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Document(1) 1. Drybread v. Chipain Chiropractic Corp., 151 Cal. App. 4th 1063

Client/matter: FR-007

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Drybread v. Chipain Chiropractic Corp. Court of Appeal of California, Third Appellate District

June 6, 2007, Filed C053568

Reporter: 151 Cal. App. 4th 1063; 60 Cal. Rptr.

TODD DRYBREAD et al., Plaintiffs and Re-spondents, v. CHIPAIN CHIROPRACTIC COR-PORATION, Defendant and Appellant.

Subsequent History: [***1] Corrected by Dry-bread v. Chipain Chiropractic Corp., 2007 Cal. App. LEXIS 964 (Cal. App. 3d Dist., June 12, 2007)

Disposition: Reversed.

Core Terms

attorney’s fees, lease, sublease, unlawful detainer action, landlord, expire, unlawful detainer, prevailing party, noncontract, trialcourt, contractual, terminate, right to recover, lessee, contract claim, notice to quit, tenant, inception, detainer, notice, breach of lease,renew, tort claim, chiropractic, coverage, rend, statutory procedure, encompass, disapprove, tortious

Case Summary

Procedural PosturePlaintiff sublessors dismissed without prejudice an unlawful detainer action brought under Code Civ. Proc., § 1161, and defendant subles-see moved for attorney fees pursuant to a pro-vision in the sublease. The Superior Court of Sacramento County (California), denied themotion, and the sublessee appealed.

Overview

3d 580; 2007 Cal. App. LEXIS 934

The complaint alleged that a written sublease for commercial premises had expired and that the sublessee’s continued possession was ma-licious. The sublease contained a clause that pro-vided for an award of attorney fees to the pre-vailing party in any action thereunder. Thetrial court concluded that the unlawful detainer proceeding was an action on a contract andthat Civ. Code, § 1717, subd. (b)(2), barred the sublessee from recovering attorney fees after a voluntary dismissal. The court, in reversing, stated that the attorney fees clause was broad enough to encompass noncontract claims and that holding over after expiration of the sub-lease was a noncontract claim. The notice to quit did not allege any contractual breach. More-over, the allegation that the sublessee’s contin-ued possession was malicious sounded intort. Although the complaint also sought attor-ney fees pursuant to contract, that did not nec-essarily make the unlawful detainer proceeding an action based on contract because contrac-tual attorney fee clauses could encompass tort claims. Thus, as the prevailing party pursuant to Code Civ. Proc., § 1032, subd. (a)(4), the sub-lessee was entitled to attorney fees.

OutcomeThe court reversed the denial of attorney fees and remanded for further proceedings.

LexisNexis® Headnotes

Civil Procedure > ... > Costs & Attorney Fees > At-torney Fees & Expenses > General OverviewCivil Procedure > Appeals > Standards of Re-view > De Novo Review

HN1 The determination of the legal basis for

Page 2 of 12 151 Cal. App. 4th 1063, *1063; 60 Cal. Rptr. 3d 580, **580; 2007 Cal. App. LEXIS 934, ***1

an award of attorney fees is a question of law which is reviewed de novo.

Civil Procedure > ... > Attorney Fees & Ex-penses > Basis of Recovery > Statutory Awards

HN2 See Civ. Code, § 1717.


HN3 The limitation of Civ. Code, § 1717, subd. (b)(2)—precluding attorney’s fees when a complaint is voluntarily dismissed—applies only to contract claims. It does not apply to noncontract claims and thus does not preclude attorney’s fees on noncontract claims where the contractual attorney’s fees clause is broad enough to encompass noncontract claims.


HN4 In general, “prevailing party” includes a defendant in whose favor a dismissal is en-tered. Code Civ. Proc., § 1032, subd. (a)(4).

Real Property Law > ... > Landlord’s Remedies & Rights > Eviction Actions > Forcible Entry & De-tainer

HN5 The summary proceedings for unlawful de-tainer are based on the English statutes that ab-rogated the common law right of a personwrongfully dispossessed to regain possession of real property by force. The statutory situa-tions in which the remedy of unlawful detainer is available are exclusive, and the statutory pro-cedure must be strictly followed. The proceed-ing has characteristics of a contract action,e.g., it usually involves a lease, and often seeks its termination and recovery of rent. But this type of relief is deemed incidental to the main purpose of the suit—recovery of possession. Title is not in issue in the conventional unlaw-ful detainer suit. Unlawful detainer actionsmay be based on (1) a breach of the lease dur-ing the term of the lease (arguably suggest-ing contract claims), or (2) a tenant holding over after the lease expires (arguably suggestingtort claims for unlawful possession).


HN6 See Code Civ. Proc., § 1161.


HN7 In order to determine whether the sum-mary and statutory procedure of unlawful de-tainer sounds in contract or in tort, the grava-men of the facts giving rise to the right torecovery must be examined. If the right to re-cover realty emanates from the breach of a lease provision occurring during an unexpired term of a lease, then the right to recover has its in-ception in a contractual arrangement between the parties. If the right to recovery is based upon a civil wrong such as possession of property by a trespasser ab initio, or by a holdover ten-ant as a resulting trespasser, or by an en-croacher then the right to recover possession of the property by way of the summary and statu-tory procedure of unlawful detainer has its in-ception in tortious conduct. It is therefore nec-essary to analyze and determine whether or not the right to possession by the landlord had its inception in a lease or contractual right or whether the right to possession by the land-lord had its inception in some sort of tortious conduct by the lessee.

Headnotes/Syllabus

SummaryCALIFORNIA OFFICIAL REPORTS SUM-MARY

The trial court denied a sublessee’s motion for an award of attorney fees after the sublessors dismissed without prejudice an unlawful de-tainer action brought under Code Civ. Proc., § 1161. The complaint alleged that a written sub-lease for commercial premises had expiredand that the sublessee’s continued possession was malicious. The sublease contained a clause that provided for an award of attorney fees to the prevailing party in any action thereunder. The trial court concluded that the unlawful de-tainer proceeding was an action on a contract


and that Civ. Code, § 1717, subd. (b)(2), barred the sublessee from recovering attorney fees after a voluntary dismissal. (Superior Court of Sacramento County, No. 05UD05598, AlanG. Perkins, Judge.)

The Court of Appeal reversed the denial of at-torney fees and remanded for further proceed-ings. The court stated that the attorney fees clause was broad enough to encompass non-contract claims and that holding over after expi-ration of the sublease was a noncontractclaim. The notice to quit did not allege any con-tractual breach. Moreover, the allegation that the sublessee’s continued possession was mali-cious sounded in tort. Although the com-plaint also sought attorney fees pursuant to con-tract, that did not necessarily make theunlawful detainer proceeding an action based on contract because contractual attorney fee clauses could encompass tort claims. Thus, as the prevailing party pursuant to Code Civ.Proc., § 1032, subd. (a)(4), the sublessee was en-titled to attorney fees. (Opinion by Sims, J.,with Scotland, P. J., and Cantil-Sakauye, J., concurring.) [*1064]

HeadnotesCALIFORNIA OFFICIAL REPORTS HEAD-NOTES

CA(1) (1)Costs § 25 > Attorney Fees > Contract Provi-sions > When Complaint Voluntarily Dismissed.

The limitation of Civ. Code, § 1717, subd. (b)(2) —precluding attorney fees when a complaint is voluntarily dismissed—applies only to con-tract claims. It does not apply to noncontract claims and thus does not preclude attorney’s fees on noncontract claims where the contrac-tual attorney fees clause is broad enough to en-compass noncontract claims.

CA(2) (2)Costs § 25 > Attorney Fees > Contract Provi-sions > Prevailing Party.

In general, “prevailing party” includes a defen-dant in whose favor a dismissal is entered( Code Civ. Proc., § 1032, subd. (a)(4)).

CA(3) (3)Landlord and Tenant § 167 > Unlawful De-tainer > Nature of Action.

The summary proceedings for unlawful de-tainer are based on the English statutes that ab-rogated the common law right of a person wrongfully dispossessed to regain possession of real property by force. The statutory situa-tions in which the remedy of unlawful detainer is available are exclusive, and the statutory pro-cedure must be strictly followed. The proceed-ing has characteristics of a contract action, e.g., it usually involves a lease, and often seeks its termination and recovery of rent. But this type of relief is deemed incidental to the main purpose of the suit—recovery of possession. Title is not in issue in the conventional unlaw-ful detainer suit. Unlawful detainer actions may be based on (1) a breach of the lease dur-ing the term of the lease (arguably suggest-ing contract claims), or (2) a tenant holding over after the lease expires (arguably suggesting tort claims for unlawful possession).

CA(4) (4)Landlord and Tenant § 167 > Unlawful De-tainer > Nature of Action.

In order to determine whether the summary and statutory procedure of unlawful detainersounds in contract or in tort, the gravamen of the facts giving rise to the right to recovery must be examined. If the right to recover realty ema-nates from the breach of a lease provision oc-curring during an unexpired term of a lease, then the right to recover has its inception in a con-tractual arrangement between the parties. If the right to recovery is based upon a civil wrong such as possession of property by a trespasser ab initio, or by a holdover tenant as a resultingtrespasser, or by an encroacher then the right to recover possession of the property by way of the summary and statutory procedure of unlaw-ful detainer has its inception in tortious con-duct. It is therefore necessary to analyze and de-termine whether or not the right to possession by the landlord had its inception in a lease or contractual right or whether the right to pos-session by the landlord had its inception in some sort of tortious conduct by the lessee.


moved the court for an award of attorney’sCA(5) (5)

Costs § 26 > Attorney Fees > Contract Provi-sions > Fees Allowed > Voluntary Dismissal of Unlaw-ful Detainer Action.

An unlawful detainer action alleging that a sub-lessee was unlawfully in possession of prem-ises after the expiration of the sublease did not sound in contract, and therefore Civ. Code, § 1717 (which bars attorney fees where contract claims are voluntarily dismissed) did not apply. Rather, the sublessee was the prevailing party pursuant to Code Civ. Proc., § 1032, subd. (a)(4), and was entitled to attorney fees pursu-ant to the provisions of the sublease.

[ Cal. Forms of Pleading and Practice (2007) ch. 174, Costs and Attorney’s Fees, § 174.276; 2 Cathcart et al., Matthew Bender Practice Guide: Cal. Trial and Post-Trial Civil Proce-dure (2006) § 25.09; 7 Witkin, Cal. Procedure (4th ed. 1997) Judgment, § 184A; 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 597.]

Counsel: Ishikawa Law Office and Brendon Ishikawa; Law Offices of D. Robert Morris andD. Robert Morris for Defendant and Appel-lant.

Law Office of Felix G. Poggemann and FelixG. Poggemann for Plaintiffs and Respondents.

Judges: Sims, J., with Scotland, P. J., and Cantil-Sakauye, J., concurring.

Opinion by: Sims

Opinion

[**581] SIMS, J.—Plaintiffs brought an un-lawful detainer action ( Code Civ. Proc., § 1161 et seq. )1 against defendant. Plaintiffs alleged defendant was unlawfully in possession of prem-ises after a written sublease had expired.

Prior to trial, plaintiffs dismissed the unlawful detainer action without prejudice. Defendant

fees pursuant to a provision in the sublease pro-viding the prevailing party shall be entitled to attorney’s fees in “any action or other proceed-ing arising out of this Sublease … .”

Plaintiffs resisted an award of attorney’s fees, re-lying on Civil Code section 1717, which pro-vides as pertinent that “[i]n any action on a con-tract … [¶] … [¶] … [w]here an action hasbeen voluntarily dismissed … , there[***2] shall be no prevailing party for pur-

poses of this section.” (Italics added.) [*1066]The trial court agreed with plaintiffs, conclud-ing plaintiffs’ action sounded more in contract than in tort, so fees were barred by CivilCode section 1717.

We respectfully disagree with the trial court. Plaintiffs’ action for wrongful possession follow-ing termination of the lease sounded in tort. Civil Code section 1717, subdivision (b)(2), does not apply. Defendant was the prevailing party pursuant to section 1032, subdivision (a)(4), 2 and was entitled to attorney’s fees pursuantto the clause in the sublease. We shall there-fore reverse the trial court order denying attor-ney’s fees.

FACTUAL AND PROCEDURAL BACK-GROUND

On August 2, 2005, plaintiffs filed an unlawful detainer action against defendant, seeking to evict defendant from commercial [**582]premises following expiration of a one-year written sublease which commenced on Janu-ary 5, 2004. The complaint said, “Plaintiff de-mands possession from each defendant because of expiration of a fixed-term lease.” The com-plaint sought fair rental value of [***3] $82.88 per day and statutory damages under section 1174, subdivision (b), on the ground that defen-dant’s continued possession was malicious.An attachment to the complaint asserted defen-dant threatened to wreak financial hardshipon plaintiffs after plaintiffs refused to sign a ret-

1 Undesignated statutory references are to the Code of Civil Procedure.2 That provision states a “prevailing party” includes “a defendant in whose favor a dismissal is entered.” ( § 1032, subd. (a)(4).)


roactive extension of the sublease and defen-dant terminated the employment of plaintiff Todd Drybread as a chiropractor in defendant’s chiropractic practice.

The complaint also sought attorney’s fees pur-suant to a written agreement. The attorney’s fees clause in the sublease stated: “If any ac-tion or other proceeding arising out of this Sub-lease is commenced by either party to this sub-lease concerning the subleased premises,then as between Sublessor and Sublessee, the prevailing party shall be entitled to receive from the other party, in addition to any other relief that may be granted, the reasonable attorneys’ fees, costs, and expenses incurred in the ac-tion or other proceeding by the prevailing party.”

On August 15, 2005, defendant filed an an-swer, which also asked for attorney’s fees. The answer alleged as follows: The sublease was still in effect because, prior to December 2004, defendant exercised its [***4] option under the sublease to extend the original one-year term for another year, which had not yet expired. 3

Therefore, defendant was not a tenant at will, as alleged by plaintiffs, and the tenancy could not be terminated by a 30-day notice to quit.[*1067]

Defendant also alleged plaintiffs waived the 30-day notice to quit when they demanded and accepted payment of rent for August 2005.

Defendant also alleged: “Defendant is in-formed and believes that plaintiffs leased the subject premises to provide an office for plain-tiff TODD DRYBREAD to use as an office for his personal chiropractic practice. Defen-dant is informed and believes and thereon al-leges that plaintiffs had no prior experience in providing chiropractic services or in running the business of a chiropractic office. Defendant is informed and believes that as a result oftheir inexperience, plaintiffs were [***5] fail-ing with respect to their chiropractic office.Defendant is informed and believes and thereon

alleges that in or about September 2003, plain-tiff TODD DRYBREAD notified defendantthat, because of his failing business, he was in-terested in abandoning his self-employment,and wished to find an employed associate posi-tion with defendant. Thereafter, in or about De-cember 2003, defendant entered into an agree-ment whereby defendant sublet the premises being leased by plaintiffs from the master land-lord. By the terms of a separate and indepen-dent agreement, also entered into in or about De-cember 2003, defendant engaged plaintiffTODD DRYBREAD as an employee in the ca-pacity of a doctor of chiropractic; however,plaintiff TODD DRYBREAD’s place of work was at an office, or offices, that did not in-clude the premises that are the subject of this unlawful detainer proceeding. On or about June15 and 16, 2005, disagreements arose be-tween defendant and plaintiff TODD [**583]DRYBREAD. As a result of these disagree-ments that arose in the employer-employee rela-tionship between defendant and plaintiff TODD DRYBREAD, attorneys were engaged on behalf of both defendant and plaintiff TODD DRYBREAD. On or about [***6] June 16, 2005, as a result of the negotiations of their re-spective legal counsel, in the course of the law-ful and peaceful exercise of rights under the law by defendant, it was agreed that plaintiff TODD DRYBREAD’s employment with defen-dant was terminated effective June 16, 2005. Defendant is informed and believes and thereon alleges that a mere five calendar days later, on June 21, 2005, plaintiffs prepared the docu-ment entitled ‘30-Day Notice to Quit’ (hereaf-ter ‘Notice’) that forms the basis for this unlaw-ful detainer proceeding. The plaintiffs did not state in the Notice any ground upon which they, in good faith, were seeking to recover posses-sion of the subject premises. While there had been an unpleasant dissolution of the employer-employee relationship … , that relationship did not have any direct connection to the continu-ation of the landlord-tenant relationship that in-dependently existed between both of the plain-

3 The sublease said, “This Sublease shall commence on 1/5/04 and shall run for a term of one year. Upon the expiration of such one year term, and each subsequent term, the Sublessee may elect to extend the term for an additional one year, by giving notice of such intent not less than 30 days before the end of the then existing term.”


tiffs and the defendant. Further, defendant is informed and believes and thereon alleges that there had been no occurrence that couldhave rationally justified the plaintiffs’ good faith creation and service of the Notice. Defen-dant is informed and believes that[***7] [*1068] the only true motive for the ser-vice of the Notice was the intent by plaintiffs to retaliate against defendant because of the ter-mination of plaintiff TODD DRYBREAD’semployment with defendant just days earlier.”

On September 16, 2005, a voluntary dismissal of the case (without prejudice) was entered atplaintiffs’ request.

On October 17, 2005, defendant filed a motion for attorney’s fees in the amount of $13,517, pursuant to sections 1021, 4 1032, 5 and 1033.5, subdivision (a)(10), 6 on the ground that defen-dant was the prevailing party in the unlawful detainer proceeding, as defined pursuant to sec-tion 1032, subdivision (a)(4) (fn. 5, ante), and that pursuant to section 1021 et seq., there was a written agreement between the parties for the successful party in any litigation to recover rea-sonable attorney’s fees as part of its costs of suit.

Defendant’s president, Christ Chipain (Chipain), submitted a declaration attesting that on De-cember 23, 2003, defendant entered the sub-lease with plaintiffs, becoming subtenant of commercial premises of which plaintiffswere the tenants under a master lease with the master landlord. The master landlord gaveconsent to the sublease. Defendant entered the sublease in order to open a second location to expand operation of its business. Defendant took possession on January 5, 2004, and in-vested resources in developing that location. In response to plaintiffs’ efforts to dispossess de-fendant, defendant incurred attorney’s fees. De-

fendant also submitted declarations from its at-torneys setting forth the amount of attorney’s fees.

[**584] Plaintiffs opposed the motion for at-torney’s fees. Plaintiff Todd Drybread submit-ted a declaration attesting the [***9] sublease was for one year with an option to renew no later than 30 days before the end of the first year. At the end of November 2004, Drybreadasked defendant whether it would be exercis-ing the option but received no response. Dur-ing January 2005, after the sublease expired, Drybread continued his employment with defen-dant, and defendant held over as a subtenant in the office. On June 14, 2005, defendant’s president, Chipain, gave Drybread a document entitled, “Sublease Extension.” Drybread was wary because it was backdated to January 1, 2005, and said the [*1069] parties agreedto “extend” the sublease by one year. It did not indicate timely exercise of the option. Dry-bread refused to sign the document because of its false statements. Immediately thereafter,“Dr. Chipain and I [Todd Drybread] severed my employment. Upon disclosing to Dr. Chipain that I would be leaving his employ, he stated to me that he would sue me for every dime Iowned.” Drybread further attested: “Initially, be-cause of my need to open a location withinwhich to engage in chiropractic, I initiated this proceeding to evict [defendant] from my of-fices. However, after initiating this proceeding on August 2, 2005, I found [***10] an alter-native location for my practice, and asked my at-torney to dismiss this action.” Drybread fur-ther attested that he was responsible fordefendant’s accounting and knew defendant lost money almost every month on its business operations in the subleased premises. Dry-bread further expressed his opinion that the

4 Section 1021 states: “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided.”5

Section 1032 states a prevailing [***8] party is entitled as a matter of right to recover costs, and “prevailing party” includes “a defendant in whose favor a dismissal is entered … .” ( § 1032, subd. (a)(4).)6

Section 1033.5, subdivision (a)(10), says items allowable as costs include “[a]ttorney fees, when authorized by any of the fol-

lowing: [¶] (A) Contract. [¶] (B) Statute. [¶] (C) Law.”


amount of attorney’s fees sought by defendant was unreasonable.

After hearing oral argument, the trial court af-firmed its tentative ruling denying attorney’s fees. The written tentative ruling stated inpart: “Defendant argues that a proceeding in un-lawful detainer is a special proceeding and is a noncontract cause of action and as such, de-fendant is not barred from recovering reason-able attorney’s fees as the result of a plaintiff’s voluntary pretrial dismissal. As a statutory rem-edy to regain possession of real property, an un-lawful detainer proceeding has characteristics of a contract action, e.g., it usually involves a lease, and often seeks its termination and re-covery of rent. [Citations.] [¶] Given the legal is-sues presented by the parties, the unlawful de-tainer action in this case sounds more incontract than not. That being the case, Civil Code section 1717(b)(2) [***11] bars defen-dant from recovering attorney’s fees.”

Defendant appealed to the appellate division of the superior court. After oral argument, the ap-pellate division affirmed the trial court’s order without explanation.

We granted defendant’s petition to transfer the case to this court under former rule 64 ofthe California Rules of Court 7 (see now rule8.1008 et seq.).

DISCUSSION

I. Standard of ReviewHN1 “The determination of the legal basis for an award of attorney fees is a question oflaw which we review de novo. [Citation.]” (Honey Baked Hams, [*1070] Inc. v. Dickens (1995) 37 Cal.App.4th 421, 424 [43 Cal. Rptr. 2d 595] (Honey Baked Hams), disap-proved on other grounds in Santisas v. Goodin (1998) 17 Cal.4th 599, 614, fn. 8 [71 Cal. Rptr. 2d 830, 951 P.2d 399] (Santisas).)

Plaintiffs argue an abuse of discretion standard applies because this type of case calls for the

trial court to make a case-by-case determina-tion of the nature of the [**585] lawsuit in or-der to determine whether it lies in contract or tort. Even assuming an abuse of discretion stan-dard, we shall conclude defendant is entitled to attorney’s fees.

II. Application of Civil Code Section 1717 to Unlawful Detainer Defendant argues Civil Code section 1717 [***12] applies only to contract actions, and

the trial court improperly applied that statute to this unlawful detainer action. Defendant ar-gues all unlawful detainer actions sound in tort and, even if they do not necessarily sound in tort, this unlawful detainer action sounded in tort. We shall conclude this unlawful detainer ac-tion sounded in tort, and the trial court’s de-nial of defendant’s motion for attorney’s fees was improper.

Civil Code section 1717 states in part:

HN2 “(a) In any action on a contract, where the contract specifically provides that attor-ney’s fees and costs, which are incurred to en-force 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 pre-vailing 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 ad-dition to other costs. [¶] … [¶]

“Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit. [¶] … [¶]

“(b)(1) The court, upon notice and motion by a party, shall determine who is the party prevail-ing on the contract for purposes of this section, whether or not [***13] the suit proceeds to fi-nal judgment. Except as provided in paragraph(2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also de-termine that there is no party prevailing on the contract for purposes of this section.

7 Undesignated rule references are to the California Rules of Court.


“(2) Where an action has been voluntarily dis-missed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.” (Italics added.)

HN3 CA(1) (1) The limitation of Civil Code sec-tion 1717, subdivision (b)(2)—precluding attor-ney’s fees when a complaint is voluntarily dis-missed—applies [*1071] only to contract claims. ( Santisas, supra , 17 Cal.4th at p. 622.) It does not apply to noncontract claims and thus does not preclude attorney’s fees on noncontract claims where the contractual attor-ney’s fees clause is broad enough to encom-pass noncontract claims. (Ibid.) In Santisas, buy-ers of a residence brought a contract and tort action against the sellers. After the plaintiffs dis-missed the complaint with prejudice beforetrial, the trial court awarded attorney’s fees to the defendants pursuant to a clause in the pur-chase agreement that “‘[i]n the event legal ac-tion [***14] is instituted by the Broker(s), or any party to this agreement, or arising out of the execution of this agreement or the sale, or to collect commissions, the prevailing partyshall be entitled to receive from the other party a reasonable attorney fee to be determined by the court in which such action is brought.’” ( Id . at p. 603.)

Santisas, supra , 17 Cal.4th 599 , held Civil Code section 1717 barred recovery of attor-ney’s fees for the contract claims but not the tort claims. The Supreme Court said, “contractual attorney fee provisions are generally enforce-able in voluntary pretrial dismissal cases ex-cept as barred by [ Civil Code] section 1717.” ( 17 Cal.4th at p. 622.) [**586] “Under [ Civil Code] section 1717, the seller defendants are not ‘part[ies] prevailing on the contract’ be-cause that section specifies that there is noparty prevailing on the contract when, as here, the plaintiffs have voluntarily dismissed the action, and therefore defendants may not re-cover the attorney fees they incurred in the de-

fense of the contract claim. But this conclu-sion does not affect the seller defendants’ right to recover as costs the attorney fees they in-curred in defense of the tort claims. Because [ Civil Code] section 1717 [***15] does not ap-ply to those claims [citations], it does not bar

recovery of attorney fees that were incurred in litigation of those claims and that are other-wise recoverable as a matter of contract law.” ( Id . at p. 619.)

In holding that Civil Code section 1717 barred attorney’s fees for the contract claims, Santi-sas disapproved of this court’s opinion in Honey Baked Hams, supra , 37 Cal.App.4th at page 426, insofar as it said Civil Code section 1717 was restricted to unilateral attorney’s feesclauses (which needed Civ. Code, § 1717 to make the clauses reciprocal). ( Santisas, supra , 17 Cal.4th at p. 614, fn. 8.)

Thus, Civil Code section 1717 does not bar re-covery of attorney’s fees for noncontractclaims voluntarily dismissed by the plaintiff, as long as the attorney’s fees clause is broadenough to encompass such noncontract claims.

Here, the clause is broad enough. It says: “If any action or other proceeding arising out of this Sublease is commenced by either party to this sublease concerning the subleased premises,then as between Sublessor and Sublessee, the prevailing party shall be entitled to receive from the other party, in [*1072] addition to anyother relief that may be granted, [***16] the rea-sonable attorneys’ fees, costs, and expenses in-curred in the action or other proceeding bythe prevailing party.” This clause is broad enough to encompass noncontract claims such as this unlawful detainer action. (See Santisas, supra , 17 Cal.4th at p. 603 [clause calling for attorney’s fees “[i]n the event legal action is in-stituted by the Broker(s), or any party to this agreement, or arising out of the execution of this agreement or the sale, or to collect commis-sions” applied to buyer’s tort claim against seller]; Gonzales v. Personal Storage, Inc . (1997) 56 Cal.App.4th 464, 480 [65 Cal.Rptr.2d 473] [clause calling for attorney’s fees in “‘any legal action’ ” applied to tort action (ital-ics omitted)].)

HN4 CA(2) (2) In general, “prevailing party” in-cludes “a defendant in whose favor a dis-missal is entered … .” ( § 1032, subd. (a)(4); see also § 1033.5, subd. (a)(10) [costs include at-torney’s fees authorized by contract].)


Thus, defendant is entitled to recover attor-ney’s fees unless such fees are barred by Civil Code section 1717.

The question is whether this unlawful detainer action was “an action on a contract” (towhich Civ. Code, § 1717 applies and bars attor-ney’s fees) or a noncontract claim.

HN5 CA(3) (3) “The summary proceedings [***17] for … unlawful detainer are based on

the English statutes that abrogated the com-mon law right of a person wrongfully dispos-sessed to regain possession of real property by force. The statutory situations in which theremedy of unlawful detainer is available are ex-clusive, and the statutory procedure must be strictly followed. [Citations.]

“The proceeding has characteristics of a con-tract action, e.g., it usually involves a lease, and often seeks its termination and recovery ofrent. But this type of relief is [**587] deemed incidental to the main purpose of the suit—recovery of possession. [Citation.] Title is not in issue in the conventional unlawful detainer suit. [Citation.]” (5 Witkin, Cal. Procedure(4th ed. 1997) Pleading, § 597, pp. 67-68.)

“ ‘The remedy of unlawful detainer is designed to provide means by which the timely posses-sion of premises which are wrongfully with-held may be secured to the person entitledthereto. The summary character of the action would be defeated if, by cross-complaint or counterclaim, issues irrelevant to the right of im-mediate possession could be introduced.’ ”( Green v. Superior Court (1974) 10 Cal.3d 616, 632 [111 Cal. Rptr. 704, 517 P.2d 1168] [ten-ant may raise landlord’s breach [***18] of im-plied warranty of habitability as defense in un-lawful detainer proceeding].) [*1073]Unlawful detainer actions may be based on (1) a breach of the lease during the term of the lease (arguably suggesting contract claims), or

(2) a tenant holding over after the lease expires (arguably suggesting tort claims for unlawful possession).

Thus, section 1161 states: HN6 “A tenant of real property, for a term less than life … is guilty of unlawful detainer:

“1. When he or she continues in possession … after the expiration of the term for which it is let to him or her; provided the expiration isof a nondefault nature however brought about without the permission of his or her landlord … ; but nothing in this subdivision shall be con-strued as preventing the removal of the occu-pant in any other lawful manner; but in case of a tenancy at will, it must first be terminatedby [30-day] notice, as prescribed in the Civil Code. [8]

“2. When he or she continues in possession … without the permission of his or her landlord … after default in the payment of rent, pursu-ant to the lease or agreement under which the property is held, and [a three-day notice toquit has been served]. … [¶] … [¶]

“3. When he or she continues in possession … after a neglect or failure to perform other con-ditions or covenants of the lease or agreement under which the property is held, … and [a three-day notice to quit has been served] … . [¶] … [¶]

“4. Any tenant[ or subtenant] … assigning or subletting or committing waste upon the de-mised premises, contrary to the conditions or covenants of his or her lease, or maintaining, committing, or permitting the maintenanceor commission of a nuisance upon the demised premises or using the premises for an unlaw-ful purpose, thereby terminates the lease, and the landlord … shall upon service of three days’ notice to quit … be entitled to restitution of pos-session of the demised premises … .

“5. [***20] When he or she gives written no-

8 Civil Code section 1945 states: “If a lessee of real property remains in possession thereof after the expiration of the hiring, and the lessor accepts rent from him, the parties are presumed to have renewed the hiring on the same terms and for the same time, not exceeding one [***19] month when the rent is payable monthly, nor in any case one year.”

Civil Code section 1946 calls for a 30-day notice to quit in order to terminate month-to-month tenancies.


tice as provided in Section 1946 of the Civil Code of his or her intention to terminate the hir-ing of the real property, or makes a written of-fer to surrender which is accepted in writing by the landlord, but fails to deliver possession at the time specified in that written notice, with-out the permission of his or her landlord ….” [*1074][**588] Thus, the unlawful detainer statute en-

compasses breach of lease (arguably contract-type matters) and holdover possession after ex-piration of the lease (arguably a noncontract issue). This duality is repeated in section 1174, which states a prevailing landlord in an unlaw-ful detainer action alleging breach of lease is en-titled to possession and a judgment declaring the lease forfeited, as long as the notice to quit stated the landlord’s election to declare thelease forfeited. Section 1174 also states, “if that notice does not so state that election, thelease or agreement shall not be forfeited.”

Here, plaintiffs’ claim was that defendant was holding over after expiration of the lease—a noncontract claim.

The trial court nevertheless determined this case sounded more in contract than in tort.

Defendant argues the trial court [***21] erred.

We agree.

As we shall explain, we conclude that even if some unlawful detainer actions sound in con-tract, the plaintiffs in this case pleaded a tort-based claim.

The nature of unlawful detainer actions was a key issue in the insurance coverage case of Fragomeno v. Insurance Co. of the West (1989) 207 Cal. App. 3d 822 [255 Cal. Rptr. 111] (Fragomeno) (disapproved on othergrounds in Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 838-841, fns. 12-13 [88 Cal. Rptr. 2d 366, 982 P.2d 229]). There, lessee own-ers of a dry cleaning business brought an ac-tion against their insurer for declaratory relief, breach of contract, and breach of the cov-

enant of good faith and fair dealing. The Court of Appeal, Second Appellate District, af-

firmed summary judgment in favor of the in-surer on the ground that the personal injury en-dorsement in the insureds’ comprehensivepolicy did not provide coverage for the unlaw-ful detainer action brought against them bytheir lessor. The endorsement obligated the in-surer to pay any sums the insurers became ob-ligated to pay as damages because of injury aris-ing out of a wrongful entry or eviction orother invasion of the right of private occu-pancy. ( Fragomeno , at p. 826 .) The policy clearly covered only tort liability, and[***22] the issue was whether unlawful de-

tainer sounded in contract or tort. ( Id . at p. 828 .) Fragomeno defined the issue as “whether a les-see’s alleged unlawful possession of theleased premises constitutes an ‘invasion of the right of private occupancy’ within the mean-ing of the lessee’s insurance policy as a matter of law so as to require [the insurer] to defend and indemnify the lessee for any judgment which might be rendered against the lesseeas a result of the unlawful detainer [*1075] ac-tion.” ( Id . at p. 825 .) The Court of Appealheld that the insurance policy gave the in-sureds no right to defense and indemnification in the unlawful detainer action, since that ac-tion sounded in contract, not tort, in that it had its origin in the lessor’s right to possession as a result of the insureds’ alleged breach of the lease. ( Id . at p. 831.)

CA(4) (4) Fragomeno said, HN7 “[I]n order to determine whether this summary and statu-tory procedure [unlawful detainer] sounds in contract or in tort the gravamen of the facts giv-ing rise to the right to recovery must be exam-ined. If the right to recover realty emanatesfrom the breach of a lease provision occurring during an unexpired term of a lease, then the right to recover [***23] has its inception in a contractual arrangement between the parties. If the right to recovery is based upon a civil wrong such as possession of property by a tres-passer ab initio, or by a holdover tenant as a[**589] resulting trespasser, or by an

en-croacher then the right to recover possession of the property by way of the summary and statu-tory procedure of unlawful detainer has its in-ception in tortious conduct. [¶] It is there-


fore necessary to analyze and determine whether or not the right to possession by the landlord … had its inception in a lease or con-tractual right or whether the right to posses-sion by the landlord had its inception in some sort of tortious conduct by the lessee.” ( Frago-meno , 207 Cal. App. 3d at pp. 830-831 , some italics added.)

Fragomeno, supra , 207 Cal. App. 3d 822 , con-cluded the inception of the landlord’s right to recover the premises was in a contractual or leasehold agreement between the parties. ( Id . at p. 831.) It was undisputed that the lessees breached the written lease with the landlord. It was irrefutable, said the court, that the land-lord’s right to recover the real property ema-nated from the breach of the lease occurring within the unexpired term [***24] of thelease by reason of the lessee’s “unagreed to” use of the premises. (Ibid.) Therefore, the sum-mary procedure of unlawful detainer being uti-lized to prevent interference with the land-lord’s right to private occupancy by virtue of the intraterm leasehold breach was contractual. As a matter of law, the lessees’ insurancepolicy with the insurer gave the insureds no right to defense and indemnification as a result of the unlawful detainer action which had its origins in the landlord’s right to possession as a result of the lessees’ intraterm breach of the lease contract. (Ibid.)

A dissenting justice in Fragomeno, supra , 207 Cal. App. 3d 822 , discussed case law atlength and opined damages recoverable in an un-lawful detainer action sound in tort. ( Id . at pp. 831-836 (dis. opn. of Johnson, J.).)

Contending that unlawful detainer always sounds in tort, defendant is unhappy with Frago-meno. Defendant argues Fragomeno was an in-surance coverage case and therefore is not controlling here, because cases are authority only for points actually involved and decided. However, the nature of unlawful detainer ac-tions was critical to resolution of the insur-ance [*1076] coverage question. Therefore de-fendant [***25] is simply wrong in relying on the principle that cases are not authority for points unnecessary to the decision.

Defendant claims Fragomeno was overruled in Vandenberg v. Superior Court, supra , 21 Cal.4th 815. However, Vandenberg merely dis-approved of the insurance coverage aspect of Fragomeno, i.e., that liability arising ex con-tractu, as opposed to ex delicto, is not cov-ered under policies limiting coverage to amounts the insured is “legally obligated to pay as dam-ages.” ( Vandenberg, supra , 21 Cal.4th at pp. 838-841 & fns. 12-13.) Vandenberg concluded

the insurer could not avoid coverage (in an ac-tion for breach of lease due to property dam-age from pollution) solely on the ground that damages were assessed on a contractual theory. (Ibid.) Vandenberg did not disapprove ofFragomeno’s holding regarding the nature of un-lawful detainer.

Defendant argues that, even if some unlawful de-tainer actions sound in contract, the plaintiffs in this case expressly pleaded a tort-based claim. At this point, we agree with defendant.

Thus, plaintiffs’ unlawful detainer action was based on a claim of unlawful holdover posses-sion after expiration of the lease. It was not based on a breach of the lease [***26] itself.Plaintiffs gave a 30-day notice to quit which did not allege any contractual [**590] breachand which referred to a “tenancy at will” rather than a tenancy under a lease. Although the com-plaint form checked a box stating the notice to quit “included an election of forfeiture” (of a lease), which suggests a breach of contract claim (see discussion of § 1174, ante), the no-tice to quit contained no such election. The com-plaint stated plaintiffs “demand[] possessionfrom each defendant because of expiration of a fixed-term lease.” The complaint also alleged defendant’s continued possession was “mali-cious” (which would entitle plaintiffs to statu-tory damages under § 1174, subd. (b)). Malice pertains to tort claims, not contract claims. Al-though the complaint also sought attorney’s fees pursuant to contract, that does not necessarily make the unlawful detainer action an action based on contract, because we have seen con-tractual attorney clauses may encompass tort claims if the clause is broad enough.

Thus, we see no basis upon which the trial court could have concluded that this unlawful


detainer action sounded more in contract than in tort.

In their respondents’ brief on [***27] appeal, plaintiffs argue the trial court correctly deter-mined this action sounded in contract because the entire relationship between the partiesarose out of the sublease, and by defendant’s holding over after expiration of the sublease, the sublease was renewed on the same terms asthe original. ( Civ. Code, § 1945; Rosetto v. Bar-ross (2001) 90 Cal.App.4th Supp. 1, 6 [110 Cal.Rptr.2d 255] [termination of term con-tained in contract transformed three-year ten-ancy into month-to-month relationship].) Plain-tiffs argue that, as of the date the unlawfuldetainer action began, [*1077] a contract gov-erning the parties existed, and there would be no landlord/tenant relationship without this con-tract.

However, plaintiffs’ argument misses the mark. Even assuming the existence of a contract,that does not mean this unlawful detainer ac-tion was contract based. Notably, neither the no-tice to quit nor the unlawful detainer com-plaint alleged any breach of the sublease. We note Civil Code section 1945 (fn. 8, ante) did not operate to renew the sublease for a one-year pe-riod, because that statute merely operated to renew on a monthly basis, since the rent was due monthly. 9 Although defendant’s position was that it renewed the sublease [***28] for an-other year, plaintiffs did not seek possession for breach of the sublease. The action did not sound in contract simply because the parties were previously bound by a contract. Plain-tiffs’ action was for tortious holding over after expiration of the lease.

Plaintiffs argue alternatively that no enforce-able contract exists upon which to justify an award of attorney’s fees because defendant al-lowed the sublease to expire without renew-ing it. Plaintiffs cite no authority, other than the general principle stated in Santisas, supra , 17 Cal.4th at page 606, that recoverable litigation

costs include attorney’s fees only when the party entitled to costs has a legal basis, indepen-dent of the cost statutes and grounded in an agreement, statute or other law, upon which to claim attorney’s fees. This general principle does not aid plaintiffs. Even assuming defen-dant did not properly renew the lease for an-other [***29] year, the terms of the lease were still in effect when plaintiffs filed the un-lawful detainer action. [**591] Thus, by op-eration of Civil Code section 1945 (fn. 8, ante), defendant’s continued possession after expira-tion of the one-year term and plaintiffs’ accep-tance of rent after expiration of the one-year term (which plaintiffs do not dispute) operated as a month-to-month renewal “on the same terms.” The attorney’s fees clause in the sub-lease was in effect when the unlawful detainer action was filed.

CA(5) (5) We conclude this unlawful detainer action did not sound in contract, and therefore Civil Code section 1717 (which bars attor-ney’s fees where contract claims are volun-tarily dismissed) does not apply. Rather, defen-dant was the prevailing party pursuant to Code of Civil Procedure section 1032, subdivi-sion (a)(4), and was entitled to attorney’sfees pursuant to the provisions of the sublease.

The trial court abused its discretion in deny-ing defendant’s motion for attorney’s fees.[*1078]

DISPOSITION

The order denying attorney’s fees is reversed and the case is remanded to the trial court for fur-ther proceedings.

Defendant shall recover its costs on appeal. ( Cal. Rules of Court, rule 8.276(a)(1)-(2).)

Scotland, P. J., and Cantil-Sakauye, [***30] J., concurred.

On June 12, 2007, the opinion was modified to read as printed above.

9 The sublease does not state when rent was due but merely referred to the master lease, which is not in the record on appeal. Nevertheless, it appears the rent was due monthly, as reflected in the answer to the complaint and the trial court’s unchallenged reference to monthly rent.

Documents

caappellatelaw.lexblogplatformthree.com · Web view“Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit. “(b)(1) The court,