Dorsey v. Superior Court of San Diego Cnty.
| Decision Date | 22 October 2015 |
| Docket Number | D067836 |
| Citation | 193 Cal.Rptr.3d 834,241 Cal.App.4th 583 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Michael DORSEY, as Trustee, etc., Petitioner, v. The SUPERIOR COURT of San Diego County, Respondent; Jeffrey Crosier et al., Real Parties in Interest. |
Law Offices of Randall S. Waier and Randall S. Waier for Petitioner.
No appearance for Respondent.
Tenants Legal Center and Christian A.M. Curry for Real Parties in Interest.
A defendant who loses in the small claims court can appeal to the superior court and obtain a new hearing. Although (with limited exceptions) lawyers cannot take part in the conduct or defense of a small claims trial, lawyers may represent parties in a small claims appeal. (Code Civ. Proc., § 116.530.)1 Section 116.780(c) provides for an award of attorney fees up to $150 in connection with a small claims appeal. Under section 116.790, the amount is increased up to $1,000 if the superior court finds the appeal was “without substantial merit and not based on good faith....”
The small claims court dispute here arises out of a condominium lease, which contains a prevailing party attorney fee provision. After the superior court heard the small claims appeal, it entered judgment in favor of the tenants, Jeffrey and Rebekah Crosier (together, Crosier), against the landlord, Michael Dorsey as trustee of the Dorsey Trust, in the principal amount of $1,560.
After judgment, Crosier sought $11,497.50 in attorney fees as the prevailing parties under the attorney fee provision in the lease. Dorsey opposed the motion, asserting section 116.780(c) trumped the contractual attorney fees provision, limiting any award to $150. The superior court awarded Crosier $10,373.
The issue in this case of first impression is whether section 116.780(c) expressly, or the policy of the statute implicitly, overrides the freedom to contract for a different amount of attorney fees.
Small claims court exists so people with meritorious claims for small amounts may have those claims adjudicated without spending more on attorney fees than the claims are worth. (City and County of San Francisco v. Small Claims Court (1983) 141 Cal.App.3d 470, 474, 190 Cal.Rptr. 340.) Section 116.780(c) reflects a legislative determination that a small claims appeal should require no more than minimal attorney time. The small claims appeal procedure was intended to be integral to the legislative scheme for expeditious and cost-effective resolution of small claims. Therefore, as we explain, section 116.780(c) must be construed to override contractual attorney fee provisions and limit the attorney fee award here to $150.
After the superior court granted Crosier's motion for attorney fees, Dorsey filed a petition for a writ of mandate. We issued an order to show cause, inviting Crosier to file a return.
When the Court of Appeal issues an order to show cause, the real party in interest may file “a return by demurrer, verified answer, or both.” (Cal. Rules of Court, rule 8.487(b)(1).) “The return must conform to the rules governing an answer in a civil action, and the usual rules of pleading apply.” (8 Witkin, Cal. Procedure (5th ed. 2008) Extraordinary Writs, § 195, p. 1099.)
In response to the order to show cause, Crosier's return included neither an answer nor a demurrer. Instead, the return contains a two-page “Procedural and Factual History” verified by Rebekah Crosier and a memorandum of points and authorities.
In his traverse, Dorsey asks us to “strike” the return because it does not include a verified answer or affirmative defenses. We decline to strike the return; however, Crosier's failure to answer or demurrer results in the factual allegations in Dorsey's petition being deemed true. (Bank of America, N.A. v. Superior Court (2013) 212 Cal.App.4th 1076, 1084–1085, 151 Cal.Rptr.3d 526.) These allegations comprise the facts stated below.
In October 2012 Dorsey and Crosier entered into a one-year written lease for a condominium. After the lease terminated, disputes arose between the parties. Paragraph 40 of the lease contains an attorney fee provision, stating, “In any action or proceeding arising out of this Agreement, the prevailing party between Landlord and Tenant shall be entitled to reasonable attorney fees and costs.”
In March 2014 Crosier filed a small claims court claim against Dorsey. Crosier sought $10,000 for alleged breach of the rental agreement, breach of the implied covenant of quiet enjoyment, wrongful retention of security deposit, retaliation, and constructive eviction. Crosier claimed an additional $850 as “reasonable attorneys [sic ] fees.”
Dorsey filed a “Defendant's Claim” in the small claims court. Dorsey alleged Crosier was liable for holdover rent and other damages. Dorsey sought “attorney's fees of $2,000.”
The small claims court entered judgment in favor of Crosier on their claim for $3,200 and in favor of Dorsey on his claim for $1,153—resulting in a net judgment favoring Crosier for $2,047. Dorsey appealed to the superior court.2 Both sides were represented by counsel on the small claims appeal. The superior court found (1) Dorsey breached the lease by not returning $1,560 of Crosier's security deposit, and (2) Crosier did not breach the lease.
Crosier's attorney thereafter filed a motion seeking $11,497.50 in attorney fees under the prevailing party attorney fee provision in the lease.
Dorsey filed opposition, asserting the $150 cap in section 116.780(c) governed all attorney fee awards in small claims court appeals.
The superior court issued a tentative ruling stating that although “the Court would be inclined to award Plaintiffs at or near the amount of attorney fees requested,” section 116.780(c) limited the award to $150. However, after hearing argument, the court reversed its tentative ruling and awarded Crosier $10,447.50. The superior court concluded,
Dorsey filed a petition for writ of mandate, asserting section 116.780(c) governs the award of attorney fees in all small claims appeals. We issued an order to show cause why the relief requested should not be granted.
The superior court's judgment on a small claims appeal is “final and not appealable.” (§ 116.780(a).) The Court of Appeal will also not entertain a writ petition in deciding the small claims appeal. (Linton v. Superior Court (1997) 53 Cal.App.4th 1097, 1099, fn. 2, 62 Cal.Rptr.2d 202.)
However, if law is to be made settling a significant issue of small claims procedure, “the appellate courts must have jurisdiction to entertain petitions for extraordinary review in appropriate circumstances.” (Houghtaling v. Superior Court (1993) 17 Cal.App.4th 1128, 1131, 21 Cal.Rptr.2d 855.) Writ relief is appropriate here to review this significant issue in small claims law and to ensure uniform interpretation of the governing statutes. (Universal City Nissan, Inc. v. Superior Court (1998) 65 Cal.App.4th 203, 205, 75 Cal.Rptr.2d 910.)
“[The] small claims process was established to provide an inexpensive and expeditious means to settle disputes over small amounts.” (Pace v. Hillcrest Motor Co. (1980) 101 Cal.App.3d 476, 478, 161 Cal.Rptr. 662.) With limited exceptions, no attorney may take part in the conduct or defense of a small claims action. (§ 116.530(a).) There are no formal pleadings (§ 116.310), no pretrial discovery (§ 116.310), and no legal rules of evidence (§ 116.510). There is no right to jury trial, and the court need not issue a statement of decision. (Acuna v. Gunderson Chevrolet, Inc. (1993) 19 Cal.App.4th 1467, 1471, 24 Cal.Rptr.2d 62.)
The small claims judge may “consult witnesses informally and otherwise investigate the controversy with or without notice to the parties.” (§ 116.520.) The hearings are often “terminated in a short space of time” and the awards “are often based on the application of common sense; and the spirit of compromise and conciliation attends the proceedings.” (Sanderson v. Niemann (1941) 17 Cal.2d 563, 573, 110 P.2d 1025.)
A plaintiff who elects to file an action in small claims court has no right to appeal that claim. (§ 116.710(a).) Upon appeal by a defendant, there is a “new hearing” before a judge who did not hear the trial. (§ 116.770(a).) The appeal is to be conducted in the same manner as the original hearing—informally, promptly, fairly, and inexpensively, except that attorneys may participate in the appeal. (§§ 116.510, 116.770(b), (c).) Pretrial discovery is prohibited; there is no right to jury trial, and no tentative decision or statement of decision is required. (§ 116.770(b).) The superior court's judgment on the appeal “is final and not appealable.” (§ 116.780(a).)
For good cause and in the interest of substantial justice, the superior court may award a party to an appeal reimbursement of attorney fees actually and reasonably incurred in connection with the appeal up to $150. (§ 116.780(c).) If the court finds the appeal was without substantial merit and not based on good faith, but intended to harass, delay, or encourage the other party to abandon his or her claim, the court may award attorney fees actually and reasonably incurred in connection with the appeal that do not exceed $1,000. (§ 116.790.)
The Judicial Branch of California website informs the public about such attorney fees on a small claims appeal, stating:
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