Filed 9/3/15 Ahern v. Asset Management Consultants CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication 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 FIVE

PRISCILLA AHERN et al.,

Plaintiffs and Appellants,

v.

ASSET MANAGEMENT 

CONSULTANTS, INC. et al.,

Defendants and Respondents.

 B258030

 (Los Angeles County

 Super. Ct. No. BS141657)

APPEAL from a postjudgment order of the Superior Court of the County of Los 

Angeles, Michelle R. Rosenblatt, Judge. Reversed.

Catanzarite Law Corporation, Kenneth J. Catanzarite, Nicole M. CatanzariteWoodward, Eric V. Anderton for Plaintiffs and Appellants.

Jackson, DeMarco, Tidus & Peckenpaugh, M. Alim Malik, Charles M. Clark for 

Defendants and Respondents.
2

INTRODUCTION

Plaintiffs and appellants (plaintiffs)1appeal from the trial court’s postjudgment 

order awarding attorney fees to defendants and respondents (defendants).

2

 Plaintiffs 

contend that the trial court erred when it found that defendants had prevailed on a 

contract claim and when it determined that defendants were entitled to enforce the 

attorney fees provision in the purchase agreement in issue. Defendants contend that the 

issue of whether they are parties to the purchase agreement entitled to enforce its attorney 

fees provision has been decided in their favor by the trial court in a related action

between the same parties. They also contend that they have a right, even as 

nonsignatories, to enforce the attorney fees provision under Civil Code section 1717.

Contrary to defendants’ assertion, the issue of whether defendants are parties to 

the purchase agreement has been decided against them by the Court of Appeal in the 

other related action between the same parties, case number B253974.

3

 Because we agree 

with that decision, we hold that defendants are not parties to the purchase agreement 

entitled to enforce its attorney fees provision. We further hold that defendants have no 

right under Civil Code section 1717 to enforce the purchase agreement as nonsignatories. 

Accordingly, the attorney fees award must be reversed.

 

1

Plaintiffs are Priscilla Ahern, Thomas Ahern, AMLAP Ahern, LLC, and Michael 

Stella.

2 Defendants are Asset Management Consultants, Inc., BH & Sons, LLC, Argent 

Associates, LLC, Argent Real Estate Associates, L.P., James Hopper, and Gloria Hopper.

3 On our own motion, we take judicial notice of Division Seven’s unpublished 

opinion in case number B253974.
3

BACKGROUND4

A. First Action

1. Complaint

In May 2012, plaintiffs filed a class action in the Superior Court of the County of 

Los Angeles, case number BC484356 (first action), against, inter alia, defendants. 

Plaintiffs sought to represent a class of persons who purchased interests in a commercial 

real estate venture and who allegedly had been fraudulently induced to invest in the 

venture. 

2. Arbitration Order, Dismissals Without Prejudice, and

Defendants’ Demand for Arbitration

In response to the complaint, defendants successfully petitioned the trial court in 

the first action for an order compelling arbitration pursuant to Code of Civil Procedure 

section 1281.25. The petition was based on an arbitration clause in a purchase and sale 

agreement between iStar CTL I, L.P., as seller, and BH & Sons, LLC, as buyer (iStar 

PSA). The arbitration order provided that the “scope of the Arbitration covers all causes 

of action, factual allegations and issues alleged by” plaintiffs. In response to the 

arbitration order, plaintiffs filed and the trial court entered on October 9, 2012, dismissals 

without prejudice as to their claims against defendants in the first action. 

On October 24, 2012, defendants filed a demand for arbitration against plaintiffs 

before JAMS, Inc. (JAMS)—an alternative dispute resolution provider—which demand 

sought an order that plaintiffs’ dismissals without prejudice be deemed dismissals with 

prejudice and requested “damages according to proof at the arbitration for affirmative 

claims they may assert”—i.e. those in their counterclaims. On November 8, 2012, JAMS

 

4 Much of the background is taken from our decision in a prior appeal between the 

same parties—Priscilla Ahern v. Asset Management Consultants, Inc. et al, B255853. 

5 All further statutory references are to the Code of Civil Procedure unless otherwise 

indicated.
4

commenced the arbitration by appointing Alexander Polsky as the arbitrator. Plaintiffs

refused to participate in the arbitration, which refusal the arbitrator deemed to be a 

motion to dismiss. After reviewing the briefs of the parties on the dismissal issue, the 

arbitrator denied the motion, concluding that he had jurisdiction to determine the 

affirmative claims asserted by defendants in the arbitration that related to the factual 

allegations and claims asserted by plaintiffs in the complaint in the first action. 

B. Orange County Action

In December 2012, plaintiffs filed an action in the Superior Court of the County of 

Orange, case number 2012-00620765 (Orange County action), seeking a writ of 

prohibition to restrain the arbitrator from proceeding with the arbitration. According to 

plaintiffs, on February 11, 2013, the trial court in the Orange County action dismissed the 

petition without prejudice so that it could be refiled with the trial court in the first action 

in Los Angeles County. 

C. Instant Action

In February 2013, plaintiffs filed the instant action against defendants in the 

Superior Court of the County of Los Angeles seeking a writ of prohibition to restrain the 

arbitrator from proceeding with the arbitration. The trial court in the instant action 

denied plaintiffs’ ex parte request for a writ of prohibition, but stayed the arbitration as to 

defendants’ declaratory relief claim only, pending a clarification by the trial court in the 

first action as to whether defendants’ affirmative claims should be adjudicated as part of 

the arbitration. The trial court in the first action thereafter refused to interfere with the 

arbitration, ruling that it would address any issue about the arbitrator exceeding his 

authority in response to a petition to vacate or confirm the award. At a June 2013 status 

conference in the instant action, the trial court lifted the stay of the arbitration. 
5

D. Defendants’ Arbitration Complaint, Award, and Petitions to Confirm 

and Vacate

In February 2013, defendants filed a claim in the arbitration seeking 

indemnification and declaratory relief. When the trial court in the instant action lifted the 

stay of arbitration in June 2013, the arbitration proceeded, and, on September 17, 2013, 

the arbitrator entered an award in favor of defendants. On October 4, 2013, defendants 

filed in the first action a petition to confirm the arbitration award pursuant to section 

1285. On October 15, 2013, plaintiffs filed in the first action a petition to vacate the 

arbitration award pursuant to sections 1285 and 1286.2. 

E. Amended Complaint in Instant Action for Declaratory Relief

After the trial court in the instant action sustained defendants’ demurrer to 

plaintiffs’ petition for writ of prohibition, plaintiffs requested and the trial court granted 

leave to amend the complaint to state a claim for declaratory relief. On October 15, 

2013, plaintiffs filed in the instant action an amended complaint for declaratory relief. In 

their declaratory relief claim, plaintiffs alleged that there was “an actual case in 

controversy relating [to] the legal rights and duties of the respective parties under the 

iStar PSA [and the propriety of the arbitration]. Plaintiffs seek [a] declaration of the 

parties’ rights and duties under the agreement to arbitrate under the iStar PSA and the 

propriety of the [arbitration].” 

F. Order Confirming Arbitration Award and Judgment Based Thereon

On November 14, 2013, the trial court in the first action issued an order

confirming the arbitration award and denying the petition to vacate that award pursuant to 

section 1286. On December 12, 2013, the trial court in the first action entered a 

judgment based on the arbitration award pursuant to section 1287.4. Plaintiffs filed a 

notice of appeal from that judgment on January 13, 2014. 
6

G. Order Sustaining Demurrer Without Leave to Amend 

in Instant Action and Judgment Thereon

In response to the amended complaint for declaratory relief in this action, 

defendants filed demurrers. On February 20, 2014, the trial court issued an order 

sustaining the demurrers without leave to amend. The trial court explained its ruling, in 

part, as follows: “The AMC Defendants[6]challenge the Amended Pleading on four 

grounds—(1) Plaintiffs fail to state a cause of action because there is no actual 

controversy; (2) Plaintiffs fail to state a cause of action because an alternative and more 

effective relief is available; (3) Plaintiffs’ cause of action is based on arguments the Court 

has already rejected; and (4) Plaintiffs are precluded from seeking declaratory relief of 

whether an arbitration exists between themselves and AMC Defendants in [the iStar 

PSA]. [¶] Plaintiffs do not address all four arguments. The opposition focuses on the 

position that an actual controversy exists and has been alleged, i.e. whether or not the 

arbitration was proper in the first instance. Defendants maintain there is no actual 

controversy because the arbitration has occurred and an award rendered. Plaintiffs 

maintain that until the decision is made by the Court of Appeal, Defendants cannot show 

this action is moot. However, as the reply points out, the appeal filed by Plaintiffs seeks 

to adjudicate precisely the claims filed here. Plaintiffs have not cited any authority 

indicating they may maintain both actions. The Court notes that the statutory scheme of 

the California Arbitration Act does not, within CCP section 1286, provide for the type of 

attack that Plaintiff is maintaining here. The CAA provides that a party can petition to 

vacate an arbitration award where the arbitrator acted in excess of his or her authority. 

See CCP section 1286.2(4). This does appear to be a case of first impression based upon 

its facts. [¶] Defendants also maintain that Plaintiffs allegations are insufficient because 

an alternative and more effective relief is available. See Osseous Technologies of Amer., 

inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 364 (‘“The mere 

circumstances that another remedy is available is an insufficient ground for refusing 

 

6

The trial court’s ruling referred to defendants as “the AMC Defendants.”
7

declaratory relief, and doubts regarding the propriety of an action for declaratory 

relief . . . generally are resolved in favor of granting relief.”’); Cal. Ins. Guar. Ass’n v. 

Sup. Ct. (1991) 231 Cal.App.3d 1617, 1624 (‘availability of another form of relief that is 

adequate will usually justify refusal to grant declaratory relief’ but ‘[t]he refusal to 

exercise the power is within the court’s legal discretion. . . .’). While the pleading alleges 

Plaintiffs ‘have no other appeal or plain, speedy and/or adequate remedy in ordinary 

course of law,’ as discussed above, petitions to confirm and vacate the arbitration award 

at issue in this pleading have been filed, heard, and the ruling appealed. That appeal is 

currently pending. . . .”

H. Appeal From Judgment of Dismissal in Instant Action

On April 22, 2014, plaintiffs filed a notice of appeal from the “[j]udgment of 

dismissal after order sustaining a demurrer.” At the time plaintiffs filed their notice of 

appeal, however, no final judgment of dismissal had been entered. A final judgment of 

dismissal was not entered until June 27, 2014. 

Although plaintiffs’ appeal was premature because it was taken from the 

nonappealable order sustaining the demurrer without leave to amend, we treated it as 

being from the subsequently entered final judgment of dismissal. (Maxwell v. Dolezal

(2014) 231 Cal.App.4th 93, 96, fn. 1 [“We deem appellant’s premature appeal, filed after 

the nonappealable order sustaining the demurrer without leave to amend and before the 

judgment of dismissal was entered, to be an appeal from the subsequent judgment of 

dismissal. (See Bame v. City of Del Mar (2001) 86 Cal.App.4th 1346, 1353, fn. 5 [104 

Cal.Rptr.2d 183].)”].) On June 16, 2015, we affirmed the trial court’s dismissal order in 

case number B255853.

I. Attorney Fees Award

In March 2014, defendants filed a motion for attorney fees. Defendants argued 

that they were the prevailing parties on a contract dispute under the iStar PSA which 
8

contained a prevailing party attorney fees provision.7 Plaintiffs opposed the motion, 

arguing that defendants had not prevailed on a contract dispute and that defendants were 

not parties entitled to enforce the attorney fees provision in the iStar PSA. On June 2, 

2014, the trial court issued a minute order8granting defendants’ motion for attorney fees

in the amount of $13,465. At the hearing on the motion, the trial court explained, 

“Frankly, I think that the better argument is that non-signatories may recover fees under 

certain circumstances, and that the Reynolds [Metal Co. v. Alperson (1979) 25 Cal.3d 124 

(Reynolds)] case is on point for that proposition as it applies to this matter.” On July 29, 

2014, plaintiffs filed a notice of appeal from the order awarding attorney fees. 

DISCUSSION

A. Standard of Review

The parties disagree over which standard of review applies to plaintiffs’ 

contentions that defendants were not the prevailing parties under Civil Code section 1717

and were not entitled to enforce the iStar PSA attorney fee provision as nonsignatories 

under Civil Code section 1717. Plaintiffs contend that a de novo standard governs our 

review of those issues, but defendants argue that the trial court’s award of attorney fees, 

including its determination of prevailing party status under Civil Code section 1717, is 

reviewed for abuse of discretion.

We agree with defendants that the trial court’s determination that they were the 

prevailing parties under Civil Code section 1717 is reviewed for abuse of discretion. But 

the issue of whether defendants were entitled to enforce the iStar PSA attorney fees 

 

7

The attorney fees provision stated: “10.3 Attorney Fees. In the event either party 

hereto employs an attorney in connection with [an] action or proceeding by one party 

against the other arising under the terms of this Agreement, the non-prevailing party shall 

pay the prevailing party all reasonable fees and expenses, including attorneys’ fees, 

incurred in connection with such claims.”

8

The trial court’s minute order stated that its written tentative ruling was adopted as 

the final ruling of the court. The tentative ruling, however, is not in the record on appeal.
9

provision as nonsignatories presents a question of law that is reviewed de novo. 

(DisputeSuite.com, LLC v.Scoreinc.com (2015) 235 Cal.App.4th 1261, 1265, fn. 1 

[“While we review the determination of the legal basis for an award of attorney fees de 

novo (Pueblo Radiology Medical Group, Inc. v. Gerlach (2008) 163 Cal.App.4th 826, 

828 [77 Cal.Rptr.3d 880]), the trial court’s actual determination of prevailing party status 

is often reviewed for an abuse of discretion (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 

1103, 1109 [86 Cal.Rptr.2d 614, 979 P.2d 974”].) “Such an abuse occurs only when the 

trial court acts in an ‘“‘“arbitrary, capricious, or patently absurd manner that resulted in a 

manifest miscarriage of justice.”’”’ [Citation.]” (Cussler v. Crusader Entertainment, 

LLC (2012) 212 Cal.App.4th 356, 366.)

B. Entitlement to Attorney Fees

1. Prevailing Party on Contract

Plaintiffs contend that the trial court erred when it determined that defendants 

were the prevailing parties entitled to recover attorney fees under the prevailing party fee 

provision in the iStar PSA. According to plaintiffs, the attorney fees provision limited 

recovery to fees incurred in actions arising under the terms of the iStar PSA. Therefore, 

plaintiffs argue, Civil Code section 1717 governs the entitlement issue and that section 

required a showing that defendants prevailed on a contract claim, which showing 

defendants cannot make because they prevailed on a procedural issue, not a substantive 

contract issue.

We do not need to resolve whether the trial court abused its discretion when it 

found that defendants were the prevailing parties on a contract. As explained below, 

even if the trial court did not abuse its discretion, defendants are nevertheless not entitled 

to enforce the iStar PSA’s attorney fees provision because they are not parties with any of 

the plaintiffs to that agreement. Thus, they are not entitled as contracting parties to 

enforce the attorney fees provision, even if they prevailed on a contract claim.
10

2. Parties Entitled to Enforce Attorney Fees Provision

Plaintiffs contend that the trial court erred in awarding attorney fees to defendants 

because the iStar PSA attorney fees provision limits fee recoveries to disputes between 

the parties to that agreement. The attorney fees clause limited an award of attorney fees 

to “either party hereto.” According to plaintiffs, none of the defendants were originally 

parties to that agreement and only plaintiff BH & Sons, LLC was an original party to the 

agreement. Prior to the closing of the purchase agreement, BH & Sons, LLC assigned all 

of its rights under the iStar PSA to defendant AMLAP Ahern LLC and several other 

nonparty limited liability corporations. Therefore, plaintiffs maintain that there was 

never a binding attorney fees provision between any of the plaintiffs, on the one hand, 

and any of the defendants, on the other.

Defendants argue that because the trial court in the first action found that they 

were parties to the iStar PSA in ruling on the petitions to compel arbitration and confirm

the award, the issue of their entitlement to enforce the attorney fees provision has already 

been decided against plaintiffs. In the alternative, defendants argue that when, as in this 

case, nonsignatories are required to defend a contract-based claim, they can enforce an 

attorney fees provision in the subject contract pursuant to the equitable policies of 

reciprocity that underlie Civil Code section 1717. 

In the appeal of the first action, which involved the orders compelling arbitration

and confirming the arbitration award, plaintiffs contended that the arbitration clause did 

not apply. Division Seven of this court determined in reversing the orders in the first 

action that defendants were not parties to the iStar PSA entitled to enforce the 

agreement’s arbitration clause (case number B253974). Following Division Seven’s 

analysis, with which we agree, we conclude that defendants were not parties to the iStar 

PSA entitled to enforce its attorney fees clause.

The original parties to the iStar PSA were the third-party seller, iStar CTL I, LLC, 

and defendant buyer, BH & Sons, LLC. At the closing of the purchase transaction, 

however, BH & Sons, LLC assigned its rights under the iStar PSA to plaintiff AMLAP 

Ahern, LLC and several other limited liability corporations that are not named parties to 
11

this action. Based on those relationships, the parties entitled to enforce the attorney fees 

provision would have been the seller—iStar CTL I, L.P.—and buyer—BH & Sons, LLP,

before the assignment, and AMLAP Ahern, LLC, after the assignment—based on a 

dispute between them arising from the terms of the iStar PSA. The dispute at issue here 

was between original buyer and assignor BH & Sons, LLC, and related persons and 

entities, on the one hand, and subsequent buyer and assignee AMLAP Ahern, LLC, and 

related persons and entities, on the other. Therefore, defendants were not parties to the 

iStar PSA with plaintiffs entitled to enforce that agreement’s arbitration clause and 

attorney fees provision. Moreover, the attorney fees clause in the agreement refers to 

“either party hereto.” An assignee is not a “party hereto” for purposes of attorney fees. 

(See Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 

Cal.App.4th 671, 681; see also Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC 

(2008) 162 Cal.App.4th 858, 896. Defendants refer to Exarhos v. Exarhos (2008) 159 

Cal.App.4th 898, 906, which holds that a decedent’s successor to a contract would be 

subject to the attorney fees clause, but noted that a decedent’s successor in interest “is far 

more closely aligned to the decedent than a party’s contractual assignee is to the 

contracting party.” So Exarhos does not assist defendants. 

Contrary to their assertion, defendants have no right as nonsignatories to the 

benefit of the iStar PSA attorney fees provision under Civil Code section 1717. “In 

Reynolds, [supra, 25 Cal.3d 124], our Supreme Court addressed whether nonsignatories 

to a contract can share the benefits and burdens of a prevailing party attorney fees clause. 

The plaintiff (a supplier) sued the defendants (shareholders and directors of a bankrupt 

corporation supplied by the plaintiff) on an alter ego theory. (Id. at p. 127.) The trial 

court rejected the alter ego theory and awarded attorney fees to the shareholder 

defendants, based on a contract signed by the bankrupt corporation. (Ibid.) Highlighting 

the policy of reciprocity established in Civil Code section 1717 [footnote omitted], the 

Reynolds court affirmed the award. (Reynolds, at pp. 128-129.) ‘Its purposes require 

section 1717 be interpreted to further 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 
12

entitled to attorney’s fees should he prevail in enforcing the contractual obligation against 

the defendant.’ (Id. at p. 128.) Reynolds concluded that the shareholder defendants must 

be entitled to recover attorney fees because if they had lost, they clearly would have been 

held liable for the supplier’s attorney fees as the alter egos of the bankrupt corporation.

(Id. at p. 129; see Pueblo Radiology Medical Group, Inc. v. Gerlach (2008) 163 

Cal.App.4th 826, 828-829 [77 Cal.Rptr.3d 880] [applying Reynolds].)” (CB Richard 

Ellis, Inc. v. Terra Nostra Consultants (2014) 230 Cal.App.4th 405, 416-417.)

Here, plaintiffs sued defendants in the instant action based on the iStar PSA’s 

arbitration provision, which action raised a principal issue—whether defendants were 

parties to that agreement. In doing so, plaintiffs sought to establish that defendants were 

not parties to the iStar PSA, an issue upon which plaintiffs ultimately prevailed in the 

first action. Unlike the plaintiff in Reynolds, supra, 25 Cal.3d 124, if plaintiffs in this 

action had prevailed on their claim, they would have had no right to attorney fees against 

defendants under the iStar PSA because they would have established that they were not

parties with defendants bound by the iStar PSA’s arbitration provision. And, because we 

have determined that defendants are not parties to the iStar PSA with one or more of the 

plaintiffs, defendants could not have prevailed on the merits of the declaratory relief 

claim or ever established a right to attorney fees thereunder. Therefore, the equitable 

policy of reciprocity that underlies Civil Code section 1717 has no application to the facts 

of this case. 
13

DISPOSITION

The postjudgment order awarding attorney fees to defendants is reversed. 

Plaintiffs are awarded costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

MOSK, J.

We concur:

TURNER, P. J.

KRIEGLER, J.