Court Opinion

ID: 9377922
Source: CourtListenerOpinion
Date Created: 2023-03-09 00:02:17.975591+00
Date Added: 2024-06-11T17:17:17.918884
License: Public Domain

Filed 3/8/23 Classic Auto Repair v. Ida CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 EIGHT

CLASSIC AUTO REPAIR, INC.,                                     B308002

     Plaintiff, Cross-defendant                                (Los Angeles County
and Respondent,                                                Super. Ct. No. 18VECV00335)

         v.

ZION IDA, as Trustee, etc.

     Defendant, Cross-
complainant and Appellant.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Theresa M. Traber, Judge. Affirmed.

      Law Offices of Mark E. Goodfriend and Mark Goodfriend
for Defendant, Cross-complainant and Appellant.

     McGarrigle, Kenney & Zampiello, Patrick C. McGarrigle
and Michael J. Kenney for Plaintiff, Cross-defendant and
Respondent.

                               _________________________
       After successfully obtaining an order for specific
performance of an agreement for the sale and purchase of an auto
body shop and the real property upon which it is located, plaintiff
and purchaser Classic Auto Repair, Inc. (Classic Auto) obtained
an award of attorney fees pursuant to a provision of that
agreement. Classic Auto also received an award of the rent that
seller Zion Ida collected during the period between the originally
scheduled closing date and the date the closing actually occurred
by court order (delayed escrow period).
       Ida appeals on two grounds. He contends the trial court
erred in awarding Classic Auto its attorney fees and the
previously collected rent. He argues an addendum to the
purchase agreement made each party responsible for its own
attorney fees; he also argues he was entitled to legal interest on
the amount of the purchase price as compensation for his lost use
of that money during the delayed escrow period and that the
interest would have offset the rent, resulting in a net recovery to
him. We see no error or abuse of discretion and affirm the
judgment.
                          DISCUSSION
       Because Ida did not object to the attorney fees award or
raise the issue of an interest offset during the bench trial or the
hearing on attorney fees, these issues came before the trial court
in Ida’s motion for a new trial pursuant to Code of Civil
Procedure section 657 and motion to amend and correct the
judgment pursuant to section 6631. The court denied relief.

1
      Statutory references are to the Code of Civil Procedure.

                                 2
       “The authority of a trial court in this state to grant a new
trial is established and circumscribed by statute. [Citation.]
Section 657 sets out seven grounds for such a motion[.]”
(Oakland Raiders v. National Football League (2007) 41 Cal.4th
624, 633 (Oakland Raiders).) When, as here, “the trial court
provides a statement of reasons as required by section 657, the
appropriate standard of judicial review is one that defers to the
trial court’s resolution of conflicts in the evidence and inquires
only whether the court’s decision was an abuse of discretion.
[Citations.]” (Oakland Raiders, at p. 636.)
       Section 663 is “a remedy to be used when the trial court
draws incorrect conclusions of law or renders an erroneous
judgment on the basis of uncontroverted evidence.” (Simac
Design, Inc. v. Alciati (1979) 92 Cal.App.3d 146, 153.) It is not a
vehicle for attacking the trial court’s factual findings. (Ibid.) We
review any questions of law raised in the motion de novo. (See,
e.g., Boling v. Public Employment Relations Board (2018)
5 Cal.5th 898, 912 [“the application of law to undisputed facts
ordinarily presents a legal question that is reviewed de novo.”)

A.     The Attorney Fees Award Was Proper.
       Ida moved for a new trial on the attorney fees award,
arguing the trial court had misinterpreted the purchase
agreement. He contended after trial that Paragraph 16 of the
original purchase agreement, which awarded attorney fees to the
prevailing party in any litigation, was superseded by Paragraph
27 of the addendum, which stated each party was responsible for
its own attorney fees. As the trial court recognized, this claim
would necessarily fall under subdivisions (6) or (7) of section 657.
Subdivision 6 applies when “the verdict or other decision is
against law” while subdivision 7 applies to an “[e]rror in law,

                                 3
occurring at the trial and excepted to by the party making the
application.” (§ 657, subds. 6 & 7.) Ida’s claim could also fall
under section 663, which permits amendment and correction of a
judgment when there is an “[i]ncorrect or erroneous legal basis
for the decision, not consistent with or not supported by the
facts.” (§ 663, subd. 1.)

       1.      Section 657
       The ground that a verdict or decision is “against law” under
section 657, subdivision (6) “ ‘has been sharply limited to
situations not covered by other subdivisions of C.C.P. 657’ ” and,
thus is “ ‘mainly in two situations: (a) an improper verdict
[citation]; (b) a defective statement of decision.’ ” (Collins v.
Sutter Memorial Hospital (2011) 196 Cal.App.4th 1, 17.) This
was a bench trial and so there was no verdict. A defective
statement of decision is one which fails to make a finding on a
material issue raised by the pleadings. (8 Witkin, Cal. Proc.
(6th ed. 2021) Attack on Judgment in Trial Court, § 46; see
Renfer v. Skaggs (1950) 96 Cal.App.2d 380, 383.)
       Neither was the statement of decision defective. Far from
claiming in his pleadings that Classic Auto was not entitled to
attorney fees, Ida alleged in his cross-complaint that he himself
would be entitled to attorney fees pursuant to Paragraph 16 of
the original agreement if he prevailed. He also asserted this
entitlement in his trial brief. Thus, Ida agreed at trial that
Paragraph 16 permitted an award of attorney fees to the
prevailing party in litigation.2 Put differently, Ida did not

2
     Of course, the parties’ respective pleadings do not create an
independent basis for the recovery of attorney fees. (Blickman

                                4
contend at trial, as he does now, that Paragraph 16 was
superseded by Paragraph 27 of the addendum. So, the trial
court’s statement of decision was not defective in failing to make
a finding on an issue that was never raised.
      Section 657, subdivision (7) requires that an objection or
exception be made to any legal error. It is undisputed Ida did not
make an objection before the attorney fee award was made.
Because Ida did not meet the requirements for a new trial
pursuant to section 657, we see no abuse of discretion in the trial
court’s denial of the motion.

       2.     Section 663
        Section 663 permits the judgment to be amended or
corrected when the trial court makes an incorrect conclusion of
law. Interpretation of a written agreement is a question of law
for the trial court. On appeal, it remains a question of law for
this court, “unless that interpretation depends upon resolving a
conflict in properly admitted extrinsic evidence.” (Alki Partners,
LP v. DB Fund Services, LLC (2016) 4 Cal. App. 5th 574, 599.)
There is no such conflict and so we review the trial court’s
decision de novo. (See Lange v. Schilling (2008) 163 Cal. App.4th
1412, 1416, citing Leamon v. Krajkiewcz (2003) 107 Cal.App.4th
424, 431 [“An appellate court reviews a determination of the legal
basis for an award of attorney fees independently as a question of
law.”].)
       The trial court denied the motion, finding that Paragraph
16 applied to attorney fees incurred in court proceedings, while
Paragraph 27 applied to attorney fees incurred in connection

Turkus, LP v. MF Downtown Sunnyvale, LLC (2008)
162 Cal.App.4th 858, 899.)

                                 5
with the closing of the transaction. The court found that even
without reference to the headings of the paragraphs, the contents
and language of each paragraph supported this distinction. The
references to attorney fees in Paragraph 16 were all in connection
with litigation or similar proceedings, while the reference to
attorney fees in Paragraph 27 came at the end of a paragraph
specifying responsibility for closing costs such as deed recording
and transfer taxes. The court found no conflict between the two
paragraphs.
       Ida contends the trial court erred in finding the two
paragraphs harmonious; he lists various reasons why they
conflict and why Paragraph 27 should control.
       We have reviewed the purchase agreement and reach the
same conclusion as the trial court: there is no conflict between
the two paragraphs. The various rules cited by Ida for resolving
conflicts are therefore inapplicable.
       The purchase agreement provides: “16. Attorneys’ Fees. [¶]
If any Party or Broker brings an action or proceeding (including
arbitration) involving the Property, whether founded in tort,
contract or equity, or to declare rights hereunder, the Prevailing
Party (as hereafter defined) in any such proceeding, action, or
appeal thereon, shall be entitled to reasonable attorneys’ fees and
costs. Such fees may be awarded in the same suit or received in a
separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term ‘Prevailing Party’
shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may
be, whether by compromise, settlement, judgment, or the
abandonment by the other Party or Broker of its claim or defense.
The attorneys’ fees award shall not be computed in accordance

                                6
with any court fee schedule, but shall be such as to fully
reimburse all attorneys’ fees reasonably incurred.”
       Paragraph 27 is in the addendum to the agreement. It
includes three sections. The second section is headed “Closing
Costs” and provides: “Seller will be responsible for: deed
preparation, 50% of any transfer taxes and similar charges, 50%
of any closing fees, and all other costs to be set forth in the
Definitive Agreement. Purchaser will be responsible for:
recording the deed, 50% of any transfer taxes and similar
charges, 50% of any closing fees and all other costs to be set forth
in the Definitive Agreement. Each party will be responsible for
their own attorney’s fees.”
       Ida contends that the provisions of the initial agreement
preclude us from considering the heading of the two sections. He
points to Paragraph 25 of the purchase agreement which states:
“In construing this Agreement, all headings and titles are for the
convenience of the Parties only, and shall not be considered a
part of this Agreement.” While we agree that the provision
means that the titles and headings are not controlling or
determinative, we question whether it requires us to completely
ignore them. We believe headings and titles can provide insight
into the parties’ intent. (See Infrassure, Ltd. V. First Mut.
Transp. Assur. Co. (2d Cir. 2016) 842 F.3d 174, 176 [“The purpose
of the Titles Clause is not to strip away an express indication as
to the context in which a particular provision is operative, but to
ensure that the text of a provision is not discounted or altered by
the words of its heading.”].) Nevertheless, for the sake of
argument, we will assume the headings must be ignored.
       We look to rules of grammar, which are tools or guides to
help courts determine the likely intent of the drafters. (See

                                 7
Burris v. Superior Court (2005) 34 Cal.4th 1012, 1017.)
Generally, a paragraph is defined as a short part of a text dealing
with one subject or event or idea.3 Each of the three sections in
Paragraph 27 discuss the responsibilities of the parties in
connection with the transfer of title to the property. The first
section discusses responsibility for the condition of the property
and the third section for title insurance. The second section, at
issue here, specifically addresses responsibility for the costs
associated with closing a real estate transaction: the preparation
and recording of the deed, transfer taxes, and closing fees. By
placing the sentence concerning attorney fees in the section
allocating closing costs, the parties indicated an intent that the
attorney fees allocation provision applies to fees incurred in
connection with the closing, just as the other provisions of the
paragraph do.

3      A paragraph is “a subdivision of a written composition that
consists of one or more sentences, deals with one point or gives
the words of one speaker, and begins on a new usually indented
line.” (Merriam-Webster Dictionary Online (2023)
 [as of
March 8, 2023], archived at .) A
paragraph is “a part of a piece of writing that usually deals with
one subject, that begins on a new line, and that is made up of one
or more sentences.” (Encyclopedia Britannica Online (2023)
 [as of March
8, 2023], archived at .) A
paragraph is “a short part of a text, consisting of at least one
sentence and beginning on a new line. It usually deals with a
single event, description, idea, etc.” (Cambridge Dictionary
Online (2023)  [as of March 8, 2023], archived at
.)

                                 8
       Ida contends the parties were represented by brokers and
neither party was represented by counsel at the time the
agreement was negotiated, so making each party responsible for
its own nonexistent attorney fees would be pointless. Ida has not
provided a record cite supporting his claim that the parties were
not represented by counsel at closing, and so he has forfeited this
fact-based claim. (United Grand Corp. v. Malibu Hillbillies, LLC
(2019) 36 Cal.App.5th 142, 156 (United Grand).)
       Nonetheless, the absence of attorney involvement in the
closing does not render the attorney fees provision pointless. One
of the parties might have decided to consult an attorney after the
addendum was signed, as to whether the other party had
properly prepared or recorded the deed, for example. More
broadly, many provisions in many contracts are added to cover
contingencies which the parties hope will never occur, and which,
in many cases, do not occur. Attorney fees and arbitration
provisions are prime examples of this phenomenon: If no dispute
arises between the parties those provisions are never used.
       In his reply brief, Ida contends that if the addendum were
intended to apply only to attorney fees “incurred without
litigation and to close the transaction,” it would have been
superfluous because that would have been the result anyway
“[u]nder the ‘American Rule.’ ” We do not ordinarily consider
arguments made for the first time in a reply brief. (United
Grand, supra, 36 Cal.App.5th at p. 158.) Further, it is unclear
what point Ida is trying to make as the American Rule applies to
attorney fees incurred in connection with litigation. (See, e.g.,
Trope v. Katz (1995) 11 Cal.4th 274, 278–279.) We also note
briefly that even if not required, addressing the division of

                                9
attorney fees for closing was prudent to avoid any possible
misunderstanding which might arise on this issue.
       Finally, Ida contends, again in his reply brief, that even if
the addendum only applied to closing costs, it would still have
applied to all the attorney fees in the case because those fees
“were incurred before escrow closed on July 31, 2020 and in fact
served as a credit reducing the purchase price by that amount at
the closing.” Again, we do not ordinarily consider arguments
raised for the first time in a reply brief. Further, Ida has offered
no support for the idea that closing costs are commonly (or ever)
understood as including litigation costs when a transaction fails
to close. Litigation and closing a transaction are two very
different activities.

B.    The Trial Court’s Denial of Relief on Ida’s Loss of Use
      Claim Was Neither Error nor an Abuse of Discretion.
      Although Ida frequently states in his appellate briefing
that the trial court erred in awarding Classic Auto $54,000 in
rent, his actual claim is that the trial court should have ordered a
new trial to award him interest on the full amount of the
purchase price, to compensate him for the loss of use of the
purchase money. This, according to Ida, would have exceeded the
amount of the rent award, and resulted in a net recovery for him.
      Ida characterizes the amount of his loss of use as being
readily ascertainable by resort to a simple mathematical process:
he claims the court should simply have awarded him statutory
interest on the full amount of the purchase price for the delayed
escrow period. Ida also contends that if any evidence was lacking
in the record, as the court found it was, a new trial should have
been ordered.

                                 10
       As set out above, the “authority of a trial court in this state
to grant a new trial is established and circumscribed by statute.
[Citation.] Section 657 sets out seven grounds for such a
motion[.]” (Oakland Raiders, supra, 41 Cal.4th at p. 633.) The
moving party’s failure to raise a claim and offer supporting
evidence during the trial of the matter is not among those seven
grounds.
       In his motion for a new trial, Ida broadly pointed to three
statutory grounds: “excessive damages, insufficiency of the
evidence to justify the decision, the decision is against law and
error in law. C.C.P. § 657(5)-(7).” This list appears intended to
include a reference to section 663 as well.

       1.    Excessive damages and insufficient evidence
       As the trial court emphasized, section 657 expressly
provides: “A new trial shall not be granted upon the ground of
insufficiency of the evidence to justify the verdict or other
decision, nor upon the ground of excessive or inadequate
damages, unless after weighing the evidence the court is convinced
from the entire record, including reasonable inferences therefrom,
that the court . . . clearly should have reached a different . . .
decision.” (§ 657, italics added.) Similarly, a section 663 motion
should be granted when the trial court “ ‘renders an erroneous
judgment upon the facts found by it to exist.’ ” (Machado v. Myers
(2019) 39 Cal.App.5th 779, 799, italics added; see also Plaza
Hollister Ltd. Partnership v. County of San Benito (1999)
72 Cal.App.4th 1, 14 [“ ‘section 663 is a remedy to be used when a
trial court draws incorrect conclusions of law or renders an
erroneous judgment on the basis of uncontroverted evidence’ ”].)

                                  11
       The court found that the only evidence Ida identified on the
topic of lost use of the purchase money was the passage of time
between the “target” closing date and the actual closing date of
the purchase at the price of $1.4 million. Ida does not contend on
appeal that the trial court overlooked any evidence.
       We see no abuse of discretion. As the court explained,
“Significantly, Defendant has no right to interest on the entire
purchase price but instead can only claim the net proceeds he
would have recovered if the sale had gone forward in December
2017. (Kassir v. Zahabi (2008) 164 Cal.App.4th 1352, 1357–
1359.) Defendant failed to submit evidence at trial to
demonstrate the equity he possessed in the property as of
December 2017 or the escrow expenses he would have paid if the
real estate transaction had closed as intended. Because there is
no evidence of the amount of net sales proceeds that Defendant
would have received, the Court cannot calculate the value lost by
Defendant because of the delayed escrow. Having no information
about the liens and mortgages on the property, the Court cannot
conclude that Defendant incurred any monetary loss, since it is
possible, like the seller in Kassir, that ‘the delayed performance
has not deprived [Defendant] of the use of any money, so no offset
for interest should be ordered.’ (Id. at p. 1359.)”
       We also see no abuse of discretion in the trial court’s
rejection of Ida’s claim to the statutory rate of 10 percent interest
on the purchase price. “ ‘[T]the trial court is not required to
equate the reasonable value of the use of money with interest at
the legal rate.’ ” (Kassir v. Zahabi, supra, 164 Cal.App.4th at
p. 1359.) As the trial court correctly pointed out, there is no
evidence on the appropriate rate because Ida did not raise his
claim at trial.

                                 12
       2.     Verdict against the law
       The trial court ruled that the second part of subdivision (6)
of section 657 did not provide a basis for a new trial. As we
discuss above, this is a very limited ground. Ida’s first amended
cross-complaint does not seek compensation for loss of use of the
purchase money. It sought breach of contract damages for an
inability to lease the property and for changes made to the
building at Classic Auto’s insistence. Ida’s trial brief makes the
same claim. Although Ida contends on appeal that loss of use
would not be damages, but part of an equitable accounting, Ida
has not provided a record cite showing he sought an equitable
accounting in the trial court before he filed his motion for a new
trial. Accordingly, Ida had not shown that the trial court’s
statement of decision is defective for failing to decide a material
issue raised by the pleadings.

       3.    Error in law occurring at trial
       The trial court correctly found that subdivision (7) of
section 657 requires an objection to the trial court’s ruling, which
Ida failed to make. The trial court also correctly concluded that
even if an objection had been made, there was no error of law
because there was no evidence showing the amount of net
proceeds Ida would have gained from the sale. We find no abuse
of discretion.

                                 13
                          DISPOSITION
     The judgment is affirmed. Respondent Classic Auto
Repair, Inc. is awarded costs on appeal.

                                        STRATTON, P. J.

We concur:

             GRIMES, J.

             VIRAMONTES, J.

                              14