NEW GENERATION INVESTMENTS, LLC VS PALM 10 ASSOCIATES, LLC

1. CASE # CASE NAME HEARING NAME NEW GENERATION MOTION TO TAX COSTS BY NEW CVPS2301515 INVESTMENTS, LLC VS GENERATION INVESTMENTS, LLC PALM 10 ASSOCIATES, LLC Tentative Ruling: Granted.

Plaintiff/Cross Defendant to provide notice pursuant to CCP 1019.5.

Plaintiff, New Generation Investments, LLC, alleges that Defendant, Palm 10 Associates, LLC (Palm 10) owns 246.4 acres of real property located near the intersection of Palm Drive and the I-10 freeway in Palm Springs. Plaintiff alleges that on 10/14/21, High Sand Dessert, LLC and Defendant entered into a Vacant Land Purchase Agreement and Joint Escrow Instructions (PSA), which was later assigned to Plaintiff, an entity with ownership common to High Sand Dessert, LLC. When Plaintiff and Palm 10 met to sign the PSA, the price was $1.5 million higher than what they had previously agreed to.

Defendant, Susan Harvey (Harvey), served as the dual real estate agent of both parties, and represented to them that she had received a “full price offer” for $10,348,800 ($1.5 million higher than agreed). Palm 10 heard Harvey’s representation, but did not correct her. Plaintiff protested the higher price, but she and Palm 10 indicated that they owed it to Palm 10’s partners to get the highest available price for the property. Plaintiff was unaware that Harvey’s representation about another offer was false – she had increased the price for Palm 10’s benefit to Plaintiff’s detriment when Plaintiff was also her fiduciary.

Plaintiff alleges that Palm 10 concealed its knowledge that there was no other buyer.

Based on the false representation, Plaintiff signed the PSA, made the requisite deposit, performed all its obligations except those concerning its performance that were frustrated or prevented. Plaintiff ran into obstacles due to the size of the property that fell within multiple municipal jurisdictions with different permitting processes. The parties made amendments to accommodate Plaintiff’s due diligence. In about the third quarter of 2022, Plaintiff needed an additional extension of the escrow closing date, which Palm 10 agreed to, and inserted release language as to Palm 10, which excluded claims by Plaintiff against Harvey, as Palm 10’s agent.

Plaintiff alleges that due to the exclusion Palm 10 remains liable for claims arising out of Harvey’s fraudulent conduct. Plaintiff also alleges that Harvey blocked Plaintiff’s access to the property, and interfered with its rights and ability to close escrow; that Palm 10 demanded Plaintiff close escrow; and that Plaintiff attempted to obtain an additional extension. Around this time, Plaintiff learned of Harvey’s fraudulent misrepresentation; she ultimately acknowledged there was no other offer.

Plaintiff then demanded mediation under the Agreement, but Palm 10 has refused to respond to the demand.

Plaintiff filed its Complaint on 4/3/23 alleging five causes of action: 1) breach of contract; 2) specific performance; 3) rescission; 4) breach of fiduciary duty; and, 5) fraud.

On 3/13/24, Cross-Complainant, Palm 10, filed its Cross-Complaint alleging four causes of action: 1) breach of contract for damages; 2) breach of contract for specific performance; 3) negligent misrepresentation; and, 4) intentional misrepresentation.

This matter was tried before a jury beginning on 2/3/26. Following deliberation, the jury returned a verdict, which provided no relief on any of Plaintiff’s causes of action against Palm 10, Harvey, or Desert Pacific Properties or Palm 10’s causes of action against Plaintiff. (see 3/16/26 Defense Judgment.)

Plaintiff/Cross-Defendant, New Generation Investments, LLC (New Generation), brings the instant motion to strike/tax costs claimed by Defendant/Cross-Complainant, Palm 10 Associates,

LLC (Palm 10), in its Memorandum of Costs (MOC) in the amount of $86,449.22 filed on 4/7/26. New Generation argues that the entire MOC must be stricken/taxed on the ground that Palm 10 was not the prevailing party in this action so, Palm 10 cannot recover any costs. New Generation asserts that the Judgment confirms that this case resulted in a mutual take-nothing judgment.

Defendant/Cross-Complainant, Palm 10 Associates, LLC (Palm 10),opposes the motion arguing that it obtained defense verdicts on all of New Generation’s causes of action including the breach of contract and specific performance claims where New Generation sought a $1.5 million award; that Palm 10 is the prevailing party with a net recovery by being “awarded” the $1.5 million in deposit monies and extension fees as well as a release of the lis pendens; that the authority cited by New Generation that neither side recovered relief is factually distinguishable.

The Reply asserts that Palm 10’s Opposition relies on a single factual assertion – that the Judgment awarded $1.5 million to Palm 10, which it did not; that Palm 10 failed to separate the costs incurred defending against New Generation’s Complaint from the costs incurred in prosecuting the Cross-Complaint; and re-asserts prior arguments.

Motion to Tax Costs

Cal. Rules of Court (“CRC”), Rule 3.1700, provides that a prevailing party who claims costs must serve and file a memorandum of costs within 15 days after the date of the mailing of the entry of judgment . . . . An extension for filing this document can be given by the court or through an agreement by the parties. “[T]he court may extend the times for serving and filing the cost memorandum or notice of motion to strike or tax costs for a period not to exceed 30 days.” (Id. at (b)(3).)

The losing party may dispute any or all of the items in the prevailing party’s costs memorandum. (CRC, Rule 3.1700(b)). Technically, a motion to strike challenges the entire costs bill whereas a motion to tax challenges particular items or amounts. But, the terms are often used interchangeably and there is no difference in the procedural rules. (CRC, Rule 3.1700(b).)

Here, Plaintiff/Cross-Defendant, New Generation, argues that Palm 10’s entire MOC must be stricken/taxed because Palm 10 is not the “prevailing party” in this action. In general, the prevailing party “is entitled as a matter of right to recover costs of suit in any action or proceeding. (Weil & Brown, CPG: Civil Trials and Evidence (TRG 2026) § 17:205 citing Santisas v. Goodin (1998) 17 Cal.4th 599, 606.) Where the requirements for a prevailing party are met, “the trial court has no discretion to order each party to bear their own costs of suit.” (Id. citing Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198.)

The term “prevailing party” is defined by statute to include: “The party with a net monetary recovery”; a defendant who is dismissed from the action; a defendant where neither plaintiff nor defendant recovers anything; and “[a] defendant as against those plaintiffs who do not recover any relief against that defendant.” (Id. § 17:206.) “If the party does not fall into one of these four express categories, the court may exercise its discretion to award or deny costs. (Id. citing Lincoln v. Schurgin (1995) 39 Cal.App.4th 100, 105.) This is the case even if the prevailing party obtains only partial recovery (e.g., prevails on only one of several causes of action.) (Id. § 17:208 citing Vought Const. Inc. v. Stock (2022) 84 Cal.App.5th 622, 635; Michell, supra. at 1199.) Notably, “plaintiff” includes cross-complainants and “defendant” includes cross-defendants. (Id. § 17:228.)

The “Defense Judgment” was filed on 3/16/26, and entered on 3/24/26. It attaches the jury’s verdict as Exhibit “A”. As to New Generation’s Complaint, the jury found no liability by Defendants, Palm 10, Harvey, and Desert Pacific Properties (DPP) to New Generation’s Complaint. (Defense Judgment p. 17 of 21.) The jury also found no liability by New Generation as to Palm 10’s Cross-

Complaint. (Ibid.) The verdict further provided that New Generation “shall take nothing” from Palm 10, Harvey, and DPP for its claims asserted in its Complaint. (Ibid.) And, Palm 10 “shall take nothing” from New Generation. (Ibid.)

New Generation argues that both it and Palm 10 sought the $1.5 million in deposit and extension fees. Palm 10 asserts that it was the prevailing party because it obtained a “net monetary recovery” when the $1.5 million was awarded to it. However, the verdict did not make any award to Palm 10. It merely provided that New Generation was “not entitled to a return of its deposits and/or extension fees.” (Id. p. 19 of 22.) These circumstances do not indicate that Palm 10 obtained a “net monetary recovery” to make it the prevailing party and its MOC must be stricken in its entirety.

2. CASE # CASE NAME HEARING NAME NEW GENERATION CVPS2301515 INVESTMENTS, LLC VS HEARING ON MOTION TO TAX COSTS PALM 10 ASSOCIATES, LLC Tentative Ruling:

Plaintiff, New Generation Investments, LLC, alleges that Defendant, Palm 10 Associates, LLC (Palm 10) owns 246.4 acres of real property located near the intersection of Palm Drive and the I-10 freeway in Palm Springs. Plaintiff alleges that on 10/14/21, High Sand Dessert, LLC and Defendant entered into a Vacant Land Purchase Agreement and Joint Escrow Instructions (PSA), which was later assigned to Plaintiff, an entity with ownership common to High Sand Dessert, LLC. When Plaintiff and Palm 10 met to sign the PSA, the price was $1.5 million higher than what they had previously agreed to.

Defendant, Susan Harvey (Harvey), served as the dual real estate agent of both parties, and represented to them that she had received a “full price offer” for $10,348,800 ($1.5 million higher than agreed). Palm 10 heard Harvey’s representation, but did not correct her. Plaintiff protested the higher price, but she and Palm 10 indicated that they owed it to Palm 10’s partners to get the highest available price for the property. Plaintiff was unaware that Harvey’s representation about another offer was false – she had increased the price for Palm 10’s benefit to Plaintiff’s detriment when Plaintiff was also her fiduciary.

Plaintiff alleges that Palm 10 concealed its knowledge that there was no other buyer.

Based on the false representation, Plaintiff signed the PSA, made the requisite deposit, performed all its obligations except those concerning its performance that were frustrated or prevented. Plaintiff ran into obstacles due to the size of the property that fell within multiple municipal jurisdictions with different permitting processes. The parties made amendments to accommodate Plaintiff’s due diligence. In about the third quarter of 2022, Plaintiff needed an additional extension of the escrow closing date, which Palm 10 agreed to, and inserted release language as to Palm 10, which excluded claims by Plaintiff against Harvey, as Palm 10’s agent.

Plaintiff alleges that due to the exclusion Palm 10 remains liable for claims arising out of Harvey’s fraudulent conduct. Plaintiff also alleges that Harvey blocked Plaintiff’s access to the property, and interfered with its rights and ability to close escrow; that Palm 10 demanded Plaintiff close escrow; and that Plaintiff attempted to obtain an additional extension. Around this time, Plaintiff learned of Harvey’s fraudulent misrepresentation; she ultimately acknowledged there was no other offer.

Plaintiff then demanded mediation under the Agreement, but Palm 10 has refused to respond to the demand.

Plaintiff filed its Complaint on 4/3/23 alleging five causes of action: 1) breach of contract; 2) specific performance; 3) rescission; 4) breach of fiduciary duty; and, 5) fraud.

New Generation challenges $13,246.33 in DPP’s and Harvey’s MOC as to expert fees claiming they are not entitled to preoffer expert fees. To the contrary, DPP and Harvey assert that the claimed expert fees were only for costs incurred after 11/20/25 or postoffer expert fees. (Oppo., Dec. Lowe ¶ 10, Ex. “4”.) As a result, these costs are allowed.

Item No. 15 (Other)

New Generation challenges one of the costs set forth in this category of DPP’s and Harvey’s MOC - the JAMS mediation fee ($5,433.33.) However, the challenge is the same as for filing and motion fees and deposition costs, discussed above. New Generation has not established that these costs were unreasonable or unnecessary. It has not refuted DPP’s and Harvey’s prima facie showing that they were reasonably and necessarily incurred. These costs are allowed.

In addition, New Generation vaguely and in conclusory fashion, claims attorney hotel and transportation charges, attorney meals and per diem, and unexplained photocopying are not allowable. However, it has made this challenge, for the first time, in the Reply. Costs are allowed.

3. CASE # CASE NAME HEARING NAME NEW GENERATION MOTION FOR ATTORNEYS FEES BY CVPS2301515 INVESTMENTS, LLC VS NEW GENERATION PALM 10 ASSOCIATES, LLC Tentative Ruling: Denied.

Defendant/Cross Complainant to provide notice pursuant to CCP 1019.5.

Plaintiff/Cross-Defendant, New Generation Investments, LLC (New Generation), brings this motion for attorneys’ fees pursuant to the Vacant Land Purchase Agreement (VLPA) entered into between New Generation and Defendant/Cross-Complainant, Palm 10 Associates, LLC (Palm 10) seeking $202,049.50. (Civil Code § 1717(b)(1).) New Generation argues that it is the prevailing party because the jury returned a complete defense verdict in favor of New Generation on its Complaint and on Palm 10’s Cross-Complaint. New Generation asserts its loss ($1.5 million) was less than Palm 10’s loss ($2.9 million) so New Generation obtained the greater relief.

Defendant/Cross-Complainant, Palm 10 Associates, LLC (Palm 10), opposes the motion arguing that recovering the greater relief is not based on what was sought and not received but, on what it sought that was received; that Palm 10 is the prevailing party because it was awarded the $1.5 million in deposit monies and extension fees as well as a release of the lis pendens; that Palm 10 is entitled to an attorneys’ fees award of $383,629.50; that the authority cited by New Generation that neither side recovered relief is factually distinguishable.

The Reply asserts that Palm 10’s Opposition relies on a single factual assertion – that the Judgment awarded $1.5 million to Palm 10, which it did not; the jury never reached the damages question of the special verdict; and, that the verdict was a mutual takes-nothing verdict.

Attorney Fees

In general, California follows the “American Rule” regarding entitlement to attorney’s fees, whereby each party bears its own attorney’s fees unless such fees are expressly provided for by statute, or are included as part of the terms of a contract. (CCP §1021; Reynolds Metal Co. vs. Alperson (1979) 25 Cal. 3d 124, 127.) Attorney’s fees as an allowable cost item are governed by CCP §1033.5(a)(10) and (c)(5), and motions for such fees are governed by CRC 3.1702. The

4. CASE # CASE NAME HEARING NAME NEW GENERATION MOTION FOR ATTORNEYS FEES BY CVPS2301515 INVESTMENTS, LLC VS PALM 10 PALM 10 ASSOCIATES, LLC Tentative Ruling: Denied.

Plaintiff/Cross Defendant to provide notice pursuant to CCP 1019.5.

Defendant/Cross-Complainant, Palm 10 Associates, LLC (Palm 10), brings this motion for attorneys’ fees pursuant to the Vacant Land Purchase Agreement (VLPA) entered into between Palm 10 and New Generation, seeking $383,629.50. (Civil Code § 1717(b)(1).) Palm 10 argues that it is the prevailing party because it obtained the greater relief on the contract – it was allowed to keep the $1.5 million in deposit and extension monies and obtained a release of its lis pendens wrongfully recorded against Palm 10’s property.

New Generation opposes the motion arguing that Palm 10 has not established it was the prevailing party for purposes of Civil Code § 1717; that each party did not obtain a “simple, unqualified victory”; that Palm 10 was actually awarded nothing; that this motion fails on the independent ground that Palm 10 did not establish its fees were reasonable and necessary - no details of its attorneys’ fees were provided; and, Palm 10 has not distinguished its fees in defending New Generation’s Complaint from those incurred in prosecuting its own Cross- Complaint.

Attorney Fees

In general, California follows the “American Rule” regarding entitlement to attorney’s fees, whereby each party bears its own attorney’s fees unless such fees are expressly provided for by statute, or are included as part of the terms of a contract. (CCP §1021; Reynolds Metal Co. vs. Alperson (1979) 25 Cal. 3d 124, 127.) Attorney’s fees as an allowable cost item are governed by CCP §1033.5(a)(10) and (c)(5), and motions for such fees are governed by CRC 3.1702. The court may properly award attorney’s fees when a contract provides for the allowance of attorney’s fees and suit is instituted to enforce the provisions of the contract: the trial court decides who is the prevailing party, and fixes attorney’s fees pursuant to Civil Code § 1717.

Section 1717 applies to contract provisions for the recovery of attorney’s fees, whether such provisions are unilateral (that is, allowing only one party to recover), or reciprocal (such as one allowing recovery by a “prevailing party”.) (Santisas vs. Goodin (1998) 17 Cal. 4th 599, 614).

Palm 10 brings this motion pursuant to Civil Code § 1717(b)(1) as the prevailing party who obtained the greater relief in the action on the contract. Palm 10 argues that it obtained “a simple unqualified victory by completely prevailing on or defeating, all contract claims” and noted that the VLPA (contract) provides for reasonable attorneys’ fees. (Scott Co. of Calif. v. Blount, Inc. (1990) 20 Cal.4th 1103, 1109.) Palm 10 asserts it is the prevailing party because it was allowed to keep the $1.5 million in deposit and extension monies and obtained a release of its lis pendens wrongfully recorded against Palm 10’s property so, Palm 10 obtained the greater relief.

However, where “neither party achieves a complete victory on all the contract claims, it is within the trial court’s discretion to determine which party “prevailed” on the contract.” (Weil & Brown, CPG: Civ. Proc. Before Trial (TRG 2026) § 17:837 citing Scott Co., supra.) Moreover, if the case goes to trial, the award of costs and fees is discretionary with the court: “The court may also determine that there is no party prevailing on the contract ....” (Id. § 17:868 citing Civil Code § 1717(b)(1).) “This allows the court to withhold fees where the outcome is a “draw” as a practical