Lafferty v. Wells Fargo Bank

• Decision Date: 26 March 2015
• Docket Number: C074843
• Court: California Court of Appeals Court of Appeals
• Parties: PATRICK LAFFERTY et al., Plaintiffs and Appellants, v. WELLS FARGO BANK, Defendant and Respondent.

PATRICK LAFFERTY et al., Plaintiffs and Appellants, v. WELLS FARGO BANK, Defendant and Respondent.

C074843

COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (San Joaquin)

March 26, 2015

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. CV030892)

In Lafferty v. Wells Fargo Bank (2013) 213 Cal.App.4th 545 (Lafferty I), we reversed in part and affirmed in part the dismissal of an action by Patrick and Mary Lafferty (the Laffertys) against Wells Fargo Bank (Wells Fargo). In the disposition of Lafferty I, we awarded the Laffertys their costs on appeal. (Id. at p. 573.) After the case was remanded to the trial court, the Laffertys moved for costs and attorney fees. The Laffertys sought attorney fees based on contractual fee shifting, the private attorney general statute (Code Civ. Proc., § 1021.5), and "the equitable private attorney general doctrine." The trial court granted costs in part but denied attorney fees as premature because causes of action remain to be tried.

In this appeal, the Laffertys contend they should have been awarded attorney fees on grounds that (1) they believe they will inevitably prevail against Wells Fargo, (2) they should be compensated under the private attorney general statute for pursuing an important legal issue in Lafferty I, (3) our disposition in Lafferty I constitutes a "final judgment" warranting the immediate award of attorney fees, (4) equitable considerations compel the award of attorney fees in light of the Laffertys' advanced age and costs of litigation, (5) their requests for attorney fees and a lodestar multiplier were reasonable, and (6) the trial court should have issued a statement of decision on their motion for attorney fees and costs.¹

We reject the Laffertys' contentions because costs on appeal do not include attorney fees. (Cal. Rules of Court, rule 8.278(d)(2).)² And we agree with the trial court that the request for attorney fees was prematurely filed. Our disposition in Lafferty I stated that, "[o]n remand, Patrick and Mary Lafferty may proceed to trial" on their causes of action for negligence and under the Consumer Legal Remedies Act (CLRA) (Civ. Code, § 1770 et seq.). (Italics added.) (Lafferty I, supra, 213 Cal.App.4th at pp. 572-573.) The Laffertys have not yet prevailed while their remaining causes of action still await trial. Until they are successful in proving their claims against Wells Fargo, their motion for attorney fees remains premature. Given the premature nature of the motion for attorney fees, we do not address the Laffertys' arguments that they requested a reasonable amount of attorney fees. As to the Laffertys' contention the trial court was required to issue a statement of decision, we deem the contention forfeited for failure todevelop the argument. Accordingly, we affirm the order awarding costs and denying attorney fees.

FACTUAL AND PROCEDURAL HISTORY

The Disposition in Lafferty I

As we recounted in Lafferty I, the Laffertys "bought a motor home from Geweke Auto & RV Group (Geweke) that was financed with an installment contract. Shortly after the sale, Geweke assigned the contract to [Wells Fargo] in accordance with the terms of a separate dealer agreement. The Laffertys allege the motor home was defective from the start. After months passed without the demanded repairs being made, the Laffertys disclaimed their ownership interest in the vehicle and sued Geweke. The Laffertys also sued Wells Fargo on the ground the Holder Rule³ allows them to assert all claims against the lender they otherwise had against the dealer. [¶] The trial court concluded the Holder Rule did not allow the Laffertys to assert claims against a lender that pertained only to the responsibilities of the seller. Finding no other consumer laws supported the Laffertys' claims against Wells Fargo, the trial court entered judgment in favor of Wells Fargo. The trial court also awarded attorney fees to Wells Fargo." (Lafferty I, supra, 213 Cal.App.4th at p. 550.)

We concluded that "the plain meaning of the Holder Rule allows the Laffertys to assert all claims against Wells Fargo they might otherwise have against Geweke. Underthe Holder Rule, however, the Laffertys may recover no more than what they actually paid toward the installment contract. Although the Holder Rule allows the same claims against a lender that might be brought against the seller, it does not create any causes of action." (Lafferty I, supra, 213 Cal.App.4th at p. 551.)

We reversed to allow the Laffertys to pursue causes of action against Wells Fargo under the CLRA and for common law negligence. (Lafferty I, supra, at p. 550.) However, we affirmed the trial court's dismissal of the Laffertys' claims for negligent defamation of credit, breach of warranty, breach of contract, breach of the covenant of good faith and fair dealing, violation of the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.), violation of the Tanner Consumer Protection Act (Civ. Code, § 1793.22), unfair business practices, and declaratory and injunctive relief. (Id. at p. 551.)

The disposition in Lafferty I stated that "[t]he judgment is reversed insofar as the trial court (1) sustained the demurrer to Patrick and Mary Laffertys' causes of action for negligence and under the Consumer Legal Remedies Act (Civ. Code, § 1770 et seq.), and (2) awarded attorney fees to Wells Fargo Bank. On remand, Patrick and Mary Lafferty may proceed to trial on these two causes of action against Wells Fargo Bank that the Laffertys would otherwise have had only against Geweke Auto & RV Group but for the Holder Rule, title 16, section 433.2, of the Code of Federal Regulations. Patrick and Mary Lafferty shall recover their costs on appeal. (. . . rule 8.278(a)(3) & (5).)" (Lafferty I, supra, 213 Cal.App.4th at pp. 572-573, italics added.)

The Laffertys' Motion for Costs and Attorney Fees

After the remittitur issued in Lafferty I, the Laffertys filed in the trial court a memorandum of costs on appeal in which they sought $5,631.08 in costs and $232,110 in attorney fees. Wells Fargo filed a motion to tax costs and an opposition to the request for attorney fees. The trial court denied the attorney fees motion as premature, declined toissue a statement of decision, and awarded $2,495.29 in costs. From the order, the Laffertys timely appeal.

DISCUSSION

ICosts on Appeal

The Laffertys argue the trial court erred in denying their motion for appellate attorney fees after our decision in Lafferty I. We disagree.

A.Rule 8.278

The award of costs in Lafferty I was based on rule 8.278. (213 Cal.App.4th at p. 573.) Subdivision (d)(2) of rule 8.278 states that, "[u]nless the court orders otherwise, an award of costs neither includes attorney's fees on appeal nor precludes a party from seeking them under rule 3.1702."⁴ Because Lafferty I did not expressly award attorney fees (213 Cal.App.4th at pp. 572-573), rule 8.278(d)(2) operated to limit the Laffertys to claiming costs.

Our award of costs under rule 8.278 did not indicate who might eventually be the prevailing party in this case. "[A]n award of costs on appeal does not determine, or even indicate, who is the prevailing party in the lawsuit for the purpose of awarding fees." (Wood v. Santa Monica Escrow Co. (2009) 176 Cal.App.4th 802, 807.) On this ground, we reject the Laffertys' contention that our disposition in Lafferty I constituted a "final judgment" after which attorney fees should be awarded.⁵ (See also Bank of Idaho v. PineAvenue Associates (1982) 137 Cal.App.3d 5, 15 [explaining a prior appeal did not result in "final judgment" or entitle winning party on appeal to recover anything other than "ordinary costs on appeal"], disapproved of on another ground in Snyder v. Marcus & Millichap (1996) 46 Cal.App.4th 1099.)

We reject the Laffertys' reliance on Lucky United Properties Investments, Inc. v. Lee (2013) 213 Cal.App.4th 635. Lucky involved the unique circumstances of an anti-SLAPP case under Code of Civil Procedure section 425.16. Affirmance of an order granting an anti-SLAPP motion ordinarily does determine the prevailing party in the case and, after remand, allows the trial court to award appellate costs and fees. (Id. at p. 655.) Nonetheless, the Lucky court recognized if an anti-SLAPP dismissal of a lawsuit is reversed on appeal for further proceedings in the trial court, "an award of appellate costs and fees under the statute might be premature." (Ibid.) In Lafferty I, we reversed in part for further proceedings in the trial court. Thus, even under Lucky, an award of attorney fees is premature.

The Laffertys rely on Butler-Rupp v. Lourdeaux (2007) 154 Cal.App.4th 918 to argue that our prior disposition necessarily involved an award of costs and attorney fees. In Butler-Rupp, the first appeal included a disposition that each side bear its own costs on appeal. After the trial court awarded attorney fees to respondents, a second appeal was taken to challenge the attorney fees as inconsistent with the disposition that each side was to bear its own costs. (Id. at p. 922.) The Butler-Rupp court affirmed the award of attorney fees because the disposition's specification of costs "had no bearing on the entitlement to attorney fees." (Id. at p. 928.) As in Butler-Rupp, the specification of costs in the disposition of Lafferty I, supra, 213 Cal.App.4th 545 did not indicate who might eventually be entitled to attorney fees.

The disposition in Lafferty I offers the Laffertys no basis for claiming attorney fees. To the contrary, our remand for trial on the remaining causes of action rendered the motion for attorney fees premature.

B.

Civil Code section 1717

The Laffertys contend their attorney fees motion should have been...