Filed 1/26/24 Roberts v. Crandell CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

REIKO ROBERTS,

Plaintiff and Respondent,

v.

ZAC CRANDELL et al.,

Defendants and Appellants.

B320951

Los Angeles County

Super. Ct. No.

18STCV04640

APPEAL from a postjudgment order of the Superior Court 

of Los Angeles County, Steven J. Kleifield, Judge. Affirmed.

Mandel & Manpearl, Gerald Manpearl and Jan Goodman;

Rokita Law and Amanda M. Rokita for Defendants and 

Appellants.

Law Office of Parag L. Amin and Parag L. Amin; Law 

Office of Ann Rosen and Ann Rosen for Plaintiff and Respondent.

_________________________
2

Defendants Zac Crandell and Johnny’s Bar, LLC appeal 

from the court’s order denying their motions for attorney fees

under Civil Code section 1717 after the court entered judgment 

in defendants’ favor and against plaintiff Reiko Roberts on 

the ground the statute of limitations barred her claims. The 

court found defendants had no contractual right to attorney fees. 

Finding no error, we affirm the court’s order.

BACKGROUND

As this appeal concerns the court’s order denying 

defendants’ motions for attorney fees, we provide only a 

brief summary of the underlying facts. This litigation began 

in November 2018 when Roberts sued Crandell, Johnny’s 

Bar, LLC,

1 and another business entity Crandell owned that 

is not a party to this appeal. Roberts alleged she and Crandell

formed Johnny’s Bar with Crandell as the majority, 60 percent,

owner and Roberts as the minority, 40 percent, owner. Among 

other things, Roberts alleged Crandell breached his fiduciary 

duties to her, including by mismanaging and misappropriating 

funds from the company. Defendants filed a cross-complaint 

against Roberts and her separate businesses alleging she had 

been removed from the company, and, among other things, 

had breached the Johnny’s Bar operating agreement and 

interfered in its business.

The parties demurred to each other’s pleadings, resulting 

in some causes of action being dismissed. The parties apparently 

1 Johnny’s Bar, LLC was formed to own and operate 

Johnny’s Bar, a bar in Los Angeles. We refer to the defendant 

and the business interchangeably as “Johnny’s Bar.”
3

agreed to bifurcate the trial with the court first to determine 

whether Roberts was an owner of Johnny’s Bar. The parties 

disputed which version of the operating agreement applied; 

none was signed.2

Ultimately, the trial court found in favor of defendants

on statute of limitations grounds on Roberts’s claims. The 

court ordered defendants to submit a judgment for the court’s 

signature that included a dismissal of the cross-complaint. 

The judgment, as amended by the court, states judgment is 

entered in favor of defendants against Roberts on all causes 

of action, “and against . . . Roberts for costs in the amount of 

$____ and attorney’s fees in the amount of $____ as allowed 

by law.” (The court added “as allowed by law.”) The judgment 

also states defendants’ cross-complaint against Roberts “shall be 

dismissed upon entry of judgment and this Judgment becoming 

final.” The court added, “Roberts to recover costs of $___

and attorney[’]s fees of $_____ as allowed by law.” Defendants 

objected to Roberts’s entitlement to costs or fees because the 

2 Defendants argue the trial court determined the controlling 

operative agreement was that attached to Crandell’s 2015 

complaint against Roberts in an earlier action. As Roberts notes, 

the record does not include an order making that determination. 

Nevertheless, Roberts asked the trial court to find that version 

was the effective operating agreement and she had attached it to 

her demurrer to the first amended cross-complaint. The parties 

also appear to concede the attorney fee provision at issue was the 

same in each version of the operating agreement. Accordingly, 

for purposes of this appeal, we presume the trial court considered 

the operative agreement attached to Crandell’s 2015 complaint 

when it decided defendants’ motions for attorney fees.
4

cross-complaint was a “defense action, similar to affirmative 

defenses” that became moot after the court dismissed Roberts’s

claims. Defendants also argued they had made an offer to 

Roberts under Code of Civil Procedure section 998 that she 

had rejected.

Defendants moved for attorney fees as the prevailing 

parties in the action under an attorney fee clause in the Johnny’s 

Bar operating agreement.3 Roberts opposed the motion arguing 

(1) defendants were not the prevailing party as they did not 

receive a net monetary recovery, and (2) the attorney fee clause 

in the operating agreement was limited to recovery of fees 

incurred in an arbitration, not a court trial. Crandell replied. 

He argued he was the prevailing party, he was entitled to 

reimbursement of expenses incurred for the LLC under the 

operating agreement, and the parties intended for the attorney 

fee provision to apply to litigation. Crandell noted arbitration 

was not required under the agreement, and the agreement 

intended the parties to attempt to resolve their issues through

alternative dispute resolution first, eventually requiring the 

losing party to pay the prevailing party’s attorney fees and costs.

The court heard defendants’ motions for attorney fees on 

March 21, 2022. The court denied both motions finding there 

was “no contractual right to attorney fees.” There is no reporter’s 

transcript of the hearing. The next day, defendants filed a 

request for a statement of decision, which Roberts opposed.

After reviewing the parties’ briefing on the issue, the court found 

3 Defendants had separate counsel and thus filed separate 

motions.
5

the request was untimely, and defendants were not entitled to 

a statement of decision as the motions for attorney fees were 

not a trial of a question of fact under Code of Civil Procedure 

section 632.

Defendants filed separate notices of appeal and proposed 

a settled statement. The court certified the proposed settled

statement was accurate.4

DISCUSSION

1. Applicable law and standard of review

Civil Code section 1717 authorizes the award of attorney 

fees to a prevailing party “[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.” (Civ. Code, 

§ 1717, subd. (a).) A contract’s attorney fee provision “ ‘must be 

analyzed on its own terms, and in context, pursuant to the usual 

rules of contract interpretation for determining the actual intent 

of the parties. [Citations.]’ ” (GoTek Energy, Inc. v. SoCal IP 

Law Group, LLP (2016) 3 Cal.App.5th 1240, 1249.) 

In interpreting a contract, the court “give[s] effect to 

the mutual intention of the parties as it existed at the time 

of contracting.” (Civ. Code, § 1636.) “Ordinarily, the objective 

intent of the contracting parties is a legal question determined 

solely by reference to the contract’s terms.” (Wolf v. Walt Disney 

4 The settled statement quoted from the provisions of 

the operating agreement relating to nonliability of members 

for expenses and entitlement to reimbursement and the attorney 

fee provision, summarized the parties’ positions, and stated the 

court “found that there is no contractual right to attorney fees.”
6

Pictures & Television (2008) 162 Cal.App.4th 1107, 1126 (Wolf); 

Civ. Code, § 1639 [“[w]hen a contract is reduced to writing, the 

intention of the parties is to be ascertained from the writing 

alone, if possible”]; id., § 1638 [the “language of a contract is to 

govern its interpretation, if the language is clear and explicit, and 

does not involve an absurdity”].) We consider the attorney fee 

provision in context, rather than in isolation, and in light of the 

contract as a whole. (Id., § 1641 [“The whole of a contract is to 

be taken together, so as to give effect to every part, if reasonably 

practicable, each clause helping to interpret the other.”].) Courts 

may consider extrinsic evidence even if the terms of a contract 

appear clear and unambiguous, however, if it is relevant to prove 

the language is “reasonably susceptible” to another meaning. 

(Pacific Gas & Elec. Co. v. G. W. Thomas Drayage & R. Co. (1968) 

69 Cal.2d 33, 37; Hewlett-Packard Co. v. Oracle Corp. (2021) 

65 Cal.App.5th 506, 538 (Hewlett-Packard) [“ ‘Extrinsic evidence 

is “admissible to interpret the instrument, but not to give it a 

meaning to which it is not reasonably susceptible.” ’ ”].)

Generally, interpretation of a contract is a judicial function. 

(Wolf, supra, 162 Cal.App.4th at p. 1125.) Our review is thus 

de novo, absent any conflict in extrinsic evidence. (Id. at p. 1126;

Gilkyson v. Disney Enterprises, Inc. (2021) 66 Cal.App.5th 900, 

915 (Gilkyson).)

2. The attorney fee provision applies only to arbitrations

Defendants contend they are entitled to recover their 

attorney fees from Roberts under subsection “(4) Mediation and 

Arbitration of Disputes Among Members” of section “VII. General 

Provisions” of the operating agreement. That provision provides

in full:
7

“In any dispute over the provisions of 

this operating agreement and in other disputes

among the members, if the members cannot 

resolve the dispute to their mutual satisfaction, 

the matter shall be submitted to mediation. 

The terms and procedure for mediation shall 

be arranged by the parties to the dispute.

“If good-faith mediation of a dispute 

proves impossible or if an agreed-upon 

mediation outcome cannot be obtained by 

the members who are parties to the dispute, 

the dispute may be submitted to arbitration 

in accordance with the rules of the American 

Arbitration Association. Any party may

commence arbitration of the dispute by sending 

a written request for arbitration to all other 

parties to the dispute. The request shall state 

the nature of the dispute to be resolved by 

arbitration, and, if all parties to the dispute 

agree to arbitration, arbitration shall be 

commenced as soon as practical after such 

parties receive a copy of the written request.

“All parties shall initially share the 

cost of arbitration, but the prevailing party 

or parties may be awarded attorney fees, 

costs and other expenses of arbitration. All 

arbitration decisions shall be final, binding 

and conclusive on all the parties to arbitration, 

and legal judgment may be entered based upon
8

such decision in accordance with applicable law 

in any court having jurisdiction to do so.”

The plain, unambiguous language of the provision clearly 

limits the award of attorney fees to disputes resolved through 

arbitration: if the parties to a dispute agree to arbitration,

then they “shall initially share the cost of the arbitration, but 

the prevailing party or parties may be awarded attorney fees, 

costs and other expenses of arbitration.” (Italics added.) The 

award of attorney fees to the prevailing party is referred to in

conjunction with the initial payment of the cost of arbitration

by all parties, and is qualified by the descriptor “of arbitration,”

making it clear the provision is intended to apply to the party 

prevailing in an arbitration alone. (Italics added.) Moreover, 

the attorney fee provision falls under the subsection entitled,

“Mediation and Arbitration of Disputes Among Members.” 

(See Ogburn v. Travelers’ Ins. Co. (1929) 207 Cal. 50, 52–53 

[considering entire insurance policy including introductory clause 

or caption to interpret intended coverage].) As it is undisputed 

no arbitration took place here, the provision does not authorize 

a fee award.

Without citing any relevant authority, defendants argue 

because arbitration was not mandatory—and it was Roberts who 

chose litigation and avoided arbitration—Roberts cannot “escape”

paying their attorney fees under the contract. Yet, had Roberts 

prevailed on her complaint, she too would have been unable to 

enforce the attorney fee provision of the operating agreement, 

having chosen litigation over arbitration.5

5 Defendants also argue—without cognizable legal argument 

or citation to authority—Roberts “is acting with unclean hands”
9

Defendants cite Titan Group, Inc. v. Sonoma Valley County 

Sanitation Dist. (1985) 164 Cal.App.3d 1122 to support their 

contention the arbitration provision in the operating agreement 

was nonbinding. We agree the operating agreement did not 

require the parties to arbitrate their disputes unless both sides 

consented. Roberts does not appear to contend otherwise. 

However, Titan Group says nothing about a party’s ability to 

enforce an attorney fee provision that is part of a nonbinding 

arbitration provision where no arbitration has taken place.

Defendants nevertheless contend the parties intended 

for the prevailing party in a superior court action to be entitled

to recover attorney fees. Defendants argue the parties’ conduct 

“in their pleadings in this action indicate unequivocally that they 

both believed that the attorneys’ fees provision in the contract 

applied to civil actions in the [s]uperior [c]ourt.”6 Defendants

by asking the court to interpret the fee provision as applicable 

only in arbitrated matters when she filed an action in superior 

court and asked for attorney fees. We need not consider this 

contention. (See, e.g., City of Santa Maria v. Adam (2012) 211 

Cal.App.4th 266, 287 [“we may disregard conclusory arguments 

that are not supported by pertinent legal authority or fail to 

disclose the reasoning by which the appellant reached the 

conclusions he wants us to adopt”].)

6 Defendants’ operative cross-complaint, as did its first 

amended cross-complaint, prayed for “[a]ttorneys’ fees, expenses, 

and costs as per the [o]perating [a]greement.” As defendants 

note, Roberts’s demurrer to the first amended cross-complaint 

asked for “reasonable attorney fees and costs,” and her answer 

to the second amended cross-complaint asked for “reasonable 

attorney’s fees and costs from cross-complainants and their 
10

also argue “Roberts’ understanding that the operating agreement 

would grant attorneys’ fees to the prevailing party, even if 

arbitration did not occur, is apparent in Roberts’ admissions” 

in her reply to defendants’ objection to the judgment. 

As to the latter, Roberts made no such admission. In 

responding to defendants’ objection to the court having added 

a space in the judgment for Roberts to recover “costs . . . and 

attorney[’]s fees . . . as allowed by law” based on defendants’ 

dismissal of their cross-complaint, Roberts simply acknowledged 

Civil Code section 1717 does not bar recovery of attorney fees 

on voluntarily dismissed noncontract claims if the fees clause 

is broad enough to encompass those claims. But she went on 

to argue, citing the language of the fee provision, “either neither 

of the parties are entitled to attorney’s fees since this matter 

did not go to arbitration, or if the Court is inclined to honor the 

prevailing party attorney’s fees provision despite the language 

regarding arbitration, then Roberts is entitled to move for her 

attorney’s fees and costs for prevailing on the Cross-Complaint 

to the extent that Defendants are entitled to move for attorney’s 

fees or costs on the Complaint.” (Italics added.) Thus, Roberts

simply argued she would have the same rights as defendants 

if the court were to apply the attorney fees provision despite 

its limitation to arbitration.

attorneys defending this frivolously filed and prosecuted action.” 

Roberts’s first amended complaint in turn prayed for “an award 

of attorneys’ fees pursuant to the [o]perating [a]greement 

pled by Crandell in his Cross-Complaint and First Amended 

Cross-Complaint.”
11

As for the parties’ pleadings, it is the construction given 

the contract by the parties’ conduct “before any controversy arises 

as to its meaning” that is relevant to the parties’ mutual intent 

at the time of contracting. (Southern Pacific Transportation Co. 

v. Santa Fe Pacific Pipelines, Inc. (1999) 74 Cal.App.4th 1232, 

1242, italics added [considering parties’ mutual pretrial methods 

to evaluate rent]; see also City of Hope National Medical Center 

v. Genentech, Inc. (2008) 43 Cal.4th 375, 393 [“A party’s conduct 

occurring between execution of the contract and a dispute about 

the meaning of the contract’s terms may reveal what the parties 

understood and intended those terms to mean.”].) The parties’ 

post-controversy pleadings and arguments thus are not reliable 

indicators of their mutual intent as it existed at the time they 

entered into the operating agreement. Moreover, to be entitled 

to attorney fees based on its opponent’s prayer for them, a

party must prove its opponent would have been entitled to fees 

if the opponent had prevailed. (Blickman Turkus, LP v. MF 

Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 898–899; 

see also Hasler v. Howard (2005) 130 Cal.App.4th 1168, 1171

[“A prevailing party is not entitled to fees simply because the 

opposing party requested them.”].) The mere fact both parties 

requested fees does not demonstrate they intended—at the time 

of contracting—for the prevailing party to recover attorney fees 

outside of arbitration.

In any event, even if the parties’ pleadings and memoranda

demonstrate they subjectively believed the attorney fee provision 

in the operating agreement applied to a superior court action, 

the provision is not reasonably susceptible to that interpretation. 

(Hewlett-Packard, supra, 65 Cal.App.5th at p. 538 [extrinsic 

evidence not admissible to give contract “ ‘ “a meaning to which 
12

it is not reasonably susceptible” ’ ”]; see also Gilkyson, supra,

66 Cal.App.5th at p. 916 [parties’ intent at time they entered 

into contract “is interpreted according to objective, rather than 

subjective, criteria”].) As we discussed, the only reference in 

the agreement to a prevailing party and an attorney fee award 

is in the context of an arbitration. Had the parties intended for 

attorney fees to be recoverable in any forum, they easily could 

have written the clause to state the prevailing party may be 

awarded attorney fees, costs, and other expenses “of arbitration 

or litigation” or “of any proceeding” or “in connection with the 

parties’ dispute.” 

Defendants also appear to argue this Court should 

strike the references to arbitration in the attorney fee provision 

as unconscionable because there is no mandatory right to 

arbitration under the agreement. We treat this argument

as forfeited. Not only did defendants fail to make this so-called 

unconscionability argument in the trial court, they neither

cite authority nor provide any rationale—other than to 

note the severability clause refers to a court’s or arbitrator’s 

determination that a provision is invalid or unenforceable—

as to why limiting the recovery of attorney fees to instances 

where the parties consent to resolve their dispute through 

arbitration is unconscionable. (In re Marriage of Falcone & Fyke

(2008) 164 Cal.App.4th 814, 830 [“The absence of cogent legal 

argument or citation to authority allows this court to treat 

the contentions as waived.”].)

Finally, defendants argue in their reply brief—but not in 

their opening brief—that Crandell is entitled to reimbursement 

from Roberts for expenses he incurred on behalf of Johnny’s Bar 

in this action under section II, subsection (2) of the operating 
13

agreement. Crandell also cited this subsection, which governs

“[r]eimbursement for [o]rganizational [c]osts,” in his reply 

in support of his motion for attorney fees. Whether Crandell 

can recover his expenses under this provision is not relevant 

to whether the agreement authorized an award of attorney fees 

to the prevailing party in an action on the contract under Civil 

Code section 1717, subdivision (a). We thus do not consider

the issue and can infer the trial court did not either. (Denham 

v. Superior Court of Los Angeles County (1970) 2 Cal.3d 557, 564 

[appellate court indulges all presumptions to support trial court’s 

order on matters as to which the record is silent].)

As we have concluded the trial court correctly found the 

operating agreement did not give the parties a contractual right 

to recover attorney fees if they prevailed in this action, we need 

not consider the parties’ other contentions.
14

DISPOSITION

The court’s order denying appellants Zac Crandell’s 

and Johnny’s Bar, LLC’s motions for attorney fees is affirmed. 

Respondent Reiko Roberts is to recover her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

EGERTON, J.

We concur:

EDMON, P. J.

LAVIN, J.