Windsor Pac. LLC v. Samwood Co.

• Decision Date: 30 January 2013
• Docket Number: B233514
• Citation: 152 Cal.Rptr.3d 518,213 Cal.App.4th 263
• Court: California Court of Appeals Court of Appeals
• Parties: WINDSOR PACIFIC LLC , Plaintiff and Appellant, v. SAMWOOD CO., INC. , Defendant and Respondent; Shadow Pines, LLC, Defendant and Appellant.

213 Cal.App.4th 263

152 Cal.Rptr.3d 518

WINDSOR PACIFIC LLC , Plaintiff and Appellant,

v. SAMWOOD CO., INC. , Defendant and Respondent;Shadow Pines, LLC, Defendant and Appellant.

B233514

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

Filed January 30, 2013

Judgment affirmed. Order reversed and remanded with directions.

APPEALS from a judgment and an order of the Superior Court of Los Angeles County, Michael S. Mink, Jr., Judge. Judgment affirmed. Order reversed and remanded with directions. (Los Angeles County Super. Ct. No. PC046686)

McLeod, Moscarino, Witham & Flynn and John P. Flynn, Scottsdale, for Plaintiff and Appellant.

Joseph Di Giulio and Howard Posner for Defendant and Respondent.

Michelman & Robinson, Eric J. Rans, Irvine, Robin James, San Francisco, and Stephen R. Isbell, Irvine, for Defendant and Appellant.

CROSKEY, J.

Windsor Pacific LLC (Windsor) seeks to establish a prescriptive easement over two access roads on undeveloped land in northern Los Angeles County owned by Samwood Co., Inc. (Samwood), and Shadow Pines, LLC (Shadow). Windsor used the roads for several years with Shadow's permission and pursuant to a written easement agreement with Shadow. The trial court, after a nonjury trial, granted judgment in favor of both Shadow and Samwood, holding that Windsor's use of the roads did not create a prescriptive easement over either the Samwood property or the Shadow property because Windsor's use of those roads was expressly authorized by a prior permissive easement granted to Windsor. In a post-judgment order, the trial court denied Shadow's motion for an award of attorney fees pursuant to a contractual attorney fee provision included in the written agreement that had led to creation of the aforesaid permissive easement. Windsor appealed from the judgment only with respect to the denial of a prescriptive easement over the Samwood property. Shadow has appealed from the order denying the requested attorney fee award.

Windsor contends that the permissive easement granted by its written agreement with Shadow applied only to use of the access roads on Shadow's property. Such easement agreement, Windsor argues, does not apply to use of the access roads on Samwood's property because Shadow did not have the authority to grant such an easement to Windsor. We reject that argument and hold, under the undisputed facts in this case, that Windsor is equitably estopped to deny or question Shadow's authority to grant an easement over the Samwood property. In view of this conclusion, we will affirm the judgment.

Shadow's appeal argues that the attorney fee provision in the easement agreement with Windsor authorizes a fee award in this case. We agree and hold that an attorney fee clause providing for a fee award to the prevailing party in “any action or proceeding to enforce or interpret” a contract applies not only where the plaintiff's allegations in the complaint seek to enforce or interpret the contract, but also where the defendant seeks to do so by asserting an affirmative defense raised in its answer. We will therefore reverse the post-judgment order denying Shadow's motion for an award of attorney fees and remand with directions to grant the motion and determine the amount of the award.

FACTUAL AND PROCEDURAL BACKGROUND

1. Factual Background

Windsor owns 80 acres of undeveloped land in the Canyon Country area of northern Los Angeles County. Windsor acquired the property in August and November 2003. Allen Hubsch, a real estate attorney, is Windsor's principal.

Samwood owns 160 acres of undeveloped land adjoining and immediately south of the Windsor property. Samwood acquired the property prior to 2003. Shadow owns more than 160 acres of undeveloped land immediately south of the Samwood property. Shadow acquired the property in three separate acquisitions beginning in 2006.

Tick Canyon Road traverses the Shadow property and the southeast corner of the Samwood property where Tick Canyon Road intersects with Trash Canyon Road. From that intersection, Trash Canyon Road leads north through the Samwood property toward the Windsor property. Both roads are unpaved. Hubsch began using the two roads by car in late 2002 or early 2003 when he first visited the area looking for investment property. He traveled the two roads on numerous occasions thereafter. A surveyor, a geologist and others hired by Hubsch also traveled the two roads on numerous occasions.

Samwood entered into a written agreement with Synergy, a Land & Development Company (Synergy) in April 2003 granting Synergy an option to purchase the Samwood property during a specified term. Samwood also granted Synergy “a license ... to enter upon the Property ... for the purpose of inspections and tests, and generally in connection with its investigation of the Property and its prospects for development....” The option agreement also stated that Synergy was “entitled to full access to and entry upon the Property at all times convenient to it and may allow its representatives and contractually retained independent contractors to enter in aid of Buyer's prospective development plans.” The option agreement was later assigned to another company and then to Shadow, and its term was extended. Samwood and Shadow later amended the option agreement and further extended its term.

Windsor and Shadow entered into a written Agreement Regarding Easements (ARE) in March 2006. The ARE stated that Shadow owned the Shadow property and held options to purchase the Samwood property. It provided that Windsor would execute two written agreements granting easements to Shadow over the Windsor property upon the satisfaction of certain conditions, including the approval of a tentative map and a conditional use permit for development of the Samwood and Shadow properties. It stated that Shadow could terminate the ARE at any time prior to the Windsor's delivery to Shadow of such easements, and that upon such termination Shadow would deliver to Windsor a signed agreement, known as the Termination Easement, granting Windsor an easement over the Samwood and Shadow properties. It also stated that Windsor could terminate the ARE if Shadow's options expired and were not timely renewed, if Shadow failed to timely obtain an approved tentative map satisfying certain requirements and in other circumstances.

Section 19.5 of the ARE stated that if either party exercised its right to terminate the ARE, “then ... neither Party shall have any further obligation to the other Party other than (i) pursuant to Section 17 and Section 3.3 for acts or occurrences prior to the date of termination, and (ii) pursuant to this Section.” The two referenced sections related to indemnification. Section 19.5 went on to state that within 30 days after the termination of the ARE Shadow must execute in favor of Windsor a quitclaim of any easements provided to Shadow by Windsor.

Under the heading “General Provisions” and the subheading “Governing Law,” the ARE included a provision for an award of attorney fees to the prevailing party “[i]n any action or proceeding to enforce or interpret the provisions of this Agreement.” ¹

The conditions for Windsor's execution of the two easement agreements relating to Shadow's use of the Windsor property were never satisfied, and the easements were never executed. Shadow gave notice of its termination of the ARE pursuant to the termination provision in a letter to Windsor dated August 11, 2006. Shadow provided Windsor a signed Termination Easement at that time, granting Windsor a nonexclusive easement over the two access roads on the Samwood and Shadow properties, Tick Canyon Road and Trash Canyon Road, “as such roadways may reasonably be relocated from time-to-time by Grantor [Shadow].” The Termination Easement stated further that the exact location of the easement area could change in accordance with the requirements and conditions for approval of the proposed development.

Windsor claimed a prescriptive easement over the two access roads on the Samwood property for the first time in February 2009.

2. Trial Court Proceedings

Windsor filed a complaint against Samwood and Shadow in October 2009 alleging counts for (1) quiet title, seeking to quiet title to a prescriptive easement over Tick Canyon Road and Trash Canyon Road for private or public use; (2) ejectment, alleging that the defendants have obstructed Windsor's use of the two roads and seeking to restore such use; and (3) declaratory relief, seeking a declaration as to the rights and obligations of the parties with respect to the two roads.

A nonjury trial in January 2011 resulted in a judgment in favor of the defendants. The trial court filed a Memorandum of Decision in February 2011 stating, “This Memorandum of Decision shall constitute a Statement of Decision, if one is so requested, unless within the time period provided by law, additional requests are made by a party in conformity with statutory procedures and the Rules of Court.” No party requested a statement of decision.

The Memorandum of Decision stated that Windsor and Shadow began to negotiate the ARE in mid–2005 and orally agreed at that time that each had permission to travel over the other's property. It stated that the ARE executed in March 2006 expressly granted such permission and that the Termination Easement later delivered to Windsor granted Windsor a permissive easement over the two access roads. It stated that Windsor's use of the roads therefore was permissive beginning no later than mid–2005 and that Windsor had failed to prove by clear and convincing evidence that its use of the roads was adverse for a five-year period, as necessary to establish a prescriptive easement. The trial court entered a judgment in March 2011, awarding Windsor no relief on its complaint against either defendant. Windsor timely appealed the judgment.

Shadow moved for an attorney fee award in April 2011 based on the attorney fee provision...