Filed 10/28/22 The L.A. Wholesale Produce Market v. Atlas Capital Group CA2/3
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
THE LOS ANGELES WHOLESALE B299991
PRODUCE MARKET, LLC,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. BC628018)
v.
ATLAS CAPITAL GROUP, LLC,
et al.,
Defendants and Appellants.
APPEALS from a judgment and postjudgment order of the
Superior Court of Los Angeles County, Robert S. Draper and Gail
Feuer, Judges. Affirmed as modified.
Boren, Osher & Luftman, Stephen Z. Boren and Steven F.
Kuehl for Plaintiff and Appellant The Los Angeles Wholesale
Produce Market, LLC.
Carlton Fields, Ellyn S. Garofalo, Amir Kaltgrad; DLA Piper
and Karen Hallock for Defendants and Appellants Atlas Capital
Group, LLC and Alameda Square Owner LLC.
_______________________
This action concerns a dispute over access rights on
adjacent parcels of property in downtown Los Angeles. Plaintiff
The Los Angeles Wholesale Produce Market (LAWPM) operates a
historic produce market on Parcels 1 and 2. Defendants Atlas
Capital Group LLC (Atlas) and Alameda Square Owner LLC
(Alameda) (collectively, Defendants) operate another historic
produce market on neighboring Parcel A, and have redeveloped
the property on neighboring Parcels B and C into a commercial
development known as “Row DTLA.”1 A dispute arose between
the parties over the scope of Defendants’ rights to use certain
easements over Parcel 1 as a means of egress from Parcels B
and C, and to remove an access gate operated by LAWPM.
LAWPM thereafter filed this action against Defendants,
alleging claims for declaratory relief, injunctive relief, quiet title,
and breach of contract. The trial court entered judgment in favor
of LAWPM on the declaratory relief, injunctive relief, and quiet
title claims, and in favor of Alameda on the breach of contract
claim. Both LAWPM and Defendants appeal from the judgment.
LAWPM also appeals from a postjudgment award of attorneys’
fees to Alameda. For the reasons set forth below, we affirm the
judgment, and modify Alameda’s fee award to strike certain
amounts that were not consistent with the trial court’s ruling.
FACTUAL AND PROCEDURAL BACKGROUND
The Relevant Agreements
The parties’ rights with respect to the properties at issue in
this case are governed by a series of written agreements between
1 Atlas is a private equity company that invests in real
estate projects across the country, and Alameda is organized by
Atlas to hold title to the Row DTLA parcels at issue in this case.
2
their predecessors-in-interest. The following is a summary of the
relevant agreements:
In 1982, Southern Pacific Transportation Company (SPTC),
then the fee owner of Parcel 12 as well as Parcels A, B, and C,
entered into a ground lease agreement with the Los Angeles
Wholesale Produce Market Development Corporation
(LAWPMDC), whereby SPTC leased Parcel 1 to LAWPMDC
(the “1982 Ground Lease”). The following year, the 1982 Ground
Lease was amended to provide that SPTC, as the lessor of Parcel
1, reserved the non-exclusive right to use a certain portion of the
leased premises, referred to as the “Joint Use Area,” for
“pedestrian and vehicular ingress to and egress from Parcels A,
B, and C” (the “1983 Amendment”). Plaintiff LAWPM is the
assignee of, and successor to, LAWPMDC’s interest in the 1982
Ground Lease. The lease term expires in 2048.
In 1983, SPTC, as the owner of Parcel 1 and Parcels A, B,
and C, entered into a reciprocal easement agreement with the
Community Redevelopment Agency of the City of Los Angeles
(CRA), which then owned Parcel 2, whereby SPTC and CRA
granted each other, and their respective successors and assigns,
easements over certain sections of Eighth Street between Central
Avenue and Alameda Street (the “1983 Reciprocal Easement
Agreement”). These sections of Eighth Street, which bordered
Parcel 1 and Parcel A to the north and Parcel 2 to the south,
previously had been encumbered with public street easements
2Parcel 1 is sometimes referred to as Parcel D in the
relevant agreements.
3
that were being vacated by the City of Los Angeles. Subject
to the terms of the 1983 Reciprocal Easement Agreement, the
vacated portions of Eighth Street became a private road under
the control of the owners of the respective bordering properties.
NewLowe Properties (NewLowe) later became the fee
owner of Parcel 1 and Parcels A, B, and C. In May 1991,
NewLowe conveyed its fee simple interest in Parcels B and C
to Rykoff-Sexton, Inc. (Rykoff) pursuant to a grant deed (the
“1991 Grant Deed”), while retaining ownership of Parcel 1
and Parcel A. As part of the 1991 Grant Deed, NewLowe also
conveyed to Rykoff certain limited easements over Parcel 1 and
Parcel A for the benefit of Parcels B and C, including three
easements known as (1) the Eighth Street Easement, (2) the
Truck Easement, and (3) the Track Street West Easement.
A concurrently recorded easement agreement between
NewLowe and Rykoff dated May 8, 1991 (the “1991 Easement
Agreement”) “set forth . . . all of the covenants and conditions
respecting the use, maintenance and operation of the
Easements.” The 1991 Easement Agreement stated that “[t]he
provisions of this Agreement shall inure to the benefit of, and
shall bind the Parties and their respective personal
representatives, successors and assigns.” It also provided that
“[a]ll of the covenants, agreements, conditions and restrictions set
forth in this Agreement are intended to be and shall be construed
as covenants running with the land, binding upon, inuring to
the benefit of and enforceable by the Parties hereto and all
subsequent owners or lessees of, or any party having an interest
in, their respective Parcels or any parts thereof.”
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1. The Eighth Street Easement
With respect to the Eighth Street Easement, the 1991
Easement Agreement provided that “Rykoff shall use the Eighth
Street Easement solely as a means of: (1) ingress to or egress
from the Rykoff Parcel for trucks and other vehicles via the Truck
Easement . . . or (2) ingress for trucks and other vehicles to the
Rykoff Parcel via the Track Street West Easement.” The 1991
Easement Agreement also stated that “Rykoff’s use of the Eighth
Street Easement Area shall be non-exclusive, and in common
with the use as a roadway by NewLowe.”
2. The Truck Easement
With respect to the Truck Easement, the 1991 Grant Deed
conveyed to Rykoff “[a] non-exclusive easement (the ‘Truck
Easement’) for vehicular and truck ingress and egress over a
strip of land at least 20 feet in width.” The 1991 Easement
Agreement restricted Rykoff’s use of the Truck Easement, in
pertinent part, as follows: “Rykoff shall use the Truck Easement
solely as a secondary right-of-way for trucks entering or leaving
the Rykoff Parcel, and not for any other purpose; in particular,
Rykoff shall not have the right to use the area within such
Easement . . . as a primary means of ingress or egress for trucks
or any other vehicles to and from the Rykoff Parcel.”
3. The Track Street West Easement
With respect to the Track Street West Easement, the 1991
Grant Deed conveyed to Rykoff “a non-exclusive easement (the
‘Track Street West Easement’) for vehicular right-of-way which
shall be one-way from Eighth Street to Seventh Street (but such
traffic direction may be reversed in accordance with Section 1.8 of
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the Easement Agreement to be recorded concurrently herewith)
over . . . [a] ten-foot wide strip of land.”3
The 1991 Easement Agreement also placed several
restrictions on Rykoff’s use of the Track Street West Easement.
It particular, it provided that “Rykoff’s use of the Track Street
West Easement shall be limited to the hours of 8:00 a.m. to 12:00
midnight, Pacific Time, each day, and shall be subject to the
following restrictions: [¶] (i) such Easement shall serve as a
primary means of ingress and egress only for trucks and other
vehicles entering the Rykoff Parcel for purpose of loading or
unloading at the 15 foot wide strip of land within the
northwesterly portion of Parcel B of the Rykoff Parcel . . . (the
‘Tank Car Loading Area’); and [¶] (ii) such Easement shall serve
as a secondary means of ingress and egress for trucks and other
vehicles entering the Rykoff Parcel for purposes other than
loading or unloading in the Tank Car Loading Area (it being the
intention of the Parties that Rykoff will use all reasonable
efforts to utilize Alameda and Seventh Street as the usual
means of access to all of the Rykoff Parcel except the Tank
Car Loading Area).” The 1991 Easement Agreement further
stated that “Rykoff shall not use the area of the Track Street
Easement (the ‘Track Street Easement Area’) for any other
3 Section 1.8 of the 1991 Easement Agreement stated,
in relevant part, that “[a]t any time after one year from the
recordation of the Deed (but not more than once in any 12-month
period), NewLowe shall have the right to change the direction
of the one-way flow of traffic over the Track Street West
[Easement]” provided that “[n]o such change shall be made
without Rykoff’s prior written consent, which consent shall not be
unreasonably withheld.”
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purpose or at any other time including: (i) as a means of egress
from the Rykoff Parcel or (ii) for the parking, queuing, loading or
unloading of trucks or any other vehicles, or in any other manner
which would materially obstruct the use by NewLowe of the
Track Street West Easement Area as a means of ingress and
egress into and out of the NewLowe Parcel.”
In October 1991, NewLowe conveyed its fee simple interest
in Parcel 1 to O Hill Properties, The O Hill Company, Bear Brand
Ranch Company, and Isador C. Myers (collectively, O Hill)
pursuant to a grant deed, while retaining ownership of Parcel A.
In a concurrently recorded assignment agreement dated October
10, 1991, O Hill assumed the rights and obligations of NewLowe
under the 1982 Ground Lease.
In 1992, NewLowe, then the owner of Parcel A, filed a
lawsuit against LAWPMDC, then the lessee of Parcel 1, and
other affiliated parties (collectively, the LA Market Group). On
December 3, 1993, NewLowe and the LA Market Group entered
into a Settlement, Mutual Access, and Easement Modification
Agreement (the “1993 Settlement Agreement”) to resolve their
dispute and to “modify their rights, interests and obligations with
respect to the Original 8th St. Easement and Original Joint Use
Area.”
Among other provisions, the parties to the 1993 Settlement
Agreement agreed to change the “Original Joint Use Area” to
three new areas known as the “LA Market Use Area,” the
“NewLowe Use Area,” and the “New Joint Access Area.”
NewLowe released all rights and interest in the LA Market Use
Area for the duration of the 1982 Ground Lease, and the LA
Market Group released all rights and interest in the NewLowe
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Use Area. With respect to the New Joint Access Area, the parties
agreed, in relevant part, as follows: “The portion of the Original
Joint Use Area crosshatched on Exhibit ‘10’ hereto shall be
deemed to be the New Joint Access Area. The New Joint Access
Area shall be used for ingress and egress to and from the 7th
St. Market and for truck maneuvering by NewLowe and its
Representatives. The LA Market Tenants shall have the
nonexclusive right to use the New Joint Access Area solely for
ingress and egress to and from the 7th St. Market, solely to the
extent they are permitted to have access to the 7th St. Market
Common Area. . . . Rykoff-Sexton, Inc. (‘Rykoff’) and SPTC also
shall have nonexclusive access rights over the New Joint Access
Area, solely to the extent required under written agreements
recorded prior to the Execution Date.”4
Section 8 of the 1993 Settlement Agreement also included
the following provision regarding certain gates located on 8th
Street: “LA Market Group shall maintain the existing gate at the
intersection of the former 8th Street and Central Avenue (the
‘8th-Central Gate’) and the gate at Alameda Street and the
former 8th Street and (the ‘Alameda Gate’ and, jointly with the
8th-Central Gate, the ‘Gates’), at its sole cost and expense. LA
Market Group shall keep the Gates open during the following
hours and days of business operations: 10:00 p.m. each day of the
week and closing at 12:00 p.m. Sunday through Friday, and
4 Exhibit 10 to the 1993 Settlement Agreement showed the
locations of the LA Market Use Area, NewLowe Use Area, and
New Joint Access Area, each of which was located on Parcel 1.
Exhibit 10 did not show the location of the Original Joint Use
Area, or any of the easements granted to Rykoff in the 1991
Grant Deed.
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opening 10:00 p.m. and closing at 10:00 a.m. Saturday, excluding
holidays observed by both the LA Market and the 7th St. Market
(‘Normal Hours’). All installation, maintenance and other costs
associated with the Gates shall be borne by LA Market Group.
All maintenance costs, insurance costs, property taxes and other
costs and expenses incurred in connection with the Reduced
Shared 8th St. Area other than in connection with the 8th-
Central Gate shall be allocated among the parties in the manner
set forth in the REA.”
Section 8 of the 1993 Settlement Agreement further
provided: “NewLowe and LAWPM each shall have the right, but
not the obligation, to reconfigure the 8th-Central Gate in any of
the locations shown on Exhibit ‘9’ hereto, upon 14 days’ prior
written notice to the other party of its election to do so and at the
sole cost of the electing party. The electing party shall thereafter
be responsible for the costs of removing the original fence and all
installation, maintenance and other costs incurred in connection
with the reconfigured fence. The electing party shall keep the
reconfigured fence open during Normal Hours.”
Current Ownership of the Properties
Alameda Produce Market, Inc. subsequently acquired a
fee simple ownership interest in Parcel A from NewLowe, and
in Parcels B and C from Rykoff. In 2014, the successor-in-
interest to Alameda Product Market, Inc., transferred its fee
simple ownership interest in Parcels A, B, and C to defendant
Alameda. Alameda is the current fee owner of Parcels A, B, and
C.
O Hill remains the current fee owner of Parcel 1 subject to
the 1982 Ground Lease. In 2003, the City of Los Angeles granted
a fee simple ownership interest in Parcel 2 to LAWPM. LAWPM
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is the current lessee of Parcel 1, and the current fee owner of
Parcel 2.
Current Dispute Between the Parties
LAWPM operates a large produce market on Parcels 1
and 2. Alameda currently operates a smaller produce market,
the 7th Street Market, on Parcel A. Alameda has redeveloped
Parcels B and C into a mixed-use commercial development known
as Row DTLA, which houses offices, restaurants, and retail
shops. As part of the Row DTLA project, Alameda constructed
a 10-story parking garage on Parcel B. Alameda thereafter
sought to allow vehicles exiting the parking garage on Parcel B
to access Central Avenue from 8th Street via the easements that
crossed over Parcel 1. Since 1986, however, access to Central
Avenue from 8th Street had been restricted by the 8th-Central
Gate, which LAWPM kept open during normal business hours for
its produce market and locked at all other times.
In a letter dated March 25, 2016, Jenni Harris, Atlas’s
Director of Property Management, provided LAWPM with the
terms of a proposal for allowing Row DTLA unrestricted access to
Central Avenue through the 8th-Central Gate. As set forth in
that letter, if LAWPM agreed (1) to give Row DTLA keys to the
8th-Central Gate and certain other interior gates, (2) to share
the costs of a security guard to man the 8th-Central Gate during
the hours that it was normally locked, and (3) to permit the
installation of new gate along the New Joint Access Area, then
Row DTLA would allow LAWPM to continue operating the 8th-
Central Gate in its current location, and would relinquish its
rights under the 1993 Settlement Agreement to remove and
relocate the 8th-Central Gate. If, however, LAWPM did not
agree to allow Row DTLA to have unrestricted access to Central
10
Avenue, then Row DTLA would exercise its right to remove the
8th-Central Gate and relocate it in accordance with the 1993
Settlement Agreement. It is undisputed that LAWPM did not
agree to these proposed terms.
In June 2016, the parties’ respective counsel exchanged
written correspondence about the 8th-Central Gate. In a letter
to LAWPM’s counsel dated June 17, 2016, Alameda’s counsel
provided notice that “if LAWPM fails to agree to our client’s most
recent offer . . . by the close of business Wednesday, June 22,
2016, our client will remove the [8th-Central] Gate in accord with
Section 8 of the [1993] Settlement Agreement.” In a response
letter dated June 22, 2016, LAWPM’s counsel asserted that “[t]he
current gate location and hours of operation have satisfied and
continue to satisfy the needs of the only intended users of the
[8th-Central] Gate – the LA Wholesale Produce Market . . . and
the 7th Street Market; relocation is neither necessary nor
warranted.” LAWPM’s counsel also stated that “LAWPM
continues to strongly disagree that your client has the right
pursuant to the 1993 Settlement . . . Agreement or otherwise
to remove, relocate, or reconfigure the [8th-Central] Gate.”
It is undisputed that, on July 10, 2016, Alameda removed
the 8th-Central Gate without LAWPM’s consent. It is also
undisputed that Alameda did not relocate or reconfigure the 8th-
Central Gate in any of the locations shown on exhibit 9 of the
1993 Settlement Agreement.
LAWPM’s Lawsuit Against Defendants
On July 25, 2016, LAWPM filed this action against
Alameda and Atlas. LAWPM’s first amended complaint alleged
causes of action for (1) declaratory relief regarding the Truck
Easement; (2) declaratory relief regarding the Track Street West
11
Easement; (3) quiet title, (4) injunctive relief, and (5) breach of
written contract. The first through fourth causes of action
concerned the parties’ rights with respect to the easements
granted pursuant to the 1991 Grant Deed and the 1991
Easement Agreement. The fifth cause of action pertained to
Alameda’s alleged breach of the 1993 Settlement Agreement by
failing to pay security costs incurred by LAWPM in connection
with the removal of the 8th-Central Gate.5
On August 16, 2017, the trial court granted LAWPM’s
motion for summary adjudication as to the first and fourth
causes of action, and denied the motion as to the second,
third, and fifth causes of action.
As to the first cause of action for declaratory relief
regarding the Truck Easement, the court entered declaratory
relief as follows: “With respect to the Truck Easement, . . . (1)
Defendants’ rights in and to the Truck Easement are limited to
a secondary right-of-way for trucks entering or leaving ‘Parcel
B’ and ‘Parcel C’ . . .; (2) the Truck Easement does not grant
Defendants a primary means of ingress or egress to or from
‘Parcel B’ and ‘Parcel C’ for trucks; and (3) the Truck Easement
does not grant Defendants ingress or egress to or from ‘Parcel B’
and ‘Parcel C’ for any other non-truck vehicles or pedestrian
traffic.”
As to the fourth cause of action for injunctive relief, the
court issued a permanent injunction that prohibited Defendants
5The fifth cause of action for breach of contract was alleged
against Alameda only.
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from: (1) “utilizing the Truck Easement . . . for any purpose other
than as a secondary right-of-way for trucks entering or leaving
Parcels B and C”; and (2) “utilizing the Track Street West
Easement . . . for any purpose other than as a primary means of
access for trucks and other vehicles entering Parcels B and C for
purposes of loading or unloading at the . . . ‘Tank Car Loading
Area’ . . . , or as a secondary means of ingress and egress for
trucks and other vehicles entering Parcels B and C for purposes
other than loading or unloading in the Tank Car Loading Area.”
In November 2017, the trial court held a bench trial on the
second cause of action for declaratory relief regarding the Track
Street West Easement and the third cause of action for quiet
title. On December 15, 2017, the court issued a tentative
statement of decision in favor of LAWPM, which became the
final statement of decision. One of the central disputed issues
at the trial was whether, under the 1991 Grant Deed and 1991
Easement Agreement, LAWPM’s consent was required for
Defendants to reverse the flow of traffic on the one-way Track
Street West Easement from a northeast to a southwest flow.7 In
its statement of decision, the court found that LAWPM’s consent
6On its own motion, the trial court bifurcated the trial on
the equitable and legal claims, and ordered that a bench trial on
the equitable claims would occur first.
7 In order for vehicles exiting the Row DTLA parking
garage on Parcel B to access Central Avenue from Eighth Street,
as desired by Defendants, the flow of traffic on the Track Street
West Easement would have to be reversed to a southwest flow.
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to reverse the flow of traffic on the Track Street West Easement
was required, and that LAWPM had not provided such consent.
As to the second cause of action for declaratory relief
regarding the Track Street West Easement, the court entered
declaratory relief as follows: “Defendants’ rights in and to the
Track Street West Easement . . . are (1) limited to the uses set
forth in the 1991 Grant Deed and Section 1.3 of the 1991
Easement Agreement; and (2) during the period of LAWPM’s
lease of Parcel 1, the flow of one-way traffic on the Track Street
West Easement shall be from the southwest to northeast unless
Alameda (or other successor-in-interest to Parcel A) and LAWPM
(or other successor-in-interest to the lease to Parcel 1) agree in
writing to change the flow of one-way traffic to a southwest flow
pursuant to Section 1.8 of the 1991 Easement Agreement.”
As to the third cause of action for quiet title, the court
found that, because LAWPM had prevailed on its declaratory
relief claims regarding the Truck Easement and the Track Street
West Easement, LAWPM also had prevailed on its quiet title
claim. The court granted LAWPM declaratory and injunctive
relief, as set forth in the statement of decision and the court’s
prior order on LAWPM’s motion for summary adjudication.
In October 2018, the fifth cause of action for breach of
contract was tried before a jury.8 At the conclusion of the trial,
8 In a pretrial conference with counsel, the trial court noted
that the proper interpretation of a contract was a question of law
for the court unless there was conflicting extrinsic evidence on
the contract’s meaning. However, the court stated that “it still
would be helpful for everybody to get a jury verdict” as to the
amount of damages because the losing party was likely to appeal
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the jury rendered special verdict findings in favor of Alameda
with respect to both liability and damages. As to liability, the
jury found that Alameda was not required under the 1993
Settlement Agreement to pay for any additional security services
that LAWPM incurred as a result of the removal of the 8th-
Central Gate. As to the amount of any damages, the jury found
that the cost of any additional security services that LAWPM
incurred as a result of the removal of the 8th-Central gate was
$0.9
Following the jury’s special verdict, the trial court ruled
that the question of Alameda’s liability for breach of contract was
a matter for the court to decide because no extrinsic evidence had
been presented at the jury trial relevant to interpretation of the
1993 Settlement Agreement. The parties submitted extensive
briefing on the question of liability, and the court held multiple
hearings on the matter.
The court ultimately found that Alameda was not liable for
breach of contract because LAWPM had prevented Alameda from
reconfiguring the 8th-Central Gate in accordance with the 1993
Settlement Agreement. In making this finding, the court relied
on the June 2016 correspondence between the parties’ respective
counsel, which had been admitted at the jury trial over LAWPM’s
any finding as to liability, and thus, “why not have the jury
decide the thing we all agree that the jury has to decide[.]”
9 As discussed in greater detail below, the jury was asked
to provide an answer as to the amount of additional security
costs incurred by LAWPM, irrespective of the jury’s prior
determination of whether Alameda was required to pay those
costs.
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objections, for the limited purpose of showing the positions of the
parties at that time. The court explained that Alameda would
have breached the agreement if it had simply removed the 8th-
Central gate and done nothing else; however, the attorney
correspondence showed that Alameda offered to install a new
gate in accordance with the 1993 Settlement Agreement, and by
refusing that offer, LAWPM had prohibited Alameda from doing
so. The court also found that, independent of its finding on
liability, Alameda was entitled to judgment on the breach of
contract claim because the jury found that LAWPM did not
incur any additional security costs as a result of the removal
of the 8th-Central gate.
On May 14, 2019, the trial court entered judgment in
favor of LAWPM on the first through fourth cases of action for
declaratory relief, injunctive relief, and quiet title. The court
entered judgment in favor of Alameda on the fifth cause of
action for breach of contract.
Both LAWPM and Defendants thereafter moved for a
new trial. In its motion, LAWPM requested a new trial on
the breach of contract claim. LAWPM contended, among other
arguments, that the jury instructions were misleading and
confusing because they were inconsistent with the special verdict
form. In their motion, Defendants sought a new trial on the
declaratory relief and quiet title claims. Defendants specifically
challenged the trial court’s finding that the evidence failed to
establish the location of the Joint Use Area, which Defendants
claimed was relevant to LAWPM’s standing to enforce the
restrictions on the Track Street West Easement. The trial court
denied both new trial motions.
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Both LAWPM and Defendants also filed motions for
attorneys’ fees. The trial court awarded LAWPM attorneys’
fees in the amount of $1,061,060.25 as the prevailing party on
the first through fourth causes of action. The court awarded
Alameda attorneys’ fees in the amount of $804,461.20 as the
prevailing party on the fifth cause of action.
LAWPM filed an appeal from the judgment entered in
favor of Alameda on the fifth cause of action, and an appeal from
the postjudgment order awarding attorneys’ fees to Alameda.
Defendants filed a cross-appeal from the judgment entered in
favor of LAWPM on the first through fourth causes of action.
We granted LAWPM’s motion to consolidate these appeals.
DISCUSSION
LAWPM’s Appeal from the Judgment in Favor of
Alameda on the Fifth Cause of Action
In its appeal from the judgment entered in favor of
Alameda on the fifth cause of action for breach of contract,
LAWPM challenges both the trial court’s finding of no liability
and the jury’s finding of no damages.
As to liability, LAWPM claims that (1) the evidence was
insufficient to support the trial court’s finding that Alameda did
not breach the 1993 Settlement Agreement because LAWPM
prevented Alameda from performing under the contract; and
(2) the trial court erred in admitting into evidence and relying
on the written correspondence between the parties’ attorneys
to find that Alameda was not liable for breach of contract.
As to damages, LAWPM contends that (1) the evidence
was insufficient to support the jury’s special verdict finding that
LAWPM did not suffer any damages; (2) the jury instructions and
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the special verdict form were misleading and confusing because
they were inconsistent with one another; and (3) the trial court
erred in refusing to allow LAWPM to display a demonstrative
exhibit that included simple calculations of the security costs it
had incurred as a result of the removal of the 8th-Central Gate.
We conclude that LAWPM has failed to demonstrate
any reversible error with respect to the jury’s special verdict
finding that LAWPM did not suffer damages. Because the jury’s
finding as to damages provides a sufficient independent basis for
affirming the judgment in favor of Alameda on the fifth cause of
action, we do not address LAWPM’s arguments regarding the
trial court’s separate finding as to liability.
1. Jury Trial Evidence
At the jury trial on the breach of contract claim, LAWPM
presented the testimony of Richard Gardner to prove that it
sustained damages as a result of Alameda’s removal of the
8th-Central Gate. Gardner testified that his company manages
LAWPM, and is in charge of security for the market. The normal
business hours of the market are 10:00 p.m. to 12:00 p.m.
Monday through Friday. The market closes at 12:00 p.m. on
Saturday and reopens at 10:00 p.m. on Sunday. The 8th-Central
Gate was installed when LAWPM opened in 1986, and had been
in place continuously until Alameda removed the gate on July 10,
2016. Prior to its removal, the 8th-Central Gate was open when
the market was open, and was locked when the market was
closed. A security guard was stationed at the gate only during
the hours that the market was open.
Gardner testified that, due to increased security concerns
stemming from the removal of the 8th-Central Gate, LAWPM has
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been required to keep a security guard stationed at the former
location of the gate 24 hours a day, seven days a week. A 24-hour
security guard was added to that location immediately following
the removal of the gate. Gardner also testified that he personally
reviews and pays the security invoices on behalf of LAWPM.
According to Gardner, LAWPM needed a security guard for an
additional 72 hours per week as a result of the removal of the
8th-Central Gate. From July 10, 2016 to July 15, 2018, the cost
of the additional security was $16.85 per regular hour, and
$25.28 per holiday hour. On July 15, 2018, this amount
increased to $21.60 per regular hour and $32.40 per holiday
hour because LAWPM changed security companies. Based upon
these hours and rates, the total amount that LAWPM had paid
for additional security to date as a result of the removal of the
8th-Central Gate was $152,323.72.
Gardner further testified that, in a letter to Alameda’s
counsel dated December 14, 2016, LAWPM demanded payment
for the additional security costs it had incurred through that date
due to the removal of the 8th-Central Gate. LAWPM’s demand
letter attached a one-page spreadsheet showing the hourly rates,
weekly hours, and total amount it had paid for the additional
security. Gardner confirmed that he reviewed the spreadsheet
before it was sent with the demand letter, and that the hours,
rates, and calculations included in the document were correct. It
is undisputed that Alameda never paid any of the security costs
demanded by LAWPM in connection with the 8th-Central Gate.
On cross-examination, Gardner acknowledged that the
spreadsheet that was attached to LAWPM’s December 14, 2016
demand letter was prepared by his assistant, and that he did not
know what documents, if any, the assistant had used to prepare
19
the spreadsheet. Although Gardner “looked” at the spreadsheet
before it was sent, he “didn’t do the math” himself or review the
invoices submitted by the security company. Gardner also did
not know what type of records the security company provided to
LAWPM to substantiate its bills for service. In addition, Gardner
admitted that he did not know how many roving security guards
were present at LAWPM during the hours that the market was
open or closed. Apart from the security that was added at the
former location of the 8th-Central Gate, Gardner also did not
know whether the total number of security guards present at
LAWPM at any given time had changed since the gate’s removal.
During her testimony, Harris, Atlas’s Director of Property
Management, acknowledged that a regular rate of $16.85 and a
holiday rate of $25.28 were not unreasonable hourly rates of pay
for security guards, and that these rates were within the range
that Defendants paid to the security guards on their properties.
Harris testified, however, that LAWPM never provided
Defendants with invoices showing the actual amounts that
LAWPM had paid for additional security as a result of the
removal of the 8th-Central Gate.
2. Jury Instructions and Special Verdict
At the close of the evidence, the jury was instructed on the
breach of contract claim with, among other standard instructions,
CACI Nos. 300, 303, and 350. CACI No. 300 instructed the jury:
“The Los Angeles Wholesale Produce Market claims that its prior
owner and Alameda Square Owner’s prior owner entered into a
contract . . . which outlined the parties’ rights and responsibilities
with respect to a gate known as the 8th-Central Gate. [¶] The
Los Angeles Wholesale Produce Market claims that defendant
Alameda Square Owner breached this contract by failing to pay
20
reasonably necessary additional security costs incurred by the
Los Angeles Wholesale Produce Market in connection with
Alameda Square Owner’s removal of the 8th-Central Gate. [¶]
Alameda Square Owner denies these claims.”
CACI No. 303 set forth the essential elements of the breach
of contract claim as follows: “To recover damages from Alameda
Square Owner for breach of contract, the Los Angeles Wholesale
Produce Market must prove all of the following: [¶] 1[.] That
Alameda Square Owner failed to do something that the contract
required it to do; [¶] 2[.] That the Los Angeles Wholesale Produce
Market was harmed by Alameda Square Owner’s breach of
contract; and [¶] 3[.] That Alameda Square Owner’s breach of
contract was a substantial factor in causing the Los Angeles
Wholesale Produce Market’s harm.
CACI No. 350 on damages for breach of contract provided,
in relevant part: “If you decide that the Los Angeles Wholesale
Produce Market has proved its claim against Alameda Square
Owner for breach of contract, you also must decide how much
money will reasonably compensate the Los Angeles Wholesale
Produce Market for the harm caused by the breach. This
compensation is called ‘damages.’ The purpose of such damages
is to put the Los Angeles Wholesale Produce Market in as good a
position as it would have been if Alameda Square Owner had
performed as promised. [¶] To recover damages for any harm,
the Los Angeles Wholesale Produce Market must prove that
when the contract was made, both parties knew or could
reasonably have foreseen that the harm was likely to occur in the
ordinary course of events as a result of the breach of contract. . . .
[¶] The Los Angeles Wholesale Produce Market claims damages
21
for additional security costs incurred as a result of Alameda
Square Owner’s removal of the 8th-Central Gate.”
The jury also was provided with a three-question special
verdict form that had been amended by the trial court and
approved by counsel for LAWPM.10 The first question on the
verdict form asked the jury: “1. Was Alameda Square Owner
required under the 1993 Agreement to pay for any additional
security services the Los Angeles Wholesale Produce Market
incurred as a result of the removal of the 8th-Central gate?” By a
nine to three vote, the jury answered “No” in response to question
1.
The verdict form next asked the jury: “Whether your
answer to question 1 is yes or no: 2. What is the cost, if any, of
additional security services [t]he Los Angeles Wholesale Produce
[Market] incurred as a result of the removal of the 8th-Central
gate?” By a nine to three vote, the jury answered “$0” in
response to question 2.
The third question on the verdict form concerned the
mitigation of damages by LAWPM. Because the verdict form
instructed the jury not to answer any further questions if its
answer to question 2 was zero, the jury did not respond to
question 3.
10 Although the record does not include any of the verdict
forms originally proposed by the parties, it appears that both
LAWPM and Defendants submitted special verdict forms to the
trial court for approval, and that the trial court made revisions
that resulted in the amended special verdict form that was
ultimately given to the jury. While defense counsel objected to
certain language in the amended verdict form, LAWPM’s counsel
told the court, “Your Honor, we’re fine with the verdict form.”
22
LAWPM first challenges the sufficiency of the evidence
supporting the jury’s special verdict finding that the cost of any
additional security services that LAWPM incurred as a result
of the removal of the 8th-Central Gate was zero. Specifically,
LAWPM contends that the undisputed evidence established
that it incurred $152,323.72 in additional security costs as a
result of the removal of the gate, and thus, the jury’s finding of
no damages was not supported by substantial evidence.
“The plaintiff in a breach of contract action has the burden
of proving nonspeculative damages with reasonable certainty.”
(Copenbarger v. Morris Cerullo World Evangelism, Inc. (2018) 29
Cal.App.5th 1, 11.) Proof of damages is an essential element of
a breach of contract claim. (Id. at p. 15; Pech v. Morgan (2021)
61 Cal.App.5th 841, 855.) “No damages can be recovered for a
breach of contract which are not clearly ascertainable in both
their nature and origin.” (Civ. Code, § 3301.)
“ ‘In a case where the trier of fact has determined that
the party with the burden of proof did not carry its burden and
that party appeals, “it is misleading to characterize the failure-
of-proof issue as whether substantial evidence supports the
judgment.” [Citations.] Instead, “where the issue on appeal
turns on a failure of proof at trial, the question for a reviewing
court becomes whether the evidence compels a finding in favor
of the appellant as a matter of law.” [Citation.] Specifically, we
ask “whether the appellant’s evidence was (1) ‘uncontradicted
and unimpeached’ and (2) ‘of such a character and weight as
to leave no room for a judicial determination that it was
insufficient to support a finding.’ ” ’ ” (Estes v. Eaton Corp. (2020)
23
51 Cal.App.5th 636, 651; accord, Ajaxo, Inc. v. E*Trade Financial
Corp. (2020) 48 Cal.App.5th 129, 163-164.) “This is ‘an onerous
standard’ [citation] and one that is ‘almost impossible’ for a losing
plaintiff to meet, because unless the trier of fact made specific
factual findings in favor of the losing plaintiff, we presume the
trier of fact concluded that ‘plaintiff’s evidence lacks sufficient
weight and credibility to carry the burden of proof.’ ” (Estes, at p.
651.)
Here, LAWPM bore the burden of proving that it sustained
damages as a result of Alameda’s breach of the 1993 Settlement
Agreement. At trial, LAWPM’s proof of damages came solely
from the testimony of Gardner. Gardner testified that LAWPM
incurred a total of $152,323.72 in additional security costs as a
result of the removal of the 8th-Central Gate. He also testified
that this sum was calculated by multiplying the applicable hourly
rate that LAWPM paid to its security guards by the additional
hours that were required to keep a 24-hour security guard
stationed at the former location of the 8th-Central Gate.
LAWPM argues that Gardner’s testimony provided
uncontroverted evidence to support its damages claim. It is
well-established, however, that “ ‘[s]o long as the trier of fact
does not act arbitrarily and has a rational ground for doing so, it
may reject the testimony of a witness even though the witness is
uncontradicted. [Citations.] Consequently, the testimony of a
witness which has been rejected by the trier of fact cannot be
credited on appeal unless, in view of the whole record, it is clear,
positive, and of such a nature that it cannot rationally be
disbelieved.’ ” (In re Marriage of Grimes & Mou (2020) 45
Cal.App.5th 406, 422; see Estes v. Eaton Corp., supra, 51
Cal.App.5th at p. 651 [“ ‘the jury is not required to believe the
24
testimony of any witness, even if uncontradicted’ ”]; Palmieri v.
State Personnel Bd. (2018) 28 Cal.App.5th 845, 857 [“ ‘[p]rovided
the trier of the facts does not act arbitrarily, he may reject in
toto the testimony of a witness, even though the witness is
uncontradicted’ ”].)
Although Gardner’s testimony regarding the amount
of additional security costs that LAWPM incurred was not
contradicted by other witnesses, the jury still rationally could
have chosen to reject such testimony. On cross-examination,
Gardner admitted that he did not know how many roving
security guards were working at LAWPM at any given time,
and whether the total number of guards present on the property
had changed as a result of the removal of the 8th-Central Gate.
Gardner also admitted that he did not personally prepare the
spreadsheet of security costs that was included with LAWPM’s
December 14, 2016 demand for payment, nor did he review any
security invoices or other documents in connection with that
demand. Defense counsel also elicited testimony that LAWPM
never provided Defendants with any of the invoices that would
show the actual costs that LAWPM had incurred for additional
security as a result of the removal of the 8th-Central Gate.
In her closing argument, defense counsel emphasized the
lack of supporting evidence to corroborate Gardner’s testimony
about these costs. In particular, defense counsel told the jury:
“There was no evidence other than the bare statement that ‘we
pay $16.85 an hour and something higher on weekends and
holidays and that in fact was an additional guard.’ [¶] Mr.
Gardner’s testimony, unsupported by invoices, unsupported by
timesheets, log-in cards, anything at all that would show to you
or us that, A, it was an additional guard, B, this is what we paid
25
-- I submit to you that if somebody sends you a bill just saying
‘here it is, I say this is what it is so it must be,’ you might have
some questions about that. [¶] So, I believe the answer to
question no. 2 should be zero because there is a lack of evidence.”
On this record, we cannot conclude that the jury acted
arbitrarily or without any rational basis in declining to credit
Gardner’s testimony about the damages allegedly suffered by
LAWPM as a result of the removal of the 8th-Central Gate. “We
have no power on appeal to judge the credibility of witnesses or
to reweigh the evidence.” (Bookout v. State of California ex rel.
Dept. of Transportation (2010) 186 Cal.App.4th 1478, 1486.)
Because the jury rationally could find that LAWPM did not
meet its burden of proving damages for breach of contract, the
evidence does not compel a finding in favor of LAWPM on the
element of damages as a matter of law.
LAWPM next argues that the instructions and special
verdict form given to the jury were misleading and confusing
because the instructions on breach of contract were inconsistent
with the questions on the verdict form. In particular, LAWPM
asserts that, based on the language of the instructions and the
special verdict form, the jury was necessarily required to find
no damages in response to question 2 as a result of finding no
liability for breach the contract in response to question 1.
“ ‘The propriety of jury instructions is a question of law
that we review de novo.’ ” (Jackson v. AEG Live, LLC (2015) 233
Cal.App.4th 1156, 1187; accord, Martinez v. Rite Aid Corp. (2021)
63 Cal.App.5th 958, 969.) In general, “ ‘[a] party is entitled upon
request to correct, nonargumentative instructions on every
26
theory of the case advanced by him [or her] which is supported
by substantial evidence.’ ” (Evans v. Hood Corp. (2016) 5
Cal.App.5th 1022, 1045.) “ ‘[A]n instruction correct in the
abstract, may not be given where it is not supported by the
evidence or is likely to mislead the jury.’ ” (Harb v. City of
Bakersfield (2015) 233 Cal.App.4th 606, 619.) However, “ ‘[a]
party is not entitled to have the jury instructed in any particular
fashion or phraseology, and may not complain if the court
correctly gives the substance of the applicable law.’ ” (Jackson,
at p. 1187.) Even where there is instructional error, reversal is
not warranted unless it is reasonably probable that the jury may
have based its verdict on the erroneous instruction. (Kinsman v.
Unocal Corp. (2005) 37 Cal.4th 659, 682; Soule v. General Motors
Corp. (1994) 8 Cal.4th 548, 574.) “That assessment, in turn,
requires evaluation of several factors, including the evidence,
counsel’s arguments, the effect of other instructions, and any
indication by the jury itself that it was misled.” (Soule, at p. 574.)
The correctness of a special verdict also “is analyzed as a
matter of law and therefore subject to de novo review.” (Jackson
v. AEG Live, LLC, supra, 233 Cal.App.4th at p. 1187; accord,
Martinez v. Rite Aid Corp., supra, 63 Cal.App.5th at p. 969.)
“Before a judgment on a special verdict may be entered, the
‘jury’s special verdict findings must be internally consistent and
logical.’ ” (Missakian v. Amusement Industry, Inc. (2021) 69
Cal.App.5th 630, 654.) “ ‘A special verdict is inconsistent if
there is no possibility of reconciling its findings with each other.’ ”
(Fuller v. Department of Transportation (2019) 38 Cal.App.5th
1034, 1038.) “If a verdict appears inconsistent, a party adversely
affected should request clarification, and the court should send
the jury out again to resolve the inconsistency. [Citations.] If no
27
party requests clarification or an inconsistency remains after the
jury returns, the trial court must interpret the verdict in light of
the jury instructions and the evidence and attempt to resolve any
inconsistency.” (Singh v. Southland Stone, U.S.A., Inc. (2010)
186 Cal.App.4th 338, 357-358, fn. omitted.)
Defendants claim that LAWPM forfeited any objection to
the special verdict form because LAWPM expressly agreed to the
amended verdict form that was submitted to the jury. LAWPM,
on the other hand, contends that it only acquiesced to that form
after the trial court rejected the versions proposed by the parties
in favor of rewriting its own special verdict form. LAWPM also
asserts that it preserved the issue for appeal by raising it in a
motion for new trial. Although the failure to object to the form of
a verdict before the jury is discharged may constitute a waiver or
forfeiture of any defect, “waiver is not automatic, and there are
many exceptions,” such as “where the record indicates that the
failure to object was not the result of a desire to reap a ‘technical
advantage’ or engage in a ‘litigious strategy.’ ” (Woodcock v.
Fontana Scaffolding & Equip. Co. (1968) 69 Cal.2d 452, 456, fn.
2; see Simgel Co., Inc. v. Jaguar Land Rover North America, LLC
(2020) 55 Cal.App.5th 305, 319.) As LAWPM notes, some courts
also have declined to find waiver or forfeiture where an objection
to the verdict form was raised for the first time in a posttrial
motion before the trial court. (All-West Design, Inc. v. Boozer
(1986) 183 Cal.App.3d 1212, 1220 [challenge to form of verdict
preserved by raising it in motion for new trial]; Mixon v.
Riverview Hospital (1967) 254 Cal.App.2d 364, 376-377 [same].)
In this case, however, we need not decide whether LAWPM
forfeited its challenge to the verdict form by failing to object
before the jury was discharged. Even assuming LAWPM
28
preserved its claim by asserting it in the motion for new trial,
the claim fails on the merits.
In challenging the special verdict finding as to damages,
LAWPM does not contend that either the jury instructions or the
special verdict form incorrectly stated the law. Rather, LAWPM
argues that the instructions given to the jury conflicted with the
questions on the special verdict form because the instructions
told the jury that LAWPM could only recover damages if it
proved Alameda breached the contract, whereas the verdict form
asked the jury to consider the question of damages independently
from the question of breach. LAWPM asserts that, because the
jury found that Alameda did not breach the contract in response
to question 1 on the verdict form, the instructions required the
jury to also find that LAWPM did not sustain any damages in
response to question 2. We disagree.
The special verdict form, and the trial court’s instructions
to the jury, made clear that the jury was to decide the question
of damages separately and independently from the question of
breach. The special verdict form was narrowly tailored to the
facts of the case, and was comprised of only three questions.
Question 1 concerned breach, and asked whether Alameda was
required under the 1993 Settlement Agreement to pay for any
additional security services that LAWPM incurred as a result
of the removal of the 8th-Central Gate. Question 2 addressed
damages, and asked the jury to decide the cost, if any, of the
additional security services that LAWPM incurred as a result
of the removal of the 8th-Street Gate. The special verdict form
plainly stated that “[w]hether your answer to question 1 is yes or
no,” the jury was required to answer question 2.
29
Before reading the CACI instructions to the jury, the trial
court went over the questions on the special verdict form so that
the jury would understand what it was required to do. The court
explained that question 1 on the special verdict form concerned
whether Alameda was required to pay for the expenses incurred
by LAWPM as a result of the removal of the 8th-Central Gate.
The court then told the jury: “Independent of that question, no. 2
is we want you to tell us whether you believe additional expenses
or costs were incurred as a result of the removal of the gate.” The
court later reminded the jury that it must follow the instructions
on the special verdict form and consider each question separately,
and that “after you answer a question, the form tells you what to
do next.” When defense counsel mistakenly stated during her
closing argument that “you don’t have to get to number 2 if you
say no to number 1” on the verdict form, the court immediately
interjected to correct her, and again reiterated to the jury that
question 2 on the verdict form was “independent” of question 1.
During its deliberations, the jury never asked the court for
clarification on the instructions or the verdict form, or gave
any indication that it was confused by either of them.
In support of its argument that the jury must have been
confused in answering the questions on the special verdict form,
LAWPM points to the language in CACI Nos. 300, 303, and 350,
which together defined the essential elements of the breach of
contract claim. LAWPM reasons that, because these CACI
instructions effectively told the jury that LAWPM’s right to
recover damages from Alameda was dependent upon LAWPM
proving that Alameda had breached the contract, the jury was
not equipped to consider the issue of damages separately from
the issue of breach. The special verdict form, however, clearly
30
explained to the jury that the first two questions were to be
answered separately and independently from each other. Indeed,
question 2 on the verdict form did not make reference to any
alleged breach of contract by Alameda, or even mention Alameda
at all. Question 2 simply asked the jury to determine the cost,
if any, of additional security services incurred by LAWPM as a
result of the removal of the 8th-Central Gate, and to answer
that question irrespective of its answer to question 1.
LAWPM also claims that the polling of the jury conducted
after the verdict showed the confusing and misleading nature
of the special verdict form. Contrary to LAWPM’s contention,
however, the polling merely showed that three of the 12 jurors
believed that Alameda breached the contract and that LAWPM
suffered damages, but did not reach a decision as to the amount
of damages. Given that the other nine jurors found that LAWPM
did not suffer damages, it is not surprising that the three
dissenting jurors would find it unnecessary to settle on a specific
dollar figure in response to question 2. On this record, LAWPM
has failed to demonstrate reversible error in either the jury
instructions or the special verdict form.
LAWPM further contends that the trial court committed
prejudicial error when it refused to allow LAWPM to display a
demonstrative exhibit regarding security costs. The exhibit in
question was a one-page chart that purported to show a month-
by-month breakdown of the $152,323.72 in additional security
costs that LAWPM had incurred as a result of the removal of
the 8th-Central Gate. LAWPM sought to display the chart
during Gardner’s testimony to help summarize how he calculated
31
the total amount of additional security costs incurred by LAWPM
through the trial date. Defendants objected on the ground that
the chart lacked an adequate foundation because LAWPM never
produced any of the security invoices on which the rates and
hours depicted in the chart were based. The trial court ruled
that LAWPM’s counsel could not display the chart, but could
show the jury the total amount of costs, and then ask Gardner
to explain how he calculated that figure.
We review a trial court’s ruling on the admissibility of
evidence for an abuse of discretion. (Qaadir v. Figueroa (2021) 67
Cal.App.5th 790, 803; Alexander v. Community Hospital of Long
Beach (2020) 46 Cal.App.5th 238, 258.) Under this standard,
a trial court’s decision to admit or exclude evidence will not be
disturbed “ ‘ “unless the trial court exercised its discretion in an
arbitrary, capricious, or patently absurd manner that resulted in
a manifest miscarriage of justice.” ’ ” (Qaadir, at p. 803.) Even
where a trial court errs in ruling on the admissibility of evidence,
reversal is required only “when the reviewing court, ‘ “after an
examination of the entire cause, including the evidence,” is of
the “opinion” that it is reasonably probable that a result more
favorable to the appealing party would have been reached in
the absence of the error.’ ” (Alexander, at p. 258.)
In general, “[t]rial courts have broad discretion to admit
demonstrative evidence such as maps, charts, and diagrams
to illustrate a witness’s testimony.” (People v. Mills (2010) 48
Cal.4th 158, 207.) “ ‘ “[D]emonstrative evidence is admissible for
the purpose of illustrating and clarifying a witness’ testimony” so
long as a proper foundation is laid.’ ” (People v. Vasquez (2017)
14 Cal.App.5th 1019, 1037.) Here, the trial court reasonably
could find that LAWPM failed to lay a proper foundation for its
32
chart because it did not produce any of the underlying records
on which the mathematical calculations reflected in the chart
were based. The trial court also reasonably could find that a
demonstrative exhibit that simply showed a month-by-month
summary of the costs allegedly incurred by LAWPM would not
aid the jury in understanding the substantive evidence before it.
Moreover, Gardner was permitted to testify as to the total
amount of additional security costs that LAWPM was claiming to
have incurred as result of the removal of the 8th-Central Gate.
He also was allowed to explain how he calculated that figure by
multiplying the applicable hourly rate by the additional hours
that were required to provide 24-hour security at the former
location of the gate. LAWPM has not shown how the exclusion of
a demonstrative exhibit that itself was a summary of the simple
mathematical calculations described by Gardner resulted in a
miscarriage of justice. Under these circumstances, the trial
court did not abuse its discretion in refusing to allow LAWPM
to display the demonstrative exhibit.
Defendants’ Cross-Appeal from the Judgment in
Favor of LAWPM on the First through Fourth
Causes of Action
In their cross-appeal, Defendants challenge the trial court’s
finding that LAWPM has standing to enforce the restrictions on
the Truck Easement and Track Street West Easement set forth
in the 1991 Easement Agreement. The thrust of Defendants’
argument is that LAWPM lacks standing because, under the
1982 Ground Lease, LAWPM does not have exclusive rights
over the original Joint Use Area, and LAWPM cannot prove that
the easements are located in an area that is outside of the Joint
Use Area and thus subject to its exclusive control. In rejecting
33
Defendants’ argument, the trial court found that the evidence
failed to establish where the Joint Use Area referenced in the
1982 Ground Lease is located, and whether the Track Street
West Easement is inside or outside that area. The trial court also
found that Defendants’ attorney expert on title insurance and
easement agreements was not qualified to plot the location of the
Joint Use Area, or to otherwise opine as to where that area may
be located.
In their cross-appeal, Defendants raise several arguments
related to LAWPM’s alleged lack of standing. In particular,
Defendants contend that the trial court erroneously shifted the
burden to Defendants to prove that LAWPM does not have
standing to enforce the 1991 Easement Agreement, and that
when the burden of proof is properly allocated, LAWPM cannot
establish that it has standing. Defendants further assert that,
regardless of which party had the burden of proof, there was
substantial evidence to support a finding that the Track Street
West Easement is in fact located in the Joint Use Area, and is
therefore not subject to LAWPM’s exclusive control. In addition,
Defendants claim that, to the extent the evidence was insufficient
to show where the Joint Use Area is located, the trial court erred
when it decided to exclude the proffered testimony of Defendants’
title expert regarding the location of that area. We conclude that
none of these arguments has merit.
Contrary to Defendants’ contention on appeal, the trial
court never shifted the burden to Defendants to prove that
LAWPM lacked standing to enforce the provisions of the 1991
34
Easement Agreement. Rather, the record shows that the trial
court repeatedly found that LAWPM has standing to enforce the
1991 Easement Agreement because it is the lessee of Parcel 1, the
property burdened by the easements. The record further reflects
that the trial court made its findings based on the plain language
of the 1991 Grant Deed and the 1991 Easement Agreement, and
after careful consideration of the parties’ arguments regarding
the proper interpretation of those agreements. We conclude that
the trial court properly applied the law, and that its findings as
to standing were supported by substantial evidence.
“Standing is a threshold issue necessary to maintain a
cause of action, and the burden to allege and establish standing
lies with the plaintiff.” (Mendoza v. JPMorgan Chase Bank, N.A.
(2016) 6 Cal.App.5th 802, 809.) “ ‘To have standing, a party must
be beneficially interested in the controversy; that is, he or she
must have “some special interest to be served or some particular
right to be preserved or protected over and above the interest
held in common with the public at large.” [Citation.] The party
must be able to demonstrate that he or she has some such
beneficial interest that is concrete and actual, and not
conjectural or hypothetical.’ ” (Teal v. Superior Court (2014) 60
Cal.4th 595, 599.) “Standing is a question of law that we review
independently. [Citation.] ‘However, where the superior court
makes underlying factual findings relevant to the question of
standing, we defer to the superior court and review the findings
for substantial evidence.’ ” (United Farmers Agents Assn., Inc.
v. Farmers Group, Inc. (2019) 32 Cal.App.5th 478, 488.)
California law has long recognized that “ ‘[u]nless
specifically reserved to the landlord by the terms of the lease,
everything that belongs to the demised premises or is used with,
35
or is appurtenant to, the premises, and reasonably necessary for
their beneficial use and enjoyment, passes as an incident to a
lease of the premises.’ ” (Dubin v. Robert Newhall Chesebrough
Trust (2002) 96 Cal.App.4th 465, 473.) In other words, a lessee
generally is provided with “ ‘ “everything which belongs to the
demised premises,” ’ ” and rights such as easements “constitute
an implied part of the lease.” (Owsley v. Hamner (1951) 36
Cal.2d 710, 717.) In this case, it is undisputed that LAWPM
is the current lessee of Parcel 1. At the November 2017 bench
trial, the parties jointly stipulated that (1) SPTC leased Parcel 1
to LAWPMDC pursuant to the 1982 Ground Lease; (2) LAWPM
is the assignee of, and successor-in-interest to, LAWPMDC’s
interest in the 1982 Ground Lease; and (3) the 1982 Ground
Lease expires in 2048. It is also undisputed that both the Truck
Easement and the Track Street West Easement cross Parcel 1.11
The evidence before the trial court accordingly supported its
finding that LAWPM, as current lessee of Parcel 1, has standing
to enforce the restrictions on the easements that burden the
leased premises.
In making this finding, the trial court expressly rejected
Defendants’ argument that LAWPM lacked standing because
only NewLowe and Rykoff were parties to 1991 Easement
Agreement. As the trial court aptly explained in its ruling
on LAWPM’s motion for a preliminary injunction: “In 1991,
NewLowe owned Parcels A and 1. [Citation.] NewLowe then
11 According to the testimony at the bench trial, 88 feet
of the Track Street West Easement crosses Parcel 1, and the
remaining 30 feet crosses Parcel A. Based on the survey maps
admitted at the bench trial, a majority of the Truck Easement
also crosses Parcel 1.
36
conveyed Parcel 1 to O Hill Properties, which leases the property
to LAWPM. [Citation.] . . . In addition, the 1991 [Easement]
Agreement provides that ‘[a]ll of the covenants, agreements,
conditions and restrictions set forth in this Agreement are
intended to be and shall be construed as covenants running with
the land, binding upon, inuring to the benefit of and enforceable
by the Parties hereto and all subsequent owners or lessees of, or
any party having an interest in, their respective Parcels or any
parts thereof. . . .’ [Citation.] . . . [¶] Accordingly, LAWPM may
therefore enforce the terms of the 1991 Agreement as a lessee of
the property (Parcel 1) owned by O Hill Properties, as a successor
in interest to NewLowe, which at the time of the 1991 Agreement
was the owner of both Parcel A and Parcel 1.”
In its December 15, 2017 statement of decision on the
second and third causes of action, the trial court again found
that LAWPM has standing to enforce the terms of the 1991
Easement Agreement, including the provision requiring the prior
consent of the parties to reverse the flow of traffic on the Track
Street West Easement. Based on the plain language of both the
1991 Grant Deed and the 1991 Easement Agreement, the trial
court found that “it was the intent of the parties that NewLowe’s
rights under the agreements affected its rights as the owner of
Parcels A and 1.” The trial court further found that O Hill, as the
successor to NewLowe’s interest in Parcel 1, has standing to
“enforce the agreements creating and controlling the easements
that are over Parcel 1,” and that “this standing extends to [O
Hill’s] long-term tenant LAWPM during the period of the
tenancy.”
The trial court’s rulings make clear that the court did not
misallocate the burden of proof to Defendants. Rather, the court
37
made its findings as to standing after an exhaustive review of
the relevant agreements in which the court interpreted the plain
language of those agreements to give effect to the contracting
parties’ mutual intent. (See Cortez v. Doty Bros. Equipment Co.
(2017) 15 Cal.App.5th 1, 16 [“[t]he fundamental rule of contract
interpretation is to give effect to the mutual intent of the parties
at the time they formed the contract”]; Civ. Code, § 1636 [“[a]
contract must be so interpreted as to give effect to the mutual
intention of the parties as it existed at the time of contracting”].)
In seeking to challenge the trial court’s findings on appeal,
Defendants contend that LAWPM’s burden to prove standing in
this case required LAWPM to specifically refute Defendants’
argument against standing by proving a negative, namely that
the Track Street West Easement is not located in the Joint Use
Area. Defendants claim that, unless LAWPM can show that the
Track Street West Easement falls outside of the Joint Use Area,
LAWPM cannot establish that it has standing to enforce any
restrictions on that easement. We disagree, however, that
LAWPM’s burden to prove its standing to enforce the terms of the
1991 Easement Agreement required LAWPM to also disprove
Defendants’ theory as to why standing is lacking.
Instead, LAWPM met its burden of proving that it has
standing to enforce the 1991 Easement Agreement by showing
that it leases all of Parcel 1, and that the Truck Easement and
Track Street West Easement cross Parcel 1. While Defendants
argue that the Joint Use Area was “carved out of the exclusive
rights granted to LAWPM” under the 1982 Ground Lease, they
do not dispute that the Joint Use Area was still part of the
leased, or demised, premises. Indeed, the amendment to the
1982 Ground Lease specifically defines the Joint Use Area as
38
“that part of [SPTC’s] Portion of the Eighth Street Access Area
that becomes part of the Demised Premises, together with the
portion of the Demised Premises shown tinted mauve on Exhibit
‘B’ attached hereto.” Therefore, to the extent that LAWPM’s use
of the Joint Use Area was non-exclusive under the 1982 Ground
Lease, this does not show that LAWPM lacks standing to enforce
its rights as the lessee of the premises burdened by the
easements.12 On this record, the trial court did not err in finding
that LAWPM has standing to enforce the terms of the 1991
Easement Agreement.
Defendants further argue that, even if the burden of proof
on standing was properly allocated, the trial court erred when it
refused to find that the Track Street West Easement is in fact
located in the original Joint Use Area, and is thus not subject to
LAWPM’s exclusive control. In its December 15, 2017 Statement
12 The cases on which Defendants rely to support their
claim that LAWPM lacks standing are inapposite. (Los Angeles
& R.R. Co. v. New Liverpool Salt Co. (1906) 150 Cal. 21; Nahas v.
Retail Clerks International Assn. (1956) 144 Cal.App.2d 808.) In
each of those cases, the court concluded that the lessee could
not enforce rights over certain property that was never a part
of the leased premises. (Los Angeles & R.R. Co., at p. 25 [lessee
did not have possessory rights over railroad tracks that “formed
no part of the leased premises”]; Nahas, at p. 820 [lessee did not
have possessory rights over parking lot and sidewalks that were
excluded from leased premises].) Here, LAWPM leases the
entirety of Parcel 1, and the Joint Use Area was a part of the
leased premises.
39
of Decision, the trial court noted that Defendants had “take[n]
the position that the Track Street West Easement runs over the
Joint Use Area, and that this area was specifically carved out
from the lease of Parcel 1 to LAWPM.” The court explained that
if the lessor had “carved out a portion of Parcel 1 from its lease to
LAWPM to allow vehicles from Parcels A, B and C to travel over
the Joint Use Area, that would affect LAWPM’s ability to assert
rights of NewLowe under the 1991 Easement Agreement.” The
court ultimately concluded, however, that it could not determine
from the evidence whether the Track Street West Easement is
located in the Joint Use Area, and as a result, Defendants could
not support their argument that LAWPM has no right to control
the flow of traffic on that easement. In their cross-appeal,
Defendants assert that the trial court erred because there was
substantial evidence to support a finding the Track Street West
Easement is inside the Joint Use Area. This argument is
unavailing.
Despite the voluminous record in this case, none of the
surveys, maps, or other documents presented to the trial court
showed the location of the Joint Use Area on Parcel 1. As the
trial court correctly noted, both the 1982 Ground Lease and the
1983 Amendment to that lease described the Joint Use Area as
being depicted in mauve tint on “Exhibit B”; however, “Exhibit B”
was not attached to either document. Likewise, neither the 1991
Grant Deed nor the 1991 Easement Agreement included any
reference to the location of the Joint Use Area. Although the
1993 Settlement Agreement stated that the parties had agreed to
modify their rights with respect to the “Original Joint Use Area,”
that agreement also did not include a map or survey showing
where the “Original Joint Use Area” was located.
40
The 1993 Settlement Agreement did include a legal
description of the metes and bounds of “Original Joint Use Area.”
Defendants argue that the trial court itself could have used this
legal description to plot the location of the Joint Use Area on one
of the surveys LAWPM’s licensed surveyor had prepared to show
the location of the easements. As the trial court observed,
however, “nowhere does this legal description mention the Track
Street West Easement, nor can this court as a lay reader of this
provision determine where the Track Street West Easement is
found with respect to the Joint Use Area, i.e., in the area or not
in the area.” While Defendants contend that a survey expert was
not required to plot the location of the Joint Use Area, “technical
legal descriptions of real property have precise meanings to
trained professionals” that are often beyond the common
understanding of a layperson. (Lee v. Fidelity National Title Ins.
Co. (2010) 188 Cal.App.4th 583, 598.) In this case, none of the
surveys prepared by the parties’ experts purported to show the
Joint Use Area. Additionally, neither LAWPM’s surveyor nor
Defendants’ surveyor offered any testimony as to where the
Joint Use Area was located, or whether the Track Street West
Easement was inside the Joint Use Area. Given the state of the
evidence, the trial court did not err in declining to find that the
Track Street West Easement is located in the Joint Use Area.
Lastly, Defendants contend that the trial court committed
prejudicial error when it excluded the proffered testimony of their
title expert, Kenneth Dzien, regarding the location of the Joint
Use Area. Defendants called Dzien, an attorney and consultant
41
to title insurance companies, to testify as a rebuttal expert on
the proper interpretation of the easement agreements and title
documents. Defendants also sought to elicit testimony from
Dzien that he had determined the location of the Joint Use Area
referenced in the 1982 Ground Lease based on his review of the
legal description of the “Original Joint Use Area” set forth in the
1993 Settlement Agreement and a survey prepared by
Defendants’ surveyor. The trial court sustained LAWPM’s
objection to such testimony on the ground that Defendants had
failed to lay an adequate foundation to show that Dzien was
qualified as a survey expert. We find no abuse of discretion
in the trial court’s ruling.
Under Evidence Code section 801, “a trial court acts as a
‘gatekeeper to exclude speculative or irrelevant expert opinion.’
[Citation.] A trial court may exclude expert testimony if the type
of matter on which the expert relies is unreasonable and also if
the matter relied upon does not ‘ “provide a reasonable basis for
the particular opinion offered.” ’ ” (Waller v. FCA US LLC (2020)
48 Cal.App.5th 888, 894.) A trial court also has “ ‘the obligation
to contain expert testimony within the area of the professed
expertise, and to require adequate foundation for the opinion.’ ”
(Kotla v. Regents of University of California (2004) 115
Cal.App.4th 283, 292.) Accordingly, “ ‘[t]rial judges have a
substantial gatekeeping responsibility when it comes to expert
testimony. [Citation.] . . . We review a court’s execution of these
gatekeeping duties for an abuse of discretion.” (Cooper v. Takeda
Pharmaceuticals America, Inc. (2015) 239 Cal.App.4th 555, 576.)
Here, the trial court acted well within its discretion in
excluding Dzien’s proffered testimony on a matter for which he
lacked the requisite expertise. As the trial court noted, Dzien
42
is not a surveyor. He testified that he had prior experience
examining abstracts of title, and that, “on a good day [he] can
trace out the legal description” of real property contained in a
title document. Dzien did not, however, prepare any of the
surveys in this case, and did not claim to have any personal
knowledge as to how those surveys were prepared.
Additionally, when asked how he determined the location
of the Joint Use Area, Dzien testified that he used the legal
description contained in the 1993 Settlement Agreement to
map out the Joint Use Area on the survey that was prepared by
Defendants’ surveyor. As discussed, however, none of the various
surveys prepared by the parties’ experts purported to show the
location of the Joint Use Area, and the surveyors themselves
never testified as to where the Joint Use Area was located. On
this record, the trial court reasonably could conclude that Dzien’s
proffered opinion about the location of the Joint Use Area lacked
an adequate foundation, and was therefore inadmissible.
LAWPM’s Appeal from the Award of Attorneys’ Fees
to Alameda
LAWPM also appeals from the postjudgment order
granting Alameda $804,461.20 in attorneys’ fees as the
prevailing party on the fifth cause of action. LAWPM argues
the fee award in favor of Alameda should be reversed because
(1) the trial court erroneously determined that Alameda was
entitled to attorneys’ fees as the prevailing party under Code of
Civil Procedure section 1032 (section 1032) instead of conducting
its analysis under Civil Code section 1717 (section 1717); (2) the
trial court abused its discretion in determining that Alameda’s
fee request was reasonable and supported by sufficient evidence;
and (3) the trial court abused its discretion in awarding fees to
43
Alameda that were not connected to the fifth cause of action. We
conclude the trial court did not abuse its discretion in awarding
attorneys’ fees to Alameda, but the award must be reduced to
exclude the hours expended on certain matters that were
unrelated to the fifth cause of action.
Prior to entering a judgment on LAWPM’s first amended
complaint, the trial court asked the parties to submit briefing on
the issue of which party was the prevailing party for purposes
of the judgment. While LAWPM argued that it was the
prevailing party in the action because it had achieved its main
litigation objective, Defendants asserted that Alameda had
prevailed on the fifth cause of action for breach of the 1993
Settlement Agreement. The trial court found that, under section
1032, LAWPM was the prevailing party on the first through
fourth causes of action, and Alameda was the prevailing party on
the fifth cause of action.
LAWPM filed a motion for attorneys’ fees pursuant to
section 1717. LAWPM contended it was entitled to attorneys’
fees incurred in connection with the first through fourth causes of
action under the 1991 Easement Agreement and the 1993
Settlement Agreement. Both agreements included provisions for
attorneys’ fees.13 The trial court granted LAWPM’s motion, and
13The 1991 Easement Agreement provided that “[i]f either
Party brings any suit or initiates any other proceeding to enforce
this Agreement, the prevailing Party in such suit or other
proceeding . . . shall, in addition to such other relief as may be
awarded, be entitled to recover all costs reasonably incurred by it
in connection with such proceeding (including, without limitation,
attorneys’ fees and expenses). The 1993 Settlement Agreement
stated that “[i]n the event of litigation or arbitration relating to
44
awarded LAWPM a total of $1,061,060.25 in attorneys’ fees as
the prevailing party on the first through fourth causes of action.
Alameda also filed a motion for attorneys’ fees pursuant
to section 1717. Alameda argued it was entitled to attorneys’
fees incurred in connection with the fifth cause of action because
it was the prevailing party under the 1993 Settlement
Agreement. Alameda sought to recover $1,504,590.20 in
attorneys’ fees incurred from July 2016 through July 2019.
LAWPM opposed Alameda’s motion on several grounds.
Among other arguments, LAWPM asserted that, for purposes of
determining the prevailing party under section 1717, the 1991
Easement Agreement and the 1993 Settlement Agreement should
be considered together. LAWPM also argued that, even if the
agreements were analyzed separately, Alameda still could not
establish it was the prevailing party on the 1993 Settlement
Agreement. LAWPM further contended that the attorneys’ fees
sought by Alameda were unreasonable and overreaching, and
were not supported by sufficient evidence. LAWPM’s opposition
included an attorney declaration attaching various charts, which
identified the billing entries that LAWPM claimed were vague,
excessive, or not related to the breach of contract claim.
At the hearing on Alameda’s motion for attorneys’ fees,
the trial court identified a number of deficiencies in Alameda’s
moving papers. Rather than deny the motion outright, the court
ordered Alameda to provide updated billing statements and
summary totals that excluded any time billed prior to April 14,
2017, the filing date of the first amended complaint when the
this Agreement, the prevailing party in such litigation shall be
entitled to recover its attorneys’ fees and costs.”
45
fifth cause of action for breach of contract was first alleged. The
court also ordered Alameda to provide accurate comparable
billing rates of similarly situated attorneys. Although Alameda
thereafter filed a supplemental brief and declarations that
included additional information, it continued to request the
same amount in attorneys’ fees.
On January 24, 2020, following a further hearing on
Alameda’s motion, the trial court awarded Alameda $804,461.20
in attorneys’ fees as the prevailing party on the fifth cause of
action. The court found that, because Alameda’s recovery was
limited to the fifth cause of action, Alameda was not entitled to
fees for work performed prior to April 14, 2017. The court also
found that Alameda was only entitled to recover one-fifth of the
fees sought for work performed from April 14, 2017 to August 16,
2017, the date of the ruling on LAWPM’s summary judgment
motion. In addition, the court found that Alameda was not
entitled to fees for work performed from August 16, 2017 through
December 22, 2017, because such work solely related to the court
trial on the equitable claims. The court allowed Alameda to
recover fees for work performed from January 2018 onward, but
stated that it was excluding work performed in connection with
Alameda’s new trial motion, appeal, and oppositions to LAWPM’s
fees and costs motions. The court found that, subject to these
deductions, the hourly rate and number of hours expended were
reasonable, and that Alameda was not required to further explain
the work performed by each individual attorney.
46
In challenging the attorneys’ fee award to Alameda,
LAWPM contends that the trial court abused its discretion in
finding that Alameda was the prevailing party on the fifth cause
of action under section 1032. LAWPM asserts that the trial
court instead should have analyzed whether Alameda was the
prevailing party under section 1717 by considering the 1991
Easement Agreement and the 1993 Settlement Agreement
together, and should have found that LAWPM was the sole
prevailing party on those contracts because it achieved lopsided
results in the litigation. LAWPM further argues that, even if the
agreements are considered separately, Alameda still cannot be
deemed the prevailing party on the 1993 Settlement Agreement
because that contract was also at issue in the equitable claims on
which LAWPM clearly prevailed. Based on the totality of the
record, however, we conclude the trial court did not abuse its
discretion in determining that Alameda was entitled to attorneys’
fees as the prevailing party on the breach of contract claim.
“Generally, a trial court’s determination that a litigant
is a prevailing party, along with its award of fees and costs, is
reviewed for abuse of discretion.” (Goodman v. Lozano (2010)
47 Cal.4th 1327, 1332.) “ ‘ “However, de novo review . . . is
warranted where the determination of whether the criteria for
an award of attorney fees and costs in this context have been
satisfied amounts to statutory construction and a question of
law.” ’ ” (Mountain Air Enterprises, LLC v. Sundowner Towers,
LLC (2017) 3 Cal.5th 744, 751.)
47
Under section 1032, “[e]xcept as otherwise expressly
provided by statute, a prevailing party is entitled as a matter
of right to recover costs in any action or proceeding.” (Code
Civ. Proc., § 1032, subd. (b).) For purposes of a cost award, a
“prevailing party” is defined as (1) “the party with a net monetary
recovery,” (2) “a defendant in whose favor a dismissal is entered,”
(3) “a defendant where neither plaintiff nor defendant obtains
any relief,” and (4) “a defendant as against those plaintiffs who
do not recover any relief against that defendant.” (Id., subd.
(a)(4).) However, “[i]f any party recovers other than monetary
relief and in situations other than as specified, the ‘prevailing
party’ shall be as determined by the court, and under those
circumstances, the court, in its discretion, may allow costs or
not and, if allowed, may apportion costs between the parties on
the same or adverse sides . . . .” (Id., subd. (a)(4).) Accordingly,
“ ‘section 1032 . . . declares that costs are available as “a matter
of right” when the prevailing party is within one of the four
categories designated by statute. . . . In other situations or when
a party recovers other than monetary relief, the prevailing party
is determined by the court, and the award of costs is within the
court’s discretion.’ ” (David S. Karton, A Law Corp. v. Dougherty
(2014) 231 Cal.App.4th 600, 611.)
Attorneys’ fees are allowable as costs when authorized
by contract, statute, or law. (Code Civ. Proc., § 1033.5, subd.
(a)(10).) Section 1717 governs attorneys’ fees based on a contract,
and authorizes an award of attorneys’ fees “[i]n any action on a
contract” to “the party prevailing on the contract” where the
contract specifically provides for an award of attorneys’ fees.
(Civ. Code, § 1717, subd. (a).) Subject to certain exceptions not
applicable in this case, “the party prevailing on the contract
48
shall be the party who recovered a greater relief in the action on
the contract.” (Id., subd. (b)(1).) Generally, “[w]hen determining
the prevailing party under section 1717, 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.’ ” (Silver Creek, LLC v.
BlackRock Realty Advisors, Inc. (2009) 173 Cal.App.4th 1533,
1539.) “A trial court has wide discretion in determining which
party is the prevailing party under section 1717, and we will not
disturb the trial court’s determination absent ‘a manifest abuse
of discretion, a prejudicial error of law, or necessary findings not
supported by substantial evidence.’ ” (Ibid.)
LAWPM argues that the trial court misapplied the law
when it determined that Alameda could recover attorneys’ fees
as the prevailing party on the fifth cause of action because the
court made its determination under section 1032, which governs
costs awards, rather than section 1717, which governs attorneys’
fees awards on a contract. It is true, as LAWPM asserts, that
“the prevailing party for purposes of a contractual attorney fees
award under Civil Code section 1717 . . . is not necessarily the
prevailing party for purposes of a costs award under Code of
Civil Procedure section 1032.” (David S. Karton, A Law Corp.
v. Dougherty, supra, 231 Cal.App.4th at p. 607.) Thus, “[t]he
determination of the party prevailing on the contract for purposes
of awarding attorney fees under section 1717 must be made
independently of the determination of the party prevailing in the
overall action for purposes of awarding costs under . . . section
1032.” (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc.
(2012) 211 Cal.App.4th 230, 239, italics omitted.) In this case,
49
however, the record does not demonstrate that the trial court
failed to determine whether Alameda was the prevailing party
under section 1717 in ruling on its motion for attorneys’ fees.
Alameda specifically brought its motion for attorneys’ fees
under section 1717, and argued that it was entitled to an award
of attorneys’ fees because it was the prevailing party on the 1993
Settlement Agreement, the contract at issue in the fifth cause of
action. In opposing Alameda’s motion, LAWPM contended that
the 1991 Easement Agreement and the 1993 Settlement
Agreement must be considered together for purposes of
determining the prevailing party under section 1717, and that
LAWPM was the prevailing party under the statute because it
had achieved lopsided results on those two related agreements.
LAWPM also expressly asserted that Alameda’s motion for
attorneys’ fees “must be analyzed independently of the Court’s
prior finding that Alameda is the prevailing party on the fifth
cause of action.”
In its written ruling on Alameda’s motion, the trial court
correctly stated the law that attorneys’ fees may be awarded as
costs under section 1032 when they are provided for by contract,
and that section 1717 authorizes an award of attorneys’ fees in
an action on a contract to the prevailing party on the contract.
The court also summarized the arguments set forth in LAWPM’s
opposition as to why Alameda should not be deemed the
prevailing party for purposes of a contractual attorneys’ fees
award. The court then concluded that Alameda was entitled to
recover attorneys’ fees as the prevailing party on the fifth cause
of action only. Although the court referenced its prior
determination as to the prevailing parties under section 1032, it
did not state that it was deciding Alameda’s right to attorneys’
50
fees based solely on this prior determination and without
considering the parties’ arguments under section 1717. Rather,
when considered as a whole, the court’s ruling reflects that it
awarded Alameda attorneys’ fees on the fifth cause of action for
breach of the 1993 Settlement Agreement because it determined
that Alameda was the prevailing party on that contract under
section 1717. On this record, LAWPM has failed to affirmatively
demonstrate that the court misconstrued or misapplied the law in
making its prevailing party determination. (Wertheim, LLC v.
Omidvar (2016) 3 Cal.App.5th 921, 925 [“On appeal a trial court’s
order ‘is presumed correct. Error must be affirmatively shown.’
”].)
LAWPM also asserts that the trial court erred in failing to
analyze the 1991 Easement Agreement and the 1993 Settlement
Agreement together to determine whether Alameda was the sole
prevailing party on those contracts for purposes of section 1717.
Under section 1717, “there may only be one prevailing party
entitled to attorney fees on a given contract in a given lawsuit.”
(Frog Creek Partners, LLC v. Vance Brown, Inc. (2012) 206
Cal.App.4th 515, 520.) On the other hand, “[w]here multiple
independent contracts are involved in one lawsuit, and each
contract provides an independent entitlement to fees, it is
necessary to determine the prevailing party under each
contract.” (Id. at p. 543; see Arntz Contracting Co. v. St.
Paul Fire & Marine Ins. Co. (1996) 47 Cal.App.4th 464, 491
[“[w]hen an action involves multiple, independent contracts, each
of which provides for attorney fees, the prevailing party . . . must
be determined as to each contract regardless of who prevails in
the overall action”]; Hunt v. Fahnestock (1990) 220 Cal.App.3d
628, 630 [“in a lawsuit involving several contracts, attorney’s fees
51
pursuant to . . . section 1717 may be awarded to the prevailing
party on each contract whether or not that party is a prevailing
party in the lawsuit”].)
LAWPM contends that the 1991 Easement Agreement and
the 1993 Settlement Agreement were interrelated because they
both governed the parties’ respective easement rights and were
the subject matter of the first phase of the trial in this case. The
trial court reasonably could have concluded, however, that the
two agreements were separate and independent contracts for
purposes of determining the prevailing party under section 1717.
The 1991 Easement Agreement concerned the parties’ rights with
respect to the three easements – the Eighth Street Easement, the
Truck Easement, and the Track Street West Easement – that
were conveyed pursuant to the 1991 Grant Deed. The 1993
Settlement Agreement, on the other hand, governed the parties’
rights and obligations with respect to the 8th-Central Gate.
Although the trial court briefly discussed the 1993 Settlement
Agreement in its December 15, 2017 Statement of Decision on the
second and third causes of action, it did so solely in the context of
addressing Defendants’ argument about the location of the Joint
Use Area.14 The court did not otherwise consider the 1993
14 As previously discussed, Defendants argued that the
location of the Joint Use Area, as referenced in the 1982 Ground
Lease, could be determined based upon the legal description of
the “Original Joint Use Area” included in one of the exhibits
to the 1993 Settlement Agreement. The trial court rejected
Defendants’ argument because that exhibit did not make any
reference to the easements at issue in the case, and a layperson
could not plot the location of the Joint Use Area on a survey map
based solely on a metes and bounds description.
52
Settlement Agreement in determining the parties’ respective
rights under the 1991 Easement Agreement. Indeed, the 1993
Settlement Agreement did not mention any of the easements
that were the subject of LAWPM’s first through fourth causes
action. Under these circumstances, the trial court did not err in
failing to determine that there was a single prevailing party on
the two contracts under section 1717.15
LAWPM further argues that, even if the 1991 Easement
Agreement and the 1993 Settlement Agreement are considered
separately for purposes of section 1717, Alameda still could not
15 In a related argument, LAWPM asserts that, because
there can be only one prevailing party for purposes of costs
awarded pursuant to section 1032, the trial court also erred in
determining that Alameda was a co-prevailing party under that
statute and awarding Alameda $22,886.86 in costs. As a general
rule, there is a single prevailing party under the mandatory costs
award provision of section 1032, subdivision (a)(4). (Sharif v.
Mehusa, Inc. (2015) 241 Cal.App.4th 185, 194.) However, where
the prevailing party does not fall within one of the four
mandatory costs categories specified in section 1032, subdivision
(a)(4), the statute “permits the trial court to determine the
prevailing party and then allow costs or not, or to apportion costs,
in its discretion.” (Texas Commerce Bank v. Garamendi (1994) 28
Cal.App.4th 1234, 1248-1249.) In such a situation, more than
one party may qualify as a prevailing party for purposes of a
costs award, and the trial court has discretion to decide how to
apportion costs between them. (Wohlgemuth v. Caterpillar Inc.
(2012) 207 Cal.App.4th 1252, 1264; On-Line Power, Inc. v. Mazur
(2007) 149 Cal.App.4th 1079, 1087.) Here, the record reflects,
that the trial court exercised the discretion afforded by section
1032, subdivision (a)(4) in determining that Alameda had
prevailed on the fifth cause of action. We see no abuse of
discretion in that ruling.
53
be deemed the prevailing party under the 1993 Settlement
Agreement. This argument lacks merit. While LAWPM achieved
an unqualified victory on the first through fourth causes of action
under the 1991 Easement Agreement, Alameda achieved an
unqualified victory on the fifth cause of action under the 1993
Settlement Agreement. The fact that LAWPM may have
obtained a greater recovery in the overall action by prevailing on
the four equitable claims did not preclude the trial court from
determining that Alameda was the prevailing party on the
breach of contract claim. (Arntz Contracting Co. v. St. Paul Fire
& Marine Ins. Co., supra, 47 Cal. App.4th at p. 491 [“[t]he fact
that a party ‘obtained a higher net recovery in the lawsuit is
irrelevant to the determination of which party prevailed on any
particular action on a contract’ ”].) “A trial court’s determination
as to which party has prevailed ‘ “will not be disturbed on appeal
absent a clear abuse of discretion.” ’ ” (City of West Hollywood
v. Kihagi (2017) 16 Cal.App.5th 739, 753.) LAWPM has failed
to make such a showing here.
LAWPM claims the trial court failed to conduct a lodestar
analysis prior to awarding attorneys’ fees to Alameda. LAWPM
specifically contends that the evidence was insufficient to
establish that the rates and hours requested by Alameda were
reasonable, thus, the trial court erred when it calculated the
resulting fee award. We conclude that the trial court did not
abuse its discretion in determining the reasonableness of
Alameda’s fee request.
54
“[T]he fee setting inquiry in California ordinarily begins
with the ‘lodestar,’ i.e., the number of hours reasonably expended
multiplied by the reasonable hourly rate.” (PLCM Group, Inc. v.
Drexler (2000) 22 Cal.4th 1084, 1095.) “The lodestar figure may
then be adjusted, based on consideration of factors specific to the
case, in order to fix the fee at the fair market value for the legal
services provided.” (Ibid.) Those factors include “(1) the novelty
and difficulty of the questions involved, (2) the skill displayed
in presenting them, (3) the extent to which the nature of the
litigation precluded other employment by the attorneys, [and]
(4) the contingent nature of the fee award.” (Ketchum v. Moses
(2001) 24 Cal.4th 1122, 1132.) “ ‘Such an approach anchors the
trial court’s analysis to an objective determination of the value
of the attorney’s services, ensuring that the amount awarded is
not arbitrary.’ ” (Id. at p. 1134.)
“ ‘The amount of an attorney fee to be awarded is a matter
within the sound discretion of the trial court. [Citation.] The
trial court is the best judge of the value of professional services
rendered in its court, and while its judgment is subject to our
review, we will not disturb that determination unless we are
convinced that it is clearly wrong. [Citation.] The only proper
basis of reversal of the amount of an attorney fees award is
if the amount awarded is so large or small that it shocks the
conscience and suggests that passion and prejudice influenced
the determination.’ ” (Blue Mountain Enterprises, LLC v. Owen
(2022) 74 Cal.App.5th 537, 559; see Concepcion v. Amscan
Holdings, Inc. (2014) 223 Cal.App.4th 1309, 1319 [with respect to
the amount of fees awarded, “ ‘there is no question our review
must be highly deferential to the views of the trial court’ ”].)
55
LAWPM asserts the trial court failed to conduct a lodestar
analysis to determine whether the rates and hours claimed by
Alameda were reasonable. In granting Alameda’s motion,
however, the trial court made the specific finding that
“Defendants have sufficiently provided their lodestar figures of
‘reasonable rates’ and ‘reasonable number of hours.’ ” The court
also expressly stated that “an analysis of reasonableness has
taken place in this case and the resulting fee award reflects the
reasonable number of hours expended by counsel.” The resulting
fee award did not compensate Alameda for all of the hours
requested, but rather excluded hours that the trial court
determined were not reasonably expended on the fifth cause of
action.
In finding that Alameda had “sufficiently supported its
requested billing rates,” the court explained that Alameda’s fee
expert had submitted a supplemental declaration in which he
described the rates of Alameda’s attorneys as being within the
range of “rates of attorneys at comparable firms in comparable
real estate litigation matters.” Based on such evidence, the court
found “the requested billing rates to be reasonable.” On appeal,
LAWPM disputes whether the firms and types of matters
identified by Alameda’s expert were sufficiently comparable to
the firms used and work performed in this case to support the
hourly rates sought. In determining a reasonable hourly rate,
however, “ ‘the court may rely on its own knowledge and
familiarity with the legal market, as well as the experience, skill,
and reputation of the attorney requesting fees [citation], the
difficulty or complexity of the litigation to which that skill was
applied [citations], and affidavits from other attorneys regarding
prevailing fees in the community and rate determinations in
56
other cases.’ ” (Morris v. Hyundai Motor America (2019) 41
Cal.App.5th 24, 41.) Indeed, “ ‘the trial court is in the best
position to value the services rendered by the attorneys in his or
her courtroom [citation], and this includes the determination
of the hourly rate that will be used in the lodestar calculus.’ ”
(Nishiki v. Danko Meredith, P.C. (2018) 25 Cal.App.5th 883, 898.)
LAWPM also argues that the declarations submitted by
Alameda in support of its fee request failed to describe with
sufficient particularity the relevant background, experience,
and type of work performed by each biller in this case. The
record reflects, however, that Alameda supported its motion
with billing invoices for each of the three firms that represented
it over the course of the litigation. Those invoices generally
identified the name of each biller, the date of each billing entry,
a description of the task performed, the time spent on that task,
and the biller’s hourly rate. Alameda also provided summary
charts identifying each biller by name, position, date of bar
admission, and hourly rate, and showing the total hours and
actual amounts that he or she billed each month to the case. “It
is well established that ‘California courts do not require detailed
time records, and trial courts have discretion to award fees based
on declarations of counsel describing the work they have done
and the court’s own view of the number of hours reasonably
spent.’ ” (Syers Properties III, Inc. v. Rankin (2014) 226
Cal.App.4th 691, 698.) In this case, the trial court concluded
that it had enough information to evaluate the rates and hours
sought by Alameda. The trial court did not abuse its discretion
in determining that, subject to certain deductions made by the
court, the requested rates and hours were reasonable.
57
Finally, LAWPM argues the trial court abused its
discretion when it awarded attorneys’ fees to Alameda for hours
that were not reasonably expended in connection with the fifth
cause of action. In particular, LAWPM contends the fee award
should have excluded hours that were billed in connection with
the first through fourth causes of action between January 2018
and July 2019. LAWPM also claims that the fee award should
have excluded hours that were duplicative, excessive, or based on
vague billing entries. Consistent with the trial court’s ruling, we
conclude that the amount of attorneys’ fees awarded to Alameda
must be reduced to exclude the hours expended on certain
unrelated matters, including Alameda’s motion for new trial,
appeal, oppositions to LAWPM’s fees and costs motions, unfiled
cross-complaint, and new lawsuit.
In its ruling on Alameda’s motion for attorneys’ fees, the
trial court stated that it agreed with LAWPM that Alameda’s
“fees for January 2018 onwards should not include entries related
to the new trial, appeal, or opposing LAWPM’s fees and costs
motions.” The court also indicated, however, that its calculations
of the fee award “already remove these entries, which were
highlighted in yellow in the defendants’ submission.” As LAWPM
correctly points out, the “highlighted” entries in Alameda’s
billing records do not relate to the hours billed on these specific
matters, and thus, the trial court’s calculations failed to properly
exclude such hours from the resulting fee award. In its
opposition to Alameda’s motion, LAWPM attached as exhibit E to
the declaration of Steven Kuehl a chart showing the billing
58
entries that LAWPM contends were not related to the fifth cause
of action. We have reviewed exhibit E for entries specifically
related to Alameda’s motion for new trial, appeal, and oppositions
to LAWPM’s fees and costs motions. Those entries represent a
total of $33,604.60 in attorneys’ fees.16 Alameda’s fee award
accordingly must be reduced by this amount.
In its opposition to Alameda’s motion, LAWPM also argued
that the trial court should exclude hours that were billed between
January 2018 and July 2019 in connection with a cross-complaint
that Alameda never filed and a new lawsuit that Alameda filed
against LAWPM in February 2019. In support of this argument,
LAWPM attached as exhibit G to the declaration of Steven Kuehl
a chart showing the billing entries that LAWPM asserts were
related to this cross-complaint and separate lawsuit. Although
16 As reflected in exhibit E to Steven Kuehl’s declaration,
there were a total of 18 billing entries which LAWPM specifically
identified as pertaining to Alameda’s new trial motion, appeal, or
oppositions to LAWPM’s fees and costs motions. Those entries
consisted of the following amounts in requested attorneys’ fees:
(1) $3,173.40 on June 5, 2019; (2) $1,366.20 on June 10, 2019;
(3) $1,552.50 on June 12, 2019; (4) $1,992.60 on June 14, 2019;
(5) $4,222.80 on June 17, 2019; (6) $590.40 on July 1, 2019;
(7) $4,533.30 on July 2, 2019; (8) $3,477.60 on July 3, 2019;
(9) $205.50 on July 8, 2019; (10) $186.30 on July 10, 2019;
(11) $496.80 on July 11, 2019; (12) $2,877.00 on July 11, 2019;
(13) 3,082.50 on July 12, 2019; (14) $621.00 on July 16, 2019;
(15) $1,438.50 on July 16, 2019; (16) $685.00 on July 24, 2019;
(17) $2,730.60 on July 25, 2019; and (18) $372.60 on July 26,
2019. Although the trial court agreed that these categories of
entries should not be included in the attorneys’ fee award, it
erroneously believed that Alameda had already excluded them
from its total fee request.
59
the trial court did not specifically address these entries in its
ruling on Alameda’s motion, the court did state that it “agrees
with LAWPM that Alameda’s recovery is limited to the Fifth
Cause of Action.” Alameda did not explain how these entries
were connected to the fifth cause of action in the proceedings
before the trial court, nor does it address the issue on appeal. We
have reviewed exhibit G, and agree with LAWPM that the entries
reflected in this chart are not related to the fifth cause of action.
Those entries represent a total of $74,694.30 in attorneys’ fees.
Alameda’s fee award therefore must also be reduced by this
amount.
LAWPM’s remaining objections to the fee award primarily
relate to billing entries that it asserts were duplicative, excessive,
or vague. The trial court rejected these arguments, however, in
its ruling on Alameda’s attorneys’ fees motion and found that,
with one exception, Alameda’s “billing entry descriptions and
tasks are acceptable.” The court also found that Alameda was
not required “to further explain the work performed by each
individual attorney in order to recover” fees for these entries. We
have reviewed the challenged entries, and conclude the trial court
reasonably could find that these entries were not duplicative,
excessive, or impermissibly vague. On this record, trial court did
not abuse its discretion in refusing to exclude these entries from
its calculation of the fee award.
60
DISPOSITION
The judgment is affirmed. The postjudgment order
awarding attorneys’ fees to Alameda is modified by striking a
total of $108,298.90 from the amount awarded, and is affirmed
as modified. The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
*
ADAMS, J.
We concur:
EDMON, P.J.
LAVIN, J.
*
Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.
61