NOT TO BE PUBLISHED IN OFFICIAL REPORTS
OPINION
McKINSTER, J.
MKA Cabazon Partnership, LP, defendant and appellant (hereafter defendant), appeals from the trial court's postjudgment order denying its motion under Civil Code section 1717 to recover attorney fees. Defendant made its attorney fees motion after the trial court dismissed the action of plaintiff and respondent G&B Development Company, LLC, (hereafter plaintiff) following a hearing on an order to show cause issued under Code of Civil Procedure section 583.410, which gives a court discretion to dismiss an action when delay results from failure to prosecute. At the hearing, the parties agreed the trial court could dismiss the action if the dismissal included plaintiff's complaint and defendant's cross-complaint. In denying defendant's motion for attorney fees, the trial court found that because the parties agreed to dismiss the entire action, the dismissal was voluntary, even though initiated by the order to show cause, and consequently defendant could not recover attorney fees. We agree with the trial court except with respect to attorney fees attributable to plaintiff's tort claim for breach of fiduciary duty. Therefore we will reverse and remand the matter to the trial court to apportion defendant's attorney fees claim, accordingly.
DISCUSSION
The pertinent facts are undisputed. Plaintiff filed its original complaint in October 2004 and its first amended complaint in January 2005 against defendant seeking, among other things, to quiet title to certain real property in a commercial development in Cabazon. Plaintiff alleged in pertinent part that defendant was the developer of the property and in that capacity recorded the pertinent parcel map and Conditions, Covenants, and Restrictions (CC&R's). Plaintiff alleged that it owned two parcels and had an interest in the common area of the development. In addition to seeking to quiet title to the two parcels, plaintiff included a cause of action for breach of contract based on defendant's alleged violation of the CC&R's. Defendant cross-complained against plaintiff and others alleging causes of action among other things for breach of a settlement agreement between defendant and Donald Minkoff, plaintiff's alleged alter ego.
After conducting some discovery and filing cross-motions for summary judgment, which the trial court denied in July 2006, no other action occurred in the case until May 21, 2009, when the trial court issued an order to show cause why the action should not be dismissed because "there has been no activity in this case since the motion for summary judgment and no dismissal has been filed." In response to the order to show cause, plaintiff's attorney submitted a declaration in which he stated, in pertinent part, that, "In June and July, 2008, the parties engaged in extensive settlement efforts. These efforts were unsuccessful. Thereafter, the drastic downturn in the real estate market coupled with the cost of this litigation and serious health problems suffered by Donald Minkoff, whose company is one of the owners of [plaintiff] G&B Development, made proceeding with the case impractical. There similarly has been no action on the Cross-Complaint for more than a year." Plaintiff's attorney also stated that he advised Mr. Lieberg, defendant's attorney, that he, and presumably his client, were "prepared to let the Complaint be dismissed as long as the entire action, including, of course, the Cross-Complaint, was also dismissed. Mr. Lieberg responded that he believed his client would prefer trying to settle the case. He said he would get back to me." Plaintiff's attorney contacted defendant's attorney again and this time was told that defendant would not agree to dismiss the cross-complaint. In his declaration in response to the order to show cause, defendant's attorney stated that defendant did not oppose dismissal of the complaint, or dismissal of the cross-complaint if the complaint is dismissed.
On July 15, 2009, the trial court entered an order dismissing the entire action under the provisions of Code of Civil Procedure section 583.410, and judgment was entered accordingly.
On July 31, 2009, defendant filed a motion for an award of attorney fees under Civil Code section 1717 based on the attorney fees provision in the CC&R's. Defendant asserted that it was the prevailing party as a result of the July 15, 2009, order dismissing the entire action. In its opposition, plaintiff argued that the action was voluntarily dismissed, and as a result defendant was precluded under Civil Code section 1717, subdivision (b)(2) from recovering attorney fees. The trial court agreed with plaintiff and denied defendant's attorney fees motion. Defendant appeals from that postjudgment order.
DISCUSSION
Civil Code section 1717 provides in pertinent 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 . . . to the prevailing party, then 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).) Subdivision (b)(2) of Civil Code section 1717 creates an exception to the recovery of attorney fees, and states that "[w]here an action has been voluntarily dismissed . . . , there shall be no prevailing party for purposes of this section." That subdivision codifies the holding in International Industries, Inc. v. Olen (1978) 21 Cal.3d 218 (International Industries), in which the Supreme Court "determined that a defendant could not recover attorney fees under section 1717 when the plaintiff voluntarily dismissed the action before trial." (Hsu v. Abbara (1995) 9 Cal.4th 863, 872, 873.) In International Industries, the Supreme Court held "that sound public policy and recognized equitable considerations require that we . . . refus[e] to permit recovery of attorney fees based on contract when the plaintiff voluntarily dismisses prior to trial." (International Industries, supra, 21 Cal.3d at p. 223.) The court explained that "[t]he purpose of litigation is to resolve participants' disputes, not compensate participating attorneys." (Id. at p. 224.) Permitting the recovery of fees after voluntary dismissals would tend to frustrate that purpose by "encourag[ing] plaintiffs to maintain pointless litigation in moot cases or against insolvent defendants to avoid liability for those fees." (Ibid.) "Our courts are sufficiently burdened without combat kept alive solely for attorney fees." (Ibid.) While acknowledging that the rule might be contrary to the language of the parties' contract, the court concluded "that concern for the efficient and equitable administration of justice requires that the parties in pretrial dismissal cases be left to bear their own attorney fees, whether claim is asserted on the basis of the contract or section 1717's reciprocal right." (International Industries, at p. 225.)
The issue we must resolve is whether dismissal of the action in this case was voluntary, such that there is no "prevailing party" for purposes of recovering attorney fees under the contract. That issue poses only a question of law based on undisputed facts. We independently review such issues. (Kim v. Euromotors West/The Auto Gallery (2007) 149 Cal.App.4th 170, 176.)
What "distinguishes a voluntary dismissal from an involuntary one . . . is the plaintiff's role, if any, in bringing it about. For example, where the court grants a defense motion to dismiss or when the court dismisses a pleading on its own motion, without the consent of the plaintiff, the dismissal is obviously involuntary. [Citations.] Dismissals in this category invariably require a written order signed by the judge. [Citation.] [¶] If, however, a complaint or even a single cause of action is dismissed at the request of the plaintiff or by stipulation of the parties, the dismissal is voluntary. [Citation.] Dismissals of this type may be obtained without application of the court at all; a written request to the clerk will suffice. [Citation.]" (D & J, Inc. v. Ferro Corp. (1986) 176 Cal.App.3d 1191, 1194.)
In this case, the trial court initiated the dismissal process by issuing the order to show cause and also entered an order dismissing the action. However, plaintiff agreed to the dismissal if the dismissal included defendant's cross-complaint. Defendant also agreed to dismiss the cross-complaint, as evidenced by a handwritten modification to the dismissal order initialed by counsel for both plaintiff and defendant. That handwritten modification states the entire action, "including all cross-complaints," is dismissed. By initialing the modification to the order of dismissal, both attorneys indicated their consent to dismiss the complaint and cross-complaint. A dismissal based on consent of the parties is a voluntary dismissal, as the trial court correctly found in this case. Because the action was voluntarily dismissed, Civil Code section 1717, subdivision (b)(2) precludes defendant from recovering attorney fees on the contract claims.
In Santisas v. Goodin (1998) 17 Cal.4th 599, the Supreme Court held that although a voluntary pretrial dismissal precludes recovery of attorney fees incurred in defending the contract claims it does not "bar[] recovery of attorney fees incurred in defending tort or other noncontract claims. Whether attorney fees incurred in defending tort or other noncontract claims are recoverable after a pretrial dismissal depends upon the terms of the contractual attorney fee provision." (Id. at p. 602.) The attorney fees provision in the real estate purchase and sale agreement at issue in Santisas stated, in pertinent part, that it applied to legal action initiated by the broker or any party to the agreement or "arising out of" the execution of the agreement or the sale of the real property. (Id. at p. 607.) The phrase "arising out of" contained in the attorney fees provision "embraces all claims, both tort and breach of contract . . . because all are claims `arising out of the execution of th[e] agreement or the sale.' [Citation.]" (Id. at p. 608.) In other words, the Santisas court held that the parties to the real estate purchase and sale agreement at issue in that case had agreed to an attorney fees provision that included claims other than contract claims.
In this case, the attorney fees provision in the CC&R's states: "In the event of any dispute between the parties hereto, or their successors and assigns, involving the performance or interpretation of the covenants or conditions contained in this Declaration or arising out of the subject matter of this Declaration, the prevailing party shall be entitled to recover its reasonable attorneys' fees, expert witness fees, expenses and costs." The parties do not dispute that the "arising out of" language evidences the intent to include claims other than ones based on contract in the CC&R attorney fees provision. Plaintiff contends, however, that the other claims alleged in its first amended complaint do not "arise out of" the CC&R's and therefore are not subject to the attorney fees provision.
In its first amended complaint, in addition to the second cause of action for breach of contract, plaintiff included five other purported causes of action, each separately denominated a "claim for relief." Plaintiff's first claim for relief sought to quiet title to various parcels of real property in which plaintiff claimed either outright ownership or an interest. Plaintiff based the quiet title claim on defendant's alleged improper amendment of the CC&R's. In its third claim for relief plaintiff alleged defendant breached the fiduciary duty owed to plaintiff by, among other things, unilaterally amending the CC&R's to eliminate a parcel of property plaintiff owned, and also by encumbering the common area. In its fourth claim for relief, plaintiff sought cancellation of defendant's amendment to the CC&R's and cancellation of the trust deed encumbering the common area. Plaintiff's fifth claim for relief sought imposition of a constructive trust based on defendant's refusal to cancel the CC&R amendments, remove the deed of trust encumbering the common area, and provide other parcel owners their share of income derived from the common area. In the sixth claim for relief, plaintiff sought appointment of a receiver to manage the common area as a result of defendant's actions in violation of the CC&R's.
Only the third cause of action of plaintiff's first amended complaint, which seeks damages for defendant's breach of fiduciary duty, alleges a claim other than breach of contract based in part on the CC&R's and therefore is subject to the attorney fees provision. (See Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086 ["breach of fiduciary duty is a species of tort"].) The other purported claims for relief do not allege theories of recovery but instead seek equitable remedies based on the theory that defendant violated the CC&R's. (See, e.g., Olson v. Toy (1996) 46 Cal.App.4th 818, 823 ["A constructive trust is not a true trust but an equitable remedy available to a plaintiff seeking recovery of specific property in a number of widely differing situations. The cause of action is not based on the establishment of a trust, but consists of the fraud, breach of fiduciary duty, or other act which entitles the plaintiff to some relief. That relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff."]; Jones v. Sacramento Sav. & Loan Assn. (1967) 248 Cal.App.2d 522, 530 ["A quiet title suit aimed at terminating claims upon real estate is in one sense a strict foreclosure. . . . Equitable principles apply in a quiet title action . . . ."].) Because the relief requested stems from defendant's alleged breach of the CC&R's, attorney fees are barred under Civil Code section 1717, subdivision (b)(2).
Because we conclude defendant may recover attorney fees attributable to its defense of the third claim for relief which seeks damages based on the tort of breach of fiduciary duty, we will remand this matter to the trial court for a hearing to determine what portion, if any, of defendant's attorney fees request is attributable to that theory of recovery.
DISPOSITION
The order denying defendant's motion for attorney fees is reversed and the matter remanded to the trial court to apportion attorney fees, if any, to defendant's defense of the third cause of action for alleged breach of fiduciary duty.
Defendant to recover costs on appeal.
We concur.
Ramirez, P.J.
Richli, J.
