Court Opinion

ID: 6345967
Source: CourtListenerOpinion
Date Created: 2022-06-01 22:01:38.556129+00
Date Added: 2024-06-11T09:13:08.656797
License: Public Domain

Filed 6/1/22 JHM Ventures v. Cavalier Closeouts CA2/3
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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has not been certified for publication or ordered published for purposes of rule 8.1115.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 THREE

JHM VENTURES,                                                     B305724

         Plaintiff and Appellant,                                 Los Angeles County
                                                                  Super. Ct. No. BC681286
         v.

CAVALIER CLOSEOUTS, INC.
et al.,

         Defendants and Respondents.

     APPEALS from a judgment and an order of the Superior
Court of Los Angeles County. David Sotelo, Judge. Affirmed.

     LevatoLaw and Stephen D. Weisskopf for Plaintiff and
Appellant.

     Woolf & Nachimson and Chaim J. Woolf for Defendants
and Respondents.
                   _________________________
       JHM Ventures (Plaintiff) filed a complaint against Cavalier
Closeouts, Inc. and Eyal Dahan (together Defendants) alleging
they breached written contracts related to three business deals.
The court entered judgment for Defendants after finding Plaintiff
failed to prove the existence of two of the alleged contracts, its
claims were barred by the statute of limitations, and it failed
to show it suffered damages. The court subsequently awarded
Defendants attorney fees under Civil Code section 1717. On
appeal, Plaintiff argues the court erred by (1) applying the
wrong legal analysis in concluding its claims were barred by
the statute of limitations, (2) finding it failed to prove damages,
and (3) awarding Defendants attorney fees related to claims for
which there were not written contracts in evidence. We affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
       Jason Mitchell is the sole officer and director of JHM
Ventures, which is a consulting and investment firm. Dahan
is the owner of Cavalier Closeouts, Inc. (Cavalier), which is in
the business of buying discount merchandise from manufacturers
and selling it to retail companies like Ross and T.J. Maxx.
       Mitchell and Dahan knew each other as children, but they
were not close friends. They reconnected in 2011 at a trade show
in Las Vegas. Dahan explained his business to Mitchell, and he
claimed it was low risk with the potential for very large profits.
Mitchell decided to go into business with Dahan.
1.     The Dereon Jeans Deal
       The parties’ first deal involved the purchase of Dereon
jeans (the Dereon Jeans Deal). They entered into a written
contract on February 22, 2011, under which Plaintiff agreed
to provide $80,000 to put toward the purchase of $160,000 worth
of jeans. Cavalier, in turn, agreed to “[e]xercise due care and

                                 2
diligence in fulfilling the order and sale of the Goods. Further it
will do all [in] its power to maximize profits on the transactions
related to the Goods.” The contract contains an attorney fees
provision stating “[i]n the unlikely event that legal action is
taken by either party against the other, the prevailing party
shall recoup from the losing party all legal costs and fees
including attorneys’ fees.”
       In accordance with the agreement, Plaintiff transferred
$80,000 to Defendants. Defendants purchased the jeans from
a supplier in Pakistan, but many turned out to be defective and
unsellable. According to Dahan, due to the problems caused by
the defective jeans, Mitchell agreed to end the deal in exchange
for $125,000. Between September 2011 and March 2012,
Defendants wrote Plaintiff a series of checks totaling $125,000.
The last check, dated March 12, 2012, indicates it is for “Full &
Final Payment Dereon Jeggings.” According to Dahan, the words
“full & final payment” signified that the deal was over. Mitchell
also understood the March 2012 check to be the final payment
on the deal.
2.     The Kids’ Robes Deal
       According to Mitchell, sometime after entering into the
Dereon Jeans Deal, the parties agreed to a second deal involving
kids’ robes and shirts (the Kids’ Robes Deal). Mitchell claimed
the parties entered into a short written contract stating the deal
would be governed by the same terms as the Dereon Jeans Deal.
Mitchell did not have a copy of the contract, and he believed it
had been stolen during a home burglary. According to Plaintiff,
Defendants failed to make the required payments under the
agreement. Dahan denied making any deal with Mitchell related
to kids’ robes and shirts.

                                 3
3.     The Auction Deal
       Around November 2011, the parties agreed to another deal
involving merchandise purchased from a federal customs auction
(the Auction Deal). Mitchell claimed that, like the Kids’ Robes
Deal, the parties entered into a short written contract stating
the deal would be governed by the same terms as the Dereon
Jeans Deal. Also like the Kids’ Robes Deal, Mitchell claimed
his copy of the agreement had been stolen from his home during
a burglary. With Dahan’s help, Mitchell purchased $90,270
worth of goods at the auction, which he insisted were all part
of the Auction Deal.
       Dahan acknowledged forming a deal with Mitchell related
to the auction goods, but he denied that the parties had a written
agreement. According to Dahan, he guaranteed Mitchell the
return of his initial investment and that they would split profits
from any sales of the goods. Dahan also claimed Mitchell took
about $12,000 worth of goods purchased at the auction to sell
through his own online business. Therefore, according to Dahan,
Mitchell’s initial investment in the Auction Deal was roughly
$78,000.
       Sometime around December 2012, Dahan paid Mitchell
$10,000 in connection with the deal. Dahan claimed he
subsequently paid Mitchell an additional $40,000 in cash,
but Mitchell denied it.
       In January 2013, Mitchell asked Dahan if they could set up
a “disbursement plan for the remaining amounts” due. Dahan
told Mitchell he was sorry for the delay in payment, there were
“absolutely no Christmas sales this year,” and he would “pay off”
as soon as possible.

                                4
       About seven months later, on August 10, 2013, Mitchell
sent Dahan an email “to check in . . . about the last $90k of
the balance” owed on the deal. Mitchell believed Defendants
owed him more than $90,000, but he was willing to accept
a lesser amount to settle the deal.
       Mitchell paid Dahan $10,000 sometime around September
2013. A few months later, Mitchell told Dahan it is “very
important that we come up with some plan for the last $80k . . . .”
Dahan responded that he was “pushing sales like crazy.”
       Dahan paid Mitchell another $10,000 in March 2014.
In August 2014, Dahan told Mitchell he needed to sell more
goods before he could make any additional payments. Mitchell
responded that the “deal we made was that you personally
guaranteed the amount and that it would be less than one year
until full payback.” Mitchell said that unless they could come to
an immediate agreement on a payback plan, he had “no options
other than to get attorneys involved . . . . [¶] Not paying the
money or making arrangements for repayment is not an option
without legal consequences.”
       The next month, Mitchell sent Dahan an email saying,
“You agree with me about the remaining balance of 70k
you know you had guaranteed personally and on your house,
et cetera, that you would have paid it back years ago at this
point, and yet despite my enormous patience with this whole
thing with you, you’re just twisting to even make a payment
plan.” He also wrote, “I just want the 70k that’s owed and to
be done with this.” About two years later, in September 2016,
Defendants paid Plaintiff an additional $2,000.

                                 5
4.     The complaint
       On October 26, 2017, Plaintiff filed a complaint against
Defendants for breach of contract and an accounting. Plaintiff
alleged Defendants breached their written agreements by failing
to exercise due care and diligence, and by failing to do everything
possible to maximize profits. Specifically, it alleged Defendants
failed to seek a refund from the supplier for defective jeans,
overbid on goods at the auction, failed to keep Plaintiff updated
on the status of the sales, and failed to pay all monies owed under
the agreements. In relief, Plaintiff sought, among other things,
compensatory damages and attorney fees “pursuant to contract.”
5.     The trial
       The case proceeded to a bench trial. Mitchell and Dahan
testified to their respective versions of events, as summarized
above. Each side also presented testimony from Cavalier’s
bookkeeper, David Filoteo. According to Filoteo, the Auction
Deal resulted in a net loss of $5,187.59. The Dereon Jeans Deal,
however, made profits between $37,770.26 and $100,570.76.
Filoteo could not calculate the exact profits because many
of the records related to the deal had either been destroyed
or seized by the police on an unrelated matter.
       In their post-trial brief, Defendants argued Plaintiff’s
claims were barred by the statute of limitations. Plaintiff
responded that its claims were timely because Defendants
did not breach the agreements until September 2016, when
they made the final $2,000 payment. Alternatively, it argued
the statute of limitations was tolled under the delayed discovery
rule.
       The trial court issued a proposed statement of decision
finding in Defendants’ favor on all claims. As to the Dereon

                                6
Jeans Deal and Auction Deal, the court found Plaintiff’s claims
were barred by the statute of limitations. Specifically, it found
the Dereon Jeans Deal claims were subject to a four-year statute
of limitations, and the alleged breaches occurred no later than
March 12, 2012, when Defendants gave Plaintiff a check stating
it was for full and final payment. On the Auction Deal, the court
found Plaintiff failed to prove the existence of a written contract.
Nevertheless, it concluded the parties formed an oral contract,
which is subject to a two-year statute of limitations. It further
found Plaintiff was aware of the alleged breaches no later than
August 2013, when it demanded $90,000 from Defendants.
Plaintiff, however, did not file its complaint until October 2017,
well beyond the statute of limitations for claims related to
both deals.
       The court alternatively concluded Plaintiff failed to prove
it suffered damages on either deal. With respect to the Dereon
Jeans Deal, the court found “Defendant[s] and Plaintiff realized
the tremendous amount of returns and resales of the jeans
because of their defects and decided to agree that Defendant[s]
would pay Plaintiff his costs with a 50% profit margin. . . .
Accordingly, Defendant[s’] payment of $125,000.00 was exactly
what the parties agreed to.” Alternatively, the court found
Plaintiff received its initial investment plus $45,000 in profits,
which was consistent with Filoteo’s calculations showing total
profits on the deal between $36,000 and $100,000.
       On the Auction Deal, the court found Plaintiff made an
initial investment of $78,000, the deal did not turn a profit, and
Defendants repaid Plaintiff $70,000. The court concluded that,
“[u]sing the likely extra moneys that Defendant overpaid on

                                 7
[the Dereon Jeans Deal], it is clear that Plaintiff has suffered
no damages.”
       As to the Kids’ Robes Deal, the court found Plaintiff failed
to prove it had any contract, written or oral, with Defendants.
       Plaintiff did not object to the proposed statement of
decision, which the court adopted as its final decision. The
court entered judgment for Defendants.
6.     Defendants’ motion for attorney fees
       Defendants subsequently moved for attorney fees under
Civil Code section 1717 (section 1717). In opposition, Plaintiff
argued Defendants were entitled to a third of their requested fees
in light of the fact that the court found only one of the three deals
involved a contract with an attorney fees provision.
       The court rejected Plaintiff’s argument and awarded
Defendants $110,920 in attorney fees. The court explained
that section 1717 “applies to all three contracts alleged here,
based on Plaintiff’s allegations, claims and testimony that
Defendant[s] [were] liable on each written agreement that
duplicated the Dereon [Jeans Deal] contract presented in court
that ‘clearly’ allowed for attorney fees.” Moreover, if “Plaintiff
had prevailed, Defendants would have been liable for all
of Plaintiff’s attorneys’ fees, even as to the two nonexistent
(for trial) but alleged contracts.”
       Plaintiff separately appealed the court’s judgment and
its order awarding attorney fees. We consolidated the appeals.
                            DISCUSSION
1.     The court did not err in finding the statute
       of limitations barred Plaintiff’s claims
       Plaintiff contends the trial court “applied the wrong legal
analysis” when it found the statute of limitations barred its

                                  8
claims. Specifically, it argues that because the parties had
ongoing contractual obligations, the statute of limitations did
not start to run until September 2016 at the earliest. We
conclude Plaintiff forfeited the issue and it also lacks merit.
       The statute of limitations for breach of written contract
is four years, and the statute of limitations for breach of oral
contract is two years.1 (Code Civ. Proc., §§ 337, 339.) Generally,
the statute of limitations on a cause of action for breach of
contract, whether written or oral, begins to run at the time
of the breach. (See Fox v. Ethicon Endo-Surgery, Inc. (2005)
35 Cal.4th 797, 806; E.O.C. Ord, Inc. v. Kovakovich (1988) 200
Cal.App.3d 1194, 1203.) However, “when there are ongoing
contractual obligations the plaintiff may elect to rely on the
contract despite a breach, and the statute of limitations does
not begin to run until the plaintiff has elected to treat the breach
as terminating the contract” or the time arrives for complete
performance by the other party. (Romano v. Rockwell Internat.,
Inc. (1996) 14 Cal.4th 479, 489–490 (Romano); see State Comp.
Ins. Fund v. WallDesign Inc. (2011) 199 Cal.App.4th 1525, 1530
[“The statute of limitations on a cause of action for breach of
an executory contract generally does not begin to run until
the time for full performance has arrived.”].)
       In Union Sugar Co. v. Hollister Estate Co. (1935) 3 Cal.2d
740 (Union Sugar), for example, a party brought claims for
breach of a beet farming contract that was to be carried out
over the course of a farming season. The Supreme Court held

1       Plaintiff does not challenge the trial court’s finding that
all of its claims, including its claims for an accounting, are
subject to the statute of limitations for breach of contract.

                                   9
the statute of limitations commenced when the farming season
ended and the time for complete performance arrived, rather
than the date of the initial breach. (Id. at pp. 745–746.)
Similarly, in Ross v. Tabor (1921) 53 Cal.App. 605, the court
held the statute of limitations for breach of a three-year-long
beekeeping contract started to run at the end of the three-year
term, rather than when the defendant first breached the contract.
(Id. at p. 615.)
       Here, the trial court found Defendants’ alleged breaches
occurred no later than August 2013, which was more than
four years before Plaintiff filed the complaint in October 2017.
Plaintiff does not meaningfully dispute those findings. Instead,
as we understand its argument, it contends the trial court
erred because it failed to consider that the parties’ contractual
obligations continued after the alleged breaches. Therefore,
Plaintiff suggests, the breaches did not commence the
limitations period. Rather, the statute of limitations started
to run no earlier than September 2016, when Defendants made
the final $2,000 payment.
       Initially, we agree with Defendants that Plaintiff forfeited
this issue by failing to raise it in the trial court. “ ‘The rule
is well settled that the theory upon which a case is tried must
be adhered to on appeal. A party is not permitted to change
his position and adopt a new and different theory on appeal.
To permit him to do so would not only be unfair to the trial court,
but manifestly unjust to the opposing litigant. [Citation.]’ ”
(Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869,
874.)
       Plaintiff did not raise the continuing obligations theory
in the trial court. Instead, in its post-trial brief, Plaintiff argued

                                 10
its claims were timely because Defendants first breached the
agreements no earlier than September 2016. Alternatively,
it argued the statute of limitations was tolled under the delayed
discovery rule. At no point did Plaintiff argue that, despite
Defendants’ breaches, the statute of limitations did not begin
to run because the parties had ongoing contractual obligations.
Nor did it object to the trial court’s proposed statement of
decision on the basis that it failed to address that issue. Under
these circumstances, it would be unfair to the trial court and
unjust to Defendants to permit Plaintiff now to assert the
ongoing obligations theory. Plaintiff’s failure to raise the issue
below forfeits it on appeal.2 (See Barker v. Brown & Williamson
Tobacco Corp. (2001) 88 Cal.App.4th 42, 50 [finding a plaintiff
waived an argument that delayed discovery prevented the statute
of limitations from running by failing to raise the theory in the
trial court].)
       Even if we overlooked Plaintiff’s forfeiture, we would
reject its argument on the merits. As to the Dereon Jeans Deal,
Plaintiff suggests that, because the parties did not specify a date
by which Defendants were required to sell the goods, there was
no deadline for performance and their contractual obligations
continued indefinitely. Plaintiff is mistaken. Where, as here,
a contract does not specify a time for performance, the party must

2      A reviewing court has discretion to consider a new theory
on appeal if it presents a question of law based on undisputed
facts. (Cox v. Griffin (2019) 34 Cal.App.5th 440, 450.) That is
not the case here. As discussed more fully below, the question
of whether Defendants had ongoing contractual obligations
implicates unresolved factual issues related to the deadline
for Defendants’ performance.

                                11
perform within a reasonable time. (Civ. Code, § 1657; Wagner
Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th
19, 30; Palmquist v. Palmquist (1963) 212 Cal.App.2d 322, 331;
see Caner v. Owners’ Realty Co. (1917) 33 Cal.App. 479, 481
[where a contract does not specify a time for performance,
the statute of limitations begins to run at the expiration of
a reasonable time].) What is a reasonable time is a question of
fact that depends on the situation of the parties, the nature of the
transaction, and the facts of the particular case. (The McCaffrey
Group, Inc. v. Superior Court (2014) 224 Cal.App.4th 1330, 1351.)
       We need not decide what is a reasonable time for
Defendants’ performance, however, because the trial court’s
unchallenged findings show the contract ended in March 2012.
Specifically, the court found that due to the large number
of defective jeans, the parties agreed to end the deal once
Defendants paid Plaintiff $125,000, representing its initial
investment plus a 50 percent return. Plaintiff does not challenge
that finding. Nor does it challenge the court’s finding that
Defendants paid Plaintiff $125,000 by March 2012. Once
Defendants made the final payment, neither party had ongoing
obligations related to the Dereon Jeans Deal, and the statute
of limitations started to run on any alleged breaches. Because
the statute of limitations for breach of a written contract is
four years, absent some other basis to toll the limitations period,
Plaintiff was required to file a complaint no later than March
2016. Instead, it filed its complaint in October 2017, more than
a year and a half after the statute of limitations had expired.
       Plaintiff insists Defendants’ contractual obligations
under the Dereon Jeans Deal continued beyond March 2012.
In support, it points to evidence showing Defendants continued

                                12
to make payments until September 2016 and continuously
acknowledged they owed Plaintiff money. There is no evidence,
however, that any of those payments or acknowledgements
concerned the Dereon Jeans Deal. In fact, the undisputed
evidence shows both parties believed Defendants made the
final payment on the Dereon Jeans Deal sometime around
March 2012.
       As to the Auction Deal, Plaintiff similarly contends the
parties’ contractual obligations were ongoing because their oral
agreement was silent as to the deadline for Defendants to sell
the goods. The trial court, however, did not expressly decide
whether the parties agreed to a deadline for Defendants’
performance. (See Esbensen v. Userware Internat., Inc. (1992)
11 Cal.App.4th 631, 640 [the exact terms of an oral agreement
is a question for the trier of fact to decide].) Because Plaintiff
did not bring this omission to the court’s attention, under the
doctrine of implied findings, we must “presume that the trial
court made all factual findings necessary to support the judgment
for which substantial evidence exists in the record. In other
words, the necessary findings of ultimate facts will be implied
and the only issue on appeal is whether the implied findings
are supported by substantial evidence.” (Shaw v. County of
Santa Cruz (2008) 170 Cal.App.4th 229, 267.)
       Here, there is substantial evidence from which the court
could have found the parties agreed that Defendants were
required to fully perform more than two years before Plaintiff
filed its complaint. In August 2013, for example, Mitchell
demanded Dahan pay the “last” $90,000 due under the
agreement, which implied the deadline for Defendants’
performance had already passed. About a year later, Dahan

                               13
informed Mitchell he could not make any additional payments
until he sold more goods. Mitchell did not accept that excuse,
and he threatened legal action because the “deal we made
was that you personally guaranteed the amount and that
it would be less than one year until full payback.” Mitchell,
in other words, claimed that under the terms of the deal,
Defendants were required to make full payment within a year.
Dahan did not deny that claim. The next month, in September
2014, Mitchell reminded Dahan he “guaranteed” payment “years
ago at this point.” Dahan again did not deny Mitchell’s claim.
        Under the doctrine of implied findings, we must presume
the trial court accepted this evidence and concluded the parties
agreed Defendants’ full performance was due by August 2013 at
the very latest. Once the time for Defendants’ full performance
arrived, the statute of limitations started to run on any alleged
breaches. (See Romano, supra, 14 Cal.4th at pp. 489–490; Union
Sugar, supra, 3 Cal.2d at pp. 745–746.) Because the statute of
limitations for breach of oral contract is two years, absent some
other basis to toll the limitations period, Plaintiff was required
to file a complaint no later than August 2015. Instead, it filed its
complaint in October 2017. Accordingly, the trial court properly
found the statute of limitations barred Plaintiff’s claims.3

3       Because we conclude the trial court properly found
Plaintiff’s claims were time-barred, we need not consider
Plaintiff’s arguments that the trial court erred in finding
it failed to prove damages.

                                 14
2.     The court properly awarded Defendants their
       attorney fees
       Plaintiff contends the trial court erred in awarding
Defendants attorney fees related to the claims involving
the Kids’ Robes Deal and the Auction Deal. We disagree.
       We review “a determination of the legal basis for an
award of attorney fees de novo as a question of law.” (Sessions
Payroll Management, Inc. v. Noble Construction Co. (2000)
84 Cal.App.4th 671, 677.) A party may recover its attorney fees
when authorized by contract. (Code Civ. Proc., § 1021; Reynolds
Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127.) Under section
1717, where a “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.” (Civ. Code, § 1717, subd. (a).)
       It is “settled” that a party is entitled to attorney fees under
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.’ [Citations.] [¶] This rule serves to effectuate
the purpose underlying section 1717. As [the Supreme Court]
has explained, ‘[s]ection 1717 was enacted to establish mutuality
of remedy where [a] contractual provision makes recovery of
attorney’s fees available for only one party [citations], and to
prevent oppressive use of one-sided attorney’s fees provisions.
[Citation.]’ [Citations.] The statute would fall short of this goal
of full mutuality of remedy if its benefits were denied to parties

                                  15
who defeat contract claims by proving that they were not parties
to the alleged contract or that it was never formed. To achieve
its goal, the statute generally must apply in favor of the party
prevailing on a contract claim whenever that party would have
been liable under the contract for attorney fees had the other
party prevailed.” (Hsu v. Abbara (1995) 9 Cal.4th 863, 870–871
(Hsu).)
       In Jones v. Drain (1983) 149 Cal.App.3d 484, for example,
the defendants entered into a written listing contract with Sears
Realty to sell their home, and Sears Realty entered into an oral
agreement with the plaintiff to act as a cooperative broker to find
a purchaser for the property. (Id. at p. 485.) The plaintiff sued
the defendants for breach of contract after they rejected offers
from potential purchasers that the plaintiff had located, and
it sought attorney fees under the contract. (Id. at p. 487.) The
trial court granted summary judgment in the defendants’ favor—
apparently on the basis that the parties did not have a contract
—but it denied the defendants’ request for attorney fees. (Id. at
p. 486.) The Court of Appeal reversed, holding the defendants
were entitled to their attorney fees under section 1717
because the plaintiff would have been entitled to such fees
had it prevailed. (Id. at pp. 489–490.) The court reasoned “it
is extraordinarily inequitable to deny a party who successfully
defends an action on a contract, which claims attorney’s fees,
the right to recover its attorney’s fees and costs simply because
the party initiating the case has filed a frivolous lawsuit. As
a consequence, we find that a prevailing defendant sued for
breach of contract containing an attorney’s fees provision and
having had to defend the contract cause of action is entitled to

                                16
recover its own attorney’s fees and costs therefor, even though
the trial court finds no contract existed.” (Ibid.)
       Here, Plaintiff alleged in its complaint that Defendants
breached the parties’ written contracts, and it sought attorney
fees “pursuant to contract.” Plaintiff clarified at trial that its
claims concerning the Kids’ Robes Deal and Auction Deal arose
out of contracts in which the parties agreed the deals were to
be governed by the same terms as the Dereon Jeans Deal. The
Dereon Jeans Deal contract, in turn, states that “[i]n the unlikely
event that legal action is taken by either party against the other,
the prevailing party shall recoup from the losing party all legal
costs and fees including attorneys’ fees.”
       Given the broad scope of the attorney fees provision and
Plaintiff’s insistence that the parties incorporated it into the
Kids’ Robes Deal and Auction Deal contracts, there is no question
Plaintiff would have been entitled to its attorney fees had it
prevailed on its claims for alleged breaches of those contracts.
Because Defendants prevailed instead, they were entitled to their
attorney fees under section 1717. It is irrelevant that the court
determined Plaintiff failed to prove the existence of either alleged
contract. (Hsu, supra, 9 Cal.4th at p. 870.)
       Plaintiff does not dispute that it would have been
entitled to attorney fees had it prevailed on its claims as alleged.
Nevertheless, it insists Defendants are not entitled to their
attorney fees because neither party entered into evidence written
contracts related to the Kids’ Robes Deal and Auction Deal.
Without such evidence, Plaintiff argues, it is not sufficiently clear
that it would have been entitled to attorney fees had it prevailed.
We are not persuaded.

                                 17
       Contrary to Plaintiff’s suggestions, section 1717 does not
mandate a copy of the alleged contract be entered into evidence.
Indeed, if that were a requirement, a defendant who successfully
defeats an action on an oral contract would never be entitled
to attorney fees, despite the fact that section 1717 applies to
both written and oral contracts. (Cano v. Glover (2006) 143
Cal.App.4th 326, 331.) In any event, the record in this case does
contain partial copies of the alleged contracts. As noted above,
Plaintiff claimed the parties’ contracts for the Kids’ Robes Deal
and Auction Deal incorporated the attorney fees provision of
the Dereon Jeans Deal contract, which the court entered into
evidence. This is sufficient to show Plaintiff clearly would have
been entitled to attorney fees had it prevailed on its claims.
       Plaintiff suggests in passing that, because the court might
have found Defendants breached oral contracts that lacked
attorney fees provisions, it could have prevailed on its claims
without being entitled to attorney fees. Plaintiff, however,
never urged the court to make such findings, nor did it even
acknowledge the possibility that its contracts lacked attorney
fees provisions. Instead, it maintained throughout the case
that Defendants breached contracts, whether written or oral,
with attorney fees provisions. As discussed above, had Plaintiff
prevailed on those claims, it clearly would have been entitled
to attorney fees. That the court conceivably could have awarded
Plaintiff relief under theories it did not pursue does not change
that fact.

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                        DISPOSITION
      We affirm the judgment and the order awarding attorney
fees. Defendants are awarded their costs on appeal.

     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                   EGERTON, J.

We concur:

             EDMON, P. J.

             LIPNER, J.


      Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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