Court Opinion

ID: 9751760
Source: CourtListenerOpinion
Date Created: 2023-08-28 16:58:08.716359+00
Date Added: 2024-06-11T07:26:58.759189
License: Public Domain

ARMSTRONG, J., Dissenting.
I respectfully dissent.
I would affirm the order denying the motion for attorney fees and granting the motion to tax costs because the underlying judgment does not contain *889contractual attorney fees as required by Code of Civil Procedure section 685.040 (section 685.040). I explain.
On page 881, ante, the majority wrote: “Based on the foregoing, we conclude section 685.040 can permit the recovery of reasonable and necessary attorney fees and costs incurred in enforcing a judgment. The express language of section 685.040 extends to legal expenses incurred in the enforcement of a judgment.” If that were all there were to section 685.040, then I would agree with the majority that the order denying the motion for attorney fees and costs and granting the motion to tax costs should be reversed, for it is undisputed that Chinese Yellow Pages Company has incurred legal expenses in trying to enforce the underlying judgment.1
But there is more to section 685.040. The third sentence of section 685.040 in full is: “Attorney’s fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” Section 1033.5 of the Code of Civil Procedure provides that attorney fees authorized by contract are recoverable as costs. The issue here, then, is whether the judgment that underlies the order includes an award of contractual attorney fees. As explained below, we determined in the appeal from the underlying judgment that Overseas did not breach the parties’ contract. Because Overseas is the prevailing party on the breach of contract cause of action, it should be awarded attorney fees and costs on that cause of action. (Civ. Code, § 1717, subd. (b)(1).) Thus, the judgment as modified by our opinion does not include contractual attorney fees and the orders appealed from should be affirmed under the authority of section 685.040.
On January 6, 2006, the trial court entered a judgment on jury verdict (the underlying judgment) which contained, among other liability findings, a finding that Overseas (Chinese Consumer Yellow Pages) breached the settlement agreement with CYP. The judgment also provided that “Plaintiffs Chinese Yellow Pages, Inc. and Chinese Yellow Pages, L.P. shall also have and recover the sum of_from the defendant Chinese Overseas Marketing Services Corporation, doing business as Chinese Consumer Yellow Pages, in the form of Contractual attorneys’ fees.” Shortly thereafter, Overseas filed a petition for bankruptcy. Following several postjudgment motions, Overseas filed a notice of appeal from the underlying judgment on April 3, 2006. The appeal is No. B190315.
*890The appeal dealt with trial issues relating to the validity of the jury verdict. On August 21, 2007, we filed our opinion affirming findings that found Overseas liable for various torts, but reversing the finding of breach of contract on the ground it was not supported by substantial evidence. The question of the right to recover attorney fees incurred in the enforcement of a judgment was not discussed in our opinion. Neither was the effect of the pending bankruptcy petition on the entitlement to attorney fees discussed.
The bankruptcy petition was dismissed on January 23, 2007. Shortly thereafter, and while the appeal on the underlying judgment was pending, CYP filed a motion to recover attorney fees it had expended in attempting to enforce the judgment while Overseas was in bankruptcy. CYP’s motion was based on section 685.040, which, as noted above, allows attorney fees as costs to enforce a judgment “if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of section 1033.5.” (Such fees are referred to as “contractual attorneys’ fees” in the underlying judgment.)
The trial court granted the motion to tax and denied CYP’s motion for fees. In argument on the motion, the trial court stated, citing to section 685.040, that it was unsure whether attempts to enforce an attorney fees award in a judgment should be litigated in state court or in the bankruptcy court or whether the attorney fees issue could be litigated in the state court while a bankruptcy stay was in effect. Not receiving any assistance or objection from the bankruptcy court, the trial court, believing a stay was in effect, granted the motion to strike the cost bill and denied CYP’s motion for attorney fees that were incurred in enforcing the judgment while the bankruptcy stay was believed to be in effect. (Apparently, the trial court was unaware that “On March 3, 2006, the bankruptcy court entered an order granting partial relief from the automatic stay pursuant to stipulation. Relief from the automatic stay was granted to allow the following posttrial motions to be litigated: a judgment notwithstanding the verdict motion; a motion to tax costs; and an attorney fees motion. Also, the debtor was permitted to appeal from the January 6, 2006 judgment.” (Maj. opn., ante, at p. 873.)) Fees incurred to enforce a judgment against a bankrupt debtor while the debtor’s bankruptcy is pending are recoverable under section 685.040 as costs so long as the underlying judgment includes contractual attorney fees. On February 28, 2007, CYP filed a notice of appeal No. B197234, challenging the trial court’s order. (This appeal, the second one to be filed in this case, is the one we are presently considering.)
Although the trial court’s order was incorrect at the time it was made because there was then an underlying nonfinal judgment outstanding that provided for contractual attorney fees in an amount to be decided later, a *891supervening event establishes that the court’s ultimate legal conclusion that CYP was not entitled to recover legal fees as costs under section 685.040 is indeed correct and the order granting the motion to strike and denying legal fees should be affirmed. The supervening event is our opinion deciding the appeal from the underlying judgment. As noted above, the trial court’s order was made while that appeal was pending. We decided the appeal from the underlying judgment on August 21, 2007. We held that “The judgment is reversed only insofar as it finds a contract breach recurred. The judgment is affirmed in all other respects. . . .” The import of this language is explained in that opinion, where we wrote: “Thus, there is no substantial evidence a contract breach occurred. No doubt, misrepresenting the terms of a settlement agreement can be tortious; but it is not a contract breach. The judgment must be modified to delete any reference to liability based on breach of contract.” (Italics added.)
There are only two references to liability based on breach of contract in the underlying judgment. In paragraph 4 on page 2, the judgment states that Chinese Consumer Yellow Pages breached the settlement agreement with CYP. That establishes a liability for damages based on breach of contract. In paragraph 4 on page 4, the judgment provides that CYP shall recover costs in the form of contractual attorney fees. That also is a liability based on breach of contract. With these two references deleted, as they must be according to our opinion, the underlying judgment does not include “an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of section 1033.5.” (§ 685.040.) Since the underlying judgment does not now provide for “contractual attorney fees,” CYP is not entitled to recover as costs any attorney fees it incurred in attempting to enforce its judgment pursuant to section 685.040. “However, this does not mean that an award of attorney fees to the party prevailing stands after a reversal of the judgment. ‘An order awarding costs falls with a reversal of the judgment on which it is based.’ [Citations.] ‘[T]he successful party is never required to pay the costs incurred by the unsuccessful party.’ [Citation.] After reversal of a judgment, ‘the matter of trial costs [is] set at large.’ [Citation.] Although we cannot reverse the order granting costs and fees, the trial court should do so on remand.” (Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284 [114 Cal.Rptr.2d 898].)
Therefore, the trial court’s ruling that “no fees or costs were recoverable under section 685.040” is correct and should be affirmed, even though the trial court reached that conclusion through mistaken reasoning. We are concerned with the result, not the reasons for the result. “Although the trial court did not expressly base its ruling on Evidence Code section 352, we review the ruling, not the court’s reasoning and, if the ruling was correct on any ground, we affirm. ‘ “ ‘No rule of decision is better or more firmly established by authority, nor one resting upon a sounder basis of reason and *892propriety, than that a ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for the wrong reason. If right upon any theory of law applicable to the case, it must be sustained regardless of the considerations which may have moved the trial court to its conclusion.’ ” ’ ” (People v. Geier (2007) 41 Cal.4th 555, 582 [61 Cal.Rptr.3d 580, 161 P.3d 104].)
Therefore, I would grant the petition for rehearing and affirm the order denying the motion for attorney fees and granting the motion to tax costs and award Chinese Overseas Marketing Service Corporation its costs on appeal.
A petition for a rehearing was denied January 29, 2009, and on January 26, 2009, and January 29, 2009, the opinion was modified to read as printed above. Respondent’s petition for review by the Supreme Court was denied April 1, 2009, S170402.

From time to time appellant and creditor Chinese Yellow Pages is referred to as CYP and respondent and debtor Chinese Overseas Marketing Service Corporation is referred to as “Overseas.”