Freeman cross-claimed against Boyd for 

equitable and declaratory relief. He also moved for summary 
8

judgment or adjudication on each of Boyd’s claims. Boyd opposed 

the motion. She argued there were material issues of fact 

regarding whether the foreclosure was a usurious transaction; 

whether the settlement agreement was invalid due to economic 

duress, undue influence, and unconscionability; and whether 

Freeman complied with statutes governing non-judicial 

foreclosure. 

The trial court concluded that Boyd’s claims based on postsettlement conduct were barred by res judicata, she failed to 

establish a triable issue of material fact regarding the alleged 

irregularities in the foreclosure proceedings, and she failed to 

show economic duress, undue influence, or unconscionability. It 

nevertheless denied the motion for summary judgment because it 

found that “usury claims are contained in each of Boyd’s causes of 

action” and Boyd demonstrated triable issues of material fact 

regarding whether the loan was exempt from usury because it 

was arranged by a broker and, if not, whether the settlement 

agreement removed the taint of usury from the original loan. 

These factual issues were tried to the court in a bench trial 

from June 16 to 23, 2021. The court issued a statement of 

decision in favor of Freeman on July 27, 2021. In addition to the 

factual findings outlined above, the court determined that the 

settlement agreement “was supported by valid and legal 

consideration,” “purged the original usury by maintaining this 

lower legal interest rate” of 7.86 percent, and contained a valid 

Civil Code section 1542 waiver. It further ruled that Boyd “has 

not established duress or economic compulsion,” and also rejected 

as time-barred her assertions that the settlement agreement was 

invalid due to “economic duress, economic compulsion, undue 

influence, breach of fiduciary duty and violation of Rule 3-300 of 
9

the Rules of Professional Conduct.”2 It also made related rulings

that Boyd could not “bring wrongful foreclosure claims [based] on 

defects predating the Settlement Agreement” without “first 

rescind[ing] that agreement,” and her delay in seeking to rescind 

the settlement agreement “substantially prejudiced” Freeman. 

The court found that Freeman “exercised a valid legal right with 

foreclosure proceedings” and “did not commit any unlawful 

conduct or act in bad faith.” 

Despite Boyd’s express request, the court did not make any 

findings concerning whether the original loan was arranged by a 

broker. Instead, it found that it “is immaterial whether the loan 

at issue was actually broker arranged.” The court also found that 

the mutual releases of claims and Civil Code section 1542 waiver 

rendered immaterial any potential violations of Freeman’s 

“fiduciary duties in entering into a business transaction with a 

client and . . . fail[ure] to comply with Rule 3-300 of the Rules of 

Professional Conduct (current Rule 1.8.1).” The court entered 

judgment for Freeman on September 9, 2021. 

2 Former Rule of Professional Conduct 3-300, which was in 

effect at the time of the events here, provided that “A member 

shall not enter into a business transaction with a client; or 

knowingly acquire an ownership, possessory, security, or other 

pecuniary interest adverse to a client,” unless certain 

requirements were met. Those requirements included dealing on 

terms “fair and reasonable” to the client, fully disclosing those 

terms to the client in an understandable written manner, 

advising the client to seek and providing time for the client to 

seek independent legal advice, and obtaining written consent to 

the terms of the transaction. (Former Rule of Professional 

Conduct 3-300.) This rule has been replaced with current Rule of 

Professional Conduct 1.8.1.
10

Freeman subsequently filed a memorandum of costs and a 

motion for attorney fees based on the attorney fee provision of the 

settlement agreement. Boyd filed a motion to tax costs and an 

opposition to the fee motion. She contended the fee provision was 

inapplicable because her action was not “on [the] contract” of the 

settlement agreement. 

The trial court heard the motions on November 3, 2021. It 

granted Freeman’s motion for attorney fees, finding that it was 

“undisputed that the parties litigated the issue of whether the 

settlement agreement purged the taint of usury from the original 

promissory note” and that Boyd herself acknowledged that “an 

action is ‘on a contract’ if it involves or relates to an agreement by 

seeking to define or interpret its terms or to determine a party’s 

rights or duties under the agreement.” The court found 

Freeman’s requested fees to be reasonable and awarded him 

$206,637.50. The court granted Boyd’s motion to tax $44,655 of 

Freeman’s requested costs. 

Boyd timely appealed both the judgment and the award of 

attorney fees. 

DISCUSSION 

Boyd asserts that the trial court’s factual findings establish 

that the original loan transaction was usurious and violated the 

Rules of Professional Conduct. She contends that public policies 

against usurious transactions and unfair attorney-client 

transactions “combine to invalidate the foreclosure here.” She 

further contends these “twin policies” overcome any policy 

favoring settlement of disputes. Boyd also argues that the fee 

award should be reversed, both because she should be the 

prevailing party and because the award is not authorized by the 

settlement agreement. 
11

I. Standards of review

In reviewing a judgment based on a statement of decision 

following a bench trial, we generally review findings of fact for 

substantial evidence and questions of law de novo. (Thompson v. 

Asimos (2016) 6 Cal.App.5th 970, 981.) 

Whether a transaction is usurious is a mixed question of 

fact and law. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799-

801.) The “trial court’s determination of the historical basis of 

the transactions—in common parlance, what happened—raises a 

question of fact. . . . Whether a type of transaction is subject to 

usury is a question that can have practical significance far 

beyond the confines of the case then before the court,” and thus 

poses a question of law subject to de novo review. (Id. at p. 801.) 

For similar reasons, we review “important questions of public 

policy de novo.” (People for Ethical Operation of Prosecutors and 

Law Enforcement v. Spitzer (2020) 53 Cal.App.5th 391, 409.) The 

legal basis for an attorney fee award is also subject to de novo 

review. (Mountain Air Enterprises, LLC v. Sundowner Towers, 

LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).) 

We presume the judgment of the trial court is correct. As 

the appellant, Boyd bears the burden of demonstrating, on the 

basis of the appellate record, that the trial court committed 

reversible error. (Jameson v. Desta (2018) 5 Cal.5th 594, 608-

609.) 

II. The settlement agreement purged any usury. 

Usury is the exacting, taking, or receiving of an interest 

rate greater than that allowed by law for the use or loan of 

money. (Hardwick v. Wilcox (2017) 11 Cal.App.5th 975, 978 

(Hardwick).) A loan transaction with an interest rate in excess of 

the legally permissible rate is considered usurious, even where 
12

the parties willingly negotiate it and the borrower is 

sophisticated. (Id. at pp. 978, 988; Ghirardo v. Antonioli, supra, 8 

Cal.4th at p. 807.) The legally permissible interest rates for 

various transactions are set forth in California Constitution, 

article XV, section 1; there is no dispute that 10 percent was the 

maximum rate permissible for the loan in this case. 

Civil Code, section 1916.1 provides an exemption to the 

constitutionally mandated interest rates for “any loan or 

forbearance made or arranged by any person licensed as a real 

estate broker by the State of California, and secured, directly or 

collaterally, in whole or in part by liens on real property.” (Civ. 

Code, § 1916.1.) The parties dispute whether Mortgage Options 

“arranged” the loan in 2005, thus exempting it from usury 

regardless of the effective interest rate, and presented dueling 

expert testimony on the issue at trial. The trial court declined to 

resolve the dispute, concluding instead that it was immaterial in 

light of the settlement agreement. Boyd contends that the issue 

is material, and the trial court’s findings “compel[ ] the 

conclusion that no broker arranged the loan.” We agree with the 

trial court that the issue is immaterial in light of the settlement 

agreement: even if the loan was not arranged by a broker and 

was therefore usurious, any usury was removed by the 

settlement agreement. 

Usury may have repercussions beyond the transaction in 

which it originates. Unless the usury is purged, all future 

transactions connected with or growing out of the original are 

also considered usurious. (Hardwick, supra, 11 Cal.App.5th at 

pp. 993-994.) “‘“‘An original taint of usury attaches to the whole 

family of consecutive obligations and securities growing out of the 

original vicious transaction; and none of the descendent 
13

obligations, however remote, can be free of the taint if the descent 

can be fairly traced.’” [Citation.]’” (Id. at p. 994.) However, “the 

abandonment of the usurious agreement and the execution of a 

new obligation for the amount of the actual debt free from the 

usury and bearing only legal interest, purges the original usury 

and makes the second obligation valid and enforceable.” 

(Whittemore Homes, Inc. v. Fleishman (1961) 190 Cal.App.2d 554, 

560.) It has long been recognized that a valid settlement 

agreement can serve this severing function, so long as it is not 

the product of fraud, undue influence, or other unfair advantage.

(See Credit Finance Corp. v. Mox (1932) 125 Cal.App. 583, 586.) 

The trial court found that the settlement agreement was an 

arm’s length transaction and the product of good faith 

negotiations between Freeman and Boyd’s independent legal 

counsel rather than fraud, undue duress, or any unfair 

advantage. Boyd acknowledges, rightly, that those findings are 

supported by substantial evidence and thus will stand on appeal. 

She argues that the settlement agreement nevertheless could not 

purge the usury of the original loan because “whether a 

settlement agreement purges usury turns on public policy,” and 

public policies against usury and unfair attorney-client 

transactions prevent a purge here. We disagree.

Boyd primarily relies on Hardwick, supra, 11 Cal.App.5th 

975, and Grados v. Shiau (2021) 63 Cal.App.5th 1042 (Grados). 

Both cases are distinguishable. In Hardwick, lender Wilcox 

made a series of loans to borrower Hardwick over a 10-year 

period. (Hardwick, supra, 11 Cal.App.5th at p. 979.) The loans, 

which largely rolled into one another, all had interest rates of 11 

or 12 percent; the trial court assumed without deciding that the 

loans were usurious. (See id. at pp. 982, 984.) Ultimately, the 
14

loans were rolled into two notes, and Hardwick defaulted on one 

of them. (Id. at p. 982.) After Wilcox initiated nonjudicial 

foreclosure, the parties agreed to enter a forbearance agreement 

to extend the repayment deadline. (Ibid.) The forbearance 

agreement also contained a general release of any and all claims 

Hardwick might have against Wilcox, including a waiver of his 

rights under Civil Code section 1542. (Id. at p. 983.) Hardwick 

subsequently filed suit against Wilcox, seeking to recover 

usurious interest payments, cancel the forbearance agreement, 

and prevent the foreclosure Wilcox reinstated. (Id. at p. 984.) 

Wilcox filed a cross-complaint, seeking, among other things, a 

declaration that Hardwick waived his right to recover any 

usurious interest due to the release and waiver in the 

forbearance agreement. (Ibid.) Neither Hardwick nor Wilcox 

was aware of the usury law when they signed the forbearance 

agreement. (Id. at pp. 984-985.) 

After a bench trial, the trial court concluded the 

forbearance agreement did not contain a valid waiver of usury 

violations. (Hardwick, supra, 11 Cal.App.5th at pp. 985, 988.) 

The court made factual findings that the forbearance agreement 

was a “‘descendant obligation growing out of the original usurious 

loans,’” “an extension of that original usurious transaction,” and 

“usurious in and of itself.” (Id. at p. 985.) “Under these 

circumstances, the court found, interpreting the release as a 

waiver of a usury claim would exempt Wilcox from the 

consequences of his violation of the usury law” and accordingly 

violate public policy. (Ibid.) The trial court further concluded 

that even if Hardwick could waive his usury claim, the release 

contained in the forbearance agreement was “not a knowing 

waiver of a usury claim, but rather a perpetuation of a violation 
15

of the usury law.” (Ibid.) Wilcox appealed, and the appellate 

court affirmed.

The appellate court concluded that “the record supports the 

trial court’s finding that construing this particular release as a 

waiver of usury would violate public policy.” (Hardwick, supra, 

11 Cal.App.5th at p. 989, emphasis added.) It observed that “the 

interconnection between the series of 15 notes and amendments 

to the notes substantially supports the trial court’s finding that 

the Forbearance Agreement was an extension of the underlying 

usurious loan transaction,” and “construing the unilateral 

general release . . . as a waiver of usury would allow Wilcox to 

escape the consequences of his violation of the law by permitting 

him to benefit from his illegal contract and retain the usurious 

interest he extracted from Hardwick.” (Ibid.) The appellate 

court also rejected Wilcox’s reliance on case law holding that “a 

usury claim can be released in a settlement agreement,” 

concluding that “the factual evidence showed that the release was 

not part of a settlement of a usury claim or of any other dispute. 

Rather, the sole purpose of the Forbearance Agreement was to 

extend the due dates for the loans.” (Ibid.) The court added, “the 

Forbearance Agreement was not a settlement agreement but an 

illegal contract that itself violated the usury law.” (Id. at p. 990.)

Here, the settlement agreement was a legitimate 

settlement agreement. The trial court found that Boyd was 

aware the note was possibly usurious when she was negotiating 

the agreement, and also was aware that Freeman had been 

representing her as counsel when the note was issued. It further 

found that Boyd and her independent attorney, Epstein, “knew 

about the potential existence of a usury claim and knew that she 

was entering into a settlement agreement to release any and all 
16

claims against Freeman.” Unlike the forbearance agreement in 

Hardwick, the settlement agreement contained a mutual rather 

than unilateral release of claims and lowered the interest rate on 

the loan to a non-usurious level. Moreover, the trial court found, 

and Boyd does not dispute, that the settlement agreement was 

supported by valid and legal consideration. “The question comes 

down to whether the new agreement is a mere renewal of the old 

usurious agreement, or if it purges the debt of the original 

usury.” (Whittemore Homes, Inc. v. Fleishman, supra, 190 

Cal.App.2d at p. 560.) The settlement agreement was not a mere 

renewal of the original loan; it substantially modified the interest 

rate and other loan terms, and by its own terms amended and 

superseded the original loan. 

Hardwick did not, as Boyd contends, “confirm[ ] public 

policy as the deciding factor on whether an agreement with a 

release . . . purges usury.” As we emphasized above, the court 

concluded that the particular release in the forbearance 

agreement would violate public policy by allowing Wilcox to profit 

from his wrongdoing. The ruling turned not on public policy but 

rather on the underlying facts of the transactions and contents of 

the forbearance agreement. The facts of this case are not 

analogous to those in Hardwick; its holding is not applicable 

here.

The same is true of Grados, supra, 63 Cal.App.5th 1042, 

which Boyd asserts also stands for the proposition that public 

policy is the deciding factor in whether a contract can purge 

usury. There, Grados lent Shiau $100,000 pursuant to a note 

that accrued interest at a rate of 20 percent per annum and also 

required a “$100,000 earn-out payment” on the date of maturity. 

(Grados, supra, 63 Cal.App.5th at pp. 1046-1047.) The note 
17

contained a unilateral waiver by Shiau of “any and all laws 

applicable to the payment of interest in connection with its [sic] 

payment of the Earn-Out Amount.” (Id. at p. 1047.) After Shiau 

failed to pay, Grados sued him for breach of contract. (Id. at p. 

1046.) Grados obtained entry of default and a default judgment 

in the amount of $217,388.58: $100,000 in principal, $100,000 in 

earn-out, $16,163.05 in pre-judgment interest calculated at the 

statutory rate of 10 percent from the alleged date of Shiau’s 

default, and $1,225.53 in costs. (Id. at p. 1047.) Shiau moved to 

set aside the default and default judgment. As relevant here, he 

argued that the $100,000 earn-out requirement in the note (and 

awarded in the default judgment) was usurious and rendered the 

default judgment void. (Id. at p. 1048.) He requested that the 

court at a minimum reduce the default judgment “‘to the 

principal and reasonable interest, legal interest.’” (Ibid.) The 

trial court rejected Shiau’s arguments and request and denied 

the motion to set aside without modifying the amount of the 

judgment. (Ibid.) 

On appeal, Shiau argued that the illegal terms of the note 

and illegal interest rates awarded to Grados rendered the default 

judgment void, such that the trial court abused its discretion by 

denying his motion to set aside. (Grados, supra, 63 Cal.App.5th 

at p. 1049.) The appellate court agreed that the relief awarded 

Grados in the default judgment was contrary to law. (Id. at p. 

1054.) It concluded that the interest rate was 100 percent when 

the earn-out amount was considered, “ten times above the 

maximum constitutional rate,” and accordingly “rendered that 

portion of the default judgment void.” (Id. at p. 1055.) The 

appellate court also rejected Grados’s attempt to invoke the 

waiver provision of the note. (Ibid.) Quoting Hardwick, supra, 
18

11 Cal.App.5th at pp. 989-990, the court concluded that 

“[a]llowing Grados to benefit from the unilateral provision in [the 

note] and be awarded the illegal $100,000 Earn-Out Amount, 

equivalent to the entire amount of the principal, would 

‘undermine the “theory” of California usury law, which is that 

“society benefits by the prohibition of loans at excessive interest 

rates, even though both parties are willing to negotiate them.”’” 

(Grados, supra, 63 Cal.App.5th at p. 1055.) The appellate court 

accordingly struck the improper portion of the default judgment 

and modified it to award Grados the $100,000 principal and 

interest of $8,081.53. (Id. at p. 1057.) 

Like Hardwick, Grados involved a usurious agreement that 

included a unilateral waiver of rights. Those features are not 

present in the settlement agreement here. Grados did not hold, 

as Boyd suggests, that “purported waivers of usury that run afoul 

of public policy cannot purge usury.” There was no attempt to 

purge usury in Grados, which concerned a single usurious 

agreement. Grados thus does not speak to the issue of whether a 

settlement agreement that is itself not usurious can purge the 

usury of a previous agreement. 

Boyd argues that another important public policy prevents 

the settlement agreement from purging usury: the policy “against 

allowing attorneys to take advantage of the trust their clients 

place in them by persuading them into unfair, unreasonable 

business transactions.” She asserts that regardless of the terms 

of the settlement agreement, “at the time Mr. Freeman made the 

loan to his client, it was usurious, and thus unfair and 

unreasonable. . . . [T]hat is the time frame that matters.” In 

other words, she contends the original loan was void from its 

inception as a matter of public policy. She also makes a related 
19

argument that the original loan was voidable at any time at her 

option due to Freeman’s alleged violations of former Rule 3-300 of 

the Rules of Professional Conduct. 

The trial court ruled that “Boyd’s attempt to invalidate the 

loan for violation of Rule 3-300 of the Rules of Professional 

Conduct is barred by the statute of limitations.” Indeed, we held 

as much in the previous litigation between the parties. (See Boyd 

v. Freeman (May 19, 2015, B253500) [nonpub. opn.].) Boyd 

maintains this ruling was “incorrect,” because the instant action 

did not involve claims of malpractice or breach of fiduciary duty 

and we previously held that the instant suit was not barred by 

the dismissal of the previous litigation on timeliness grounds. 

(See Boyd v. Freeman, supra, 18 Cal.App.5th at p. 850.) Even if 

we assume Boyd is correct, and the trial court erred in invoking 

the statute of limitations, the trial court alternatively ruled that 

any violations of the Rules of Professional Conduct were rendered 

“immaterial” by the mutual waivers and releases contained in the 

settlement agreement. Boyd has not demonstrated this ruling 

was erroneous. 

The trial court found that Boyd entered into the settlement 

agreement and released all claims against Freeman with the

knowledge that Freeman represented her when the initial loan 

was made. Boyd cannot overcome these findings, which are 

supported by substantial evidence in the record.3 She instead 

asserts that the policy of “putting an end to claims once they have 

3 We also note that we concluded in the previous litigation

that “Boyd knew, or should have known, the facts underlying 

[her] breach of fiduciary duty claims” “no later than the execution 

of the 2007 settlement agreement.” (Boyd v. Freeman, supra,

(B253500).)
20

been resolved . . . does not overrule the public policies against 

usury and unfair transactions between attorneys and clients.” 

The only authority she cites for this proposition is Hardwick, 

supra, 11 Cal.App.5th 975. Hardwick is equally inapplicable in 

this context, inasmuch as “there was neither a preexisting 

dispute between the parties as to whether the loans were 

usurious nor a settlement agreement in compromise of such a 

dispute.” (Hardwick, supra, 11 Cal.App.5th at pp. 990-991.)

Boyd was represented by independent counsel when she entered 

into the settlement agreement, and the releases it contained were 

mutual and supported by valid consideration. Boyd cannot now 

rely on allegations of professional misconduct to undermine the 

otherwise valid settlement agreement.4

III. The settlement agreement authorized the fee award. 

Civil Code section 1717, subdivision (a) 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 

4 Boyd also asserts that irregularities in the foreclosure 

process, such as the erroneous property address on the notice of 

default, “exacerbated the violations of public policy,” and 

“disputes” the trial court’s findings that she was not prejudiced 

by the irregularities. We need not address these minimally 

developed arguments in light of our conclusion that public policy 

did not undermine the settlement agreement from which the 

foreclosure arose. In any event, Boyd failed to carry her burden 

of showing the trial court’s findings were not supported by 

substantial evidence or its legal conclusions were incorrect. 
21

attorney’s fees in addition to other costs.” (Civ. Code, § 1717, 

subd. (a).) It is undisputed that the settlement agreement 

contained a provision awarding attorney fees to the prevailing 

party where “any action is brought to enforce or interpret any 

provision of this Agreement, or the rights or obligations of any 

Party thereunder.” Boyd, who contended below that the action 

was not “on a contract” within the meaning of Civil Code section 

1717, abandons that position and now contends the fee provision 

does not support the fee award because she did not bring an 

action to enforce or interpret the settlement agreement. She 

emphasizes that the FAC did not mention the settlement 

agreement, “let alone seeks [sic] enforcement or interpretation of 

it,” and contends that Freeman’s efforts to use the settlement 

agreement as a defense do not constitute “bringing an action to 

enforce” the agreement within the meaning of Civil Code section 

1717. 

In considering the scope of the settlement agreement’s 

attorney fee provision, we apply “traditional rules of contract 

interpretation.” (Mountain Air, supra, 3 Cal.5th at p. 752.) We 

consider the “mutual intention of the parties,” focusing first on 

the plain language of the provision. (Ibid.) However, “a

complicated and difficult set of facts may sometimes obscure 

whether a claim on which attorney fees are incurred is within the 

scope of a fees provision.” (Id. at p. 760.) Thus, where 

“warrant[ed],” we should also consider “‘the pleaded theories of 

recovery, the theories asserted and the evidence produced at 

trial, if any, and also any additional evidence submitted on the 

motion in order to identify the legal basis of the prevailing party’s 

recovery.’ [Citation.]” (Id. at pp. 760-761.)
22

The provision here contemplates an award of fees where 

“any action is brought to enforce or interpret any provision of this 

Agreement, or the rights or obligations of any Party thereunder.” 

As the trial court recognized below in its summary judgment 

ruling, Boyd is correct that she did not expressly assert a cause of 

action to set aside the settlement agreement. However, it 

continued, “this is implicitly what Boyd seeks by advancing 

claims to set aside the foreclosure sale of the Property because 

the Settlement Agreement necessarily impedes those claims.” 

Indeed, Boyd expressly argued below that she brought her 

wrongful foreclosure claim “to rescind the settlement agreement 

and void the foreclosure sale.” In its statement of decision, the 

trial court concluded that Boyd could not “bring wrongful 

foreclosure claims [based] on defects predating the Settlement 

Agreement” without “first rescind[ing] that agreement.”

Boyd’s action at its heart, if not in its caption, was brought 

to determine her rights or obligations under the settlement 

agreement. The settlement agreement was admitted as an 

exhibit at trial, which focused largely on the issue of whether the 

settlement agreement purged the usury present in the original 

loan. At the conclusion of trial, both parties indicated an 

intention to seek attorney fees if they prevailed, and explicitly 

stated they would do so under the settlement agreement. Their 

mutual intention thus was clear. 

We do not “take an overly formalistic approach to 

determining whether a prevailing party is entitled to contractual 

attorney fees.” (Mountain Air, supra, 3 Cal.5th at p. 760.) 

Freeman incurred fees in an action that determined “the rights or 

obligations” of the parties under the settlement agreement. The 

trial court did not err in awarding him those fees. 
23

DISPOSITION

The trial court’s judgment and fee order are affirmed. 

Respondent may recover his costs of appeal. 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, J.

We concur:

CURREY, ACTING, P.J.

ZUKIN, J.

 Judge of the Los Angeles County Superior Court, assigned by 

the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.