Opinion
E079531
05-16-2024
GREEN LOTUS ENTERTAINMENT, INC. et al., Plaintiffs, Cross-defendants and Appellants, v. CITY OF MONTCLAIR, Defendant, Cross-complainant and Respondent.
The Law Offices of Stanley H. Kimmel and Stanley H. Kimmel for Plaintiffs, Cross-defendants and Appellants. Dapeer, Rosenblit & Litvak, William Litvak, and Eric P. Markus for Defendant, Cross-complainant and Respondent.
NOT TO BE PUBLISHED
Order Filed Date 6/5/24
APPEAL from the Superior Court of San Bernardino County, No. CIVDS1827316 David S. Cohn, Judge.
The Law Offices of Stanley H. Kimmel and Stanley H. Kimmel for Plaintiffs, Cross-defendants and Appellants.
Dapeer, Rosenblit & Litvak, William Litvak, and Eric P. Markus for Defendant, Cross-complainant and Respondent.
ORDER MODIFYING OPINION AND DENYING PETITION FOR REHEARING
We deny appellants' petition for rehearing and modify the opinion filed in this matter on May 16, 2024, as follows:
1. On page 7, first paragraph, replace the paragraph with the following:
Finally, appellants contend that no attorneys' fees should be awarded because the City failed to make a timely election under section 7.24.240 of the Montclair Municipal Code. We are unpersuaded. The argument was raised for the first time in May 2022, after the trial court had already granted the motion, in an objection to the proposed judgment and order. The purpose of such an objection "is not to reargue the merits, but to bring to the court's attention inconsistencies between the court's ruling and the document that is supposed to embody and explain that ruling." (Heaps v. Heaps (2004) 124 Cal.App.4th 286, 292.) Appellants have therefore arguably forfeited the argument by not timely raising it below.4 In any event, the City made a timely election. Section 7.24.240 of the Montclair Municipal Code provides that a prevailing party in an action to abate a public nuisance must "elect[] in writing to seek recovery of the City's attorney's fees at the initiation of" the action. (Montclair Municipal Code, § 7.24.240.A.1.) The City's cross-complaint-which appellants did not include as part of the record but which the City included as part of its request for judicial notice-initiated the action, and it states that it seeks attorneys' fees, thus satisfying the ordinance's requirement. We express no view on whether, in a properly raised challenge, the City may recover the approximately $10,000 in attorneys' fees incurred before the cross-complaint was filed.5
4 Appellants raised a separate argument regarding section 7.24.240 of the Montclair Municipal Code, relating to notices of public nuisance, before the trial court decided the motion. However, appellants did not raise that argument on appeal until they filed a petition for rehearing, so we do not consider it. "It is well settled that arguments . . . cannot be raised for the first time in a petition for rehearing." (Gentis v. Safeguard Business Systems, Inc. (1998) 60 Cal.App.4th 1294, 1308.)
5 Appellants' petition for rehearing appears to argue in part that our filed opinion made changes to the tentative opinion without notice to the parties, captioning a section of the petition as "Tentative Ruling Changed Without Notice to the Parties" (bolding removed and capitalization altered). Appellants also claim that, as a result of this court's tentative opinion process, they "could not prepare for and argue issues related to" the Montclair Municipal Code because the tentative opinion did not address it. The tentative process achieved its intended result here. A tentative opinion was sent that did not address a properly briefed issue, appellants reasonably raised that issue at oral argument (as our pre-argument letter stated it could, and contrary to appellants' claim that they were unable to), and the opinion was changed to better respond to the arguments raised as a result. No formal notice need be given that the opinion sent to the parties might change, as such notice is implied in the term "tentative" itself.
OPINION
RAPHAEL J.
In these parties' first appeal, we upheld a preliminary injunction sought by the City of Montclair. Appellants now appeal from a prevailing party award of fees and costs, consisting of about $113,000 in attorneys' fees and $5,000 in other costs. Appellants ask us to reverse that award because no memorandum of costs was filed. As to attorneys' fees, we affirm. As to the other costs, we reverse.
I. BACKGROUND
As described in greater detail in our previous opinion (see City of Montclair v. Green Lotus Entertainment, Inc. (Jan. 28, 2021 E072768) [nonpub. opn.]), in 2018, Green Lotus Entertainment, Inc. (Green Lotus), Zen Health Wellness, and Elizabeth McDuffie sued the City of Montclair (City), seeking an injunction prohibiting the City from enforcing against them certain provisions of the Montclair Municipal Code relating to marijuana dispensaries. The City filed a cross-complaint against Green Lotus, Charles Hohman (together with Green Lotus, appellants), and McDuffie, and then moved for a preliminary injunction, arguing that cross-defendants' dispensary was a public nuisance and that prohibiting the business from continuing to operate was necessary to abate the nuisance. (Ibid.) The trial court granted the City's preliminary injunction, and we upheld it in January 2021. (Ibid.) Cross-defendants sold the property at around this time.
In June 2021, the City moved for an order declaring it the prevailing party in the action and for an award of attorneys' fees and other costs under Civil Code section 3496. The requested amounts were supported by invoices submitted along with an attorney's declaration, but no memorandum of costs was included. After multiple continuances, the trial court heard and granted the motion in February 2022. In June 2022, the trial court signed the fee order and entered judgment, awarding the City $113,387.50 in attorneys' fees and $5,208.60 in other costs.
II. ANALYSIS
We begin with attorneys' fees. "Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." (Code Civ. Proc., § 1032, subd. (b).) Such costs include attorneys' fees when authorized by statute. (Id., § 1033.5, subd. (a)(10)(B).)
We refer to the term as "attorneys' fees" but leave unchanged citations that use a slightly different spelling.
One such statute is Civil Code section 3496, which the City relied on in trial court. It states: "In any of the following described cases, the court may award costs, including the costs of investigation and discovery, and reasonable attorney's fees, which are not compensated for pursuant to some other provision of law, to the prevailing party: [¶] . . . [¶] (c) In any case in which a governmental agency seeks to enjoin the use of a building or place, or seeks to enjoin in or upon any building or place the unlawful sale, manufacture, service, storage, or keeping or giving away of any controlled substance, as authorized in Article 3 (commencing with Section 11570) of Chapter 10 of Division 10 of the Health and Safety Code."
Thus, an award of reasonable attorneys' fees to the City was authorized under Civil Code section 3496. Such fees may be claimed through a noticed motion. Under Code of Civil Procedure section 1033.5 (section 1033.5), subdivision (c)(5)(A), "[a]ttorney's fees allowable as costs pursuant to [section 1033.5, subdivision (a)(10)(B)] may be fixed . . . (i) upon a noticed motion, (ii) at the time a statement of decision is rendered, (iii) upon application supported by affidavit made concurrently with a claim for other costs, or (iv) upon entry of default judgment." Moreover, the California Rules of Court essentially make a noticed motion the only available method for claiming attorneys' fees, as it does not refer to other methods. California Rules of Court, rule 3.1702(b)(1) (undesignated rule references are to the California Rules of Court) states that a "notice of 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." (See Hardie v. Nationstar Mortgage LLC (2019) 32 Cal.App.5th 714, 720 ["In practice . . . a noticed motion is generally required" to "seek statutory attorney's fees as costs"].) The City filed such a motion in June 2021.
Appellants argue that a different rule of court governs: rule 3.1700(a)(1), which states that a "prevailing party who claims costs must serve and file a memorandum of costs." Because the City never filed such a memorandum, appellants argue that the award should be reversed.
The argument appellants make was considered and rejected in Kaufman v. Diskeeper Corp. (2014) 229 Cal.App.4th 1 (Kaufman). There, moving under section 1033.5, "Diskeeper requested attorney fees totaling $183,419, plus $878 for other costs and expenses," but Kaufman opposed, arguing that "Diskeeper had filed no memorandum of costs, as specified in rule 3.1700." (Id. at p. 5.) Discussing section 1033.5, rule 3.1700, and rule 3.1702, Kaufman held that rule 3.1700 did not apply to the attorneys' fees request. (Id. at p. 8.)
Kaufman noted that, by its terms, rule 3.1702 applied to attorneys' fees requests "'[e]xcept as otherwise provided by statute,'" and rule 3.1700 is not a statute. "To read rule 3.1700 as the governing rule," as Kaufman had argued, "would be to construe the directive of rule 3.1702(a) that 'this rule applies,' to mean 'another rule (viz., rule 3.1700) applies,'" something the court declined to do. (Kaufman, supra, 229 Cal.App.4th at pp. 8-9.) Kaufman also rejected the notion that both rules applied. It noted that "whereas [rule 3.1700] imposes relatively brief periods for the filing of a memorandum of costs and motion to tax costs, [rule 3.1702] affords a much longer period for the filing of a motion for attorney fees in unlimited civil actions." (Ibid.) "Thus, if a request for attorney fees . . . were subject to both rules, the party making the request would be obliged to trigger two duplicative but temporally divergent procedures." (Ibid.) Although it observed that rule 3.1702 "may appear to be inconsistent with the general directive in rule 3.1700(a) that '[a] prevailing party who claims costs must . . . file a memorandum of costs,'" Kaufman resolved the discrepancy by relying on the maxim that "the particular or specific rule takes precedence over the general rule." (Id. at p. 10, citing, e.g., Code. Civ. Proc., § 1859.) Because rule 3.1700 dealt with prejudgment costs while rule 3.1702 specifically concerned prejudgment attorneys' fees, the maxim supported finding that fee motions under section 1033.5 did not require a memorandum of costs. (Id. at p. 10.)
Kaufman is factually distinct in that it involved contractual attorneys' fees (Kaufman, supra, 229 Cal.App.4th at pp. 6-7, discussing Civ. Code, § 1717), not statutory attorneys' fees. Nevertheless, its reasoning is on point here, and rule 3.1702 applies to both contractual and statutory attorneys' fees. (Rule 3.1702(a).) Appellants make no attempt to argue that Kaufman was wrongly decided. We therefore find the City's failure to include a memorandum of costs did not preclude it from being awarded attorneys' fees.
The rule that specific provisions govern over general ones also demonstrates that appellants' reliance on rule 8.278(c) is misplaced. That rule, which requires a "memorandum of costs under rule 3.1700," applies broadly to "a party claiming costs awarded by a reviewing court," but rule 3.1702(b)(1) specifically refers to "attorney's fees for services up to and including the rendition of judgment in the trial courtincluding attorney's fees on an appeal before the rendition of judgment in the trial court" (italics added).
Although Kaufman supports the City's arguments about attorneys' fees, it lends no support for the City's argument regarding the $5,208.60 in other costs awarded. (See Kaufman, supra, 229 Cal.App.4th at p. 6, fn. 2 ["We agree with the trial court that Diskeeper was required to file a memorandum of costs in order to recover the other costs and expenses it sought, and that Diskeeper's failure to do so worked a forfeiture regarding them. Diskeeper does not dispute that ruling on appeal."] (italics added).) Appellants make the same argument as above regarding these other costs, and we see no reason why rule 3.1700's general requirement of a memorandum of costs should not apply. Rule 3.1702 does not state that it applies to other costs, and there is no compelling reason why that rule should be construed to encompass both attorneys' fees and other costs when both are claimed. The City all but concedes that a memorandum of costs was necessary, stating in its respondent's brief that "by its express terms, the recovery of statutory attorney fees as costs is governed by rule 3.1702, which requires only a motion; all other costs are governed by the memorandum of costs procedure set forth in rule 3.1700." We therefore reverse the award as to the other costs.
The City has requested that we take judicial notice of several documents, including two blank Judicial Council forms, the City's cross-complaint, and our prior opinion in this case. We grant the request as to the cross-complaint and otherwise deny the request as irrelevant.
Finally, appellants contend that no attorneys' fees should be awarded because the City failed to comply with section 7.24.240 of the Montclair Municipal Code. We are unpersuaded. The argument was raised for the first time in May 2022, after the trial court had already granted the motion, in an objection to the proposed judgment and order. The purpose of such an objection "is not to reargue the merits, but to bring to the court's attention inconsistencies between the court's ruling and the document that is supposed to embody and explain that ruling." (Heaps v. Heaps (2004) 124 Cal.App.4th 286, 292.) Appellants have therefore arguably forfeited the argument by not timely raising it below. In any event, the City complied with section 7.24.240 of the Montclair Municipal Code. That section provides that a prevailing party in an action to abate a public nuisance must "elect[] in writing to seek recovery of the City's attorney's fees at the initiation of" the action. (Montclair Municipal Code, § 7.24.240.A.1.) The City's cross-complaint- which appellants did not include as part of the record but which the City included as part of its request for judicial notice-states that it seeks attorneys' fees, thus satisfying the ordinance's requirement.
III. DISPOSITION
The judgment is reversed as to the award of $5,208.60 in other costs. In all other aspects, the judgment is affirmed. The parties are to bear their own costs on this appeal.
We concur: MILLER Acting P. J. CODRINGTON J.