Boyd v. Freeman CA2/4

Filed 5/18/23 Boyd v. Freeman CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR

PAULA BOYD, B316753

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC588216)
v.

DAVID FREEMAN,

Defendant and
Respondent.

APPEAL from a judgment and order of the Superior Court
of Los Angeles County, Daniel S. Murphy, Judge. Affirmed.
Paula Boyd, in pro. per.; Pollak, Vida & Barer, Daniel P.
Barer, Hamed Amiri Ghaemmaghami for Plaintiff and Appellant.
The Jamison Law Firm, Guy E. Jamison and Chelsea M.
Clayton for Defendant and Respondent.
 In late 2005, respondent attorney David Freeman loaned
$425,000 to appellant Paula Boyd, his then-client. Boyd
defaulted on the loan in 2007, at which point Freeman initiated
foreclosure proceedings against the real property that secured the
loan. He later ceased the foreclosure proceedings pursuant to a
settlement agreement with Boyd. The settlement agreement
modified various terms of the loan, including the term and
interest rate. Boyd subsequently defaulted on the modified loan,
and Freeman reinitiated foreclosure proceedings in 2012.
Freeman purchased the property by tendering a full credit bid at
a trustee sale and has been in possession of the property ever
since.
Boyd filed the instant action against Freeman, asserting
causes of action for wrongful foreclosure, to set aside trustee sale,
to void or cancel trustee’s deed upon sale, unjust enrichment, and
to quiet title. Freeman filed cross-claims for equitable and
declaratory relief. After a bench trial, the trial court issued a
statement of decision finding, among other things, that the
interest rate on the initial loan exceeded 10 percent, the
settlement agreement purged the usury, Freeman did not commit
any unlawful conduct or act in bad faith, and Boyd’s claims based
on post-settlement conduct were barred by res judicata. The
court entered judgment in favor of Freeman and later awarded
him $206,637.50 in attorney fees pursuant to a fee provision in
the settlement agreement.
Boyd now contends the court erred in ruling in Freeman’s
favor and awarding him attorney fees. She argues that public
policies against usury and unfair attorney-client transactions
invalidate the original loan and everything flowing from it,
including the foreclosure, and preclude the settlement agreement

2
from purging the usury. She further argues the fee award must
be reversed, because the action was not brought to enforce or
interpret the settlement agreement or the rights or obligations of
the parties thereunder. We reject her contentions and affirm.
FACTUAL BACKGROUND
We draw the factual background from the facts and
evidence in the record and the trial court’s statement of decision.
To the extent Boyd requested factual findings on specific
controverted issues, we limit application of the doctrine of
implied findings. (See Code Civ. Proc., § 634; SFPP, L.P. v.
Burlington Northern & Santa Fe Railway Co. (2004) 121
Cal.App.4th 452, 462.)
Original Loan
Boyd is a sophisticated businesswoman with a master’s
degree in accounting. In 2005, she owned a 16-unit apartment
building located in Glendale (“the property”). Freeman is a
sophisticated businessman with a law degree. In early 2005,
Boyd retained Freeman to represent her in connection with an
unrelated matter. Freeman represented her in that matter
throughout 2005 and early 2006. Boyd was also represented by
another attorney, Eugene Alkana, around this time. Alkana was
a licensed real estate broker as well as an attorney.
In late 2005, Freeman agreed to loan Boyd $425,000 to
purchase a coin-operated laundry business. Boyd discussed the
loan with Alkana, who reviewed documents related to the
transaction and explained that certain disclosure statements
would exempt the loan from usury. Alkana did not advise Boyd
“on the propriety or wisdom of making this loan.” Freeman had a
good faith belief that Alkana provided Boyd with independent
legal representation regarding the loan.

3
 The loan was effectuated pursuant to a written promissory
note secured by a deed of trust on the property. The note
provided that Boyd would make monthly, interest-only payments
for 12 months beginning on February 1, 2006, at an annual
interest rate of 10 percent, followed by a balloon payment of the
principal amount. Boyd paid Freeman a loan fee of $8,500, which
was deducted from the loan proceeds, as well as $582.19 in
interest for the period of December 27, 2005 to January 1, 2006.
When the loan fee and additional interest payment were factored
into the loan amount, the annual percentage rate of interest
exceeded 12 percent.
The final version of the note stated that the note had been
“made and arranged by a Real Estate Broker – Mortgage
Options.” Earlier drafts of the note did not include that
language. Mortgage Options is a licensed real estate broker and
was paid $500.00 for preparing disclosure documents for the loan.
No one from Mortgage Options ever spoke to Boyd.
Boyd made some payments but defaulted on the loan on
January 1, 2007. Freeman initiated proceedings to foreclose on
the property. Boyd retained attorney David Epstein to represent
her. On June 29, 2007, Epstein sent a letter to Freeman in which
he expressed concerns that the note was usurious and Freeman
was representing Boyd when the loan was made. Epstein also
disputed the accuracy of the assertion that Mortgage Options had
“arranged” the loan. Boyd was aware of Epstein’s concern that
the loan was possibly usurious.
Settlement Agreement and Modified Loan
Epstein and Freeman subsequently negotiated a settlement
agreement, which both Boyd and Freeman executed on
September 12, 2007. The settlement agreement recited, and the

4
trial court found, that it was the result of an arm’s length
negotiation between the parties. The trial court also expressly
found that the settlement agreement “was the parties’ good faith
attempt to resolve their disputes” and “was not the result of
fraud, undue influence, or any unfair advantage.”
Pursuant to the settlement agreement, the parties
acknowledged that the principal balance of the loan remained
$425,000. The interest rate on the principal balance between
December 1, 2006 and March 31, 2007 remained 10 percent, with
unpaid interest to accrue at that rate and be added to the
principal. From April 1, 2007 forward, however, the interest rate
was lowered to seven percent. When the $8,500 loan fee and
previous payments of 10 percent interest were included, the
resultant effective interest rate was 7.86 percent per year. The
settlement agreement also extended the term of the loan to 48
months, with a balloon payment of any remaining accrued
interest and principal due on September 30, 2011. The
settlement agreement expressly stated that it superseded and
amended the original note, though it provided the deed of trust
on the property “shall remain in place and shall be acknowledged
as valid security for payment of all sums owing as recited above.”
The settlement agreement included a mutual release of any
and all past and current claims, “including but not limited to any
claims arising out of or relating to the Note, Trust Deed, or
Foreclosure sale.” It also included a mutual and specific release
of “any and all rights provided in California Civil Code Section
1542.”1 Freeman agreed to cancel the foreclosure proceedings
and waive all late fees and penalties “assessed to date.”

1 Civil Code section 1542 provides, “A general release does
not extend to claims that the creditor or releasing party does not

5
 The settlement agreement also included the following
provision concerning attorney fees: “If any action is brought to
enforce or interpret any provision of this Agreement, or the rights
or obligations of any Party thereunder, the prevailing Party shall
be entitled to recover, as an element of such Party’s costs of suit
and not as damages, all reasonable attorneys’ fees, costs and
expense incurred or sustained by such prevailing Party in
connection with such action, including, without limitation, legal
fees and costs. The ‘prevailing party’ shall be the Party who is
entitled to recover his/her/its costs of suit, whether or not the suit
precedes [sic] to final judgment.”
Default and Foreclosure
Boyd made several payments on the loan before again
falling behind. Freeman recorded a notice of default on or about
March 21, 2012. The notice identified the defaulted obligation as
arising out of the settlement agreement and advised that a
trustee sale would occur on July 16, 2012. The notice
inaccurately stated the amount of the default and the address of
the property.
On July 16, 2012, Freeman purchased the property at the
trustee sale by tendering a full credit bid in the amount of
$591,397.64.
PROCEDURAL HISTORY
Previous Litigation
In June 2012, Boyd filed a complaint against Freeman in
which she asserted causes of action for legal malpractice, breach

know or suspect to exist in his or her favor at the time of
executing the release and that, if known by him or her, would
have materially affected his or her settlement with the debtor or
released party.” (Civ. Code, § 1542.)

6
of contract, breach of fiduciary duty, fraud, and declaratory relief.
(See Boyd v. Freeman (May 19, 2015, B253500) [nonpub. opn.].)
As here, Boyd’s claims “were predicated on allegations that after
Boyd hired Freeman to represent her in a matter, he made a
‘usurious’ loan to her secured by a deed of trust for property in
Glendale,” then “‘continued to use his legal status and his
usurious loan terms to try to take the property illegally and
wrongfully from [Boyd].’” (Boyd v. Freeman, supra, B253500.)
After Freeman’s demurrer was sustained with leave to amend,
Boyd filed a first amended complaint asserting causes of action
for breach of fiduciary duty and restitution under the unfair
competition law. The trial court sustained Freeman’s demurrer
without leave to amend on statute of limitations grounds, and we
affirmed.
Current Litigation
Boyd filed her original complaint in this action on July 16,
2015, and filed the operative first amended complaint (FAC) on
November 10, 2015. In the FAC, Boyd asserted causes of action
for wrongful foreclosure, to set aside trustee sale, to void or
cancel trustee’s deed upon sale, unjust enrichment, and to quiet
title. She did not mention the settlement agreement.
Freeman demurred to the FAC, asserting Boyd’s causes of
action were barred by the doctrine of res judicata in light of the
previous litigation between the parties. The trial court agreed
and sustained the demurrer. Boyd appealed, and we reversed
after concluding that the previous dismissal of Boyd’s claims on
timeliness grounds was not a judgment on the merits. (Boyd v.
Freeman (2017) 18 Cal.App.5th 847, 850.)
On remand, Freeman cross-claimed against Boyd for
equitable and declaratory relief. He also moved for summary

7
judgment or adjudication on each of Boyd’s claims. Boyd opposed
the motion. She argued there were material issues of fact
regarding whether the foreclosure was a usurious transaction;
whether the settlement agreement was invalid due to economic
duress, undue influence, and unconscionability; and whether
Freeman complied with statutes governing non-judicial
foreclosure.
The trial court concluded that Boyd’s claims based on post-
settlement conduct were barred by res judicata, she failed to
establish a triable issue of material fact regarding the alleged
irregularities in the foreclosure proceedings, and she failed to
show economic duress, undue influence, or unconscionability. It
nevertheless denied the motion for summary judgment because it
found that “usury claims are contained in each of Boyd’s causes of
action” and Boyd demonstrated triable issues of material fact
regarding whether the loan was exempt from usury because it
was arranged by a broker and, if not, whether the settlement
agreement removed the taint of usury from the original loan.
These factual issues were tried to the court in a bench trial
from June 16 to 23, 2021. The court issued a statement of
decision in favor of Freeman on July 27, 2021. In addition to the
factual findings outlined above, the court determined that the
settlement agreement “was supported by valid and legal
consideration,” “purged the original usury by maintaining this
lower legal interest rate” of 7.86 percent, and contained a valid
Civil Code section 1542 waiver. It further ruled that Boyd “has
not established duress or economic compulsion,” and also rejected
as time-barred her assertions that the settlement agreement was
invalid due to “economic duress, economic compulsion, undue
influence, breach of fiduciary duty and violation of Rule 3-300 of

8
the Rules of Professional Conduct.”2 It also made related rulings
that Boyd could not “bring wrongful foreclosure claims [based] on
defects predating the Settlement Agreement” without “first
rescind[ing] that agreement,” and her delay in seeking to rescind
the settlement agreement “substantially prejudiced” Freeman.
The court found that Freeman “exercised a valid legal right with
foreclosure proceedings” and “did not commit any unlawful
conduct or act in bad faith.”
Despite Boyd’s express request, the court did not make any
findings concerning whether the original loan was arranged by a
broker. Instead, it found that it “is immaterial whether the loan
at issue was actually broker arranged.” The court also found that
the mutual releases of claims and Civil Code section 1542 waiver
rendered immaterial any potential violations of Freeman’s
“fiduciary duties in entering into a business transaction with a
client and . . . fail[ure] to comply with Rule 3-300 of the Rules of
Professional Conduct (current Rule 1.8.1).” The court entered
judgment for Freeman on September 9, 2021.

2 Former Rule of Professional Conduct 3-300, which was in
effect at the time of the events here, provided that “A member
shall not enter into a business transaction with a client; or
knowingly acquire an ownership, possessory, security, or other
pecuniary interest adverse to a client,” unless certain
requirements were met. Those requirements included dealing on
terms “fair and reasonable” to the client, fully disclosing those
terms to the client in an understandable written manner,
advising the client to seek and providing time for the client to
seek independent legal advice, and obtaining written consent to
the terms of the transaction. (Former Rule of Professional
Conduct 3-300.) This rule has been replaced with current Rule of
Professional Conduct 1.8.1.

9
 Freeman subsequently filed a memorandum of costs and a
motion for attorney fees based on the attorney fee provision of the
settlement agreement. Boyd filed a motion to tax costs and an
opposition to the fee motion. She contended the fee provision was
inapplicable because her action was not “on [the] contract” of the
settlement agreement.
The trial court heard the motions on November 3, 2021. It
granted Freeman’s motion for attorney fees, finding that it was
“undisputed that the parties litigated the issue of whether the
settlement agreement purged the taint of usury from the original
promissory note” and that Boyd herself acknowledged that “an
action is ‘on a contract’ if it involves or relates to an agreement by
seeking to define or interpret its terms or to determine a party’s
rights or duties under the agreement.” The court found
Freeman’s requested fees to be reasonable and awarded him
$206,637.50. The court granted Boyd’s motion to tax $44,655 of
Freeman’s requested costs.
Boyd timely appealed both the judgment and the award of
attorney fees.
DISCUSSION
Boyd asserts that the trial court’s factual findings establish
that the original loan transaction was usurious and violated the
Rules of Professional Conduct. She contends that public policies
against usurious transactions and unfair attorney-client
transactions “combine to invalidate the foreclosure here.” She
further contends these “twin policies” overcome any policy
favoring settlement of disputes. Boyd also argues that the fee
award should be reversed, both because she should be the
prevailing party and because the award is not authorized by the
settlement agreement.

10
I. Standards of review
In reviewing a judgment based on a statement of decision
following a bench trial, we generally review findings of fact for
substantial evidence and questions of law de novo. (Thompson v.
Asimos (2016) 6 Cal.App.5th 970, 981.)
Whether a transaction is usurious is a mixed question of
fact and law. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799-
801.) The “trial court’s determination of the historical basis of
the transactions—in common parlance, what happened—raises a
question of fact. . . . Whether a type of transaction is subject to
usury is a question that can have practical significance far
beyond the confines of the case then before the court,” and thus
poses a question of law subject to de novo review. (Id. at p. 801.)
For similar reasons, we review “important questions of public
policy de novo.” (People for Ethical Operation of Prosecutors and
Law Enforcement v. Spitzer (2020) 53 Cal.App.5th 391, 409.) The
legal basis for an attorney fee award is also subject to de novo
review. (Mountain Air Enterprises, LLC v. Sundowner Towers,
LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).)
We presume the judgment of the trial court is correct. As
the appellant, Boyd bears the burden of demonstrating, on the
basis of the appellate record, that the trial court committed
reversible error. (Jameson v. Desta (2018) 5 Cal.5th 594, 608-
609.)
II. The settlement agreement purged any usury.
Usury is the exacting, taking, or receiving of an interest
rate greater than that allowed by law for the use or loan of
money. (Hardwick v. Wilcox (2017) 11 Cal.App.5th 975, 978
(Hardwick).) A loan transaction with an interest rate in excess of
the legally permissible rate is considered usurious, even where

11
the parties willingly negotiate it and the borrower is
sophisticated. (Id. at pp. 978, 988; Ghirardo v. Antonioli, supra, 8
Cal.4th at p. 807.) The legally permissible interest rates for
various transactions are set forth in California Constitution,
article XV, section 1; there is no dispute that 10 percent was the
maximum rate permissible for the loan in this case.
Civil Code, section 1916.1 provides an exemption to the
constitutionally mandated interest rates for “any loan or
forbearance made or arranged by any person licensed as a real
estate broker by the State of California, and secured, directly or
collaterally, in whole or in part by liens on real property.” (Civ.
Code, § 1916.1.) The parties dispute whether Mortgage Options
“arranged” the loan in 2005, thus exempting it from usury
regardless of the effective interest rate, and presented dueling
expert testimony on the issue at trial. The trial court declined to
resolve the dispute, concluding instead that it was immaterial in
light of the settlement agreement. Boyd contends that the issue
is material, and the trial court’s findings “compel[ ] the
conclusion that no broker arranged the loan.” We agree with the
trial court that the issue is immaterial in light of the settlement
agreement: even if the loan was not arranged by a broker and
was therefore usurious, any usury was removed by the
settlement agreement.
Usury may have repercussions beyond the transaction in
which it originates. Unless the usury is purged, all future
transactions connected with or growing out of the original are
also considered usurious. (Hardwick, supra, 11 Cal.App.5th at
pp. 993-994.) “‘“‘An original taint of usury attaches to the whole
family of consecutive obligations and securities growing out of the
original vicious transaction; and none of the descendent

12
obligations, however remote, can be free of the taint if the descent
can be fairly traced.’” [Citation.]’” (Id. at p. 994.) However, “the
abandonment of the usurious agreement and the execution of a
new obligation for the amount of the actual debt free from the
usury and bearing only legal interest, purges the original usury
and makes the second obligation valid and enforceable.”
(Whittemore Homes, Inc. v. Fleishman (1961) 190 Cal.App.2d 554,
560.) It has long been recognized that a valid settlement
agreement can serve this severing function, so long as it is not
the product of fraud, undue influence, or other unfair advantage.
(See Credit Finance Corp. v. Mox (1932) 125 Cal.App. 583, 586.)
The trial court found that the settlement agreement was an
arm’s length transaction and the product of good faith
negotiations between Freeman and Boyd’s independent legal
counsel rather than fraud, undue duress, or any unfair
advantage. Boyd acknowledges, rightly, that those findings are
supported by substantial evidence and thus will stand on appeal.
She argues that the settlement agreement nevertheless could not
purge the usury of the original loan because “whether a
settlement agreement purges usury turns on public policy,” and
public policies against usury and unfair attorney-client
transactions prevent a purge here. We disagree.
Boyd primarily relies on Hardwick, supra, 11 Cal.App.5th
975, and Grados v. Shiau (2021) 63 Cal.App.5th 1042 (Grados).
Both cases are distinguishable. In Hardwick, lender Wilcox
made a series of loans to borrower Hardwick over a 10-year
period. (Hardwick, supra, 11 Cal.App.5th at p. 979.) The loans,
which largely rolled into one another, all had interest rates of 11
or 12 percent; the trial court assumed without deciding that the
loans were usurious. (See id. at pp. 982, 984.) Ultimately, the

13
loans were rolled into two notes, and Hardwick defaulted on one
of them. (Id. at p. 982.) After Wilcox initiated nonjudicial
foreclosure, the parties agreed to enter a forbearance agreement
to extend the repayment deadline. (Ibid.) The forbearance
agreement also contained a general release of any and all claims
Hardwick might have against Wilcox, including a waiver of his
rights under Civil Code section 1542. (Id. at p. 983.) Hardwick
subsequently filed suit against Wilcox, seeking to recover
usurious interest payments, cancel the forbearance agreement,
and prevent the foreclosure Wilcox reinstated. (Id. at p. 984.)
Wilcox filed a cross-complaint, seeking, among other things, a
declaration that Hardwick waived his right to recover any
usurious interest due to the release and waiver in the
forbearance agreement. (Ibid.) Neither Hardwick nor Wilcox
was aware of the usury law when they signed the forbearance
agreement. (Id. at pp. 984-985.)
After a bench trial, the trial court concluded the
forbearance agreement did not contain a valid waiver of usury
violations. (Hardwick, supra, 11 Cal.App.5th at pp. 985, 988.)
The court made factual findings that the forbearance agreement
was a “‘descendant obligation growing out of the original usurious
loans,’” “an extension of that original usurious transaction,” and
“usurious in and of itself.” (Id. at p. 985.) “Under these
circumstances, the court found, interpreting the release as a
waiver of a usury claim would exempt Wilcox from the
consequences of his violation of the usury law” and accordingly
violate public policy. (Ibid.) The trial court further concluded
that even if Hardwick could waive his usury claim, the release
contained in the forbearance agreement was “not a knowing
waiver of a usury claim, but rather a perpetuation of a violation

14
of the usury law.” (Ibid.) Wilcox appealed, and the appellate
court affirmed.
The appellate court concluded that “the record supports the
trial court’s finding that construing this particular release as a
waiver of usury would violate public policy.” (Hardwick, supra,
11 Cal.App.5th at p. 989, emphasis added.) It observed that “the
interconnection between the series of 15 notes and amendments
to the notes substantially supports the trial court’s finding that
the Forbearance Agreement was an extension of the underlying
usurious loan transaction,” and “construing the unilateral
general release . . . as a waiver of usury would allow Wilcox to
escape the consequences of his violation of the law by permitting
him to benefit from his illegal contract and retain the usurious
interest he extracted from Hardwick.” (Ibid.) The appellate
court also rejected Wilcox’s reliance on case law holding that “a
usury claim can be released in a settlement agreement,”
concluding that “the factual evidence showed that the release was
not part of a settlement of a usury claim or of any other dispute.
Rather, the sole purpose of the Forbearance Agreement was to
extend the due dates for the loans.” (Ibid.) The court added, “the
Forbearance Agreement was not a settlement agreement but an
illegal contract that itself violated the usury law.” (Id. at p. 990.)
Here, the settlement agreement was a legitimate
settlement agreement. The trial court found that Boyd was
aware the note was possibly usurious when she was negotiating
the agreement, and also was aware that Freeman had been
representing her as counsel when the note was issued. It further
found that Boyd and her independent attorney, Epstein, “knew
about the potential existence of a usury claim and knew that she
was entering into a settlement agreement to release any and all

15
claims against Freeman.” Unlike the forbearance agreement in
Hardwick, the settlement agreement contained a mutual rather
than unilateral release of claims and lowered the interest rate on
the loan to a non-usurious level. Moreover, the trial court found,
and Boyd does not dispute, that the settlement agreement was
supported by valid and legal consideration. “The question comes
down to whether the new agreement is a mere renewal of the old
usurious agreement, or if it purges the debt of the original
usury.” (Whittemore Homes, Inc. v. Fleishman, supra, 190
Cal.App.2d at p. 560.) The settlement agreement was not a mere
renewal of the original loan; it substantially modified the interest
rate and other loan terms, and by its own terms amended and
superseded the original loan.
Hardwick did not, as Boyd contends, “confirm[ ] public
policy as the deciding factor on whether an agreement with a
release . . . purges usury.” As we emphasized above, the court
concluded that the particular release in the forbearance
agreement would violate public policy by allowing Wilcox to profit
from his wrongdoing. The ruling turned not on public policy but
rather on the underlying facts of the transactions and contents of
the forbearance agreement. The facts of this case are not
analogous to those in Hardwick; its holding is not applicable
here.
The same is true of Grados, supra, 63 Cal.App.5th 1042,
which Boyd asserts also stands for the proposition that public
policy is the deciding factor in whether a contract can purge
usury. There, Grados lent Shiau $100,000 pursuant to a note
that accrued interest at a rate of 20 percent per annum and also
required a “$100,000 earn-out payment” on the date of maturity.
(Grados, supra, 63 Cal.App.5th at pp. 1046-1047.) The note

16
contained a unilateral waiver by Shiau of “any and all laws
applicable to the payment of interest in connection with its [sic]
payment of the Earn-Out Amount.” (Id. at p. 1047.) After Shiau
failed to pay, Grados sued him for breach of contract. (Id. at p.
1046.) Grados obtained entry of default and a default judgment
in the amount of $217,388.58: $100,000 in principal, $100,000 in
earn-out, $16,163.05 in pre-judgment interest calculated at the
statutory rate of 10 percent from the alleged date of Shiau’s
default, and $1,225.53 in costs. (Id. at p. 1047.) Shiau moved to
set aside the default and default judgment. As relevant here, he
argued that the $100,000 earn-out requirement in the note (and
awarded in the default judgment) was usurious and rendered the
default judgment void. (Id. at p. 1048.) He requested that the
court at a minimum reduce the default judgment “‘to the
principal and reasonable interest, legal interest.’” (Ibid.) The
trial court rejected Shiau’s arguments and request and denied
the motion to set aside without modifying the amount of the
judgment. (Ibid.)
On appeal, Shiau argued that the illegal terms of the note
and illegal interest rates awarded to Grados rendered the default
judgment void, such that the trial court abused its discretion by
denying his motion to set aside. (Grados, supra, 63 Cal.App.5th
at p. 1049.) The appellate court agreed that the relief awarded
Grados in the default judgment was contrary to law. (Id. at p.
1054.) It concluded that the interest rate was 100 percent when
the earn-out amount was considered, “ten times above the
maximum constitutional rate,” and accordingly “rendered that
portion of the default judgment void.” (Id. at p. 1055.) The
appellate court also rejected Grados’s attempt to invoke the
waiver provision of the note. (Ibid.) Quoting Hardwick, supra,

17
11 Cal.App.5th at pp. 989-990, the court concluded that
“[a]llowing Grados to benefit from the unilateral provision in [the
note] and be awarded the illegal $100,000 Earn-Out Amount,
equivalent to the entire amount of the principal, would
‘undermine the “theory” of California usury law, which is that
“society benefits by the prohibition of loans at excessive interest
rates, even though both parties are willing to negotiate them.”’”
(Grados, supra, 63 Cal.App.5th at p. 1055.) The appellate court
accordingly struck the improper portion of the default judgment
and modified it to award Grados the $100,000 principal and
interest of $8,081.53. (Id. at p. 1057.)
Like Hardwick, Grados involved a usurious agreement that
included a unilateral waiver of rights. Those features are not
present in the settlement agreement here. Grados did not hold,
as Boyd suggests, that “purported waivers of usury that run afoul
of public policy cannot purge usury.” There was no attempt to
purge usury in Grados, which concerned a single usurious
agreement. Grados thus does not speak to the issue of whether a
settlement agreement that is itself not usurious can purge the
usury of a previous agreement.
Boyd argues that another important public policy prevents
the settlement agreement from purging usury: the policy “against
allowing attorneys to take advantage of the trust their clients
place in them by persuading them into unfair, unreasonable
business transactions.” She asserts that regardless of the terms
of the settlement agreement, “at the time Mr. Freeman made the
loan to his client, it was usurious, and thus unfair and
unreasonable. . . . [T]hat is the time frame that matters.” In
other words, she contends the original loan was void from its
inception as a matter of public policy. She also makes a related

18
argument that the original loan was voidable at any time at her
option due to Freeman’s alleged violations of former Rule 3-300 of
the Rules of Professional Conduct.
The trial court ruled that “Boyd’s attempt to invalidate the
loan for violation of Rule 3-300 of the Rules of Professional
Conduct is barred by the statute of limitations.” Indeed, we held
as much in the previous litigation between the parties. (See Boyd
v. Freeman (May 19, 2015, B253500) [nonpub. opn.].) Boyd
maintains this ruling was “incorrect,” because the instant action
did not involve claims of malpractice or breach of fiduciary duty
and we previously held that the instant suit was not barred by
the dismissal of the previous litigation on timeliness grounds.
(See Boyd v. Freeman, supra, 18 Cal.App.5th at p. 850.) Even if
we assume Boyd is correct, and the trial court erred in invoking
the statute of limitations, the trial court alternatively ruled that
any violations of the Rules of Professional Conduct were rendered
“immaterial” by the mutual waivers and releases contained in the
settlement agreement. Boyd has not demonstrated this ruling
was erroneous.
The trial court found that Boyd entered into the settlement
agreement and released all claims against Freeman with the
knowledge that Freeman represented her when the initial loan
was made. Boyd cannot overcome these findings, which are
supported by substantial evidence in the record.3 She instead
asserts that the policy of “putting an end to claims once they have

3 We also note that we concluded in the previous litigation
that “Boyd knew, or should have known, the facts underlying
[her] breach of fiduciary duty claims” “no later than the execution
of the 2007 settlement agreement.” (Boyd v. Freeman, supra,
(B253500).)

19
been resolved . . . does not overrule the public policies against
usury and unfair transactions between attorneys and clients.”
The only authority she cites for this proposition is Hardwick,
supra, 11 Cal.App.5th 975. Hardwick is equally inapplicable in
this context, inasmuch as “there was neither a preexisting
dispute between the parties as to whether the loans were
usurious nor a settlement agreement in compromise of such a
dispute.” (Hardwick, supra, 11 Cal.App.5th at pp. 990-991.)
Boyd was represented by independent counsel when she entered
into the settlement agreement, and the releases it contained were
mutual and supported by valid consideration. Boyd cannot now
rely on allegations of professional misconduct to undermine the
otherwise valid settlement agreement.4
III. The settlement agreement authorized the fee award.
Civil Code section 1717, subdivision (a) provides, “In any
action on a contract, where the contract specifically provides that
attorney’s fees and costs, which are incurred to enforce that
contract, shall be awarded either to one of the parties or to the
prevailing party, then the party who is determined to be the
party prevailing on the contract, whether he or she is the party
specified in the contract or not, shall be entitled to reasonable

4 Boyd also asserts that irregularities in the foreclosure
process, such as the erroneous property address on the notice of
default, “exacerbated the violations of public policy,” and
“disputes” the trial court’s findings that she was not prejudiced
by the irregularities. We need not address these minimally
developed arguments in light of our conclusion that public policy
did not undermine the settlement agreement from which the
foreclosure arose. In any event, Boyd failed to carry her burden
of showing the trial court’s findings were not supported by
substantial evidence or its legal conclusions were incorrect.

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attorney’s fees in addition to other costs.” (Civ. Code, § 1717,
subd. (a).) It is undisputed that the settlement agreement
contained a provision awarding attorney fees to the prevailing
party where “any action is brought to enforce or interpret any
provision of this Agreement, or the rights or obligations of any
Party thereunder.” Boyd, who contended below that the action
was not “on a contract” within the meaning of Civil Code section
1717, abandons that position and now contends the fee provision
does not support the fee award because she did not bring an
action to enforce or interpret the settlement agreement. She
emphasizes that the FAC did not mention the settlement
agreement, “let alone seeks [sic] enforcement or interpretation of
it,” and contends that Freeman’s efforts to use the settlement
agreement as a defense do not constitute “bringing an action to
enforce” the agreement within the meaning of Civil Code section
1717.
In considering the scope of the settlement agreement’s
attorney fee provision, we apply “traditional rules of contract
interpretation.” (Mountain Air, supra, 3 Cal.5th at p. 752.) We
consider the “mutual intention of the parties,” focusing first on
the plain language of the provision. (Ibid.) However, “a
complicated and difficult set of facts may sometimes obscure
whether a claim on which attorney fees are incurred is within the
scope of a fees provision.” (Id. at p. 760.) Thus, where
“warrant[ed],” we should also consider “‘the pleaded theories of
recovery, the theories asserted and the evidence produced at
trial, if any, and also any additional evidence submitted on the
motion in order to identify the legal basis of the prevailing party’s
recovery.’ [Citation.]” (Id. at pp. 760-761.)

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 The provision here contemplates an award of fees where
“any action is brought to enforce or interpret any provision of this
Agreement, or the rights or obligations of any Party thereunder.”
As the trial court recognized below in its summary judgment
ruling, Boyd is correct that she did not expressly assert a cause of
action to set aside the settlement agreement. However, it
continued, “this is implicitly what Boyd seeks by advancing
claims to set aside the foreclosure sale of the Property because
the Settlement Agreement necessarily impedes those claims.”
Indeed, Boyd expressly argued below that she brought her
wrongful foreclosure claim “to rescind the settlement agreement
and void the foreclosure sale.” In its statement of decision, the
trial court concluded that Boyd could not “bring wrongful
foreclosure claims [based] on defects predating the Settlement
Agreement” without “first rescind[ing] that agreement.”
Boyd’s action at its heart, if not in its caption, was brought
to determine her rights or obligations under the settlement
agreement. The settlement agreement was admitted as an
exhibit at trial, which focused largely on the issue of whether the
settlement agreement purged the usury present in the original
loan. At the conclusion of trial, both parties indicated an
intention to seek attorney fees if they prevailed, and explicitly
stated they would do so under the settlement agreement. Their
mutual intention thus was clear.
We do not “take an overly formalistic approach to
determining whether a prevailing party is entitled to contractual
attorney fees.” (Mountain Air, supra, 3 Cal.5th at p. 760.)
Freeman incurred fees in an action that determined “the rights or
obligations” of the parties under the settlement agreement. The
trial court did not err in awarding him those fees.

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 DISPOSITION
The trial court’s judgment and fee order are affirmed.
Respondent may recover his costs of appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, J.

We concur:

CURREY, ACTING, P.J.

ZUKIN, J.


Judge of the Los Angeles County Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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