Court Opinion

ID: 6104933
Source: CourtListenerOpinion
Date Created: 2022-01-19 22:02:49.869497+00
Date Added: 2024-06-11T08:53:45.856928
License: Public Domain

Filed 1/19/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

UNITED GRAND CORPORATION,                      B305146

       Plaintiff and Appellant,                (Los Angeles County
                                               Super. Ct. No. BC554172)
       v.

MARCIE STOLLOF,

       Defendant and Respondent.

     APPEAL from an order of the Superior Court of
Los Angeles County, Edward B. Moreton, Jr., Judge. Affirmed.

      Law Office of Bruce Adelstein and Bruce Adelstein for
Plaintiff and Appellant.

    Cozen O’Connor, Erik L. Jackson, Matthew Lewitz and
Thomas W. Casparian for Defendant and Respondent.

                       _________________________
      In this sixth appeal arising from a simple unpaid rent case
that began in 2014, appellant United Grand Corporation appeals
from an order granting respondent Marci Stollof attorney fees as
the prevailing party pursuant to the terms of a rent guaranty
agreement between her and United Grand. We affirm the trial
court’s order.

                        BACKGROUND
       United Grand Corporation (United Grand or UGC) filed
this action in August 2014, alleging that Malibu Hillbillies had
breached a lease agreement by failing to make rent payments in
the amount of $46,395.86 and Marcie Stollof had breached a
guaranty agreement by failing to make those payments when
Malibu Hillbillies did not. Both agreements include attorney fees
provisions. United Grand sought prejudgment interest and
attorney fees.
       United Grand obtained default judgments against Stollof
and Malibu Hillbillies. On April 13, 2015, judgment in the
amount of $67,852.55 was entered against Stollof and Malibu
Hillbillies. This amount included attorney fees and costs. As
detailed in our previous opinion, “Despite the essentially
uncontested nature of the case, [UGC’s] attorney, Cyrus Sanai,
continued to generate a large amount of attorney fees on the
case.” (United Grand Corp. v. Malibu Hillbillies, LLC (2019)
36 Cal.App.5th 142, 146 (United Grand).)
       Stollof lived in Maryland and was represented by counsel
there. United Grand elected to pursue Stollof in Maryland for
payment of the judgment. On May 22, 2015, United Grand
initiated enforcement proceedings in the Circuit Court for

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Baltimore County, Maryland. On May 29, 2015, the Maryland
court entered judgment in the amount of $67,852.55.
       As we explained in our prior opinion: “In July 2015, Stollof
tried to settle the case by offering to pay the amount of the April
13, 2015 judgment. United Grand refused the offer. United
Grand’s attorney, Sanai, explained his view of the litigation in
the letter refusing the offer: ‘What your client did not realize was
that once judgment was entered, unopposed requests for post-
judgment attorney fees would be rubber-stamped, and that
myself and Maryland counsel could, if we took post-judgment fees
on contingency, obtain a multiplier on our [lodestar] rate.’ ”
(United Grand, supra, 36 Cal.App.5th at p. 147.)
       On July 31, 2015, Stollof began the process of depositing
$68,418.35 in the Maryland court to satisfy the judgment, which
required court approval. Her motion was accompanied by a check
in that amount. She also filed a motion in California to set aside
the default judgment against her.
       With permission of the Maryland court, on September 10,
2015, Stollof deposited $68,418.35. United Grand was free to
withdraw these funds at any time if it accepted that the amount
satisfied the judgment. United Grand did not do so.
       On December 24, 2015, the trial court in California set
aside the default as to Stollof. Now free of the default judgment
entered against her, in April 2016 Stollof sought to end the case
by either releasing $56,615.59 of the money deposited with the
Maryland court to United Grand or transferring the full amount
deposited in the Maryland court, plus an additional $12,000 (for a
total of $80,000) to the Los Angeles County Superior Court.
United Grand refused both offers.

                                 3
       In May 2016, Stollof tried again to end the case. Her
attorney tendered a check for $56,705 to United Grand; this
amount represented the damages sought in the complaint plus
interest through May 2016. United Grand never deposited the
check.
       After these attempts at settlement failed, Stollof filed a
First Amended Answer to the complaint on July 19, 2016, in
which she alleged the defense of tender, specifically alleging the
deposit of funds in the Maryland court.
       On August 1, 2016, Stollof filed a motion in Los Angeles
Superior Court to deposit $56,705. The trial court granted the
motion on October 18, 2016 and Stollof deposited the funds that
same day. United Grand withdrew the full amount on November
23, 2016.
       Seeing that United Grand had been paid the full amount of
damages alleged in the complaint, the trial court issued an order
to show cause why United Grand’s complaint should not be
stricken as to Stollof. By March 17, 2017, United Grand and its
counsel Sanai had sought close to $2 million in attorney fees.
That same date, as a partial terminating sanction, the trial court
issued an order striking United Grand’s prayer for attorney fees
due to “pervasive misconduct” by United Grand, its attorney or
both. The court indicated that in an effort to end the case and, as
it said, “restore common sense and fairness in this clearly
‘extreme situation,’ ” it intended to enter judgment in favor of
United Grand and against Stollof in the amount already paid by
Stollof to United Grand. (United Grand, supra, 36 Cal.App.5th at
p. 150.) On April 11, 2017, the court entered such a judgment,
expressly finding that the judgment had been satisfied on
October 18, 2016 when Stollof deposited that amount with the

                                4
court. The trial court incorporated its March 17, 2017 ruling into
the judgment and specifically found that United Grand’s attorney
had committed misconduct.
      United Grand filed a notice of appeal, marking the fifth
appeal in this matter. We affirmed the trial court’s judgment.
(United Grand, supra, 36 Cal.App.5th at p. 167.) Following
remand, the trial court issued the order awarding attorney fees to
Stollof. That order is the subject of this appeal.

                          DISCUSSION
       The trial court awarded Stollof “her reasonable attorneys’
fees (totaling $165,870.00) and costs (totaling $42.00) incurred as
Stollof is the prevailing party in this action. Stollof is awarded
her reasonable attorneys’ fees and costs in connection with
(i) Stollof’s successful dismissal of Plaintiff United Grand
Corporation’s (‘UGC’) claim for attorneys’ fees in the trial and
(ii) Stollof’s successful dismissal of Second District Court of
Appeal No. B283833.”
       Allocation of attorney fees can be provided for by contract,
subject to the provisions and protections of Civil Code
section 1717.1 A trial court's determination that a litigant is a
prevailing party under section 1717 is generally reviewed for
abuse of discretion, but if the challenge to that determination is
solely one of law, the de novo standard of review applies. (Khan
v. Shim (2016) 7 Cal.App.5th 49, 55.)

1     Undesignated statutory references are to the Civil Code.

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I.    Stollof Is the Prevailing Party for Purposes of Attorney Fees.
      United Grand contends the trial court erred in awarding
attorney fees and costs to Stollof because it, not Stollof, was the
prevailing party under section 1717, subdivision (b)(1), as shown
by entry of judgment in its favor. United Grand argues it
“obtained a ‘simple, unqualified victory.’ It sued to recover
$46,395.86 for the defendants’ breach of contract. It obtained a
default judgment for this amount, and recovered the full amount
sought.”
      United Grand’s default judgment was set aside, and the
judgment ultimately entered by the trial court was not a “simple,
unqualified victory” for United Grand; it was not a victory at all.
The entry of judgment was, as the trial court expressly noted, a
partial terminating sanction. As such it was an act of leniency
toward United Grand, not a determination that United Grand
had obtained an unqualified victory. As the trial court noted,
complete dismissal of the action “would not . . . appear improper”
given the “deliberate and egregious misconduct by Plaintiff or
Plaintiff’s lawyer, or both.” Further, since United Grand had
withdrawn the funds deposited with the court by Stollof, the case
was no longer at issue. The trial court noted that it had inherent
power to dismiss the case because “courts should hear only actual
disputes and prevent harassment of defendants.” Rather than
entirely dismiss the case, the court elected to strike the prayer for
attorney fees and “simply enter[] a judgment for Plaintiff against
Stollof in the amount already collected by Plaintiff.” 2

2     The trial court noted Stollof did not object to this lesser
sanction.

                                  6
       These same facts establish Stollof as the prevailing party
under subdivision (b)(2) of section 1717, which provides: “Where
the defendant alleges in his or her answer that he or she
tendered to the plaintiff the full amount to which he or she was
entitled, and thereupon deposits in court for the plaintiff, the
amount so tendered, and the allegation is found to be true, then
the defendant is deemed to be a party prevailing on the contract
within the meaning of this section.” (§ 1717, subd. (b)(2).)
       David S. Karton, A Law Corp. v. Dougherty (2014)
231 Cal.App.4th 600 (Karton) sets out the governing analysis by
which “prevailing party” is determined where a party pays a
default judgment, only to have that default judgment later set
aside. Under the reasoning of that case, which we adopt, Stollof
is the prevailing party.
       Briefly, in Karton, after a default judgment was entered in
1999, the defendant voluntarily made partial payment of the
judgment amount, and by March 2008 Karton had recovered the
remainder of that amount through collection efforts. (Karton,
supra, 231 Cal.App.4th at pp. 603–604.) In August 2009 the
default judgment was vacated and, for reasons which are not
clear, the matter was sent to arbitration. The arbitration panel
found that defendant “had already paid” Karton an amount far in
excess of the amount owed. (Id. at p. 605.) Karton then
inexplicably moved for and obtained a trial de novo, with similar
results: the trial court “concluded that [defendant’s] contractual
debt to Karton was fully repaid (with interest) nearly four years
before trial and that Karton was therefore not entitled to
damages or any other remedy on the breach of contract claim.”
(Id. at p. 606.) Nevertheless “the court’s statement of decision
states that Karton ‘has established its breach of contract claim.’
(Underscoring omitted.) The court appears to have reasoned that

                                7
because ‘[Karton] had to sue [defendant] to recover fees owed,’
Karton should be able to recover attorney fees incurred in this
litigation, pursuant to the attorney fee provision of the retainer
agreement.” (Ibid.)
       The Court of Appeal disagreed, finding that the defendant
was the prevailing party under section 1717, subdivision (b)(2).
The Court of Appeal recognized that the facts of the case did not
precisely fit with subdivision (b)(2), because the plaintiff had
actually accepted payment of the debt, leaving nothing for the
defendant to deposit. Nevertheless, the Court of Appeal
concluded the logic of the statute required that defendant be
deemed the prevailing party. (Karton, supra, 231 Cal.App.4th at
p. 608.) We agree.
       A case in which a defendant’s default has been taken
necessarily has no adversarial quality. (Vincent v. Sonkey (2020)
59 Cal.App.5th 160, 164.) A default judgment is, effectively, a
debt which is owed. Thus, a defendant who tenders payment of a
default judgment is in the same position as a defendant who
makes a pre-complaint tender of payment of a contractual debt:
they are doing so at a time when no complaint is pending. Thus,
even if United Grand were correct that the general legal
definition of tender requires a pre-complaint offer and if this
definition were incorporated into section 1717, subdivision (b)(2),
Stollof made such pre-complaint tender no later than September
10, 2015, when she deposited the amount of the default judgment
with the Maryland court. She later alleged this deposit in her
amended answer as part of her affirmative defense of tender. 3

3
      In her earlier motion to deposit the funds, incorporated by
reference into her amended answer, she stated she “hereby
tenders $68,418.35 which are the funds necessary to satisfy the

                                 8
        United Grand argues that section 1717, subdivision (b)(2)
clearly requires tender must be made before the defendant
answers. We agree, but more than that we hold that this is the
only timing requirement: tender need only be made pre-answer,
not pre-complaint. That is all that is specified in the statute.
Because Stollof completed her first tender at the latest in
September 2015 when the Maryland court accepted her deposit,
tender occurred before the default judgment was vacated in
December 2015, and so necessarily before she filed an answer in
the case.
        Because we conclude the logic of Karton governs the facts
before us, we decline to address United Grand’s analysis of
Joseph Magnin Co. v. Schmidt (1978) 89 Cal.App.3d Supp. 7, an
opinion from the appellate division of the Los Angeles County
Superior Court addressing section 181.1, an analogous attorney
fee provision in the Unruh Act. “Appellate division decisions
[may] have persuasive value, but they are of debatable strength
as precedents and are not binding on higher reviewing courts.”
(Velasquez v. Superior Court (2014) 227 Cal.App.4th 1471, 1477,
fn. 7.)
        Any other argument raised by United Grand which faults
the timing of Stollof’s ultimate deposit of the funds with the Los
Angeles Superior Court is forfeited by United Grand’s obstructive
conduct. We find United Grand is estopped from relying on
delays it caused.

judgment.” The motion was accompanied by a check in that
amount. Thereafter, United Grand had the ability to withdraw
those funds in satisfaction of the judgment it had registered in
Maryland. Thus this deposit was not the equivalent of a deposit
made pending resolution of the case. Stollof adequately alleged
tender.

                                9
II.    United Grand Has Forfeited Its Claims Concerning
       Attorney Fees Allegedly Attributable to Sanai Alone.
       United Grand contends the trial court should not have
awarded Stollof fees for services rendered in connection with
Sanai’s personal appeal from the sanctions award against him
and his contempt proceedings. United Grand also complains that
Stollof’s attorneys did not submit timesheets or explain in detail
how they incurred the total amount of fees. United Grand
acknowledges that these claims should have been, but were not,
made in the trial court and that “ordinarily” the claims would be
forfeited on appeal. United Grand contends we should
nevertheless consider these claims because they are issues of law
based on undisputed facts. We do not agree.
       United Grand asks that we remand the matter with
directions “to have Stollof’s lawyers submit their time records
and the trial court make a proper allocation of attorney’s fees.”
This necessarily acknowledges that the facts are not undisputed
and the record not adequate to resolve its claims.
       Stollof’s attorneys did not act improperly in submitting
declarations and summaries of their work. “It is well established
that ‘California courts do not require detailed time records, and
trial courts have discretion to award fees based on declarations of
counsel describing the work they have done and the court’s own
view of the number of hours reasonably spent.’ ” (Syers
Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 698.)
United Grand should have, but did not, object to the summaries if
it needed more detailed records to show what fees were
recoverable. We decline United Grand’s request to consider its
forfeited claims or to remand the matter for further proceedings.

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                         DISPOSITION
      The trial court’s order is affirmed. Respondent Marcie
Stollof is awarded costs on appeal.

     CERTIFIED FOR PUBLICATION

                                    STRATTON, J.

We concur:

             GRIMES, Acting P. J.

             WILEY, J.

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