Court Opinion

ID: 2680070
Source: CourtListenerOpinion
Date Created: 2014-06-23 19:02:41.471448+00
Date Added: 2024-06-11T11:38:53.662628
License: Public Domain

Filed 6/23/14 Painter v. Francis Realty, Inc, Profit Sharing Plan CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                        (Shasta)
                                                            ----

BRENT PAINTER,                                                                               C073864

                   Plaintiff and Appellant,                                        (Super. Ct. No. 174301)

         v.

FRANCIS REALTY, INC., PROFIT SHARING
PLAN et al.,

                   Defendants and Respondents.

         Plaintiff Brent A. Painter brings this pro se appeal from an award of attorney fees
to defendants Francis Realty Profit Sharing Plan (Francis Realty) and Placer Foreclosure,
Inc., following defendants’ successful motion for summary judgment. Painter contends
the attorney fee award of $41,350 pursuant to Civil Code section 17171 was improper

1   Further undesignated statutory references are to the Civil Code.

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because the underlying complaint sounded in tort, rather than in contract, and the judge
that granted defendants’ motion for attorney fees was prejudicially biased against him.
        Because only the cause of action for declaratory relief may be said to have been
brought “on the contract” for the purposes of section 1717, we reverse and remand the
matter for the trial court to exercise its discretion to allocate attorney fees appropriately.
                                      BACKGROUND
        The Foreclosure, the Complaint, and the Summary Judgment Motion
        In August 2009, Painter’s mother Betty J. Painter (Betty)2 borrowed $550,000
from Francis Realty. The loan was memorialized by a promissory note and secured by a
deed of trust against real property in an unincorporated part of Shasta County.
        The promissory note contained an attorney fee clause by which Betty “promise[d]
to pay such sum as the court may fix as attorney’s fees” if an “action be instituted on this
Note.” The accompanying deed of trust (entitled “First Deed of Trust with Assignment
of Rents”) contains no attorney fee provision.
        Betty defaulted on the note by failing to make the monthly payments it required
and Francis Realty recorded a notice of default and election to sell, and notice of trustee’s
sale.
        Betty filed for bankruptcy protection, which had the effect of delaying the
trustee’s sale. Betty then transferred the property to Painter and his wife; Painter and his
wife filed for bankruptcy protection, which further delayed the trustee’s sale. Eventually,
the trustee sale occurred, and Francis Realty purchased the property at the sale.
        Painter and his wife, who lived on the property, refused to vacate and Francis
Realty brought an unlawful detainer action against them.

2   Because the plaintiffs share a surname, we refer to Betty Painter by her first name.

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       Betty and Painter then filed the instant action for damages, rescission, and
declaratory and injunctive relief against Francis Realty and Placer Foreclosure based on
their actions in connection with the foreclosure. The complaint alleges, in summary, that
defendants: (1) failed to comply with sections 2923.5 and 1572 when conducting the
foreclosure; (2) fraudulently named Placer Foreclosure as trustee; (3) intentionally and
negligently misrepresented that Placer Foreclosure was authorized to conduct the
trustee’s sale; (4) engaged in fraudulent business practices within the meaning of
Business and Professions Code section 17200; and (5) violated the Federal Truth in
Lending Act by failing to provide Betty with notice she could rescind the transaction.
Finally, Betty and Painter also sought to quiet title the property to themselves, and sought
a declaration that Francis Realty had no legal right to authorize foreclosure on the
property.
       Betty, Painter, and his wife brought a motion to consolidate the unlawful detainer
action with the complaint or, alternatively, to stay the unlawful detainer action.
Defendants opposed the motion, and the court denied it. Francis Realty obtained a
judgment in the unlawful detainer action and obtained possession of the property. Betty,
Painter, and his wife sought an ex parte preliminary injunction enjoining defendants from
removing them from the property during the pendency of the action. Defendants opposed
the application and the court denied it.
       Defendants then moved for summary judgment. Painter’s opposition to the
motion conceded most of defendants’ arguments, but sought to amend the complaint to
add a claim that the description of the property secured by the deed of trust erroneously
purported to include water rights associated with it.
       The trial court denied Painter’s request to amend the complaint and granted
defendants’ motion for summary judgment. In so doing, the court (Baker, J.) made the
following findings:

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       The first cause of action asserts violations of section 2923.5 and the California
Foreclosure Prevention Act in connection with the foreclosure. Because those provisions
apply only to loans made between 2003 and 2007 and in 2008 respectively, and the note
and deed of trust here were executed in August 2009, plaintiffs cannot show the existence
of a triable issue of fact on these statutory claims.
       The second cause of action for fraud fails because the allegations of an improper
assignment of the deed of trust or the note are without factual basis, and Placer
Foreclosure was properly substituted as trustee.
       The third cause of action for intentional misrepresentation and fourth cause of
action for negligent misrepresentation rest on allegations that Placer Foreclosure was not
authorized to commence the foreclosure action, and failed to comply with section 2923.5.
These two causes of action lack merit as a matter of law.
       The fifth cause of action purports to allege actionable fraud, but it contains no
additional allegations of fact, other than the fraud claims raised in the third and fourth
causes of action.
       The sixth cause of action for violation of Business and Professions Code
section 17200 fails because the alleged fraudulent business practice is defendants’ failure
to comply with section 2923.5, which is inapplicable.
       The seventh cause of action alleges defendants violated the Federal Truth in
Lending Act, but its provisions apply only to creditors who “regularly extend consumer
credit,” which is defined in the applicable regulations; Francis Realty does not meet this
definition.
       The eighth cause of action to quiet title alleges defendants lacked standing to
foreclose, and the trustee’s sale is therefore void. Defendants’ evidence shows they did
have standing.

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       Finally, the ninth cause of action seeks a declaration of the parties’ respective
rights and duties regarding the property, a claim the court found to rest on the mistaken
“premise that defendants lacked standing to foreclose.”
       The Motion for Attorney Fees
       After their summary judgment motion was granted, defendants filed a
memorandum of costs and motion for attorney fees, seeking fees of $41,350 pursuant to
section 1717. Defendants’ counsel submitted a declaration in support of the motion
seeking an award of attorney fees, to which he attached a statement showing what work
was performed on the matter and the time billed for each item.
       Betty and Painter opposed the request, filing a motion to strike the motion for
attorney fees or, alternatively, to tax costs. They argued no attorney fee award was
proper because the complaint was a tort action, not an action “on the contract” to which
section 1717 applies, and the fees sought were excessive.
       Following an unreported hearing, at which Painter appeared, the trial court
(Marlow, J.) granted defendants’ request for attorney fees. The court’s order notes that
the complaint “asserted nine different causes of action arising out of defendants’
attempted foreclosure on a deed of trust” and it found that the action was “at least in part,
an action arising out of the Note and Deed of Trust and that Civil Code section 1717
applies.” Considering all of the factors applicable to a claim for attorney fees under
Ketchum v. Moses (2001) 24 Cal. 4th 1122 and Serano v. Priest (1977) 20 Cal. 3d 25, the
court found “[d]efendants were required to answer the complaint, respond to plaintiffs’
motion to consolidate, respond to plaintiff’s request for injunctive relief, file motions to
compel plaintiffs’ responses to discovery, and file a motion for summary judgment,” and
determined that defendants’ attorney fees claim of $41,350, based on a billing rate of
$280 for 147.48 hours spent, to be “reasonable and necessary.”

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                                       DISCUSSION
                                               I
                              The Application of Section 1717
       As a general rule, each party to litigation must bear its own attorney fees, unless
otherwise provided by statute or contract. (Code Civ. Proc., § 1021.) The determination
of the legal basis for an award of attorney fees is a question of law which we review de
novo. (Brown Bark III, L.P. v. Haver (2013) 219 Cal. App. 4th 809, 821 (Brown).
       Absent a statute authorizing the recovery of attorney fees, the parties may agree on
whether and how to allocate attorney fees. (Xuereb v. Marcus & Millichap, Inc. (1992)
3 Cal. App. 4th 1338, 1341 (Xuereb).) They may limit the recovery of fees only to claims
arising from certain transactions or events, or award them only on certain types of claims.
(Brown, supra, 219 Cal.App.4th at p. 818.) Here, the parties’ agreement to an award of
attorney fees is limited: they agreed as a provision of the promissory note that Betty
would “pay such sum as the court may fix as attorney’s fees” if an “action be instituted
on th[e] Note.” An action “on the Note” is analogous to a provision allowing recovery of
attorney fees to enforce the terms of a note, and should be interpreted narrowly. (Cf. Gil
v. Mansano (2004) 121 Cal. App. 4th 739, 743.)
       Attorney fees are available under section 1717 only if the party prevails in an
action on the contract.3 Moreover, the gravamen of the action must be to enforce that

3  Section 1717 provides in relevant part: “(a) In 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 . . . [¶] . . . [¶]

 “(b)(1) The court . . . shall determine who is the party prevailing on the contract for
purposes of this section . . . . [T]he party prevailing on the contract shall be the party
who recovered a greater relief in the action on the contract. The court may also

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contract. (Hyduke’s Valley Motors v. Lobel Financial Corp. (2010) 189 Cal. App. 4th 430,
435 (Hyduke’s Valley).) “ ‘It is difficult to draw definitively from case law any general
rule regarding what actions and causes of action will be deemed to be “on a contract” for
purposes of [Civil Code section] 1717.’ [Citation.] Among the relevant factors are ‘the
pleaded theories of recovery, the theories asserted and the evidence produced at trial, if
any, and also any additional evidence submitted on the motion in order to identify the
legal basis of the prevailing party’s recovery. [Citations.]’ ” (Ibid.; see also Brown,
supra, 219 Cal.App.4th at pp. 821-822, and cases cited therein.) An action which is not
on a contract containing an attorney fee provision is not an action “on the contract”
within the meaning of section 1717. (See Hyduke’s Valley, supra, 189 Cal.App.4th at p.
436.)
        An examination of Painter’s pleaded theories of recovery shows that, with one
exception, defendants did not prevail on causes of action “on the contract” for purposes
of section 1717. The first two causes of action seek to enforce statutory duties imposed
upon mortgage servicers who seek to foreclose, which the trial court found not to apply to
the transactions between the parties, which occurred in 2009. The second cause of action
is for fraud based on actions of the alleged trustee under the deed of trust; and the third
and fourth causes of action allege misrepresentation in connection with the foreclosure;
the fifth cause of action alleges fraud; the sixth cause of action asserts a fraudulent
business practice; and the seventh cause of action asserts a violation of a statutory duty to
give notice. The eighth cause of action charges defendants lack standing to foreclose.
        Though defendants prevailed on the first eight causes of action, those were not
causes of action brought “on the contract” that provided for the recovery of attorney fees
by the prevailing party within the meaning of section 1717. (See Hyduke’s Valley, supra,

determine that there is no party prevailing on the contract for purposes of this section.
. . .” (§ 1717, subds. (a), (b).)

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189 Cal.App.4th at p. 436.) Only one of the two contracts at issue, the promissory note,
contains an attorney fee provision. The first eight causes of action do not purport to
challenge the validity of the promissory note or otherwise assert that Betty did not owe
the money she borrowed under the promissory note from Francis Realty. Rather, the
underlying basis for those causes of action is plaintiffs’ claim that the notice of default
under the deed of trust and subsequent trustee’s sale under the deed of trust was
statutorily deficient, fraudulently made, or conducted without standing by defendants.
       The second, third, fourth, fifth, and sixth causes of action seek relief on tort
grounds, based on the defendants’ alleged actions in connection with the foreclosure on
the property. Section 1717 “does not apply to tort claims; it determines which party, if
any, is entitled to attorneys’ fees on a contract claim only. [Citations.] As to tort claims,
the question of whether to award attorneys’ fees turns on the language of the contractual
attorneys’ fee provision, i.e., whether the party seeking fees has ‘prevailed’ within the
meaning of the provision and whether the type of claim is within the scope of the
provision. [Citation.] This distinction between contract and tort claims flows from the
fact that a tort claim is not ‘on a contract’ and is therefore outside the ambit of section
1717. [Citations.]” (Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal. App. 4th
698, 708; see Santisas v. Goodin (1998) 17 Cal. 4th 599, 615 (Santisas); Xuereb, supra,
3 Cal.App.4th at p. 1342.) Thus, the court must disregard any tort claims included in the
action when determining whether section 1717 applies. (See Santisas, at p. 615; Exxess,
at p. 708.)
       Two claims, the first and seventh causes of action, are based on allegations
defendants violated various statutory duties imposed upon those who seek to foreclose
upon property. The eighth cause of action claims defendants lacked standing to foreclose
upon the property. These claims, too, do not represent causes of action “on a contract”
containing an attorney fee provision within the meaning of section 1717. To the extent
that the first eight causes of action may be said to “involve” a contract, the contract they

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involve (i.e. the deed of trust) is one which does not provide for the award of attorney
fees.
        This brings us to the final and ninth cause of action for declaratory relief to
“ascertain their rights and duties pursuant to the property and all matters related to and
arising from it.” The complaint’s prayer includes plaintiffs’ request for “a declaration of
the rights and duties of the parties relative to Plaintiffs’ Home to determine the actual
status and validity of the loan, Deed of Trust and Notice of Default.” Section 1717
applies if the action was on a contract, even though the relief sought was of a declaratory
nature. (Milman v. Shukhat (1994) 22 Cal. App. 4th 538, 545.) Thus, only to the extent
that defendants prevailed on the cause of action for declaratory relief to determine the
“validity of the loan,” were they entitled to recover their attorney fees.
                                               II
                  Apportionment of Defendants’ Request for Attorney Fees
        Where, as here, an action asserts both contract and tort or other noncontract
claims, section 1717 applies only to attorney fees incurred to litigate the contract claims.
(Santisas, supra, 17 Cal.4th at p. 615.)
        “Where a cause of action based on the contract providing for attorneys’ fees is
joined with other causes of action beyond the contract, the prevailing party may recover
attorneys’ fees under section 1717 only as they relate to the contract action.” (Brown,
supra, 219 Cal.App.4th at p. 829; see also Reynolds Metals Co. v. Alperson (1979)
25 Cal. 3d 124, 129; Amtower v. Photon Dynamics, Inc. (2008) 158 Cal. App. 4th 1582,
1603-1604.) The prevailing party seeking attorney fees as costs in such a case must
generally allocate the attorney fees incurred between the causes of action on the contract
and causes of action related to noncontract claims, or causes of action based upon
contracts that contain no attorney fee provision; and allocation is within the trial court’s
discretion. (Reynolds, at p. 219; Amtower, at pp. 1603-1604.)

                                               9
       Defendants made no attempt to allocate the attorney fees incurred between the
declaratory relief cause of action that was arguably on the contract from the noncontract
causes of action. In opposing defendants’ motion for attorney fees, Painter argued in
writing that the complaint was not an action on the contract, because it was based on
defendants’ foreclosure on the property and was “principally a tort case, not a contracts
law case.” This record counters respondents’ argument that plaintiffs failed to raise the
issue below. This argument, though far from artful, was sufficient.4
       Where fees are authorized for some causes of action in a complaint but not for
others, the trial court has discretion to allocate the attorney fees claimed among them, and
to award only those fees incurred to defend against causes of action brought on the
contract. (See Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007)
155 Cal. App. 4th 525, 555.) Here, the trial court’s order granting defendants’ motion for
attorney fees does not reflect the court’s understanding of the need to determine this issue
or to exercise its discretion accordingly.
       Defendants argue attorney fees need not be apportioned when the issues raised by
the various claims are so interrelated it would have been impossible to separate them into
claims for which attorney fees are properly awarded and claims for which they are not
(see Brown, supra, 219 Cal.App.4th at pp. 829-830); they suggest the trial court may
have applied this rule to determine that apportionment was inappropriate in this case. But
the record is silent on this point. Accordingly, we must remand the matter to the trial

4  In so concluding, we are not relieving Painter from the same restrictive rules of
procedure that would apply were he an attorney. (See Nelson v. Gaunt (1981)
125 Cal. App. 3d 623, 638-639.) “A doctrine generally requiring or permitting exceptional
treatment of parties who represent themselves would lead to a quagmire in the trial
courts, and would be unfair to the other parties to litigation.” (Rappleyea v. Campbell
(1994) 8 Cal. 4th 975, 985.)

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court for it to exercise its discretion to allocate the attorney fees sought by defendants.
(See id. at p. 830.)
       We disagree, however, with Painter’s argument that Judge Marlow “showed
prejudicial bias in her ruling.” Painter has not shown the trial court was biased against
plaintiffs on the basis of their pro se status or otherwise. We have reviewed the record
and find nothing to support such a claim. Nor does the record suggest that Judge Marlow
“disregard[ed] any and all aspect[s]” of Painter’s opposition to defendants’ request for
attorney fees. Moreover, Painter offers no cogent analysis supported by citations to the
record and authority of how the court was biased against him. Therefore, his claim of
bias is forfeited. (Cal. Rules of Court, rule 8.204(a)(1)(C); Maria P. v. Riles (1987)
43 Cal. 3d 1281, 1295-1296; City of Lincoln v. Barringer (2002) 102 Cal. App. 4th 1211,
1239-1240.)
                                      DISPOSITION
       We reverse the trial court’s order awarding attorney fees to defendants, and
remand for the trial court to determine, in a manner consistent with this opinion, whether
any attorney fees are recoverable pursuant to Civil Code section 1717. Painter shall
recover his costs on appeal. (Cal. Rules of Court, rule 8.278 (a)(2).)

                                                         DUARTE                 , J.

We concur:

      BLEASE                 , Acting P. J.

      NICHOLSON              , J.

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