1

Filed 6/4/19; Modified and certified for partial publication 7/1/19 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

J.B.B. INVESTMENT PARTNERS LTD. 

et al.,

Plaintiffs and Respondents,

v.

R. THOMAS FAIR et al.,

Defendants and Appellants.

 A152877 & A153698

 (San Mateo County

 Super. Ct. No. CIV522693)

In the first appeal in this consolidated matter1(case No. A152877), R. Thomas 

Fair (Fair), Bronco RE Corporation (Bronco), BRE Boulevard LLC (Boulevard), and 

BRE Cameron Creek LLC (Cameron; collectively defendants) appeal after the trial 

granted in part of the motion for summary adjudication filed by J.B.B. Investment 

Partners, Ltd. (JBB) and Silvester Rabic (Rabic; collectively plaintiffs), arising from 

defendants’ alleged breach of a settlement agreement between the parties. On appeal, 

defendants contend the court erred in granting the motion because triable issues of 

material fact exist regarding whether the parties ever entered into a binding settlement 

agreement. 

In the second appeal (case No. A153698), plaintiffs appeal after the trial court 

denied most of the attorney fees they requested in their motion for attorney fees in this 

matter. Plaintiffs contend the trial court should have awarded them attorney fees for the 

 

1 On April 25, 2018, we granted defendants’ unopposed motion to consolidate the 

two appeals. 
2

entire dispute, consistent with Civil Code section 1717’s mutuality requirement and 

public policy or, at a minimum, it should have awarded them fees as prevailing parties on 

defendants’ failed motions to compel arbitration and a related appeal. 

We shall affirm the judgment in case No. A152877, and shall also impose 

monetary sanctions on defendants and their attorneys for bringing a frivolous appeal. We 

will also affirm the order in case No. A153698. 

BACKGROUND2

Fair, an attorney and inactive member of the California State Bar, is the founder of 

Bronco, and Bronco is the managing member of Boulevard and Cameron. Boulevard and 

Cameron are Arizona limited liability companies (LLCs) formed in 2007, and they each 

own apartment units in Arizona. 

JBB is a limited partnership based in Atherton, California and Rabic is a 

nonattorney individual investor. In late 2007 and early 2008, JBB invested $150,000 and 

Rabic invested $100,000 in Boulevard and Cameron, and both became members of the 

LLCs. 

Subsequently, plaintiffs asserted they had discovered that defendants had made 

various fraudulent representations and omissions, and the parties attempted to negotiate a 

settlement of their dispute. On July 4, 2013, Jack Russo, plaintiffs’ counsel, sent a 

demand letter to Fair via email, in which a final settlement offer was made (July 4 offer). 

On July 5, after receiving no response from Fair, plaintiffs filed a lawsuit against 

defendants. Later that same day, Fair responded to Russo’s demand letter by email, 

stating that he agreed to settle the matter. Fair repeated his acceptance of the July 4 offer 

several times in emails and voice messages to Russo and Ansel J. Halliburton, another of 

plaintiffs’ attorneys. 

 

2 The factual and procedural background is taken in part from our prior opinions in 

this case, J.B.B. Investment Partners, Ltd. v. Fair (2014) 232 Cal.App.4th 974, 978 

(J.B.B. Investment Partners I) and J.B.B. Investment Partners, Ltd. v. Fair (A145221, 

Jan. 25, 2017) [nonpub opn.] (J.B.B. Investment Partners II). 
3

On July 11, 2013, Halliburton sent a draft of the final settlement. On August 6,

after subsequent communications between the parties and after Fair failed to sign the July 

11 settlement agreement, plaintiffs filed a motion pursuant to Code of Civil Procedure 

section 664.63to enforce the parties’ settlement, which plaintiffs argued they had entered

into through the July 4 and 5 email exchanges between Fair and counsel for plaintiffs. 

On August 15, defendants filed a motion to stay the action and compel arbitration, 

pursuant to the arbitration provision contained in each LLC’s operating agreement. 

On October 18, 2013, following a hearing, the trial court granted plaintiffs’ motion 

to enforce the settlement and denied defendants’ motion to compel arbitration. On 

November 1, the court entered its judgment granting plaintiffs’ motion to enforce the 

settlement. Also on November 1, the court entered a separate order denying defendants’ 

motion to stay the action and compel arbitration.4 

On November 12, 2013, defendants filed a notice of appeal solely from the trial 

court’s November 1 “Order on Motion to Enforce Settlement and Judgment Pursuant to 

[section 664.6].” On December 5, 2014, a panel of this Division found that “Fair’s 

printed name on the document sought to be enforced as a settlement was not a signature,” 

for purposes of section 664.6’s signature requirement. We therefore reversed the 

judgment enforcing the settlement. (J.B.B. Investment Partners I, supra, 232 

Cal.App.4th at p. 978.)5

 

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

otherwise indicated. 

4 The court certified both its judgment enforcing the settlement and its order 

denying arbitration for interlocutory appeal under section 166.1. 

5

In light of this holding, we “express[ed] no opinion as to whether plaintiffs can 

enforce the[ir] July 4 offer [to settle] by another method, such as a motion for summary 

judgment for breach of contract.” (J.B.B. Investment Partners I, supra, 232 Cal.App.4th 

at p. 991, fn. 4.) In the opinion, we also affirmed the trial court’s postjudgment order 

denying plaintiffs’ motion for attorney fees because they were no longer the prevailing 

party and therefore not entitled to fees. (Id. at pp. 977–978, 983.)
4

On April 20, 2015, plaintiffs filed a first amended complaint, alleging causes of 

action for securities fraud in violation of the California Corporations Code, fraud, breach 

of fiduciary duty, constructive fraud, breach of contract, breach of the implied covenant 

of good faith and fair dealing, declaratory relief, promissory estoppel, rescission for fraud 

in the inducement, and legal malpractice. They also filed a motion for summary 

judgment. Also on April 20, defendants filed a second motion to stay the action and 

compel arbitration, based on the same arbitration provisions in the applicable operating 

agreements they relied on in the first motion to compel arbitration. 

On May 15, 2015, following a hearing, the trial court denied defendants’ motion to 

stay the action and compel arbitration, on the grounds that (1) the motion was “an 

untimely and improper request for reconsideration” of the prior order denying 

defendants’ motion to compel arbitration, and (2) defendants had “engaged in extensive 

litigation activities which indicate a waiver of their right to arbitrate claims arising out of 

the alleged Operating Agreements.” 

Defendants appealed and on January 25, 2017, a panel of this Division affirmed 

the trial court’s order denying the motion to compel arbitration. (J.B.B. Investment 

Partners II, supra, A145221.) 

On April 12, 2017, defendants filed a cross-complaint, alleging causes of action 

for breach of contract, breach of the implied covenant of good faith and fair dealing, 

violation of Business and Professions Code section 17200, breach of fiduciary duty, 

negligent and intentional infliction of emotional distress, and false imprisonment. 

On May 12, 2017, plaintiffs filed a special motion to strike (anti-SLAPP motion), 

pursuant to section 425.16, directed to defendants’ cross-complaint. On July 21, the trial 

court granted the motion in its entirety. The court also awarded plaintiffs $12,609 in 

attorney fees and costs, pursuant to section 425.16, subdivision (c)(1). Following 

defendants’ appeal, we affirmed the trial court’s order granting plaintiffs’ anti-SLAPP 

motion. (J.B.B. Investment Partners, Ltd. v. Fair (A152143, Feb. 5, 2019) [nonpub. 

opn.] (J.B.B. Investment Partners III).) 
5

On August 9, 2017, plaintiffs filed two motions for summary adjudication related 

to the July 5, 2013 agreement: first, as to the eighth cause of action for breach of contract 

or, in the alternative, the ninth cause of action for promissory estoppel, and second, for 

release of claims as to causes of action 1-7, 10, and 11. 

On October 27, 2017, the trial court granted plaintiffs’ motion for summary 

adjudication as to the eighth cause of action in their first amended complaint for breach 

of contract and denied the motion as to the ninth cause of action for promissory estoppel. 

As to the breach of contract cause of action, the court found as a matter of law that “on 

July 5, 2013, [Fair], on behalf of himself and the three entity defendants, entered into a 

binding settlement agreement with plaintiffs. Defendants thereafter breached the 

agreement by refusing to recognize and comply with the terms of the settlement. 

Because the court finds no triable issues on plaintiffs’ breach of contract claim, including 

the amount of damages ($350,000 plus interest from July 1, 2014), the claim is amenable 

to summary adjudication. [Citation.]” As to the alternative promissory estoppel cause of 

action, the court found that because it was not reasonably disputable that there was 

adequate consideration to support the agreement, promissory estoppel did not apply.

In addition, the court found that because plaintiffs’ July 4 offer expressly 

contemplated a general release and waiver of claims upon defendants’ payment of the 

proposed settlement funds, the granting of plaintiffs’ motion for summary adjudication of 

the eighth cause of action “extinguishes causes of action 1-7, 10 and 11. By virtue of the 

settlement, plaintiffs have released their claims against defendants.” The court therefore 

granted plaintiffs’ second summary adjudication motion regarding release of claims.6

On November 7, 2017, defendants filed a notice of appeal from the court’s order 

granting summary adjudication of the eighth cause of action in plaintiffs’ first amended 

complaint. 

On January 29, 2018, the court entered a final judgment in plaintiffs’ favor. 

 

6

 On November 13, 2017, plaintiffs dismissed the ninth—and last remaining—

cause of action. 
6

On November 15, 2017, plaintiffs filed a motion for attorney fees, as the 

prevailing party in the action, requesting $621,328.34 in fees and costs. 

On January 29, 2018, the trial court awarded plaintiffs $4,918.00 in attorney fees 

“for the additional SLAPP related proceedings,” but denied the additional requests for 

fees incurred in litigating their initial and first amended complaints; defending against 

defendants’ cross-complaint, in which they had already been awarded $12,609 in fees and 

costs; opposing defendants’ motion for a stay pending appeal following the order 

granting the anti-SLAPP motion; and opposing defendants’ motions to compel arbitration 

and defending against defendants’ prior appeal from the court’s order denying the final 

motion to compel arbitration. 

On February 14, 2018, plaintiffs filed a notice of appeal from the court’s order 

denying their motion for attorney fees. 

DISCUSSION

I. Defendants’ Appeal of the Grant of Plaintiffs’ Motion for Summary

Adjudication as to the Breach of Contract Cause of Action

A. The Merits

In case No. A152877, defendants contend the court erred in granting plaintiffs’

motion for summary adjudication as to the eighth cause of action for breach of contract 

because triable issues of material fact exist regarding whether the parties ever entered 

into a binding settlement agreement. 

“A party may move for summary adjudication as to one or more causes of action 

within an action . . . if the party contends that the cause of action has no merit . . . . A 

motion for summary adjudication shall be granted only if it completely disposes of a 

cause of action . . . .” (§ 437c, subd. (f)(1).) A motion for summary adjudication “shall 

proceed in all procedural respects as a motion for summary judgment.” (§ 437c, subd. 

(f)(2).) 

“For purposes of motions for summary judgment and summary adjudication: 

[¶] A plaintiff or cross-complainant has met his or her burden of showing that there is no 

defense to a cause of action if that party has proved each element of the cause of action 
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entitling the party to judgment on the cause of action. Once the plaintiff or crosscomplainant has met that burden, the burden shifts to the defendant or cross-defendant to 

show that a triable issue of one or more material facts exists as to the cause of action or a 

defense thereto. The defendant or cross-defendant shall not rely upon the allegations or 

denials of its pleadings to show that a triable issue of material fact exists but, instead, 

shall set forth the specific facts showing that a triable issue of material fact exists as to 

the cause of action or a defense thereto.” (§ 437c, subd. (p)(1); see Aguilar v. Atlantic 

Richfield Co. (2001) 25 Cal.4th 826, 849.) 

“ ‘ “[W]e take the facts from the record that was before the trial court when it 

ruled on that motion,” ’ and ‘ “ ‘ “review the trial court’s decision de novo, considering 

all the evidence set forth in the moving and opposing papers except that to which 

objections were made and sustained.” ’ ” ’ [Citations.] In addition, we ‘ “liberally 

construe the evidence in support of the party opposing summary judgment and resolve 

doubts concerning the evidence in favor of that party.” ’ [Citations.]” (Hughes v. Pair

(2009) 46 Cal.4th 1035, 1039.) 

“ ‘A settlement agreement is a contract, and the legal principles [that] apply to 

contracts generally apply to settlement contracts.’ [Citation.] Its validity is thus ‘judged 

by the same legal principles applicable to contracts generally.’ [Citations.]” (Stewart v. 

Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1585 (Stewart).) The elements of a 

cause of action for breach of contract include the existence of a contract, plaintiff’s 

performance or excuse for non-performance, defendants’ breach, and resulting damages 

to plaintiff. (CDF Firefighters v. Maldonado (2008) 158 Cal.App.4th 1226, 1239.) The 

first element—the existence of a contract—requires parties capable of contracting, their 

consent, a lawful object, and a sufficient cause or consideration. (Civ. Code, § 1550.) 

In the present case, defendants claim no contract came into existence because the 

mutual consent requirement was not satisfied, arguing that there is a triable issue of fact 

as to whether their purported acceptance of the July 4 offer was “absolute and 

unqualified” as is required before a court will find consent. (Civ. Code, § 1585.) 
8

The undisputed evidence in the record shows the following. Russo, plaintiffs’ 

attorney, sent the July 4 offer to Fair via email on the evening of July 4, 2013, stating that 

it was plaintiffs’ “LAST AND FINAL OFFER,” and setting forth the 10 required terms

of the settlement. The final paragraph of the offer stated, “WE require a YES or NO on 

this proposal, you need to say ‘I accept’ and I will work the balance of this holiday 

weekend to get the paperwork drafted. Anything less shifts all focus to the litigation and 

to the court Orders we will seek now as well as in the future as well as the subpoenas we 

will serve on Folio and a hosts [sic]. It is now up to you to decide whether you would 

rather resolve this amicably or not. Let me know your decision.”7

 

7 The July 4 offer further stated in relevant part: “NO interest in your counteroffer for settlement, Tom, too little, too late, and I think the train has left (and certainly is 

leaving) the station. They are NOW more than ever convinced that you defrauded them, 

that you defrauded others, and that you have to be exposed for the Ponzi schemes you 

run. I say that because you have gone from one failure (Boulevard) to another (Cameron) 

to yet another fund-raising (Folio) and they are NOW convinced that your refusal to turn 

over all documents of ALL transactions is [be]cause you moved monies ILLEGALLY 

from Boulevard to support Cameron and now to get Folio started[.] YOUR CAREER IS 

ON THE LINE HERE, YOU MAY OR MAY NOT SEE IT THIS WAY BUT IN MY 

33+ YEARS OF PRACTICE I HAVE SEEN FOLKS TALK THEIR WAY OUT OF 

ONE LAWSUIT BY ONE CLAIMANT, EVEN OUT OF TWO LAWSUITS BY TWO 

CLAIMANTS, BUT WE ARE TALKING NOW (SOON) THREE OR MORE 

LAWSUITS BY THREE OR MORE ADDITIONAL CLAIMANTS SO THIS IS THEIR 

LAST AND FINAL OFFER BEFORE ORDERS ARE OBTAINED FROM THE 

COURT THIS WEEK[.] 

“1. You must represent and warrant (and provide full disclosure that) no monies 

moved illegally from one entity to another, they still do not understand how much money 

you pulled out of Boulevard or why that investment entirely failed (and full disclosure 

means turn over 100% of everything) and if this is a non-starter, it will confirm for them 

the Ponzi Scheme they NOW believe exists here and has existed for perhaps as long as 

Bernie Madoff got away with it. But that was discovered and eventually they all are so 

the day of reckoning is really at hand and if you feel 100% innocent you should disclose 

and disclose fully (and should have months ago). 

“2. You must enter a Stipulated Judgment for $350,000 which is the full bore 

amount of all amounts invested, all interest, all fees, all costs and everything else which 

Stipulated Judgment will be held in escrow and not entered if payment is timely made in 

accord with the next paragraph.” 
9

The next day, July 5, at 10:17 a.m., Fair responded, “Jack, the facts will not in any 

way support the theory in your email. I believe in Cameron. So I agree. Tom [F]air.” 

At 10:28 a.m., Halliburton, another attorney for plaintiffs, sent an email to Fair 

stating, “I don’t understand your email. Are you rejecting Jack’s settlement offer or 

accepting it? Please be unambiguous, because I am about to file the complaint and ex 

parte papers unless we hear an unambiguous acceptance.” At 11:20 a.m., Halliburton 

sent another email to Fair stating that he was at the courthouse and had left Fair two 

voicemail messages and telling Fair to call him if he wanted to accept the offer. At 11:29

a.m., Russo sent Fair an email stating that counsel were at the courthouse and preparing 

 

The offer continued with several more terms of the agreement, including timing 

and conditions for staying all litigation pending Fair’s payments and the filing of general 

releases and a waiver of claims. 

The offer then stated: “9. All other forebearances [sic] set forth in the previous 

email to you including mutual non-disparagements, mutual confidentiality and the like 

will be part of the standard settlement paperwork, they will agree not to contact or 

otherwise respond to other claimants who inquire about the situation or about the 

Schuster Litigation or otherwise. ALL bets are off in this regard if you let this last 

settlement opportunity pass today. 

“10. The Settlement Paperwork would be drafted in parallel with your full 

disclosure of all documents and all information as required by the first paragraph hereof; 

it is a material inducement to this settlement that you demonstrate that there is, IN FACT, 

not a Ponzi or Ponzi-like scheme at work here and the misrepresentations and nondisclosures of which they have complained are, in fact, simply at most a negligent 

mistake on your part—as was the failure to get signatures on the ACTUAL FULLLENGTH LLC Operating Agreements AND at that time, you disclosed that ‘priority’ 

really has NO MEANING in the context of the ‘priority payments’ which they were 

promised.] 

“At bottom, they would rather have a jury determine that representing ‘priority 

payments’ would be made when NONE were paid is just outright fraudulent. . . . Trust 

me, in this environment with the Bernie Madoffs of the world behind bars it is not hard 

for jurors to REQUIRE that over-disclosure occur and anything less is not just fiduciary 

breach but rather fraud and the type of fraud that cannot be discharged in bankruptcy. 

That is not really an option here so you should think carefully about whether you want to 

test your career in front of 12 honest, hard-working San Mateo citizens. It is your choice;

this is their last offer. . . .”
10

to file the action, and that Fair needed to respond, “I accept.” At 12:25 p.m., Halliburton 

sent an email to Fair informing him that plaintiffs had filed their complaint in San Mateo 

County Superior Court. 

At 1:02 p.m., Fair responded, “I said I agree. Took wording right from Jack’s 

email. I agree.” At 1:04 p.m., Fair left a voicemail for Halliburton, stating that he had 

not been able to respond earlier because he had been playing golf on a course that did not 

allow cell phones and that “I agreed to your terms . . . I agreed. We have a deal . . . you 

can stop proceeding at this point. . . .” At 1:07 p.m., Fair sent an email to Halliburton in 

which he stated, “I do not believe you gave proper notice. Also I agreed with your terms. 

You should [n]ot have filed. We clearly have an agreement. tom fair [sic].” At 1:36, 

Fair sent an email to Russo, stating, “Filing does not obviate agreement/acceptance. Pls 

[please] acknowledge.” 

At 1:53 p.m., in an email to Fair, Russo stated, “This confirms full agreement, I 

will work on the formal settlement paperwork which will conform to the settlement 

agreement made today based on the 10 numbered paragraphs. . . . I will seek to get that 

settlement paperwork to you for review by Monday with the goal of getting it all 

finalized and signed next week. The settlement is otherwise binding under [section 

664.6].” At 1:55 p.m., Fair sent a text message to plaintiffs’ counsel, stating “I have 

accepted by phone and emai[l]. I said accepts which is the same as ‘agreed.’ You must 

stop and you must tell the court we have an agreement.” At 2:09 p.m., Fair’s emailed 

response to Russo’s 1:53 p.m. email confirming full agreement was “Ok.” 

We agree with the trial court’s conclusion that “[t]he foregoing communications 

permit only one reasonable conclusion—the parties agreed to a binding settlement on 

July 5, 2013.” The plain language of these communications demonstrates, as a matter of 

law, the existence of a settlement agreement between the parties. (See Weddington 

Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811 [“ ‘The existence of mutual 

consent is determined by objective rather than subjective criteria, the test being what the 

outward manifestations of consent would lead a reasonable person to believe’ ”].) We 

therefore find meritless defendants’ claim that Fair’s “July 5 e-mail was a further 
11

expression of [his] hope that the parties could reach a final agreement.” (See Harris v. 

Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307 (Harris) [“ ‘The objective 

intent as evidenced by the words of the instrument, not the parties’ subjective intent, 

governs our interpretation’ ”].)8 

Moreover, the fact that plaintiffs planned to follow up with a formal written 

agreement, which they did on July 11, 2013, does not render the earlier agreement 

invalid, given the parties’ communications on July 4 and 5, which demonstrated their 

intent to be bound by the terms of the July 4 offer. (See Blix Street Records, Inc. v. 

Cassidy (2010) 191 Cal.App.4th 39, 48 [“When parties intend that an agreement be 

binding, the fact that a more formal agreement must be prepared and executed does not 

alter the validity of the agreement”].) Defendants are correct that the July 11 written 

agreement contained additional terms not contained in the July 4 offer, including a term 

that no defendant admits liability, an indemnification agreement, a waiver of unknown 

claims, a governing law provision, and an integration clause. The July 11 agreement also 

contained a definition of the parties subject to the proposed agreement and signature 

blocks for each defendant. These additions, however, were standard settlement terms that 

did not materially change the specific terms of the July 4 offer that was accepted on July 

 

8 Defendants point to Fair’s declaration and deposition testimony as showing that 

he did not believe he had agreed to a final settlement. For example, in his declaration, 

Fair stated, “When I sent my response to Mr. Russo’s July 4, 2103 e-mail, I did not 

consider it a formal acceptance of any final and complete settlement offer. Rather, I 

considered my response . . . to be in the nature of an agreement to work towards a formal 

agreement, much like a binding letter of intent.” In his deposition testimony, Fair further 

stated that when he said he agreed, “I was agreeing to work it out,” to avoid litigation, not 

agreeing that the July 4 offer was a final agreement. He also stated that “I thought I had 

agreed to terms that were suggested in an e-mail during the morning, which had become 

moot . . . .” He believed that the proposal had become moot “[b]ecause they did file [the 

complaint], and I changed my mind.” 

Fair’s belated assertion that he did not intend to be bound when he said he 

accepted the July 4 offer is belied by an objective reading of the words he used in his 

emails to plaintiffs’ counsel, in which he repeatedly said he agreed to the proposal and 

insisted the parties had an agreement. (See Harris, supra, 74 Cal.App.4th at p. 307.)
12

5. (See ibid.; compare Weddington Productions, Inc. v. Flick, supra, 60 Cal.App.4th at 

pp. 813–814 [because a not yet drafted licensing agreement was “centrally material” to 

settlement agreement and there had been no meeting of minds on its terms, agreement 

was unenforceable].) In addition, the fact that defendants failed to sign the July 11 

agreement does not nullify the binding nature of the July 5 settlement. (See Harris,

supra, 74 Cal.App.4th at p. 307 [“Where the writing at issue shows ‘no more than an 

intent to further reduce the informal writing to a more formal one’ the failure to follow it 

with a more formal writing does not negate the existence of the prior contract”].)9 

In their briefing, defendants erroneously claim that in our 2014 opinion, in which 

we held that the settlement agreement was not enforceable under section 664.6 because 

Fair’s typed name in a July 5, 2013 email, did not constitute an electronic signature, we 

“determined” that Fair’s responses to the July 4 offer “did not create a binding settlement 

agreement because the ‘plain language of the July 4 offer made it clear that . . . future 

paperwork was forthcoming.’ (J.B.B. Investment Partners [I], supra, 232 Cal.App.4th at 

p. 989.)” Defendants’ partial quotation from our 2014 opinion is misleading. We were 

not addressing whether Fair’s responses to the July 4 offer created a binding settlement 

agreement, but instead were addressing the fact that “the plain language of the July 4 

offer made it clear that no signature was being requested as the offer included no 

signature line or signature block, contained no signature by any of the plaintiffs, and 

advised that future paperwork was forthcoming.” (J.B.B. Investment Partners I, at 

p. 989, italics added.) This language does not reflect any conclusion on our part as to the 

 

9 Equally unconvincing is defendants’ argument that plaintiffs are estopped by 

their own admissions from claiming the parties entered into an enforceable settlement 

agreement on July 5, 2013. They quote from a July 16 email in which plaintiffs’ counsel 

stated, “Once we have your [signature] . . . we can be done” and a July 19 email in which 

counsel stated, “we must close the final settlement paperwork . . . . We are not going to 

stay anything until we have a signed deal.” Again, that plaintiffs’ counsel reminded 

defendants to follow through with the earlier agreement to sign the formal agreement 

prepared on July 11, does not constitute an admission or change the fact that the evidence 

shows that the parties had entered into a binding settlement agreement on July 5. 
13

binding nature of plaintiffs’ July 4 offer. The opinion solely addressed the question of 

enforceability under section 664.6. Indeed, as already noted, we explicitly “express[ed] 

no opinion as to whether plaintiffs can enforce the July 4 offer by another method, such 

as a motion for summary judgment for breach of contract.” (J.B.B. Investment Partners

I, at p. 991, fn. 4; see Stewart, supra, 134 Cal.App.4th at p. 1585.) 

Defendants also argue that the material terms of the July 4 offer were not 

sufficiently certain to form the basis of a final agreement. “A settlement agreement, like 

any other contract, is unenforceable if the parties fail to agree on a material term or if a 

material term is not reasonably certain.” (Lindsay v. Lewandowski (2006) 139 

Cal.App.4th 1618, 1622; see Civ. Code, § 3390, subd. (e) [obligations that cannot be 

specifically enforced include “[a]n agreement, the terms of which are not sufficiently 

certain to make the precise act which is to be done clearly ascertainable”].) As the trial 

court found, however, the July 4 offer—which Russo described in the email as plaintiffs’ 

“ ‘FINAL OFFER’ ”—“included specific terms (settlement amount, payment deadline, 

release of claims, etc.) delineated in 10 separately numbered paragraphs, which expressly 

invited defendants’ acceptance.” These material terms were unambiguous and clear, and 

therefore enforceable. (See Stewart, supra, 134 Cal.App.4th at p. 1586, fn. 24.)

10

 

Nor is there any merit to defendants’ abbreviated argument that even if Fair did 

agree to the terms of the July 4 offer, he could not agree for all defendants. First, as the 

trial court stated in its order, “Plaintiffs presented evidence demonstrating Mr. Fair was 

the sole person with the authority to enter into a binding settlement on behalf of all three 

 

10 Also unpersuasive is defendants’ assertion that there was no meeting of the 

minds because Halliburton, plaintiffs’ counsel, responded to Fair’s first email on July 5, 

2013, by stating that he did “not understand your email. Are you rejecting [plaintiffs’] 

settlement offer or accepting it?” (See Panagotacos v. Bank of America (1998) 60 

Cal.App.4th 851, 855–856 [“ ‘[T]erms proposed in an offer must be met exactly, 

precisely and unequivocally for its acceptance to result in the formation of a binding 

contract [citations]; and a qualified acceptance amounts to a new proposal or counteroffer 

putting an end to the original offer’ ”].) However, as already discussed, after Halliburton 

posed this question, Fair proceeded to affirm over and over again that he accepted the 

July 4 offer, thereby removing any possible ambiguity. 
14

entities.”11 Second, Russo stated in the July 4 offer that if defendants did not pay the 

settlement funds by July 1, 2014, plaintiffs would “enter the Judgment against you [Fair] 

and all other defendants . . . .” (Italics added.) This language demonstrates that the offer 

expressly contemplated a settlement as to all parties. 

We also reject defendants’ claim that by filing the complaint in this matter on the 

afternoon of July 5, plaintiffs “terminated and rescinded their July 4 settlement proposal, 

which specifically was premised on the material term that [they] would stay all litigation 

and not file the complaint.” According to defendants, because the settlement offer had 

been rescinded by the time of Fair’s emails later that afternoon insisting there was an 

agreement despite the fact that plaintiffs had filed the complaint, no contract was ever 

formed. First, the July 4 offer did not state that plaintiffs would not file a complaint. 

Rather, it stated that “[a]ll litigation would be stayed . . . .” Thus, the filing of the 

complaint was not inconsistent with the July 4 offer. Second, and more importantly, as 

the trial court stated in its order, “Defendants’ contention that the complaint’s filing 

invalidated the offer directly contradicts Mr. Fair’s contemporaneous statement that the 

filing of the complaint had no impact whatsoever on the parties’ settlement agreement 

(i.e., that it was not material, and did not change anything). [Citation.] Defendants’ 

present contention (now in the midst of litigation, four years after-the-fact) that the filing 

of the complaint nullified the deal is irreconcilable with Defendants’ statements at the 

time of the settlement.” 

Also without merit is defendants’ claim that the July 4 offer could not form the 

basis of an enforceable agreement because it was procured through duress and violated 

rule 5-100 of the California Rules of Professional Conduct (Rules Prof. Conduct, rule 5-

100), an ethical rule applying to attorneys, by threatening criminal charges against Fair if 

 

11 The court noted that the evidence showed that Fair “was the only Officer and 

Director of defendant Bronco RE Corp., which was the managing Member of both of the 

LLC defendants) . . . .” 
15

he did not accept plaintiffs’ offer.12 The July 4 offer did not involve a violation of rule 5-

100. As the plain language of Russo’s email makes clear, even when mentioning Bernie 

Madoff and Ponzi schemes, Russo was threatening to expose Fair’s alleged fraud in civil 

litigation if the parties did not settle, not by either expressly or impliedly threatening him 

with criminal charges “to obtain an advantage in a civil dispute.” (Rules Prof. Conduct, 

rule 5-100(A).) 

Defendants further argue that the purported agreement fails because it violates the 

statute of frauds, which requires a signed written agreement in certain circumstances, 

including the sale of real property. (See Civ. Code, § 1624, subd. (a)(3) [contracts that 

are invalid unless in writing and signed by the party to be charged include “[a]n 

agreement for the leasing for a longer period than one year, or for the sale of real 

property, or of an interest therein; such an agreement, if made by an agent of the party 

sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed 

by the party sought to be charged”].) Here, as plaintiffs point out in their respondents’

brief, “the transaction between the [parties] was a settlement agreement, not a real 

property transaction. [Plaintiffs] bought a fractional interest in an LLC. [Citation.] 

Though the business of the LLC related to real property, [the agreement] is not for the 

transfer of that property, but settlement of claims related to the investments in two LLCs. 

The statute of frauds for real property was created to protect buyers and sellers of real 

property.” The statute of frauds and its requirements are plainly inapplicable to the 

circumstances of this case. (See Civ. Code, § 1624, subd. (a)(3).) 

For all of the foregoing reasons, we conclude no triable issues of material fact 

exist regarding whether defendants entered into a binding settlement agreement with 

plaintiffs on July 5, 2013. The trial court properly granted plaintiffs’ motion for 

summary adjudication as to the eighth cause of action for breach of contract in their first 

 

12 Rules of Professional Conduct, rule 5-100(A) provides: “A member shall not 

threaten to present criminal, administrative, or disciplinary charges to obtain an 

advantage in a civil dispute.” 
16

amended complaint. (See § 437c, subd. (p)(1); see Aguilar v. Atlantic Richfield Co., 

supra, 25 Cal.4th at p. 849.) 

B. Sanctions

On March 22, 2019, following oral argument in this case, the clerk of this court 

sent a letter to counsel advising that the court, acting on its own motion, was considering 

the imposition of sanctions on defendants and/or their counsel, in favor of plaintiffs 

and/or this court in case No. A152877 “for taking an appeal that is frivolous or filed for 

purposes of harassment or delay.” At our request, both parties have filed supplemental 

briefing on this question. Plaintiffs’ counsel also filed a declaration supporting the 

amount of monetary sanction requested and defendants waived argument on the issue of 

sanctions. (See Cal. Rules of Court, rule 8.276.)13 

1.

“Section 907 provides, ‘When it appears to the reviewing court that the appeal was 

frivolous or taken solely for delay, it may add to the costs on appeal such damages as 

may be just.’ Rule 8.276(a) gives us the authority to ‘impose sanctions . . . on a party or 

an attorney for: [¶] (1) Taking a frivolous appeal or appealing solely to cause delay. . . .’ 

In explaining these provisions, our Supreme Court has explained ‘an appeal should be 

held to be frivolous only when it is prosecuted for an improper motive—to harass the 

respondent or delay the effect of an adverse judgment—or when it indisputably has no 

merit—when any reasonable attorney would agree that the appeal is totally and 

completely without merit.’ [Citation.] 

“In determining whether an appeal indisputably has no merit, California cases 

have applied both subjective and objective standards. The subjective standard looks to 

the motives of the appealing party and his or her attorney, while the objective standard 

looks at the merits of the appeal from a reasonable person’s perspective. [Citation.] 

Whether the party or attorney acted in an honest belief there were grounds for appeal 

 

13 All further rule references are to the California Rules of Court unless otherwise 

indicated. 
17

makes no difference if any reasonable person would agree the grounds for appeal were 

totally and completely devoid of merit. [Citation.] 

“The objective and subjective standards ‘are often used together, with one 

providing evidence of the other. Thus, the total lack of merit of an appeal is viewed as 

evidence that appellant must have intended it only for delay.’ [Citation.] An 

unsuccessful appeal, however, ‘ “should not be penalized as frivolous if it presents a 

unique issue which is not indisputably without merit, or involves facts which are not 

amenable to easy analysis in terms of existing law, or makes a reasoned argument for the 

extension, modification, or reversal of existing law.” ’ [Citation.]” (Kleveland v. Siegel 

& Wolensky, LLP (2013) 215 Cal.App.4th 534, 556–557 (Kleveland), citing, inter alia, In 

re Marriage of Flaherty (1982) 31 Cal.3d 637, 649-650.) 

In the present case, “[a]lthough we recognize sanctions should be used sparingly 

to deter only the most egregious conduct [citation], we find them warranted here.” 

(Kleveland, supra, 215 Cal.App.4th at p. 557.) That is because defendants’ arguments on 

appeal are not “supported by a careful reading of the record or the law nor could these 

arguments be reasonably characterized as presenting unique issues or arguing for 

extension, modification, or reversal of existing law.” (Kleveland, at p. 557.) 

First, the history of this matter is relevant to our determination of the propriety of 

sanctions. (See Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 192 [“Appellate courts 

can, and often do, consider prior conduct of attorneys and their clients in considering 

whether sanctions are appropriate”].) This case began almost six years ago, with a 

settlement offer to which Fair—a licensed attorney—agreed in writing some six times. 

(See Barnard v. Langer (2003) 109 Cal.App.4th 1453, 1463 [defendant attorneys 

“negotiated a fair and reasonable settlement which was accepted by a fully informed” 

plaintiff, who then challenged the agreed upon fee within days of settlement].) 

Additional prior conduct is also relevant to our sanctions determination, including 

defendants’ repeated attempts to arbitrate this matter, together with a tardy appeal to this 

court of one of the trial court’s orders denying their motion to arbitrate, despite their 

failure to appeal the denial of their initial motion to arbitrate. (J.B.B. Investment Partners 
18

II, supra, A145221.) In addition, the trial court granted plaintiffs’ special motion to 

strike a cross-complaint filed by defendants, after finding that defendants’ claims did not 

constitute protected speech and defendants were not likely to prevail on the merits 

because all of the claims in the cross-complaint were protected by the litigation privilege.

(Civ. Code, § 47, subd. (b)(2).) We affirmed the court’s order on appeal. (J.B.B. 

Investment Partners III, supra, A152143.) As we stated in our 2018 opinion affirming 

the grant of the anti-SLAPP motion, defendants “offered misleading quotes, taken out of 

context from the demand letter,” to argue that plaintiffs’ attorney was threatening 

criminal prosecution for Fair’s alleged Ponzi scheme if Fair did not agree to pay plaintiffs 

$350,000, whereas he in fact “threatened no such thing.” (Ibid.) Defendants raised a 

similar argument in support of their motion for summary adjudication and in this appeal, 

which provides further evidence of frivolousness. (See Bucur v. Ahmad, supra, 244 

Cal.App.4th at p. 192.) 

Defendants also offered misleading partial quotes from one of our own prior 

opinions in this case in which we reversed the trial court’s judgment enforcing the 

settlement against defendants, pursuant to section 664.6. They then relied on this 

misleading language to argue that this court found that no settlement in fact occurred. 

Our decision, however, was based on the narrow ground that the settlement document in 

question did not satisfy section 664.6’s signature requirement. (J.B.B. Investment 

Partners I, supra, 232 Cal.App.4th at p. 991 [“the trial court erred when it concluded that 

Fair’s printed name at the bottom of the e-mail satisfied the strict signature requirements 

under . . . section 664.6”].) In both their anti-SLAPP appeal and the present appeal, 

defendants have distorted the language and intent of our own 2014 opinion to support 

their claim that we held in that opinion that no settlement had been reached, which we 

explicitly stated in that opinion we were not doing. (See id. at p. 991, fn. 4 [declining to 

address defendants’ claims that no settlement was reached, stating, “[w]e also express no 

opinion as to whether plaintiffs can enforce the July 4 offer by another method, such as a 
19

motion for summary judgment for breach of contract”];14 cf. Kleveland, supra, 215 

Cal.App.4th at p. 557 [in awarding sanctions against defendants, appellate court noted 

that defendants appeared “merely to pretend the results of [prior related] litigation were 

something they clearly were not” and that they “brazenly misrepresented the record 

and/or obscured facts”].) 

In addition, in their supplemental briefing opposing sanctions, defendants purport 

to demonstrate the merit of this appeal by asserting that “there are several potential triable 

issues of material fact regarding the existence, actual terms, and enforceability of the 

parties’ purported July 5, 2013 settlement agreement.” They then repeat in summary 

form the same completely meritless arguments raised in the trial court and in their 

opening brief on appeal, in which they offered selective facts, misrepresented the record, 

and/or argued completely inapplicable law. (See Kleveland, supra, 215 Cal.App.4th at 

p. 557 [frivolousness of appeal was shown in party by defendants’ use of “selective 

‘facts’ from the record” and their asking appellate court “to consider ‘evidence’ that was 

explicitly rejected by the trial court . . . , while ignoring the relevant statutes and case 

law”]; Kurokawa v. Blum (1988) 199 Cal.App.3d 976, 996 [“The briefs state the record 

loosely, cite strained authorities and discuss legal principles in a vacuum”].) 

Two of the many possible examples of this conduct include defendants’ claim, yet 

again, that the repeated express statements by Fair on July 5, 2013, that he agreed to the 

settlement offer were in fact only an “expression of his hope that the parties could reach a 

final settlement,” and their assertion that the agreement “at least arguably” violated the 

statute of frauds because “the subject investments concern investments in real property,” 

when the only transaction at issue plainly was the settlement agreement, not a real 

 

14 Even in their supplemental letter brief opposing sanctions, defendants again use 

a partial quote from our 2014 opinion to falsely claim that we there stated that “Fair’s 

responses to [plaintiffs’] July 4 settlement proposal did not create a binding settlement 

agreement because the ‘plain language of the July 4 offer made it clear that . . . future 

paperwork was forthcoming.’ ” (Quoting J.B.B. Investment Partners I, supra, 232 

Cal.App.4th at pp. 989–990.) 
20

property transaction. Such arguments can only be described as “indisputably without 

merit.” (Kleveland, supra, 215 Cal.App.4th at p. 557.) 

For all of these reasons, we conclude that “any reasonable attorney would agree 

that the appeal is totally and completely without merit” and would not have raised the 

arguments defendants make on appeal, which are merely rehashed in the supplemental 

briefing in opposition to imposition of sanctions. (Kleveland, supra, 215 Cal.App.4th at 

p. 556.)15 In light of this conclusion, we need not directly address plaintiffs’ additional 

arguments that there is evidence demonstrating that defendants filed this appeal for the 

subjective purpose of delay because we find that the history of this case and the 

indisputable “total lack of merit” of this appeal provide strong evidence of defendants’ 

subjective intent, i.e., that they “ ‘must have intended it only for delay.’ ” (Kleveland, at 

p. 557; see Barnard v. Langer, supra, 109 Cal.App.4th at p. 1465 [“The facts of the case 

before us and the undisputed facts about Barnard’s behavior in other cases make it clear 

that this appeal is both frivolous and taken solely for the purpose of delay”].) 

In short, we are persuaded, by clear and convincing evidence, that the pursuit of 

this appeal was frivolous, and warrants sanctions. (See Kleveland, supra, 215 

Cal.App.4th at p. 558.) 

 

15 In support of their opposition to imposition sanctions, defendants have 

submitted the declarations of two experienced outside attorneys with whom defendants’ 

counsel conferred in connection with the briefing of this appeal. One of those attorneys 

stated, “I reviewed the briefing and expressed to [defendants’ counsel] my belief that the 

Appeal had merit. I never communicated to them that I believed the Appeal was made in 

bad faith, as I never formed such an opinion.” The second attorney made a very similar 

statement, adding that “I expressed to them my belief that the [defendants] had a 

favorable probability of prevailing.” Again, in light of the evidence of the total lack of 

merit of the appeal, together with the history of this case, the vague statements by two 

additional attorneys that they believed this appeal “had merit” does not change our 

conclusion. (Cf. Kleveland, supra, 215 Cal.App.4th at pp. 556–557 [“Whether the party 

or attorney acted in an honest belief there were grounds for appeal makes no difference if 

any reasonable person would agree the grounds for appeal were totally and completely 

devoid of merit”].)
21

2.

As to the appropriate amount of the sanctions, “ ‘[f]actors relevant to determining 

the amount of sanctions to be awarded to a party responding to a frivolous appeal include 

“the amount of respondent’s attorney fees on appeal; the amount of the judgment against 

appellant; the degree of objective frivolousness and delay; and the need for 

discouragement of like conduct in the future.” ’ [Citations.]” (Kleveland, supra, 215 

Cal.App.4th at p. 558.) 

Here, plaintiffs’ counsel has filed a declaration estimating that the firm’s work 

defending this appeal, which does not include the amount spent on plaintiffs’ 

consolidated attorney fees appeal (case No. A153698), will total $42,340.00. Counsel 

also states that costs incurred on appeal total $2,314.64.16 Considering the many years’ 

delay in payment of the settlement amount of $250,000, to which Fair repeatedly agreed 

in writing, and which led to the expenditure of attorney fees well beyond that initial 

settlement amount over the course of this litigation; the high degree of objective 

frivolousness of the appeal, as discussed in part I.B.1, ante; and the need to deter such 

improper conduct in the future, we believe that sanctions covering plaintiffs’ attorney 

fees and costs on appeal are appropriate. (See Kleveland, supra, 215 Cal.App.4th at 

p. 558; see also Keitel v. Heubel (2002) 103 Cal.App.4th 324, 343 [“The amount of 

attorney fees reasonably incurred in responding to a frivolous appeal is an appropriate 

measure of sanctions”].) 

We will therefore award plaintiffs a total of $44,654.64 in attorney fees and costs 

as sanctions. 

3.

Finally, we conclude sanctions should be imposed against both defendants and 

their attorneys for the filing of this frivolous appeal. (See Pierotti v. Torian (2000) 81 

Cal.App.4th 17, 36 [“We may order a litigant, his attorney, or both to pay sanctions on 

 

16 In their briefing in opposition to sanctions, defendants do not challenge the 

specific amount of fees and costs plaintiffs have requested. 
22

appeal”].) Defendants—through Fair, an inactive member of the State Bar of 

California—and their attorneys initiated an appeal that was totally meritless, following a 

lengthy history of dubious litigation, which they doggedly pursued over many years 

despite Fair’s repeated and insistent acceptance of an offer to settle this case at its 

inception, in July 2013. (See Pierotti, at pp. 36-37; In re Marriage of Schnabel (1994) 30 

Cal.App.4th 747, 756; see also Bus. & Prof. Code, § 6068, subd. (c) [it is an attorney’s 

duty “[t]o counsel or maintain those actions, proceedings, or defenses only as appear to 

him legal or just”]; accord, Rules Prof. Conduct, rule 3.1(a); compare Summers v. City of 

Cathedral City (1990) 225 Cal.App.3d 1047, 1080 [declining to impose sanctions against 

plaintiff after concluding appeal resulted solely from failure of counsel to adequately 

research merits of plaintiff’s case before undertaking appeal].) 

Accordingly, we will impose the sanctions, as set forth in part I.B.2., ante, of this 

opinion, jointly and severally against defendants and their attorneys, Patrick Baldwin and 

Christopher Mader. (See Pierotti v. Torian, supra, 81 Cal.App.4th at pp. 36–37; In re 

Marriage of Schnabel, supra, 30 Cal.App.4th at p. 756.) This opinion constitutes a 

written statement of our reasons for imposing sanctions. (See Bucur v. Ahmad, supra, 

244 Cal.App.4th at p. 195.) A copy of this opinion shall be forwarded to the State Bar of 

California, in compliance with the requirements of Business and Professions Code 

section 6086.7 subdivision (a)(3). (See Bucur, at p. 195.) 

II. Plaintiffs’ Appeal of the Denial of their Motion for Attorney Fees

In case No. A153698, plaintiffs contend the trial court should have awarded them 

attorney fees for the entire dispute, consistent with Civil Code section 1717’s mutuality 

requirement and public policy or, at a minimum, should have awarded them fees as 

prevailing parties on defendants’ motions to compel arbitration and the related appeal.17 

 

17 On appeal, plaintiffs do not specifically challenge the court’s finding that they 

were not entitled to fees for defending against defendants’ cross-complaint beyond those 

awarded in connection with their anti-SLAPP motion or for fees incurred in opposing 

defendants’ motion to stay the matter pending appeal or the order granting the antiSLAPP motion. 
23

We review a determination of the legal basis for an award or denial of attorney 

fees de novo, as a question of law. (Brown Bark III, L.P. v. Haver (2013) 219 

Cal.App.4th 809, 821 (Brown Bark); Frog Creek Partners, LLC v. Vance Brown, Inc.

(2012) 206 Cal.App.4th 515, 523 (Frog Creek).)18 

“A party may not recover attorney fees unless expressly authorized by statute or 

contract. [Citations.] In the absence of a statute authorizing the recovery of attorney 

fees, the parties may agree on whether and how to allocate attorney fees. [Citation.] 

They may agree the prevailing party will be awarded all the attorney fees incurred in any 

litigation between them, limit the recovery of fees only to claims arising from certain 

transactions or events, or award them only on certain types of claims. . . . [Citation.] 

[¶] To ensure mutuality of remedy, however, [Civil Code] section 1717 makes an 

attorney fee provision reciprocal even if it would otherwise be unilateral either by its 

terms or in its effect. [Citations.]” (Brown Bark, supra, 219 Cal.App.4th at pp. 818–819, 

citing § 1021 [“Except as attorney’s fees are specifically provided for by statute, the 

measure and mode of compensation of attorneys . . . is left to the agreement, express or 

implied, of the parties”]; see also § 1033.5, subd. (a)(10).) 

Civil Code Section 1717, subdivision (a) provides in relevant part: “In any action 

on a contract, where the contract specifically provides that attorney’s fees and costs, 

which are incurred to enforce that contract, shall be awarded either to one of the parties 

or to the prevailing party, then the party who is determined to be the party prevailing on 

the contract, whether he or she is the party specified in the contract or not, shall be 

entitled to reasonable attorney’s fees in addition to other costs.” 

 

18 Defendants argue that the correct standard of review is abuse of discretion. 

Although “it is a discretionary trial court decision on the propriety or amount of statutory 

fees to be awarded . . . , a determination of the legal basis for an attorney fee award is a 

question of law to be reviewed de novo. [Citation.]” (Carver v. Chevron U.S.A., Inc.

(2002) 97 Cal.App.4th 132, 142.) Thus, in this case, where we must review “the 

applicable statutes and provisions of the contract,” and the underlying facts are not in 

dispute, our review is de novo. (Ibid.) 
24

A.

Plaintiffs first argue that the court erred when it refused to award them all of the 

attorney fees they incurred in litigating their initial and first amended complaints in the 

dispute with defendants, pursuant to Civil Code section 1717. We disagree. 

The only contracts plaintiffs have sought to enforce throughout this case are (1) 

investment agreements between the parties that were explicitly not based on the operating 

agreements, which plaintiffs have stated they never saw before they filed their action 

against defendants,19 and (2) the July 2013 settlement agreement, which the parties agree 

contained no attorney fee provision. Plaintiffs nevertheless argue that because defendants

claimed entitlement to fees in their now-stricken cross-complaint pursuant to the 

operating agreements, which plaintiffs never signed and which contains an arbitrationrelated fees provision, plaintiffs are entitled to fees in the present matter pursuant to those 

agreements under Civil Code section 1717’s reciprocity requirement. 

Again, Civil Code section 1717 requires reciprocity of remedy in the award of fees

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.” The plain language of the statute thus makes clear 

that its reciprocity principles “have ‘limited application. [They] cover[] only contract 

actions, where the theory of the case is breach of contract, and where the contract sued 

upon itself specifically provides for an award of attorney fees incurred to enforce that

contract. . . .’ ” (Brown Bark, supra, 219 Cal.App.4th at p. 820, italics added.) Civil 

Code section 1717 is therefore wholly inapplicable here, where plaintiffs’ initial

complaint attempted to hold defendants responsible for their alleged breach of a contract

unrelated to the operating agreements and where they subsequently sought to enforce the 

settlement agreement, which contains no fees provision. This is so regardless of the 

 

19 Indeed, the only claims plaintiffs made concerning the operating agreements 

were that they were not a party to those agreements. As they stated in their first amended 

complaint, “plaintiffs are not bound by the terms of either of the operating agreements, 

which plaintiffs never saw and to which they never agreed . . . .” 
25

theory for recovery of fees defendants may have asserted in their unsuccessful crosscomplaint, for which plaintiffs have already been awarded their fees under section 

425.16, subdivision (c)(1).

20

 In addition, as we discuss in part II.B., post, of this opinion, 

even were the operating agreements the pertinent contracts, those agreements contain 

attorney fees provisions that are only applicable to arbitration of any disputes between 

the parties. 

B.

Plaintiffs next contend that even if they are not entitled to recover all of the 

attorney fees they incurred while litigating their action against defendants, the court 

should at least have awarded them fees as prevailing parties on defendants’ motions to 

compel arbitration and the related appeal, which they claim were governed by the 

arbitration provision in the operating agreements. Plaintiffs cite to Brown Bark in which 

the court explained that Civil Code section 1717 makes an otherwise unilateral attorney 

fee provision reciprocal when, inter alia, “ ‘a person sued on a contract containing a 

provision for attorney fees to the prevailing party defends the litigation “by successfully 

arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same 

contract.” [Citation.] . . . ’ [Citation.] Accordingly, [Civil Code] section 1717 allows a 

party who defeats a contract claim by showing the contract did not apply or was 

unenforceable to nonetheless recover attorney fees under that contract if the opposing 

party would have been entitled to attorney fees had it prevailed. [Citation.]” (Brown 

Bark, supra, 219 Cal.App.4th at p. 819, quoting Santisas v. Goodin (1998) 17 Cal.4th 

599, 611.) 

 

20 We find unpersuasive plaintiffs’ labored attempt to demonstrate they are entitled 

to attorney fees under the operating agreements, as when they state, “In many respects, it 

would be fair to characterize the July 5[, 2013] Agreement as a modification of 

[plaintiffs’] agreement to invest in [defendants’] LLCs, as it set up a process to govern 

the relationship between the parties until [defendants] either sold [plaintiffs’] interests in 

the LLC or the stipulated judgment came into effect.” 
26

Brown Bark is inapposite. First, the present case does not involve a unilateral 

attorney fee provision. (See Brown Bark, supra, 219 Cal.App.4th at p. 819.) The 

identical arbitration provision in each of the two operating agreements (for Cameron and 

Boulevard) is expressly reciprocal. Second, and most important, unlike the situation 

discussed in Brown Bark, the reciprocity requirement of Civil Code section 1717 is 

inapplicable here because defendants would not have been entitled to attorney fees had 

they prevailed on the motions to compel arbitration or the related appeal. (See Brown 

Bark, at p. 819; accord, Hsu v. Abbara (1995) 9 Cal.4th 863, 870 [it is now settled that a 

party is entitled to fees under Civil Code section 1717 “ ‘even when the party prevails on 

grounds the contract is inapplicable, invalid, unenforceable or nonexistent, if the other 

party would have been entitled to attorney’s fees had it prevailed.’ ”], italics added.) 

The arbitration provision in the Cameron and Boulevard operating agreements 

provides in relevant part: “19.5 Disputes. Any dispute, disagreement, claim or 

controversy among the Members arising out of or relating to this Agreement . . . or any 

breach of this Agreement (‘Dispute’) shall be subject to the negotiation, mediation and 

arbitration provisions contained herein. [If not settled by good faith negotiation and/or

mediation], the Dispute shall be finally settled by shall be settled by [sic] arbitration to be 

held in Marin County, California . . . by a panel of three (3) arbitrators qualified to 

consider the matter in dispute. The arbitrators may grant injunctions or other relief in 

which dispute or controversy. The decision of a majority of the arbitrators shall be final, 

conclusive and binding upon the parties to the arbitration; and any party shall be entitled 

to cause judgment on the decision or award of the arbitrators to be entered in any court of 

competent jurisdiction. . . . The Member initiating the arbitration shall pay the costs, 

deposits and expenses of such arbitration and the prevailing party shall be awarded its 

attorneys’ fees and expenses, in addition to all other relief awarded by the arbitrators, 

provided that if the arbitrators determines [sic] that a Member has initiated an 

arbitration without a reasonable basis for doing so, then the arbitrators shall assess 

against that Member all costs of the Company and the other Members relating to 
27

arbitration, including attorneys’ fees and expenses of the Company and such other 

Members.” (Italics added.) 

Plaintiffs claim that the italicized language in this provision is ambiguous as to 

whether only an arbitrator may award attorney fees and whether the award must be made 

only as to fees incurred in the arbitration itself. We do not agree that the language is 

ambiguous, at least with respect to its applicability to the facts of this case. First, the first

part of the sentence containing the fees provision makes plain that it is the prevailing 

party in the arbitration who is to be awarded attorney fees, regardless of whether the 

language is arguably ambiguous as to whether it is only the arbitrators, and not the court, 

who may make such an award. This language clearly does not authorize recovery of 

prevailing party fees incurred in separate court litigation. (See §§ 1021, 1033.5, subd. 

(a)(10).) The motions to compel and the related appeal in this case solely involved 

litigation in the trial court and this court; there was no prevailing party in any arbitration. 

Second, to the extent plaintiffs argue that the latter part of the fees-related sentence—

which authorizes an assessment of fees from a party who has initiated arbitration absent a 

reasonable basis for doing so—is applicable here, the language makes clear that it is only 

the arbitrators, in the arbitration proceeding, who may assess such fees. Because it was 

the court, and not arbitrators, that addressed any possible efforts by defendants to 

“initiate[] an arbitration without a reasonable basis for doing so,” this portion of the 

arbitration provision would not entitle plaintiffs to fees in defending against defendants’ 

motions to compel arbitration. 

Thus, the fact that defendants claimed a right to fees under the arbitration 

provision in the operating agreements if they succeeded in their efforts to compel 

arbitration is of no consequence. Because defendants would not have been entitled to 

recover attorney fees under the arbitration provision had they prevailed on their motions 

to compel or on appeal, plaintiffs’ reliance on Brown Bark and Civil Code section 1717 
28

to argue for mutuality of remedy is unavailing.

21

 (See Hsu v. Abbara, supra, 9 Cal.4th at 

p. 870; Brown Bark, supra, 219 Cal.App.4th at p. 819.)22

DISPOSITION

In case No. A152877, the judgment is affirmed. Defendants and their attorneys, 

Patrick Baldwin and Christopher Mader, are ordered to pay $44,654.64 in sanctions to 

plaintiffs for bringing this frivolous appeal. This obligation is joint and several, and 

sanctions shall be paid no later than 30 days after the date the remittitur is issued. A copy 

of this opinion shall be forwarded to the State Bar of California upon issuance of the 

remittitur. 

 

21 Frog Creek, supra, 206 Cal.App.4th 515, on which plaintiffs also rely to support 

their claim of entitlement to fees incurred in defeating defendants’ efforts to arbitrate this 

matter, is likewise inapplicable to the present situation. Plaintiffs completely miss the 

point of Frog Creek when they argue that the court’s statement in that case that “when a 

party defeats an independent petition to compel arbitration, the action is terminated and 

the prevailing party on the petition is entitled to fees under Civil Code section 1717” (id. 

at p. 533) supports their position. Frog Creek involved very different facts—the parties 

had entered into a contract with both an arbitration clause and a separate attorney fees 

provision—and resolved a completely different issue: whether a plaintiff who files a 

lawsuit and, while that lawsuit is still pending, defeats the defendant’s petition to compel 

arbitration is “entitled to recover attorney fees, even if the plaintiff ultimately loses the 

substantive contract dispute[.]” (Id. at p. 520.) Division Five of this District held, 

consistent with other Courts of Appeal, that “defeating a petition to compel arbitration 

filed in a pending contract action does not justify a grant of fees under Civil Code section 

1717 where the merits of the contract claims remain pending in that action.” (Frog 

Creek, at p. 535.) Frog Creek is of no assistance to plaintiffs. 

22 Plaintiffs note in their briefing that they “prevailed in every aspect of this 

dispute, having won their summary adjudication motions, striking [defendants’] crosscomplaint, and defeating the arbitration motions and appeal.” While we certainly 

understand plaintiffs’ frustration about their inability to recover most of their fees, despite 

these repeated wins, we cannot ignore California law, under which each party is expected 

to bear its own fees in the absence of an applicable statute or an attorney fees provision in 

a valid contract. (§ 1021; Brown Bark, supra, 219 Cal.App.4th at pp. 818–819.) As 

already discussed, however, plaintiffs are entitled to sanctions in the amount of their 

attorney fees and costs on appeal in case No. A152877. (See pt. I.B., ante.) 
29

In case No. A153698, the order is affirmed, and the parties shall each bear their 

own costs on appeal. (See rule 8.278(a)(5).) 
30

_________________________

Kline, P.J.

We concur:

_________________________

Richman, J.

_________________________

Stewart, J.

J.B.B. Investment Partners, Ltd. et al. v. Fair et al. (A152877 & A153698)
1

Filed 7/1/19

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

J.B.B. INVESTMENT PARTNERS LTD. 

et al.,

Plaintiffs and Respondents,

v.

R. THOMAS FAIR et al.,

Defendants and Appellants.

 A152877 

 (San Mateo County

 Super. Ct. No. CIV522693)

J.B.B. INVESTMENT PARTNERS LTD. 

et al.,

Plaintiffs and Appellants,

v.

R. THOMAS FAIR et al.,

Defendants and Respondents.

 A153698

 (San Mateo County

 Super. Ct. No. CIV522693)

ORDER MODIFYING OPINION 

AND CERTIFYING OPINION

FOR PARTIAL PUBLICATION

NO CHANGE IN JUDGMENT

THE COURT:

It is ordered that the unpublished opinion filed herein on June 4, 2019, be modified 

as follows:

On page 16, the last sentence in the paragraph under the heading “B. Sanctions” 

(before the rules citation), is changed to read:

Plaintiffs’ counsel also filed a declaration supporting the amount 

 

* Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is 

certified for publication with the exception of part II of the Discussion.
2

of monetary sanctions requested and defendants waived argument on 

the issue of sanctions. 

On page 18, the last sentence of the first full paragraph (before the Bucur citation), 

is changed to read:

Defendants raised a similar argument in their opposition to the

motion for summary adjudication and in this appeal, which provides 

further evidence of frivolousness. 

On page 20, the first sentence of footnote 15 is changed to read:

In support of their opposition to imposition of sanctions, 

defendants have submitted the declarations of two experienced outside

attorneys with whom defendants’ counsel conferred in connection with

the briefing of this appeal. 

There is no change in the judgment. 

Dated: ____________________ _________________________

Kline, P.J.