Santa Fe Pacific Pipelines v. Union Pacific CA2/8

Filed 10/23/13 Santa Fe Pacific Pipelines v. Union Pacific CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

SANTA FE PACIFIC PIPELINES, INC., B244361 et al., (Los Angeles County Plaintiffs and Appellants, Super. Ct. No. BS136153)

v.

UNION PACIFIC RAILROAD COMPANY,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, James R. Dunn, Judge. Reversed.

Mayer Brown, Donald Falk, Neil M. Soltman and Michael F. Kerr for Plaintiffs and Appellants.

McKenna Long & Aldridge, Thomas F. Winfield III and Michael H. Wallenstein for Defendant and Respondent.

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“It is now settled that a party is entitled to attorney fees under [Civil Code] section 1717 ‘even when the party prevails on grounds the contract is inapplicable, invalid, unenforceable or nonexistent, if the other party would have been entitled to attorney’s fees had it prevailed.’” (Hsu v. Abbara (1995) 9 Cal.4th 863, 870.) But what happens when neither party would be entitled to contractual attorney fees because the contractual fee provision does not include the disputed matter? Following Hasler v. Howard (2005) 130 Cal.App.4th 1168, 1169, we hold that a dispute which falls outside the ambit of an attorney fee provision cannot support a fee award for the prevailing party, even if the losing party mischaracterized the nature of the dispute and requested fees. We reverse the trial court’s order awarding attorney fees. FACTUAL AND PROCEDURAL BACKGROUND Appellants are Santa Fe Pacific Pipelines, Inc.; SFPP, L.P. Kinder Morgan Operating L.P. “D”; and Kinder Morgan G.P., Inc. (collectively the pipeline), and they operate a petroleum pipeline. Respondent is Union Pacific Railroad Company (the railroad), and it operates a railroad and rents easements to the pipeline. Prior to the litigation in this case, the parties or their predecessors litigated other claims and reached a settlement agreement entered into in April 1994 and an amended and restated easement agreement (AREA) entered into in July 1994. The litigation relevant to this case began in 2004, when the railroad sought a determination of the amount of rent owed by the pipeline for the use of the railroad’s easements. The parties agreed the case would be determined by a temporary judge and stipulated that the Honorable Eli Chernow “shall determine the annual rent as of January 1, 2004” and all posttrial motions relating to the judgment. After the temporary judge issued a tentative opinion in favor of the railroad, the railroad sought interest on the difference between the amount of rent owed by the pipeline as determined by the temporary judge and the amount the pipeline paid. The pipeline challenged the temporary judge’s jurisdiction to award interest and filed a petition to compel arbitration, arguing that the interest determination should be made by arbitrators instead of the temporary judge. The pipeline described the dispute it