Swan v. Tesconi CA1/3

CourtCalifornia Court of Appeal
DecidedJune 2, 2015
DocketA138119
StatusUnpublished

This text of Swan v. Tesconi CA1/3 (Swan v. Tesconi CA1/3) 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
Swan v. Tesconi CA1/3, (Cal. Ct. App. 2015).

Opinion

Filed 6/2/15 Swan v. Tesconi CA1/3 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION THREE

PENNY SWAN, Plaintiff and Respondent, A138119 v. DOROTHY TESCONI, as Trustee, etc., (Sonoma County et al., Super. Ct. No. SCV247226) Defendants and Appellants.

Defendants/appellants Dorothy Tesconi, individually and as trustee of the Charles D. and Dorothy E. Tesconi Trust (Tesconi), and Chad Young (Young) (together, defendants), appeal from the trial court’s post-judgment order awarding attorney fees and costs to plaintiff/respondent Penny Swan (Swan). In issuing the order, the trial court rejected defendants’ claim that Swan was precluded from recovering fees and costs and was required to pay defendants’ fees and costs because she did not accept defendants’ offer to compromise under Code of Civil Procedure section 998 (998 offer) and thereafter failed to obtain a more favorable result. On appeal, defendants contend: (1) the trial court erred in determining that the 998 offer was ambiguous and invalid and that Swan was therefore not bound by it; and (2) even if the court did not err in determining that Swan was entitled to fees and costs, the amount of fees awarded was “excessive” and must be reduced. We reject the contentions and affirm the order.

1 FACTUAL AND PROCEDURAL BACKGROUND On April 22, 2010, Penny and Marvin Swan (together, plaintiffs) filed an action against Tesconi, the owner of the building where the couple rented an apartment, and against Young, who managed the property. Plaintiffs alleged there were severe habitability problems, including inadequate heating, rodent infestation, mold and mildew growth, defective plumbing, and improper venting of exhaust gases. They alleged that Tesconi refused to conduct repairs and properly maintain the premises despite repeated requests, and that when they asked Young for assistance, he verbally harassed and threatened them, making them fear for their safety. In or about November 2009, plaintiffs contacted the City of Santa Rosa (the City) and began withholding rental payments in an effort to force defendants to repair the conditions. Defendants tried to evict plaintiffs by filing unlawful detainer actions, but were unsuccessful. Young continued to harass and retaliate against plaintiffs, and plaintiffs obtained a restraining order against Young. The City inspected the premises and found they were in substandard condition. The City issued a Notice of Violation on February 23, 2010 and made numerous unsuccessful efforts to force repairs. The City ultimately declared the unit uninhabitable on November 12, 2010, and ordered plaintiffs to vacate the premises. Plaintiffs alleged the following causes of action: negligent and intentional breach of the implied warranty of habitability; negligent and intentional nuisance; negligence; intentional infliction of emotional distress; breach of implied covenant of quiet use and enjoyment; negligent and intentional violation of statutory duties; and retaliation/constructive eviction. On January 20, 2011, defendants made a 998 offer offering “to settle in full all of the claims of Plaintiff PENNY SWAN for the valuable consideration of THIRTY-FIVE THOUSAND DOLLARS AND ZERO CENTS ($35,000), EXCLUSIVE OF RECOVERABLE AND REASONABLE ATTORNEY FEES.” The 998 offer further stated, “The above-cited Offer settles all claims, including both economic and non- economic damages, alleged in the underlying Complaint by Plaintiff PENNY SWAN. The amount of $35,000.00 is inclusive of all Plaintiff PENNY SWAN’s costs, but is

2 exclusive of PENNY SWAN’s recoverable and reasonable attorney fees.” “On signing the below agreement to accept the above-recited valuable consideration in settlement, Plaintiff PENNY SWAN shall file a Notice of Settlement of the Entire Case with the court.” “On receipt of the above-recited valuable consideration in settlement, Plaintiff PENNY SWAN shall file a Request for Dismissal with Prejudice of her entire case and all Causes of Action against these offering Defendants.” “This Offer will expire within thirty (30) calendar days, or at the time of commencement of trial, whichever occurs first . . . The deadline for acceptance is . . . February 21, 2011.” “If this Offer is not accepted, and should Plaintiff PENNY SWAN fail to obtain a more favorable judgment or award at trial, Plaintiff PENNY SWAN shall not recover her post-Offer costs or reasonable attorney fees and shall instead pay Defendants’ costs and reasonable attorney fees from the time of this Offer. In addition, the court in its discretion may require Plaintiff PENNY SWAN to pay a reasonable sum to cover costs of the services of Defendants’ expert witnesses actually incurred and reasonably necessary.”1 Plaintiffs’ attorney, Joshua Katz, who received the 998 offer, was concerned that “the language was unclear and ambiguous,” and that “while the contract [i.e., the parties’ rental agreement] provided for fees to the prevailing party, the offer did not state that [Swan] would be entitled to fees or was the prevailing party for purposes of fees. Nor did the offer provide for a judgment, which would have entitled [Swan] to fees under the contract.”2 Katz was also concerned that if Swan accepted the offer as worded, she “might be liable for defendants’ costs and fees.” Katz therefore consulted with a colleague who specializes in housing cases and has experience with 998 offers; she told Katz that the 998 offer was “ambiguous at best.” After conducting further research and

1 Also on January 20, 2011, defendants made a 998 offer to Marvin Swan that contained the same terms as the 998 offer to Penny Swan. 2 The parties’ rental agreement provided in part: “The prevailing party in an action brought for the recovery of rent . . . or to compel the performance of anything agreed to be done herein, or to recover for damages to said property, or to enjoin any act contrary to the provision hereof, shall be awarded all of the costs in connection therewith, including . . . reasonable attorney’s fees.”

3 consulting with Richard Pearl, “an expert in attorney fees issues and the author of [an attorney fees treatise],” Katz “determined that there were problems” with the 998 offer because it “required [Swan] to file a dismissal, under Civil Procedure section 1717, [such that Swan] would not be entitled to fees pursuant to the contractual fee clause. Also, if [Swan] dismissed, the Defendants would be entitled to their costs in an amount unknown to me. Finally, with a dismissal, for non-contract causes of action either party could claim it achieved its litigation goals and seek fees.” On February 10, 2011, Katz contacted one of defendants’ attorneys, Colin Hatcher, by email and voice mail “explaining the issue of attorney’s fees” and expressing interest in settling the case if the issue could be resolved. Hatcher replied that Katz needed to speak with defendants’ attorney Kevin K. Cholakian, but that Cholakian would not be available to speak with him before February 22, 2011. Because the 998 offer was going to expire on February 21, 2011, Katz called Hatcher to follow up and was told that Cholakian was the only attorney who could discuss settlement issues. Katz therefore left a message for Cholakian explaining that because the offer expired February 21, 2011, he needed to speak with him before then. Katz did not hear from Cholakian.

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Bluebook (online)
Swan v. Tesconi CA1/3, Counsel Stack Legal Research, https://law.counselstack.com/opinion/swan-v-tesconi-ca13-calctapp-2015.