Galan v. Wolfriver Holding Corp.

80 Cal. App. 4th 1124, 96 Cal. Rptr. 2d 112, 2000 Daily Journal DAR 5387, 2000 Cal. Daily Op. Serv. 4038, 2000 Cal. App. LEXIS 397
CourtCalifornia Court of Appeal
DecidedMay 22, 2000
DocketNo. B129512
StatusPublished
Cited by30 cases

This text of 80 Cal. App. 4th 1124 (Galan v. Wolfriver Holding Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Galan v. Wolfriver Holding Corp., 80 Cal. App. 4th 1124, 96 Cal. Rptr. 2d 112, 2000 Daily Journal DAR 5387, 2000 Cal. Daily Op. Serv. 4038, 2000 Cal. App. LEXIS 397 (Cal. Ct. App. 2000).

Opinion

Opinion

KLEIN, P. J.

Defendant and appellant Wolfriver Holding Corporation (Wolfriver) appeals an order denying its motion for attorney fees after plaintiffs and respondents Antonio Cruz Galan et al. (collectively, Galan) voluntarily dismissed their action against Wolfriver.1

The essential issue presented is whether the trial court abused its discretion in finding Wolfriver was not the prevailing party for purposes of [1126]*1126recovery of attorney fees. We conclude plaintiffs’ voluntary dismissal of their action against Wolfriver did not confer prevailing party status upon Wolfriver for purposes of recovering attorney fees pursuant to Civil Code section 1942.4.

On this record, the trial court acted within its discretion in finding Wolfriver was not the prevailing party. Therefore, the order is affirmed.

Factual and Procedural Background

This matter arose from a slum housing case against Daniel Lee related to his ownership and operation of substandard buildings in the downtown Los Angeles area. After Lee defaulted on his building at 916 Georgia Street (the building), the bank that financed the building, Far East National Bank (Far East), acquired it in December 1993. Far East thus was named as a defendant in the lawsuit filed by Galan.

In August 1994, Far East sold the building to Wolfriver. Thereafter, Wolfriver and its various principals or agents, Mauricio Candelario, Prairie Management Company, Frank Ticas and Milton Roca, were added as Doe defendants.

When Wolfriver took over the building, it had serious habitability problems. The roof leaked, the plumbing and heating systems required work, the building was infested with cockroaches and rats, and seismic work had not been completed. By 1996, the building was in the city’s rent escrow account program, under which rents were paid to the city, with the moneys released to pay for repairs.

In the spring of 1998, the case was resolved with respect to the Lee defendants and Far East. As part of their settlement with Far East, plaintiffs agreed to dismiss the case against the Wolfriver defendants. This was significant to Far East because Wolfriver had a claim against Far East for fraud in the transfer, and Wolfriver’s claims included reimbursement for the cost of defending the lawsuit. Plaintiffs agreed to dismiss Wolfriver because Wolfriver was uninsured and it was questionable whether a judgment against Wolfriver was collectible. Plaintiffs dismissed their claims against Wolfriver without prejudice.

Wolfriver then brought a motion against plaintiffs for attorney fees and costs, seeking attorney fees amounting to $13,785 plus other costs totaling $774. Plaintiffs moved to strike or tax costs.

The matter was heard on December 9, 1998. The trial court awarded costs to Wolfriver in the sum of $674 but denied its request for attorney fees. The [1127]*1127trial court set forth its reasons in a tentative decision, which it adopted as its final ruling. In denying attorney fees, the trial court explained: “1. It appears from the case law that the Court has discretion to determine which party prevailed ‘at a practical level.’ [ft] Wolfriver has not established that it has prevailed. It has not established that the building it purchased did not have the problems which plaintiffs have alleged, nor has it established that all or some of those problems were caused by tenant sabotage, [ft] Instead, it appears that plaintiffs made a satisfactory settlement with the other defendants, which included as a condition that plaintiffs dismiss Wolfriver. [ft] Further, having settled, plaintiffs made a practical determination that it was not worth pursuing Wolfriver through what would have been a costly trial, [ft] Thus, at the practical level the court concludes that there is no prevailing party. The merits of the dispute against Wolfriver were never resolved. Instead, it appears that Wolfriver ‘waited the plaintiffs out,’ betting that the plaintiffs, having settled with the other defendants, would let Wolfriver go.”

On February 5, 1999, Wolfriver filed a notice of appeal from the order denying its motion for attorney fees.2

Contentions

Wolfriver contends the trial court erred in denying the motion for attorney fees because the trial court found that Wolfriver was the prevailing party and awarded it costs, and as the prevailing party within the meaning of Code of Civil Procedure section 1032 it was also entitled to its attorney fees pursuant to Civil Code section 1942.4.

Discussion

Trial court acted within its discretion in finding there was no prevailing party within the meaning of Civil Code section 1942.4.

Plaintiffs’ complaint included a cause of action for violation of Civil Code section 1942.4. Said statute provides in relevant part: “(a) Any landlord who demands or collects rent when all of the following conditions exist is liable to the tenant or lessee for the actual damages sustained by the tenant or lessee and special damages in an amount not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000): [ft] (1) The rental dwelling substantially lacks any of the affirmative standard characteristics listed in Section 1941.1. [ft] . . . [ft] (b) In addition to recovery of allowable costs of suit, the prevailing party shall be entitled to recovery of reasonable attorney’s fees in an amount fixed by the court.” (§ 1942.4, italics added.)

[1128]*1128Wolfriver’s theory is that because plaintiffs’ cause of action against Wolfriver under Civil Code section 1942.4 ended in a dismissal, Wolfriver was the prevailing party as a matter of law and is entitled to its attorney fees in addition to costs.

Wolfriver’s contention it was the prevailing party is based on the definition of that term as set forth in Code of Civil Procedure section 1032. Said statute, pertaining to recovery of costs, defines a prevailing party as follows: “(a) As used in this section, unless the context clearly requires otherwise: [f] • • • [H] (4) ‘Prevailing party’ includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.” (§ 1032, subd. (a)(4), italics added.)

We reject Wolfriver’s attempt to import the definition of “prevailing party” under Code of Civil Procedure section 1032, into Civil Code section 1942.4. Pursuant to section 1032, a prevailing party is entitled to recover costs in an action or proceeding. (§ 1032, subd. (b).) However, in defining the term “prevailing party,” section 1032 begins with the phrase “[a]s used in this section[.j” (§ 1032, subd. (a).) Thus, section 1032 does not purport to define the term “prevailing party” for all purposes.

Further, although Civil Code section 1942.4 authorizes an award of attorney fees to the prevailing party, nowhere in that statute is there a definition of “prevailing party.” Therefore, it would appear the determination of which party, if either, prevailed in an action brought under section 1942.4 is a matter left to the discretion of the trial court.

Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568 [26 Cal.Rptr.2d 758] (hereafter, Heather Farms) is instructive. In Heather Farms,

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80 Cal. App. 4th 1124, 96 Cal. Rptr. 2d 112, 2000 Daily Journal DAR 5387, 2000 Cal. Daily Op. Serv. 4038, 2000 Cal. App. LEXIS 397, Counsel Stack Legal Research, https://law.counselstack.com/opinion/galan-v-wolfriver-holding-corp-calctapp-2000.