VENTOP, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY VS GARBIS CHRIKJIAN, INDIVIDUALLY AND DBA CIGAR COMPANY

Tentative Rulings

Case Number: 19VEUD03285    Hearing Date: November 16, 2020    Dept: W

ventop, llc v. garbis chrikjian dba cigar company

motion for attorney fees

Date of Hearing: November 16, 2020 Trial Date: N/A

Department: W Case No.: 19VEUD03285

Moving Party: Plaintiff Ventop, LLC

Responding Party: Defendant Garbis Chrikjian dba Cigar Company

BACKGROUND

This is an unlawful detainer action involving commercial property. On December 16, 2019, Plaintiff filed a complaint against Defendant on the grounds the lease had expired on its own terms on April 30, 2018 and that lease did not allow for any more options to renew. Defendant remains in possession of the subject property.

Throughout the initial litigation regarding this issue, Defendant maintained that the lease Plaintiff is suing under is not the applicable lease. Plaintiff alleges even under the Defendant’s lease, Defendant is not entitled to possession because the option language that purports to grant unlimited renewals is ambiguous and equivocal.

The court related the instant case with Chrikjian’s complaint for breach of contract (LC107173) and the Ventop, LLC’s previous unlawful detainer action (LC107250).

On November 2, 2020, the court granted Defendant Chrikjian’s Motion to Stay the Proceedings Pending Appeal. The court denied Defendant’s Motion for Relief from Forfeiture.

[Tentative] Ruling

Plaintiff’s Motion for Attorney Fees is DENIED.

DISCUSSION

Plaintiff Ventop, LLC moves the court for an order awarding attorney fees in the amount of $35,483.50 against Defendant Garbis Chrikjian on the grounds that the parties’ lease agreement contains an attorney fee clause that entitles Plaintiff, as the prevailing party, to recover its reasonable attorney fees, costs and expenses incurred in this action.

A prevailing party is entitled to reasonable attorney fees in addition to other costs. (CCP § 1033.5(a)(10).) “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. (CCP § 1032(a)(4).) In all other circumstances, the “prevailing party” shall be as determined by the court. (Id.)

The prevailing party bears the burden of proof and the amount is left to the trial court’s sound discretion. (Christian Research Institute v. Alnor (2008) 165 Cal. App. 4th 1315, 1320.) A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether. (Serrano v. Unruh (1982) 32 Cal.3d 621, 635.)

In the instant matter, there is no dispute Plaintiff is the prevailing party. Rather, the parties dispute whether the clause in the lease allows for attorney fees in the instant matter. In the alternative, Defendant disputes the amount of fees requested.

The court finds Plaintiff is not entitled to attorney fees. Plaintiff contends the fee provision broadly applies to the parties’ dispute and the mutuality of remedy under Civil Code section 1717 separately supports awarding Plaintiff its attorney fees. However, the provision does not broadly apply to the issue at hand. Here, the provision fee states: “Tenant shall pay all costs, damages and expenses (including reasonable attorney’s fees and expenses) suffered by Landlord by reason of Tenant’s defaults.” (Abb Decl. Exh. A.)

Plaintiff does not explain how this provision is broad enough to apply to Plaintiff’s unlawful detainer action in which Defendant was a holdover tenant. The court notes there is a holdover tenant provision in the lease agreement, which provides, “If Tenant maintains possession of the Premises for any period after the termination of this Lease (“Holdover Period”), Tenant shall pay to Landlord lease payment(s) during the Holdover Period at a rate equal to the normal payment rate set forth in the Renewal Terms paragraph.” (Abb Decl. Exh. A.)

However, this hold over provision does not reflect Defendant was in default of the lease agreement. The default provision provides the “Tenant shall be in default of this Lease if Tenant fails to fulfill any lease obligation or term by which Tenant is bound.” (Abb Decl. Exh. A.) Plaintiff has failed to demonstrate how Defendant did not fulfill their lease obligations. Plaintiff filed the instant complaint on the grounds the lease had expired on its own terms and that although the lease did not allow for any more options to renew, Defendant remained in possession of the subject property.

Next, Plaintiff has not demonstrated they are entitled to attorney fees through Civil Code section 1717’s “mutuality of remedy” provision. “The first situation in which section 1717 makes an otherwise unilateral right reciprocal, thereby ensuring mutuality of remedy, is “when the contract provides the right to one party but not to the other.” (Olen, supra, 21 Cal.3d 218, 223, 145 Cal.Rptr. 691, 577 P.2d 1031.) In this situation, the effect of section 1717 is to allow recovery of attorney fees by whichever contracting party prevails, “whether he or she is the party specified in the contract or not” (§ 1717, subd. (a)). The second situation in which section 1717 makes an otherwise unilateral right reciprocal, thereby ensuring mutuality of remedy, is when a person sued on a contract containing a provision for attorney fees to the prevailing party defends the litigation “by successfully arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same contract.” (North Associates v. Bell (1986) 184 Cal.App.3d 860, 865, 229 Cal.Rptr. 305.)” (Santisas v. Goodin (1998) 17 Cal.4th 599, 610–611.)

Plaintiff argues the instant action is similar to the second situation and cites North Associates to support their contention. However, North Associates is not similar to the situation at hand. The attorney fee provision in North Associates was much broader. There, the attorney fee provision provided that “[i]n case suit should be brought for recovery of the premises, or any sum due hereunder, or because of any act which may arise out of the possession of the premises, by either party, the prevailing party shall be entitled to all costs incurred in connection with such action, including a reasonable attorney's fee.” (North Associates, supra, 184 Cal.App.3d at p. 862.) This provision is not limited to defaults like the provision in the current lease agreement. As a result, Defendant would not have been entitled to attorney fees in the prior unlawful detainer action. The Tentative Ruling in the prior unlawful detainer action found “the attorney fee clause in the lease agreement is not broad enough to encompass noncontract claims. The lease agreement provides: “Tenant shall be in default of the lease if he fails to fulfill any obligations under the lease... Tenant shall pay all costs, damages, and expenses (including reasonable attorney fees and expenses) suffered by Landlord by reason of Tenant's defaults.” As such, the provision for attorney fees does not broadly cover both contract and tort claims; rather, it covers only in the event of defaults – a contract claim.” (LC107250 Minute Order, March 4, 2020.)

Lastly, the court finds Defendant is not judicially estopped from arguing that the attorney fee provision does not apply to this unlawful detainer action. Even if they were judicially estopped from making the argument, the terms of the lease agreement applies to defaults only.

Based on the foregoing, Plaintiff’s Motion for Attorney Fees is DENIED.