Weil, Gotshal & Manges v. CA-Towers @ShoresCenter CA1/1

Filed 4/24/07 Weil, Gotshal & Manges v. CA-Towers @Shores Center CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE

This case raises issues of intersecting equitable and legal claims concerning a law firms long-term, multi-million dollar lease of office space and an unfulfilled contractual promise of access-controlled parking.

Plaintiff, the law firm of Weil, Gotshal & Manges LLP, entered into a written long-term lease agreement with the corporate predecessor of defendants, CA-Towers @ Shores Center, L.P. et al., for office space in Silicon Valley. The lease provided for access-controlled surface parking that defendants failed to provide. Plaintiff sued defendants for rescission, fraud, breach of contract, and reformation. After a bench trial, the trial court awarded damages for breach of contract and reformed the contract to reflect the true intent of the parties regarding parking. But the court found that no fraud had occurred and denied plaintiff rescission. The court also denied each sides request for attorneys fees.

Plaintiff contends it was denied its right to jury trial on its fraud claim, and that it should have been considered the prevailing party and awarded attorneys fees. Defendants cross-appeal and contend that the trial court erroneously admitted parol evidence to interpret the lease terms, and that they should have been considered the prevailing parties and awarded attorneys fees. We reject all contentions and affirm.

I. FACTS

We take the substantive facts from the trial courts lengthy and thorough statement of decision, which includes detailed findings of fact. These findings are supported by substantial evidence and the parties do not contend otherwise.[1]

Facts Surrounding the Negotiation and Execution of the Lease

Plaintiff is a New York-based international law firm with approximately 1,200 lawyers. In 1992, plaintiff opened a four-lawyer Silicon Valley office in Menlo Park. By 2005 that office had expanded to approximately 60 attorneys.

In 1999, plaintiff had about eight years remaining on the lease for its Menlo Park office. Plaintiff was paying $3.80 per square foot for about 34,000 square feet, and enjoyed free parking in a surface lot with no access controls. Plaintiff needed additional office space and began looking for a new Silicon Valley location.

After looking at several locations which did not have access-controlled parking, plaintiff entered into negotiations for new office space in a planned development known as The Towers @ Shores Center (The Towers) in Redwood Shores, a suburban area of the City of Redwood City. Defendant Spieker Properties, L.P. (Spieker) owned the unimproved land on the development site. In February 2000, Spieker submitted a site plan to the City which proposed a six-story and an eight-story office building, with an adjacent parking structure. The City approved the site plan the following April.

In April and May of 2000, plaintiff and Spieker exchanged letters of intent regarding a pre-development lease. From the outset, Spieker told plaintiff it would be charged for parking. Plaintiff originally contemplated occupying the top three floors of the eight-story building, with secure parking in the parking structure. The negotiations shifted focus to the premise that plaintiff would occupy the top four floors of the six-story building, with parking in an access-controlled surface parking lot at a cost of $35 per month per access card.

In May 2000, after the shift in focus from the eight-story to the six-story building, representatives of plaintiff and Spieker had a  rather heated  telephone conversation in which the representative of plaintiff asked why the firm had to pay for parking. The Spieker representative replied that access-controlled parking was part of the overall aura and concept of The Towers and was designed to achieve the same benefits for its tenants, namely, secure and sufficient parking. The Spieker representative described a manned booth and access-controlled arms at the three separate entrances to the surface parking lot. Based on this explanation, [plaintiff] acquiesced to paying for access-controlled surface-lot parking.

The lease was  heavily negotiated  by attorneys for plaintiff and Spieker for over two months, and executed on August 17, 2000. Under the terms of the lease, plaintiff rented 101,000 square feet for a 15-year term. Plaintiffs initial annual base rent was $9,393,000. Plaintiff agreed to an additional rental charge of $35 per month per access card as the initial and minimum rate for 3.1 access cards per 1,000 square feet, which amounted to approximately $11,000 per month. This monthly charge was for  [s]urface parking, including all access control equipment, and required signage.  These monthly parking charges amounted to $1,971,900 over the lease term.

On February 26, 2001, Spieker submitted a modified site plan to the City for approval of Spiekers plan for access-control parking at The Towers.[2] The parking plan consisted of a manned booth located at the Twin Dolphin Drive entrance to [T]he Towers with gates and arms at each of the three entrances controlled by access cards and tickets issued to visitors.

On March 9, the Architectural Review Committee of the Shores Business Center Association approved the design of the access-controlled parking plan. On March 27, Citys Architectural Review Committee approved Spiekers access-control parking plan, but referred it to the City Planning Commission to  determine the land use implications in setting this policy and consider the precedent setting nature of allowing access control booths in parking lots in Redwood Shores.  Apparently, it was not common at the time for Redwood Shores commercial tenants to pay for parking.

Spieker believed that the City deemed its modified site plan a minor amendment to the previously approved site plan and planned development permit. Accordingly, Spieker sought approval to proceed with the installation of the underground work needed to support parking lot gates and arms. On May 17, Spieker formally applied to the City for a modification of its planned development permit to allow for the access-controlled parking plan.

On June 5, the Planning Commission approved the access-controlled parking plan by a vote of 3-2. The next day an appeal was taken from the Commissions approval decision.

Spiekers project manager then informed plaintiffs Silicon Valley office administrator that Spieker did not get approval for its access-control equipment. . . . The project manager sought [plaintiffs] assistance by attending the upcoming hearing on the appeal before the City Council.

On June 22, Spieker sent written notice to plaintiff that Base Building Substantial Completion, as defined in the lease, had occurred. Plaintiff disagreed and replied that construction was incomplete in several respects, including the lack of parking access, control and signage.  On July 2, Spiekers attorney replied that the incomplete construction did not prevent the occurrence of Base Building Substantial Completion. With regard to parking, the Spieker attorney wrote:  Since ample parking is and has been available for Tenants use, the condition of the parking facilities does not materially interfere with or materially delay construction of Tenants improvements, and, accordingly, Base Building Substantial Completion cannot be affected by such condition. 

Plaintiff continued to dispute Spiekers conclusion that Base Building Substantial Completion had occurred, and gave written notice that it was thereafter paying its rent under protest. 

Spieker merged with defendant EOP Operating Limited Partnership (EOP) effective July 2. EOP became the leasing agent for The Towers.

On July 23, the City Council heard the appeal. No representative of plaintiff attended the City Council meeting. Two representatives of EOP appeared and told the City Council that without its proposed access-controlled parking plan, EOP could not control who came onto the premises. EOP also argued that it had a vested right to the parking plan under its development agreement, and asked the City Council to treat its application for a modification of its planned development permit as a minor amendment. The City Attorney disagreed and argued that the previously approved site plan did not mention parking gates, and that the application sought a major amendment. After expressing concern about the proposal for parking gates, the City Council voted to send the matter back to the Planning Commission for further consideration.

In August, plaintiff moved into its leased office space at The Towers.

On August 8, EOP withdrew its application for the proposed access-controlled parking plan. Susan Sagy, EOPs vice president for development, decided to withdraw the application because of the belief that the City would not approve parking gates and would only approve other forms of access-control equipment. EOP considered two alternative forms of access control, a SmartPass system and nested parking. The City approved the SmartPass system. Plaintiff rejected both alternatives as half-baked. 

The access-controlled surface parking lot with gates and a manned booth was never built. The Towers used a parking garage with an access card system. Some of plaintiffs employees began to use the parking garage, with EOPs permission, in late July 2002. By September 2003, all of plaintiffs employees were using, and continued to use, the parking garage.

As of May 31, 2005, plaintiff had paid EOP $507,000 in monthly parking charges under the lease.

When plaintiff entered into the lease, the Bay Area commercial real estate market was very strong for landlords. During 2001 and 2002, the market softened considerably and rental rates declined significantly. As a result, the lease became very expensive  for plaintiff. And as a result of the markets downturn, plaintiff was unable to proceed with its plan to sublease a portion of the office premises, and thus suffered an annual income shortfall of about $2 million and had to reduce its budgeting income by about $3.3 million to cover the shortfall and additional expenses associated with keeping more of its new offices for its own business operations.

Procedural History

On March 26, 2004, plaintiff filed a complaint naming Spieker, EOP, and others as defendants.[3] Plaintiffs first cause of action was denominated Rescission, and contained detailed allegations that defendants entered into the lease negotiations knowing that they had falsely represented to plaintiff that The Towers would have secure, access-controlled surface parking. Plaintiff alleged this was [o]ne of the critical terms of the negotiations. . . . Plaintiff alleged that defendants knew they would be unable to provide access-controlled surface parking, had no intention of doing so, and only made the promise of such parking to induce plaintiff to enter into the lease. Plaintiff sought to rescind the entire lease agreement because of the alleged false promises regarding parking.

Plaintiffs second cause of action was for fraud. Plaintiff set forth its fraud cause of action in barely half a page, incorporating by reference the facts alleged in the cause of action for rescission. The damage allegation of the fraud cause of action alleges that plaintiffs damages from the alleged fraud represent[ed] the amount that plaintiff has overpaid for the premises, including amounts paid for secured parking that was never provided and additional expenses alleged in the rescission cause of action.

The third and fourth causes of action were for breach of contract and reformation, respectively.[4]

Trial was set for May 2, 2005.[5] On that date, plaintiff filed a trial brief in which it admitted that its general damages under the tort theory of fraud mirror those of contract. . . .[6]

The parties filed numerous motions in limine. Three of defendants motions in limine are pertinent to the issues on appeal.

Jury Trial. The lease contained a pre-dispute mutual waiver of jury trial. Despite the contractual waiver, plaintiff demanded a jury trial. Defendants filed a motion in limine to enforce the jury trial waiver and strike the jury trial demand. Defendants relied on Trizec Properties, Inc. v. Superior Court (1991) 229 Cal.App.3d 1616 (Trizec), which they characterized as [t]he controlling California case on the issue of pre-dispute contractual waiver of jury trials, and which held that such waivers were enforceable.

Plaintiff opposed the motion. Plaintiff argued that it was seeking rescission of the entire lease on the ground that defendants induced them to enter the lease with fraudulent misrepresentations and because of their fraudulent inducement, defendants could not rely on a favorable provision of the lease. In other words, plaintiff invoked the principle that one who defrauds another into entering into a contract cannot force his victim to adhere to a provision favorable to the defrauding party. (See, e.g., Ron Greenspan Volkswagen, Inc. v. Ford Motor Land Development Corp. (1995) 32 Cal.App.4th 985, 994-995.)

Equity First Rule. Defendants filed a motion in limine to sever the legal and equitable issues and to try the equitable claims the first cause of action for rescission and the fourth cause of action for reformation first. Equitable actions would be tried to the court. Defendants suggested that the court could make factual findings on the equitable claims that would implicate, and perhaps resolve, the remaining legal claims.

Defendants argued that the Courts determination of rescission and reformation will necessarily involve the determination of several issues that also are implicated in [plaintiffs] promissory fraud and breach of contract claims, and that by trying the equitable claims first, the Court will have determined several of the issues in the case, potentially eliminating the remaining legal claims.

Defendants relied primarily on Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665 (Raedeke), and Nwosu v. Uba (2004) 122 Cal.App.4th 1229 (Nwosu).

Plaintiff opposed the motion. Its argument was based primarily on judicial economy. Plaintiff acknowledged the courts discretion to bifurcate the trial into legal and equitable issues, but argued that bifurcation would overcomplicate the proceedings and increase the time of trial. Plaintiff stated that the court could distinguish the legal and equitable issues. Plaintiff essentially conceded its causes of action for rescission and reformation were equitable. Plaintiff also stated, in what we shall see will be a telling admission, that Plaintiffs causes of action for rescission . . . and damages . . . are based on the same facts. Only one transaction is in issue.

Parol Evidence. Defendants moved to exclude parol evidence from plaintiff on an issue of contract interpretation, specifically whether the lease phrase access control equipment included gates and arms. Defendants argued the evidence should be excluded because the lease was fully integrated.

Plaintiff opposed the motion. Plaintiff argued the parol evidence was consistent with the lease, and that fraudulent inducement was an exception to the parol evidence rule.

The trial court heard oral arguments on the three motions in limine on May 11 and May 12. On May 11, the court announced its tentative ruling to deny the motion to enforce the jury trial waiver, but took the motion under submission after argument.

Having tentatively concluded there would be a jury trial, the court then turned to the equity first motion, noting that defendants sought to sever trial on the claims for rescission and reformation which everybody seems to agree are equitable. The court noted that if it changed its mind and granted the motion to enforce the waiver of jury trial, its going to be a court trial all the way and there wont be any need to try issues separately.

But positing that it would not change its mind and there would be a jury trial, the court announced its tentative decision to grant the equity first motion. The court noted that a trial of the equitable claims before a trial of the remaining legal claims is the preferred procedure where the case involves both equitable and legal claims. The court also noted that trying the equitable issues first may promote judicial economy if such may obviate the necessity for subsequent trial of the legal issues. For these two principles, the court relied on Nwosu, supra, 122 Cal.App.4th at pp. 1238, 1242.

The court then noted that if I stick with my original tentative ruling on the jury waiver, then if I try the equitable issues first and deny rescission, then the contractual waiver of the right to trial by jury will be enforced and no jury ever need be impaneled to try the remaining legal issues. If I try the equitable issues first and grant rescission instead of denying it, then the contractual waiver of the right to trial by jury will not be enforced under my tentative ruling and a jury will need to be impaneled to try the remaining legal claims.

In our view, the trial court was positing that if it denied the rescission claim, there would be no separate trial of the fraud claim.

The court continued to examine the scenario of a court trial on the equitable claims leading to a grant of rescission followed by a jury trial on fraud. The court concluded that such a jury trial would be on greatly narrowed legal claims. The court suspected that plaintiff would elect to rescind the lease and seek damages for fraud and breach of contract, in which case the jury would not have to determine liability for fraud and breach of contract only damages. The court also concluded that my factual findings on the fraud supporting the rescission claim will be binding on the jury in determining the fraud claim, the legal claim for fraud[,] and thus the jury will only have to determine damages for [the] fraud claim and/or liability and damages for the breach of contract claim.

Plaintiffs counsel replied, I am frankly fresh out of arguments. I mean I dont disagree with the courts conclusions. Counsel asserted that the only comment he and his co-counsel had involved scheduling and inconvenience of witnesses, and suggested the court impanel an advisory jury to listen to the evidence on the equitable claims, but to be the trier of fact on, and resolve, any remaining legal claims. Plaintiffs counsel did not dispute the courts characterization of the rescission cause of action as equitable, and did not dispute the courts statement of its belief that the courts findings on rescission would bind the jury on fraud.

The court took the equity first motion under submission together with the jury waiver motion because they are intimately tied. . . .

On May 12, the court reversed its tentative decision on the jury waiver motion, and announced its decision to grant the motion to enforce the jury trial waiver and strike plaintiffs jury trial demand: [T]he parties in this case, in my opinion, have clearly and unequivocally agreed to waive a jury trial. . . . It then found that, in light of this ruling, the equity first motion was moot.

With regard to the parol evidence motion, the court denied the motion to exclude parol evidence regarding whether the lease was induced by fraud. The court also ruled that parol evidence involving interpretation of lease terms would be admitted provisionally at a bench trial.

A bench trial commenced and ended on May 26. During trial the court admitted parol evidence, both under the fraud exception and because the court believed the evidence was relevant to prove a meaning to which the language of the lease was reasonably susceptible.

Post-Trial Proceedings

On July 1, the trial court filed a lengthy and detailed tentative statement of decision. The trial court ruled against plaintiff on its claims for fraud and rescission, but ruled for plaintiff on its claims for breach of contract and reformation.

Fraud. The trial court found that defendants did not defraud plaintiff. First, the court found that defendants had promised to provide access-controlled surface parking. In so doing the court relied on exhibits to the lease and the parties letters of intent, and on parol evidence, to interpret the contractual phrase, [s]urface parking, including all access control equipment, and required signage. The court found that defendants promised to provide a particular type of access-control equipment, namely a manned booth at one entrance with gates and arms at the three entrances to the surface parking lot. The court further found that plaintiff only agreed to pay the parking charges of approximately $11,000.00 per month if such access-control equipment was provided in the surface parking lot.

But the trial court found that plaintiff had failed to establish a necessary element of its fraud cause of action, i.e., that defendants did not intend to perform on its promise at the time the promise was made. The court found that defendants, at the time the lease was executed on August 16, 2000, did in fact intend to provide [plaintiff] with the promised access-controlled surface parking.

The trial court relied on the testimony of defendants witnesses regarding their intent at the time the leased was signed. The court specifically referred to testimony of Susan Sagy, who testified that, at the time the Lease was signed, [defendants] fully intended to install access-control equipment in the surface parking lot and never thought that obtaining a permit for gates and arms would be an issue. Although she knew that approvals from the Architectural Review Committees for the Shores Business Center Association and the City would be required, Ms. Sagy testified that she did not learn until after such architectural review that an amendment to the Planned Development Permit would also be required.

The court also relied on defendants conduct both before and after the lease was signed. Defendants took several actions, listed in the statement of decision, consistent with Sagys testimony and defendants intent to provide the promised access-control parking system.

Rescission. Plaintiffs claim for rescission was based on three distinct grounds: fraud, mutual mistake, and failure of consideration. The trial court ruled that plaintiffs rescission claim based on fraud fails for the same reasons as does its fraud claim. The court ruled that the claims for rescission based on mutual mistake and failure of consideration fail because the provision for access-controlled parking was not a material matter.

Breach of Contract. The court ruled in plaintiffs favor, finding that defendants had breached its promise to provide access-controlled surface parking, and a particular type of access-control equipment a manned booth at one entrance with gates and arms at the three entrances to the surface parking lot. The court concluded that plaintiffs damages for the contract breach were the amount of the monthly parking charges paid as of May 31, 2005: $507,000.

Reformation. The court found that the parties true intent was to have [defendants] provide surface parking with access-control equipment comprised of a manned booth and gates and arms and to have [plaintiff] pay the specified parking charges therefor. It was not the parties intent that [plaintiff] be obligated to pay for surface parking without such access-control equipment. Accordingly, the court concluded that the lease should be reformed to reflect the parties true intent, i.e., that [plaintiff] does not have to pay for surface parking unless the same is equipped with a manned booth and gates and arms.

On August 4, 2005, the California Supreme Court decided Grafton Partners v. Superior Court (2005) 36 Cal.4th 944 (Grafton), in which it held that pre-dispute contractual waivers of jury trial were unenforceable. (Id. at pp. 950, 956.) The Supreme Court specifically disapproved Trizec. (Id. at p. 956.) The Grafton decision is retroactive. (Id. at p. 967.)

On August 8, the trial court in the present case asked the parties to brief the effect, if any, of Grafton upon the courts tentative statement of decision. In their brief, defendants argued that plaintiff was not entitled to a jury trial on its equitable claims of rescission and reformation, and that the courts findings on the rescission claim necessarily disposed of the fraud claim. In its brief, plaintiff argued that Grafton required a jury trial on its fraud claim.[7]

On August 30, the court held a hearing on the effect of Grafton on its tentative statement of decision. Referring to the May 11 hearing, the trial court said, I dont think I said [it] at that time, but I will say it now . . . I would have heard the equitable claims first. Even with an advisory jury impaneled, to listen to the evidence on the equitable claims but to be the trier of fact on any remaining legal claims, I would have rendered my decision first on the equitable claims before turning to the jury for its decision on the legal claims, so the parties would have had the benefit of my findings and rulings on the equitable claims first. And in that sense then, as I said during the hearing on the [equity first] motion, my findings would either have been binding on the jury, or [w]ould have disposed of the legal fraud claim. In other words, had there been a jury trial, no different result would have been reached.

The court continued: [I]n light of the Supreme Courts decision in Grafton, I should not have enforced the jury waiver provision, that is clear. And I should have upheld . . . plaintiffs right to trial by jury on its legal claims, i.e., the fraud and breach of contract claim.

As indicated, I would have tried first . . . plaintiffs equitable claims, namely rescission and reformation, and my findings, as evidenced in the tentative [statement of] decision . . . would my finding on the fraud claim and on the parties contract in deciding the rescission and reformation claims would have been binding on the jury, or would have disposed of certain elements of those claims.

The fraud claim never would have been sent to the jury in light of my findings on fraud that I had to make in order to reach the rescission claim. (Italics added.)[8]

The court concluded that Grafton did not have any practical effect whatsoever on this case.

Counsel for plaintiff responded with arguments that he was apparently making for the first time. He contended that had the court granted the equity first motion, he would have asked the court to impanel a jury to hear both the equitable and legal claims, and he would have elected his remedies damages or rescission at the conclusion of the trial. Counsel also argued that had the court indicated it would proceed with a jury trial, we would have circled our wagons and asked a very important question. And that is: shall we, at this point, withdraw our claim for rescission on an equitable basis, [and] try this case to a jury on the question of fraud. . . .

Plaintiffs co-counsel admitted that he and counsel didnt think about it, i.e., this election of remedies issue, until just a short time before we came to court for the hearing.

The court observed that both sides came to me from day number one of trial agreeing that the rescission claim and the reformation claim were equitable claims to be tried by the court.

After additional argument, the court stated that I never, ever, had in my mind-set that I was going to let the jury make the findings first and that I would accept their findings and have them bind my decision on the equity claim. The court ruled that plaintiffs election-of-remedies argument was speculative regarding what plaintiff might have done, and that Grafton had no effect on the tentative decision.

On September 2, the court filed its statement of decision that is essentially similar to the tentative statement of decision. On September 30, the court entered judgment in accordance with its findings and rulings, granting plaintiff reformation and $507,000 in breach of contract damages, but denying plaintiff relief on its causes of action for fraud and rescission. Because the lease contained an attorneys fees provision, the court directed the parties to brief the issue of who was the prevailing party for purposes of contractual attorneys fees.

Plaintiff moved for an award of contractual attorneys fees, arguing that it was the prevailing party within the meaning of Civil Code section 1717 (section 1717) because it prevailed on its causes of action for breach of contract and reformation. Defendants, on the other hand, argued that because neither party prevailed on all of the contract claims, the court should award attorneys fees to the party who obtained the greater relief. Defendants claimed they had obtained the greater relief by winning on the rescission claim, and thus preserving the balance of $160 million of rent payments remaining on the lease.

The trial court determined that plaintiff was the prevailing party within the meaning of Code of Civil Procedure section 1032, subdivision (a)(4) because it obtained a net monetary recovery, and was thus entitled to recover its statutory costs. The court, however, did not award attorneys fees to either party. The court determined that no party was the prevailing party on the contract for the purposes of awarding attorneys fees under section 1717. The court noted that plaintiff prevailed on the breach of contract and reformation claims, while defendants prevailed on the fraud and rescission claims. The court concluded: Comparing the relief awarded on these contract claims with the parties demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, closing arguments, etc., this Courts decision was clearly good news and bad news to and a mixed result for both sides. The court relied on Hsu v. Abbara (1995) 9 Cal.4th 863, 871-877 (Hsu).

II. DISCUSSION

Plaintiffs Appeal

Jury Trial. Plaintiff contends that it was denied its constitutional right to trial by jury on its fraud claim. We agree, but we believe that plaintiff has suffered no harm under the unusual circumstances of this case. The trial courts factual findings on the equitable claim of rescission, which would have been tried to the court in any case, disposed of the fraud claim based on the same facts. Remand for a jury trial on the fraud claim would be pointless and an affront to judicial economy.

We first note that prior to the decision in Grafton, the trial court was entitled to take the view that the parties waiver of jury trial was valid under Trizec. Thus, the court properly proceeded to try the matter without a jury. Once Grafton was decided and retroactively invalidated the jury trial waiver after the matter had been tried and the court had issued a lengthy and detailed tentative statement of decision the court allowed the parties to brief and argue the effect of Grafton on the case. The court concluded that Grafton had no practical effect on the case, given the unusual circumstances. We agree because a jury trial, while a matter of constitutional entitlement, would have changed nothing in this case and would not have permitted an award of additional damages to plaintiff.

Even under Grafton, plaintiff would never have proceeded to a jury on its claim for rescission.[9] A claim of rescission is an equitable claim. (See Fowler v. Ross (1983) 142 Cal.App.3d 472, 477-478.) There is no right to jury trial on an equitable cause of action. (Raedeke, supra, 10 Cal.3d at p. 671; Nwosu, supra, 122 Cal.App.4th at pp. 1237-1238.) Plaintiff styled a cause of action for rescission, which is equitable as plaintiff agreed below.

But now, stressing its right to a jury trial on the legal claim of fraud, and seemingly arguing that its case is primarily (if not entirely) legal, plaintiff argues that rescission is merely an equitable remedy, not a cause of action. Under the circumstances of this case, the distinction between equitable remedy and equitable claim is immaterial.

Plaintiffs current argument is inconsistent with plaintiffs litigation position below. Plaintiff styled its rescission claim not only as a cause of action, but the primary cause of action of the complaint that alleged the detailed operative facts. Plaintiff sought rescission on three separate theories: fraud, mutual mistake, and failure of consideration. Plaintiff agreed below, at least until the August 30 Grafton hearing, that the claim was equitable and agreed it could be tried to the court. In any case, the gist of plaintiffs claim for rescission is equitable, and that claim was properly tried to the court without a jury. (See Nwosu, supra at p. 1238.)

When a case presents a mixed bag of equitable and legal claims, the equitable claims may properly be tried first, to the court, and if the courts determination of those issues is also dispositive of the legal issues, nothing further remains to be tried by a jury. [Citations.] (Raedeke, supra, 10 Cal.3d at p. 671; see Nwosu, supra, 122 Cal.App.4th at p. 1238; Jaffe v. Albertson Co. (1966) 243 Cal.App.2d 592, 609.) The courts findings on an equitable claim may obviate the need for a subsequent trial on the legal claims. (Nwosu, supra, at p. 1238.) Thus, equitable determinations that are dispositive of related legal claims render a jury trial on the legal claims unnecessary, and do not result in the violation of the right to trial by jury.

That is precisely the case here. Plaintiff alleged its detailed facts in the rescission cause of action. The fraud cause of action simply incorporated those facts by reference. Plaintiff admitted its fraud cause of action was based on the same facts as its rescission cause of action. The court tried the factual claims advanced by plaintiff in support of its fraud claim in the context of the rescission claim, and found that defendants committed no fraud. This finding is dispositive of the fraud cause of action, and a jury trial was unnecessary on that claim.

Plaintiff argues that it had the right to elect its remedies and seek a jury trial on its fraud claim. But it made no such election before trial,and agreed that the rescission claim could be tried first and to the court. Plaintiff speculates about what it might have done had it anticipated Graftonbut speculation does not inform or determine our disposition of appellate contentions.

Plaintiff, parsing through some of defendants witnessess testimony, claims that a jury might have upheld the fraud claim. Plaintiff essentially argues that there is some evidence to support a finding of fraud. First, plaintiff misreads the evidence. Second, the fact that a different trier of fact could have reached a contrary conclusion does not change the rule that a trial courts determinations on an equitable claim are binding on, and may dispose of, a legal claim. And there is substantial evidence in support of the trial courts findings.

Plaintiff also admits that any fraud damages mirror those of contract. Since plaintiff has been awarded the $507,000 damages it sought for breach of contract, no additional damages could possibly be awarded for fraud.

Attorneys Fees. The lease contained a provision that In any action which [defendants] or [plaintiff] brings to enforce its respective rights hereunder, the unsuccessful party shall pay all costs incurred by the prevailing party, including . . . reasonable attorneys fees . . . .

Contractual attorneys fees are governed by section 1717. Subdivision (a) of that statute provides, as here pertinent: In any action on a contract, where the contract specifically provides that attorneys fees and costs, which are incurred to enforce that contract, shall be awarded . . . to the prevailing party, then the party who is determined to be the party prevailing on the contract . . . shall be entitled to reasonable attorneys fees in addition to other costs. Subdivision (b)(1) of the statute also defines party prevailing as the party who recovered a greater relief in the action on the contract.

Plaintiff contends that it is the prevailing party under this provision, because it prevailed on its causes of action on the contract, i.e., breach and reformation. It contends that its causes of action for rescission and fraud, on which it did not prevail, are irrelevant to the attorneys fees issue because they are not actions on the contract, and in any case sought not to enforce the contract, but to render it a nullity.[10]

Plaintiff is incorrect. Numerous cases establish that [a]n action for rescission is an action on a contract for purposes of an award of attorney fees and other costs under section 1717. [Citation.] (Reveles v. Toyota By the Bay (1997) 57 Cal.App.4th 1139, 1152, fn. 6 & 1152-1153; see Hastings v. Matlock (1985) 171 Cal.App.3d 826, 840-841; Star Pacific Investments, Inc. v. Oro Hills Ranch, Inc. (1981) 121 Cal.App.3d 447, 463.)[11] And our Supreme Court has instructed us that a party may be entitled to attorneys fees under section 1717 even if the party is seeking not to enforce the contract, but to render it invalid, unenforceable, or nonexistent. (Hsu, supra, 9 Cal.4th at p. 870.)

Thus, as the trial court noted, this case is one in which each side won some relief on the contract: plaintiff on breach of contract and reformation, defendants on fraud and rescission. In such a case, where the results of the litigation are mixed, the trial court may, in its discretion, declare neither side to be a prevailing party and deny both sides attorneys fees. (Civ. Code,  1717, subd. (b)(1) [The court may . . . determine that there is no party prevailing on the contract for purposes of this section.]; Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109 (Scott); Hsu, supra, 9 Cal.4th at pp. 871, 875-876.) In making such a determination, the trial court is to compare the relief awarded on the contract claim or claims with the parties demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. (Hsu, supra, at p. 876; see Scott, supra, at p. 1109.)

The trial court in this case made such a discretionary determination. We only disturb such a determination when there is a clear showing of abuse of discretion. (McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1456 (McLarand).)

Plaintiff has not met its burden of showing an abuse of that discretion. Plaintiff sought and obtained $507,000 in contract damages for paying for a bargained-for type of parking which defendants failed to provide. Plaintiff also obtained a related reformation of the lease with regard to that type of parking. Defendants, on the other hand, withstood plaintiffs failure of proof on the claims of fraud and rescission and the attempt to undo a multi-million dollar lease. We cannot see how the trial court abused its discretion in denying attorneys fees to both sides.[12]

Defendants Cross-Appeal

Parol Evidence. Defendants contend that the trial court erred by admitting parol evidence to interpret the contract term, [s]urface parking, including all access control equipment, and required signage. Defendants argue that because of the claimed error, the judgment for plaintiff on the causes of action for breach of contract and reformation should be reversed. We disagree.

We need not present a discourse on the parol evidence rule. Where, as here, a contract is integrated, a court may admit extrinsic evidence to prove a meaning to which the language of the instrument is reasonably susceptible. [Citation.] (Haggard v. Kimberly Quality Care, Inc. (1995) 39 Cal.App.4th 508, 517-518.)

The phrase [s]urface parking, including all access control equipment, and required signage is reasonably susceptible to the interpretation reached by the trial court. The court properly considered parol evidence to reach the conclusion that the parties intended access control equipment to mean a particular type of access-control equipment a manned booth at one entrance with gates and arms at the three entrances to the surface parking lot. We see no error.

Attorneys Fees. Defendants argue that if the judgment in favor of plaintiff is reversed on the above ground, then defendants are the prevailing party for purposes of attorneys fees under section 1717. But we are not reversing the judgment favorable to plaintiff. Thus, defendants are not entitled to attorneys fees. This case remains a proper one for the trial courts discretionary determination that there is no prevailing party, as we have discussed above. Justice was served by the courts allocation of attorneys fees.

III. DISPOSITION

The judgment is affirmed in its entirety.

______________________

Marchiano, P.J.

We concur:

______________________

Stein, J.

______________________

Swager, J.

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[1] In this Statement of Facts, passages inside double quotation marks are from the statement of decision. We omit references to the trial courts footnotes.

[2] Subsequent dates are in 2001 unless we indicate otherwise.

[3] The defendants were a number of corporations and limited partnerships. Due to various mergers the defendants at the time of judgment are the respondents on appeal: EOP, Equity Office Properties Trust, and CA-Towers @ Shores Center.

[4] A fifth cause of action, for negligence, settled before trial and was dismissed on May 24, 2005.

[5] Subsequent dates are in 2005 unless we indicate otherwise.

[6] Plaintiff claimed its fraud damages also included punitive damages. But punitive damages seem to play no role in this case. Indeed, as far as we can tell the phrase punitive damages does not appear in plaintiffs opening brief. Plaintiffs first mention of punitive damages on appeal is in its reply brief.

[7] Plaintiff argued that Grafton did not require a jury trial on its breach of contract claim on which it successfully obtained damages because the issues in that claim were legal issues of contract interpretation properly tried by the court. The court observed that having received damages for breach in the amount of the monthly parking charges, plaintiff got as much from me as a jury could have given you on that particular claim.

[8] Plaintiff claims on appeal that it had a jury trial right on its fraud claim. It does not argue it had a jury trial right to its claim for breach of contract probably because, having obtained damages for breach, it does not want to retry that claim.

[9] As well as its claim for reformation, but our focus is on the rescission cause of action.

[10] Again, plaintiff insists that rescission is not a cause of action but a remedy. But in this case, plaintiff styled it as a cause of action. In any case, the distinction is not controlling for our present purposes. Plaintiff sought rescission of the lease and did not prevail on that claim.

[11] Two aspects of the Reveles decision, which are unrelated to the proposition for which we cite the case, were disapproved in Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal.4th 1246, 1261, and Snukal v. Flightways Manufacturing., Inc. (2000) 23 Cal.4th 754, 775, fn. 6.

[12] We reject plaintiffs claim that because it was found to be the prevailing party under Code of Civil Procedure section 1032, it necessarily is the prevailing party under section 1717. That is not the law. Where there is a lawsuit on a contract containing an attorneys fees provision, section 1717 including its provision for the court to find no prevailing party prevails. (McLarand, supra, 231 Cal.App.3d at pp. 1455-1456; see Building Maintenance Service Co. v. AIL Systems, Inc. (1997) 55 Cal.App.4th 1014, 1021.) In contrast, where there is no suit on a contract, the prevailing party is determined by Code of Civil Procedure section 1032. (See Wakefield v. Bohlin (2006) 145 Cal.App.4th 963, 987.) Plaintiffs reliance on Wakefield is thus somewhat puzzling. Plaintiff also relies on Thompson v. Miller (2003) 112 Cal.App.4th 327, which was a tort case and did not involve section 1717. (Id., at pp. 334-337.)