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Date: 11-04-2017

Case Style: Stara Orien v. Mista L. Lutz

Case Number: B277323

Judge: Flier

Court: California Court of Appeals Second Appellate District Division Eight on appeal from the Superior Court, Los Angeles County

Plaintiff's Attorney: Richard W. Millar

Defendant's Attorney: Zachary D. Schorr

Description: Defendants Mista L. Lutz and Russell A. Howells appeal
from an order granting attorney fees to plaintiff Stara Orien,
respondent here, after the trial court entered an interlocutory
judgment of partition in her favor. The trial court found that an
attorney fee provision in an earlier settlement agreement among
the parties applied to the partition action, and thus awarded all
fees to plaintiff under Civil Code section 1717 rather than
apportioning the costs of partition under Code of Civil Procedure
section 874.040. We hold that the partition action did not fall
within the terms of the attorney fee provision. Accordingly, we
reverse the order.
BACKGROUND
In 2003 plaintiff and defendants received a gift of two
residences from their mother. Each took an undivided one-third
interest in the properties.
In 2006 the parties entered into a settlement agreement to
resolve a probate claim regarding their mother’s estate initiated
by defendant Howells. Paragraph 11.1 of the settlement
agreement, entitled “Sale of properties,” stated, “Mista, Stara and
Russell [(i.e., plaintiff and defendants)] may sell the properties at
any time they agree to do so. However, this provision shall not
prevent any one or more of the parties from filing a partition
action with respect to either or both the properties, in the event
that Mista, Stara and Russell are unable to unanimously agree
on whether or not the properties should be sold.”
Paragraph 21.1 of the settlement agreement provided for
attorney fees, stating, “Should any party hereto retain counsel for
the purpose of enforcing or preventing the breach of any provision
herein, including but not limited to instituting an action for a
declaration of such party’s rights or obligations hereunder, or for
any other judicial remedy, then the prevailing party shall be
entitled in addition to such other relief as may be granted, to be
2
reimbursed by the other party for all costs and expenses incurred
thereby, including but not limited to, reasonable attorney’s fees
and costs.”
In October 2013, plaintiff filed a complaint against
defendants seeking partition by sale of both properties. The
complaint referred to the 2006 settlement agreement, alleging
that as part of that agreement “the Parties stipulated that any
one of them could partition the Properties in the absence of a
unanimous agreement among them.” The complaint also
referenced the attorney fee provision in the agreement, and
plaintiff sought attorney fees and costs in the prayer.
The trial court granted summary judgment for plaintiff,
and entered an interlocutory judgment for partition by sale. In a
separate order, the trial court awarded attorney fees to plaintiff
pursuant to paragraph 21.1 of the 2006 settlement agreement
and Civil Code section 1717, which governs awards of attorney
fees for actions on contract.1 The court found that plaintiff’s
partition action “concerned enforcement of one of the provisions
of the settlement agreement—paragraph 11.1—that allowed for
partition by sale of the properties at issue” and therefore fell
within the attorney fees provision. The court rejected defendants’
argument that plaintiff had the right to seek partition
independent of the agreement: “. . . Defendants, who were
represented by counsel in the execution of the Settlement
Agreement, voluntarily included this provision in the agreement.
Plaintiff, through this action, specifically sought to enforce that
provision as cited in her complaint.”
1 Code of Civil Procedure section 874.110, subdivision (a),
allows a court in a partition action to order payment of attorney
fees prior to final judgment.
3

The court found that the fees sought by plaintiff “were
incurred for the common benefit,” as required to apportion
attorney fees among the parties to a partition action. (See Code
Civ. Proc., §§ 874.010, 874.040.) Given its ruling under Civil
Code section 1717, however, the court declined to apportion fees
and instead awarded them all to plaintiff.2
Defendants timely appealed.3
DISCUSSION
1. Entitlement to attorney fees under settlement
agreement
Defendants argue the court erred in interpreting the
settlement agreement to allow recovery of attorney fees for a
partition action. We agree with defendants.
“We review de novo a determination of an award of
attorney fees under a contractual provision where, as here, no
extrinsic evidence has been offered to interpret the contract, and
the facts are not in dispute.” (Kangarlou v. Progressive Title Co.,
Inc. (2005) 128 Cal.App.4th 1174, 1177.) “Our goal in
interpreting a contract is to give effect to the mutual intention of
the contracting parties at the time the contract was formed. (Civ.
Code, § 1636.) We ascertain that intention solely from the
2 Plaintiff sought $108,934 in fees. The court reduced this
amount to $81,700.50 to reflect a number of “unacceptably vague”
items billed by plaintiff’s counsel. The amount of fees is not at
issue in this appeal.
3 Interlocutory judgments directing partition are appealable,
as are orders made after such judgments. (Code Civ. Proc.,
§ 904.1, subd. (a)(1), (2), (9).) An order granting attorney fees is
an appealable order after judgment. (Whiteside v. Tenet
Healthcare Corp. (2002) 101 Cal.App.4th 693, 706.)
4

written contract if possible, but also consider the circumstances
under which the contract was made and the matter to which it
relates. (Id., §§ 1639, 1647.) We consider the contract as a whole
and interpret its language in context so as to give effect to each
provision, rather than interpret contractual language in isolation.
(Id., § 1641.) We interpret words in accordance with their
ordinary and popular sense, unless the words are used in a
technical sense or a special meaning is given to them by usage.
(Id., § 1644.) If contractual language is clear and explicit and
does not involve an absurdity, the plain meaning governs. (Id.,
§ 1638.)” (Windsor Pacific LLC v. Samwood Co., Inc. (2013) 213
Cal.App.4th 263, 274 (Windsor Pacific), disapproved of on other
grounds by Mountain Air Enterprises, LLC v. Sundowner Towers,
LLC (2017) 3 Cal.5th 744, 756, fn. 3.)
At issue here are the trial court’s findings that the
settlement agreement “provided a right to partition by sale” and
plaintiff’s partition action sought to enforce that contractual
right, thus entitling plaintiff to attorney fees under paragraph
21.1 and Civil Code section 1717.4 Defendants dispute that the
right to partition is contractual. They argue that the parties had
the right to partition independent of the agreement, and the
agreement “neither enlarged nor restricted” that right. “At best,”
4 Civil Code section 1717 states, in relevant part, “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.” (Civ. Code, § 1717,
subd. (a).)
5

defendants argue, “the settlement agreement merely clarifies
that none of the settling parties have waived their right to
partition.” The trial court rejected this argument, noting that
defendants “voluntarily included this provision in the
agreement.”
Defendants are correct that the parties had the right to
seek partition regardless of the agreement. “A co-owner of
property has an absolute right to partition unless barred by a
valid waiver.” (LEG Investments v. Boxler (2010) 183
Cal.App.4th 484, 493 (LEG Investments), citing Code Civ. Proc.,
§ 872.710, subd. (b).) The trial court, while acknowledging the
statutory right to partition, apparently found that the language
in the settlement agreement created an identical right in the
contract, thus bringing it within the ambit of the attorney fee
provision.
We disagree with the trial court’s conclusion. Paragraph
11.1 of the settlement agreement states that the parties may sell
the properties should they agree to do so, but “this provision shall
not prevent any one or more of the parties from filing a partition
action” should they fail to agree to a sale. Giving this language
its ordinary meaning, the phrase “shall not prevent” does not
imply the creation of a new right, but the preservation of an
existing right. That existing right can only be the statutory right
to partition; the agreement does not mention partition other than
in paragraph 11.1, and the record contains no other possible
source of that right. So even accepting the trial court’s position
that a statutory right can effectively be transformed into a
contractual right by including it in an agreement, the language
does not reflect that the parties did so here.
6
The fact that the right to partition exists independent of
the agreement does not render the partition language in
paragraph 11.1 surplusage. Because the otherwise absolute right
to partition may be waived by contract (LEG Investments, supra,
183 Cal.App.4th at p. 493), the wise drafter of an agreement
among co-owners of property will include language making clear
no such waiver is intended. To do otherwise risks a later judicial
finding that the parties have impliedly waived their right to
partition by virtue of other contractual provisions. (See, e.g.,
ibid. [agreement giving right of first refusal to co-owners implies
agreement not to bring partition action]; Penasquitos, Inc. v.
Holladay (1972) 27 Cal.App.3d 356, 358 [waiver of right to
partition implied by cotenants entering into lease and option
agreements with third party]; Pine v. Tiedt (1965) 232 Cal.App.2d
733, 738 [waiver implied when partition “would conflict with a
prior agreement of the parties as to the use of the property”].)
Given the plain meaning of the language, and
“consider[ing] . . . the matter to which it relates” (Windsor Pacific,
supra, 213 Cal.App.4th at p. 274), namely the waivable right to
partition, we conclude that the intent of the language concerning
partition in paragraph 11.1 was to prevent an implied waiver of
the parties’ existing right to partition, not to bring that right
within the terms of the agreement and its attorney fee clause.
Indeed, it would be anomalous to hold that by expressly shielding
an existing right from a particular contractual provision a party
impliedly intended to subject that right to all other provisions of
the contract. The more reasonable interpretation is that the
parties wished to preserve their right to partition free and clear
of the agreement. The right to partition therefore was not a
7
“provision” within the contract that plaintiff “enforce[ed],” as
required to invoke the attorney fee clause.5
Plaintiff argues that she is entitled to recover attorney fees
so long as her partition action “involved a contract,” regardless of
whether her claim was contractual in nature. (Boldface omitted.)
In support, she cites Blickman Turkus, LP v. MF Downtown
Sunnyvale, LLC (2008) 162 Cal.App.4th 858 (Blickman), which
states that “ ‘. . . California courts liberally construe the term
“ ‘ “on a contract” ’ ” as used within [Civil Code] section 1717.
[Citation.] As long as the action “involve[s]” a contract it is “ ‘on
[the] contract’ ” within the meaning of section 1717.’ ” (Id. at
p. 894.)
Blickman addressed whether a cross-complaint asserting
tort claims6 could be an action “ ‘on a contract’ ” within the
meaning of Civil Code section 1717. (Blickman, supra, 162
Cal.App.4th at p. 894.) The cross-complaint was filed by a lessor,
Mozart, against Blickman Turkus, LP (BTC), the real estate
agent for a lessee, alleging that BTC had failed to disclose
material information about the lessee’s financial condition. (Id.
at pp. 865, 867.) BTC was not a party to the agreement
containing the attorney fee provision, which was between Mozart
and its own real estate agent. (Id. at pp. 865, 867, 894.) BTC
5 Defendants also argue that the statute governing attorney
fees in partition actions, Code of Civil Procedure section 874.010,
should prevail over Civil Code section 1717. Given our holding,
we need not decide this question.
6 The cross-complaint asserted causes of action for
concealment, breach of fiduciary duty, negligence, and negligent
supervision. (See Blickman, supra, 162 Cal.App.4th at pp. 868,
884, 889, 892.)
8

successfully demurred to the cross-complaint and did not seek
attorney fees. (Id. at p. 866.) On appeal, however, for reasons
both complicated and irrelevant to this appeal, the parties agreed
that determination of whether the cross-complaint was “on a
contract” was necessary to decide whether Mozart was entitled to
fees for prevailing against BTC’s complaint, in which BTC
claimed to be a third party beneficiary of the agreement between
Mozart and its agent. (See id. at pp. 865-866, 892-894.)
The Court of Appeal found the action was “on a contract.”
(Blickman, supra, 162 Cal.App.4th at p. 895.) The court noted
that the cross-complaint referred to the agreement between
Mozart and its agent 14 times, attached a copy of the agreement,
and incorporated it by reference. (Ibid.) The cross-complaint
“relie[d] heavily on the language of the agreement” as well as
BTC’s own claims under the agreement to establish certain
agency relationships, including between Mozart and BTC. (Ibid.)
Finally, the cross-complaint sought attorney fees, “an item of
relief for which no colorable basis other than the commission
agreement appears.” (Ibid.)
Plaintiff, analogizing to Blickman, asserts her claim
“involved” the settlement agreement because that agreement was
referenced in and attached to her complaint, and plaintiff relied
on the agreement “to establish [her] right to partition.” This
argument is unpersuasive. As discussed, the agreement does not
“establish” a right to partition, but merely shields the existing
statutory right from waiver. Thus, regardless of the agreement’s
inclusion in the complaint, plaintiff did not and could not rely on
that agreement to establish her right to partition under these
circumstances—her right instead arose under the law, and the
9
agreement was irrelevant to her claim.7 Blickman, in which the
cross-complaint referred to and relied on the relevant agreement
to establish certain necessary facts, is therefore distinguishable.
We acknowledge that attorney fee provisions, if drafted
broadly, can encompass noncontractual claims. (See Santisas v.
Goodin (1998) 17 Cal.4th 599, 608 (Santisas).) Courts have found
provisions sufficiently broad to reach noncontractual claims when
they apply to actions “arising out of” or “relating to” a contract or
its subject matter, or to “any dispute under” an agreement. (Id.
at p. 607; Allstate Ins. Co. v. Loo (1996) 46 Cal.App.4th 1794,
1799; Thompson v. Miller (2003) 112 Cal.App.4th 327, 336-337.)
In contrast, when an attorney fee provision is limited to actions
“to enforce the terms [of the agreement] or declare rights
hereunder,” courts have found this language too narrow to
encompass noncontractual claims. (Exxess Electronixx v. Heger
Realty Corp. (1998) 64 Cal.App.4th 698, 702-703, 709-711
(Exxess); see Gil v. Mansano (2004) 121 Cal.App.4th 739, 745
(Gil) [tort claim not “action to enforce” an agreement such to
bring it within attorney fee provision].)8
7 The circumstances would be different had defendants
themselves invoked the settlement agreement and claimed
plaintiff had waived her right to partition by executing it; in that
case, plaintiff could rely on paragraph 11.1 to counter this
argument, and likely would be in a stronger position to seek
attorney fees were she to prevail.
8 We recognize that the fee provision in Blickman was
narrow, limited to “ ‘any litigation between the parties hereto to
enforce any provision of this Agreement’ ” (Blickman, supra, 162
Cal.App.4th at p. 893), yet the court found the crosscomplainant’s
tort claims to be “on a contract” for purposes of
Civil Code section 1717. (Blickman, at p. 895.) But Blickman
10

The language at issue here provides for fees “[s]hould any
party hereto retain counsel for the purpose of enforcing or
preventing the breach of any provision herein, including but not
limited to instituting an action for a declaration of such party’s
rights or obligations hereunder, or for any other judicial
remedy . . . .” This is similar to the narrow language in Exxess,
and by its terms is limited to actions seeking to “enforc[e] or
prevent[] the breach” of the agreement. Because a partition
action accomplishes neither of these things, the attorney fee
provision cannot be interpreted to extend to it.9
never discussed whether the fees provision was sufficiently broad
to encompass noncontractual claims, perhaps because the parties
did not raise the issue. Thus Blickman does not support the
proposition that the attorney fees provision at issue here
encompasses a noncontractual partition action, especially in light
of authority expressly holding the contrary. (See Exxess, supra,
64 Cal.App.4th at pp. 702-703; Gil, supra, 121 Cal.App.4th at
p. 745.)
9 To the extent plaintiff is suggesting that the clause “or for
any other judicial remedy” encompasses noncontractual actions,
we reject this argument. This clause modifies the phrase
“instituting an action,” that is, a party may recover fees for
instituting an action either for “a declaration of such party’s
rights or obligations hereunder” or “for any other judicial
remedy.” “[I]nstituting an action” is itself presented as an
example of “enforcing or preventing the breach of any provision
herein”—thus, the “action” contemplated is a contractual one,
and “any other judicial remedy” would be limited to remedies
available in contractual actions.
11

2. Entitlement to attorney fees under Code of Civil
Procedure sections 874.010 and 874.040
Defendants contest the trial court’s finding that the
attorney fees incurred by plaintiff were for the common benefit
and therefore, in the absence of an applicable attorney fee
agreement, allocable among the parties. In the alternative,
defendants argue that if allocation is warranted, the allocation
should include not only plaintiff’s fees but defendants’ as well,
with the plaintiff and each defendant paying one-third of all
attorney fees. We address these issues to assist the trial court on
remand. We disagree that fees incurred by plaintiffs in contested
proceedings cannot be for the common benefit, but agree that
reasonable fees incurred for the common benefit by defendants to
a partition action may also be allocated among the parties. The
trial court may decide in the first instance whether and how to
allocate fees.
Code of Civil Procedure section 874.04010 provides that “the
court shall apportion the costs of partition among the parties in
proportion to their interests or make such other apportionment
as may be equitable.” These costs include “[r]easonable
attorney’s fees incurred or paid by a party for the common
benefit.” (§ 874.010, subd. (a).) We review the trial court’s orders
regarding attorney fees for abuse of discretion, and its “decision
will only be disturbed when there is no substantial evidence to
support the trial court’s findings or when there has been a
miscarriage of justice.” (Finney v. Gomez (2003) 111 Cal.App.4th
527, 545 (Finney).)
10 All further statutory references are to the Code of Civil
Procedure.
12

Defendants argue that plaintiff’s partition action was not
for the common benefit because defendants did not want to
partition the properties, but to keep them “for their long term
income and appreciation.” Defendants claim that “[t]hese goals
were eviscerated by the forced partition and liquidation, exposing
them to immediate adverse tax consequences and the inability to
afford comparable replacement properties.” They assert that
cases from other jurisdictions “have denied attorney’s fees under
the common benefit doctrine where the partition action was
adversarial.”
We reject this argument. Our Supreme Court has spoken
on this issue directly, holding that under former section 796, the
predecessor to the current partition cost statute, “counsel fees
may be allowed . . . for services rendered for the common benefit
even in contested partition suits.” (Capuccio v. Caire (1932) 215
Cal. 518, 528-529 (Capuccio).) In Capuccio, a defendant argued
“that the services performed by plaintiff’s counsel in connection
with the many controverted issues presented by the partition
litigation” were not “ ‘for the common benefit.’ ” (Id. at p. 528.)
The Supreme Court rejected this, explaining that “ ‘the more just
and equitable rule to be applied . . . would require a proper
division of the expenditures entailed in the maintenance of such
actions for the common benefit among those who shall have been
found to be entitled to their respective shares and interests in
said property by the ultimate judgment of the court, regardless of
whether or not there had arisen and been litigated
controversies . . . .’ ” (Ibid., italics omitted, quoting Capuccio v.
Caire (1929) 207 Cal. 200, 208.)
The Supreme Court has also made clear that under former
section 796 fees incurred by a defendant to a partition action
13
could be for the common benefit, and therefore allocable in part to
the plaintiff, despite the fact that the defendant had “resisted
partition, with the claim that plaintiff had no interest in the
subject property, that it belonged to defendant alone, and that
plaintiff was a mere volunteer in paying the delinquent taxes.”
(Riley v. Turpin (1960) 53 Cal.2d 598, 601-603 (Riley). This
principle has been applied under the current statute as well.
(See Forrest v. Elam (1979) 88 Cal.App.3d 164, 174 (Forrest)
[proper to allocate portion of defendants’ fees to plaintiff under
§ 874.010 when defendants’ counsel “performed services for the
common benefit” by contesting plaintiff’s claim to interest to
which he was not entitled].) Again, the fact that the action was
contested was no bar to the proportional allocation of attorney
fees; as Forrest demonstrates, even fees incurred resolving
contested issues can be for the common benefit.
Although former section 796 has been repealed, its
language concerning “common benefit” is not materially different
from the current sections 874.010 and 874.040. Former section
796 stated in relevant part, “The costs of partition, including
reasonable counsel fees, expended . . . for the common benefit, . . .
must be paid by the parties respectively entitled to share in the
lands divided, in proportion to their respective interests
therein . . . .” The current statutory sections, which do not
change or further define “common benefit,” provide no basis to
disregard the clear precedent of Capuccio and Riley.11 Moreover,
11 Defendants note that former section 796, unlike the current
section 874.040, does not contain language allowing equitable
apportionment that differs from allocation in proportion to each
party’s interest in the property. This is true—former section 796
contains only a limited exception to the rule of proportional
14

cases interpreting those sections continue to permit the allocation
of attorney fees in contested partition actions. (See, e.g., Forrest,
supra, 88 Cal.App.3d at p. 174.)
From these authorities it is evident that the “common
benefit” in a partition action is the proper distribution of the
“ ‘respective shares and interests in said property by the ultimate
judgment of the court.’ ” (Capuccio, supra, 215 Cal. at p. 528.)
This sometimes will require that “ ‘controversies’ ” be
“ ‘litigated’ ” to correctly determine those shares and interests
(ibid.), but this ultimately can be for the common benefit as well.
The fact that a party resists the partition does not change this.
(See Randell v. Randell (1935) 4 Cal.2d 575, 582 [“The presence
and litigation of controversial issues between all the parties does
not preclude the allowance of attorney’s fees for services
connected with such issues where such services are found to be
for the common benefit of the parties.”]; Forrest, supra, 88
Cal.App.3d at p. 174 [defendant’s resistance to plaintiff’s
unmeritorious claim was for the common benefit].)
We note that while the presence of contested issues does
not bar the allocation of fees in partition actions, defendants are
nonetheless protected from plaintiffs who bring unfounded claims
or otherwise drive up costs unnecessarily, just as plaintiffs are
allocation, stating that when “ ‘litigation arises between some of
the parties only, the court may require the expense of such
litigation to be paid by the parties thereto, or any of them.’ ” (See
Lin v. Jeng (2012) 203 Cal.App.4th 1008, 1024-1025 (Lin); id. at
p. 1023 [contrasting § 874.040’s “general equitable exception”
with former section 796’s “single exception to an otherwise
mandatory rule”].) But defendants do not explain why this
distinction makes Capuccio and Riley inapplicable to the case
here.
15

protected from unscrupulous defendants. Sections 874.010 and
874.040 provide numerous avenues for trial courts to adjust the
allocation of costs if, for example, fees are incurred for purposes
that unduly exacerbate the dispute or do not provide a common
benefit to all parties. For instance, under section 874.010 a court
may find that fees incurred “advocat[ing] a position of limited
merit” are not for the common benefit and should be borne by the
party “pressing” such “spurious matters.” (Forrest, supra, 88
Cal.App.3d at p. 174; id. at p. 173 [proper to reduce fees to
plaintiff who presented “a time consuming and meritless
contention that he should receive some amount greater than that
to which he [was] legally entitled”].) Or, a court may achieve a
similar result through an exercise of its equitable discretion
under section 874.040 and require a party to bear its own fees.
(See Lin, supra, 203 Cal.App.4th at pp. 1025-1026 [equitable for
plaintiff in partition action to bear her own attorney fees when
she sought to prevent her siblings from obtaining interests to
which they were entitled, herself claimed an interest to which she
“was well aware that she was not entitled,” and created
unnecessary procedural hurdles].)12 A court also can adjust the
allocation of fees incurred by a party to the extent they are not
12 In so holding, Lin disagreed with Finney. Finney relied on
the Law Revision Commission comments to section 874.040 to
conclude that a court’s power to apportion costs equitably was
limited, as in the former section 796, to cases in which the
litigation arose only among some of the parties to a partition
action. (Finney, supra, 111 Cal.App.4th at pp. 545-546.) Lin
rejected this reasoning as having “ ‘exalted the Comments over
the statutory language,” which clearly omits the limited
exception from former section 796. (Lin, supra, 203 Cal.App.4th
at p. 1025.)
16

“reasonable” as required by section 874.010, subdivision (a). (Cf.
Finney, supra, 111 Cal.App.4th at p. 550 [reversing fee award in
partition action when trial court made no determination of
reasonableness].)
On remand, the trial court may exercise its discretion in
allocating fees, including setting the fee amounts and
determining the appropriate allocation. As in Riley and Forrest,
in making these determinations the court should consider the
fees incurred by defendants as well as plaintiff, and allocate them
appropriately to the extent they are reasonable and incurred for
the common benefit.

Outcome: We reverse the order granting attorney fees and remand for further proceedings consistent with this opinion. The parties shall bear their own costs on appeal.

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