Court Opinion

ID: 7633003
Source: CourtListenerOpinion
Date Created: 2022-07-29 19:02:40.978614+00
Date Added: 2024-06-11T16:25:16.684113
License: Public Domain

Filed 7/29/22
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    FIRST APPELLATE DISTRICT

                           DIVISION FOUR

 SHAO YAN CHEN et al.,
      Plaintiffs and
 Respondents,                           A161885

 v.                                     (San Francisco City &
 VALSTOCK VENTURES,                     County Super. Ct. No.
 LLC, et al.                            CGC-18-566208)
      Defendants and
 Appellants.

       The trial court awarded a group of plaintiffs approximately
$1.1 million in attorney’s fees under Civil Code section 1717 after
granting their motion for summary adjudication of the sole cause
of action on the contract in this case, before trial or disposition of
the remaining non-contract causes of action.1 The defendants
appeal, arguing the award of attorney’s fees was premature
because the litigation as a whole had not yet ended. We agree
and will therefore reverse.
                           BACKGROUND
       Because the issue in this appeal is purely procedural, we
need not describe in detail the factual background. In brief, Shao
Yan Chen, Han Lin Liu, Zhi Hua Mo, Yuk Yee Cheng, Hui Zhen

       1   Undesignated statutory references are to the Civil Code.

                                   1
Hu, Ruizhao Wu, and Qi Di Wu (collectively, tenants) had a
dispute with Valstock Ventures, LLC and 371 Broadway Street,
LLC (together, Valstock) over which of two documents was the
operative lease governing the tenants’ tenancies in two of
Valstock’s apartment buildings. The tenants filed suit against
Valstock seeking a declaratory judgment on this question,
alleging a civil conspiracy, and stating claims for violations of the
Fair Employment and Housing Act (Gov. Code, §§ 12900–12996)
(FEHA), Unfair Competition Law (Bus. & Prof. Code, § 17203)
(UCL), and section 37.10B of the San Francisco Rent Ordinance.2
      After approximately a year of litigation, Valstock filed a
motion for summary judgment and the tenants filed a motion for
summary adjudication of their declaratory judgment cause of
action and Valstock’s related affirmative defenses. In September
2020, the trial court denied Valstock’s motion and granted the
tenants’ motion. The tenants’ allegation of civil conspiracy and
their other causes of action remained pending.
      The tenants then moved under section 1717 for an award of
roughly $2.1 million in attorney’s fees, arguing that the trial
court’s summary adjudication ruling meant they were the
prevailing parties on the sole cause of action on the contract.
Valstock responded by filing an ex parte application asking the
court to continue the filing deadlines and hearing date on the fees
motion until after a settlement conference and certain pre-trial

      2  Several other plaintiffs joined the tenants in this
complaint and named several additional defendants. We
disregard these other parties because they were not part of the
litigation on the attorney’s fees award at issue in this appeal.

                                  2
deadlines had passed. The record does not contain a transcript of
the ex parte hearing or reflect any orders issued after the
hearing. Other documents in the record indicate, however, that
the trial court suggested at the hearing that plaintiffs voluntarily
continue the hearing date on their fees motion until after trial or
entry of judgment. The trial court also ordered the parties to
meet and confer regarding Valstock’s request for a continuance.
      The parties were unable to come to an agreement, and the
next day Valstock filed a second ex parte application, this time to
continue the hearing date until after entry of a final judgment in
the action. The second ex parte application argued the trial court
should continue the hearing date until after entry of final
judgment under the court’s authority to manage its proceedings,
in order to promote judicial economy. Valstock also asserted that
a fee award was premature because the court had not entered
final judgment and the remaining causes of action were in trial.
Again, there is no direct record of the court’s actions at the ex
parte hearing, but we infer that the trial court denied Valstock’s
application, since briefing proceeded on the attorney’s fees
motion.
      The trial court ultimately awarded the tenants
approximately $1.1 million in fees.3 A few weeks later, the

      3  Although the trial court granted the tenants’ motion for
fees, it restated its earlier comment, presumably from one of the
ex parte hearings, that it was “a little anomalous that an
attorneys’ fees motion as to one cause of action has been filed
while the case is nominally in trial and before the conclusion of
the case.”

                                  3
 tenants moved to enforce the fee award. Valstock then appealed
 the fee award. The trial court denied the tenants’ motion to
 enforce the fee award, concluding that Valstock’s appeal
 automatically stayed enforcement of the fee order. Valstock later
 filed an amended notice of appeal.
                            DISCUSSION
I.   Forfeiture
       The tenants argue that we should not entertain Valstock’s
 challenge to the timing of the fee award because Valstock failed
 to raise it below. “ ‘ “As a general rule, theories not raised in the
 trial court cannot be asserted for the first time on appeal;
 appealing parties must adhere to the theory (or theories) on
 which their cases were tried. This rule is based on fairness—it
 would be unfair, both to the trial court and the opposing litigants,
 to permit a change of theory on appeal.” ’ ” (Hewlett-Packard Co.
 v. Oracle Corp. (2021) 65 Cal.App.5th 506, 548.)
       Valstock’s ex parte application to continue the hearing on
 the tenants’ fee motion until after final judgment raised two
 arguments, albeit cursorily. First, Valstock asserted it was
 “premature” to hear the fees motion because the trial court had
 not yet entered final judgment and the remaining causes of
 action were in trial. Second, it argued the trial court had
 authority to continue the hearing to promote judicial economy.
 The first argument is essentially the same as Valstock’s
 argument on appeal. Valstock did not cite any of the same
 authority that it presents here—indeed, it cited no authority at
 all to support its prematurity argument—but that is not

                                   4
  significant. “We are aware of no prohibition against citation of
  new authority in support of an issue that was in fact raised
  below.” (Giraldo v. Department of Corrections & Rehabilitation
  (2008) 168 Cal.App.4th 231, 251.) Valstock might have saved
  itself considerable time, effort, and expense had it spent more
  time developing its prematurity argument in the trial court, but
  it raised the issue sufficiently to preserve it for appeal.
        Even if Valstock had not raised the issue below, we would
  still reject the tenants’ forfeiture argument. As the tenants
  acknowledge, appellate courts “have discretion to consider a new
  theory on appeal when it is purely a matter of applying the law to
  undisputed facts.” (Brown v. Boren (1999) 74 Cal.App.4th 1303,
  1316.) That is the situation here, where the only relevant facts
  are undisputed: the trial court entered summary adjudication of
  the single cause of action in the case that is “on the contract” and
  then awarded attorney’s fees under section 1717 to the tenants as
  the parties who prevailed on the contract. The tenants argue we
  should not exercise our discretion to address the issue, but the
  only justification they offer is that they believe Valstock’s
  arguments are meritless and an invitation to error. Whatever
  the merits of this rationale for applying the forfeiture doctrine, it
  has no bearing here because, as we explain, post, we agree with
  Valstock on the merits of this case.
II.   Mootness
        The tenants suggest that because Valstock’s appeal of the
  fee award is based entirely on prematurity and the absence of a
  final disposition of the litigation, Valstock’s argument will be

                                    5
moot if the trial court enters a final judgment while this appeal is
pending. This argument is hypothetical, because there is not a
final judgment. Valstock’s request for judicial notice contains the
most recent evidence on the state of proceedings in the trial
court, and it indicates only that as of September 2021, trial of the
tenants’ remaining causes of action was set to begin in January
2022 and conclude in February 2022.4 During the July 12, 2022,
oral argument, the parties indicated that they have an August
2022 trial date. There is thus no final judgment in this matter. 5
      We will therefore proceed to the merits of the parties’
dispute.

      4 Valstock has requested judicial notice of four former
versions of section 1717 and four minute orders the trial court
entered regarding trial on the other causes of action in the
tenants’ complaint. We deny the request for notice of former
versions of section 1717. We will consider the evolution of section
1717 without the need for judicial notice; citation to such
materials is sufficient. (Quelimane Co. v. Stewart Title Guaranty
Co. (1998) 19 Cal.4th 26, 45, fn, 9.) We grant the request for
notice of the trial court’s minute orders solely for the purpose of
evaluating the potential mootness of this case. (In re M.F. (2022)
74 Cal.App.5th 86, 111.)
      5  In any event, even if the trial court had entered final
judgment, we would not be persuaded to declare this appeal
moot. “An appellate court retains discretion to decide a moot
issue if the case presents an issue of ‘ “substantial and continuing
public interest” ’ and is capable of repetition yet evades review.”
(Citizens Oversight, Inc. v. Vu (2019) 35 Cal.App.5th 612, 615.)
This appears to be a case of first impression, and the correct
procedure for obtaining a fee award after a summary
adjudication order is a matter of continuing public interest. If
entry of a final judgment can moot an appeal from a fee award
following a pre-trial ruling, this issue is also likely to recur and
evade appellate review in future cases.

                                 6
III.      Interim fee awards
        A. Standard of review
             Valstock contends that section 1717 did not allow the trial
       court to make an interim award of attorney’s fees based on the
       summary adjudication order. This is a legal question that turns
       on the interpretation of a statute, so we interpret it de novo.
       (Frog Creek Partners, LLC v. Vance Brown, Inc. (2012)
       206 Cal.App.4th 515, 523 (Frog Creek) [“ ‘ “On appeal this court
       reviews a determination of the legal basis for an award of
       attorney fees de novo as a question of law” ’ ”].)6
             “In interpreting a statute, our primary goal is to determine
       and give effect to the underlying purpose of the law. [Citation.]
       ‘Our first step is to scrutinize the actual words of the statute,
       giving them a plain and commonsense meaning.’ [Citation.] ‘ “If
       the words of the statute are clear, the court should not add to or
       alter them to accomplish a purpose that does not appear on the

             6  The tenants urge us to apply an abuse of discretion
       standard of review to the trial court’s determination that they
       prevailed on the contract under section 1717. (DisputeSuite.com,
       LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 974, 979
       (DisputeSuite).) Because the issue here is a simple question of
       statutory interpretation, not whether the tenants met their
       litigation objectives, the abuse of discretion standard does not
       apply. However, the standard of review in this case is
       immaterial; even if we were to apply the abuse of discretion
       standard, we would reach the same result given our
       interpretation of the statute. (Pina v. County of Los
       Angeles (2019) 38 Cal.App.5th 531, 545 [“ ‘ “Action that
       transgresses the confines of the applicable principles of law is
       outside the scope of discretion and we call such action an ‘abuse’
       of discretion” ’ ”].)

                                         7
face of the statute or from its legislative history.” ’ [Citation.] In
other words, we are not free to ‘give words an effect different from
the plain and direct import of the terms used.’ [Citation.]
However, ‘ “the ‘plain meaning’ rule does not prohibit a court
from determining whether the literal meaning of a statute
comports with its purpose or whether such a construction of one
provision is consistent with other provisions of the statute.” ’
[Citation.] To determine the most reasonable interpretation of a
statute, we look to its legislative history and background.”
(Goodman v. Lozano (2010) 47 Cal.4th 1327, 1332.)
 B. Analysis
      Finality of summary adjudication ruling
      The parties’ disagreement over whether the trial court was
authorized to make an attorney’s fees award is in part a dispute
about the effect of the summary adjudication order on which the
trial court based the fee award. Without argument or authority,
Valstock asserts that the fee award was an interim fee award
because the FEHA, UCL, and San Francisco Rent Ordinance
causes of action and conspiracy allegation remained pending and
the trial court had not entered final judgment when it made the
award, implying that the summary adjudication order was not
final. It later notes that the summary adjudication order was not
appealable. The tenants, meanwhile, treat the summary
adjudication order as if it were itself a final judgment, describing
the trial court as entering declaratory judgment and repeatedly
asserting that a declaratory judgment has the force of a final
judgment.

                                  8
      We agree with Valstock. It is established law that “[a]n
order granting partial summary judgment—or summary
adjudication—is not an appealable order.” (Tucker Ellis LLP v.
Superior Court (Nelson) (2017) 12 Cal.App.5th 1233, 1240.)
Because the summary adjudication order was not appealable, it
was an interim ruling, not a final resolution. (Robbins v. Los
Angeles Unified School Dist. (1992) 3 Cal.App.4th 313, 317
[“Normally, the rule for distinguishing between an interim and a
final order is whether such order is appealable”].) The tenants
try to obfuscate this point by citing Code of Civil Procedure
section 1060’s statement that a declaratory judgment “shall have
the force of a final judgment,” which has been in the statute since
the Legislature first enacted it in 1921. (See Stats. 1921, ch. 463,
§ 1, p. 690.) They also note that trial court can only grant
summary adjudication if it “completely disposes” of a cause of
action. (Code Civ. Proc., § 437c, subd. (f)(1).) But they stop short
of contending that the summary adjudication order was itself
appealable or a final judgment, and it was neither. The
statements in Code of Civil Procedure section 1060 giving a
declaratory judgment the force of a final judgment and in section
437c allowing summary adjudication of only a complete cause of
action do not change the non-final status of the summary
adjudication order. The tenants cite nothing to suggest either
provision suspends operation of the “one final judgment” rule,
which “prohibits review of intermediate rulings by appeal until
final resolution of the case.” (Griset v. Fair Political Practices
Com. (2001) 25 Cal.4th 688, 697.) It would be rather peculiar if

                                  9
Code of Civil Procedure section 1060 made the summary
adjudication order immediately final, since that would mean
summary adjudication of a request for a declaration of the
parties’ rights under a contract would be immediately final,
where another type of summary adjudication of contractual
rights, such as an award to one party for breach of the same
contract, would not.
      The summary adjudication order was also not final because
a “ ‘trial court retains the inherent authority to change its
decision at any time prior to the entry of judgment.’ ” (Le
Francois v. Goel (2005) 35 Cal.4th 1094, 1100 (Goel), quoting
Darling, Hall & Rae v. Kritt (1999) 75 Cal.App.4th 1148, 1156;
see also Goel, at p. 1107 [agreeing with Darling, Hall]; see also
Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227,
237 [rejecting contention that trial court had no authority to
vacate prior order compelling arbitration, explaining, “Even
without a change of law, a trial court may exercise its inherent
jurisdiction to reconsider an interim ruling”].) This authority
exists to allow trial courts to correct their own errors. (Goel, at
p. 1107.) Similarly, Code of Civil Procedure section 1008 allows a
court to reconsider and change an order “at any time” if there has
been a change in law. (Code Civ. Proc., § 1008, subd. (c).) This
provision has been used to vacate an order granting summary
adjudication seven years after it was originally entered.
(International Ins. Co. v. Superior Court (1998) 62 Cal.App.4th
784, 786.) Because a summary adjudication order on a cause of
action for declaratory judgment is subject to reconsideration,

                                 10
either statutorily or based on the court’s inherent authority, it
cannot qualify as a final order.
         Code of Civil Procedure section 437c, subdivision (n)(1)
states, “If a motion for summary adjudication is granted, at the
trial of the action, the cause or causes of action within the action,
affirmative defense or defenses, claim for damages, or issue or
issues of duty as to the motion that has been granted shall be
deemed to be established and the action shall proceed as to the
cause or causes of action, affirmative defense or defenses, claim
for damages, or issue or issues of duty remaining.” This provision
does not make the summary adjudication order here a final
resolution because trial in this matter had not started when the
tenants requested attorney’s fees. Moreover, Code of Civil
Procedure section 437c, subdivision (n)(1) does not contain an
exception to a court’s statutory and inherent authority to modify
a summary adjudication order. Any facts summarily adjudicated
are deemed established unless and until the court modifies its
order.
         The parties’ briefing originally did not address the impact
of Goel, supra, 35 Cal.4th 1094, so we requested supplemental
briefing on the application of that case and any related authority.
In response, the tenants argue that the summary adjudication
order is final under Goel because, they assert, the trial court has
never reconsidered the order. But whether or not the trial court
has reconsidered its summary adjudication order (which is not a
matter in the record in this appeal), it retains authority to do so,
which is sufficient to prevent the order from being final.

                                   11
      The tenants also argue that a trial court’s authority to
reconsider an order cannot mean it is not final because rulings
are subject to later reversal, correction, or modification until all
final appeals are exhausted. The only authority the tenants cite
for this statement is Code of Civil Procedure section 1049, which
states, “An action is deemed to be pending from the time of its
commencement until its final determination upon appeal, or until
the time for appeal has passed, unless the judgment is sooner
satisfied.” This statute does not give trial courts inherent
authority to modify their rulings after a final judgment or other
final disposition of a case, and in any event, we are not dealing
with a scenario in which jurisdiction has passed from the trial
court to the appellate court. Since the question here is whether a
summary adjudication ruling is final as to the trial court, the
prospect of modification of an order on appeal is not relevant.7

      7Pointing to what they suggest is the overbreadth of
Valstock’s position here, the tenants argue that deeming the
summary adjudication order non-final under Goel would mean a
summary judgment order would also be non-final and not permit
an award of fees under section 1717 under our reasoning. But
that proves too much. The tenants are correct that a summary
judgment order is non-final, but this does not bar an award of
fees under section 1717. A fees motion may not follow a
summary judgment order alone, but it can follow the entry of
judgment based on a summary judgment order. (Cf. Saben,
Earlix & Associates v. Fillet (2005) 134 Cal.App.4th 1024, 1030
[“a summary judgment is appealable, but an order granting
summary judgment is not”]; Phillips v. Phillips (1953) 41 Cal.2d
869, 874 [issuance of memorandum containing findings of fact
and conclusions of law after trial was not the entry of judgment;
“at any time before entry of judgment” a trial court may amend or

                                  12
      Fee awards after interim resolution of contract
      claims
      a. Statutory text
      Our conclusion that the summary adjudication order was
not a final resolution of the contract cause of action in the
tenants’ complaint does not resolve the issue before us, because
the question remains whether section 1717 permits fee awards
based on interim resolutions of contract claims like the summary
adjudication order in the tenants’ favor. We conclude it does not.
      The text of section 1717 does not explicitly address the
question of when a trial court may make a fee award. However,
the statutory language generally supports Valstock’s contention
that fees should be awarded only at the complete end of
litigation, including on non-contract claims. Section 1717
contains several different provisions that are relevant here, and
we will consider them in turn.
      Section 1717, subdivision (a) states, in pertinent part, “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.” (Italics added.) The
same subdivision later declares, “Reasonable attorney’s fees shall

change its findings of fact and conclusions of law and “enter a
judgment different from that first announced”].)

                                 13
be fixed by the court, and shall be an element of the costs of suit.”
(Italics added.)
      The inclusion of section 1717 fees as an element of costs is
significant because costs are awarded at the end of an action.
Section 1032 of the Code of Civil Procedure defines the prevailing
party entitled to costs in terms of the total outcome of the
litigation. (Code Civ. Proc., § 1032, subd. (a)(4) [prevailing party
“includes the party with a net monetary recovery, a defendant in
whose favor a dismissal is entered, a defendant where neither
plaintiff nor defendant obtains any relief, and a defendant as
against those plaintiffs who do not recover any relief against that
defendant”].) While section 1717 contains its own definition of a
prevailing party, which we discuss post, the association between
section 1717 attorney’s fees and costs is a preliminary indication
that the Legislature envisioned attorney’s fees being awarded
only at the end of an entire action.
      Section 1717, subdivision (b)(1) provides in part, “The
court, upon notice and motion by a party, shall determine who is
the party prevailing on the contract for purposes of this section,
whether or not the suit proceeds to final judgment. Except as
provided in paragraph (2), the party prevailing on the contract
shall be the party who recovered a greater relief in the action on
the contract.” (Italics added.) The use of the past tense in the
definition of a prevailing party for the purposes of section 1717 as
the party who “recovered” indicates that the determination would
be made after a final resolution of the litigation, not merely an
interim resolution of only some of the causes of action in the case.

                                 14
(Cf. P R Burke Corp. v. Victor Valley Wastewater Reclamation
Authority (2002) 98 Cal.App.4th 1047, 1052 [attorney’s fees
motions are almost always filed after entry of judgment in part
because “before the entry of judgment, there is technically no
prevailing party”].)
      Two cases support our interpretation of section 1717’s
references to costs and recovery. First, Bank of Idaho v. Pine
Avenue Associates (1982) 137 Cal.App.3d 5, 7, 15–16 (Bank of
Idaho) considered whether a former version of section 1717 that
defined the prevailing party as the party “entitled to recover costs
of suit” authorized an interim award of attorney’s fees to the
plaintiff for succeeding on appeal in reversing a judgment
following an order sustaining the defendant’s demurrer without
leave to amend. (Id. at p. 16.) The court concluded it did not,
because the connection between fees and costs indicated “that
there be some reckoning of the net success of the respective
parties” that could not “be ascertained until the final termination
of the suit.” (Ibid.) The definition of prevailing party in section
1717 has changed since Bank of Idaho, and the interim request
for fees here is different than a request for fees after an appeal
that remands the case for further proceedings. But section 1717
maintains the connection between a fee award and the costs of
suit, which gives Bank of Idaho’s analysis continuing relevance.
      Second, Bell v. Farmers Ins. Exchange (2001)
87 Cal.App.4th 805, 808–809 (Bell) considered whether Labor
Code section 1194 authorized an interim award of attorney’s fees
following a summary adjudication ruling in favor of the plaintiffs

                                 15
on one of the defendant’s affirmative defenses in a class action
suit for unpaid overtime. Labor Code section 1194, subdivision
(a) provided that “any employee receiving less than the legal
minimum wage or the legal overtime compensation applicable to
the employee is entitled to recover in a civil action the unpaid
balance of the full amount of this minimum wage or overtime
compensation, including interest thereon, reasonable attorney’s
fees, and costs of suit.” Bell construed the use of “recover” in this
provision as referring to recovery by judgment. (Bell, at p. 831.)
It also deduced that attorney’s fees were part of the judgment
because interest and costs of suit, which were the other items in
the phrase “ ‘including interest thereon, reasonable attorney’s
fees, and costs of suit,’ ” were part of a judgment. (Ibid.) Bell
reasoned that it would be inconsistent for the statute to refer to
one pre-judgment item with three other items awarded in a final
judgment. (Ibid.) The same considerations apply to section 1717,
which explicitly makes fees an element of costs and allows an
award of attorney’s fees to the party that “recovered” greater
relief in the action on the contract. Indeed, Bell itself cited
section 1717 as an example of a statute that did not permit
interim fee awards, based on the language making fees an
element of costs, Bank of Idaho, and another case applying the
same principle. (Bell, at p. 833.)
      The tenants rely on a different aspect of subdivision (b)(1),
the instruction that a trial court shall determine the party
prevailing on the contract “whether or not the suit proceeds to
final judgment.” (§ 1717, subd. (b)(1).) They argue this means

                                  16
that fee awards can and must be made before final disposition of
a case, so long as the contract claims have been resolved. On its
face, this phrase does appear to support the tenants’ position.
However, the language seems somewhat peculiar if the
Legislature intended it to authorize an interim award of
attorney’s fees, since it mentions the resolution of the entire suit,
rather than the resolution of the contract causes of action. If the
tenants’ position were correct, a more natural way to phrase such
a provision would be to say that a court must determine the
prevailing party on the contract “upon resolution of the causes of
action on the contract,” or “when the causes of action on the
contract have been resolved.” Additionally, the tenants’
interpretation of the phrase “whether or not the suit proceeds to
final judgment” runs contrary to the other language referring to
costs and referring to the prevailing party as having “recovered”
in the action on the contract, making the statute ambiguous.
(§ 1717, subds. (a), (b)(1).) To decide which interpretation of the
statute is most reasonable, we therefore consider the legislative
history of this aspect of the statute.
      Our Supreme Court has already described the evolution of
section 1717. (Hsu v. Abbara (1995) 9 Cal.4th 863, 872–874
(Hsu).) Until 1981, section 1717 defined a prevailing party as
“the party in whose favor final judgment is rendered” and did not
address the mechanism by which contractual attorney’s fees
should be awarded. (Hsu, at p. 872; Stats. 1968, ch. 266, § 1,
p. 578.) In 1981, the Legislature changed the definition of
prevailing party to “the party who is entitled to recover costs of

                                  17
suit.” (Hsu, at p. 873; Stats. 1981, ch. 888, § 1, p. 3399.) At the
same time, it added two other provisions. First, it added the
provision in what is now section 1717, subdivision (b)(2) stating
that when “an action has been voluntarily dismissed or dismissed
pursuant to a settlement of the case, there shall be no prevailing
party.” (Hsu, at p. 873.) This was apparently intended to codify
the holding of a prior Supreme Court case. (Ibid.) Second, the
Legislature added the provision on which the tenants rely, which
states that a trial court “shall determine who is the prevailing
party, whether or not the suit proceeds to final judgment.” (Ibid.)
Hsu explained, “By this provision, the Legislature appears to
have intended to abrogate the holding in Samuels v. Sabih (1976)
62 Cal.App.3d 335, 340, which had held that a defendant could
not recover attorney fees under section 1717 if the action was
dismissed for failure to prosecute.” (Ibid.; see also Bank of Idaho,
supra, 137 Cal.App.3d at pp. 15–16 [similarly interpreting the
Legislature’s intent behind the amendment].)
      The tenants repeatedly quote Hsu and its description of the
evolution of section 1717, but they ignore Hsu’s explanation of
the purpose for the phrase on which they rely. Hsu’s explanation
does not support the tenants’ position that the phrase was
intended to allow for interim awards before the final conclusion of
litigation. Instead, the history shows that the phrase was a
reaction to a court’s construction of the prior statutory language
defining a prevailing party as one who obtains a “final judgment.”
(Samuels v. Sabih, supra, 62 Cal.App.3d at p. 340.) Read against
this backdrop, the phrase shows the Legislature intended merely

                                 18
to allow for fee awards when litigation concludes in something
other than a final judgment, such as a dismissal. The
amendment still presupposes that the litigation will be over
before a trial court can make a fee award. (Bank of Idaho, supra,
137 Cal.App.3d at p. 15 [the amendment “does not imply that the
suit need not be finally disposed of”]; Presley of Southern
California v. Whelan (1983) 146 Cal.App.3d 959, 961 (Presley)
[agreeing with Bank of Idaho that “this amendment merely
allows a fee award where the final outcome of a lawsuit does not
take the form of a final judgment but nevertheless one party wins
and one loses; it does not allow an award where the suit is still
ongoing”].) The simultaneous change at the time to defining
prevailing party as “the party who is entitled to recover costs of
suit” confirms this, since it maintained the tie between attorney’s
fees and an award of costs at the end of litigation, a tie that
remains in other places in the current version of the statute.
      In light of Hsu’s explanation of the purpose of this
provision, we conclude that the phrase “whether or not the suit
proceeds to final judgment” does not mean section 1717 allows for
interim awards of attorney’s fees, but rather supports the
contrary interpretation that the Legislature intended attorney’s
fees under section 1717 to be awarded only at the conclusion of
all litigation in a case, either in a final judgment or some other
final disposition.
      In addition to relying on the phrase “whether or not the
suit proceeds to final judgment,” the tenants emphasize that
section 1717, subdivision (a) allows the party “who is determined

                                 19
to be the party prevailing on the contract” to collect fees and
subdivision (b)(1) defines the party prevailing on the contract as
“the party who recovered a greater relief in the action on the
contract.” (§ 1717, subd. (b)(1).) They again turn to Hsu, which
explained that in 1987 the “Legislature replaced the term
‘prevailing party’ with the term ‘party prevailing on the contract,’
evidently to emphasize that the determination of prevailing party
for purposes of contractual attorney fees was to be made without
reference to the success or failure of noncontract claims.” (Hsu,
supra, 9 Cal.4th at pp. 873–874.) They also quote Hsu’s
statement that the “prevailing party determination is to be made
only upon final resolution of the contract claims.” (Id. at p. 876.)
The tenants argue these provisions mean that fees can be
awarded as soon as the trial court rules on the contract claims in
a case, even when other issues remain to be decided.
      The legislative history does not support the tenants’
position. (Gananian v. Wagstaffe (2011) 199 Cal.App.4th 1532,
1542, fn. 9 [“We may take judicial notice of legislative history
materials on our own motion”].) Our review of the legislative
history confirms the evolution of the statute described in Frog
Creek, supra, 206 Cal.App.4th at pages 526–530. As noted, ante,
after 1981 section 1717 defined the prevailing party as the party
entitled to recover costs. The Legislature first changed the
definition to “the party who recovered a greater relief in the
action on the contract” in 1986, inadvertently reverted to the
prior definition in a later amendment that year, and restored the
new definition in 1987. (Id. at pp. 527–529.) When the

                                 20
Legislature originally changed the definition in 1986, it did so in
order to conform to a simultaneous amendment to Code of Civil
Procedure section 1032 that defined the prevailing party for the
purposes of costs as “ ‘the party with a net monetary recovery, a
defendant in whose favor a dismissal is entered, a defendant
where neither plaintiff nor defendant obtains any relief, and a
defendant as against those plaintiffs who do not recover any
relief against that defendant.’ ” (Frog Creek, at p. 528.) Thus,
section 1717’s new definition of prevailing party as the party who
recovered a “greater relief in the action on the contract” was
intended to parallel the “net monetary recovery language” added
to Code of Civil Procedure section 1032. (Frog Creek, at p. 529.)
      Nowhere in the legislative history of section 1717 in 1986
or 1987 is there any indication that the Legislature intended to
allow for interim awards of attorney’s fees upon the resolution of
the contract claims in a case even if further litigation remains on
non-contract claims. Instead, the Legislature’s attempt to create
consistency between section 1717 and the procedures for a
prevailing party to collect costs reinforces our conclusion that
attorney’s fees are intended to be part of costs and therefore
awarded, like all costs, at the conclusion of the litigation of an
action.
      Hsu and its interpretation of section 1717 are not to the
contrary. Hsu held that a trial court must determine which party
prevailed on the contract by looking only at the outcome of the
contract claims, without taking into account any equitable
considerations unrelated to litigation success on the contract

                                 21
claims. (Hsu, supra, 9 Cal.4th at pp. 876–877.) This holding
indicates nothing about when a trial court must make this
determination. Likewise, Hsu’s statement that a prevailing party
determination “is to be made only upon final resolution of the
contract claims” does not say what qualifies as a final resolution.
(Id. at p. 876.) It is also significant that Hsu cited Bank of Idaho
as support for this statement, which as we have seen supports
our conclusion that section 1717 only allows an award of
attorney’s fees at the end of litigation. (Ibid.)
      The tenants also cite DisputeSuite.com, LLC v.
Scoreinc.com, supra, 2 Cal.5th 968, but that case does not
address the question we face. DisputeSuite applied Hsu’s “final
resolution” principle and held that the dismissal of an action
based on forum non conveniens, with the expectation that the
plaintiff would refile the case in another state, did not dispose of
the parties’ contractual dispute so the trial court could not make
the necessary evaluation of the parties’ relative success on the
contract claims to permit a fees award. (Id. at pp. 972, 974.) We
have already concluded that the trial court’s summary
adjudication order does not constitute a final resolution of the
contract claims, so Hsu’s and DisputeSuite’s statements are not
helpful to the tenants.8

      8 Valstock argues, based on Bank of Idaho, supra,
137 Cal.App.3d at page 16, that section 1717, subdivision (b)(2)’s
statement that there will be no prevailing party if an action “has
been voluntarily dismissed or dismissed pursuant to a settlement
of the case” further indicates that the statute does not allow
interim fee awards. (See also Presley, supra, 146 Cal.App.3d at
pp. 961–962 [agreeing with Bank of Idaho on this point].) It is

                                  22
      Although the tenants do not cite it, Burkhalter Kessler
Clement & George LLP v. Hamilton (2018) 19 Cal.App.5th 38
arguably supports their position. That case relied on section
1717’s “whether or not the suit proceeds to final judgment”
language when it held that an award of attorney’s fees under
section 1717 prior to entry of final judgment was not premature.
(Burkhalter, at pp. 46–47 [rejecting argument that the prevailing
defendant should have waited to move for attorney fees until
after the entry of judgment because “that is not required under
section 1717”].) However, the procedural history of that case is
different. The prevailing defendant had successfully demurred to
the plaintiff’s first amended complaint, and the plaintiff then
amended the complaint and did not name that defendant as a
party. (Id. at p. 42.) The trial court then granted the prevailing
defendant’s motion for dismissal with prejudice based on the
plaintiff’s failure to name her as a party in the second amended
complaint. (Ibid.) Because the prevailing party was already
dismissed from the case by the second amended complaint and
the court engaged in no analysis of section 1717’s language or
history, this case is distinguishable and unpersuasive.
      The last aspect of section 1717 that is relevant to our
analysis is subdivision (c). That subdivision directly addresses a
scenario in which an action involves both contract and non-
contract causes of action, stating, “In an action which seeks relief

unnecessary for us to consider this argument because we
conclude other aspects of the statute make it sufficiently clear
that it does not permit interim fee awards.

                                 23
in addition to that based on a contract, if the party prevailing on
the contract has damages awarded against it on causes of action
not on the contract, the amounts awarded to the party prevailing
on the contract under this section shall be deducted from any
damages awarded in favor of the party who did not prevail on the
contract. If the amount awarded under this section exceeds the
amount of damages awarded the party not prevailing on the
contract, the net amount shall be awarded the party prevailing
on the contract and judgment may be entered in favor of the
party prevailing on the contract for that net amount.” (§ 1717,
subd. (c).)
      This provision establishes the procedure for reconciling a
party’s award of attorney’s fees on the contract portion of an
action with the outcome of the rest of the action. The existence of
the process for such reconciliation indicates that contractual fee
awards should be made only after the end of all litigation in a
case, including litigation of non-contract claims. The statute
creates no exceptions for cases in which contract claims are
disposed of earlier than the non-contract claims, such as through
a demurrer or summary adjudication. In such cases, if the party
could have moved for attorney’s fees immediately upon an
interim resolution of the contract claims, there would be no
reason to deduct an attorney’s fees award in favor of the party
prevailing on the contract from damages awarded against that
party on non-contract claims or to reduce a fee award by the
amount of an offsetting damages determination. The party
prevailing on the contract at the pre-trial stage would, like the

                                 24
tenants did here, immediately move to collect their fees, leaving
nothing to offset. This would contravene the Legislature’s
evident intent that a prevailing party receive only the net
monetary amount to which it is entitled, rather than requiring
the parties to transfer back and forth different amounts awarded
under different theories.
      b. The tenants’ authorities
      The tenants cite several authorities that they contend
support their position that section 1717 permits interim fee
awards, but their reliance on these cases is misplaced.
      PNEC Corp. v. Meyer (2010) 190 Cal.App.4th 66, 70–71,
disapproved of in part by DisputeSuite, supra, 2 Cal.5th at
page 979,9 and Winick Corp. v. Safeco Insurance Co. (1986)
187 Cal.App.3d 1502, 1507 (Winick), both stated that litigation
need not end in a final judgment for a prevailing party to obtain
fees under section 1717. However, these statements concerned
arguments that a final decision on the merits was necessary for a
party to obtain a fee award, as opposed to a final termination of
the litigation for procedural reasons or some other basis. Neither
case discussed whether an award of fees is proper before
completion of the litigation as a whole. In both cases, the
litigation had ended before the trial court awarded fees, via a
dismissal based on forum non conveniens in PNEC Corp. and

      9The tenants’ citation to this case fails to note that
DisputeSuite disapproved it in part. We assume this failure was
inadvertent, not an attempt to mislead the court about the extent
to which PNEC Corp. v. Meyer is still good law. Counsel for the
tenants would be well advised in the future to properly cite cases’
subsequent history.

                                    25
dismissal for failure to complete service in three years in Winick.
(PNEC Corp., at pp. 70–71; Winick, at pp. 1506–1508.)
      Similarly, the tenants cite a Witkin treatise as agreeing
that section 1717 contains no requirement of a final judgment.
(7 Witkin, Cal. Proc. (6th ed. 2022) Judgment § 204.)10 The
treatise does so state, but the statement merely reflects the
statute’s shift away from defining prevailing party by reference to
a final judgment. (Ibid.) Tellingly, the tenants also ignore the
next sentence in the treatise, which remarks, “However, final
disposition is required.”11 (Ibid.)
      c. Other statutes and policy considerations
      To the extent that the proper interpretation of section 1717
remains in any doubt, a few final points cement our conclusion
that section 1717 does not permit interim fee awards.
      First, the Judicial Council’s rule governing motions for
attorney’s fees under section 1717 is consistent with our

       The tenants cited the edition of the treatise in effect
      10

when they filed their brief. (7 Witkin Cal. Proc. (5th ed. 2020)
Judgment, § 195.) We cite to the most recent edition, which is
materially identical to the edition the tenants cited.
      11 The treatise relies on Presley for this conclusion, which
applied a previous version of section 1717 but nonetheless
supports our interpretation of the current statutory text, as
discussed, ante. (7 Witkin, Cal. Proc. (6th ed. 2022) Judgment
§ 205.) The treatise also discusses several decisions that have
reached different outcomes when considering whether interim
fees are available after rulings on petitions to compel arbitration,
some of which the tenants also cite. (E.g., Turner v. Schultz
(2009) 175 Cal.App.4th 974, 976; Acosta v. Kerrigan (2007)
150 Cal.App.4th 1124, 1125.) We do not discuss these decisions
because the rulings in those cases did not involve the merits of a
dispute, so they are distinguishable.

                                  26
interpretation of section 1717 as permitting fee awards only at
the end of an action.12 Rule 3.1702(b)(1) of the California Rules of
Court13 states that a “motion to claim attorney’s fees for services
up to and including the rendition of judgment in the trial court—
including attorney’s fees on an appeal before the rendition of
judgment in the trial court—must be served and filed within the
time for filing a notice of appeal.” Tying the deadline for an
attorney’s fees motion to the deadline for filing an appeal, as rule
3.1702 does, indicates that a trial court will only award fees at
the end of an action, when the opposing party can also file an
appeal. Additionally, this deadline runs only from a judgment, so
the entry of a non-appealable order, such as a summary judgment
or summary adjudication order, does not trigger it. (Saben,
Earlix & Associates v. Fillet, supra, 134 Cal.App.4th at pp. 1029–
1030.) However, we recognize that rule 3.1702 is not conclusive.
It is only a rule and not a statute, so it could not contradict
section 1717. (Cal. Court Reporters Assn. v. Judicial Council of

      12 While some attorney’s fees claims can be raised in a
memorandum of costs, claims for fees under section 1717 can only
be raised via motion or upon entry of a default judgment, unless
the parties stipulate otherwise. (Code Civ. Proc., § 1033.5,
subds. (c)(5)(A) [“Attorney’s fees allowable as costs pursuant to
subparagraph (A) . . . of paragraph (10) of subdivision (a) shall be
fixed either upon a noticed motion or upon entry of a default
judgment, unless otherwise provided by stipulation of the
parties”], (c)(5)(B) [“Attorney’s fees awarded pursuant to Section
1717 of the Civil Code are allowable costs under Section 1032 as
authorized by subparagraph (A) of paragraph (10) of subdivision
(a)”].)
      13All subsequent references to rules are to the California
Rules of Court.

                                  27
Cal. (1995) 39 Cal.App.4th 15, 18 [“rules of court are only valid to
the extent that they comply with the constitutional charge to be
‘not inconsistent with statute’ ”].) It is also possible that the rule
merely sets an outer deadline and permits attorney’s fees motions
at any point earlier in a case. But this reading of the rule is less
plausible because it would give parties such a wide range of time
in which to claim fees and give the prevailing party a choice of
when to request a fees award, which could create an opportunity
for gamesmanship and mischief.14

      14 Valstock cites 580 Folsom Associates v. Prometheus
Development Co. (1990) 223 Cal.App.3d 1, 30, for its statement,
“Only when a final judgment has been entered in this matter,
whether after further appellate review or not, will there be a
prevailing party.” Valstock appears to imply that this means the
trial court here could not award attorney’s fees for the
declaratory judgment cause of action until after the conclusion of
all appeals from a final judgment. 580 Folsom is not apposite or
persuasive here. That decision affirmed a trial court’s denial of a
plaintiff’s post-judgment motion for attorney’s fees incurred in
proceedings on a defendant’s writ petition challenging a
summary adjudication order, which petition the Court of Appeal
had previously summarily denied. (Id. at pp. 8–9, 29–30.) The
court’s reasoning turned on the fact that the summary denial of
the writ petition was not a final adjudication or determination of
a cause, so the plaintiff did not prevail on it. (Id. at p. 30.) The
court did not consider whether the plaintiff’s victory in the trial
court upon final judgment entitled it to fees for the interim writ
proceedings. We do not construe 580 Folsom as holding that fee
awards under section 1717 for proceedings in the trial court will
always be premature until all appellate proceedings are complete.
(Bankes v. Lucas (1992) 9 Cal.App.4th 365, 368 [“Although a
prevailing party at trial may not be the prevailing party after an
appeal, it has been held that a motion for attorney fees is not
premature despite the filing of a notice of appeal”], superseded by

                                  28
      Second, interim attorney’s fees awards are anomalous in
civil litigation.15 Another court recently made the same point,
rejecting a claim to interim fees under a different statute because
there was no indication the Legislature intended “to depart from
well-established principles that fees and costs are ordinarily not
granted for interim success, and that the prevailing party is
determined, and fees and costs awarded, at the conclusion of the
litigation.” (Artus v. Gramercy Towers Condominium Assn.
(2018) 19 Cal.App.5th 923, 927 [rejecting claim for fees for
interim success under the Davis-Stirling Common Interest
Development Act (§§ 4000 et seq.) where party lost at trial].) Our
research has disclosed that some decisions have held that certain
California statutes allow for interim fee awards, but they are few
and distinguishable.16

statute on other grounds as stated in Lee v. Wells Fargo Bank
(2001) 88 Cal.App.4th 1187, 1197.)
      15 We do not consider here interim fee awards in the
distinct contexts of probate and family law, which are governed
by different statutes and considerations. (See, e.g., People ex rel.
Harris & Becerra v. Shine (2017) 16 Cal.App.5th 524, 533–534
[discussing principle of interim fee awards in litigation
concerning a trust estate]; Alan S. v. Superior Court (2009)
172 Cal.App.4th 238, 242 [Family Code authorizes pendente lite
attorney’s fee awards in various types of proceedings to give
parties equal opportunity to present their arguments].)
      16 The tenants cite Animal Lovers Volunteer Ass’n, Inc. v.
Carlucci (9th Cir. 1989) 867 F.2d 1224, 1225, abrogated on other
grounds by Sorenson v. Mink (9th Cir. 2001) 239 F.3d 1140, 1149,
but apart from referring to a prevailing party, the federal statute
at issue in that case does not resemble section 1717. (See also
Bell, supra, 87 Cal.App.4th at pp. 832–833 [“The federal decisions
authorizing interim attorney fee awards are predicated in large

                                 29
      The tenants point out that courts have recognized that
Code of Civil Procedure section 1021.5 allows for interim awards
of private attorney general attorney’s fees. (E.g., Urbaniak v.
Newton (1993) 19 Cal.App.4th 1837, 1844; Bell, supra,
87 Cal.App.4th at p. 833 [“Apart from the sphere of private
attorney general actions under Code of Civil Procedure section
1021.5, the award of interim attorney fees in California remains
a wholly untested and novel concept that is ordinarily barred by
explicit statutory language”].) But Code of Civil Procedure
section 1021.5 permits fee awards for enforcing important rights
and conferring benefits on the public before the conclusion of a
case, and those objectives can be achieved at interim stages of
litigation. (Bell, at p. 833.) This contrasts with section 1717’s
limitation of fees to the party “who recovered a greater relief in
the action on the contract.” (§ 1717, subd. (b)(1), italics added;
Bell, at p. 833.) Additionally, interim fees are available under
Code of Civil Procedure section 1021.5 only when a benefit is
“ ‘secure.’ ” (Urbaniak, at p. 1844.) While some decisions have
upheld awards of fees after appeals that upheld a portion of a
party’s victory while requiring further proceedings on other
claims, we are aware of no decision affirming an award of fees
under Code of Civil Procedure section 1021.5 after an interim
ruling that has not already been upheld or directed by a higher
court. (E.g., Bouvia v. County of Los Angeles (1987)
195 Cal.App.3d 1075, 1080, 1086 [plaintiff was entitled to fees

measure on circumstances and legislative history not present” in
cases under California law].)

                                 30
under Code Civ. Proc., § 1021.5 for obtaining writ from appellate
court directing trial court to issue an injunction, despite claims
for damages that remained pending]; Sundance v. Municipal
Court (1987) 192 Cal.App.3d 268, 271 [plaintiffs were entitled to
fees under Code Civ. Proc., § 1021.5 for obtaining order affirmed
by Supreme Court, even though further litigation was
contemplated].)
      The tenants also argue that interim fee awards are
permissible under section 3426.4 and statutes providing for
discovery sanctions based on fee-shifting provisions. Section
3426.4 allows a court to award attorney’s fees to a prevailing
party in a misappropriation of trade secrets case if “a claim of
misappropriation is made in bad faith, a motion to terminate an
injunction is made or resisted in bad faith, or willful and
malicious misappropriation exists.” The statute does not
explicitly allow for interim fee awards, and the tenants cite no
authority holding that it does. Even if it did permit interim fee
awards, such as perhaps for prevailing in preliminary injunction
proceedings, it does not condition such an award on recovery, like
section 1717, so it has little bearing here. The discovery statutes
do explicitly require interim monetary sanctions upon rulings on
discovery motions. (E.g., Code Civ. Proc., § 2030.290, subd. (c)
[“The court shall impose a monetary sanction . . . against any
party, person, or attorney who unsuccessfully makes or opposes a
motion to compel a response to interrogatories, unless it finds
that the one subject to the sanction acted with substantial
justification or that other circumstances make the imposition of

                                 31
the sanction unjust”].) But the language of these statutes does
not resemble section 1717, either.
      Monterossa v. Superior Court (2015) 237 Cal.App.4th 747,
754 held that a subdivision in section 2924.12, a provision in the
Homeowner’s Bill of Rights (Civil Code, §§ 2920.5, 2923.4–2923.7,
2924, 2924.9–2924.12, 2924.15, 2924.17–2924.20) that provides
certain foreclosure protections, authorizes fee awards when a
plaintiff obtains only a preliminary injunction and not a
permanent injunction. Section 2924.12 authorizes fees for a
plaintiff who obtains injunctive relief or an award of damages,
and as Monterossa noted, under that “unique statutory scheme,
in many cases the best a plaintiff can hope to achieve is a
preliminary injunction.” (Monterossa, at p. 754.) The same is not
true in civil litigation concerning contracts.
      Close v. Sotheby’s, Inc. (2018) 909 F.3d 1204, 1207, 1213,
which the tenants cite, affirmed an interim award of fees under
subdivision (a)(3) of section 986, the Resale Royalties Act. Close
engaged in no analysis of the statute at issue and the only
California state court cases it cited were Winick and Urbaniak v.
Newton, both of which are inapposite. (Id. at p. 1213.) Close also
has not been cited by any California state court.
      As a last example, a defendant who succeeds in striking
only part of a complaint under the anti-SLAPP statute, as well as
a plaintiff who succeeds in defeating a frivolous anti-SLAPP
motion, can immediately collect attorney’s fees. (Code Civ. Proc.,
§ 425.16, subd. (c); Bel Air Internet, LLC v. Morales (2018)
20 Cal.App.5th 924, 946.) But the statute creating the anti-

                                 32
SLAPP motion procedure includes the provision authorizing such
fees; there is no similar provision in the summary judgment
statute authorizing an immediate award of contractual attorney’s
fees. The express provision authorizing interim fee awards in
section 425.16, subdivision (c) serves to underscore that such
awards are the exception in civil litigation, not the rule.
      Given the wealth of statutes permitting attorney’s fee
awards, the absence of any other provisions besides these few
allowing for interim fee awards is significant. (See Wegner et al.,
Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group
2008) ¶ 17:545 [“Literally hundreds of California statutes
authorize court awards of attorney fees in specific types of
actions”].)
      Finally, our interpretation of section 1717 is preferable as a
matter of trial and appellate procedure. Valstock points out that
the unappealability of the summary adjudication ruling,
combined with the appealability of the fee award, means Valstock
must accept in this fee appeal that the tenants prevailed on the
contract claims. Only later, in an appeal after the end of the
litigation in the trial court, can Valstock challenge the merits of
the summary adjudication ruling. Valstock argues this sequence
will preclude it from being able to challenge the merits of the
summary adjudication in a way that effectively allows for
reversal of the fee award.
      Although Valstock does not cite it, Bell supports their
concern. It pointed out, “The award of interim attorney fees
would present peculiar problems in a statute that conditions the

                                 33
right to recover attorney fees on the plaintiff’s recovery, and we
find nothing in the language of Labor Code section 1194
providing guidance as to when, and under what conditions, an
interim fee may be granted. The most plausible explanation is
that the Legislature contemplated only an award following final
judgment, governed by familiar statutory procedures and rules of
court.” (Bell, supra, 87 Cal.App.4th at p. 831.) Bell also noted
“the awkward dilemmas that would be presented by an interim
award,” which the trial court had sought to avoid by retaining
jurisdiction to adjust or refund the fees award, depending on the
outcome of later proceedings. (Ibid.) Bell was reluctant to
believe the Legislature intended to authorize an award of fees
subject to unrestricted adjustment or refund later in the
litigation, since “[s]uch a process would run counter to the
principle that, when differing interpretations are possible, ‘ “[i]t
is the duty of the courts within the framework of the statutes
passed by the Legislature, to interpret the statutes so as to make
them workable and reasonable.” ’ ” (Id. at pp. 831–832.)
      While it would technically be possible for us to reverse an
interim fee award under section 1717 if we were to reverse later
the summary adjudication order on which it is based, Bell
indicates that Valstock’s concerns about the sequencing are valid.
If the tenants have enforced an interim fee award before
judgment, as they have already tried to do here, Valstock will
need to claw back the fees from the tenants if it succeeds in a
later appeal from a final judgment or if some subsequent
development in the litigation affects the amount of fees owed.

                                 34
Such a clawback could prove difficult to collect, unless the
prevailing party sets the funds aside until all appeals are final,
which would call into question the point of the award in the first
place.
         The appealability of a fee award, like the one the trial court
entered here against Valstock, mitigates some of these concerns
but does not eliminate them. Valstock was able to stay
enforcement of the award by appealing it and triggering the
automatic appellate stay. (Code Civ. Proc., § 916, subd. (a).) But
if we upheld the trial court’s award, that ruling would likely
become final long before an appeal from a final judgment in the
action could be resolved, so the appeal of the fee award would not
avoid the problem entirely. Of course, this aspect of the appellate
stay, too, calls into question the purpose of an interim fee award.
The appealability of the award, combined with the length of time
it takes for a Court of Appeal to dispose of an appeal, means an
interim fee award is often unlikely to provide much help to a
party facing a mismatch in litigation resources. Moreover, if a
party can avoid having to pay an interim fee award only by
appealing it, we can expect to see parties file appeals with
questionable merit purely to avoid (or at least delay) having to
pay fees in the middle of a case. The Courts of Appeal will also
have to rule on appeals from fee awards that could later become
moot if the underlying orders are reversed. While perhaps not
the most important concern, the potential for waste of appellate
judicial resources, when other litigants are waiting for their own

                                   35
appeals to be resolved, counsels against allowing interim fee
awards.
      The tenants suggest Valstock could have avoided such
issues by seeking writ review of the summary adjudication order.
This is true, but they cite nothing to suggest Valstock was
required to seek writ review, and it was not. (Angelica Textile
Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 504 [“there is
no requirement in our summary judgment statute that parties
that wish to challenge orders granting summary adjudication do
so by way of a writ petition”].) They also argue that Valstock
could have suggested to the trial court that it should sua sponte
reconsider the summary adjudication, under the authority
recognized in Goel, supra, 35 Cal.4th 1094. Again, however, they
cite nothing that obligated Valstock to pursue this course.
      Bell avoided these problems by reviewing the “decisional
underpinning” of the fees award—meaning the summary
adjudication order—under Code of Civil Procedure section 906.
(Bell, supra, 87 Cal.App.4th at pp. 809, 829.) That statute allows
an appellate court to review “any intermediate ruling,
proceeding, order or decision which involves the merits or
necessarily affects the judgment or order appealed from.” (Code
Civ. Proc., § 906.) While we agree with much of Bell’s analysis
regarding interim fee awards, we part company with it on its
application of this statute.17 It is established law that a
summary adjudication ruling is not appealable, while a fee award
“is appealable as a final determination on a collateral matter,

      17   No subsequent case has followed Bell on this point.

                                  36
severable from the general subject of the litigation.” (Smith v.
Krueger (1983) 150 Cal.App.3d 752, 756; Tucker Ellis LLP v.
Superior Court (Nelson), supra, 12 Cal.App.5th at p. 1240.) If a
reviewing court can be forced to review a summary adjudication
ruling in an appeal from a subsequent fee award, it would call
into question whether the fee award is truly collateral. It would
circumvent the one final judgment rule that precludes immediate
appeals of summary adjudication rulings. It would also give a
party who prevails on a summary adjudication motion ruling the
power to expedite or delay appellate review of the ruling by
choosing whether or not to file a motion for an interim attorney’s
fees award that could then be appealed. Holding that section
1717 does not permit interim fee awards, as we do, avoids these
concerns.
                                DISPOSITION
       The trial court’s order is reversed, without prejudice to
consideration of a subsequent motion for attorney’s fees at the
appropriate time. The parties shall bear their own costs on
appeal.

                                                          BROWN, J.

WE CONCUR:

POLLAK, P. J.
STREETER, J.

Chen et al. v. Valstock Ventures, LLC, et al. (A161885)

                                          37
Trial Court: San Francisco City & County Superior Court

Trial Judge:     Hon. Ethan P. Schulman

Counsel:   California Appellate Law Group LLP, Johanna
           Schiavoni, Jennifer Teaford; Kronenberg Law PC,
           William S. Kronenberg, V. Sathienmars for
           Defendants and Appellants.

           Ropes & Gray LLP, Douglas H. Hallward-Driemeier,
           Rocky C. Tsai; Winifred V. Kao for Plaintiffs and
           Respondents.