In re: Steven James Savage and Angela Kathleen Savage

Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
Date filed: 2015-05-20
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Combined Opinion
                                                            FILED
 1                         NOT FOR PUBLICATION               MAY 20 2015

 2                                                       SUSAN M. SPRAUL, CLERK
                                                           U.S. BKCY. APP. PANEL
                                                           OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )        BAP No. EC-14-1074-JuKuPa
                                   )
 6   STEVEN JAMES SAVAGE and       )        Bk. No.   12-28943
     ANGELA KATHLEEN SAVAGE,       )
 7                                 )        Adv. No. 12-02513
                    Debtors.       )
 8   ______________________________)
                                   )
 9   STEVEN JAMES SAVAGE,          )
                                   )
10                  Appellant,     )
                                   )
11   v.                            )        M E M O R A N D U M*
                                   )
12   LEONARD BRILL; VICKI BRILL,   )
                                   )
13                  Appellees.     )
     ______________________________)
14
                      Argued and Submitted on May 14, 2015
15                         at Sacramento, California
16                            Filed - May 20, 2015
17             Appeal from the United States Bankruptcy Court
                   for the Eastern District of California
18
         Honorable Christopher M. Klein, Chief Bankruptcy Judge,
19                              Presiding
                        _________________________
20
     Appearances:     Jeffrey H. Ochrach of Ochrach Law Group argued
21                    for appellant Steven James Savage; Kathryn Shubik
                      Diemer of Diemer, Whitman & Cardosi, LLP argued
22                    for appellees Leonard and Vicki Brill.
                           _________________________
23
     Before:   JURY, KURTZ, and PAPPAS, Bankruptcy Judges.
24
25
26       *
          This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may
   have (see Fed. R. App. P. 32.1), it has no precedential value.
28 See 9th Cir. BAP Rule 8024-1.

                                      -1-
 1           Appellee Leonard Brill (Brill) filed an adversary
 2   proceeding against chapter 71 debtor, Steven James Savage,
 3   seeking a determination that his claim against debtor was
 4   nondischargeable under § 523(a)(2) and (6) and requesting denial
 5   or revocation of debtor’s discharge under § 727(a)(2) and (4).2
 6   After a trial, the bankruptcy court entered judgment in debtor’s
 7   favor on all claims for relief.      Debtor then filed a motion
 8   seeking $65,476.90 in attorneys’ fees and costs (Fee Motion),
 9   which the bankruptcy court denied.       This appeal followed.   We
10   AFFIRM.
11                                 I.   FACTS3
12           In June 2009, California Designer Cabinets, Inc. dba Savage
13   Designer Cabinets (CDC) and Brill entered into a sales agreement
14   whereby CDC would manufacture custom cabinets for Brill’s house.
15   A dispute arose between Brill and CDC regarding the timing of
16   constructing the cabinets.     As a result, Brill cancelled the
17
18       1
          Unless otherwise indicated, all chapter and section
19 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
   “Rule” references are to the Federal Rules of Bankruptcy
20 Procedure and “Civil Rule” references are to the Federal Rules of
   Civil Procedure.
21
         2
22        Although Vicki Brill was added as a plaintiff to the
   complaint in August 2013, for purposes of simplicity and because
23 it makes no difference to the result, this memorandum will speak
   as if Brill were the sole plaintiff in the adversary proceeding.
24 For the same reason, we refer to debtor as though he was the sole
   debtor.
25
        3
26        We take judicial notice of various pleadings which were
   docketed and imaged by the bankruptcy court in this adversary
27 proceeding and the underlying bankruptcy case. Atwood v. Chase
   Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th
28 Cir. BAP 2003).

                                        -2-
 1   contract and demanded a refund.     When he did not receive one,
 2   Brill sued CDC and Developers Surety and Indemnity Company in
 3   the California state court, asserting causes of action for,
 4   among others, rescission of the contract or, alternatively, for
 5   breach of contract.     Debtor was not a named defendant in the
 6   case.4    Around the same time, CDC stopped all operations and
 7   went out of business.     In February 2012, Brill obtained a
 8   default judgment against CDC in the amount of $134,775.08, which
 9   included his costs and attorneys’ fees.
10           A few months later, debtor and his wife filed a joint
11   chapter 7 petition.
12           In August 2012, Brill filed an adversary complaint against
13   debtor seeking a determination that his claim against debtor was
14   nondischargeable under § 523(a)(2) and (6) and requesting denial
15   or revocation of debtor’s discharge under § 727(a)(2) and (4).
16   As to his § 523(a)(2) and (6) claims for relief, Brill alleged
17   that debtor committed fraud by representing that he was properly
18   licensed and able to perform the work he had contracted to do
19   under the sales agreement.     Brill further alleged that debtor
20   failed to supply the cabinets and install them in a timely
21   manner and in compliance with California law.     Finally, Brill
22   asserted that debtor’s willful and malicious refusal to honor
23   his contract with Brill caused Brill to suffer significant
24   damages.     In his prayer for relief on these claims, Brill
25
         4
26        It appears that Brill first filed a state court lawsuit
   naming CDC and debtor as defendants. Defendants filed a motion
27 to change venue which the state court granted. Brill then
   dismissed that lawsuit and filed an entirely new case against CDC
28 only and removed any claims against debtor personally.

                                      -3-
 1   requested actual damages “arising from the torts” described,
 2   punitive damages, and costs.    As to his § 727(a)(2) and (4)
 3   claims for relief, Brill alleged that debtor failed to properly
 4   describe his assets in his bankruptcy petition, failed to
 5   disclose commission income, and made numerous preferential
 6   transfers to insiders including his father and son prior to
 7   filing the bankruptcy.   In his prayer for relief on these
 8   claims, Brill requested revocation of debtor’s discharge and
 9   also requested actual damages “arising from the torts” set forth
10   above, punitive damages, and costs.
11        Debtor filed a motion to dismiss the complaint on the
12   ground that Brill was not a creditor holding a claim in his
13   estate because (1) Brill had entered into the underlying
14   contract with CDC and (2) Brill had obtained a state court
15   default judgment against CDC.    Judge Klein denied the motion
16   without elaboration.
17        Debtor then answered the complaint with general denials and
18   asserted numerous affirmative defenses including, among others,
19   that Brill was not a creditor and had no standing to assert any
20   claims in debtor’s bankruptcy proceeding.
21        The matter was set for trial on November 22, 2013, before
22   the Honorable David E. Russell.    In his trial brief, Brill
23   argued for denial or revocation of debtor’s discharge under
24   § 727(a)(2) and (4).   In a footnote, Brill stated that he did
25   not intend to pursue the § 523(a) claims at trial.    Therefore,
26   no arguments related to those claims.    In a three-page trial
27   brief, debtor asserted that Brill’s purported dismissal of the
28

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 1   § 523(a) claims was ineffective.5
 2           At trial, debtor’s counsel argued again that Brill was not
 3   a creditor in debtor’s estate because Brill had entered into the
 4   contract with CDC.     According to debtor’s counsel, if Brill was
 5   not a creditor, then he did not have the right to assert a § 727
 6   claim.     Counsel further asserted that Brill had obtained a
 7   default judgment against CDC for the underlying debt and was now
 8   asserting the same claims against him.
 9           Brill’s counsel argued that debtor had made a “judicial
10   admission” in his schedules that Brill was a creditor.      Counsel
11   also requested that she be allowed to amend the complaint to
12   include alter ego allegations if the complaint did not already
13   include them     — which it did not.   Judge Russell was not
14   persuaded by her judicial admission argument and declined to
15   allow any further amendments to the complaint.
16           Judge Russell proceeded with the trial and heard testimony
17   from debtor.     Brill’s counsel questioned debtor about various
18   omissions from his schedules and the transfer of certain assets.
19   There was no evidence presented on the § 523 claims during
20   trial.     At the close of Brill’s case on the § 727 claims for
21   relief, debtor’s counsel moved for judgment in debtor’s favor
22   under Civil Rule 52,6 on the grounds that Brill was not a
23
24       5
          Cal. Civil Code § 1717(b)(2) provides: “Where an action
25 has been voluntarily dismissed . . ., there shall be no
   prevailing party for purposes of this section.” Debtor implied
26 that Brill may have attempted to dismiss the § 523 claims to
   avoid the payment of any attorneys’ fees.
27
        6
          Civil Rule 52 is made applicable to bankruptcy proceedings
28
   by Rule 7052.

                                      -5-
 1   creditor with standing to assert the claims and there was no
 2   evidence to support the claims.
 3           Apparently ruling on the motion, Judge Russell placed his
 4   findings of fact and conclusions of law on the record.       First,
 5   he concluded that Brill was not a creditor.     Next, Judge Russell
 6   ruled on the § 727 claims and found that, although debtor had
 7   omitted an asset from his schedules, it was a mistake.       He also
 8   found debtor’s testimony was straightforward and non-evasive.
 9   Judge Russell concluded that debtor was honest and thus there
10   was no basis to deny his discharge.     Finally, Judge Russell
11   noted that the adversary complaint included a § 523(a)(2) claim
12   for relief, but no evidence was presented on that claim.
13   Therefore, he decided to enter judgment in favor of debtor on
14   the §§ 523(a)(2) claim7 and 727(a) claim.    On November 28, 2013,
15   the bankruptcy court entered a Civil Minute Order granting
16   judgment in debtor’s favor.
17           Once the judgment became final, debtor filed the Fee Motion
18   seeking $65,476.90 in attorneys’ fees and costs.     Relying on the
19   underlying contract between Brill and CDC and Cal. Civ. Code
20   (CC) § 1717(a), debtor argued that he was entitled to recover
21   attorneys’ fees since Brill’s claims were based “on the
22   contract.”     Debtor maintained that Brill’s responses to
23   discovery showed that the claims he alleged in the adversary
24   complaint arose out of the CDC contract.     When asked what acts
25   debtor committed that formed the basis for the claims alleged in
26
27
         7
          The bankruptcy court did not specifically refer to the
28 § 523(a)(6) claim.

                                      -6-
 1   the adversary complaint, Brill stated:      “Defendant failed to
 2   commence and continue, and suspended and abandoned work on the
 3   Brill Home in violation of the Sales Agreement and California
 4   law.    Defendant willfully and maliciously refused to honor his
 5   contract with Plaintiff.”      Finally, debtor argued that the
 6   underlying litigation need not necessarily be for breach of
 7   contract.    Citing Marsu, V.V. v. Walt Disney Co., 185 F.3d 932,
 8   939 (9th Cir. 1999), debtor asserted that even an action
 9   “sounding in tort” may trigger the right to a contractual
10   attorney fees recovery if the fee provision is broadly worded.
11          Brill opposed the Fee Motion, contending that the claims
12   for relief in the adversary complaint were based on the
13   nondischargeability provisions and not on breach of contract.
14          On February 4, 2014, Judge Klein heard the parties’
15   arguments on the Fee Motion.      At the continued February 18, 2014
16   hearing on the matter, Judge Klein placed his findings of fact
17   and conclusions of law on the record.      Citing Redwood Theaters,
18   Inc. v. Davison (In re Davison), 289 B.R. 716 (9th Cir. BAP
19   2003) and Santisas v. Goodin, 951 P.2d 399 (Cal. 1998), the
20   bankruptcy court found that the adversary proceeding was
21   fundamentally a tort action and not covered by CC § 1717.        The
22   bankruptcy court denied the Fee Motion by entering a Civil
23   Minute Order on February 18, 2014.      Debtor timely appealed.
24                            II.    JURISDICTION
25          The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
26   §§ 1334 and 157(b)(1).    We have jurisdiction under 28 U.S.C.
27   § 158.
28

                                       -7-
 1                                 III.    ISSUE
 2        Did the bankruptcy court abuse its discretion by denying
 3   debtor’s Fee Motion?
 4                          IV.   STANDARDS OF REVIEW
 5        A bankruptcy court’s decision denying an award of
 6   attorney’s fees should not be disturbed absent an abuse of
 7   discretion.   Renwick v. Bennett (In re Bennett), 298 F.3d 1059,
 8   1063 (9th Cir. 2002); Fry v. Dinan (In re Dinan), 448 B.R. 775,
 9   783 (9th Cir. BAP 2011).     The bankruptcy court abuses its
10   discretion when it fails to identify and apply “the correct
11   legal rule to the relief requested,” United States v. Hinkson,
12   585 F.3d 1247, 1263 (9th Cir.2009) (en banc), or if its
13   application of the correct legal standard was “(1) ‘illogical,’
14   (2) ‘implausible,’ or (3) without ‘support in inferences that
15   may be drawn from the facts in the record.’”        Id. at 1262.
16        Whether attorney’s fees may be awarded to the prevailing
17   party in an action to deny discharge is a question of law that
18   we review de novo.   Tuloil, Inc. v. Shahid (In re Shahid),
19   254 B.R. 40, 44–45 (10th Cir. BAP 2000).
20        We may affirm on any ground supported in the record.
21   ASARCO, LLC v. Union Pac. R. Co., 765 F.3d 999, 1004 (9th Cir.
22   2014).
23                                V.   DISCUSSION
24        It is well settled that the Bankruptcy Code does not
25   include a general right to attorneys’ fees.        Heritage Ford v.
26   Baroff (In re Baroff), 105 F.3d 439, 441 (9th Cir. 1997);
27   In re Dinan, 448 B.R. at 784.        The “American Rule” is that
28   attorney fees generally are not recoverable by a prevailing

                                          -8-
 1   party unless specifically allowed by contract or statute.
 2   Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240,
 3   257–58 (1975); In re Baroff, 105 F.3d at 441.     In a
 4   nondischargeability action, attorney fees can be included if the
 5   fees are recoverable under a state statute.     Bertola v. N. Wis.
 6   Prod. Co. (In re Bertola), 317 B.R. 95, 99–100 (9th Cir. BAP
 7   2004).     In claiming an entitlement to attorneys’ fees in this
 8   litigation, debtor relies on the attorney fee provision in the
 9   contract between CDC and Brill, CC § 1717, and Cal. Code Civ. P.
10   (CCP) § 1021.8    We apply California law to determine whether
11   debtor was entitled to his attorneys’ fees.
12           The contractual attorney fee provision provides in relevant
13   part:
14           In the event of any form of breach of contract or
             threatened breach of this agreement resulting in legal
15           expenses, whether incident to litigation or not, the
             buyer shall be responsible for all reasonable
16           attorneys fees and expenses incurred. . . .
17           CC § 1717 states in relevant part:
18           (a) In any action on a contract, where the contract
             specifically provides that attorney’s fees and costs,
19           which are incurred to enforce that contract, shall be
             awarded either to one of the parties or to the
20           prevailing party, then the party who is determined to
             be the party prevailing on the contract, whether he or
21           she is the party specified in the contract or not,
             shall be entitled to reasonable attorney's fees in
22           addition to other costs.
23           . . . .
24           CCP § 1021 provides in relevant part:
25           Except as attorney’s fees are specifically provided
             for by statute, the measure and mode of compensation
26
27
         8
          Debtor never cited CCP § 1021 as a basis for his
28 attorneys’ fees in the bankruptcy court.

                                      -9-
 1        of attorneys and counselors at law is left to the
          agreement, express or implied, of the parties . . . .
 2
 3   A.   CC § 1717 Does Not Apply To This Case Because Brill Would
          Not Have Been Entitled To Attorneys’ Fees In This
 4        Adversary.
 5        CC § 1717 allows a party or nonparty to recover attorneys’
 6   fees incurred in the litigation of a contract claim.     See
 7   Hosseini v. Key Bank (In re Hosseini), 504 B.R. 558, 567-68 (9th
 8   Cir. BAP 2014); In re Davison, 289 B.R. at 726 (citing Santisas,
 9   17 Cal.4th 599, 615 (1998)).   The legislature’s goal in enacting
10   this section was to ensure the mutuality of an attorneys’ fees
11   remedy in contractual attorney fees provisions.     Santisas,
12   17 Cal.4th at 610; Hsu v. Abbara, 9 Cal.4th 863, 870-71 (Cal.
13   1995).   There are two aspects to this mutuality: (1) an
14   attorneys’ fee provision entitling only one party to fees must
15   be interpreted to allow fees to whichever party prevails; and
16   (2) a nonsignatory sued under the contract may recover
17   attorneys’ fees just as a signatory would, under certain
18   circumstances.   Santisas, 17 Cal.4th at 610–611.    Debtor’s focus
19   in this appeal is on the second mutuality requirement since he
20   was not a signatory to the contract.
21        Undoubtedly if Brill had tried to hold debtor liable for
22   CDC’s debt under an alter ego theory in the state court
23   litigation, debtor could have made a claim for attorneys’ fees
24   if he had prevailed.   The California Supreme Court decided the
25   question in Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (Cal.
26   1979), a collection case in which a creditor sued two individual
27   shareholders of a bankrupt corporation as its alter egos.       The
28   shareholders prevailed, and the court found they were entitled

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 1   to fees under attorney fee provisions in the notes.    “Had
 2   plaintiff prevailed on its cause of action claiming defendants
 3   were in fact the alter egos of the corporation . . . ,
 4   defendants would have been liable on the notes.    Since they
 5   would have been liable for attorney’s fees pursuant to the fee
 6   provision had plaintiff prevailed, they may recover attorney’s
 7   fees pursuant to [CC] section 1717 now that they have
 8   prevailed.”   Id. at 129.   However the question before us is
 9   different.    Brill did not sue debtor in the state court under an
10   alter ego theory and did not assert an alter ego claim against
11   debtor in this adversary.    Indeed, the bankruptcy court denied a
12   request by Brill’s counsel for amendment of the complaint to
13   include such a claim.   Moreover, assertion of an alter ego claim
14   provides a contractual remedy against a non-party to a contract.
15   This was not an action for breach of contract but about a
16   debtor’s right to a discharge.    Therefore, Reynolds has no
17   application to these facts.
18        Putting Reynolds aside, debtor’s entitlement to recover
19   fees under the contract would exist purely by virtue of the
20   mutuality provisions under CC § 1717; that is, he would be
21   entitled to recover fees against Brill only because Brill would
22   have been entitled to recover fees against him had Brill
23   succeeded in the adversary proceeding.    Under California’s
24   merger doctrine, the entry of the judgment extinguished all
25   contractual rights Brill had under the terms of the contract
26   between CDC and Brill, including the right to attorneys’ fees.
27   Hambrose Reserve, Ltd. v. Faitz, 9 Cal.App.4th 129 (Cal. Ct.
28   App. 1992) (“Once there is a judgment, contractual rights are

                                      -11-
 1   merged into and extinguished by the terms of the judgment.    At
 2   that point there is no subsisting contractual attorney fee
 3   provision on which [CC] section 1717 may operate.”); Chelios v.
 4   Kaye, 219 Cal.App.3d 75, 80 (Cal. Ct. App. 1990) (“When . . . a
 5   lawsuit on a contractual claim has been reduced to a final,
 6   nonappealable judgment, all of the prior contractual rights are
 7   merged into and extinguished by the monetary judgment, and
 8   thereafter the prevailing party has only those rights as set
 9   forth in the judgment itself.” (Emphasis added).    Accordingly,
10   because the contract was extinguished, Brill could not have
11   invoked the contractual fee clause to recover his fees in this
12   adversary proceeding under either the § 523 or the § 727 claims.
13        For all these reasons, the mutuality provisions under
14   CC § 1717 do not extend to debtor.
15   B.   The Litigation Was Not An Action “On The Contract” As
          Required Under CC § 1717(a).
16
17        We agree with Judge Klein that Brill’s § 523 claims for
18   relief were tort-based claims not covered by CC § 1717.    The
19   title of the cause of action is of secondary importance to the
20   nature of the parties’ assertions in applying CC § 1717(a).
21   In re Baroff, 105 F.3d at 443.    Also, “[i]n determining whether
22   an action is ‘on the contract’ under [CC §] 1717, the proper
23   focus is not on the nature of the remedy, but on the basis of
24   the cause of action.”   In re Tobacco Cases I, 193 Cal.App.4th
25   1591, 1602 (Cal. Ct. App. 2011).    Applying these principles,
26   Brill’s factual allegations against debtor under the § 523(a)(2)
27   and (6) claims for relief were based on debtor’s own fraud and
28   conduct and did not implicate contract principles.    Thus, the

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 1   bankruptcy court committed no error by applying the holdings of
 2   Davison and Santisas to this case — the creditor’s action must
 3   have been brought to enforce its rights under the agreement.
 4   Santisas, 951 P.2d at 409 (tort claims are “outside the ambit of
 5   section 1717”); Davison, 289 B.R. at 724 (attorneys’ fees for
 6   tort claims are not recoverable under CC § 1717); see also
 7   In re Baroff, 105 F.3d at 443 (“Under California law, a tort
 8   action for fraud arising out of a contract is not an action on a
 9   contract within the meaning of [CC] § 1717.”).
10          In addition, debtor’s argument that Brill’s adversary
11   complaint was an action based “on the contract” centers on the
12   threshold issue of Brill’s creditor status and standing to bring
13   the §§ 523 and 727 claims.    However, Brill’s creditor status and
14   legal standing in the adversary proceeding was a pure question
15   of law, the answer to which did not depend upon contract
16   principles.    Generally, California law treats a corporation as
17   an entity separate and distinct from its shareholders, officers
18   and directors.    Communist Party v. 522 Valencia, Inc.,
19   35 Cal.App.4th 980, 993 (Cal. Ct. App. 1995).    Under ordinary
20   circumstances, shareholders do not incur personal liability for
21   the corporation’s actions during its existence.    They are not
22   personally liable for the corporation’s debts or its torts.
23   Bing Crosby Minute Maid Corp. v. Eaton, 46 Cal.2d 484, 487 (Cal.
24   1956).    In applying this law, Judge Russell was not called upon
25   to make any determination regarding the parties’ contract other
26   than noting that the underlying contract was between Brill and
27   CDC.    Under the authorities cited above, it followed that Brill
28   was not a creditor with a claim in debtor’s estate.

                                     -13-
 1        Finally, the trial conducted before Judge Russell was only
 2   on Brill’s § 727 claims for relief since Brill had abandoned his
 3   § 523 claims prior to trial.   In refusing to deny debtor’s
 4   discharge under § 727, Judge Russell did not rely on the
 5   contract or even discuss it.   Instead, the court heard debtor’s
 6   testimony, found him honest, and concluded there was no basis to
 7   deny debtor his discharge.   Notably, debtor has cited no case
 8   law which holds that § 727 claims are actions “on a contract”
 9   when such claims are successfully defended.    See Tuloil, Inc. v.
10   Shahid (In re Shahid), 254 B.R. 40, 44–45 (10th Cir. BAP 2000)
11   (concluding § 727 does not provide a statutory basis for an
12   award of attorneys’ fees, and that the attorney fee clause in
13   creditor’s contract with debtor was inapplicable because an
14   action under § 727 was not an action on the contract).   The
15   Panel was also unable to find any Ninth Circuit case where a
16   prevailing creditor in a § 727 action was awarded attorneys’
17   fees on any provision.
18        For all these reasons, debtor’s reliance on Win v. Tran
19   (In re Tran), 301 B.R. 576, 583 (Bankr. S.D. Cal. 2003) misses
20   the mark.   In Tran, the bankruptcy court noted that the trial
21   had proceeded as a breach of contract claim.   The record does
22   not support such a finding under the facts of this case.
23   C.   Debtor’s CCP § 1021 Argument Has Been Waived.
24        Debtor also argues that Judge Klein erred by not
25   considering whether the attorney fee provision in the contract
26   was broadly worded to cover actions sounding in tort as well as
27   contract.   “We apply a general rule against entertaining
28   arguments on appeal that were not presented or developed before

                                    -14-
 1   the [bankruptcy] court.”    Davis v. Elect. Arts Inc., 775 F.3d
 2   1172, 1180 (9th Cir. 2015).    Debtor’s Fee Motion did not mention
 3   CCP § 1021 and debtor’s counsel never argued before Judge Klein
 4   that CCP § 1021 was applicable to the attorney fee provision in
 5   the contract.    Accordingly, debtor’s argument about the
 6   applicability of CCP § 1021 to the attorney fee provision is
 7   deemed waived.
 8        We have recognized three circumstances in which we have
 9   discretion to reach waived issues, including “‘when the issue
10   presented is purely one of law and either does not depend on the
11   factual record developed below, or the pertinent record has been
12   fully developed.’” Id.    Under the circumstances of this case,
13   whether the attorney fee provision is broad enough to cover
14   fraud and other torts is a question of law that we can address
15   on the existing record.    See United States v. 1.377 Acres of
16   Land, 352 F.3d 1259, 1264 (9th Cir. 2003) (the interpretation of
17   language in a contract is a question of law reviewed de novo).
18   We therefore exercise our discretion to address the issue.
19        Although debtor suggests we interpret the attorney fee
20   provision broadly to cover all disputes arising out of the
21   contract, we decline to do so.    On its face, the express
22   language of the attorney fee provision limits recovery of
23   attorneys’ fees to actions relating to breach of the contract.
24   The narrow language employed cannot be construed to cover all
25   actions “resulting from” the agreement as debtor argues.     Also,
26   neither the § 523 claims nor the § 727 claims were “disputes
27   arising from the contract” between Brill and CDC.
28   Accordingly, CCP § 1021 is of no help to debtor under these

                                      -15-
 1   circumstances.
 2                           VI.   CONCLUSION
 3        Having found no error, we AFFIRM.
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