Court Opinion

ID: 7804010
Source: CourtListenerOpinion
Date Created: 2022-08-26 19:02:09.837128+00
Date Added: 2024-06-11T16:29:46.091186
License: Public Domain

Filed 8/26/22 Sun West Mortgage v. First Alliance Home Mortgage CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE

 SUN WEST MORTGAGE                                                     B303510, B304901
 COMPANY, INC.,
                                                                       (Los Angeles County
           Plaintiff and Respondent,                                   Super. Ct. No. BC659293)

           v.

 FIRST ALLIANCE HOME
 MORTGAGE, LLC,

           Defendant and Appellant.

     APPEAL from a judgment of the Superior Court of
Los Angeles County, Dennis J. Landin, Judge. Affirmed.
     Law Offices of Russell J. Thomulka and Russell J.
Thomulka for Defendant and Appellant.
     Early Sullivan Wright Gizer & McRae, Scott E. Gizer and
Diane M. Luczon for Plaintiff and Respondent.
                 ____________________________
       Defendant and appellant First Alliance Home Mortgage,
LLC (First Alliance) issued a loan to a borrower to refinance an
investment property. First Alliance later sold this loan to
plaintiff and respondent Sun West Mortgage Company, Inc.
(Sun West), which in turn sold the loan to Fannie Mae.
Fannie Mae demanded that Sun West repurchase the loan
because the borrower lacked sufficient cash reserves to satisfy
Fannie Mae’s guidelines. Pursuant to an agreement that
governed Sun West’s initial purchase of the loan from
First Alliance, Sun West demanded that First Alliance
repurchase the loan from Sun West. First Alliance did not
repurchase the loan.
       Sun West filed suit against First Alliance for breach of
contract and indemnity. After a one-day bench trial, the trial
court found in favor of Sun West on both causes of action and
ordered (a) First Alliance to pay Sun West the amount Sun West
had paid to Fannie Mae to repurchase the loan ($73,077.13); and
(b) Sun West to transfer the loan back to First Alliance. The
trial court awarded Sun West prejudgment interest at the rate
of 10 percent, which accrued from the date Sun West repurchased
the loan from Fannie Mae to the date First Alliance repurchased
the loan from Sun West, along with $160,000 in attorney fees and
$14,660.90 in expert fees and other costs.
       On appeal, First Alliance principally argues that the
trial court erred in: (1) ordering specific performance of the
parties’ agreement by requiring First Alliance to repurchase the
loan instead of awarding ordinary contract damages to Sun West;
(2) awarding excessive attorney fees and costs, given that
Sun West’s actual damages were (according to First Alliance)
only $5,236.27; (3) selecting a prejudgment interest rate of

                                  2
10 percent instead of the 4.5 percent rate applicable to the
underlying loan; and (4) applying that 10 percent interest rate to
the repurchase price rather than what First Alliance contends
are Sun West’s actual damages. We conclude First Alliance fails
to establish that the trial court abused its discretion in granting
specific performance and in awarding attorney fees and costs; the
4.5 percent interest rate does not govern the prejudgment
interest calculation because the 4.5 percent rate is owed by the
borrower of the loan and not First Alliance; and the court did not
err in applying the 10 percent rate to the repurchase price
because the grant of specific performance was proper. Finding no
error, we affirm the judgment.

      FACTUAL AND PROCEDURAL BACKGROUND1
      We summarize only those facts that are pertinent to our
disposition of this appeal.

      1  Our factual and procedural background is derived in part
from undisputed aspects of the trial court’s rulings, admissions
made by the parties in their filings, and assertions Sun West
raises in its respondent’s brief to which First Alliance does not
respond in its reply. (See Baxter v. State Teachers’ Retirement
System (2017) 18 Cal.App.5th 340, 349, fn. 2 [utilizing the
summary of facts provided in the trial court’s ruling]; Standards
of Review, post [noting that the trial court’s orders and
judgments are presumed correct]; Artal v. Allen (2003)
111 Cal.App.4th 273, 275, fn. 2 [“ ‘[B]riefs and argument . . . are
reliable indications of a party’s position on the facts as well as the
law, and a reviewing court may make use of statements therein
as admissions against the party.’ ”]; Rudick v. State Bd. of
Optometry (2019) 41 Cal.App.5th 77, 89–90 [concluding that the
appellants made an implicit concession by “failing to respond in
their reply brief to the [respondent’s] argument on th[at] point”].)

                                     3
1.    The broker agreement
       On August 28, 2012, Sun West and First Alliance entered
into the mortgage broker and correspondent agreement (broker
agreement). The broker agreement states that First Alliance is
“in the business of originating, brokering, soliciting, and/or
selling Mortgage Loans,” and that First Alliance “desires to sell”
and Sun West “desires to purchase Mortgage Loans, in
accordance with the terms of this Agreement.” This agreement
governs the parties’ business transactions that occurred in 2013,
and the document provides that “it shall be interpreted and
construed in accordance with, and shall be governed by, the laws
of the State of California.”
       In section 3 of the agreement, First Alliance makes several
representations and warranties “[a]s to each Loan Application or
Mortgage Loan submitted to” Sun West. For instance,
paragraph 3(b)(i) provides: “The Loan Application or Mortgage
Loan strictly complies with, and has been originated, processed,
closed, and Funded in accordance with the Guides,[2 ] Applicable
Law, the guidelines of the Insuring Agency, [Sun West’s]
instructions, and FHA, HUD, VA, USDA-RD, Freddie Mac,

      2  The broker agreement defines “Guides” to “mean and
include the [Sun West] Forward Mortgage Seller Guide (‘Forward
Guide’), [Sun West] Reverse Mortgage Seller and Underwriting
Guide (‘Reverse Guide’), [Sun West] Product Manual, lender
alerts, and all other materials, including without limitation,
product profiles, underwriting standards, loan commitments,
closing instructions, other communications, overlays,
announcements or guidelines published by [Sun West] on its
website or provided to [First Alliance] from time to time, as
amended and supplemented, that are in effect at loan Funding.”

                                    4
Fannie Mae, or Investor[3 ] guidelines.” Further,
paragraph 3(b)(vi) provides: “All representations made by
[First Alliance] to [Sun West] concerning the Mortgage Loan and
all information contained in the Loan Application and in any
document provided to [Sun West] have been verified by [First
Alliance] as true and correct in all respects.”
       Section 5 identifies certain occurrences that constitute
“Events of Default” under the broker agreement. (Boldface
omitted.) For example, paragraph 5(a) states: “Uncured Breach.
[First Alliance] has breached any representation, warranty,
covenant, or other obligation contained in this Agreement and
[First Alliance] has failed to cure such breach to the satisfaction
of [Sun West] within ten (10) days of [Sun West’s] notice thereof.”
Another example is paragraph 5(e), which provides: “Loan
Ineligible For Purchase. In the reasonable judgment of [Sun
West], the Mortgage Loan is not eligible for Ginnie Mae, Fannie
Mae, or Freddie Mac pool participation or whole loan purchase or
purchase by an Investor.” Additionally, paragraph 5(f) states
that the following is included in the definition of “Events of
Default”: “Investor Demand. For reasons other than the action
of [Sun West], an Investor requires [Sun West] to repurchase a
Mortgage Loan, indemnify the Investor, or reimburse the
Investor for pricing premiums, fees, or other losses.”
       Paragraph 6(a) of the agreement enumerates certain
remedies that Sun West “may elect” to recover “[u]pon the

      3 The broker agreement defines the term “Investor” as
“any person or entity that has purchased a Mortgage Loan from
[Sun West] and/or has issued a guaranty or policy of mortgage
insurance and includes, without limitation, Ginnie Mae,
Fannie Mae, Freddie Mac or an [sic] private investor.”

                                    5
occurrence of an Event of Default . . . .” Of particular relevance
here is paragraph 6(a)(ii), which states: “Repurchase.
[First Alliance] agrees to repurchase the Mortgage Loan (or the
mortgaged property, if title thereto is held by [Sun West]) at the
‘Repurchase Price’ (defined in the Guides), plus $2,000 as
reimbursement for [Sun West’s] administrative expenses. All
repurchases shall be completed within twenty (20) days following
receipt of written notice from [Sun West] to repurchase.”
Further, paragraph 6(a)(iii) provides in pertinent part:
“Indemnification. [First Alliance] agrees to indemnify and defend
and hold [Sun West] . . . harmless from and against, and shall
reimburse [Sun West] with respect to, any and all losses,
damages, demands, claims, liabilities, costs and expenses,
including reasonable attorneys’ fees, whether or not a lawsuit is
filed (collectively, ‘Losses’), of any nature or cause whatsoever,
incurred by reason of or arising out of or in connection with: . . .
an Event of Default . . . .”
       The broker agreement also contains the following fee-
shifting provision: “Attorneys’ Fees and Costs. In the event of
any controversy, claim or action between the parties, arising from
or related to this agreement, the prevailing party will be entitled
to receive from the other party its reasonable attorneys’ fees and
costs.”

2.    The loan transaction, Fannie Mae’s repurchase
      demand, and Sun West’s attempt to have
      First Alliance repurchase the loan
      On March 15, 2013, First Alliance issued the subject loan to
a borrower in the amount of $77,000 to allow him to refinance an
investment property located in Pennsylvania. Pursuant to the
terms of the broker agreement, Sun West later purchased the

                                    6
loan from First Alliance. Sun West subsequently sold the loan to
Fannie Mae.
       In a letter dated November 18, 2013, Fannie Mae
demanded that Sun West repurchase the loan because
Fannie Mae claimed the borrower did not have sufficient cash
reserves to meet Fannie Mae’s guidelines. On May 8, 2014,
Sun West repurchased the loan from Fannie Mae for $73,077.13.4
       In a letter dated September 7, 2016, Sun West demanded
that First Alliance repurchase the loan pursuant to
paragraph 6(a)(ii) of the broker agreement within twenty days of
the date of the letter. First Alliance failed to respond to this
letter, and later claimed that it did not receive this
correspondence because First Alliance had relocated and
Sun West sent the letter to First Alliance’s prior address.

3.    The trial court proceedings
      On April 28, 2017, Sun West filed a complaint against
First Alliance, alleging two causes of action: (1) breach of

      4   Although Sun West presented stipulated testimony from
its chief operations officer that Sun West repurchased the loan
from Fannie Mae on May 8, 2014 for $76,067.45, the parties
seemed to have agreed in their posttrial briefing that Sun West
actually paid $73,077.13 to Fannie Mae to repurchase the loan.
      In addition, we note that First Alliance does not dispute
Sun West’s claims that: (a) At some point before Sun West
repurchased the loan from Fannie Mae, Sun West contacted
First Alliance in an attempt to cure the aforesaid violation of
Fannie Mae’s guidelines (i.e., the borrower’s insufficient cash
reserves), and (b) “First Alliance was not able to provide any
additional documentation” that would have achieved that
objective.

                                    7
contract and (2) indemnity. In the complaint, Sun West averred
that First Alliance’s breach of the broker agreement damaged
Sun West “in an amount . . . no less than $80,000.” In its prayer
for relief, Sun West sought “damages in an amount according to
proof at trial; [¶] . . . pre-judgment interest at the legal rate for
all amounts owed; [¶] . . . an award of reasonable attorneys’ fees
pursuant to the Agreement; [¶] . . . costs of suit incurred herein;
and [¶] . . . such other and further relief as the Court deems just
and proper.”
        A one-day bench trial was held on May 29, 2019. On
July 29, 2019, the trial court issued a tentative decision, wherein
the court announced its intention to rule as follows: “[A]s to the
first cause of action for breach of contract and the second cause of
action for indemnity, the court finds in favor of [Sun West] and
against [First Alliance]. [Sun West] will be awarded $73,077.13,
pre-judgment interest, costs of suit and reasonable attorney
fees. . . . Also, the parties are ordered to meet and confer to
determine how and when the subject loan will be returned to
[First Alliance] and what credit against the judgment, if any,
should be allowed given that payments on the loan have been
made.” On August 20, 2019, the trial court issued a minute order
in which it “adopt[ed] the Tentative Ruling and [found] in favor of
Sun West . . . .”
        On December 12, 2019, the trial court entered judgment in
favor of Sun West (initial judgment). The initial judgment
recited the following: “On September 24, 2019, First Alliance
transferred to Sun West $72,634.00 to repurchase the subject
loan. Sun West transferred back the subject loan to
First Alliance and on October 22, 2019, transferred back the

                                     8
escrow balance of $1,858.47 to First Alliance.” 5 The court
decreed that “Sun West is entitled to pre-judgment interest at the
rate of ten percent (10%) per annum on the amount awarded of
$73,077.13 from May 8, 2014 to September 24, 2019,” and that
“Sun West is entitled to attorney’s fees and costs in the amount of
$174,660.90.” It further decreed that Sun West “is entitled to
additional costs” and that “Sun West shall have and recover from
First Alliance interest at the rate of ten percent (10%) per annum
on any amounts outstanding under this Judgment from the date
of entry of this Judgment until fully paid.” The initial judgment
did not quantify the amount of the “additional costs” to which
Sun West was entitled. First Alliance appealed the initial
judgment on January 2, 2020.6
      On February 6, 2020, the trial court entered an amended
judgment that is substantially similar to the initial judgment; the
only apparent difference between the two judgments is that the
amended judgment provides that Sun West is entitled to
additional costs of “$4,400.01.” First Alliance appealed the

      5  Although neither party explains why First Alliance paid
less than $73,077.13 to repurchase the loan from Sun West, the
disparity may be attributed to the trial court’s order requiring
the parties to “meet and confer to determine . . . what credit
against the judgment, if any, should be allowed given that
payments on the loan have been made.”
      6   Although First Alliance’s counsel erroneously
represented that “Plaintiff ASTRA PACIFIC OUTDOOR, LLC”
was appealing a judgment purportedly entered on
“August 6, 2019,” Sun West concedes that this notice of appeal
was filed on behalf of First Alliance and that it concerns the
initial judgment.

                                   9
amended judgment on March 9, 2020. We later consolidated
First Alliance’s appeals of the initial and amended judgments.
       On July 9, 2020, the trial court entered a second amended
judgment that does not appear to differ in any material respect
from the amended judgment.7 On September 3, 2020, the trial
court entered a third amended judgment that is substantially
similar to the second amended judgment; the only apparent
difference between the two documents is that the third amended
judgment calculates the amount of prejudgment interest due
thereunder, to wit, $39,341.46.8

                   STANDARDS OF REVIEW
       “In reviewing a judgment based upon a statement of
decision following a bench trial, we review questions of law
de novo. [Citation.] We apply a substantial evidence standard of
review to the trial court’s findings of fact. [Citation.] Under this

      7  In their respective appellate briefs, neither party
identifies the differences between the various iterations of the
judgment that the trial court issued.
      8  Although First Alliance did not appeal the second
amended judgment or the third amended judgment, its failure to
do so does not affect our jurisdiction because First Alliance’s
appellate claims concern only rulings included in the initial
judgment from which it timely appealed—i.e., the repurchase of
the loan, the $174,660.90 attorney fees and costs award, and the
method of calculating the prejudgment interest. (See Ellis v.
Ellis (2015) 235 Cal.App.4th 837, 842–843 [holding that if an
appealing “ ‘party can obtain the desired relief from a judgment
before it is amended,’ ” then “any changes [included in an
amended judgment] are considered to relate back to the original
judgment and the time to appeal runs from the entry of the first
judgment”].)

                                    10
deferential standard of review, findings of fact are liberally
construed to support the judgment and we consider the evidence
in the light most favorable to the prevailing party, drawing all
reasonable inferences in support of the findings.” (Thompson v.
Asimos (2016) 6 Cal.App.5th 970, 981 (Thompson).)
        “Judgments and orders granting or denying specific
performance . . . are reviewed under an abuse of discretion
standard” (Petrolink, Inc. v. Lantel Enterprises (2022)
81 Cal.App.5th 156, 165–166 (Petrolink, Inc.)), as are attorney fee
awards (Roth v. Plikaytis (2017) 15 Cal.App.5th 283, 289–290
(Roth)). “[We also] review a trial court’s determination on which
costs are reasonably necessary and reasonable in amount under
the abuse of discretion standard.” (Charton v. Harkey (2016)
247 Cal.App.4th 730, 739 (Charton).) “ ‘The abuse of discretion
standard is “deferential,” but it “is not empty.” [Citation.] “[I]t
asks in substance whether the ruling in question ‘falls outside the
bounds of reason’ under the applicable law and the relevant
facts.” ’ [Citation.]” (Roth, supra, 15 Cal.App.5th at p. 290.)
        “Determining whether the 10 percent interest rate of
section 3289, subdivision (b) . . . applies is a question of law we
review de novo.” (Carmel Development Co., Inc. v. Anderson
(2020) 48 Cal.App.5th 492, 525.)
        “ ‘A judgment or order of a lower court is presumed to be
correct on appeal, and all intendments and presumptions are
indulged in favor of its correctness.’ [Citation.]” (Thompson,
supra, 6 Cal.App.5th at p. 981.) Thus, “ ‘ “it is the appellant’s
responsibility to affirmatively demonstrate error[,]” ’ ” and
“ ‘ “review is limited to issues which have been adequately raised
and briefed.” ’ [Citation.]” (See Los Angeles Unified School Dist.
v. Torres Construction Corp. (2020) 57 Cal.App.5th 480, 492

                                   11
(Los Angeles Unified School Dist.).) “ ‘[T]o demonstrate error, an
appellant must supply the reviewing court with some cogent
argument supported by legal analysis and citation to the record.’
[Citation.]” (Hernandez v. First Student, Inc. (2019)
37 Cal.App.5th 270, 277 (Hernandez).) The appellant bears this
burden of rebutting the presumption of correctness accorded to
the trial court’s decision, regardless of the applicable standard
of review. (See Los Angeles Unified School Dist., at p. 492 [noting
that these principles apply to “ ‘ “an appeal from any
judgment” ’ ”]; see also Orange County Water Dist. v. Sabic
Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 368, 399
[indicating that an appellant must affirmatively show the trial
court erred even if the de novo standard of review applies].)
       Additionally, “ ‘[i]f the decision of a lower court is correct on
any theory of law applicable to the case, the judgment or order
will be affirmed regardless of the correctness of the grounds upon
which the lower court reached its conclusion.’ [Citation.]”
(Estate of Sapp (2019) 36 Cal.App.5th 86, 104.)

                            DISCUSSION

   A.    First Alliance Fails to Establish the Trial Court
         Abused Its Discretion in Awarding Specific
         Performance to Sun West
       First Alliance argues the trial court erred in granting
specific performance of the broker agreement by ordering
First Alliance to pay $73,077.13 and requiring Sun West to
transfer the underlying loan back to First Alliance. In particular,
First Alliance contends that Sun West did not request specific
performance in its complaint, and that this remedy was improper
because “damages were adequate and would have compensated

                                      12
Sun West . . . .” First Alliance insists the trial court should have
instead awarded “ ‘benefit of the bargain’ ” damages, i.e., the
difference between “the fair market value that Sun West paid to
Fannie Mae which it had not anticipated having to pay” and “the
fair market value of what Sun West received from Fannie Mae in
exchange for that unanticipated payment.” (Some capitalization
omitted.) First Alliance claims this formula “yields . . . actual
damages of only $5,236.72 . . . .”
       As a preliminary matter, we assess the nature of the relief
afforded to Sun West. In its statement of decision, the trial court
ruled that Sun West “will be awarded $73,077.13, pre-judgment
interest, costs of suit and reasonable attorney fees,” and it
“ordered [the parties] to meet and confer to determine how and
when the subject loan will be returned to” First Alliance. In
essence, the court ordered First Alliance to perform an obligation
that Sun West claimed had been imposed by the broker
agreement—i.e., the “repurchase of the [l]oan” at the
“[r]epurchase ‘[p]rice’ of $73,077.13 . . . .” We agree with
First Alliance that this ruling constitutes an order granting
specific performance.9 (See 58 Cal.Jur.3d (2020) Specific
Performance, § 1 [“An action for specific performance [is a suit in

      9    First Alliance also asserts that “specific performance
is not a remedy that [Sun West] ever requested.” During the
proceedings below, First Alliance contended that ordering it to
pay Sun West to reacquire the loan “would only be appropriate if
[Sun West] were suing for specific performance, which it has not
done.” In its posttrial rebuttal brief, Sun West responded: “[T]o
the extent the Court views Sun West’s relief as requesting
specific performance, the Court has the authority to order that
relief . . . .” Thus, it does not appear that the trial court was
acting sua sponte in awarding specific performance to Sun West.

                                    13
which] one party to an agreement seeks to compel the other to
perform as he or she agreed.”]; see also Petrolink, Inc., supra,
81 Cal.App.5th at p. 165 [holding that “an order compelling a
party to perform an affirmative act is inherently an order for
specific performance,” e.g., an order requiring the parties to
complete “a property sale transaction”].)
       Yet, we do not agree with First Alliance that the absence of
a prayer for specific performance in the complaint precluded
Sun West from obtaining this relief. Given that First Alliance
answered the complaint, the trial court was authorized to
“grant . . . any relief consistent with the case made by the
complaint and embraced within the issue. . . . regardless of
whether the theory upon which liability [was] sought to be
imposed involve[d] legal or equitable principles.” (See Code Civ.
Proc., § 580, subd. (a).) Specific performance is an equitable
remedy for breach of contract.10 Furthermore, Sun West alleged
in its complaint that the broker agreement obligated
First Alliance to repurchase the loan, and Sun West sought “such
other and further relief as the Court deems just and proper,”
thereby notifying First Alliance that Sun West could seek relief
other than damages. Because specific performance is relief that
is consistent with the case made by the complaint and embraced

      10  (5 Witkin, Cal. Procedure (6th ed. 2021), § 780 [“Specific
performance is an alternative remedy; the cause of action is for
breach of contract.”]; Wong v. Jing (2010) 189 Cal.App.4th 1354,
1360, fn. 2 [“[S]pecific performance . . . [is an] equitable remed[y]
and not [a] cause[ ] of action for injuries.”].)

                                    14
within the issues raised thereby, Sun West’s failure to request
that remedy in its pleading is immaterial.11
       First Alliance intimates for the first time in its reply that
had Sun West sought specific performance in the complaint, then
First Alliance would have conducted discovery on entitlement
to that relief. First Alliance waived this argument by failing to
raise it in a timely fashion. (Habitat & Watershed Caretakers v.
City of Santa Cruz (2013) 213 Cal.App.4th 1277, 1292, fn. 6
[“Arguments presented for the first time in an appellant’s reply
brief are considered waived.”].) In any event, defense counsel’s
failure to undertake discovery on this question does not
demonstrate that the trial court erred in granting specific
performance, given that Code of Civil Procedure section 580 put
counsel on notice that Sun West could obtain remedies other than
those identified in the complaint and Sun West alleged in the
complaint that the broker agreement obligated First Alliance to
repurchase the loan. (See Steinhart v. County of Los Angeles
(2010) 47 Cal.4th 1298, 1316 [“[A]ttorneys are ‘charged with
knowledge of the law in California.’ ”].)
       In addition to its assertion that Sun West should have
prayed for specific performance in the complaint, First Alliance
also maintains that “specific performance was not lawfully

      11  (See Wright v. Rogers (1959) 172 Cal.App.2d 349, 367–
368 [“[W]hen an answer is filed, the case becomes one in which
the court is authorized regardless of the prayer to grant any relief
consistent with the plaintiff’s averments. The jurisdiction of the
court to grant any particular relief depends not on the prayer but
on the issues—that is, on the scope of the complaint and the
issues made or which might have been made under it—and any
relief consistent with the issues raised may be granted regardless
of the prayer.”].)

                                    15
justified.” “ ‘The basic rule is that . . . specific performance will be
granted only when the legal remedy, such as an action for
damages, is inadequate.’ [Citation.]” (Valley Crest Landscape
Development, Inc. v. Mission Pools of Escondido, Inc. (2015)
238 Cal.App.4th 468, 492.)
       As Sun West points out in its briefing, Sun West’s chief
executive officer testified that if Sun West attempted to resell the
loan to an entity other than First Alliance, then Sun West would
have needed to execute a mortgage loan purchase agreement
exposing Sun West to liability for “anything in the loan that [the
buyer is] not aware of . . . or any misrepresentations” in the loan
documents. This corporate officer further testified that Sun West
sought to avoid incurring this liability. In response to Sun West’s
reliance on this evidence, First Alliance directs us to testimony
from its own chief executive officer in which he stated his belief
that First Alliance “could easily sell this [loan] without having to
[agree to] indemnify” the purchaser of the loan.
       Because granting or denying specific performance is a
matter committed to the trial court’s discretion (see Petrolink,
Inc., supra, 81 Cal.App.5th at pp. 165–166), the court was
entitled to credit Sun West’s evidence on this point and reject the
testimony of First Alliance’s chief executive officer. (See In re
Caden C. (2021) 11 Cal.5th 614, 640–641 (Caden C.) [holding that
when an appellate court reviews “ ‘the factual basis for an
exercise of discretion,’ ” it “should ‘not reweigh the evidence,
evaluate the credibility of witnesses, or resolve evidentiary
conflicts’ ”].) Moreover, First Alliance does not argue that the
testimony from Sun West’s chief executive officer falls short of
establishing that an award of damages would have been
inadequate. In sum, First Alliance has failed to discharge its

                                      16
burden of affirmatively establishing the trial court abused its
discretion in awarding Sun West specific performance of the
broker agreement instead of “ ‘benefit of the bargain’ ” damages.
(Capitalization omitted.) (See Los Angeles Unified School Dist.,
supra, 57 Cal.App.5th at p. 492.)

   B.    First Alliance Does Not Show the Trial Court
         Abused Its Discretion in Awarding Attorney Fees
         and Costs to Sun West
       “ ‘[T]he [attorney] fee setting inquiry in California
ordinarily begins with the “lodestar,” i.e., the number of hours
reasonably expended multiplied by the reasonable hourly rate.’
[Citation.] ‘The lodestar figure may then be adjusted, based on
consideration of factors specific to the case, in order to fix the fee
at the fair market value for the legal services provided.
[Citation.] . . . .’ [Citation.]” (Roth, supra, 15 Cal.App.5th at
p. 290.) “ ‘ “Because the ‘experienced trial judge is the best judge
of the value of professional services rendered in his court,’ we will
not disturb the trial court’s decision unless convinced that it is
clearly wrong . . . .” ’ [Citation.]” (Ibid.)
       “All costs awarded to a prevailing party must be
(1) incurred by that party, whether or not paid; (2) ‘reasonably
necessary to the conduct of the litigation rather than merely
convenient or beneficial to its preparation’; and (3) reasonable in
amount.” (Charton, supra, 247 Cal.App.4th at p. 739.)
       During the proceedings below, the trial court granted
Sun West’s motion for attorney fees and costs and awarded
Sun West a total of $174,660.90, $160,000.00 of which were
attorney fees, $8,784.70 of which were expert fees, and $5,876.20
were other costs. The court stated the attorney fee award was

                                     17
“computed based on a blended rate of $400 per hour for 400
hours, which . . . is the reasonable amount to litigate this case.”
        First Alliance argues the $174,660.90 attorney fees and
costs award is “exorbitant” because “the actual economic damage
[is] less than approximately . . . $8,000,” and “First Alliance . . .
served an offer of compromise pursuant to [Code of Civil
Procedure section] 998 in the amount of $8,000.00 ‘plus costs as
allowed by the court,’ that would have addressed reasonable
attorneys’ fees.” First Alliance also contends that because
“Sun West’s damages predictably were . . . . less than one-third of
the $25,000” ceiling on limited civil jurisdiction, the trial court
should have denied costs or reduced the amount awarded
pursuant to Code of Civil Procedure section 1033,
subdivision (a).12 These arguments are unavailing because they
rely on First Alliance’s flawed assertion that the trial court erred
in ordering First Alliance to pay $73,077.13 to repurchase the
loan.13 (See Discussion, part A, ante.)
        Furthermore, First Alliance alleges the trial court should
have reduced the award of attorney fees and costs because it had
a “good faith” defense. Specifically, First Alliance argues the

      12   Code of Civil Procedure section 1033, subdivision (a)
provides in pertinent part: “Costs or any portion of claimed costs
shall be as determined by the court in its discretion in a case
other than a limited civil case . . . where the prevailing party
recovers a judgment that could have been rendered in a limited
civil case.” (Code Civ. Proc., § 1033, subd. (a).)
      13  For instance, First Alliance argues in its reply brief that
“the inflated award of attorneys’ fees clearly was unreasonable
given the amount of actual damages.” (Italics added; boldface &
capitalization omitted.)

                                    18
“sole” provision of the broker agreement the complaint alleged
that First Alliance had breached was paragraph 5(f), which
provision “explicitly required the absence of fault by Sun West.”
According to First Alliance, the trial court’s statement of decision
“specifically recognized that Sun West was involved in the
underwriting, knew about the account deficiency at the closing,
and . . . made the affirmative decision to proceed with the
closing.” First Alliance thus submits paragraph 5(f) “exonerated
First Alliance,” meaning “First Alliance’s defense to this matter
was reasonable.”
       First Alliance misreads the record. In its statement of
decision, the trial court stated that although one exhibit
“suggests that Sun West may have engaged in an underwriting
function, the balance of the evidence shows that it was only First
Alliance that served as the underwriter relative to the subject
loan.” The court deemed “credible and reasonable” the evidence
showing that First Alliance was the sole underwriter. The court
further stated that “even if Sun West personnel were engaged in
tasks similar to those of an underwriter, they were not given
information about the borrower’s insufficient cash reserves until
the time of closing.” Consequently, the lower court ruled that
“the contract provision that First Alliance seeks to invoke to
avoid repurchasing the loan, i.e. that when Sun West makes a
mistake, First Alliance is relieved of its repurchase obligation, is
not applicable.”
       Under the deferential abuse of discretion standard of
review applicable to First Alliance’s claim of error (Roth, supra,
15 Cal.App.5th at p. 290; Charton, supra, 247 Cal.App.4th at
p. 739), the trial court’s finding that Sun West was not at fault
vis-à-vis the loan transaction is conclusive. (See Caden C., supra,

                                    19
11 Cal.5th at pp. 640–641 [holding that a reviewing court
may not reweigh the evidence in assessing the factual basis for a
trial court’s exercise of discretion].) First Alliance’s good faith
defense argument thus fails.
       For the foregoing reasons, we conclude that First Alliance
has not shown the trial court erred in awarding $174,660.90 in
attorney fees and costs to Sun West.

   C.    First Alliance Fails to Demonstrate the Trial
         Court Erred in Awarding Prejudgment Interest to
         Sun West
      The trial court awarded Sun West prejudgment interest at
the rate of 10 percent per annum on $73,077.13, accruing from
May 8, 2014, the date on which Sun West repurchased the loan
from Fannie Mae, to September 24, 2019, the date on which
First Alliance repurchased the loan from Sun West. (See Factual
& Procedural Background, parts 2–3, ante.) First Alliance
maintains that under Civil Code section 3289, prejudgment
interest should have been calculated using the 4.5 percent rate
owed by the borrower on the underlying loan and, because “it was
always a fully performing loan,” Sun West “was not entitled to
any pre-judgment interest.” First Alliance further claims that
“the award by the Trial Court of 10% interest in addition to the
4 ½% yielded Sun West actual interest received in the amount of
14 ½%,” which “was clearly an error.” Additionally,
First Alliance insists that, “even assuming for the sake of
argument . . . Sun West was entitled to some additional interest,
the interest would only apply to the minimal correctly calculated
damages and not to the full amount paid by Sun West to Fannie
Mae without any deduction for the value of the . . . [l]oan received
by Sun West.”

                                    20
       Civil Code section 3289 provides: “(a) Any legal rate of
interest stipulated by a contract remains chargeable after a
breach thereof, as before, until the contract is superseded by a
verdict or other new obligation. [¶] (b) If a contract entered into
after January 1, 1986, does not stipulate a legal rate of interest,
the obligation shall bear interest at a rate of 10 percent per
annum after a breach. [¶] For the purposes of this subdivision,
the term contract shall not include a note secured by a deed of
trust on real property.” (Civ. Code, § 3289.)
       It appears that First Alliance is claiming that Civil Code
section 3289, subdivision (a) required the trial court to utilize the
4.5 percent interest rate owed by the underlying loan borrower,
and that the court erred in instead utilizing subdivision (b)’s
10 percent rate to compute prejudgment interest. As Sun West
points out in its respondent’s brief, however, the 4.5 percent rate
of interest is imposed by “a contract between Sun West and the
borrower, not First Alliance.” (Italics added.) This fact
precludes First Alliance from invoking Civil Code section 3289,
subdivision (a), given that this subdivision has been interpreted
to provide that “the contractual rate agreed upon by the parties in
the contract governs following a breach . . . .”14 (See Cavalry
SPV I, LLC v. Watkins (2019) 36 Cal.App.5th 1070, 1092, italics
added; see also Harm v. Frasher (1960) 181 Cal.App.2d 405, 418
[rejecting the defendants’ assertion that a prior version of Civil
Code, § 3289, subd. (a) required the trial court to “use[ ] the
contract interest rate of 5 per cent per annum” because “the
plaintiffs [were] not suing the party who agreed to pay” that

      14 First Alliance does not claim that the broker agreement
supplies an applicable prejudgment interest rate.

                                    21
interest rate]; cf. Cavalry SPV I, LLC, at pp. 1075–1077, 1094–
1095 [holding that Civil Code, § 3289, subd. (a) barred the holder
of credit card debt from utilizing subd. (b)’s 10 percent
prejudgment interest rate because the credit card agreement
specified a different interest rate].) Accordingly, First Alliance
fails to establish the trial court erred in employing the 10 percent
rate provided in subdivision (b).
       Sun West characterizes First Alliance’s contention
regarding the 14.5 percent interest rate as “a confusing argument
about an offset on the interest amount.” Sun West further argues
that this argument is not properly before us because
First Alliance “presented [it] without any citation to legal
authority . . . .” In response, First Alliance argues in its reply
brief that the “actual interest rate received of 14½% . . . . was
clearly in excess of the . . . Civil Code §3289 rate and the award of
that rate was an error.”
       We agree with Sun West that, aside from First Alliance’s
citation to Civil Code section 3289 in its opening and reply briefs,
First Alliance does not supply any legal authority to support its
argument that the trial court erroneously allowed Sun West to
obtain “an actual interest rate” of 14.5 percent. Insofar as
First Alliance is arguing that the trial court erred by awarding
prejudgment interest at a rate that exceeds 4.5 percent, that
contention fails because, as explained above, the rate charged to
the borrower does not govern the prejudgment interest
calculation as to First Alliance’s breach of its contract with
Sun West. To the extent that First Alliance maintains the
interest Sun West collected from the borrower should have been
subtracted from the award of prejudgment interest,
5First Alliance fails cogently to raise that argument and support

                                    22
it with any pertinent legal authority. (Hernandez, supra,
37 Cal.App.5th at p. 277 [“We may and do ‘disregard conclusory
arguments that are not supported by pertinent legal authority or
fail to disclose the reasoning by which the appellant reached the
conclusion he wants us to adopt.’ ”].) Our declination to discuss
this matter further rests largely on the principle that an
appellant must provide a respondent with a reasonable
opportunity to refute the appellant’s claims of error.15 (Cf.
Hernandez, at pp. 277–278 [“ ‘Fairness militates against allowing
an appellant to raise an issue for the first time in a reply brief
because consideration of the issue deprives the respondent of the
opportunity to counter the appellant by raising opposing
arguments about the new issue.’ ”].)
       Lastly, First Alliance’s argument that the prejudgment
interest rate should have been applied to only “the minimal
correctly calculated damages and not to the full amount paid by
Sun West to Fannie Mae” is predicated on First Alliance’s
assertion that the trial court should not have granted specific
performance to Sun West. Given that this premise is flawed (see
Discussion, part A, ante), we reject First Alliance’s assertion that

      15   As we noted in our Factual and Procedural Background,
the trial court ordered the parties to “meet and confer to
determine . . . what credit against the judgment, if any, should be
allowed given that payments on the loan have been made,”
First Alliance later paid Sun West $72,634 to repurchase the
loan, and Sun West thereafter transferred an escrow balance of
$1,858.47 to First Alliance. (See Factual & Procedural
Background, part 3, ante.) First Alliance does not argue, let
alone offer evidence establishing, that these apparent reductions
to the $73,077.13 repurchase price failed to account adequately
for the interest payments that the borrower made to Sun West.

                                    23
the trial court erroneously calculated the award of prejudgment
interest.

                           DISPOSITION
    The judgment is affirmed. Respondent Sun West Mortgage
Company, Inc. is awarded its costs on appeal.
    NOT TO BE PUBLISHED.

                                           BENDIX, Acting P. J.

We concur:

             CHANEY, J.

             KELLEY, J.*

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

                                   24