Filed 4/26/22 H.T.L. Properties, LLC v. Speck CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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

not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion 

has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

H.T.L. PROPERTIES, LLC et al.

Plaintiffs and Appellants,

v.

JAMES SPECK et al.,

Defendants and Respondents.

 B302436

 (Los Angeles County

 Super. Ct. No. BC677442)

APPEAL from an order of the Superior Court of 

Los Angeles County. Michael P. Vicencia, Judge. Affirmed.

McCreary and Duncan J. McCreary for Plaintiffs and 

Appellants.

Ferruzzo & Ferruzzo, Gregory J. Ferruzzo, Alex C. 

Verdegem and Sean E. Morrissey for Defendants and 

Respondents.

______________________________
2

This litigation arises out of a dispute between certain 

entities and individuals concerning the use of a large electronic 

sign in the City of Long Beach to advertise car dealerships in the 

area. When plaintiffs and appellants H.T.L. Properties, LLC

(HTL Properties) and HTL Automotive, Inc. (HTL Automotive), 

were denied use of the sign, they filed a lawsuit against 

defendants and respondents James Speck (Speck), Circle 

Automotive Group, Inc. (Circle Auto), and Electra Media, Inc.

(EMI), claiming that defendants wrongfully denied them use of 

the sign. Defendants successfully moved for summary judgment

and were awarded attorney fees and costs. HTL Properties and 

HTL Automotive appealed the trial court’s order granting 

summary judgment, and on May 4, 2021, we dismissed HTL 

Automotive’s appeal because it was not in good standing with the 

Franchise Tax Board and affirmed the judgment against HTL 

Properties. (H.T.L. Properties, LLC v. Speck (May 4, 2021), 

B299160 [nonpub. opn.], p. 21.) They now appeal the trial court’s 

award of attorney fees and costs.

Because the trial court did not err in awarding defendants 

attorney fees and costs, we affirm.

FACTUAL BACKGROUND

As set forth in our prior opinion, the parties dispute the use 

of an electronic advertising sign. Use of that sign is governed by 

the North East Long Beach Advertising Association’s (NEDA) 

agreement (the NEDA agreement). (H.T.L. Properties, LLC v. 

Speck, supra, B299160, at p. 3.) According to the terms of the 

NEDA agreement, the NEDA sign is used solely for identifying 

NEDA members’ auto dealerships. Only NEDA members may 

use the NEDA sign. HTL Automotive became a member of 

NEDA in 2008 when it purchased a participating car dealership. 
3

It ceased being a NEDA member in 2016 when it sold its car 

dealership. (Id. at p. 4.)

Neither HTL Properties nor any of the three defendants 

was ever a party to the NEDA agreement. (H.T.L. Properties, 

LLC v. Speck, supra, B299160, at p. 17.)

The NEDA agreement provides, in relevant part: “If any 

party defaults in the performance of their obligations pursuant to 

this Agreement and any party entitled to enforce such provision 

has obtained the services of an attorney with respect to the 

default involved, the defaulting party shall pay to such 

non defaulting party upon resolution of said default in favor of 

the non defaulting party, any costs or fees involved including 

reasonable attorneys’ fees, whether or not suit[] has been 

instituted. In the event action is commenced to enforce any of the 

provisions contained in this Agreement, the prevailing party 

shall be entitled to recover from the other party thereto, 

reasonable attorney fees and costs of such suit whether or not 

such action proceeds to final judgment.”

PROCEDURAL BACKGROUND

On September 27, 2017, plaintiffs filed the instant action 

against defendants, alleging, inter alia, breach of contract.

1 

(H.T.L. Properties, LLC v. Speck, supra, B299160, at p. 9.) 

According to the respondent’s brief, plaintiffs specifically 

requested attorney fees in their complaint.

1

As set forth in our prior opinion, the alleged contract is 

undefined. Plaintiffs’ claims could have been based upon some 

vague oral agreement or the NEDA agreement. We addressed 

both possibilities in our prior opinion. (H.T.L. Properties, LLC v. 

Speck, supra, B299160, at pp. 15–18.)
4

Defendants moved for summary judgment. (H.T.L. 

Properties, LLC v. Speck, supra, B299160, at p. 10.) On April 24, 

2019, the trial court granted defendants’ motion for summary 

judgment. In so doing, the trial court determined that the NEDA 

agreement was controlling. “Only members of [NEDA could] 

advertise on the [NEDA] [s]ign. [Because] [p]laintiffs sold their 

[car] [d]ealership, . . . [p]laintiffs no longer had any interest in, or 

right to advertise on the [NEDA] [s]ign because they were no 

longer members of” NEDA. Thus, plaintiffs had no viable claim 

against defendants. (H.T.L. Properties, LLC v. Speck, supra, 

B299160, at p. 12.)

Thereafter, defendants filed a motion for attorney fees and 

costs. They argued that pursuant to California statutes and the 

terms of the NEDA agreement, they were entitled to recoup their 

attorney fees and costs.

Plaintiffs opposed the motion.

On September 10, 2019, the trial court granted defendants’

motion, awarding them $157,191 in attorney fees and $7,219.60 

in costs.

2

Plaintiffs’ timely appeal ensued.

DISCUSSION

I. Standard of review

As defendants correctly point out in their respondents’ 

brief, plaintiffs do not challenge the amount of attorney fees 

awarded. Rather, the only issue on appeal is whether they were 

2

Later, on October 19, 2021, the trial court awarded 

defendants an additional $40,519.50 in attorney fees and $977.08 

in costs incurred in connection with plaintiffs’ unsuccessful 

appeal. Those amounts were added to the judgment, with a total 

award of $197,710.50 in attorney fees and $8,196.68 in costs.
5

“entitled to recover attorney fees.” Thus, as the parties agree, we 

review this issue de novo. (Dzwonkowski v. Spinella (2011) 200 

Cal.App.4th 930, 934.)

II. Relevant law

Civil Code section 1717, subdivision (a) (section 1717), 

“declares that ‘[i]n 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.’ 

(Italics added.)” (California-American Water Co. v. Marina Coast 

Water Dist. (2017) 18 Cal.App.5th 571, 576.)

“The primary purpose of section 1717 is to ensure 

mutuality of remedy for attorney fee claims under contractual 

attorney fee provisions.” (Santisas v. Goodin (1998) 17 Cal.4th 

599, 610.) In other words, section 1717 “makes an otherwise 

unilateral right [to contractual attorney fees] reciprocal, thereby 

ensuring mutuality of remedy.” (Santisas v. Goodin, supra, at 

p. 611.) “To ensure mutuality of remedy . . . , it has been 

consistently held that when a party litigant prevails in an action 

on a contract by establishing that the contract is invalid, 

inapplicable, unenforceable, or nonexistent, section 1717 permits 

that party’s recovery of attorney fees whenever the opposing 

parties would have been entitled to attorney fees under the 

contract had they prevailed. [Citations.]” (Santisas v. Goodin, 

supra, at p. 611.)

“‘. . . California courts liberally construe the term “‘“on a 

contract”’” as used within section 1717. [Citation.] As long as the 
6

action “involve[s]” a contract it is “‘on [the] contract’” within the 

meaning of section 1717. [Citations.]’ [Citations.]” (Blickman 

Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 

Cal.App.4th 858, 894.)

III. Analysis

Applying these legal principles, we conclude that the trial 

court properly determined that defendants were entitled to 

attorney fees under the terms of the NEDA agreement. Plaintiffs 

initiated this litigation because they sought use of the NEDA 

sign. (H.T.L. Properties, LLC v. Speck, supra, B299160, at p. 12.) 

The use of that sign is governed by the NEDA agreement. (Id. at 

p. 3.) And the NEDA agreement contains a broad attorney fee 

provision.

Urging us to reverse, plaintiffs rely upon Mountain Air 

Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744 

for the proposition that because defendants “raised a contract as 

a bar to the operative complaint,” they are not entitled to 

attorney fees. Plaintiffs seem to be arguing that because their 

claim was actually based upon an alleged oral agreement and/or 

e-mails memorializing an oral agreement, neither of which 

contained an attorney fees provision, defendants cannot claim 

attorney fees pursuant to the NEDA agreement. We are not 

convinced. As the trial court properly determined, and as we 

held in our prior opinion, the NEDA agreement controlled this 

dispute; it set forth all of the terms concerning the use of the 

NEDA sign. Thus, its attorney fee provision applies as well.

The fact that plaintiffs did not attach a copy of the NEDA 

agreement to their complaint or allege its existence does not 

compel a different result. This matter was fully litigated to 

judgment, and it has been determined that this matter is 
7

governed by the NEDA agreement. The fact that that agreement 

was not attached to the complaint is irrelevant.

Plaintiffs further argue that defendants are not entitled to 

attorney fees because they (defendants) were not parties to the 

NEDA agreement. Plaintiffs are mistaken. The purpose of 

section 1717 requires it “‘be interpreted to . . . provide a 

reciprocal remedy for a nonsignatory defendant, sued on a 

contract as if he were a party to it, when a plaintiff would clearly 

be entitled to attorney[] fees should he prevail in enforcing the 

contractual obligation against the defendant.’ [Citations.]” 

(Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 819.) 

Had plaintiffs succeeded in enforcing the NEDA agreement 

against defendants, plaintiffs would have been entitled to recover 

their attorney fees. Thus, even though defendants were 

nonsignatories to the NEDA agreement, they are entitled to 

recoup their attorney fees here.

Plaintiffs also contend that the trial court erred in 

awarding attorney fees to Alant Corporation, Inc. Alant 

Corporation, Inc., was not awarded attorney fees.

Finally, plaintiffs contend that the terms of the contract’s 

attorney fee provision do not apply for at least two reasons: 

(1) When the trial court granted defendants’ motion for summary 

judgment, it found that plaintiffs were not parties to the NEDA 

agreement and a contractual attorney fee clause only applies to a 

party; and (2) Plaintiffs were not in default of performance. We 

disagree.

As set forth above, plaintiffs brought this action “on the 

contract,” specifically the NEDA agreement. The fact that they 

were ultimately adjudged not to be parties to the NEDA 

agreement does not negate defendants’ entitlement to attorney 
8

fees for the same reasons set forth above. (See, e.g., Hyduke’s 

Valley Motors v. Lobel Financial Corp. (2010) 189 Cal.App.4th 

430, 435 [“on occasion attorney fees may be assessed against a 

nonsignatory who loses an action on the contract”]; Santisas v. 

Goodin, supra, 17 Cal.4th at p. 611; Brown Bark III, L.P. v. 

Haver, supra, 219 Cal.App.4th at pp. 819–820.)

And, plaintiffs misconstrue the term “default.” Fairly read, 

their complaint against defendants was based upon the theory 

that defendants defaulted on their obligation under the NEDA 

agreement to allow plaintiffs to use the NEDA sign. Regardless, 

the second sentence of the attorney fee clause is broad, covering 

any action to enforce any of the provisions set forth in the NEDA 

agreement. At this risk of sounding redundant, that is exactly 

what this lawsuit was all about.

DISPOSITION

The order is affirmed. Defendants are entitled to attorney 

fees and costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_____________________, J.

ASHMANN-GERST

We concur:

________________________, P. J.

LUI

________________________, J.

HOFFSTADT