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Ideal Homes v. DenHoy

California Court of Appeals, Sixth District
May 27, 2008
No. H031071 (Cal. Ct. App. May. 27, 2008)

Opinion


IDEAL HOMES, Plaintiff and Respondent, v. WILLIAM DENHOY et al., Defendants and Appellants. H031071 California Court of Appeal, Sixth District May 27, 2008

NOT TO BE PUBLISHED

Santa Cruz County Super. Ct. No. CV151701.

Duffy, J.

William DenHoy (DenHoy) is the owner of the Blue & Gold Mobilehome Park (Park) located in the City of Santa Cruz. Ideal Homes (Ideal), a manufactured homes dealer, sued DenHoy, alleging that he illegally prevented it from conducting business in the Park. The case proceeded to trial on Ideal’s claims for violation of the Unruh Civil Rights Act (Civ. Code, § 51; hereafter Unruh Act), and for intentional interference with contractual relations. The jury returned a verdict in DenHoy’s favor, and he then sought to recover more than $150,000 in attorney fees incurred in the litigation. DenHoy argued, inter alia, that he was entitled to fees as the prevailing party under section 798.85, which permits the recovery of attorney fees by a prevailing party in an action arising out of the Mobilehome Residency Law (§ 798 et seq.; hereafter MRL). The court denied the motion.

Further statutory references are to the Civil Code unless otherwise stated.

On appeal, DenHoy argues that the court erred because he was entitled to attorney fees as the prevailing party (1) to an action arising under the MRL; (2) to an intentional interference with contract claim, where the subject contracts each contained an attorney fee provision; and (3) to Ideal’s claim zunder the Unruh Act. We conclude that DenHoy was entitled to recover attorney fees under none of these theories. Accordingly, we will affirm the order denying his attorney fee motion.

PROCEDURAL BACKGROUND

I. The Complaint

On June 6, 2005, Ideal filed a complaint against DenHoy. The complaint alleged three causes of action for violation of the Unruh Act (§ 51); intentional interference with contractual relations; and intentional interference with prospective economic advantage.

Ideal alleged in its complaint that it operated a manufactured home dealership with its principal place of business in Capitola, California. As part of its business, Ideal bought used homes in mobilehome parks and resold and replaced them with new homes for resale. It had conducted over 100 sales transactions within the County of Santa Cruz in the two and one-half years prior to the filing of the complaint, including six transactions at the Park in Santa Cruz owned and operated by defendant. In connection with its business, Ideal assisted its prospective buyers with financing arrangements necessary to complete their purchase of manufactured homes and their application for occupancy of particular mobilehome parks.

Ideal alleged in its complaint that in January 2005, it entered into an agreement to sell a home it owned in space 44 of the Park to Daniel Serna-Olvera and Olga Sigala (collectively, Buyers). The Buyers were approved for financing to purchase the home, but DenHoy denied their occupancy application because a credit report showed two social security numbers for Serna-Olvera. Ideal requested that Waterhouse Management Corporation (Waterhouse)—another entity that owned and managed mobilehome parks—evaluate the Buyers’ residency application. Based upon its investigation and the fact that the Buyers had been approved for a loan to purchase the mobilehome, Waterhouse concluded that the Buyers’ residency application should be approved; it communicated that conclusion to DenHoy. Notwithstanding this information, in February 2005, DenHoy rejected the Buyers’ application; Park management informed Ideal that the Park had had a prior “bad experience with a Hispanic family in the [P]ark violating park rules by moving additional occupants into their unit without obtaining approval and that [the P]ark did not want a similar situation to happen again. The [P]ark’s management indicated [it] would not approve the application because of these prior problems with Hispanic tenants.” The Buyers ultimately purchased a unit at a different mobilehome park in Santa Cruz.

The complaint alleged that on March 11, 2005, DenHoy informed Ideal that “he ‘did not like the way IDEAL did business and therefore IDEAL could no longer work in his park.’ ” On March 17, 2005, the Park’s manager advised Ideal that it could not install any homes in the Park and that DenHoy was considering requiring that Ideal remove its existing units.

Ideal alleged further in its complaint that DenHoy interfered with other business transactions involving Ideal. A broker, David Mann, was involved in an April 2005 purchase agreement in which Ideal was the buyer; after Mann was informed by Park management that Ideal could not do business in the Park, the sales transaction was terminated. In another instance, Michelle Johnson listed her home (space 121 of the Park) for sale with Ideal. DenHoy forced Johnson to remove a “for sale” sign on her property and told her that he would not approve of any potential buyer that Ideal found; as a result, she cancelled her listing.

The agreement apparently involved the proposed sale of a used mobilehome to Ideal by the Sisters of the Holy Family.

In the first cause of action, Ideal alleged that DenHoy’s conduct of denying the Buyers’ residency applications and preventing Ideal from conducting business in the Park was a result of Ideal’s association with the Buyers, who were Hispanic, in violation of the Unruh Act. It alleged as a second cause of action that DenHoy’s conduct constituted the intentional inducement of third party residents to breach their contracts with Ideal. The third cause of the complaint alleged that DenHoy had intentionally interfered with Ideal’s prospective business relations with other residents of the Park and with prospective purchasers wanting to locate in the Park.

II. The Proceedings

DenHoy filed a motion for judgment on the pleadings, arguing that none of the three claims in the complaint stated a viable cause of action. The court denied the motion. DenHoy also moved for summary judgment or, in the alternative, for summary adjudication. The court denied summary judgment but granted the motion for summary adjudication as to the third cause of action for intentional interference with prospective economic advantage. After a four-day trial, the jury returned special verdicts in favor of DenHoy on both causes of action. The court entered judgment on the special verdicts on July 19, 2006.

On July 25, 2006, DenHoy filed a motion for recovery of attorney fees in the amount of $150,584.75. He claimed that, as the prevailing party, he was entitled to attorney fees because Ideal’s “action arose from claims for violation of the Unruh Civil Rights Act, the [MRL], and various contracts, all of which provided for the recovery of prevailing party’s attorneys’ fees; . . .” Ideal opposed the motion and also filed a motion to tax costs. On November 13, 2006, the court entered its order denying DenHoy’s motion for attorney fees.

DenHoy filed a timely notice of appeal. The matter is appealable. (PR Burke Corp. v. Victor Valley Wastewater Reclamation Authority (2002) 98 Cal.App.4th 1047, 1053 [postjudgment order on motion for attorney fees is separately appealable as order made after an appealable judgment under Code Civ. Proc., § 904.1, subd. (a)(2)].)

DISCUSSION

I. Issue On Appeal

The single issue presented in this appeal is whether the court erred in its denial of DenHoy’s posttrial motion for attorney fees. DenHoy makes three arguments in support of his claim of error:

1. DenHoy was the prevailing party in an action arising out of the MRL and was thus entitled to attorney fees under section 798.85.

2. DenHoy prevailed in connection with Ideal’s claims for interference with contractual relations. Because each of the contracts at issue in that interference claim contained an attorney fee clause, DenHoy was entitled to recover his attorney fees under section 1717.

3. DenHoy was entitled to attorney fees as the prevailing party on Ideal’s claim under the Unruh Act.

We address each of these contentions below.

II. Standard of Review

“ ‘On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.’ ” (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175, quoting Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142; see also Corbett v. Hayward Dodge, Inc. (2004) 119 Cal.App.4th 915, 921.)

In this case, the issues of whether DenHoy may recover attorney’s fees as the prevailing party in an action arising under the MRL, under contracts that were the subject of litigation, or under the Unruh Act involve the application of law to undisputed facts. (MHC Financing Limited Partnership Two v. City of Santee (2005) 125 Cal.App.4th 1372, 1397 (MHC Financing) [entitlement to attorney fees under § 798.85 is legal question subject to de novo review]; Salawy v. Ocean Towers Housing Corp. (2004) 121 Cal.App.4th 664, 669 [entitlement to attorney fees under former § 1354, subd. (f) (now § 1354, subd. (c)) as prevailing party in action to enforce governing documents of common interest development reviewed de novo]; Sessions Payroll Management, Inc. v. Noble Const. Co. (2000) 84 Cal.App.4th 671, 677 (Sessions Payroll) [legal basis for contractual attorney fee award reviewed de novo].) Accordingly, we review de novo the question of whether DenHoy is entitled to attorney fees under the alternative legal theories that he advances. (See Connerly, supra, 37 Cal.4th at pp. 1175-1176; MHC Financing, supra, 125 Cal.App.4th at p. 1397.)

See Statutes 1996, chapter 1101, section 1.

III. Attorney Fee Claim Under the MRL

A. Contentions of Appellant

DenHoy argues that he was the prevailing party in an action that arose under the MRL and was thus entitled to attorney fees pursuant to under section 798.85. He argues that in order for a prevailing party to be entitled to attorney fees under section 798.85, it is not essential that the action include a direct claim under the MRL as long as the case “involve[s] the direct application of MRL provisions in the context for which the MRL was designed.” (SC Manufactured Homes, Inc. v. Canyon View Estates, Inc. (2007) 148 Cal.App.4th 663, 678 (SC Manufactured Homes).) Here (DenHoy argues), although Ideal did not directly state an MRL claim, “[t]hroughout the action, Ideal claimed through argument, pleadings, and the presentation of evidence before the jury that DenHoy [had] violated the MRL, specifically, [section] 798.74.” Ideal asserted that DenHoy had violated section 798.74 in rejecting the Buyers’ residency applications without legal justification and that this asserted violation was a key component of the case. In support of this position, DenHoy points to allegations of the complaint, pretrial documents, and arguments of counsel and evidence presented at the trial.

As noted above, the complaint alleged that Ideal entered into a contract with the Buyers to sell its mobilehome located on space 44 of the Park. The Buyers submitted multiple applications for residency at the Park, but DenHoy turned down each application. Ideal alleged in paragraph 11 of its complaint that in March 2005, Buyers retained an attorney, William Constantine, who wrote a letter to DenHoy in which he referenced a provision of the MRL (§ 798.74) in connection with DenHoy’s decision to deny the Buyers’ residency application. The complaint included a similar allegation that in March 2005, Ideal’s attorney, David Dunbar, wrote to DenHoy and asserted that his denial of the Buyers’ residency application was in violation of the MRL (§ 798.74) and of the Unruh Act.

DenHoy also identifies three pretrial documents filed by Ideal as evidencing that an alleged violation of the MRL was central to its case. In its application for a temporary restraining order and preliminary injunction, Ideal included two presuit demand letters from attorneys representing the Buyers and Ideal that had been referred to in the complaint. Also, in its responsive separate statement of material facts in opposition to DenHoy’s motion for summary judgment, Ideal included references to the MRL and to DenHoy’s alleged discriminatory rejection of the Buyers’ residency applications. And Ideal stated in its settlement conference statement that DenHoy had “rejected the Hispanic [Buyers’] residency applications without legal justification . . . .”

DenHoy represented in his opening brief that the court granted Ideal’s request for a preliminary injunction. The appendix designated by DenHoy, however, contains no documents that corroborate that assertion.

Ideal’s counsel noted in her opening statement that DenHoy had violated the MRL. She did not specifically refer to the MRL in closing argument; but DenHoy cites a short passage in which Ideal’s counsel argued that the Buyers’ contract was conditioned on the Park’s approval of their residency application and “that condition depends on if the approval was done according to the law, and that’s what you need to decide.” DenHoy also argues conclusorily that much of the evidence introduced at trial by Ideal referenced “the claimed violation of the MRL.” That assertion, however, is not borne out by a review of the record.

“Also, you are going to hear throughout the trial [about] guidelines that park owners need to follow through the Mobile Home Act. And you’ll hear evidence of some of those guidelines that were violated by [DenHoy].”

DenHoy’s brief contains five references to the trial record that purportedly support his contention that Ideal presented significant direct evidence of an alleged violation of the MRL. Three of those references do not concern an alleged violation of the MRL: (1) Sigala’s testimony that the residency application she and her husband submitted to another mobilehome park was accepted; (2) real estate broker Mann’s testimony that he spoke with DenHoy and that due to a prior issue with Ideal, he would not approve a sales transaction involving Mann’s client and Ideal, resulting in Ideal agreeing to cancel the contract; and (3) Jack Barss’s testimony that his company, Ideal, was damaged because of DenHoy’s rejection of the Buyers’ residency applications. The two other references are to the testimony of Ruben Garcia, an employee of Waterhouse, who testified that he did not find anything in the Buyers’ credit report that suggested that their residency application should have been denied. He did not specifically testify concerning the MRL. And Garcia admitted that he did not look at the first application of the Buyers that DenHoy denied, and that it would have been reasonable to regard Serna-Olvera’s two social security numbers in the report as “a problem” that would prompt more questions.

B. Entitlement to Attorney Fees Under Section 798.85

The MRL “regulates relations between the owners and the residents of mobilehome parks.” (Cacho v. Boudreau (2007) 40 Cal.4th 341, 345.) As we have previously explained, “The protections afforded by the [MRL] reflect legislative recognition of the unique nature of mobilehome tenancies. (See Civ. Code, § 798.55, subd. (a).) Ordinarily, mobilehome park tenants own their homes but rent the spaces they occupy. [Citation.] Once a mobilehome is in place in a park, it is difficult to relocate. [Citations.] Its owner thus ‘is more likely to be a long-term resident.’ [Citation.] In many cases, mobilehome park tenants have limited and undesirable options if they find ‘living in the park no longer desirable, practical, or possible . . . .’ [Citation.]” (People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102, 109.)

The statutes within the MRL cover topics such as the form of, and mandatory and prohibited terms for, rental agreements between the resident and the mobilehome park (§§ 798.15 - 798.19.5); the instances in which the park may be required to permit the sublease of a mobilehome by a park tenant (§ 798.23.5); the procedures that must be followed by the park in amending its rules and regulations (§ 798.25); the circumstances under which park management may enter mobilehomes (§§ 798.26, 799.2.5); when park management may remove unauthorized vehicles (§ 798.28.5); required procedures for a park’s implementation of rent increases (§ 798.30); permissible charges, including security deposits, by the park to tenants (§§ 798.31 - 798.44); regulation of homeowners’ meetings (§§ 798.50 - 798.52); regulation of termination of tenancies by parks and homeowners (§§ 798.55 - 798.61); and the regulation of ownership transfers of mobilehomes and mobilehome parks (§§ 798.70 - 798.83). (See generally Friedman et al., Cal. Practice Guide: Landlord-Tenant (The Rutter Group 2007) ch. 11.) In so regulating these activities, the MRL provides “homeowners a measure of stability and predictability in their mobilehome park residency. . . . ” (Griffith v. County of Santa Cruz (2000) 79 Cal.App.4th 1318, 1321, 1323.)

It is against this backdrop that we evaluate DenHoy’s claimed entitlement to attorney fees under section 798.85. That statute provides: “In any action arising out of the provisions of [the MRL,] the prevailing party shall be entitled to reasonable attorney’s fees and costs. A party shall be deemed a prevailing party for the purposes of this section if the judgment is rendered in his or her favor or where the litigation is dismissed in his or her favor prior to or during the trial.” It has been held that the language in the first sentence of section 798.85 “encompasses only those actions directly involving the application of MRL provisions in specific factual contexts addressed by the MRL, such as actions by mobilehome park residents against management for failing to maintain physical improvements in common facilities in good working order.” (MHC Financing, supra, 125 Cal.App.4th at p. 1398 [mobilehome park owner that successfully sued municipality to invalidate rent control ordinances not entitled to attorney fees under § 798.85].) The critical inquiry here therefore is whether Ideal’s suit constituted an “action arising out of” the MRL. We conclude that it was not.

SC Manufactured Homes, supra, 148 Cal.App.4th 663—cited by both parties in support of their respective positions—is instructive. There, a mobilehome dealer sued other dealers and park owners for allegedly being involved in a kickback scheme that prevented it from selling its mobilehomes. (Id. at p. 666.) “After [the] plaintiff dismissed most defendants, the dismissed defendants filed motions for attorney fees and costs pursuant to Civil Code section 798.85, . . .” (Ibid.) The trial court denied the attorney fee motions, concluding that the action did not “ ‘arise out of the MRL, . . . [but] at best, [the] Plaintiffs’ claims are related to the MRL.’ ” (Id. at p. 672.)

The appellate court affirmed. (SC Manufactured Homes, supra, 148 Cal.App.4th at p. 681.) In concluding that the dismissed defendants were not entitled to attorney fees, the appellate court first observed that “the underlying case must arise in the context of those relationships and claims addressed by the MRL. It is not sufficient that the case ‘relates to’ the MRL.” (Id. at p. 675.) A case may fall within the ambit of section 798.85 even if there is no specific cause of action under the MRL alleged, “as long as the dispute is one within the scope of the MRL. While the defendants’ defenses may be considered, the foundation of the case must be grounded in the MRL.” (SC Manufactured Homes, supra, at p. 676.)

Because the action could not be considered a suit between a mobilehome park and it tenants—the parties regulated under the MRL—the court concluded that it did not “arise out of” the MRL. It reasoned: “The MRL regulates the conduct between tenants and landlords—mobilehome homeowners and residents and mobilehome management (owners and owners’ agents). [Citation.] However, the case here does not involve a landlord/tenant dispute. It does not involve a lawsuit brought by a park manager to protect its rights as against its homeowners and residents. It does not involve a lawsuit brought by residents arising from their tenancy. It does not involve a case . . . where an entity with standing brings a lawsuit to protect park residents. Rather, [the] plaintiff is a dealer of mobilehomes; joint defendants and Parklane are dealers of mobilehomes and managers and owners of mobilehome parks. Regardless of how [the] plaintiff framed its complaint, regardless of the titles to the three specified causes of action, and even though [the] plaintiff cited sections of the MRL in articulating the alleged conspiratorial and tortious conduct of the defendants, [the] plaintiff sought to protect its own pocketbook—not the rights of tenants. [The p]laintiff alleged it was foreclosed from competing in the marketplace of mobilehomes. . . . The case before us does not involve the direct application of MRL provisions in the context for which the MRL was designed.” (SC Manufactured Homes, supra, 148 Cal.App.4th at p. 678.)

Likewise, here Ideal alleged that it was damaged as a result of DenHoy’s alleged wrongful conduct. Ideal claimed that it, in essence, had been precluded from conducting any business at the Park as a result of DenHoy’s interference with its business relations with several customers, i.e., tenants and prospective tenants of the Park. Thus, like the plaintiffs in SC Manufactured Homes, Ideal contended that, by reason of DenHoy’s alleged wrongful conduct, “it was foreclosed from competing in the marketplace of mobilehomes” within the Park. (SC Manufactured Homes, supra, 148 Cal.App.4th at p. 678.) Ideal did not seek any relief on behalf of its customers. Nor did it assert on their behalf any claims under the MRL. Although Ideal did make two brief references in its complaint to the MRL—including a reference to the presuit letter from its attorney claiming that DenHoy had violated the MRL—the action did “not involve the direct application of MRL provisions in the context for which the MRL was designed.” (Ibid.)

The cases cited in SC Manufactured Homes, supra, 148 Cal.App.4th at pages 676-677 in which attorney fee awards were allowed under section 798.85 or its predecessor do not support DenHoy’s position here. In Palmer v. Agee (1978) 87 Cal.App.3d 377, mobilehome owners who prevailed in an unlawful detainer action by their landlord were held entitled to attorney fees because their defense to the suit was the landlord’s noncompliance with the MRL. Del Cerro Mobile Estates v. Proffer (2001) 87 Cal.App.4th 943, again involved a dispute between a mobilehome park and its tenant in which the prevailing tenant was held entitled to attorney fees because she “had a legal basis to claim recovery of such fees grounded in the [MRL] . . . .” (Id. at p. 948.) And in People v. McKale (1979) 25 Cal.3d 626, the district attorney brought an action on behalf of mobilehome park tenants against the park and a bank under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) alleging violations of the MRL. Each case is plainly distinguishable from the dispute before us here, and the determinations of entitlement to attorney fees there do not justify a finding that DenHoy is entitled to attorney fees under section 798.85.

DenHoy’s effort to distinguish this case from SC Manufactured Homes on the basis that the latter case was disposed of at the early stages following dismissal is unavailing. Although the case here was concluded after trial, the character of the action is not significantly different from SC Manufactured Homes. In each case, the plaintiff mobilehome dealer was not asserting on behalf of park tenants violations of the MRL; “[the] plaintiff sought to protect its own pocketbook—not the rights of tenants.” (SC Manufactured Homes, supra, 148 Cal.App.4th at p. 678.) It is therefore immaterial that the case before us was more procedurally evolved at the point the attorney fee motion was made than as occurred in the SC Manufactured Homes action.

The action here did not “arise out of” the MRL as required for an award of attorney fees under section 798.85. At most, the claims for a violation of the Unruh Act and interference with contractual relations related to the MRL, insofar as Ideal contended that DenHoy’s denial of the Buyers’ residency applications constituted a denial of the Buyers’ rights under the MRL. The trial court therefore properly rejected DenHoy’s request for attorney fees under section 798.85.

IV. Attorney Fee Claim Under Contracts

DenHoy argues in the alternative that he is entitled to attorney fees because he prevailed on Ideal’s claim for intentional interference with contractual relations. The basis for this argument is that the underlying contracts that he was alleged to have disrupted each contained a provision for the award of attorney fees. He asserts that under section 1717, subdivision (a), he is the prevailing party under the contracts and entitled to his attorney fees. DenHoy’s position is without merit.

Section 1717, subdivision (a) provides in relevant 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.”

Indeed, DenHoy’s claim of entitlement to attorney fees under section 1717 is so devoid of merit as to be a borderline frivolous argument.

Under “fundamental principles applicable to attorney fee claims under section 1717, “[o]rdinarily attorney fees can only be awarded when the lawsuit (1) involves a claim covered by a contractual attorney fee clause [citation] and (2) is between the parties to that contract [citation].” (Super 7 Motel Associates v. Wang (1993) 16 Cal.App.4th 541, 544.) An exception to the second principle requiring that the party seeking attorney fees be a party to the contract exists where a nonsignatory prevailing defendant sued on a contract itself would have been liable for fees under the contract had the plaintiff prevailed. (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 128.) Thus, in Reynolds Metals, the Supreme Court concluded that nonsignatory defendants, against whom the plaintiff sought to impose liability for debts incurred by two bankrupt corporations of which the defendants were shareholders, were entitled to recover attorney fees as the prevailing parties where the underlying contracts sued on included attorney fee clauses: “Had [the] plaintiff prevailed on its cause of action claiming [the] defendants were in fact the alter egos of the corporation, [citation], [the] defendants would have been liable on the notes. Since they would have been liable for attorney’s fees pursuant to the fees provision had [the] plaintiff prevailed, they may recover attorney’s fees pursuant to section 1717 now that they have prevailed.” (Id. at p. 129.)

Another circumstance in which a prevailing party may recover attorney fees in an action in which one of the parties is not a signatory is where one party is a third party beneficiary to the contract. (Sessions Payroll, supra, 84 Cal.App.4th at p. 680.) For instance, where a homeowner sued a subcontractor who supplied custom cabinetry and the owner claimed he was a third party beneficiary to the subcontractor’s contract with the general contractor, the award of attorney fees to the prevailing owner was upheld on appeal. (Loduca v. Polyzos (2007) 153 Cal.App.4th 334.) The court in Loduca found that the owner was plainly a third party beneficiary because the contract referred to the owner in the reference line and stated that “the cabinetry was to be built according to plans developed for Loduca’s home.” (Id. at p. 343.)

In Whiteside v. Tenet Healthcare Corp. (2002) 101 Cal.App.4th 693, 698 (Whiteside), the plaintiff unsuccessfully sued a hospital that had treated him for allegedly breaching both an admissions agreement and the hospital’s agreement with his medical insurer by accepting an additional payment from another company that insured him under a group health policy. The trial court awarded substantial attorney fees to the hospital (id. at p. 706); the appellate court reversed, concluding that there was an insufficient nexus between the hospital and the plaintiff to support a conclusion that the plaintiff could have enforced the agreement between the hospital and the insurer under a third party beneficiary theory. (Id. at pp. 708-709.)

DenHoy’s claim for attorney fees here satisfies neither of the requirements identified in Super 7 Motel Associates v. Wang, supra, 16 Cal.App.4th at page 544. First, the action here clearly did not “involve[] a claim covered by a contractual attorney fee clause.” (Ibid.) Each of the three contracts alleged in the complaint—the purchase order between Ideal and the Buyers, the purchase agreement between Ideal and the Sisters of the Holy Family, and the listing agreement between Ideal and Michelle Johnson—contains an attorney fee provision calling for the recovery of attorney fees by the prevailing party “[i]f action is instituted to enforce this agreement . . . .” Here, the claim involving the three contracts was one for intentional interference with contract, an action sounding in tort. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 520 & fn. 8.) “A tort claim does not enforce a contract. [Citation.] Where a contract authorizes an award of attorney fees in an action to enforce any provision of the contract, tort claims are not covered. [Citations.]” (Gil v. Mansano (2004) 121 Cal.App.4th 739, 743 [attorney fees not recoverable in fraud action, notwithstanding the defendant asserted release under contract as a defense]; see also Hasler v. Howard (2004) 120 Cal.App.4th 1023, 1027 [attorney fee provision in listing agreement for actions regarding broker’s compensation did not cover seller’s suit against broker for fraud and breach of fiduciary duty].) Here, Ideal’s claim was that DenHoy interfered with the three contracts to which he was not a party; the claim was not one to “enforce” any of the contracts.

Second, the action was not one “between the parties to that contract.” (Super 7 Motel Associates v. Wang, supra, 16 Cal.App.4th at p. 545.) Although each of the three contracts notes that the mobilehome is located at the Park and refers generally to mobilehome park approval, none of the agreements states that it is made for the Park’s or DenHoy’s benefit. “The party claiming to be a third party beneficiary bears the burden of proving that the contracting parties actually promised the performance which the third party beneficiary seeks.” (Sessions Payroll, supra, 84 Cal.App.4th at p. 680.) By no stretch of the imagination may any of the three contracts here be construed as conferring third party beneficiary status upon DenHoy. “ ‘A third party should not be permitted to enforce covenants made not for his benefit, but rather for others. He is not a contracting party; his right to performance is predicated on the contracting parties’ intent to benefit him. [Citations.] As to any provision made not for his benefit but for the benefit of the contracting parties or for other third parties, he becomes an intermeddler. Permitting a third party to enforce a covenant made solely to benefit others would lead to the anomaly of granting him a bonus after his receiving all intended benefit.’ [Citation.]” (Ibid.)

DenHoy cites Pacific Preferred Properties, Inc. v. Moss (1999) 71 Cal.App.4th 1456, in support of his position. That case is entirely distinguishable. There, the court held that a nonsignatory real estate broker was entitled to attorney fees under a contract where the attorney fee provision expressly provided for such fees in an action against the broker and the attorney fee clause “unambiguously include[d] the broker within the ambit of its benefit provisions and its performance obligations.” (Id. at p. 1462.)

Lastly, we summarily reject DenHoy’s contention that he should recover attorney fees because Ideal’s complaint contained a generalized prayer for attorney fees. Under Reynolds Metals Co. v. Alperson, supra, 25 Cal.3d at page 128, a prevailing party cannot recover attorney fees unless it can establish that it would have been liable for such fees under the contract had the other party prevailed. The mere allegation in a complaint of entitlement to fees does not establish that contractual right. (M. Perez Co. v. Base Camp Condominiums Assn. No. One (2003) 111 Cal.App.4th 456, 463-470; Sessions Payroll, supra, 84 Cal.App.4th at pp. 681-682.)

V. Attorney Fee Claim Under Unruh Act

DenHoy asserts that he is also entitled to attorney fees because he prevailed on Ideal’s claim under the Unruh Act. He argues that although the Act does not expressly permit recovery of attorney fees by a defendant who successfully resists such a claim, such relief is not specifically prohibited. DenHoy’s contentions are without merit.

Section 52, subdivision (a)—the statute under which DenHoy apparently claims an entitlement to attorney fees—provides in relevant part: “Whoever denies, aids or incites a denial, or makes any discrimination or distinction contrary to Section 51, 51.5, or 51.6, is liable for each and every offense for the actual damages, and any amount that may be determined by a jury, or a court sitting without a jury, up to a maximum of three times the amount of actual damage but in no case less than four thousand dollars ($4,000), and any attorney’s fees that may be determined by the court in addition thereto, suffered by any person denied the rights provided in Section 51, 51.5, or 51.6.” We construe this statute, contrary to DenHoy’s position, as establishing a unilateral right to attorney fees for a prevailing plaintiff asserting an Unruh Act claim.

DenHoy in his opening brief neglects to cite the code section on which he bases his argument of entitlement to attorney fees as the prevailing party on the Unruh Act claim. The reference to section 52, subdivision (a) is found in Ideal’s brief.

“In matters of statutory construction our primary concern is the Legislature’s intent. (Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 724.) To determine intent, we begin with the language of the statute itself. (Ibid.) In examining that language, we give the words their ordinary meaning. (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.) If the language is clear, there is no need for construction or reliance on other indicia of intent. (Ibid.)” (Doran v. North State Grocery, Inc. (2006) 137 Cal.App.4th 484, 488.)

Here, the language is clear. Subdivision (a) of section 52 provides attorney fees, as an additional item of recovery, to anyone denied civil rights protected under the Unruh Act from the party responsible for the discrimination. It does not use broader language, such as “prevailing party,” that would suggest a reciprocal right to attorney fees in favor of a party who successfully defends an Unruh Act claim. (Cf. § 55 [providing that “prevailing party” in action under Disabled Persons Act (§ 54 et seq.) entitled to reasonable attorney fees].) “When the Legislature intends that the successful side shall recover its attorney’s fees no matter who brought the legal proceeding, it typically uses the term ‘prevailing party.’ (See, e.g., [citations] [§] 55 [citations].) On the other hand, when the Legislature desires to authorize the award of fees only to one side or the other, it signals that intent by using such terms as ‘plaintiff’ (see, e.g., [citations] [§] 52, subd. (a) [citations]) or ‘defendant’ [citations].” (Stirling v. Agricultural Labor Relations Bd. (1987) 189 Cal.App.3d 1305, 1311, other internal citations omitted.)

“The language of the statute places ‘liab[ility]’ for ‘attorney’s fees . . . suffered by any person denied the rights provided in Section 51, 51.5, or 51.6,’ on ‘[w]hoever denies, aids or incites a denial, or makes any discrimination or distinction contrary to Section 51, 51.5, or 51.6.’ [Citation.] Thus, the plain language makes clear that only those who deny rights guaranteed by section 51, 51.5, or 51.6 are liable for attorney fees.” (Doran v. North State Grocery, Inc., supra, 137 Cal.App.4th at p. 489.) We therefore conclude that section 52, subdivision (a) provides a right to attorney fees only to a prevailing Unruh Act plaintiff. “Civil Code sections 51 and 51.5 violators are liable for actual and statutory damages and attorney fees. Stated another way, a Civil Code section 52 prevailing plaintiff is entitled to actual and statutory damages and attorney fees.” (Engel v. Worthington (1997) 60 Cal.App.4th 628, 633; see also Gunther v. Lin (2006) 144 Cal.App.4th 223, 242-243, fn. 18 [dictum to the effect that only prevailing plaintiff may recover attorney fees under Unruh Act].)

Since “we [have] conclude[d] that the statutory meaning is free of doubt, uncertainty, or ambiguity, the language of the statute controls, and our task is completed.” (Sisemore v. Master Financial, Inc. (2007) 151 Cal.App.4th 1386, 1411.) It is thus unnecessary to resort to legislative history, although it would appear that such history is consistent with our conclusion that section 52, subdivision (a) provides a right to attorney fees only to prevailing Unruh Act plaintiffs. (See Engel v. Worthington, supra, 60 Cal.App.4th at pp. 633-635.)

DenHoy, as the party alleged to have violated the Unruh Act, was not entitled to an award of attorney fees under section 52, subdivision (a) even though he prevailed on that claim.

DenHoy cites Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985 (Murillo) as being supportive of his claim for attorney fees. Murillo offers no support for DenHoy’s position. That case did not involve an Unruh Act claim. Indeed, it did not even concern a claim for attorney fees. Rather, Murillo addressed the question of whether a defendant that prevailed in an action under the Song-Beverly Consumer Warranty Act (§ 1790 et seq.) could recover its litigation costs under the general statute allowing costs to the prevailing party (Code Civ. Proc., § 1032, subd. (b)), notwithstanding section 1794’s provision allowing a prevailing plaintiff under the Act to recover costs and attorney fees.

DISPOSITION

The trial court’s order denying motion for attorney fees is affirmed.

WE CONCUR: Mihara, Acting P.J., McAdams, J.


Summaries of

Ideal Homes v. DenHoy

California Court of Appeals, Sixth District
May 27, 2008
No. H031071 (Cal. Ct. App. May. 27, 2008)
Case details for

Ideal Homes v. DenHoy

Case Details

Full title:IDEAL HOMES, Plaintiff and Respondent, v. WILLIAM DENHOY et al.…

Court:California Court of Appeals, Sixth District

Date published: May 27, 2008

Citations

No. H031071 (Cal. Ct. App. May. 27, 2008)