Anthony v. Snyder

Filed 2/28/06 Anthony v. Snyder CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, Lisa Guy-Schall, Judge. Reversed.

Garner Anthony filed a Code of Civil Procedure section 1085 petition for writ of mandate and a request for injunctive relief against John Snyder, acting as the director of public works for the County of San Diego, and the Board of Supervisors of the County of San Diego (the Board). The petition sought a court order requiring Snyder and the Board to enforce San Diego County Code section 81.402 and Government Code section 66462, subdivision (a) by requiring real party in interest Barratt American Incorporated (Barratt) to make certain offsite road improvements adjacent to Anthony's land in connection with a residential development being created by Barratt pursuant to a Final Map approved by the Board. The request for injunction sought a court order prohibiting Snyder and the Board from accepting Barratt's subdivision improvements or releasing Barratt's subdivision improvement agreement security bonds pending ruling on the writ petition. Anthony also requested an award of attorney fees under Code of Civil Procedure section 1021.5. The trial court issued the writ of mandate.

Snyder, the Board and Barratt (collectively SB&B) appealed the trial court judgment issuing the writ of mandate, and this court reversed the judgment and directed the trial court to enter judgment for SB&B. (Anthony v. Snyder (2004) 116 Cal.App.4th 643, 669 (Anthony I).) SB&B then filed a motion in the trial court for an award of costs and attorney fees as the prevailing parties in the writ proceeding. The trial court concluded Anthony would have been entitled to attorney fees under Code of Civil Procedure section 1021.5 had he been successful in the writ proceeding, and under the reciprocal provisions of Civil Code section 1717 (section 1717)^[1] SB&B were entitled to attorney fees. The trial court entered judgment for attorney fees in favor of SB&B, and Anthony timely filed this appeal of the judgment.

On appeal the parties essentially eschew the rationale of the trial court's award of attorney fees to SB&B. Anthony contends that under section 1717 he can be liable for attorney fees only if his petition is an action on a contract containing an attorney fee clause and he was a signatory to the contract. He contends he was not a signatory to any contract and does not fit within any exception subjecting a nonsignatory to liability for attorney fees. He also contends his petition was not an action on a contract to enforce the contract under section 1717.

SB&B contend in response that Anthony's petition was an action on a contract within the meaning of section 1717, and had he prevailed on the petition he would have been entitled to attorney fees under the attorney fee clause in the contract even though he was not a signatory to the contract. They conclude that under the reciprocal effect of section 1717 they, as the prevailing parties, are therefore entitled to attorney fees.

FACTUAL BACKGROUND

In 1995 Barratt's predecessor in interest applied to the County of San Diego (the County) for approval of a tentative map under the provisions of the Subdivision Map Act (SMA; Gov. Code, § 66410 et seq.), dividing 127 acres of land in the County into 28 lots (the project). Access to the project from a public street is provided by a private roadway offsite of the project and adjacent to land owned by Anthony. Anthony requested County officials to impose, as a condition to approval of the tentative map for the project, a requirement that the subdivider make significant improvements to the private roadway. He contended those improvements were required to meet the County standards for private streets. However, the director of public works considered the condition of the private roadway to be satisfactory and did not include its improvement as a condition to approval of the tentative map.

The County's Planning and Environmental Review Board approved the tentative map, subject to conditions that did not include a condition the private road be improved. Anthony filed an administrative appeal to the County Planning Commission, which in February 1996 denied the appeal. The Planning Commission then approved the tentative map for the project, subject to conditions that did not include improvement of the private road. Neither Anthony nor anyone else appealed the decision of the Planning Commission to the Board.

Barratt acquired the project after the tentative map's approval became final and in 2001 sought approval of the Final Map by the Board. Barratt chose not to satisfy all of the conditions of the tentative map prior to the Board's approval of the Final Map and therefore entered into a subdivision improvement agreement with the County. That agreement permitted approval of the Final Map but obligated Barratt to satisfy all of the conditions of the tentative map within a specified time. Performance of Barratt's obligations was secured by bonds and the subdivision improvement agreement provided that, "As part of the security given for the faithful performance of this Agreement . . . there shall be included costs and reasonable fees, including reasonable [attorney] fees, incurred by the . . . County in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered."

On February 21, 2002, approximately one year after the Board approved the Final Map, Anthony filed the instant petition for writ of mandate seeking an order to compel Snyder and the Board to require Barratt to make improvements to the private road that provides access to the project.

DISCUSSION

Attorney fees are recoverable as costs if authorized by contract, statute or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).) The general authorization for the contractual award of attorney fees is set forth in Code of Civil Procedure section 1021 (section 1021):

"Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys . . . is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs . . . ."

Under section 1021 the parties to a contract may provide for the award of attorney fees in litigation arising out of the contract as they may agree, including an award for attorney fees incurred in an action based on tort theories (Lerner v. Ward (1993) 13 Cal.App.4th 155; Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338), and an award for attorney fees under a contractual provision benefiting only one of the parties (Moallem v. Coldwell Banker Com. Group, Inc. (1994) 25 Cal.App.4th 1827). However, in the limited situation of an action on a contract that contains a provision providing for an award of attorney fees incurred to enforce that contract, the prevailing party in the action is entitled to an award of attorney fees even if the contract provides for an award of attorney fees only to the other party. (§ 1717.) In Xuereb, it was stated the "effect [of section 1717] is to make an otherwise unilateral right to attorney fees reciprocally binding upon all parties to actions to enforce the contract." (Xuereb, at p. 1342.)

Further, as stated in Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 379-380:

"As a general rule, attorney fees are awarded only when the action involves a claim covered by a contractual attorney fee provision and the lawsuit is between signatories to the contract. [Citation.]

"Under some circumstances, however, the reciprocity principles of Civil Code section 1717 will be applied in actions involving signatory and nonsignatory parties. [Citation.] [Fn. omitted.]"

The award of attorney fees under section 1717 to nonsignatories to the contract against signatories, and to signatories to the contract against nonsignatories, has been upheld in several situations. As stated in an exhaustive and critical review of the use of section 1717 to shift attorney fees between signatories and nonsignatories to a contract:

"[L]itigation about the application of . . . section 1717 has expanded to include every possible combination of prevailing parties and signatories to a contract: a prevailing signatory defendant's ability to recover fees from a losing non-signatory plaintiff, a prevailing signatory plaintiff's ability to recover fees from a losing non-signatory defendant, and a prevailing non-signatory plaintiff's ability to recover fees from a losing signatory defendant. [Fns. omitted.]" (Miller, Attorneys' Fees for Contractual Non-Signatories Under California Civil Code Section 1717: A Remedy in Search of a Rationale (1995) 32 San Diego L.Rev. 535 at pp. 553-554.)

Attorney fees have been awarded under section 1717 to and against nonsignatories to a contract in at least four types of cases:

1. A signatory to a contract with an attorney fee clause in an action against a nonsignatory alleging alter ego, conspiracy or co-venturer;

2. A contract action in which the contract is found unenforceable;

3. A third party beneficiary contract action by a nonsignatory against a signatory; and

4. An action involving a nonassuming grantee of real property encumbered by a preexisting deed of trust.

(See Miller, supra, at pp. 555-556.) The current rule was stated in Real Property Services Corp. v. City of Pasadena, supra, 25 Cal.App.4th at p. 382 to be:

"[I]n cases involving nonsignatories to a contract with an attorney fee provision, the following rule may be distilled from the applicable cases: A party is entitled to recover its attorney fees pursuant to a contractual provision only when the party would have been liable for the fees of the opposing party if the opposing party had prevailed. Where a nonsignatory plaintiff sues a signatory defendant in an action on a contract and the signatory defendant prevails, the signatory defendant is entitled to attorney fees only if the nonsignatory plaintiff would have been entitled to its fees if the plaintiff had prevailed."

(See also Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111.)

However, section 1717, which under certain circumstances permits an award of attorney fees to or against a nonsignatory to a contract, applies only to "contract actions, where the theory of the case is breach of contract, and where the contract sued upon itself specifically provides for an award of attorney fees incurred to enforce that contract." (Xuereb v. Marcus & Millichap, Inc., supra, 3 Cal.App.4th at p. 1342; see also Lerner v. Ward, supra, 13 Cal.App.4th at p. 159.) If the action is not for breach of contract to enforce the contract containing the attorney fee clause, then section 1717 does not apply and the right to an award of attorney fees must be authorized under the more comprehensive provisions of section 1021 or by other statute. (Moallem v. Coldwell Banker Com. Group, Inc., supra, 25 Cal.App.4th at p. 1830.) If an attorney fee award is not available under section 1717 it may be available under section 1021, but in the latter event it is available only to or against a signatory to the contract. (Super 7 Motel Associates v. Wang (1993) 16 Cal.App.4th 541, 545-547.) If an attorney fee award is available under Code of Civil Procedure section 1021.5, the award is authorized by statute (Code Civ. Proc., § 1033.5, subd. (a)(10)) and section 1717 does not apply.

SB&B contend that Anthony's petition for writ of mandate was an action on a contract: the subdivision improvement agreement signed by the County and Barratt, and approved by the Board in connection with its approval of the Final Map for the project. They then posit that section 1717 therefore applies and not only imposes a reciprocal effect to the improvement agreement's attorney fee clause but also authorizes an award of attorney fees to a prevailing signatory to the improvement agreement against a nonsignatory.

In this case we conclude the petition was not an action on the contract to enforce the contract; rather, the petition challenged the propriety of the tentative map and the alleged omission from the conditions to the tentative map of the obligation to improve the private road. Section 1717 therefore has no application to this case. (Stout v. Turney (1978) 22 Cal.3d 718, 730; Lerner v. Ward, supra, 13 Cal.App.4th at p. 159.) Because the contractual attorney fee award must be based on section 1021 or Code of Civil Procedure section 1021.5 and not section 1717, the award against Anthony is authorized only if the contract contained an attorney fee provision sufficiently broad to include the remedies asserted and only if Anthony was a signatory to the subdivision improvement agreement. (Super 7 Motel Associates v. Wang, supra, 16 Cal.App.4th at pp. 545-547.) Anthony was neither a party nor a signatory to the subdivision improvement agreement. The subdivision improvement agreement was between the County and Barratt and signed only by them.

Our conclusion that the petition is not an action on the subdivision improvement agreement to enforce that agreement is based on the role of the subdivision improvement agreement in the scheme of Final Map approval under the SMA as explained in Anthony I, supra, 116 Cal.App.4th 643, the first appeal in this case. In Anthony I, we concluded Anthony did not have "the ability to enforce the subdivision improvement agreement on a contractual or statutory basis. Rather, the subdivision improvement agreement must be read within and consistent with the statutory context of the SMA procedures, and it does not create separately enforceable contractual covenants, even if they are framed as a duty to follow standards set by County ordinances." (Id. at p. 647.)

As we discussed at length in Anthony I, under the SMA scheme for approval of a Final Map, a tentative map and its conditions are first approved. Then, approval of the Final Map consistent with the approved tentative map is a ministerial act, which must be accepted if the conditions of the tentative map have been satisfied or the subdivider has agreed to satisfy those conditions by entering into a subdivision improvement agreement. The subdivision improvement agreement mirrors the conditions of the tentative map that have not been satisfied at the time of approval of the Final Map and obligates the developer to satisfy those conditions. The subdivision improvement agreement does not create new or different conditions from those attached to approval of the tentative map. (See Anthony I, supra, 116 Cal.App.4th at pp. 660-668.)

As a result of this scheme of the SMA, the omission from the subdivision improvement agreement in this case of any requirement to improve the offsite private road to the project reflects the fact that requirement was not a condition to approval of the tentative map. Therefore, Anthony's petition to compel the Board to require Barratt to improve the offsite private road was necessarily a legal challenge to the tentative map approval, not the subdivision improvement agreement, the terms of which were determined at the time of approval of the tentative map. Anthony I held that Anthony's petition was barred by the 90-day statute of limitations to challenge the validity of conditions to the tentative map under Government Code section 66499.37 and by Anthony's failure to exhaust administrative remedies by appealing the approval of the tentative map and its conditions to the Board. (Anthony I, supra, 116 Cal.App.4th at pp. 653-658.) Anthony I therefore held Anthony's petition was a challenge to approval of the tentative map and not an action on the subdivision improvement agreement to enforce the agreement.

Because the gist of Anthony's petition necessarily was a challenge to approval of the tentative map and not an action on the subdivision improvement agreement, there is no basis on which to apply section 1717, the only legal provision under which SB&B suggest Anthony can be held liable to them for attorney fees incurred in defense of Anthony's petition.

DISPOSITION

The judgment is reversed. Anthony is entitled to costs on appeal.

McDONALD, J.

I CONCUR:

McINTYRE, J.

BENKE, J.

I respectfully dissent In his petition Garner Anthony alleged that under the subdivision improvement agreement Barratt American Incorporated (Barratt) was required to improve Via Maria Elena (VME). (Anthony v. Snyder (2004) 116 Cal.App.4th 643, 658, 659 (Anthony I).) Importantly, the trial court relied on the contractual nature of Anthony's claims in finding they were not subject to any defense based on a failure to exhaust administrative remedies or the 90-day statute of limitations provided by the Subdivision Map Act (SMA) (Gov. Code, § 66410 et seq.). In its initial ruling, the trial court stated: " 'The issue presented by the petition is the interpretation of the improvement agreement which did not [exist] until approximately five years after the tentative map was approved. Petitioner maintains that the contract at issue was lawfully and properly approved by the respondent board. Petitioner is requesting that the court determine the duties of the respondents under the contract. [¶] The record shows that there was no reason for petitioner to pursue an administrative remedy at the time of final map approval where the improvement agreement upon which the approval was based included a provision which required the construction of road improvements. [Citation.] The petition seeks to compel the respondent board to enforce the terms of the improvement agreement in a manner which was consistent with the requirements of county ordinances, as alleged in the petition.' " (Anthony I, supra, 116 Cal.App.4th at pp. 651-652, fn. omitted.)

When the case reached us on the merits on Barratt's appeal, although we decided the exhaustion requirements and time limits set forth in the SMA barred Anthony's claims, like the trial court we nonetheless treated Anthony's claims as the contract claims he undeniably alleged. In dealing with the SMA defenses Barratt and the County of San Diego (County) raised, we stated: "To address these issues, we are required to take into account the unusual manner in which Anthony has pled his petition, to assert that the subdivision improvement agreement entered into between the County and Barratt creates, on his part as an interested citizen, enforceable contract rights or rights to enforce a mandatory duty on the part of the County appellants to perform any acts indicated under County ordinances that would require Barratt to construct the subject road improvements." (Anthony I, supra, 116 Cal.App.3d at p. 653, italics added.)

Significantly, although we found Anthony had failed to timely exhaust administrative remedies under the SMA, we stated: "That is not the end of the inquiry, however. Similar to the arguments of the plaintiff in Legacy Group, supra, 106 Cal.App.4th 1305, Anthony goes farther, contending that under the subdivision improvement agreement, contract interpretation issues are presented that do not involve 'a controversy over or arising out of the Subdivision Map Act.' [Citation.] This theory presupposes that the action is not primarily an attack on the project maps, at least as it focuses upon the alleged mandatory duties required under the subdivision ordinance (and/or the subdivision improvement agreement), i.e., the duties of the County and its personnel to conform with applicable law. [¶] Despite our preliminary conclusion that the trial court should have disposed of the matter on statute of limitations and exhaustion of remedies grounds, we believe we are constrained by the nature of the pleadings in this matter to address this argument in terms of whether these allegations about the 2001 final map approval and subdivision improvement agreement entered into in conjunction with it, read as a whole, raise questions about the imposition of duties outside the scope of the tentative map and its conditions for approval." (Anthony I, supra, 116 Cal.App.4th at pp. 657-658, italics added.)

Then, in dealing with the merits of Anthony's contract claims, we stated: "We conclude the language of the subdivision agreement does not support an interpretation that the parties intended to contravene the prior findings of the director of public works, as approved by the planning commission, that the VME offsite road improvements were not required to be accomplished by Barratt. It makes no sense to interpret paragraph 5 of the subdivision improvement agreement, referring to completion of offsite street improvements 'to the satisfaction of the Director . . . prior to requesting acceptance of the improvements secured under this Agreement' as requiring the improvement of VME to the minimum level of County Standards, when the director had already made findings that it was satisfactory not to require such improvements." (Anthony I, supra, 116 Cal.App.4th at pp. 667-668.)

In light of the trial court's treatment of Anthony's claims as contract claims and our own treatment of them as such, I cannot accept the majority's summary conclusion that "Anthony's petition to compel the Board to require Barratt to improve the offsite private road was necessarily a legal challenge to the tentative map approval, not the subdivision improvement agreement, the terms of which were determined at the time of approval of the tentative map." (Majority opn., p. 10, italics added.) The majority's post hac amendment to Anthony's petition will come as something of a surprise not only to Barratt, but to our colleagues on the panel that decided Anthony I. Plainly, had our colleagues in Anthony I had the benefit of the majority's insight, they would have been spared a great deal of analytical trouble. Because of the brevity of the majority's discussion of the contractual nature of Anthony's claims, I am unable to fully discern the reasons which have compelled the majority to depart so radically from the record and our prior opinion in Anthony I.

The record discloses that at all material times in these proceedings Anthony was represented by counsel, who no doubt conceived the creative but unsuccessful contract theory Anthony pursued. I must presume counsel, in relying on the subdivision improvement agreement, was fully aware of its attorney fees clause and the risks relying on it would pose to his client under Civil Code section 1717. Importantly, we must recognize it was only Anthony's contract theory which permitted Anthony to prosecute his action as extensively as he did. As the trial court's initial disposition makes clear, in the absence of the contract theory Barratt would have been able to promptly and far less expensively prevail.

A further word about Barratt's position is in order here. It purchased a parcel of land with a view toward development. The costs of that development were no doubt increased by the delay and out-of-pocket expenses Barratt incurred in ultimately defeating Anthony's claims. Like any other litigant who has prevailed on a contract claim which includes an attorney fees provision, Barratt was entitled to recover its reasonable attorney fees.

I would affirm the trial court's order.

BENKE, Acting P. J.

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^[1] Section 1717 provides, in part: "(a) In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs."