Genis v. Krasne

• Decision Date: 23 October 1956
• Citation: 47 Cal.2d 241,302 P.2d 289
• Court: California Supreme Court
• Parties: Sayde GENIS, Mrs. Mae Swlg, and Mrs. Doris Weiler, Plaintiffs and Appellants, v. Clyde A. KRASNE, Clyde A. Krasne Company, a co-partnership, Harry Maron, David Erenberg, Victor Erenberg, and Clyde A. Krasne Company, a California corporation, Defendants. Harry Maron and Clyde A. Krasne Company, a co-partnership, Respondents. L. A. 24188.

Page 289

302 P.2d 289

47 Cal.2d 241

Sayde GENIS, Mrs. Mae Swlg, and Mrs. Doris Weiler, Plaintiffs and Appellants, v. Clyde A. KRASNE, Clyde A. Krasne Company, a co-partnership, Harry Maron, David Erenberg, Victor Erenberg, and Clyde A. Krasne Company, a California corporation, Defendants Harry Maron and Clyde A. Krasne Company, a co-partnership, Respondents.

L. A. 24188.

Supreme Court of California, In Bank.

Oct. 23, 1956.

Dryden, Harrington, Horgan & Swartz, Jacob Swartz and Vernon G. Foster, Los Angeles, for appellants.

Fred Horowitz, Alvin F. Howard and Amos Friedman, Los Angeles, for respondents.

SCHAUER, Justice.

Plaintiffs appeal from a judgment of dismissal entered after a demurrer to their complaint was sustained without leave to amend and after plaintiffs' motions for permission to file an amendment to the complaint and for reconsideration of the sustaining of the demurrer without leave to amend were denied.

Plaintiffs, assignees of lessors, seek to recover from the assignees of lessee the amount of attorneys' fees expended by plaintiffs in successful defense of a prior action brought by the assignees of lessee. For convenience, we will refer to plaintiffs-appellants as if they were the original lessors and to defendants-respondents as if they were the original lessee.

The provision of the lease under which lessors seek recovery reads as follows: 'if Lessee shall bring any action for any relief against Lessors, declaratory or otherwise, arising out of this lease, and Lessors shall prevail in such action, Lessee agrees to pay Lessors a reasonable attorney's fee which shall be taxed as part of the costs of such action.'

Lessors prevailed in the earlier action but they did not in that action secure an award of attorneys' fees. In such prior action lessors (defendants there) set up a claim for attorneys' fees as a so-called affirmative defense; at the close of the first trial of the prior action lessors were allowed attorneys' fees as if they were costs, but on lessee's motion to tax costs the item for attorneys' fees was stricken; on the second trial of the prior action lessors, so far as their complaint discloses, over the objection of opposing counsel and without the consent of the court, announced their intention of 'requesting this court to proceed in a separate proceeding to, if necessary, hear evidence as to the amount of any attorneys' fees which should be allowed, or to seek the recovery of that by way of an independent action.'

We have concluded that the contract (lease) upon any reasonable construction requires that attorneys' fees be recovered, if at all, as if they were costs in the prior action. In this connection it is to be observed that plaintiffs' complaint in this action does not allege, and plaintiffs do not claim, that there is available to them extrinsic evidence which would permit construction of the contract other than according to the normal meaning of its language.

The complaint, with the proposed amendment, alleges:

The Lease: A photostatic copy of the lease is attached to and made a part of the complaint. ¹ The following provisions of the lease relate to this controversy:

Lessors agree to furnish janitor service. 'No additional locks shall be placed upon any doors of the premises * * *.'

'Lessors shall be in no wise responsible for any loss of or damage to property from the leased premises, however occurring.'

'In case Lessors shall bring suit to recover any rent due hereunder or for breach of any covenant of this lease, or to recover possession of the premises, and shall recover in the suit, or if Lessee shall bring any action for any relief against Lessors, declaratory or otherwise, arising out of this lease, and Lessors shall prevail in such action, Lessee agrees to pay Lessors a reasonable attorney's fee which shall be taxed as part of the costs of such action.'

The Facts Concerning the Prior Action by Lessee: The complaint in the prior action alleged: The premises were leased with the provision that lessee place no additional locks upon the doors. Lessee 'entrusted' the leased premises and their contents to lessors except when the premises were open for business. Lessors permitted their agents to have keys to the premises. Using these keys the agents wrongfully entered the premises and converted goods of lessee.

Issues were joined by answer of lessors. As a 'ninth affirmative defense' the answer alleged that the lease contained the above quoted paragraph as to attorneys' fees and that $7,500 was a reasonable fee for the defense of the action. The answer prayed for recovery of that amount.

In the prior action lessee claimed that lessors' liability arose out of the landlordtenant relationship and 'relied upon the following facts:

'1. The fact that the lease prohibited the tenants from providing additional locks to their doors.

'2. That under the terms of the lease, the landlord retained keys to the tenant's premises and such keys were used in the theft of the tenant's property.

'3. The duty of a landlord, upon a lease being made, to secure the tenant in the quiet enjoyment of the premises.

'4. An implied term of the lease that the landlord did not permit the use of keys retained by her to be used in the theft of the tenant's property.'

The first trial of the prior action resulted in a judgment of nonsuit. Lessors included in their memorandum of costs and disbursements an item of $7,500 for attorneys' fees. On lessee's motion to tax costs that item was stricken. Lessee appealed from the judgment of nonsuit and lessors appealed from the order striking the item for attorneys' fees. The District Court of Appeal (Maron v. Swig (1952), 115 Cal.App.2d 87, 92, 251 P.2d 770) reversed the judgment of nonsuit; it determined that, because of such reversal, the order granting the motion to tax costs was moot; therefore, it dismissed lessors' appeal from such order.

A second trial of the prior action was had before a jury. Before the matter was submitted to the jury the following occurred in chambers: Lessors' counsel said, 'we are mindful of this affirmative defense. We are not to be considered as waiving it but have chosen to await the action of the jury in this case either for the purpose of then requesting this court to proceed in a separate proceeding to, if necessary, hear evidence as to the amount of any attorneys' fees which should be allowed, or to seek the recovery of that by way of an independent action.' Lessee's counsel replied, 'We don't consent to this procedure. I just want to make it clear that we are not consenting to such a procedure.'

No evidence on the issue of attorneys' fees was offered at the second trial in the prior action, and the question of recovery of attorneys' fees by lessors was not referred to before the jury. It is alleged that the 'affirmative defense' was 'in fact withdrawn by * * * (lessors) at the trial of said case.' But there is no allegation whether the trial court made any ruling as to the above quoted (and pleaded) colloquy of counsel, and no allegation as to whether attorneys' fees were included in lessors' memorandum of costs at the conclusion of the second trial of the prior action.

The second judgment in the prior action makes no mention of the subject of attorneys' fees. It is in the usual form of a judgment on a verdict for defendant. Such verdict and judgment in the prior action were for lessors (defendants there). Judgment became final without appeal.

The complaint in the present action further alleges: Lessors paid $24,250 attorneys' fees for defense of the prior action. That is a reasonable sum for the professional services rendered. Under date of 'January _ _, 1955,' lessors made written demand upon lessee for such sum. The complaint shows that January, 1955, was after the judgment in the prior action became final. Lessee has not paid or offered to pay the sum or any part thereof.

The Nature of Attorneys' Fees Recoverable Only by Virtue of Contract: The texts accept the view of those cases which characterize attorneys' fees recoverable only by virtue of contract (and not as costs either by statute or by case law) as 'damages.' (13 Cal.Jur.2d, Costs, § 36; 14 Cal.Jur.2d, Damages, § 104; 3 Witkin, California Procedure (1954), pp. 1914-1915.) Such fees cannot be allowed a successful litigant without pleading and proof (or admission) that there is a contract provision for them. This is so whether the successful party is plaintiff (Brooks v. Forington (1897), 117 Cal. 219, 221, 48 P. 1073; Prescott v. Grady (1891), 91 Cal. 518, 522, 27 P. 755; Stubblefield v. Fickle (1954), 123 Cal.App.2d 325, 327, 266 P.2d 808) or defendant (Techow v. Pollack (1952), 111 Cal.App.2d 556, 558, 244 P.2d 915; City Investment Co. v. Pringle (1920), 49 Cal.App. 353, 355, 193 P. 504). But attorneys' fees are not like the usual item of damages, for the court may allow a reasonable attorneys' fee in the judgment without hearing evidence or making a finding as to the amount of such fee. (See Huber v. Shedoudy (1919), 180 Cal. 311, 313-314, 181 P. 63; ...