Bank of Idaho v. Pine Avenue Associates

• Decision Date: 27 October 1982
• Citation: 137 Cal.App.3d 5,186 Cal.Rptr. 695
• Court: California Court of Appeals
• Parties: BANK OF IDAHO, N.A., a National Banking Association, Plaintiff and Appellant, v. PINE AVENUE ASSOCIATES, a Limited Partnership, Charles J. Pietsch, J. Charles Yoss, and Larry J. Calemine, Defendants and Respondents. BANK OF IDAHO, N.A., a National Banking Association, Plaintiff and Respondent. v. PINE AVENUE ASSOCIATES, a Limited Partnership, Charles J. Pietsch, J. Charles Yoss, and Larry J. Calemine, Defendants and Appellants, Civ. 62836, Civ. 63361.

Page 695

186 Cal.Rptr. 695

137 Cal.App.3d 5

BANK OF IDAHO, N.A., a National Banking Association, Plaintiff and Appellant, v. PINE AVENUE ASSOCIATES, a Limited Partnership, Charles J. Pietsch, J. Charles Yoss, and Larry J. Calemine, Defendants and Respondents.

BANK OF IDAHO, N.A., a National Banking Association, Plaintiff and Respondent. v. PINE AVENUE ASSOCIATES, a Limited Partnership, Charles J. Pietsch, J. Charles Yoss, and Larry J. Calemine, Defendants and Appellants,

Civ. 62836, Civ. 63361.

Court of Appeal, Second District, Division 3, California.

Oct. 27, 1982.

Bennett & Fields, and Howard M. Fields, Los Angeles, for plaintiff, appellant and respondent Bank of Idaho.

Cox, Castle & Nicholson, and George D. Calkins, Los Angeles, for defendants, respondents, and appellants Pine Avenue Associates, et al.

POTTER, Acting Presiding Justice.

Both of the above appeals are from portions of an order of the superior court with respect to costs on a prior appeal in plaintiff's action seeking a declaration of the parties' rights, rescission, and restitution with respect to a complex real estate transaction wherein plaintiff was seller and lender, and defendants were buyer and borrower. The former appeal was from a judgment dismissing the action after a demurrer to the third amended complaint was sustained without leave to amend. The result of the former appeal was that the judgment was reversed and the cause remanded with directions to vacate the order sustaining the demurrer and dismissing the action. Our opinion therein did not discuss costs nor attorney's fees as an item thereof. The remittitur simply provided: "Appellant to recover costs on appeal."

Upon remand, plaintiff timely filed a memorandum of costs on appeal, including items numbered as follows:

                "1.   Filing Fees ..........................   $  50.00
                "2.   Preparation of record on
                      appeal ...............................     857.00
                "3.   Printing of briefs (including costs
                      of transmission and service) .........   1,803.08
                "4.   . . . 
                "5.   Attorneys fees as costs pursuant
                      to Civil Code § 1717 for work
                      performed from filing of Third
                      Amended Complaint on July 10
                      1978 to October 16, 1980 .............  60,889.01
                "........................................... __________
                                             "Total          $63,599.09"
                

Defendants moved to strike the entire memorandum of costs or, in the alternative, to strike item 5. Defendants also moved to tax each item of costs as inappropriate and excessive.

In support of their motion to strike item 5 in its entirety, defendants cited the language of the contract for sale of real estate sued upon and of a note given as consideration. The contract provided that "the prevailing party" in any litigation to enforce it was entitled to recover reasonable attorney's fees. The note obligated the maker to pay "reasonable attorneys fees" in the event suit was "instituted for its collection."

Defendants further showed that the complaint contained a fourth cause of action, seeking an award of attorney's fees as damages. Plaintiff conceded that it "does allege in paragraph 6 of the Fourth Cause of Action of the Third Amended Complaint, that by virtue of defendant's breach of contract, plaintiff has been damaged in the amount of unpaid principal plus interest, plus attorneys fees," and "[i]n addition, plaintiff prays for attorneys fees and costs of suit."

In support of the motion to tax item 5 as excessive, defendants pointed out that the item as claimed showed that it covered services not related to the appeal by including charges for a period commencing July 10, 1978, whereas the appeal was not filed until April 16, 1979.

The showing with respect to item 1 ($50 filing fee) consisted simply of stating the assumption that it must be for the original filing fee in the superior court. In its opposition, plaintiff corrected this misapprehension by pointing out that this was the $50 filing fee payable upon filing the notice of appeal.

With respect to item 2 (preparation of record on appeal), defendants simply noted plaintiff's failure to "demonstrate that the purported cost of record on appeal in the amount of $857.00 is reasonable." In opposition, plaintiff pointed out that the amount claimed as the cost of the record on appeal was the amount that the clerk demanded for preparation of the record which was made voluminous by virtue of defendants' demand that the entire court file be included.

With respect to item 3 (printing of appellants' brief), defendants objected to plaintiff's utilization of the printing services of Parker & Sons, Inc., law printers, rather than some cheaper process. In its opposition, plaintiff showed by declaration that the amount claimed was the amount actually paid to Parker & Sons and pointed out that defendants' appellate brief was likewise printed by Parker & Sons.

The trial court finally disposed of defendants' motion by an order of January 9, 1981. Defendants' motion to strike the entire memorandum of costs was denied "for reasons Items Nos. 1, 2 and 3 are proper costs on appeal and permissible." Defendants' motion to strike item 5 (attorney's fees) was granted for reasons stated as follows:

"a) There is no final judgment at this time.

"b) Attorney's fees may be requested in their entirety at a later time because contractual provisions exist and request is made therefor in complaint."

The motion to tax each item of costs as inappropriate and excessive was denied "except as to item 5 thereof, which is placed off calendar because of ruling striking Item 5 herein."

Plaintiff filed its timely notice of appeal from that portion of the order which strikes Item 5. Thereafter, defendants filed their timely notice of appeal from that portion of the order "denying the defendants' motion to tax items 1, 2 and 3...."

In view of the fact that the issues presented by the two appeals, though arising out of the same order, are distinct, we will address them in separate portions of this opinion.

PLAINTIFF'S APPEAL (No. 62836)

Contentions

Plaintiff contends that the trial court erred in striking Item 5 (attorney's fees) from its memorandum of costs on appeal because: (1) the appellate decision awarding costs is a "final judgment" in plaintiff's favor, making it the "prevailing party" entitled to its fees as an item of costs pursuant to Civil Code section 1717 in effect at the time of the trial court's ruling; ¹ (2) public policy considerations require the award of plaintiff's attorney's fees as costs; and (3) the amendment to Civil Code section 1717, effective January 1, 1982, ² mandates that plaintiff be awarded attorney's fees as prevailing party on the prior appeal.

Defendants contend that the trial court's order should be affirmed because: (1) plaintiff is not a prevailing party since the appellate decision was not a "final judgment," that is, a "determination of all the parties' rights"; and (2) it would be unjust to award plaintiff attorney's fees at this juncture. Defendants have not responded to plaintiff's third contention which was raised for the first time in plaintiff's reply brief.

Discussion

Summary

The appellate decision finally determined only that the relief sought by plaintiff was not necessarily " 'relief contrary to the policy of California anti-deficiency legislation,' " and that plaintiff was entitled to its appeal costs made recoverable by California Rules of Court, rule 26. ³

Recovery of attorney's fees as costs under Civil Code section 1717 is dependent upon the claimant's status as "the prevailing party" and upon it being equitable to award them. Plaintiff has shown neither such status nor equities sustaining an interim award.

The trial court, therefore, properly deferred determination of plaintiff's right to attorney's fees.

Plaintiff Not "the Prevailing Party" Within Civil Code Section 1717

In its reply brief, plaintiff for the first time ⁴ raises the effect of the amendment to Civil Code section 1717, effective January 1, 1982, and submits "that under the former and present versions of Civil Code § 1717," the court's ruling is erroneous. A threshold question is thereby presented: what law governs the propriety of the court's order? Though there is no question that, as an amendment to remedial legislation, the amendment applies to "past transactions," to wit, the agreement for fees (Abrams v. Stone (1957) 154 Cal.App.2d 33, 42, 315 P.2d 453), it is less clear that such an amendment renders erroneous a decision which necessarily was made under the prior law. In Tulare Dist. v. Lindsay-Strathmore Dist. (1935) 3 Cal.2d 489, 45 P.2d 972, our Supreme Court noted that there was a division of authority on that question. The court stated (id., at pp. 527-528, 45 P.2d 972):

"[O]n the main question as to whether the cause should be disposed of according to the law in effect at the time judgment was rendered, or to the law in effect at the time the cause is disposed of on appeal, there is a sharp diversion of authority. (4 Cor.Jur., p. 1119, sec. 3109; see, also, Cooley, Constitutional Limitations, 8th ed., vol. 2, p. 790.) California, apparently has cases both ways. In Hancock v. Thom, 46 Cal. 643, and in D.I. Nofziger Lumber Co. v. Waters, 10 Cal.App. 89 [101 Pac. 38], without adequate discussion, it was held that the law in effect at the time the judgment was rendered by the lower court was controlling, while in First National Bank v. Henderson, 101 Cal. 307 [35 Pac. 899], it was held that the appellate court must dispose of the case in accordance with the law existing at the time of its own decision. (See, also, 2 Cal.Jur., p. 806, sec. 474; 2 Cal.Jur., p. 972, sec. 572.) Whether these cases are in conflict or can be reconciled, and what the better rule may be in cases of appeals generally need not now be decided. In the class of appeal here presented, there should be and there is no question. The present action involves an appeal...