Riverside County Transportation Commission v. Liston Brick Co. CA4/2

• Court: California Court of Appeal
• Decided: April 21, 2014
• Docket: E054980
• Status: Unpublished

Opinion

Filed 4/21/14 Riverside County Transportation Commission v. Liston Brick Co. CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION TWO

RIVERSIDE COUNTY TRANSPORTATION COMMISSION, E054980 Plaintiff and Respondent, (Super.Ct.No. RIC500888) v. OPINION LISTON BRICK COMPANY OF CORONA,

Defendant and Appellant.

APPEAL from the Superior Court of Riverside County. Gloria Trask, Judge.

Affirmed.

Law Offices of William B. Hanley and William B. Hanley for Defendant and

Appellant.

Best Best & Krieger, Danielle G. Sakai, and Kira L. Klatchko for Plaintiff and

Respondent.

1 I. INTRODUCTION

Defendant Liston Brick Company of Corona (Liston) appeals from judgment in

favor of plaintiff Riverside County Transportation Commission (RCTC) in RCTC’s

action for specific performance of an agreement for the sale and purchase of property.

Liston contends the trial court improperly interpreted the agreement and RCTC’s

evidence was insufficient to carry its burden of proof; the trial court erred in failing to

grant Liston prejudgment interest; and the trial court erred in awarding RCTC contractual

attorney fees. We find no error, and we affirm.

II. FACTS AND PROCEDURAL BACKGROUND

On August 11, 2006, Liston and RCTC entered into a written agreement

(Agreement) under which Liston agreed to sell to RCTC real property (the Property)

located at the intersection of Cajalco Road and Interstate 15 in Corona for a purchase

price of $8,420,530. Liston represented that to the best of its knowledge, no hazardous

materials were presently or previously located on the Property and no governmental

actions requiring enforcement or cleanup of hazardous materials had been threatened,

instituted, or completed. The Agreement defined “hazardous materials” as follows:

“hazardous wastes, hazardous materials, hazardous substances or any other formulation

intended to define, list or classify substances by reason of deleterious properties as such

terms are defined in any applicable federal, state or local laws or ordinances, including

without limitation any material defined as a ‘hazardous material’ in Section 25501 of the

California Health and Safety Code, pesticides, fungicides, rodenticides, asbestos, and

petroleum hydrocarbons and by-products.”

2 The Property had formerly been used for the manufacture of bricks and later for

recycling aluminum. A Phase I environmental assessment revealed that underground

storage tanks and disposal pits had existed on the Property and that the Air Quality

Management District had recorded violations at the Property. There had also been a

citation for illegal off-site disposal of waste. RCTC’s environmental consultant, Ninyo &

Moore, recommended a geophysical survey, collection of physical samples, and analysis

of the samples for chemicals. Escrow was to close on September 1, 2006, or 10 days

following completion of a Phase II Environmental Site Assessment.

On October 12, 2006, the parties entered into a first amendment to the Agreement.

RCTC wanted to perform additional environmental testing and wanted Liston to shut

down its aluminum recycling operation and remove all improvements, foundations, and

footings under the buildings. RCTC agreed to reimburse Liston for the removal of the

improvements and agreed to release the money to Liston to pay for the demolition. The

costs totaling $175,000 were secured by a deed of trust on the Property in favor of RCTC.

Paragraph 4 of the first amendment provided that if RCTC’s further environmental

investigation confirmed that hazardous materials existed on or under the Property in

concentrations beyond applicable action levels, and that if RCTC agreed to proceed with

the transaction, escrow would close “on or before fifteen (15) days following finalization

and acceptance of the Remediation Plan (as defined below), including a determination

that estimated remediation costs will be adequately secured by the Holdback Amount (as

defined below).”

3 Paragraph 6 of the first amendment provided: “6. Escrow Holdback. The

Purchase Price is based on a valuation of the Property free from contamination by

Hazardous Materials. As a result of preliminary investigations, Buyer’s consultants have

recommended further environmental investigation, including a geotechnical investigation

and, if recommended thereafter, a Phase II. If a Phase II is required and if it discloses the

presence upon or under the Property of Hazardous Materials at action levels requiring

remediation by governmental authorities having jurisdiction over such matters

(‘Governmental Authorities’), Buyer will cause its consultants to prepare a ‘Remediation

Plan,’ setting forth in detail an estimated schedule and cost to complete the Remediation

Plan. The final form of such Remediation Plan will be subject to review and approval by

Governmental Authorities and Seller. If Seller has failed to object to the Remediation

Plan in writing within fifteen (15) days after receipt, Seller will be deemed to have

approved the Remediation Plan. If Seller objects in writing to the Remediation Plan

within such period, Buyer and Seller and their respective environmental consultants will

meet within ten (10) business days following Buyer’s receipt of such written objections

and attempt to reconcile Seller’s objections to the Remediation Plan. If Buyer and Seller

are unable to resolve Seller’s objections, the determination of Governmental Authorities

will be binding on Buyer and Seller.” Paragraph 6 further provided for the holdback of

an amount equal to 200 percent of the estimated cost to complete the remediation plan,

not to exceed $3,000,000. Any remaining balance of the holdback, after implementation

of the remediation plan and issuance of “closure” or “no further action” letters by

relevant governmental authorities, would be released to Liston.

4 On March 6, 2007, the parties entered into a second amendment to the Agreement.

Liston was then in default on the first trust deed on the Property. To avoid the loss of the

Property through foreclosure, RCTC agreed to advance and pay $1,815,000 on the first

trust deed and another $445,588 toward Liston’s bankruptcy obligation. Those amounts

would be credited against the purchase price. The Second Amendment stated that

environmental testing and evaluation of the Property had been delayed because of

concerns raised by the Hazardous Materials Management Division of the Riverside

County Department of Environmental Health (HazMat), and RCTC had been unable to

complete environmental testing and investigation to determine what remediation would

be required.

HazMat transferred the matter to the California Department of Toxic Substance

Control (DTSC) as the lead agency having jurisdiction over remediation for the site. In

May 2008, RCTC submitted a work plan to DTSC. On May 21, 2008, Liston declared

that it was unilaterally terminating the Agreement. On June 6, 2008, RCTC filed a

complaint against Liston alleging causes of action for specific performance and breach of

contract. The parties later agreed to an order for specific performance requiring

compliance with and performance of the terms of the Agreement to complete the

purchase of the Property. The parties agreed that the only issue remaining for trial was

the amount of the holdback contemplated in Paragraph 6 of the first amendment.

Meanwhile, RCTC’s investigation confirmed that the groundwater was not

contaminated, but the soil was contaminated. RCTC’s environmental consultant, Ninyo

& Moore, prepared a remedial action plan dated September 21, 2009, and RCTC

5 provided Liston with a copy of that plan. The plan identified three alternatives for

remediation. Alternative 2, the recommended plan, provided for soil excavation and off-

site disposal at an estimated cost of $2,130,000. RCTC and its consultants met with

Liston to discuss the September 2009 plan, and as a result of Liston’s objections, agreed

to revise the scope and approach of the plan, specifically, the volume of soil to be

removed.

Ninyo & Moore then prepared an April 5, 2010, action plan. In the April 5 plan,

the cost estimate for Alternative 2 was reduced to $816,000. A chart on page 32 of the

April 5 plan stated the overall cost estimates for each of the three alternatives. The

overall cost of Alternative 2 was shown to be $816,000. Another chart provided a

schedule for the estimated completion times. Ninyo & Moore provided a copy of the

plan to Liston. Ninyo & Moore also sent a copy of the April 5 plan to DTSC, which

provided comments.

RCTC again revised the action plan in response to comments of DTSC and the

Human and Ecological Risk Office. The DTSC approved the January 2011 plan subject

to public comment requirements.

The matter proceeded to trial on the sole issue of the amount of the holdback.

Liston moved for judgment under Code of Civil Procedure section 631.8. Liston argued

that RCTC failed to carry its burden of proof to establish that Liston had had an

opportunity to review a detailed cost estimate for the remediation. Liston also contended

that the April 5, 2010, action plan went beyond the scope of the Agreement in that it

6 called for removal of materials that did not constitute hazardous waste as defined in the

Agreement.

The trial court denied the motion. Liston then rested its case without submitting

any additional evidence or calling any witnesses.

The trial court found in RCTC’s favor and found that the holdback should be

based on the $816,000 calculation, which Liston stipulated it had received and to which it

did not object. The trial court found that the April 2010 plan and the January 2011 plan

“contain adequate and sufficient detail regarding the estimated schedule and costs to

complete the remediation to satisfy [RCTC’s] obligation under Paragraph 6 of the First

Amendment. The [plans] provide in detail the objectives of the investigation and

remediation; the findings of hazardous substances; and the reasoning to support that the

overall cost is appropriate under the circumstances.” The court further found that Liston

had received both those plans “and did not prepare or submit any written objections as

required by Paragraph 6 . . . .” The court found that Liston was aware of its right to

object because it had previously provided written objections to the September 2009 plan.

Judgment was entered, including an order for specific performance. The order

stated that the purchase price should be reduced by $100,000 to reflect the initial escrow

deposit, by $75,000 to account for an increased deposit under the Amendment, by

$2,490,589 to account for the advance RCTC had given Liston to avoid foreclosure, and

by $1,632,000, a holdback calculated at 200 percent of the $816,000 estimated cost of

implementing the April 5, 2010, remedial plan. The order further stated that RCTC was

entitled to contractual attorney fees.

7 RCTC filed a motion for costs, to which Liston objected. RCTC also filed a

motion seeking $335,660.90 in attorney fees. After a hearing, the trial court granted

RCTC all the attorney fees sought.

Additional facts are set forth in the discussion of the issues to which they relate.

III. DISCUSSION

A. Interpretation of Agreement

Liston contends the trial court improperly interpreted the agreement, and RCTC’s

evidence was insufficient to carry its burden of proof. Specifically, Liston contends it did

not receive adequate notice of the estimated cost of the remediation plan which would

have allowed it to calculate the amount of the holdback, and Liston also disputes whether

the materials that were the subject of remediation were in fact hazardous materials as

defined by the Agreement.

1. Standard of Review

The issue of what notice Liston actually received is one of fact to which we apply

substantial evidence review. Under that standard, “We ‘“‘“consider all of the evidence in

the light most favorable to the prevailing party, giving it the benefit of every reasonable

inference, and resolving conflicts in support of the [findings]. [Citations.]” [Citation.]

We may not reweigh the evidence and are bound by the trial court's credibility

determinations. [Citations.] Moreover, findings of fact are liberally construed to support

the judgment. [Citation.]’” [Citations.]’ [Citation.] ‘“The substantial evidence

[standard of review] applies to both express and implied findings of fact made by the

superior court in its statement of decision rendered after a nonjury trial.” [Citation.]’

8 [Citation.] ‘The testimony of a single witness may be sufficient to constitute substantial

evidence. [Citation.]’ [Citation.]” (Citizens Business Bank v. Gevorgian (2013) 218

Cal.App.4th 602, 613.)

The question of what notice the contract required is a question of law: “The

‘interpretation of a contract is subject to de novo review where the interpretation does not

turn on the credibility of extrinsic evidence.’ [Citation.]” (Brisbane Lodging, L.P. v.

Webcor Builders, Inc. (2013) 216 Cal.App.4th 1249, 1256.)

2. Analysis

(a) Notice given to Liston

Liston contends RCTC did not carry its burden of proving compliance with the

notice requirements of the holdback provision.

It was undisputed that Liston received the September 21, 2009, remedial action

plan and met with RCTC and its consultants to discuss that plan. However, the

September 2009 plan provided to Liston did not include a one-page table of estimated

remedial costs. In response to Liston’s comments, RCTC’s consultants prepared a

revised plan, the April 5, 2010, plan, which reduced the estimated cost for Alternative 2

to $816,000. That plan was provided to Liston, but Liston did not object to or comment

on that plan. That plan was also submitted to the DTSC, which provided comments and

proposed revisions.

In response to the DTSC’s comments, RCTC prepared another revised plan dated

January 12, 2011. That plan showed the estimated cost for Alternative 2 to be $816,000,

9 but did not include a one-page table of estimated remedial costs. It was undisputed that

Liston was provided with a copy of the plan but did not comment on it.

Liston argues that because it was not provided with a one-page table entitled

“estimated remedial alternative costs,” (capitalization omitted) the April 2010 remedial

action plan did not provide the detailed estimate of costs required by the Agreement, and

Liston was therefore not required to respond to the April 2010 plan. However, Liston did

object to the September 2009 plan that was presented in substantially similar format, and

RCTC revised the plan in response to Liston’s comments. We conclude the information

RCTC provided in both plans was sufficient to trigger Liston’s requirement to respond to

the proposed plans within 15 days or to forfeit its objections.

B. Scope of Remediation

Liston further contends that RCTC included estimates for the cleanup of

nonhazardous materials. Liston based that argument on Crone’s testimony that

nonhazardous materials did not require cleanup, and the cost estimate included cleanup

costs for “‘non-RCRA [Resource Conservation and Recovery Act] hazardous waste’” at

an estimated removal cost of $315,000. However, Crone further testified that “Non-

RCRA hazardous waste is a waste that meets the definition criteria in California law for a

hazardous waste, but would not be defined as a federal hazardous waste,” and it would be

included as a hazardous material. Crone testified that the term “hazardous waste” is an

industry term of art, and “it also has definition in various statutes and by guidance

provided by governmental regulatory agencies.” The term “material” is broader than the

10 term “waste.” The April 2010 plan stated that it had been “developed in accordance with

applicable DTSC guidance . . . .”

The Agreement’s definition of hazardous material, as set forth above, was

expansive. Crone’s testimony did not show that the proposed remediation included any

material that did not fit within that broad definition. Moreover, having failed to object to

or comment on the April 2010 plan, Liston forfeited any objection based on the scope of

the work.

C. Prejudgment Interest

Liston contends the trial court erred in failing to grant Liston prejudgment interest.

Prejudgment interest is not available to a party unless that party is entitled to

receive damages. (Civ. Code, § 3287, subd. (a).)1 Because Liston has shown no such

entitlement to damages, the trial court did not err in failing to award prejudgment

interest.2

1 “(a) Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any such debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state.” (Civ. Code, § 3287, subd. (a).)

2 We note that, citing McGuire & Hester v. San Francisco (1952) 113 Cal.App.2d 186, 193-194, RCTC also argues prejudgment interest was not awardable against it as a public entity. However, Civil Code section 3287, subdivision (1) was amended in 1959 to provide that “[t]his section is applicable to recovery of damages and interest from any such debtor, including the state or any county, city, city and county, municipal [footnote continued on next page]

11 D. Attorney Fee Award

Liston contends the trial court erred in awarding RCTC contractual attorney fees.

More specifically, Liston argues (1) there was no evidence the requested fees were

reasonable, (2) the trial court should have appointed an independent expert to evaluate the

fee request and should have permitted discovery on the issue, and (3) RCTC did not

establish its entitlement to attorney fees.

1. Additional Background

The attorney fee provision of the Agreement provided: “15.9 Attorney’s Fees. In

any action or proceeding brought to enforce or interpret any provision of this Agreement,

or where any provision hereof is validly asserted as a defense, the prevailing party shall

be entitled to recover actual attorneys’ fees and all other litigation costs . . . .”

RCTC requested attorney fees totaling $355,660.90. The declaration of Danielle

Sakai submitted in support of the motion stated that the law firm billed RCTC at

discounted hourly rates ranging between $150 for summer associates and $260 for

partners. Sakai stated those rates were well within or below the acceptable range of

hourly rates for attorneys with similar experience in the area. Sakai stated that the case

had been “extremely document-intensive” due to its nature, including exhibits totaling

thousands of pages. Moreover, there had been extensive discovery, and the parties had

attended private mediation and multiple settlement conferences. RCTC’s counsel

[footnote continued from previous page] corporation, public district, public agency, or any political subdivision of the state.” (Stats. 1959, ch. 1735, p. 4186, § 1.) Thus, RCTC’s reliance on McGuire is misplaced.

12 conferred with multiple consultants and experts, and had prepared for trial twice,

including an originally scheduled jury trial before the issues had been pared down.

RCTC provided copies of invoices evidencing the attorney fees.

Sakai stated in her declaration in support of the request for attorney fees: “Fees

were incurred for review of environmental and administrative reports and documents,

conferring with consultants and experts and opposing counsel to ensure that RCTC

satisfied its obligations under the terms of the Agreement as well as to protect RCTC’s

interests. But for Liston Brick’s attempt to terminate the Agreement, RCTC would not

have incurred these attorney fees relating to administrative and regulatory activities. By

Liston Brick refusing to cooperate with environmental due diligence investigation and

raising meritless objections to proposed work plans and remediation reports, RCTC’s

efforts to obtain DTSC approval as a condition to the close of escrow were undoubtedly

delayed, resulting in unnecessarily incurring attorneys’ fees. RCTC incurred $46,336.80

in attorneys’ fees to assist with necessary regulatory and administrative activities relating

to environmental investigation and efforts to obtain DTSC approval for the remediation

of the Property.” (Original underscore.)

Sakai further stated in her declaration: “Liston Brick’s refusal to allow RCTC to

access the Property to conduct groundwater and soil analysis as mandated by the DTSC

threatened RCTC’s ability to complete the purchase of the Property and resulted in

additional attorneys’ fees for RCTC. As a consequence, RCTC was required to file the

Right of Entry Action to obtain a court order to obtain access and proceed with

environmental due diligence investigation. After a number of delays and continuances,

13 on December 29, 2008, the Court granted the petition and issued an order for RCTC’s

right of entry onto the Property. In compliance with the Court’s order, RCTC attempted

to work with Liston Brick and its counsel to coordinate access to the Property. However,

through July 2009, Liston Brick continued to obstruct that access and raised a number of

challenges that resulted in the incurring of additional attorneys’ fees. In an effort to

secure access to continue the environmental investigation, RCTC incurred $50,3691.10

[sic] in attorney fees.” (Original underscore.)

Liston requested discovery in the trial court to determine the merits of a fee award

and sought the appointment of a fee expert at RCTC’s expense. The trial court denied the

request and awarded RCTC all the fees it sought, finding that the hourly rates and amount

of time billed were reasonable. The award included attorney fees in the amount of

$46,336.80 for “administrative and regulatory activities” and in the amount of $50,369.10

for “right of entry” litigation.

2. Entitlement to Fees

Liston argues that the trial court erred in awarding RCTC its attorney fees in the

amount of $46,336.80 for “Administrative and Regulatory Activities” and in the amount

of $50,369.10 for “Right of Entry Litigation.”

As the party seeking an attorney fee award, RCTC had the “‘burden of showing

that the fees incurred were “allowable,” were “reasonably necessary to the conduct of the

litigation” and were “reasonable in amount.”’” (Donahue v. Donahue (2010) 182

Cal.App.4th 259, 271.) Under the Agreement, attorney fees were awardable “[i]n any

14 action or proceeding brought to enforce or interpret any provision of this

Agreement . . . .”

“California case law clearly provides a trial court discretion to award a fee that

compensates work performed in a collateral action that may not have been absolutely

necessary to the action in which fees are awarded but was nonetheless closely related to

the action in which fees are sought and useful to its resolution.” (Children’s Hospital &

Medical Center v. Bonta´ (2002) 97 Cal.App.4th 740, 779-780 (Children’s Hospital).) In

its statement of decision, the trial court found that “[a]s a preliminary matter, RCTC was

required to obtain an Order for a Right of Entry to complete the balance of environmental

testing because Liston Brick refused to allow RCTC entry onto the Property.” In other

words, the right of entry action was closely related to the current action and useful, if not

necessary, to its resolution. Thus, the trial court did not abuse its discretion in awarding

the fees requested for services connected to the right of entry action.

Sakai’s declaration stated that fees connected to the administrative and regulatory

activities were directly connected to obtaining DTSC approval for remediation and were

caused by Liston’s attempt to terminate the Agreement and failure to cooperate with

environmental due diligence investigation, among other things. That declaration

supported the trial court’s discretionary determination that the fees for administrative and

regulatory activities were closely related to the current action and useful to its resolution.

(Children’s Hospital, supra, 97 Cal.App.4th at pp. 779-780.)

15 We conclude the trial court did not abuse its discretion in awarding the challenged

fees.

3. Amount of Fees

“With respect to the amount of fees awarded, there is no question our review must

be highly deferential to the views of the trial court. [Citation.] As our high court has

repeatedly stated, ‘“‘The “experienced trial judge is the best judge of the value of

professional services rendered in his [or her] court, and while his judgment is of course

subject to review, it will not be disturbed unless the appellate court is convinced that it is

clearly wrong”—meaning that it abused its discretion.’”’ [Citations.]” (Children’s

Hospital, supra, 97 Cal.App.4th at p. 777.) On appeal, we disturb the trial court’s

decision only “when there is no substantial evidence to support the trial court’s factual

findings or when there has been a miscarriage of justice.” (Frei v. Davey (2004) 124

Cal.App.4th 1506, 1512.)

“It is well established that ‘“[t]he value of legal services performed in a case is a

matter in which the trial court has its own expertise . . . . The trial court makes its

determination after a consideration of a number of factors, including the nature of the

litigation, its difficulty, the amount involved, the skill required in its handling, the skill

employed, the attention given, the success or failure, and other circumstances in the

case.” [Citation]’ [Citation.]” (Bernardi v. County of Monterey (2008) 167 Cal.App.4th

1379, 1395.) Here, RCTC supported its request for attorney fees with a declaration and

invoices substantiating the claimed fees. The hourly rates claimed for attorney services

ranged between $150 and $260 per hour, which were stated to be at discounts of up to 45

16 percent from the firm’s normal rates. We conclude the trial court did not abuse its

discretion in granting RCTC’s request for fees.

4. Independent Expert

Liston contends the record RCTC provided did not enable the trial court to weigh

the factors relevant to the determination of a reasonable fee award, and the trial court

erred in denying Liston’s request for the appointment of an independent expert to

evaluate the fee request.

Evidence Code section 730 authorizes a trial court to appoint an independent

expert when it appears that expert evidence may be required; however, the trial court’s

exercise of that authority is discretionary. (E.g., Ripley v. Pappadopoulos (1994) 23

Cal.App.4th 1616, 1622, fn. 14.) We conclude the trial court did not abuse its discretion

in denying Liston’s request for the appointment of an expert.

5. Discovery

Liston also appears to contend the trial court erred in denying its request for

discovery, Liston does not provide the required separate heading for that point in his

brief (see Cal. Rules of Court, rule 8.204(a)(1)(B)), and we therefore deem the argument

forfeited. (Pacific Gas & Electric Co. v. City and County of San Francisco (2012) 206

Cal.App.4th 897, 905, fn. 9.)

17 IV. DISPOSITION

The judgment is affirmed. Costs on appeal are awarded to Plaintiff and

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

HOLLENHORST Acting P. J. We concur:

MILLER J.

CODRINGTON J.