Court Opinion

ID: 2678842
Source: CourtListenerOpinion
Date Created: 2014-06-17 23:01:11.467968+00
Date Added: 2024-06-11T13:11:01.138964
License: Public Domain

Filed 6/17/14 Lasertone Corp. v. E.S.E. Eletronics CA2/2
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION TWO

LASERTONE CORPORATION,                                               B248908

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. BC401101)
         v.

E.S.E. ELECTRONICS et al.,

         Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Los Angeles County.
Steven J. Kleifield, Judge. Reversed and remanded.

         Law Office of Martin F. Goldman, Martin F. Goldman for Plaintiff and Appellant.

         Law Office of John Drooyan, John N. Drooyan for Defendants and Respondents.

                  ___________________________________________________
       This is the second appeal in this case. In the first appeal, we found in favor of
plaintiff Lasertone Corporation (Lasertone), affirming the trial court’s order granting
Lasertone’s motion to enforce a settlement agreement.
       Following remittitur, Lasertone moved to recover costs and fees incurred on
appeal pursuant to an attorney fees clause in its settlement agreement with defendants
E.S.E. Electronics (ESE) and David Kazemi. The trial court denied the request for
attorney fees, finding that it was bound by a prior ruling. Because we find that the
settlement agreement provided for recovery of attorney fees in connection with the prior
appeal, we reverse.
                                          FACTS
The First Appeal1
       Lasertone shipped to defendants products valued at $207,171.74. The products
were diverted by a third party affiliated with defendants. Defendants did not pay for the
products and Lasertone brought suit for the open account balance.
       The parties eventually stipulated to entry of judgment in favor of Lasertone in the
amount of $257,187.54 (including interest, costs, and fees), with entry of judgment to be
stayed, provided that defendants paid the sum of $120,000 to Lasertone, and further that
defendants used “their best efforts to pursue their claim for recovery from all insurance
policies and sources available to them, for the losses alleged to have been sustained by
Defendants from and on behalf of the conduct of Federico Kimura aka Ovando in
diverting the shipments of goods to Defendants from Plaintiff, and which created the
open account balance claimed to be due by Plaintiff in the principal sum of $207,171.74.”
The parties’ settlement agreement required that defendants “execute all documents
necessary to impose a first lien upon any recoveries sought by Defendant and shall agree
to have any said recoveries issued to Defendants by a joint check made payable to

1     We summarize the facts and procedural history detailed in the unpublished
opinion in the first appeal, B238589, filed October 22, 2012.

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Plaintiff, as a joint payee and Defendants and pay over to Plaintiff from the first proceeds
of any recovery, an additional sum up to a total amount of $80,000.00.”
       Thus, Lasertone stood to recover a total of $200,000. Defendants paid the first
$120,000. They also pursued litigation against their insurance carrier, and eventually
obtained a settlement. Defendants refused to pay Lasertone the additional $80,000,
however, asserting that Lasertone was only entitled to receive a portion of the money, and
that the rest should be paid to defendants’ attorneys.
       The trial court denied a request for a “turn over order” brought by Lasertone.
Following the denial, Lasertone brought a “motion for enforcement of settlement”
pursuant to Code of Civil Procedure section 664.6.2 In its moving papers, Lasertone
contended that it should receive the full $80,000, plus fees and costs it expended seeking
to enforce the settlement agreement.
       The trial court granted Lasertone’s motion to enforce the settlement agreement,
finding that it was entitled to recover the full $80,000 based on the language of the
settlement agreement, but denied its request for attorney fees. Following an appeal by
defendants, we affirmed the trial court’s order. Because Lasertone did not appeal the trial
court’s denial of attorney fees, we had no occasion to examine the propriety of the denial.
The Instant Matter
       Following remittitur, Lasertone filed a “motion to affix amount of attorney’s fees
awardable as item of cost.” Lasertone asserted that as the prevailing party, it was entitled
to recover attorney fees expended in the appeal based on the following language from the
parties’ settlement agreement: “In the event any party to this Agreement brings suit to
enforce or interpret any provision of this Agreement, or is required to defend any action
or proceeding, the defense to which is based upon any provision of this Agreement, the

2       Code of Civil Procedure section 664.6 provides: “If parties to pending litigation
stipulate, in a writing signed by the parties outside the presence of the court or orally
before the court, for settlement of the case, or part thereof, the court, upon motion, may
enter judgment pursuant to the terms of the settlement. If requested by the parties, the
court may retain jurisdiction over the parties to enforce the settlement until performance
in full of the terms of the settlement.”

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unsuccessful party agrees to pay the prevailing party the court costs, and attorney’s fees
actually incurred by the successful party.”
         The trial court denied Lasertone’s request for attorney fees, opining that it was
bound by its prior ruling denying fees in connection with Lasertone’s earlier motion to
enforce the settlement agreement. The trial court found that, under the language of the
settlement agreement, Lasertone was precluded from recovering attorney fees because
Lasertone did not “bring suit to enforce or interpret any provision of” the settlement
agreement.
         Lasertone timely appealed.
                                        DISCUSSION
         The determination of the legal basis for an attorney fee award is a question of law,
which we review de novo. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169,
1175.)
         Lasertone argues that it was authorized by the settlement agreement to recover the
attorney fees expended on the prior appeal. Attorney fees can be awarded as costs to a
prevailing party when authorized by contract. (Civ. Code, § 1717; Code Civ. Proc.,
§§ 1021, 1033.5, subd. (a)(10).) This includes fees incurred on appeal. (See Cal. Rules
of Court, rules 8.278(d)(2), 3.1702(c).) We review de novo a contractual right to attorney
fees, where the facts are not in dispute. (Paul v. Schoellkopf (2005) 128 Cal.App.4th 147,
151.)
         The trial court based its decision to deny fees on language in the settlement
agreement awarding fees to a party that “brings suit to enforce or interpret any provision
of” the settlement agreement. The court found that Lasertone had not brought suit but
had only successfully defended an appeal. Lasertone contends that the trial court failed
to apply the more apt language in the settlement agreement that awards fees to any party
“required to defend any action or proceeding, the defense to which is based upon any
provision of this Agreement.”
         Lasertone’s position is the correct one. By the express terms of the settlement
agreement, it was not required to bring suit in order to be entitled to an award of attorney

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fees. Rather, the settlement agreement contained another independent condition under
which a party could recover fees. Lasertone was also entitled to a fees award if it was
“required to defend any action or proceeding, the defense to which is based upon any
provision of” the settlement agreement.
            The prior appeal was brought by defendants. Lasertone’s successful defense of
the prior appeal was specifically based on the terms of the settlement agreement. This
defense of the first appeal gave rise to a right to attorney fees because it was a defense of
a “proceeding.” (See Maynard v. Brandon (2005) 36 Cal.4th 364, 374 [“An appeal is ‘[a]
proceeding undertaken to have a decision reconsidered by bringing it to a higher
authority.’ (Black’s Law Dict. (7th ed. 1999) p. 94, col. 1.)”]; Rooney v. Vermont
Investment Corp. (1973) 10 Cal.3d 351, 367 [“The term ‘proceeding’ may refer not only
to a complete remedy . . . but also to a mere procedural step that is part of a larger action
or special proceeding”]; Ramirez v. Sturdevant (1994) 21 Cal.App.4th 904, 918
[“Prosecuting an appeal is a proceeding discrete from proceedings in the trial court
. . .”].)
            Nor was the trial court bound by its prior order denying Lasertone’s attorney fees.
The first request was brought in conjunction with Lasertone’s successful motion for
enforcement pursuant to Code of Civil Procedure section 664.6. The parties’ settlement
agreement specifically required that a party seeking to enforce the settlement agreement
“bring suit” in order to be entitled to attorney fees. Because Lasertone did not bring suit,
the trial court’s initial denial of fees was correct. The instant request for fees, however,
was based entirely on fees incurred by Lasertone as the respondent on appeal. Because
Lasertone’s successful defense of the appeal was a defense of a proceeding based on the
terms of the settlement agreement, Lasertone was entitled to recover fees expended in
connection with the prior appeal.

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                                    DISPOSITION
      The trial court’s order of May 15, 2013, is reversed. On remand, the trial court is
to determine the appropriate amount of attorney fees awardable to Lasertone in
connection with the prior appeal, B238589.
      Lasertone is awarded its attorney fees on appeal and its costs.
      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                                         BOREN, P.J.
We concur:

      ASHMANN-GERST, J.

      CHAVEZ, J.

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