Court Opinion

ID: 8483914
Source: CourtListenerOpinion
Date Created: 2022-11-15 18:02:17.162191+00
Date Added: 2024-06-11T16:49:49.710188
License: Public Domain

Filed 11/15/22 Counts v. Chadwick CA1/1
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

                                     FIRST APPELLATE DISTRICT

                                                   DIVISION ONE

 CALEB COUNTS et al.,
             Plaintiffs and Respondents,
                                                                        A163282
 v.
 RHONDA CHADWICK,                                                       (Solano County
                                                                        Super. Ct. No. FCS048235)
             Defendant and Appellant.

         This litigation centers on a contract between defendant Rhonda
Chadwick and plaintiffs Caleb Counts and Nathan Coleman (collectively,
plaintiffs), under which Chadwick was to transfer control of a cannabis
dispensary to plaintiffs. She appeals from a judgment entered in plaintiffs’
favor after a bench trial, claiming that reversal is required because she was
improperly denied a continuance, the contract at issue was illegal and
unenforceable, and the trial court erred by finding that plaintiffs were
entitled to be placed on the dispensary’s board of directors. She also claims
that the court abused its discretion in awarding attorney fees to plaintiffs.
We affirm in full.1

        Plaintiffs filed a motion for sanctions against Chadwick and her
         1

appellate attorney on the basis that this appeal is frivolous. The motion is
denied. Although we ultimately reject Chadwick’s claims, they are not so
clearly lacking in merit or made solely for the purpose of delay that sanctions

                                                               1
                                    I.
                          FACTUAL AND PROCEDURAL
                               BACKGROUND2
      Chadwick operated a small cannabis dispensary in Vallejo, Homegrown
Holistic Collective, Inc. (H2C), which was organized as a nonprofit mutual
benefit corporation. In November 2015, she and plaintiffs entered a contract
entitled Agreement for Transfer of Control (Agreement). Under the
Agreement, plaintiffs promised to pay Chadwick a $20,000 deposit, and she
promised to transfer control of H2C to them by November 15, 2015.
Specifically, she promised to (1) “take all actions necessary” to replace H2C’s
board of directors with herself and plaintiffs and (2) amend H2C’s bylaws to
ensure plaintiffs held the majority of seats on the board of directors with “full
authority to manage and operate [H2C].” Plaintiffs timely paid the deposit,
but Chadwick did not replace the board of directors or amend the bylaws.
      Under the Agreement, Chadwick also promised to “ensure that [H2C]
submit[ted] to the City of Vallejo all required documentation, in accordance
with the laws and ordinances of the City of Vallejo, to receive a Final Letter
of Limited Immunity . . . from the City of Vallejo.” In turn, plaintiffs were
required to pay $150,000 to Chadwick within five days of H2C’s receiving a
limited immunity letter (an aspect of how Vallejo regulated marijuana
businesses at the time), and an additional $300,000 “[u]pon the first
anniversary” of the letter’s receipt. Plaintiffs also promised to pay Chadwick
$310,0000 upon H2C’s receiving “from the City of Vallejo a certificate of
occupancy” for the dispensary’s planned new location. These additional

are justified. (See Applied Business Software, Inc. v. Pacific Mortgage
Exchange, Inc. (2008) 164 Cal.App.4th 1108, 1119.)
      2The underlying facts are primarily drawn from the trial court’s two
statements of decision.

                                        2
payments were also conditioned on Chadwick’s having “timely performed all
of [her other] obligations” under the Agreement.
      H2C received a limited immunity letter from Vallejo in October 2015,
but the letter conditioned H2C’s good standing on its “compliance with the
Building Code, Fire Code[,] and ventilation requirement” at the new location
by December 31, 2015. The building at the new location did not fully comply
with these requirements until the following June, and plaintiffs did not make
the additional payments required under the Agreement.
      For several months after the Agreement was entered, “[p]laintiffs
continued to act in good faith to perform [it] and expended significant sums to
complete renovation of the building at the new location [for the dispensary],
to purchase inventory, and to market and operate the business of H2C.”
During this time period, H2C “operated at a net loss.” In October 2016,
Chadwick and her husband “seized physical control of the H2C business
building, inventory, assets[,] and business records, and excluded [p]laintiffs
from operation and management of the business.”
      The following January, plaintiffs brought suit against Chadwick, her
husband, and H2C (collectively, Chadwick defendants).3 The operative
complaint alleged claims for breach of contract, breach of the covenant of
good faith and fair dealing, unfair business practices, declaratory relief,
fraudulent transfer, and quantum meruit, as well as a cause of action under
Corporations Code section 709 (section 709) to determine H2C’s directors.
Chadwick filed a cross-complaint against plaintiffs for declaratory relief.

      3 Vallejo Creative Solutions, LLC, a company associated with Counts,
was also a plaintiff, but the parties’ appellate briefing does not mention this
entity. In addition, other defendants were named in the suit, but they are
not parties to this appeal.

                                        3
      The trial court conducted a bifurcated bench trial in which the
section 709 claim was tried first. In May 2020, the court issued a statement
of decision on that claim, concluding that Chadwick breached the Agreement
by failing to place plaintiffs on H2C’s board of directors and amend the
bylaws, and plaintiffs did not breach the covenant of good faith and fair
dealing or waive any of Chadwick’s breaches. Accordingly, the court ordered
that H2C’s board of directors now consisted of Chadwick and plaintiffs and
that H2C’s bylaws be amended to provide that plaintiffs had a majority of
seats on the board and that the board “ha[d] the full authority to manage and
operate the corporation.”4
      In April 2021, after the remaining causes of action were tried, the trial
court issued a second statement of decision addressing them. The court ruled
that Chadwick breached the Agreement but rejected plaintiffs’ claims of
fraudulent transfer and declaratory relief, as well as Chadwick’s declaratory-
relief claim. After accounting for plaintiffs’ payment of the $20,000 deposit
and other credits, the court awarded $720,039.68 to Chadwick, “conditioned
upon [her] curing her breach by placement of [p]laintiffs on the [b]oard of
[d]irectors of H2C and amendment of the [b]ylaws of H2C.”5 The court
awarded plaintiffs $1,198,073.29 in attorney’s fees and $223,533.83 in costs
as the prevailing parties, resulting in a net monetary judgment of

      4 Chadwick and her husband filed a petition for a writ of mandate in
this court to challenge the May 2020 decision and a preliminary injunction
effectuating the decision. We denied the petition for “fail[ure] to demonstrate
that petitioners lack[ed] an adequate remedy at law and that [they would]
suffer irreparable harm absent writ review.” (Chadwick v. Superior Court,
A160467.)
      5Based on another provision of the Agreement, Chadwick was also
awarded “one hundred twenty (120) pounds of ‘sugar trim,’ ” and plaintiffs
were ordered to donate $10 to her charity organization, House of Broken
Dolly.

                                       4
$701,567.44 against Chadwick. After unsuccessfully moving for a new trial,
Chadwick appealed.
                                         II.
                                     DISCUSSION
      A.       The Trial Court Did Not Abuse Its Discretion by Denying
               Chadwick’s Request for a Six-month Continuance.
      Chadwick contends that the trial court abused its discretion by denying
her a continuance to “substitute in her chosen attorney after she was
abandoned by her first attorney on the eve of trial.” The claim lacks merit.
               1.     Additional facts
      In early 2019, counsel for the Chadwick defendants moved to be
relieved as counsel based on a conflict of interest, and the motion was
calendared for that April. In March, the trial court held a hearing to consider
the Chadwick defendants’ ex parte motions to move up consideration of
counsel’s motion and to continue trial on the section 709 claim, which was
also set for April.
      At the March hearing, Chadwick indicated she would sign a
substitution of attorneys, mooting her counsel’s motion to be relieved, if the
trial court would continue the trial for at least 90 days. One of the attorneys
she proposed to retain, Mark Pappas, then stated that he and his partner
were willing to become attorneys of record only if “the trial date [was]
vacated, and no new trial [was] set at [that] particular time.” Pappas
explained that he was “booked up until at least October or November” on
other cases.
      The trial court responded that if it “grant[ed] a continuance, [it was]
not going to be until October.” The court subsequently vacated the trial date,
indicating it would re-set it at a future hearing, and directed Chadwick and
her husband “to not delay in obtaining new counsel to represent [them] in

                                         5
this case.” Our record reflects no further discussion of the issue, but within
three weeks, a different attorney not affiliated with Pappas was representing
the Chadwick defendants. Trial on the section 709 claim ultimately began in
late October 2019.
            2.     Analysis
      “To ensure the prompt disposition of civil cases, the dates assigned for a
trial are firm. All parties and their counsel must regard the date set for trial
as certain.” (Cal. Rules of Court, rule 3.1332(a).) “[C]ontinuances of trials
are disfavored” and cannot be granted except upon “an affirmative showing of
good cause.” (Id., rule 3.1332(c).) Substitution of trial counsel may constitute
good cause, “but only where there is an affirmative showing that the
substitution is required in the interests of justice.” (Id., rule 3.1332(c)(4).) In
determining whether to grant a continuance, a trial court “must consider all
the facts and circumstances that are relevant to the determination,”
including the length of the requested continuance. (Id., rule 3.1332(d).)
      We review the denial of a continuance for an abuse of discretion.
(Forthmann v. Boyer (2002) 97 Cal.App.4th 977, 984.) Under this standard,
we affirm the trial court’s ruling if it “is based on a reasoned judgment and
complies with legal principles and policies appropriate to the case before the
court” and does not constitute a clear abuse of discretion. (Id. at pp. 984–
985.) An appellant bears the burden “to demonstrate from the record that
such an abuse has occurred.” (Id. at p. 985.)
      Chadwick claims the trial court abused its discretion by denying her a
continuance so that she could obtain her chosen counsel. But as plaintiffs
observe, the trial court vacated the trial date in response to her request,
effectively continuing the trial. Thus, the complained-of ruling is more

                                         6
accurately characterized not as the denial of a continuance but the refusal to
continue the trial for six months, from April to October 2019.
      Although this refusal meant that Pappas was unwilling to represent
Chadwick, she cites no authority suggesting that the denial of a continuance
to enable a party to retain a particular attorney constitutes an abuse of
discretion. The decisions on which she relies found in favor of parties who
were forced to represent themselves at trial after being denied a continuance
of any length. (Oliveros v. County of Los Angeles (2004) 120 Cal.App.4th
1389, 1395; Vann v. Shilleh (1975) 54 Cal.App.3d 192, 197–198.) Chadwick,
in contrast, quickly retained new counsel, who represented her during the
rest of the proceedings below. As she offers no other reason that the trial
court abused its discretion, we conclude it did not err by refusing to continue
the trial for six months.
      B.    Chadwick Fails to Demonstrate that the Agreement Was
            Unenforceable as an Illegal Contract.
      Chadwick claims that the Agreement was illegal and unenforceable
because it violated various state and local laws. We disagree.
            1.     Additional facts
      Before the second phase of the trial, the Chadwick defendants filed a
bench brief arguing that the Agreement was illegal because it violated Vallejo
city ordinances in effect when it was entered that “prohibit[ed] the sale or
transfer of a medical marijuana dispensary within [that] jurisdiction.” The
Chadwick defendants also argued that the Agreement was illegal because it
violated the Compassionate Use Act of 1996 (CUA) (Health & Saf. Code,
§ 11362.5) and the Medical Marijuana Program Act (MMP) (Health & Saf.
Code, § 11362.7 et seq.), in that “it was meant to generate a profit from
operating a cannabis business.”

                                       7
      After hearing argument from the parties, the trial court ruled that the
Agreement was not an illegal contract. The court concluded that “nothing in
the [state] statutes or the Vallejo ordinances . . . prohibit[ed] a transaction of
this type,” namely, “a contract to replace members on a board of directors.”
The court also held that even if the contract was illegal, it was nonetheless
enforceable because the equities weighed in plaintiffs’ favor.
            2.     Analysis
      When the Agreement was entered in 2015, “[f]ederal law prohibit[ed]
the use, possession, manufacture[,] and sale of marijuana,” and California
voters had not yet approved Proposition 64, which legalized recreational use
of the drug. (City of Vallejo v. NCORP4, Inc. (2017) 15 Cal.App.5th 1078,
1081.) The CUA and MMP permitted medicinal use of marijuana, but the
steps these statutes took to enable that use “were limited and specific.” (City
of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013)
56 Cal.4th 729, 744–745.)
      At the time, cannabis dispensaries were not a permitted land use in
Vallejo. (See City of Vallejo v. NCORP4, Inc., supra, 15 Cal.App.5th at
p. 1082.) Earlier in 2015, Vallejo adopted an ordinance conveying “ ‘[l]imited
civil immunity’ ” on “ ‘existing medical marijuana dispensary operators that
have obtained tax certificates and paid their quarterly taxes’ to operate.” (Id.
at p. 1084.) Thus, at the time the Agreement was entered, the Vallejo
Municipal Code provided, “It is unlawful for any person to cause, permit or
engage in the cultivation, possession, distribution, exchange or giving away of
marijuana or products containing marijuana in any form, for medical or non-
medical purposes except as provided in this chapter, and pursuant to any and
all other applicable local and state law. The prohibition includes renting,
leasing, or otherwise permitting a medical marijuana dispensary to occupy or

                                         8
use a location, vehicle, or other mode of transportation.” (Former Vallejo
Mun. Code, § 7.100.030(B).) Notwithstanding this prohibition, the ordinance
provided that “a limited immunity shall be available and may be asserted as
an affirmative defense” in any action by Vallejo to enjoin such activity. (Id.,
§ 7.100.050.) The ordinance also provided that “[n]o medical marijuana
dispensary that is sold or transferred will receive limited immunity. Transfer
is a change in principals, assignment of lease or sale of business asset other
than a marijuana product.” (Id., § 7.100.100(A).)
      A contract is illegal if it is “[c]ontrary to an express provision of law,”
including a local ordinance, or “[c]ontrary to the policy of express law, though
not expressly prohibited.” (Civ. Code, § 1667; see Espinoza v. Calva (2008)
169 Cal.App.4th 1393, 1400.)6 As a “general rule[,] . . . the courts will not
grant relief under the terms of an illegal contract.” (Wong v. Tenneco (1985)
39 Cal.3d 126, 138.) “In determining whether the subject of a given contract
violates public policy, courts must rely on the state of the law as it existed at
the time the contract was made.” (Moran v. Harris (1982) 131 Cal.App.3d
913, 918.) Whether a contract is illegal is a question of law reviewed de novo.
(Timney v. Lin (2003) 106 Cal.App.4th 1121, 1126.)
      Several exceptions exist to the rule that illegal contracts will not be
enforced. (Asdourian v. Araj (1985) 38 Cal.3d 276, 291.) As relevant here,
“[i]n compelling cases, illegal contracts will be enforced in order to ‘avoid
unjust enrichment to a defendant [i.e., the party seeking to avoid the
contract] and a disproportionately harsh penalty upon the plaintiff [i.e., the
party seeking to enforce the contract].’ [Citation.] ‘ “In each case, the extent
of enforceability and the kind of remedy granted depend upon a variety of

      6   All further statutory references are to the Civil Code unless otherwise
noted.

                                         9
factors, including the policy of the transgressed law, the kind of illegality[,]
and the particular facts.” ’ ” (Id. at p. 292.) Factors commonly considered
include whether the defendant is part of “the group primarily in need of the
[law’s] protection,” whether the contract is inherently immoral or inequitable,
the relative sophistication of the parties, and which party is more at fault.
(Id. at pp. 292–293.)
      We need not decide whether the Agreement was illegal, because even if
it was, Chadwick fails to demonstrate that the trial court erred by concluding
it was nonetheless enforceable. She focuses most of her appellate briefing on
the Agreement’s purported illegality, discussing the alternative ground for
the court’s ruling only in passing. As to that ground, she claims that “[i]n
applying the illegality of contract doctrine as a defense, courts do not consider
whether its application results in unjust enrichment in favor of the party
opposing enforcement of the contract” because the doctrine prioritizes the
public interest over avoiding potential injustice between the parties. True,
the rationale for refusing to enforce illegal contracts is that “ ‘the public
importance of discouraging such prohibited transactions outweighs equitable
considerations of possible injustice between the parties.’ ” (Asdourian v. Araj,
supra, 38 Cal.3d at p. 291.) But as Asdourian and other cases make clear,
despite this general principle the equities between the parties sometimes
justify enforcing an illegal contract. (Asdourian, at p. 292; e.g., Corrie v.
Soloway (2013) 216 Cal.App.4th 436, 449; California Physicians’ Service v.
Aoki Diabetes Research Institute (2008) 163 Cal.App.4th 1506, 1516.)
      Chadwick also argues that the trial court improperly relied on cases
applying this exception because they “are inapplicable and distinguishable
from the case at bar.” She does not explain why they are inapposite,
however, except to say that since plaintiffs “operated H2C at a loss[,] . . . no

                                        10
benefit was conferred on [her].” In fact, Chadwick received $20,000 from
plaintiffs, and when she took back control of H2C, they had invested a
significant amount of money in the entity.
      Moreover, in addition to the monetary benefit Chadwick realized,
several other factors are relevant and weigh against her. These include
whether the defendant has acted wrongfully, whether the defendant is part of
the class of persons the law is meant to protect, and whether the contract was
“malum in se (‘immoral in character, inherently inequitable or designed to
further a crime or obstruct justice’)” or merely “malum prohibitum (‘only
voidable depending on the factual context and the public policies involved’).”
(California Physicians’ Service v. Aoki Diabetes Research Institute, supra,
163 Cal.App.4th at pp. 1516–1517.) On the latter point, the trial court
observed that California’s public policy against marijuana “has been eroded
significantly over the years, commencing virtually at the time that this
contract was entered into,” and that “contracts relating to marijuana and the
sale of businesses [are] becoming very acceptable.” Chadwick does not
explain why the court’s balancing of this and other factors was erroneous. As
a result, we conclude she is not entitled to relief on this claim.
      C.    Chadwick Fails to Show that the Agreement Was Unenforceable
            for Other Reasons.
      Next, Chadwick argues that the Agreement was also unenforceable
because it was (1) unauthorized under H2C’s bylaws, (2) not ratified by H2C’s
board of directors, and (3) the product of undue influence. We reject these
claims.
      In making her first argument, Chadwick relies on two “Defendants’
Trial Exhibits” that include H2C’s bylaws and articles of incorporation. We
agree with plaintiffs that we cannot consider these documents because there
is no indication they were admitted into evidence. Chadwick responds that

                                        11
they were lodged and “before the Trial Court in [her] new trial motion and by
law are part of the record on appeal.” But whether a document is part of the
record on appeal is not the same issue as whether we may consider it as
evidence of the Agreement’s invalidity. Moreover, not only does Chadwick
fail to show that these exhibits were ever admitted at trial, she also fails to
show that they were submitted or considered in connection with her motion
for a new trial. In fact, the exhibits and the motion for a new trial appear
nowhere near each other in her appellant’s appendix, which purports to be in
chronological order. Nor is there a file stamp on the exhibits, and the
appendix’s table of contents lists their date as “NA.” In short, it is unclear
whether these exhibits were ever properly presented to the trial court, and
we thus reject Chadwick’s argument based upon them.
      For the same reason, we also reject Chadwick’s contention that the
Agreement was invalid because it was not ratified by H2C’s board of
directors. Chadwick claims that because “the bylaws and articles of H2C are
largely silent on board and member powers,” it must be true that “[t]he
business affairs of H2C are . . . the sole province of the board and the
members.” Since we decline to consider H2C’s bylaws and articles of
incorporation for the reasons given above, the premise of this argument is
unsupported. Accordingly, the argument fails.
      Finally, Chadwick argues that the Agreement was a product of undue
influence upon her by plaintiffs’ “agent,” a person she claims introduced her
to plaintiffs and participated in the contract negotiations. She did not clearly
raise this claim until her motion for a new trial, which the trial court
summarily denied. But even assuming that she preserved the issue, she fails
to show entitlement to relief.

                                       12
      “Undue influence is a contract defense based on the notion of coercive
persuasion,” and the party raising the defense generally has the burden of
proof. (In re Marriage of Starr (2010) 189 Cal.App.4th 277, 284; § 1575; see
Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 911.) Whether
a contract is the product of undue influence is a question of fact. (See
Gomez v. Smith (2020) 54 Cal.App.5th 1016, 1033.) “ ‘In the case where the
trier of fact has expressly or implicitly concluded that the party with the
burden of proof did not carry the burden and that party appeals, it is
misleading to characterize the failure-of-proof issue as whether substantial
evidence supports the judgment.’ ” (Dreyer’s Grand Ice Cream, Inc. v. County
of Kern (2013) 218 Cal.App.4th 828, 838.) Rather, the question is more
properly characterized as “ ‘whether the appellant’s evidence was
(1) “uncontradicted and unimpeached” and (2) “of such a character and
weight as to leave no room for a judicial determination that it was
insufficient to support a finding.” ’ ” (Ibid.)
      Thus, even if we assume that the trial court rejected the undue-
influence claim on its merits, to succeed on appeal Chadwick would have to
demonstrate that the evidence compelled a finding in her favor. She utterly
fails to do so, citing only evidence purportedly favorable to her without
addressing any evidence that would support the court’s implicit finding. As a
result, we reject this claim as well.
      D.     The Trial Court Did Not Err by Concluding that Plaintiffs Were
             Entitled to Be Placed on H2C’s Board of Directors.
      Chadwick contends that the trial court erred by granting plaintiffs
relief on their section 709 claim and placing them on H2C’s board of directors.
Specifically, she claims that the court erred by concluding that (1) the
October 2015 letter from Vallejo did not qualify as a “Final Letter of Limited
Immunity” under the Agreement’s terms, meaning that plaintiffs’ obligation

                                         13
to pay her $150,000 was not triggered, and (2) plaintiffs were not obligated to
make payments under the Agreement “despite receiving the benefit of their
bargain in operating the business.” (Some capitalization omitted.) We are
not persuaded.
       As the trial court found, “[d]uring the pendency of this action, H2C was
converted to a for-profit corporation to which . . . [section] 709 applies to
rights of directorship.” That provision authorizes an equitable cause of action
“to determine the validity of an election of corporate directors.” (Morrical v.
Rogers (2013) 220 Cal.App.4th 438, 442, 451.) In a section 709 proceeding, a
trial court may “ ‘determine all questions which may affect the validity of a
contested election,’ ” including the meaning of an underlying contract. (Id. at
pp. 455–456, italics omitted.) We review issues of contract interpretation de
novo. (City of Petaluma v. Cohen (2015) 238 Cal.App.4th 1430, 1438–1439.)
      First, Chadwick claims the term “Final Letter of Limited Immunity”
was ambiguous and the trial court should have construed it to include the
October 2015 letter, because otherwise three “other provisions in the
Agreement” would be “render[ed] meaningless”: the provision that
Chadwick’s husband be removed from the board “upon execution of [the]
Agreement,” the provision that $150,000 was due within five days of the
immunity letter’s receipt “but not sooner than November 1, 2015,” and the
provision that $310,000 was due within five days after H2C received a
certificate of occupancy for the new location. Chadwick does not explain why
any of these provisions cannot be reconciled with the court’s contractual
interpretation. Moreover, even if the October 2015 letter did qualify as a
“Final Letter of Limited Immunity,” plaintiffs’ obligation to pay the $150,000
was expressly contingent upon Chadwick’s performing other duties she failed
to discharge, including replacing the board of directors and amending H2C’s

                                        14
bylaws. Accordingly, she has not demonstrated that the court erred by
determining that plaintiffs did not breach the immunity-letter portion of the
Agreement.
      Second, Chadwick claims that plaintiffs’ obligation to make additional
payments was not excused by her failure to place plaintiffs on H2C’s board of
directors, because thereafter “they continued to recognize the validity of the
contract . . . and controlled the management of the dispensary.” Relying on
Spiegelman v. Metropolitan Life Insurance (1937) 21 Cal.App.2d 299, 301, she
argues that “[s]uch conduct constitutes a waiver.” The portion of Spiegelman
cited states that “it is well settled that when an insurance company, after
knowledge of any default for which it might terminate a policy, enters into
negotiations which recognize its continued validity, the right to claim a
forfeiture for such default is waived.” (Ibid.) Even assuming that an 85-year-
old insurance case has any bearing here, Chadwick cites no evidence to
support her assertions about plaintiffs’ conduct. Accordingly, her argument
is forfeited. (See Shenouda v. Veterinary Medical Bd. (2018) 27 Cal.App.5th
500, 514 [appellant has burden to demonstrate error with necessary citations
to record].)
      E.       The Trial Court Did Not Abuse Its Discretion in Awarding
               Attorney Fees to Plaintiffs.
      Finally, Chadwick claims the trial court abused its discretion by
awarding “excessive” attorney fees. She is incorrect.
      The Agreement provided that “the prevailing party” in “any
controversy, claim[,] or dispute relating to [the Agreement’s] subject matter”
was entitled to recover “all of its expenses, including, without limitation,
attorneys fees and costs.” Plaintiffs filed a bench brief seeking attorney fees
of up to $1,619,200, representing $1,012,313 in actual fees with a multiplier
of 1.2 to 1.6. The Chadwick defendants opposed, claiming that the number of

                                       15
hours and billing rates were unreasonable, that no multiplier was warranted,
and that the trial court should award no more than $450,000 in attorney fees.
      In its second statement of decision, the trial court found that plaintiffs
were the prevailing parties and entitled to reasonable attorney fees under
section 1717. Agreeing with the Chadwick defendants that some of plaintiffs’
charges were not reasonably incurred, the court set the lodestar at
$998,394.41. The court also concluded that a multiplier of 1.2 was
warranted, based on its findings that plaintiffs’ attorneys were highly skilled,
could not take other matters while litigating the case—which “involved a
high degree of difficulty”—and obtained “a high quality result.”
      Under section 1717, subdivision (a), if a “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,” the
party who prevails in an action on the contract “shall be entitled to
reasonable attorney’s fees in addition to other costs. [¶] . . . [¶] Reasonable
attorney’s fees shall be fixed by the court, and shall be an element of the costs
of suit.” “[T]he fee setting inquiry in California ordinarily begins with the
‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the
reasonable hourly rate. . . . The lodestar figure may then be adjusted, based
on consideration of factors specific to the case, in order to fix the fee at the
fair market value for the legal services provided.” (PLCM Group, Inc. v.
Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM Group).) In determining the
appropriate figure, a trial court considers “ ‘a number of factors, including the
nature of the litigation, its difficulty, the amount involved, the skill required
in its handling, the skill employed, the attention given, the success or failure,
and other circumstances in the case.’ ” (Id. at p. 1096.)

                                        16
      “[T]he trial court has broad authority to determine the amount of a
reasonable fee” under section 1717. (PLCM Group, supra, 22 Cal.4th at
pp. 1094–1095.) “ ‘The “experienced trial judge is the best judge of the value
of professional services rendered in [the judge’s] court, and while [this]
judgment is of course subject to review, it will not be disturbed unless the
appellate court is convinced that it is clearly wrong” ’—meaning that it
abused its discretion.” (Id. at p. 1095.)
      Initially, Chadwick appears to suggest that plaintiffs were not the
prevailing parties, pointing out that some of their claims were unsuccessful
and “the entire ‘damages’ phase of the trial was unnecessary and ineffective
as [plaintiffs] failed to prove any damages at all except attorney fees and
costs.” Chadwick provides no legal authority in support of this claim, and we
therefore treat it as forfeited. (See Gonzalez v. City of Norwalk (2017)
17 Cal.App.5th 1295, 1311.)
      Chadwick also argues that the attorney fees plaintiffs incurred “for
inefficient and unsuccessful claims . . . adjudicated after the initial
proceedings . . . should have been deducted from the lodestar.” She does not
identify with any specificity the fees she claims should have been deducted,
much less identify where the challenged billings are in the record. Therefore,
this aspect of her claim is also forfeited. (See Shenouda v. Veterinary Medical
Bd., supra, 27 Cal.App.5th at p. 514.)
      Finally, Chadwick contends that the trial court abused its discretion by
applying a multiplier. She claims that “because the [c]ourt made a finding
that the fees were reasonable without the multiplier,” it had no discretion to
increase the lodestar. In fact, on the page of the second statement of decision
that she cites, the court found that the rates charged by plaintiffs’ attorneys
were reasonable, not that the lodestar itself constituted a reasonable amount

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of attorney fees. As the balance of the statement of decision makes clear, the
court then properly considered other relevant factors, including the result
obtained and the case’s difficulty, to conclude that the lodestar should be
increased by a multiplier of 1.2.
      Chadwick claims that the use of a multiplier was also improper because
the Agreement did not authorize the prevailing parties to recover more than
the amount of attorney fees actually incurred. She argues that “parties do
not have the power to be awarded attorney fees greater than the amount they
incur unless they ‘specifically agree that the court shall have the power to
award attorney fees in an amount greater than the prevailing party actually
incurs.’ ” (Quoting San Dieguito Partnership v. San Dieguito River Valley
Regional Etc. Authority (1998) 61 Cal.App.4th 910, 919.) Her quotation of
San Dieguito is misleading, as the appellate court stated that it “need[ed] not
decide in this case whether the parties to a contract may specifically agree” to
an award of attorney fees greater than those incurred. (Ibid., italics added.)
Rather, the decision held only that an award of attorney fees is so limited if
the contract provides that “the prevailing party shall be entitled to an award
‘in the amount of attorneys’ fees and costs incurred’ ” (ibid.), and even that
holding was later undermined by PLCM Group. (See PLCM Group, supra,
22 Cal.4th at p. 1097, fn. 5.) Regardless, no such language appears in the
Agreement, and the case law makes abundantly clear that a trial court has
discretion to adjust upward the amount of attorney fees actually incurred to
reflect “the fair market value for the legal services provided.” (Id. at
pp. 1095–1096.)
      In short, Chadwick fails to demonstrate that the trial court abused its
discretion in awarding attorney fees to plaintiffs. Thus, this claim also fails.

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                                  III.
                              DISPOSITION
     The judgment is affirmed. Respondents are awarded their costs on
appeal.

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                                          _________________________
                                          Humes, P.J.

WE CONCUR:

_________________________
Margulies, J.

_________________________
Devine, J.*

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

Counts v. Chadwick A163282

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