Court Opinion

ID: 6220709
Source: CourtListenerOpinion
Date Created: 2022-02-10 20:02:35.969557+00
Date Added: 2024-06-11T08:57:18.155050
License: Public Domain

Filed 2/10/22 Ranch at the Falls v. Indian Springs Homeowners Assn. 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

RANCH AT THE FALLS LLC et                                        B311278
al.,

      Plaintiffs, Cross-defendants                              (Los Angeles County
      and Appellants,                                           Super. Ct. No. PC055790)

         v.

INDIAN SPRINGS
HOMEOWNERS ASSOCIATION,
INC.,

     Defendant, Cross-complainant
     and Respondent.

      APPEAL from a postjudgment order of the Superior Court
of Los Angeles County. Melvin D. Sandvig, Judge. Affirmed.
      Cozen O’Connor and Frank Gooch III for Plaintiffs, Cross-
defendants and Appellants.
      O’Toole Rogers, Nicholas A. Rogers, Aaron A. Hayes;
Beaumont Tashjian, Lisa A. Tashjian and Tara M. Radley for
Defendant, Cross-complainant and Respondent.

                       __________________________________
                             SUMMARY
       This is a dispute over the trial court’s award of attorney
fees to defendant Indian Springs Homeowners Association, Inc.,
as the prevailing party under Civil Code section 1717. The fee
award followed this court’s reversal of the trial court’s earlier
judgment in favor of plaintiffs Ranch at the Falls LLC and April
Hart. (Ranch at the Falls LLC v. O’Neal (2019) 38 Cal.App.5th
155 [finding plaintiffs had no enforceable easement over certain
private streets in Indian Springs].)
       The reversed judgment included an award of attorney fees
to plaintiffs, who had asserted and prevailed on their contention
they were entitled to fees as third party beneficiaries of easement
and maintenance agreements between defendant and another
homeowners association. Now, plaintiffs contend the trial court
erred in applying the doctrine of judicial estoppel to preclude
plaintiffs from contesting defendant’s entitlement to fees.
Plaintiffs contend no attorney fees should be awarded because
the judicial estoppel doctrine also applies to defendant, who
opposed—unsuccessfully—the original award of attorney fees to
plaintiffs.
       We find no merit in plaintiffs’ contention. We also reject
plaintiffs’ assertions that their financial condition required the
trial court to award no fees, and that the fees were unreasonable
and excessive. We therefore affirm the attorney fee order.
                               FACTS
       In 1998, defendant recorded a declaration of easement in
favor of abutting landowners, including plaintiffs, and so did the
homeowners association in neighboring Indian Falls (the 1998
easement declarations). The parties to this lawsuit disagreed
over the scope of those easements.

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       Contemporaneously with the 1998 easement declarations,
defendant and the Indian Falls homeowners association also
made “Easement and Maintenance Agreement[s]” with each
other. In these “maintenance agreements,” each homeowners
association gave the other, and abutting property owners, right of
way easements over and across the same streets as the two
easement declarations, to create a direct path through the
respective projects for ingress and egress. These maintenance
agreements contained a clause entitling the prevailing party to
attorney fees, “[i]f any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement . . . .” Just before
the trial on the merits of this lawsuit, plaintiffs filed an ex parte
motion to amend their complaint to assert a claim for attorney
fees based on the 1998 maintenance agreements. The trial court
denied the ex parte motion, but apparently ruled plaintiffs could
amend according to proof. At the close of plaintiffs’ evidence, the
parties revisited the subject, and after argument, the trial court
granted the motion to amend the complaint.
       After the trial court’s decision in plaintiffs’ favor, plaintiffs
sought an award of attorney fees under Civil Code section 1717,
arguing that as abutting landowners, they were third party
beneficiaries of the maintenance agreements. Defendant opposed
plaintiffs’ motion, contending plaintiffs were not entitled to
attorney fees under the maintenance agreements. The trial court
agreed with plaintiffs, and awarded plaintiffs $199,459 in
attorney fees.
       As stated at the outset, this court reversed the trial court’s
judgment, including the award of attorney fees to plaintiffs.
After our remittitur was issued, the trial court entered a new
judgment on February 13, 2020.

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       Defendant then filed a motion for attorney fees, contending
it was entitled to fees under Civil Code section 1717, and that
plaintiffs were judicially estopped from arguing otherwise. The
trial court granted defendant’s motion, awarding attorney fees of
$731,682.08, and costs of $111,540.01. The court found all
elements of the doctrine of judicial estoppel applied. The court
also found plaintiffs “have failed to adequately support their
argument that the Court should exercise its discretion and deny
the instant motion because granting same would cause Plaintiffs
financial ruin.”
       Plaintiffs filed a timely appeal.
                             DISCUSSION
       Plaintiffs’ first argument is that judicial estoppel applies to
both defendant and plaintiffs, and so we should reverse the
attorney fee award. Plaintiffs point out that, when they sought
fees, defendant took the position plaintiffs were not third party
beneficiaries entitled to attorney fees under the maintenance
agreements. Therefore, plaintiffs conclude, judicial estoppel
applies to prevent defendant from seeking recovery of its fees
under those agreements. Plaintiffs apparently misunderstand
the requirements of the doctrine.1
       We recently explained the relevant principles. “Judicial
estoppel bars a party from gaining an advantage by taking one
position and then seeking a second advantage by taking an
incompatible position. The goals are to maintain the integrity of
the judicial system and to protect parties from opponents’ unfair

1      Plaintiffs have requested judicial notice of our 2019 opinion
on the merits of this case, and of defendant’s appellate brief
arguing that plaintiffs were not third party beneficiaries entitled
to attorney fees under the maintenance agreements. We grant
the request, but those records do not change our conclusions.

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strategies. The doctrine is discretionary and has five
prerequisites: (1) The same party has taken two positions in
(2) judicial or quasi-judicial administrative proceedings; (3) the
party was successful in asserting the first position (that is, the
tribunal adopted the position or accepted it as true); (4) the two
positions are totally inconsistent; and (5) the party did not take
the first position as a result of ignorance, fraud, or mistake.”
(DotConnectAfrica Trust v. Internet Corp. for Assigned Names &
Numbers (2021) 68 Cal.App.5th 1141, 1158 (DotConnectAfrica).)
       Here, the trial court had discretion to apply the doctrine
against plaintiffs, because they met all five prerequisites:
Plaintiffs have taken two totally inconsistent positions in judicial
proceedings, were successful in asserting the first position, and
did not take the first position as a result of ignorance, fraud or
mistake. Defendant also took two inconsistent positions, but
defendant was not successful in asserting its first position: the
trial court adopted plaintiffs’ position, not defendant’s. (See
Tuchscher Development Enterprises, Inc. v. San Diego Unified
Port Dist. (2003) 106 Cal.App.4th 1219, 1246 [“The doctrine
should be applied only when the person against whom it is
asserted ‘was successful in asserting the first position (i.e., the
tribunal adopted the position or accepted it as true).’ ”].) Thus
the trial court had discretion to apply judicial estoppel to the
plaintiffs, but not to the defendant. It is as simple as that.
       Plaintiffs cite and quote extensively from several cases, but
none of them presents circumstances like those in this case. For
example, plaintiffs say R.W.L. Enterprises v. Oldcastle, Inc.
(2017) 17 Cal.App.5th 1019 (R.W.L. Enterprises) “support[s]
reversal of the attorneys fee award.” It does not. R.W.L.
Enterprises observes that “a party’s mere assertion of the right to
recover fees does not estop it from challenging a fee award or vest

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the other party with the right to recoup attorney fees if it
prevails,” and cites many cases to the effect that the mere
pleading of a right to fees does not create an estoppel. (Id. at
pp. 1035–1036.) We agree with that principle, but it does not
apply here.
       This is not a case of a “ ‘mere allegation in a complaint that
the plaintiff is entitled to receive attorney fees,’ ” or a case where
the losing party’s “ ‘merely having claimed fees will entitle his
prevailing opponent to them when he loses.’ ” (R.W.L.
Enterprises, supra, 17 Cal.App.5th at p. 1036, quoting cases.)
This is a case where plaintiffs amended their complaint to allege,
and then litigated and succeeded in obtaining an attorney fee
award under the maintenance agreements. They are properly
precluded from arguing that “Civil Code § 1717 does not allow for
the award of attorneys’ fees to [defendant]” under the very same
agreements.
       Plaintiffs cite M. Perez Co., Inc. v. Base Camp
Condominiums Assn. No. One (2003) 111 Cal.App.4th 456, but
the case does not help them. Base Camp agreed “with the many
state court decisions refusing to apply estoppel against a losing
party who sought attorney fees under circumstances where that
party would not have been entitled to such fees had it prevailed.”
(Id. at p. 470.) Plaintiffs quote Base Camp’s statement that “[i]f a
party claims a contractual right to attorney fees, but the contract
does not contain such a provision, that party will not be able to
recover attorney fees, even if it prevails in the litigation.” (Id. at
p. 466.) That is so, of course, but the trial court here decided, as
plaintiffs contended, that the maintenance agreements did
contain such a provision. (Cf. Jones v. Union Bank of California
(2005) 127 Cal.App.4th 542, 549 (Union Bank) [“[The plaintiffs’]

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prior successful motion for attorney fees in the same action estops
them from claiming [defendant] has no right to the fees.”].)
       Of course, the trial court has discretion in determining
whether to apply judicial estoppel to plaintiffs. “If the elements
for judicial estoppel are present, whether to apply the doctrine is
within the trial court’s discretion, which we review for an abuse
of discretion.” (DotConnectAfrica, supra, 68 Cal.App.5th at
p. 1158.) Here, however, we see no basis for finding any abuse of
discretion by the trial court.
       At oral argument, plaintiffs’ counsel urged us to find that
judicial estoppel is reserved for circumstances involving bad faith
conduct. Plaintiffs cite cases where the issue arises in the
context of bankruptcy proceedings, where the debtor fails to list
claims against a creditor as a potential asset. (E.g., Haley v. Dow
Lewis Motors (1999) 72 Cal.App.4th 497, 509–510 [quoting
federal authority stating that “ ‘[a]sserting inconsistent positions
does not trigger application of judicial estoppel unless
“intentional self-contradiction is . . . used as a means of obtaining
unfair advantage,” ’ ” and “ ‘[a]n inconsistent argument sufficient
to invoke judicial estoppel must be attributable to intentional
wrongdoing’ ”].) But this case has nothing to do with bankruptcy
issues. Further, we have expressly rejected a similar contention
in DotConnectAfrica. There, the plaintiff argued it did not take
its first position in bad faith, and we stated that “[j]udicial
estoppel . . . does not require bad faith.” (DotConnectAfrica,
supra, 68 Cal.App.5th at p. 1162.) We adhere to that position.
As stated earlier, all five prerequisites for the application of
judicial estoppel against plaintiffs were present here. (Id. at
p. 1158.)
        Next, plaintiffs point to Garcia v. Santana (2009)
174 Cal.App.4th 464 (Garcia), where the court found “the

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financial circumstances of the losing party and the impact of the
award on that party” were relevant considerations in an award of
attorney fees pursuant to a statute (id. at pp. 476–477), and “in
the proper case, the trial court does have the discretion to
determine that the award that is reasonable is zero.” (Id. at
p. 477; but see Walker v. Ticor Title Co. of California (2012)
204 Cal.App.4th 363, 372 [concluding it was “inappropriate to
consider the losing party’s financial status as an equitable factor
in assessing contractual attorney fees”].) In any event, the
operative word in Garcia is “discretion.”
      Plaintiffs say the trial court erred because an award of
attorney fees “would result in [Ms. Hart’s] financial ruination.”
The trial court rejected this claim and plaintiffs’ reliance on
Garcia, pointing out the plaintiff in Garcia was indigent and self-
represented. (Garcia, supra, 174 Cal.App.4th at p. 468.) The
court here found plaintiffs were represented by counsel and did
not show the attorney fee award “would cause their financial
ruin.” The trial court stated: “The only evidence offered by
Plaintiffs is the declaration of April Hart without any
documentation to support her claim that the Ranch is her only
asset; she is on Medi-Cal; she accepts rent from her sons; and/or
she owes $40,000 in taxes. Additionally, Hart provides no
evidence regarding the value of the Ranch, her income, her
monthly expenses, efforts to seek gainful employment, etc.”
Plaintiffs argue Ms. Hart’s statements in her declaration were
uncontroverted, but the trial judge, who presided over the entire
proceeding, was plainly not satisfied with her undocumented
statements and the lack of evidence on the value of the Ranch
and other items. (See Villanueva v. City of Colton (2008)
160 Cal.App.4th 1188, 1204 [the plaintiff failed to submit a
declaration “setting forth his gross income, his net income, his

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monthly expenses, his assets, or any other information which he
thought would lend support to his position”].) We see no abuse of
discretion in the court’s conclusion plaintiffs did not establish the
fee award would cause financial ruin.
       Finally, plaintiffs contend the attorney fees sought were
excessive. They complain that one of the lawyers billed 25 hours
in one day; that the Beaumont Tashjian firm cannot recover fees
because they also represented other parties who had no right to
attorney fees; it was unnecessary to have four lawyers present at
trial; and fees were duplicative. Plaintiffs do not mention that
the trial court agreed with these complaints, finding the hours
claimed were “excessive and/or duplicative”; certain of the fees
claimed by the Beaumont Tashjian firm overlapped with work
required for their other clients in the case; and defendant “failed
to establish why it was necessary to have four attorneys
represent it at the trial.” Consequently, the trial court reduced
the hours claimed, “resulting in a reduction of the fees requested
by one-quarter.”
       “We must affirm an award of attorney fees absent a
showing that the trial court clearly abused its discretion.” (Union
Bank, supra, 127 Cal.App.4th at p. 549.) Plaintiffs have made no
such showing.
                            DISPOSITION
       The order awarding attorney fees is affirmed. Defendant
shall recover its costs on appeal.

                               GRIMES, Acting P. J.
      WE CONCUR:

                         STRATTON, J.           WILEY, J.

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