PEÑA, J.
George Vue, Ly Pao Yang and United Hmong Council, Inc., appeal, contending the trial court erroneously awarded Hmong International New Year Foundation, Inc., Charlie Vang, Joseph Youa Vang, Zang Her, and Liahoua Vang attorney fees of $88,742.47. Specifically, plaintiffs maintain that because defendants were not signatories to the original agreement that contained an attorney fee provision, such fees cannot be awarded to defendants pursuant to Civil Code section 1717. They contend the trial court failed to articulate a basis or theory upon which plaintiffs would have been able to recover fees from defendants had plaintiffs prevailed. Further, plaintiffs assert defendants did not step into the shoes of any party to the agreement, nor were defendants third party beneficiaries to that agreement. Finally, plaintiffs contend the fees awarded were excessive. We disagree with plaintiffs and affirm.
Prior to the agreement that is the subject of this appeal, two separate Hmong New Year celebrations would occur in Fresno. Community leaders then came together in an effort to unify the Hmong people's proud celebrations.
On November 17, 1998, representatives of three separate nonprofit groups executed the "Agreement Re Hmong New Year Celebration." The parties included Hmong National New Year, Inc., and Hmong National Council, Inc. (collectively, the Fairgrounds Group), and United Hmong International, Inc. (the Sunnyside Group). The agreement provided for a consolidated 1999 New Year celebration to be held at the Fresno County Fairgrounds, to be sponsored and conducted by the Sunnyside Group.
Among other things, the agreement included a noncompete provision whereby the Fairgrounds Group agreed not to sponsor, conduct, or participate in another Hmong New Year celebration of any type in the Central Valley for a period of 10 years. It also provided, "in the event that the Sunnyside Group does not hold the Hmong New Year Celebration in Fresno County, California, the Sunnyside Group may not assign the right to conduct the Celebration to any group, organization or individual, but rather the right to conduct such Celebration shall automatically vest with the Fairgrounds Group." A separate provision provided, "No party shall assign its interest hereunder without the prior written consent of the other party."
The agreement was signed by Ly Pao Yang and Yang Mee Hang as president and secretary, respectively, of Hmong National New Year, Inc., George Vue as president of Hmong National Council, Inc., and Youa True Vang and Zang Her as chairman and secretary, respectively, of the United Hmong International, Inc. Additionally, Ly Tou, George Vue, Paul Ly, and Ly Pao Yang, as individuals, agreed to be bound by the noncompete provision. Finally, the agreement was witnessed by David BearHeart for the City of Fresno, Gerald Dyer on behalf of the City of Fresno Police Department, and Scott Anderson for the Fresno County Fairgrounds.
On April 4, 1999, Vang Thao, president of United Hmong International, Inc., and Youa True Vang, president of Hmong International New Year Committee, executed a document entitled "Resolution of Agreement Between United Hmong International, Inc. and Hmong International New Year Foundation, Inc." The resolution stated a meeting was held to "discuss and clarify the structure" of the two named organizations, and noted as "RESOLVED" a number of issues, including that the "name of Hmong International New Year Foundation, Inc. shall be changed to `Hmong International New Year, Inc.,'" that the "Hmong International New Year Committee shall collaborate and cooperate with United Hmong International, Inc.," and that the "Hmong International New Year Committee shall perform its daily business without the interference of United Hmong International, Inc. or any other organizations." The resolution was witnessed by Nhia Long Vang and Wa Her Vang, president and advisor, respectively, of the Vang Family.
On December 15, 2011, George Vue, Ly Pao Yang, Cheng Lee, Hmong National Council, Inc., and Hmong National New Year, Inc., filed a complaint asserting causes of action for breach of contract, declaratory relief, breach of fiduciary duty, and accounting. Named defendants included United Hmong International, Inc., Hmong International New Year Foundation, Inc., Vang Thao, and Youa True Vang.
On January 30, 2012, George Vue, Ly Pao Yang, Cheng Lee and United Hmong Council, Inc., filed a first amended complaint.
On March 6, 2012, defendants demurred to the first amended complaint. On that same date, defendants also filed a motion for an order striking plaintiffs' causes of action pursuant to Code of Civil Procedure section 425.16, the anti-SLAPP statute.
Plaintiffs filed their opposition to both the demurrer and the motion to strike on March 16, 2012.
Both matters were heard and argued April 18, 2012. The trial court's tentative ruling became the order of the court. As to the demurrer, and the first cause of action for declaratory relief in particular, the court sustained with leave to amend on the bases of the statute of limitations, standing, unclean hands, and mootness. With regard to the second cause of action for breach of fiduciary duty, the court sustained with leave to amend for uncertainty and failure to state a claim. It overruled the demurrer with regard to the statute of limitations defense. Lastly, regarding the third cause of action for accounting, the court sustained with leave to amend for uncertainty and failure to state a claim. It again overruled the demurrer with regard to the statute of limitations defense. Plaintiffs were given 10 calendar days within which to file an amended complaint.
As to the anti-SLAPP motion,
On April 30, 2012, United Hmong Council, Inc., filed its second amended complaint against defendants Hmong International New Year Foundation, Inc., Charlie Vang, Joseph Youa Vang, and Zang Her, alleging the following causes of action: declaratory relief, breach of fiduciary duty, and interference with prospective economic advantage.
Shortly thereafter, the parties filed a stipulation providing that judgment could be entered in favor of defendants Hmong International New Year Foundation, Inc., Charlie Vang, Joseph Youa Vang, and Zang Her, dismissing with prejudice the action of plaintiffs George Vue, Cheng Lee, and Ly Pao Yang. Further, the stipulation provided judgment could be entered in favor of defendant Liahoua Vang, dismissing with prejudice the entire action of plaintiffs United Hmong Council, Inc., George Vue, Cheng Lee, and Ly Pao Yang. Judgment was entered accordingly on May 10, 2012. A notice of entry of judgments was filed May 14, 2012.
On May 17, 2012, a memorandum of costs in the sum of $2,035 was filed against all plaintiffs in favor of defendant Liahoua Vang and against George Vue, Ly Pao Yang and Cheng Lee in favor of all other defendants.
Defendants filed a motion for attorney fees and litigation costs on May 25, 2012. On that same date, defendants filed a request for judicial notice in support of the motion. On May 30, 2012, defendants filed a supplemental declaration in support of the motion for attorney fees.
On July 27, 2012, plaintiffs filed their points and authorities in opposition to the motion for attorney fees.
On August 7, 2012, a reply to the opposition was filed with the court.
The trial court issued its tentative ruling on September 11, 2012. Briefly stated, the court found defendants were entitled to recover their costs and attorney fees against plaintiffs George Vue, Ly Pao Yang, and United Hmong Council, Inc. Conversely, the court found defendants were not entitled to a recovery against plaintiff Cheng Lee. Furthermore, the trial court declined to apply a multiplier, finding the case did not involve substantial complexity, a significant number of witnesses, nor extensive expert testimony. It noted the matter resolved at the early stages and did not require a trial on the merits. While the court acknowledged the language barriers faced by counsel, it found that factor did not merit application of a multiplier.
On September 12, 2012, the matter was argued and submitted. The trial court took the matter under advisement.
On September 21, 2012, the court issued its order granting an award of attorney fees and litigation expenses. More particularly, it ordered defendants Hmong International New Year Foundation, Inc., Charlie Vang, Joseph Youa Vang, Zang Her, and Liahoua Vang be awarded $88,742.47 against plaintiffs George Vue, Ly Pao Yang, jointly and severally, and defendant Liahoua Vang was awarded that sum against plaintiff United Hmong Council, Inc. The court denied defendants' request to apply a multiplier of 1.25 to the lodestar amounts and denied the motion as to plaintiff Cheng Lee.
The notice of entry of order was filed September 27, 2012. An amended notice was filed September 28, 2012.
On November 5, 2012, plaintiffs George Vue, Ly Pao Yang, and the United Hmong Council, Inc., filed a notice of appeal.
"On appeal, a determination of the legal basis for an attorney fees award is reviewed de novo as a question of law. (Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671, 677.)" (Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962, 966.) As to the reasonableness of an attorney fee award, we review the amount of an attorney fee award for abuse of discretion. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) The Applicable Statute & Fee Provision at Issue
Civil Code section 1717 provides in relevant part:
Here, the 1998 agreement between Hmong National New Year, Inc., Hmong National Council, Inc., and United Hmong International, Inc.,
The Trial Court's Ruling
In relevant part, the trial court ruled as follows:
Plaintiffs assert defendants are not entitled to recover attorney fees because they were not sued on the contract or agreement, they did not step into the shoes of a party to the agreement, and they were not third party beneficiaries to the agreement.
Plaintiffs' first amended complaint included a cause of action for declaratory relief. More particularly, plaintiffs contended defendants breached the 1998 agreement by entering into the subsequent resolution, and thus, "a judicial determination of the rights and duties of the parties relative to the ongoing right to conduct the Hmong New Year Celebration" was necessary. The first amended complaint also asserted a breach of fiduciary duty cause of action, and a cause of action for an accounting. Reasonable attorney fees were included in the complaint's prayer.
If a cause of action is "on a contract," and the contract provides the prevailing party shall recover attorney fees incurred to enforce the contract, then attorney fees must be awarded on the contract claim in accordance with Civil Code section 1717. (Santisas v. Goodin (1998) 17 Cal.4th 599, 615-617.)
Here, in their claim for declaratory relief, plaintiffs requested the trial court determine the parties' rights and duties under the 1998 agreement. That agreement included an attorney fee provision. Because plaintiffs' action for declaratory relief requires an interpretation of the agreement, it was on a contract. (Texas Commerce Bank v. Garamendi (1994) 28 Cal.App.4th 1234, 1246.) Hence, such a claim is "on a contract" for purposes of Civil Code section 1717. (Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 348 ["`Actions for a declaration of rights based upon an agreement are "on the contract" within the meaning of Civil Code section 1717'"]; see also City and County of San Francisco v. Union Pacific R.R. Co. (1996) 50 Cal.App.4th 987, 999-1000; Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1259.)
In an action on a contract, where the contract specifically provides attorney fees and costs incurred to enforce the contract will be awarded either to one of the parties or to the prevailing party, the party who is determined to be the prevailing party on the contract, whether a party to the specific contract or not, is entitled to reasonable attorney fees in addition to other costs. (Civ. Code, § 1717, subd. (a); Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1113.)
Here, there is no dispute defendants were the prevailing parties. Defendants prevailed by successfully demurring to plaintiffs' first amended complaint. The trial court permitted leave to amend, however, the second amended complaint named only United Hmong Council, Inc., as plaintiff. Consequently, judgment was entered in favor of defendants Hmong International New Year Foundation, Inc., Charlie Vang, Joseph Youa Vang, Zang Her, and Liahoua Vang against plaintiffs George Vue and Ly Pao Yang. Additionally, judgment was entered in favor of defendant Liahoua Vang against plaintiff United Hmong Council, Inc.
Here, the trial court concluded that because plaintiffs George Vue, Ly Pao Vang and the United Hmong Council, Inc., were signatories to the 1998 agreement that included an attorney fee provision, had plaintiffs prevailed in their claims against defendants, they would have been entitled to recover their fees. Whether a party to the agreement or not, defendants are entitled to attorney fees as the prevailing parties pursuant to subdivision (a) of section 1717 of the Civil Code.
In Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124 (Reynolds), our Supreme Court held that a nonsignatory defendant has a Civil Code section 1717 reciprocal right to attorney fees where (1) the nonsignatory defendant is sued on the ground that he stands in the shoes of a party to the contract, and (2) the defendant would be liable for fees had the signatory plaintiff prevailed on the contract action. (Reynolds, at p. 128.) The Reynolds defendants were sued on the theory they were alter egos of the corporate entity that had signed promissory notes with an attorney fee provision. The defendants were held not liable on the notes and awarded attorney fees under the reciprocity provision of section 1717. The Reynolds court reasoned:
Defendants Joseph Youa Vang and Zang Her were signatories to the 1998 agreement in their representative capacities. To the degree defendants Hmong International New Year Foundation, Inc., Charlie Vang, and Liahoua Vang were not signatories to the 1998 agreement, we find they stood in the shoes of the other signatory defendants. (See Cargill, Inc. v. Souza, supra, 201 Cal.App.4th at p. 966.) Further, we find that had plaintiffs prevailed in their causes of action, they would have succeeded in showing an improper assignment occurred, triggering a breach of contract and/or fiduciary duty. That result would likely have given plaintiffs the right, as they reference in their first amended complaint, to "assume operations of the [Hmong] New Year Celebration." Hence, plaintiffs would have been entitled to attorney fees as provided for in the 1998 agreement.
Plaintiffs assert the express terms of the 1998 agreement make it inapplicable to this dispute. This claim has no merit.
Plaintiffs' opening brief quotes only a portion of the fee provision in support of this assertion. A reading of the entire provision makes it clear fees can be awarded in this dispute. The agreement provides, in significant part, as follows: "Should any litigations be commenced between the parties hereto concerning this Agreement, or the rights and duties of any party in relation thereto, the party prevailing . . . shall be entitled . . . to recover from the losing party a reasonable sum" in attorney fees. (Italics added.) Thus, unlike Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 896 cited by plaintiffs, the provision at issue here does not limit the provision only to the parties named in the agreement. (Cargill, Inc. v. Souza, supra, 201 Cal.App.4th at pp. 967-969.) This dispute pertains to the rights and duties of any party in relation to the 1998 agreement. That language includes defendants.
A nonsignatory party may be entitled to attorney fees where the nonsignatory party is a third party beneficiary of the contract. (Cargill, Inc. v. Souza, supra, 201 Cal.App.4th at p. 966.)
In this case, the agreement was entered into by three public benefit corporations. A public benefit corporation is organized for the public benefit or for charitable purposes. (Corp. Code, § 5111.) Specifically here, the record is replete with references to the fact the 1998 agreement was entered into with the intent to benefit the Hmong community as a whole by consolidating previously separate and competing Hmong New Year celebrations into a single, unified event. As a result, we find the nonsignatory defendants are third party beneficiaries of the 1998 agreement.
Lastly, we note plaintiffs cite a number of authorities in support of their aforementioned argument. We do not address each citation here. Suffice to say, those authorities are either not inconsistent with the authorities cited herein, or are distinguishable on their facts. Our independent review of the legal basis for the trial court's award of attorney fees reveals no error. Accordingly, we will affirm the trial court's ruling in this regard.
Plaintiffs contend the number of hours claimed by defendants was excessive and the trial court failed to conduct an adequate review of the hours claimed. We disagree.
"[T]he determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court, whose decision cannot be reversed in the absence of an abuse of discretion." (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623.) "`Discretion is abused in the legal sense "whenever it may be fairly said that in its exercise the court in a given case exceeded the bounds of reason or contravened the uncontradicted evidence." [Citations.]' [Citation.]" (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.)
The trial court's first step in determining reasonable attorney fees is to establish "the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer's hourly rate." (EnPalm, LLC v. Teitler (2008) 162 Cal.App.4th 770, 774.) The lodestar figure is subject to adjustment, based on "`a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.' [Citation.]" (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1096.)
A party seeking recovery of attorney fees and costs should submit sufficiently detailed records to enable a court to determine the nature of the litigation, its difficulty, the amount of time required to address the issues, the skill involved, the attention given, the success or failure, and other circumstances of the case. (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1096.)
In this case, plaintiffs do not argue the hourly rate employed in calculating fees is erroneous. Rather, they assert "it does not appear that the trial court made any attempt to review reasonableness of the number of hours claimed by defendants' counsel." This claim lacks merit.
We note defendants submitted sufficiently detailed records in support of their motion. (PLCM Group v. Drexler, supra, 22 Cal.4th at p. 1096.) Further, a review of the trial court's tentative ruling reveals it considered all pleadings submitted on the issue. Thus, we presume it examined the evidence, including the specific number of hours claimed and the evidence in support thereof. (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1324 [it is trial court's role to examine the evidence; we presume trial court performed its duty].)
More particularly, in explaining its decision to deny defendants' request for a multiplier, it is plain the trial court concluded the remainder of the request to be reasonable:
The trial court was mindful of the fact that, as plaintiffs assert, "the case remained in the early pleading stage," yet determined that given the circumstances presented, 220 hours was not unreasonable. The court acknowledged the burden faced by defense counsel for language or translation issues. It can be reasonably inferred on this record that the court was persuaded by defense counsel's contention it was necessary he learn Hmong history, tradition, and culture in order to properly represent his clients. Therefore, the trial court's finding does not exceed the bounds of reason. (Hadley v. Krepel, supra, 167 Cal.App.3d at p. 682.)
Without analysis or explanation, plaintiffs assert "the trial court should have made a determination under the Serrano v. Priest standard as to the reasonableness of the hours spent on the task involved," contending the trial court abused its discretion. We find no such abuse.
In Serrano v. Priest (1977) 20 Cal.3d 25, Public Advocates, Inc., appealed an award of attorney fees, arguing it was inadequate in light of the circumstances of the case. It contended the trial court "failed to take adequate account of the novelty and extreme difficulty of this litigation, its extremely contingent character, the significance of the issues determined, and the standard which the award in this case will set for similar awards in future cases." (Id. at p. 48.)
Here, the trial court had before it defendants' points and authorities, the declarations of defense counsel, and the relevant billing records. As noted above, it considered the nature of the case, the complexity of the issues presented, as well as the stage of the proceedings, and the particular circumstances of the case. (See PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1096.) Those considerations are analogous to the novelty and difficulty of this litigation and the significance of the issues presented in Serrano v. Priest. The "extremely contingent character" and the effect of the award in the future (Serrano v. Priest, supra, 20 Cal.3d at p. 48) are not relevant here given the nature of the proceedings. Serrano concerned the eligibility of the plaintiffs' attorneys for the award of fees under the "private attorney general" theory. (Id. at p. 47.) Even assuming any standard it articulated is applicable here, we find no error.
In sum, the trial court's consideration was proper and we find no abuse of discretion as to its award of attorney fees.
For the foregoing reasons, we conclude the trial court did not err in granting defendants' motion for attorney fees in the sum of $88,742.47.
The judgment is affirmed. Costs on appeal are awarded to defendants.
LEVY, Acting P.J. and DETJEN, J., concurs.
