Court Opinion

ID: 4017199
Source: CourtListenerOpinion
Date Created: 2016-07-19 21:02:37.351011+00
Date Added: 2024-06-11T12:52:54.734858
License: Public Domain

Filed 6/14/16

                                  CERTIFIED FOR PUBLICATION
                         APPELLATE DIVISION OF THE SUPERIOR COURT
                       STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

     INTELLIGENT INVESTMENTS CORP.,                      )   No. BV 031101
                                                         )
             Plaintiff and Respondent,                   )   Central Trial Court
                                                         )
             v.                                          )   No. 14U06637
                                                         )
     MIGUEL GONZALES,                                    )
                                                         )
             Defendant and Appellant.                    )   OPINION
                                                         )

             APPEAL from a judgment of the Superior Court of Los Angeles County, Robert S.
     Harrison, Commissioner. Reversed.
             Daniel J. Bramzon, Ross T. Kutash and Claudia Medina of BASTA, Inc. for Defendant
     and Appellant Miguel Gonzales.
             Dennis P. Block of the Law Offices of Dennis P. Block & Associates for Plaintiff and
     Respondent Intelligent Investments Corp.
                                         *           *             *

md                                                   1
       Defendant and appellant Miguel Gonzales appeals the court‟s denial of his motion for
attorney fees after the voluntary dismissal by plaintiff and respondent Intelligent Investments
Corporation of its unlawful detainer action. Defendant contends he was entitled to attorney
fees pursuant to the fee shifting provision under Los Angeles Municipal Code (LAMC)
section 162.09(A)(5), which applies to unlawful detainer actions involving property in the City
of Los Angeles‟s Rent Escrow Account Program (REAP), and therefore Civil Code
section 1717, subdivision (b)(2),1 did not bar recovery of fees. We agree and reverse the order.
                                              BACKGROUND
       On June 2, 2014, plaintiff filed an unlawful detainer action against defendant based on
service of a three-day notice to perform covenants or quit. Attached to the complaint was a
rental contract for the subject premises executed by defendant and landlord Gumersindo
Bautista. Defendant answered the following week, generally denying each allegation in the
complaint and asserting several affirmative defenses, including breach of the warranty of
habitability, violation of the Los Angeles Rent Stabilization Ordinance, and retaliation. Two
weeks later, plaintiff voluntarily dismissed the action.
       On July 25, 2014, defendant filed a motion for attorney fees. Defendant argued the
property was in REAP2 when plaintiff commenced the unlawful detainer action and that,
pursuant to LAMC section 162.09(A)(5), he was entitled to attorney fees as the prevailing
party. In support of his motion, defendant submitted: a declaration stating he normally paid his
rent to REAP; documentation showing plaintiff had notice the property was in REAP as of
December 19, 2013; and receipts dated May 6, 2014, and June 2, 2014, reflecting payments
defendant made to the REAP account.
       On September 2, 2014, the court denied defendant‟s motion on the ground he had no
basis for recovering attorney fees.

       1
           All further statutory references are to the Civil Code unless otherwise specified.
       2
       REAP (LAMC, §§ 162.00-162.12) was created to provide a method to enforce the Housing
Code and to encourage compliance from landlords with regard to maintenance and repair of buildings.
(LAMC, § 162.01.)

                                                       2
                                           DISCUSSION
       “A request for an award of attorney fees is largely entrusted to the discretion of the trial
court, whose ruling „will not be overturned in the absence of a manifest abuse of discretion, a
prejudicial error of law, or necessary findings not supported by substantial evidence.
[Citations.]‟ [Citation.] The trial court exercises a particularly „wide discretion‟ in determining
who, if anyone, is the prevailing party for purposes of section 1717[, subdivision ](a).
[Citations.] To overturn that determination on appeal, the objecting party must demonstrate „a
clear abuse of discretion.‟ [Citation.] However, the „determination of the legal basis for an
award of attorney fees‟ is a „question of law‟ which the reviewing court will examine de novo.
[Citation.]” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th
858, 894.)
Entitlement of Prevailing Party to Recover Attorney Fees
       With respect to attorney fees incurred to litigate a contract claim, the recovery of such
fees are governed by section 1717. Subdivision (a) provides in part: “In any action on a
contract, where the contract specifically provides that attorney‟s fees . . . incurred to enforce
that contract, shall be awarded . . . , then the party who is determined to be the party prevailing
on the contract, . . . shall be entitled to reasonable attorney‟s fees . . . .” However,
subdivision (b)(2) “sets forth an exception to the general entitlement to contractual attorney
fees.” (CDF Firefighters v. Maldonado (2011) 200 Cal.App.4th 158, 164, italics added.)
Under this exception, “[w]here an action has been voluntarily dismissed . . . , there shall be no
prevailing party for purposes of this section.” (§ 1717, subd. (b)(2).) According to plaintiff,
section 1717, subdivision (b)(2), precluded the recovery of attorney fees in this case.
       But, defendant did not seek contract-based attorney fees. Rather, he sought attorney
fees under LAMC section 162.09, which applies specifically to unlawful detainer actions
involving properties in REAP. Subdivision (A)(5) of this section provides: “In any action by a
landlord to recover possession of a rental unit, the tenant may raise as a defense any grounds set
forth in this section. If the tenant is the prevailing party, he or she shall be entitled to recover
reasonable attorneys‟ fees and expenses.” Thus, section 1717, subdivision (b)(2), does not

                                                  3
apply in this case. “[S]ection 1717[, subdivision] (b)(2) has no application where, as here,
attorney fees were not sought under a contract, but pursuant to [a fee-shifting] statute[.]”
(Parrott v. Mooring Townhomes Assn., Inc. (2003) 112 Cal.App.4th 873, 878.) Put another
way, “recoverable litigation costs do include attorney fees when the party entitled to costs has
an independent statutory basis upon which to claim recovery of attorney fees. [Citation.]”
(Damian v. Tamondong (1998) 65 Cal.App.4th 1115, 1129, citing Santisas v. Goodin (1998) 17
Cal.4th 599, 606-607.) Such is the case here.
       Plaintiff argues defendant waived any claim this case involved REAP by not alleging
that fact or asserting it as a defense in his answer, and that he was therefore estopped from
asserting it as a basis for fees after the case was dismissed. However, plaintiff does not connect
the burden to plead a particular statutory defense in an answer to a defendant‟s right to
ultimately recover attorney fees. Rather, the cases cited by plaintiff in support of its argument3
concern the timing of two separate, but identical, assertions of an affirmative defense and stand
for the general proposition that a defendant is precluded from asserting, after trial or on appeal,
an affirmative defense that was not made at trial. It seems quite different to draw the
conclusion that a defendant is estopped from seeking attorney fees under a specified statutory
scheme unless the defendant pled, in its answer, that the status of the property at issue renders a
prevailing defendant eligible for attorney fees pursuant to that same statutory scheme. Indeed,
plaintiff cites no authority that goes this far, and to do so would seem to expand the answer to
something more than a formal written pleading by a defendant setting forth the grounds of his
or her defense.4
       Moreover, defendant did assert as an affirmative defense in his answer that plaintiff

       3
       See Ekstrom v. Marquesa at Monarch Beach Homeowners Assn. (2008) 168 Cal.App.4th 1111,
1123; California Academy of Sciences v. County of Fresno (1987) 192 Cal.App.3d 1436, 1442.
       4
        Black‟s Law Dictionary defines “answer” as “A defendant‟s first pleading that addresses the
merits of the case, . . . [and] usu[ally] sets forth the defendant‟s defenses and counterclaims.” (Black‟s
Law Dict. (7th ed. 1999) p. 90, col. 2.) “Affirmative relief may not be claimed in the answer” (Code
Civ. Proc., § 431.30, subd. (c)) and unlawful detainer cases are unique in that, due to the summary
nature of the proceedings, counterclaims are not considered (Green v. Superior Court (1974) 10 Cal.3d
616, 632; accord, Drybread v. Chaipain Chiropractic Corp. (2007) 151 Cal.App.4th 1063, 1072).

                                                    4
“served defendant with the notice to quit or filed the complaint to retaliate against defendant.”
Retaliation is a “ground” set forth in LAMC section 162.09. Subdivision (A)(4) of this section
provides as relevant: “If the dominant intent of a landlord in seeking to recover possession of a
rental unit is retaliation for the tenant‟s . . . exercise of rights or duties under this article, and if
the tenant is not in default as to the payment of rent, then the landlord may not recover
possession of a rental unit in any action or proceeding or cause the tenant to quit voluntarily.
Until the unit is removed from REAP and for one year thereafter, the landlord shall have the
burden of proving that any action to recover possession, other than one based on nonpayment of
rent, is not brought for the purposes of retaliation.” Evidence submitted in support of
defendant‟s motion for attorney fees—including a declaration from defendant stating he
normally paid his rent to REAP, documentation showing plaintiff had notice the property was
in REAP as of December 19, 2013, and receipts for May 2014 and June 2014 reflecting
payments defendant made to the REAP account before and at the time the complaint was
filed—demonstrated plaintiff was aware the property was in REAP and that, per LAMC
section 162.09(A)(4), defendant “[wa]s not in default as to the payment of rent.”5
       Assuming defendant was the prevailing party, he was entitled to an award of his
reasonable attorney fees under LAMC section 162.09(A)(5).
The Prevailing Party
       The trial court did not indicate whether it found either party to be the prevailing party.
Rather, the minute order denying defendant‟s motion for attorney fees stated simply the
motion was denied and did not indicate the basis for the ruling. Further, although LAMC
       5
         We also note, without additional discussion, it is not entirely clear that a tenant is required to
assert a REAP-related defense to an unlawful detainer action in order to recover attorney fees as the
prevailing party. Although LAMC section 169.02(A)(5) both (1) permits tenants to assert their rights
under REAP as a defense to an unlawful detainer action, and (2) grants tenants who prevail in the
action the right to recover “reasonable attorneys‟ fees and expenses,” it does not by its terms limit the
recovery of attorney fees to only those tenants who prevail on a defense set forth in this section.
Rather, it appears to permit the recovery of attorney fees by any tenant of a property in REAP who
prevails on any ground.
        We reject plaintiff‟s suggestion that the court impliedly found no violation of LAMC
section 162.09 to support a claim for attorney fees. No such finding was necessary to the court‟s
disposition of defendant‟s motion.

                                                      5
section 162.09(A)(5) states unequivocally, a tenant who prevails in “any action by a landlord to
recover possession of a rental unit . . . shall be entitled to recover reasonable attorney‟s fees,” it
does not define “prevailing party.”
       In Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146
(Salehi), where the statute under which attorney fees were sought also did not define
“prevailing party,” the court noted “„[t]he words “shall be [entitled to recover]” reflect a
legislative intent that [the prevailing party] receive attorney fees as a matter of right (and that
the trial court is therefore obligated to award attorney fees) whenever the statutory conditions
have been satisfied.‟ [Citation.]” (Id. at p. 1152.) This in turn required the trial court to
analyze “„which party . . . prevailed on a practical level.‟ [Citation.])” (Id. at p. 1153, quoting
Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574; see also
Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 150 [“the court should
adopt a pragmatic approach, determining prevailing party status based on which party
succeeded on a practical level” in achieving its overall litigation objectives]; Galan v. Wolfriver
Holding Corp. (2000) 80 Cal.App.4th 1124, 1129 (Galan).)
       In the present case, as noted, the record does not indicate whether the court engaged in
any such analysis. But, unlike cases in which this analysis may require extensive or additional
fact-finding,6 the determination of which party prevailed in an unlawful detainer action is
generally straightforward. “„[T]he primary purpose of an unlawful detainer action is to obtain
the possession of real property in the cases specified by statute. [Citations.]‟ . . . . The
judgment, if any, for damages and the rent found due . . . is a mere incident to the main
object—the recovery of possession. [Citations.] The plaintiff was not the prevailing party
insofar as the primary purpose of the action which she instituted; . . . The defendant, on the
other hand, . . . prevailed by defeating the plaintiff‟s claim to possession . . . .” (Strickland v.

       6
        For example, whether there was “willful and malicious misappropriation” for recovery of fees
under section 3426.4 (see Khavarian Enterprises, Inc. v. Commline, Inc. (2013) 216 Cal.App.4th 310,
328-329); or whether a landlord demanded rent under the conditions specified in section 1942.4,
subdivision (a), for the purpose of recovering attorney fees under that section (see Galan, supra, 80
Cal.App.4th at p. 1129.)

                                                   6
Becks (1979) 95 Cal.App.3d Supp. 18, 21; see also Beverly Hills Properties v. Marcolino
(1990) 221 Cal.App.3d Supp. 7, 10 [citing Strickland v. Becks for the proposition that “right to
possession in unlawful detainer action is main object of suit and determines who is prevailing
party” for the purpose of awarding attorney fees under section 1717].)
       Even in cases involving the pretrial dismissal of an action, the defendant may be found
to be the prevailing party for the purpose of awarding attorney fees. For example, the dismissal
of a case involving a construction contract dispute “achieved one hundred percent of the
„precise factual/legal condition‟ [the defendant] „sought . . . .‟ The most [the defendant]—or
any other civil defendant—ordinarily can hope to achieve is to have the plaintiff‟s claim thrown
out completely. This is exactly what happened here. In „pragmatic‟ terms, it does not make
any difference whether this total victory comes only after a jury reaches a verdict as to each and
every substantive issue or whether, as here, it comes through a judge‟s decision the plaintiff
waited too long to serve its complaint on the defendant. In any practical sense of the word, the
defendant „prevailed.‟” (Winick Corp. v. Safeco Ins. Co. (1986) 187 Cal.App.3d 1502, 1508.)
Similarly, despite the plaintiff‟s claim in Salehi that she dismissed the case for procedural
reasons, the Court of Appeal held the trial court abused its discretion in not finding the
defendant was the prevailing party for purposes of attorney fees: “To say [the plaintiff] was,
somehow, the prevailing party on a „practical level‟ or that she realized her „litigation
objectives‟ is to do violence to these legal phrases of art.” (Salehi, supra, 200 Cal.App.4th at
p. 1155.)7
       On the record before us, any finding by the court that defendant was not the prevailing
party was a clear abuse of discretion. (See Blickman Turkus, LP v. MF Downtown Sunnyvale,
LLC, supra, 162 Cal.App.4th at p. 894.) As a result of plaintiff‟s dismissal of its action seeking
“to recover possession of a rental unit,” defendant “achieved one hundred percent” of his own
litigation objectives. He is therefore entitled to an award of attorney fees.
       7
       Exceptions to this apparent trend include where factual findings are required to support an
award of attorney fees (discussed ante), and where an action is dismissed pursuant to a settlement
agreement which does not provide for the recovery of attorney fees (see, e.g., Galan, supra, 80
Cal.App.4th at pp. 1129-1130.)

                                                   7
                                        DISPOSITION
      The order is reversed, and the matter is remanded for a determination of reasonable
attorney fees. Costs on appeal are awarded to appellant.

                                                ______________________
                                                KUMAR, Acting P. J.

      We concur:

                                                ______________________
                                                RICCIARDULLI, J.

                                                ______________________
                                                B. JOHNSON, J.

                                               8