Court Opinion

ID: 6335242
Source: CourtListenerOpinion
Date Created: 2022-04-26 23:02:12.145442+00
Date Added: 2024-06-11T09:23:50.574096
License: Public Domain

Filed 4/26/22 H.T.L. Properties, LLC v. Speck CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 TWO

H.T.L. PROPERTIES, LLC et al.                                         B302436

         Plaintiffs and Appellants,                                   (Los Angeles County
                                                                      Super. Ct. No. BC677442)
         v.

JAMES SPECK et al.,

         Defendants and Respondents.

     APPEAL from an order of the Superior Court of
Los Angeles County. Michael P. Vicencia, Judge. Affirmed.

     McCreary and Duncan J. McCreary for Plaintiffs and
Appellants.

     Ferruzzo & Ferruzzo, Gregory J. Ferruzzo, Alex C.
Verdegem and Sean E. Morrissey for Defendants and
Respondents.
               ______________________________
       This litigation arises out of a dispute between certain
entities and individuals concerning the use of a large electronic
sign in the City of Long Beach to advertise car dealerships in the
area. When plaintiffs and appellants H.T.L. Properties, LLC
(HTL Properties) and HTL Automotive, Inc. (HTL Automotive),
were denied use of the sign, they filed a lawsuit against
defendants and respondents James Speck (Speck), Circle
Automotive Group, Inc. (Circle Auto), and Electra Media, Inc.
(EMI), claiming that defendants wrongfully denied them use of
the sign. Defendants successfully moved for summary judgment
and were awarded attorney fees and costs. HTL Properties and
HTL Automotive appealed the trial court’s order granting
summary judgment, and on May 4, 2021, we dismissed HTL
Automotive’s appeal because it was not in good standing with the
Franchise Tax Board and affirmed the judgment against HTL
Properties. (H.T.L. Properties, LLC v. Speck (May 4, 2021),
B299160 [nonpub. opn.], p. 21.) They now appeal the trial court’s
award of attorney fees and costs.
       Because the trial court did not err in awarding defendants
attorney fees and costs, we affirm.
                    FACTUAL BACKGROUND
       As set forth in our prior opinion, the parties dispute the use
of an electronic advertising sign. Use of that sign is governed by
the North East Long Beach Advertising Association’s (NEDA)
agreement (the NEDA agreement). (H.T.L. Properties, LLC v.
Speck, supra, B299160, at p. 3.) According to the terms of the
NEDA agreement, the NEDA sign is used solely for identifying
NEDA members’ auto dealerships. Only NEDA members may
use the NEDA sign. HTL Automotive became a member of
NEDA in 2008 when it purchased a participating car dealership.

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It ceased being a NEDA member in 2016 when it sold its car
dealership. (Id. at p. 4.)
      Neither HTL Properties nor any of the three defendants
was ever a party to the NEDA agreement. (H.T.L. Properties,
LLC v. Speck, supra, B299160, at p. 17.)
      The NEDA agreement provides, in relevant part: “If any
party defaults in the performance of their obligations pursuant to
this Agreement and any party entitled to enforce such provision
has obtained the services of an attorney with respect to the
default involved, the defaulting party shall pay to such
non defaulting party upon resolution of said default in favor of
the non defaulting party, any costs or fees involved including
reasonable attorneys’ fees, whether or not suit[] has been
instituted. In the event action is commenced to enforce any of the
provisions contained in this Agreement, the prevailing party
shall be entitled to recover from the other party thereto,
reasonable attorney fees and costs of such suit whether or not
such action proceeds to final judgment.”
                PROCEDURAL BACKGROUND
      On September 27, 2017, plaintiffs filed the instant action
against defendants, alleging, inter alia, breach of contract.1
(H.T.L. Properties, LLC v. Speck, supra, B299160, at p. 9.)
According to the respondent’s brief, plaintiffs specifically
requested attorney fees in their complaint.

1
      As set forth in our prior opinion, the alleged contract is
undefined. Plaintiffs’ claims could have been based upon some
vague oral agreement or the NEDA agreement. We addressed
both possibilities in our prior opinion. (H.T.L. Properties, LLC v.
Speck, supra, B299160, at pp. 15–18.)

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       Defendants moved for summary judgment. (H.T.L.
Properties, LLC v. Speck, supra, B299160, at p. 10.) On April 24,
2019, the trial court granted defendants’ motion for summary
judgment. In so doing, the trial court determined that the NEDA
agreement was controlling. “Only members of [NEDA could]
advertise on the [NEDA] [s]ign. [Because] [p]laintiffs sold their
[car] [d]ealership, . . . [p]laintiffs no longer had any interest in, or
right to advertise on the [NEDA] [s]ign because they were no
longer members of” NEDA. Thus, plaintiffs had no viable claim
against defendants. (H.T.L. Properties, LLC v. Speck, supra,
B299160, at p. 12.)
       Thereafter, defendants filed a motion for attorney fees and
costs. They argued that pursuant to California statutes and the
terms of the NEDA agreement, they were entitled to recoup their
attorney fees and costs.
       Plaintiffs opposed the motion.
       On September 10, 2019, the trial court granted defendants’
motion, awarding them $157,191 in attorney fees and $7,219.60
in costs.2
       Plaintiffs’ timely appeal ensued.
                              DISCUSSION
I. Standard of review
       As defendants correctly point out in their respondents’
brief, plaintiffs do not challenge the amount of attorney fees
awarded. Rather, the only issue on appeal is whether they were

2
      Later, on October 19, 2021, the trial court awarded
defendants an additional $40,519.50 in attorney fees and $977.08
in costs incurred in connection with plaintiffs’ unsuccessful
appeal. Those amounts were added to the judgment, with a total
award of $197,710.50 in attorney fees and $8,196.68 in costs.

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“entitled to recover attorney fees.” Thus, as the parties agree, we
review this issue de novo. (Dzwonkowski v. Spinella (2011) 200
Cal.App.4th 930, 934.)
II. Relevant law
       Civil Code section 1717, subdivision (a) (section 1717),
“declares that ‘[i]n 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.’
(Italics added.)” (California-American Water Co. v. Marina Coast
Water Dist. (2017) 18 Cal.App.5th 571, 576.)
       “The primary purpose of section 1717 is to ensure
mutuality of remedy for attorney fee claims under contractual
attorney fee provisions.” (Santisas v. Goodin (1998) 17 Cal.4th
599, 610.) In other words, section 1717 “makes an otherwise
unilateral right [to contractual attorney fees] reciprocal, thereby
ensuring mutuality of remedy.” (Santisas v. Goodin, supra, at
p. 611.) “To ensure mutuality of remedy . . . , it has been
consistently held that when a party litigant prevails in an action
on a contract by establishing that the contract is invalid,
inapplicable, unenforceable, or nonexistent, section 1717 permits
that party’s recovery of attorney fees whenever the opposing
parties would have been entitled to attorney fees under the
contract had they prevailed. [Citations.]” (Santisas v. Goodin,
supra, at p. 611.)
       “‘. . . California courts liberally construe the term “‘“on a
contract”’” as used within section 1717. [Citation.] As long as the

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action “involve[s]” a contract it is “‘on [the] contract’” within the
meaning of section 1717. [Citations.]’ [Citations.]” (Blickman
Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162
Cal.App.4th 858, 894.)
III. Analysis
       Applying these legal principles, we conclude that the trial
court properly determined that defendants were entitled to
attorney fees under the terms of the NEDA agreement. Plaintiffs
initiated this litigation because they sought use of the NEDA
sign. (H.T.L. Properties, LLC v. Speck, supra, B299160, at p. 12.)
The use of that sign is governed by the NEDA agreement. (Id. at
p. 3.) And the NEDA agreement contains a broad attorney fee
provision.
       Urging us to reverse, plaintiffs rely upon Mountain Air
Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744
for the proposition that because defendants “raised a contract as
a bar to the operative complaint,” they are not entitled to
attorney fees. Plaintiffs seem to be arguing that because their
claim was actually based upon an alleged oral agreement and/or
e-mails memorializing an oral agreement, neither of which
contained an attorney fees provision, defendants cannot claim
attorney fees pursuant to the NEDA agreement. We are not
convinced. As the trial court properly determined, and as we
held in our prior opinion, the NEDA agreement controlled this
dispute; it set forth all of the terms concerning the use of the
NEDA sign. Thus, its attorney fee provision applies as well.
       The fact that plaintiffs did not attach a copy of the NEDA
agreement to their complaint or allege its existence does not
compel a different result. This matter was fully litigated to
judgment, and it has been determined that this matter is

                                  6
governed by the NEDA agreement. The fact that that agreement
was not attached to the complaint is irrelevant.
      Plaintiffs further argue that defendants are not entitled to
attorney fees because they (defendants) were not parties to the
NEDA agreement. Plaintiffs are mistaken. The purpose of
section 1717 requires it “‘be interpreted to . . . provide a
reciprocal remedy for a nonsignatory defendant, sued on a
contract as if he were a party to it, when a plaintiff would clearly
be entitled to attorney[] fees should he prevail in enforcing the
contractual obligation against the defendant.’ [Citations.]”
(Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 819.)
Had plaintiffs succeeded in enforcing the NEDA agreement
against defendants, plaintiffs would have been entitled to recover
their attorney fees. Thus, even though defendants were
nonsignatories to the NEDA agreement, they are entitled to
recoup their attorney fees here.
      Plaintiffs also contend that the trial court erred in
awarding attorney fees to Alant Corporation, Inc. Alant
Corporation, Inc., was not awarded attorney fees.
      Finally, plaintiffs contend that the terms of the contract’s
attorney fee provision do not apply for at least two reasons:
(1) When the trial court granted defendants’ motion for summary
judgment, it found that plaintiffs were not parties to the NEDA
agreement and a contractual attorney fee clause only applies to a
party; and (2) Plaintiffs were not in default of performance. We
disagree.
      As set forth above, plaintiffs brought this action “on the
contract,” specifically the NEDA agreement. The fact that they
were ultimately adjudged not to be parties to the NEDA
agreement does not negate defendants’ entitlement to attorney

                                 7
fees for the same reasons set forth above. (See, e.g., Hyduke’s
Valley Motors v. Lobel Financial Corp. (2010) 189 Cal.App.4th
430, 435 [“on occasion attorney fees may be assessed against a
nonsignatory who loses an action on the contract”]; Santisas v.
Goodin, supra, 17 Cal.4th at p. 611; Brown Bark III, L.P. v.
Haver, supra, 219 Cal.App.4th at pp. 819–820.)
       And, plaintiffs misconstrue the term “default.” Fairly read,
their complaint against defendants was based upon the theory
that defendants defaulted on their obligation under the NEDA
agreement to allow plaintiffs to use the NEDA sign. Regardless,
the second sentence of the attorney fee clause is broad, covering
any action to enforce any of the provisions set forth in the NEDA
agreement. At this risk of sounding redundant, that is exactly
what this lawsuit was all about.
                          DISPOSITION
       The order is affirmed. Defendants are entitled to attorney
fees and costs on appeal.
       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                               _____________________, J.
                               ASHMANN-GERST

We concur:

________________________, P. J.
LUI

________________________, J.
HOFFSTADT

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