Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County, Los Angeles County Super. Ct. No. BC326918, Conrad Aragon, Judge.
Law Offices of Patrick L. Garofalo, Patrick L. Garofalo for Plaintiffs and Appellants.
Law Offices of Eric Y. Nishizawa, Eric Y. Nishizawa; Law Offices of Ricardo A. Torres, II, Ricardo A. Torres II for Plaintiff and Respondent.
BOREN, P.J.
Judgment was entered in favor of defendants after plaintiff failed to prove at trial that he suffered any damage arising from a breach of contract. The judgment was an unqualified win for defendants; therefore, they are entitled to their contractual attorney fees as a matter of law. We reverse the trial court’s order denying defendants’ post judgment motion for attorney fees.
FACTS
This is the second appeal in this case. As described in our prior opinion, plaintiff Alireza Panahpour is a dentist who rented an office suite in a building owned by defendants. (Panahpour v. Nansay USA, Inc. (Nov. 9, 2007, B192830) [nonpub. opn.] p. 2 (Panahpour I).) Panahpour objected when defendants rented office space to the Social Security Administration (SSA), which serves members of the general public, because the SSA’s clientele created an unpleasant ambiance. (Ibid.) Despite the objectionable clientele of the SSA, Panahpour continued to practice dentistry in the building, and his profits climbed annually. (Id. at pp. 2-3.)
Panahpour sued defendants for breach of contract and various torts, all arising from his objections to the SSA office. In a special verdict, a jury found that defendants breached the covenant of quiet enjoyment, and that plaintiff’s damages for relocation expenses are $150,000. (Panahpour I, p. 4.) Defendants moved for JNOV, which the trial court granted. The court found no evidence of damages: Panahpour sought only his relocation expenses as damages, and there was no evidence that he relocated. In fact, he was still occupying the premises on the date of the jury verdict. (Ibid.)
Panahpour pursued an appeal in this court. We affirmed the judgment entered in favor of defendants. We wrote that Panahpour “cannot recover relocation expenses without evidence of a relocation. As a result, the jury’s damages award is contrary to the laws relating to the covenant of quiet enjoyment.” (Panahpour I, p. 2.)
Defendants brought a motion in the trial court for an award of contractual attorney fees, as the prevailing parties in the litigation. Defendants requested an award of $87,628.75. Counsel for defendants noted that his fees were far less than the $168,000 fee award requested by Panahpour after the jury found for plaintiff (but before the court granted defendants’ motion for JNOV). Panahpour opposed defendants’ motion, arguing that defendants are not the prevailing parties because the jury found that defendants breached the covenant of quiet enjoyment, even if there was no evidence of damages.
The parties’ lease reads, “In the event of any action or proceeding brought by either party against the other under this lease, the prevailing party shall be entitled to recover all costs and expenses including the fees of its attorneys . . . .”
The trial court ruled that defendants did not obtain a simple unqualified victory because the jury found that defendants breached the covenant of quiet enjoyment, a finding that was not disturbed when the trial court later found that there was no evidence of any damage to plaintiff. It wrote, “Under the circumstances presented, the court is of the opinion that neither side prevailed for purposes of being deemed a prevailing party.” However, the court awarded defendants $9,089.40 in costs. Defendants timely appeal from the denial of their motion for attorney fees.
DISCUSSION
In any action on a contract containing an attorney fees clause, “the party who is determined to be the party prevailing on the contract . . . shall be entitled to reasonable attorney’s fees in addition to other costs.” (Civ. Code, § 1717, subd. (a).) The statute deems that “the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract.” (Id., subd. (b)(1).) The trial court “shall determine who is the party prevailing on the contract . . . .” (Ibid.) An order denying attorney fees is appealable. (Code Civ. Proc., § 904.1, subd. (a)(2); Milman v. Shukat (1994) 22 Cal.App.4th 538, 540, fn. 2.) While the trial court generally has discretion to determine the propriety or amount of an award of attorney fees, de novo review is warranted where the facts are undisputed and the question is whether the criteria for an award of attorney fees have been satisfied. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175; Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142; Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 724.)
For purposes of recovering costs, a defendant is the “prevailing party” if the plaintiff recovers no relief from the defendant. (Code Civ. Proc., § 1032, subd. (a)(4).)
“When a party obtains a simple, unqualified victory by completely prevailing on or defeating all contract claims in the action and the contract contains a provision for attorney fees, section 1717 entitles the successful party to recover reasonable attorney fees incurred in the prosecution or defense of those claims. [Citation.] If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees. ‘[I]n deciding whether there is a “party prevailing on the contract,” the trial court is to compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources.’” (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109 (Scott).)
In Scott, the plaintiff sought to prove $2 million in damages, but succeeded in establishing only about $440,000 in damages: “plaintiff here did not achieve all of its litigation objectives, and thus is not automatically a party prevailing on the contract for purposes of section 1717 . . . .” (20 Cal.4th at p. 1109.) In this situation, where the plaintiff recovered some, but not all, of its damages, “the trial court did not abuse its discretion in implicitly concluding that on balance plaintiff prevailed on the contract for purposes of section 1717.” (Scott, at p. 1109.) The Supreme Court noted, “had defendant here prevailed on the contract by defeating completely plaintiff’s contract claims, it would have been entitled to attorney fees under the contractual provision by virtue of section 1717.” (Scott, at p. 1114.)
Here, defendants prevailed on the contract by defeating plaintiff’s contract claim. The judgment states, plaintiff “take[s] nothing in this action.” This was a complete victory for defendants. Plaintiff’s contract claim failed because there was no evidence of any damage. This is what the trial court found when it granted JNOV, and it is what this court found on appeal. The trial court wrote, “there was no evidence to support the jury’s award of relocation expenses.” We wrote, “the jury’s award of $150,000 in relocation expenses was unsupported by any evidence.” (Panahpour I, p. 8.)
To recover for breach of contract, “a plaintiff must plead and prove (1) a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff.” (Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532, 1545; Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1391, fn. 6.) Panahpour proved some elements of his claim—that defendants breached the lease by renting an office to the SSA, which substantially interfered with plaintiff’s use and enjoyment of the leased premises. However, without any proof of damage his claim against defendants could not and did not succeed. Panahpour could have surrendered possession of the premises and sued for damages. (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 590.) Panahpour did not surrender possession of the premises and paid no money to relocate. Alternatively, Panahpour could “elect ‘to stand upon the lease, remain in possession and sue for breach of contract damages . . . .” (Ibid.) Panahpour remained in possession, but as was fully discussed in our prior opinion, he presented no proof of contract damages in the form of lost profits, lost goodwill, or loss of use. (Panahpour I, pp. 6-8.) There was, in short, a failure of proof on a fundamental element of plaintiff’s breach of contract claim.
The trial court, in denying defendants’ request for attorney fees, apparently relied on the following provision in Civil Code section 1717: “The court may also determine that there is no party prevailing on the contract for purposes of this section.” (Civ. Code, § 1717, subd. (b)(1) .) This provision “vests the trial court with discretion in making the prevailing party determination,” in apparent contradiction with the statutory mandate that the prevailing party “shall be entitled” to its attorney fees. (Hsu v. Abbara (1995) 9 Cal.4th 863, 871.) “The words, ‘shall be entitled’ reflect a legislative intent that a party prevailing on a contract receive attorney fees as a matter of right (and that the trial court is therefore obligated to award attorney fees) whenever the statutory conditions have been satisfied.” (Id. at p. 872.)
The Supreme Court harmonized the apparent contradiction in Civil Code section 1717 by clarifying when the trial court has discretion to deny attorney fees. “‘[T]ypically, a determination of no prevailing party results when both parties seek relief, but neither prevails, or when the ostensibly prevailing party receives only a part of the relief sought.’ [Citation.] By contrast, when the results of the litigation on the contract claims are not mixed—that is, when the decision on the litigated contract claims is purely good news for one party and bad news for the other—the Courts of Appeal have recognized that a trial court has no discretion to deny attorney fees to the successful litigant. Thus, when a defendant defeats recovery by the plaintiff on the only contract claim in the action, the defendant is the party prevailing on the contract under section 1717 as a matter of law.” (Hsu v. Abbara, supra, 9 Cal.4th at pp. 875-876, bold face added.) This construction “harmonizes section 1717 internally by allowing those parties whose litigation success is not fairly disputable to claim attorney fees as a matter of right, while reserving for the trial court a measure of discretion to find no prevailing party when the results of the litigation are mixed.” (Hsu v. Abbara, at p. 876.)
The defendants’ litigation success in this case is not fairly disputable; therefore, they are entitled to claim their attorney fees as a matter of right. The judgment in this case gave nothing to plaintiff because he failed to prove an element of his breach of contract claim. This is purely good news for defendants and purely bad news for plaintiff. The end result was not mixed: defendants achieved complete success when judgment was entered in their favor because plaintiff failed to present evidence supporting his claim of damage. Because defendants defeated plaintiff’s recovery on his contract claim, they are the parties prevailing on the contract under section 1717 as a matter of law. The trial court had no discretion to deny defendants their attorney fees.
DISPOSITION
The post judgment order denying attorney fees to defendants is reversed. The case is remanded to the trial court to determine a reasonable amount of attorney fees for the trial, and to award those fees to defendants. Defendants are awarded their attorney fees and costs for this appeal, in an amount to be determined by the trial court. (Milman v. Shukhat, supra, 22 Cal.App.4th 538, 546.)
We concur: ASHMANN-GERST, J., CHAVEZ, J.