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KROLOP v. NATIONAL ECON CORPORATION, G045140. (2012)

Court: Court of Appeals of California Number: incaco20120209060 Visitors: 5
Filed: Feb. 09, 2012
Latest Update: Feb. 09, 2012
Summary: NOT TO BE PUBLISHED IN OFFICIAL REPORTS OPINION RYLAARSDAM, ACTING P. J. After being sued for breach of contract, foreclosure of lien, and on a common count by a mold and asbestos remediation company, defendant Linda Krolop cross-complained against that company (not a party to the appeal) and a second such company, National Econ Corporation (National) for breach of contract and negligence. National filed a separate action against Krolop for breach of contract, common counts, open book account
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NOT TO BE PUBLISHED IN OFFICIAL REPORTS

OPINION

RYLAARSDAM, ACTING P. J.

After being sued for breach of contract, foreclosure of lien, and on a common count by a mold and asbestos remediation company, defendant Linda Krolop cross-complained against that company (not a party to the appeal) and a second such company, National Econ Corporation (National) for breach of contract and negligence. National filed a separate action against Krolop for breach of contract, common counts, open book account, reasonable value, and foreclosure on mechanic's lien. The matters were consolidated and tried together.

Following an 11-day trial, the jury denied any relief to National on its complaint against Krolop. On Krolop's cross-complaint, the jury awarded no damages on her breach of contract claim against National despite finding she had been harmed by its failure "to do something that the contract required it to do." At the same time it determined Krolop was entitled to economic damages under the negligence cause of action in the amount of $37,271 and noneconomic damages in the amount of $15,000 against both cross-defendants, with comparative fault apportioned to each of them at 45 percent and to Krolop at 10 percent.

The court denied Krolop's subsequent motion for attorney fees, concluding there was no prevailing party because "all parties were unsuccessful on their contractual claims . . . ." She contends that was an abuse of discretion as to National because she "defeated [it's] breach of contract claim" and "prevailed on her return breach of contract claim with a finding of breach . . . that further caused damage" but that "[t]he jury . . . awarded those losses under the negligence cause of action . . ., based on the same facts and circumstances as those submitted in support of her breach of contract claim . . . ." We find no error and affirm.

Additional relevant facts are set forth in the discussion.

DISCUSSION

Civil Code section 1717 (all further statutory references are to this code) provides, in relevant part: "(a) 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 prevailing party 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. . . . [¶] . . . [¶] (b)(1) The court . . . shall determine who is the party prevailing on the contract for purposes of this section . . . . [T]he party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section."

"`[T]he trial court "`is given wide discretion in determining which party has prevailed on its cause(s) of action. Such a determination will not be disturbed on appeal absent a clear abuse of discretion."' [Citation.]' [Citation.]" (Roden v. AmerisourceBergen Corp. (2010) 186 Cal.App.4th 620, 663.)

"[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. The prevailing party determination is to be made only upon final resolution of the contract claims and only by `a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.' [Citation.]" (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.) Where the judgment was a "`simple, unqualified win'" on the only contract claim, a trial court has no discretion to deny an attorney fee award to that prevailing party and a party "whose litigation success is not fairly disputable" can claim attorney fees as a matter of right. (Ibid.) On the other hand, if both parties seek relief on a contract but neither party prevails, the trial court retains discretion to determine that there is no prevailing party. (Id. at p. 875.)

Here "neither party achieve[d] a complete victory on all the contract claims . . . ." (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109.) National recovered nothing on its complaint against Krolop and the jury awarded no damages to Krolop on her claim for breach of contract in her cross-complaint, despite finding Krolop was harmed by National's failure "to do something that the contract required it to do." "Winning on liability but failing to prove any damages does not result in any benefit to a plaintiff. Proving liability proves only an element of a cause of action, not the cause of action itself." (Childers v. Edwards (1996) 48 Cal.App.4th 1544, 1550; see also Foothill Properties v. Lyon/Copley Corona Associates (1996) 46 Cal.App.4th 1542, 1554-1556 [court did not abuse discretion in declaring the defendant the prevailing party where, although the plaintiff success in obtaining "some relief" in breach of contract case, the defendant "obtained a simple, unqualified win" due to plaintiff's failure to prove damages].) Krolop sought damages, not a determination National had breached the contract. Because the jury found Krolop suffered no damages as a result of National's actions, she did not prove her contract claim.

Although the jury awarded damages under Krolop's negligence cause of action, section 1717 authorizes an award of attorney fees only to a party who has recovered on a contract claim, not on a tort claim, even if the tort claim is related to the contract. (§ 1717, subd. (b)(1) [prevailing party is one "who recovered a greater relief in the action on the contract"]; Stout v. Turney (1978) 22 Cal.3d 718, 730 ["tort action for fraud arising out of a contract is not . . . an action `on a contract' within the meaning of [section 1717]"].) As the Supreme Court has stated, "if an action asserts both contract and tort or other noncontract claims, section 1717 applies only to attorney fees incurred to litigate the contract claims. [Citation.]" (Santisas v. Goodin (1998) 17 Cal.4th 599, 615.)

We do not dispute that "[i]f a contractual attorney fee provision is phrased broadly enough . . . it may support an award of attorney fees to the prevailing party in an action alleging both contract and tort claims . . . ." (Santisas v. Goodin, supra, 17 Cal.4th at p. 608.) But here the contract limits fee recovery to an "action . . . to enforce any provision of this agreement . . . ."

Krolop contends the fact she recovered her losses under the negligence, rather than breach of contract, cause of action elevates "`form over substance'" because "[e]very piece of testimony and documentation of damages was the same whether by way of a breach of contract or because of [National's] negligence. In fact, . . . the negligence of [National] was its breach of contract." As support, she cites her cross-complaint, its prayer for relief, and her reply to the opposition to her attorney fee motion.

But allegations in her negligence claim that National contaminated and destroyed her personal property do not appear in the breach of contract cause of action. The damages she recovered at trial relating to her personal property were awarded under the negligence cause of action, as were damages for emotional distress, which are not recoverable for breach of contract. Additionally, she sought differing amounts of damages for the breach of contract ($175,000) versus negligence ($250,000) for a total of $425,000 as asserted in the prayer for relief. And her reply brief in opposition to her motion for attorney fees merely contains her counsel's arguments, which do not constitute evidence the two causes of action were premised on the same facts. (In re Zeth S. (2003) 31 Cal.4th 396, 414, fn. 11.)

Krolop also references her testimony and that of "several third party witnesses," including an expert witness. But none of that testimony has been included in the record on appeal. Krolop had the burden of "provid[ing] an adequate record to assess error. [Citations.]" (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.) Her failure to do so forfeits her argument in this regard and "precludes a determination that the court abused its discretion." (Wagner v. Wagner (2008) 162 Cal.App.4th 249, 259.)

Krolop maintains that given "the law against double recovery under tort and contract causes seeking the same damages," which her attorney argued during closing argument, and the jury's findings she was harmed by National's breach of contract, "[t]he only logical conclusion . . . was that the jury awarded the harm found to have been caused by the breach of contract under the negligence verdict." But that is pure speculation unsupported by any evidence or law.

Krolop further asserts she "sought money. [On w]hich cause of action they awarded the money to her is of no moment in obtaining her litigation objective." It may not have mattered to her at trial, but the cause of action under which damages are awarded affects her ability to recover attorney fees. Section 1717 does not authorize fees to a party prevailing on a tort but not a contract claim.

Relying on our recent opinion holding an abuse of discretion occurs where the court fails to recognize that the party who obtained a "lopsided" victory is the prevailing party (De La Cuesta v. Benham (2011) 193 Cal.App.4th 1287, 1290), Krolop argues she received such a victory because by defeating National's complaint she achieved her objectives of avoiding foreclosure and payment of money to National. She ignores the fact she recovered no damages on her breach of contract cross-claim. As stated in de la Cuesta, the "greatest significance . . . is the relative extent of the success of each party in comparison to its basic litigation position . . . ." (Id. at p. 1296; see also Hsu v. Abbara, supra, 9 Cal.4th at p. 876 ["prevailing party determination is to be made . . . only by `a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions'"].) Because neither party succeeded on its contract claims, the trial court was well within its discretion in concluding Krolop did not sufficiently prevail to justify an attorney fee award.

Moreover, Krolop acknowledges that in de La Cuesta, the landlord-plaintiff recovered 70 percent of his claimed damages. In contrast, although Krolop's demand for economic damages (relating to her personal property) as set forth in her response to form interrogatories, was $367,746.43, the jury awarded her $33,807.60 in economic damages on her negligence claim, amounting to approximately 9 percent of her claimed damages. The court did not abuse its discretion in determining there was no prevailing party.

DISPOSITION

The order is affirmed. Respondent shall recover its costs on appeal.

O'LEARY, J. and IKOLA, J., concurs.

Source:  Leagle

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