Hill v. Affirmed Housing Group

/Filed 6/9/14 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

JAMES C. HILL et al., H038874 (Santa Clara County Plaintiffs and Appellants, Super. Ct. No. 1-07-CV087095)

v.

DIDIER DEGERY et al.,

Defendants and Respondents.

Plaintiffs James C. Hill and Dawn L. Hill as trustees under a revocable trust dated February 17, 1977 (the Hills) appeal from a postjudgment order awarding contractual attorney fees to Affirmed Housing Group (Affirmed) under Civil Code section 1717. We find no abuse of discretion and affirm. I. FACTUAL AND PROCEDURAL BACKGROUND In the underlying suit, the Hills sued San Jose Family Housing Partners, LLC (LLC) and Affirmed, a managing member of LLC, for alleged violations of a written easement agreement.1 LLC and Affirmed (collectively defendants) were jointly represented by the law firm of Incorvaia & Associates at a bench trial on the Hills’ claims. In their joint trial brief, defendants argued that, under Corporations Code section 17101, Affirmed could not be liable for LLC’s actions solely because of its status as a member of LLC. Defendants also jointly argued that the easement could not lawfully be enforced and, in any event, they had not violated the easement.

1 The Hills also sued a third defendant, Didier DeGery, who was dismissed before trial and is not a party to this appeal.

The trial court ruled that Affirmed was immune from suit under Corporations Code section 17101, noting that the Hills had presented no evidence to show that Affirmed engaged in any conduct outside of its capacity as a member of LLC. As to LLC, the court rejected the illegality defense and concluded LCC had violated the easement agreement. Following entry of judgment in its favor, Affirmed moved to recover attorney fees and costs pursuant to Civil Code section 1717. The trial court denied that motion on two independent grounds: (1) Affirmed was not a prevailing party on the underlying contract; and (2) Affirmed was barred from recovery based on the principle of unity of interest. On appeal, we reversed the order denying Affirmed’s motion for attorney fees, reasoning that (1) Affirmed was the prevailing party vis-à-vis the Hills; (2) the unity of interest principle does not apply to Civil Code section 1717; and (3) even if the unity of interest principle were applicable, it would not bar Affirmed’s claim for attorney fees because “Affirmed prevailed at trial on an entirely separate defense from those raised by LLC”--its statutory immunity. (Hill v. Affirmed Housing Group (Mar. 12, 2012, H035541) [nonpub. opn.].) In a footnote, we noted: “the record does not disclose whether or not Affirmed moved for summary judgment on its affirmative defense of statutory immunity. Since the Hills presented no evidence at trial to overcome that defense, we presume Affirmed would have prevailed on such a motion, thus avoiding the (likely substantial) attorney fees generated both in preparing for trial and in the course of the trial itself.” (Ibid.) We remanded the matter to the trial court “for a determination of the amount of reasonable attorney fees to be awarded to Affirmed.” (Ibid.) We also ruled that “Affirmed shall recover its costs on appeal.” (Ibid.) On remand, Affirmed filed a renewed motion for an award of attorney fees and costs. It sought $299,401.61 in contractual attorney fees and costs incurred in the trial court and $27,665.12 in attorney fees and costs incurred on the initial appeal. The trial