DONALD SHERWYN v. RUTH NATHANIEL (2010)

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Donald S. Sherwyn sued Ruth E. Nathaniel for breach of contract, alleging that Nathaniel refused to pay attorney fees he earned representing her in a divorce action.   Nathaniel responded that Sherwyn's fees were unreasonable and he had accepted a payment of $100,000 and an assignment of interest in several monetary judgments against her ex-husband as satisfaction of the debt.   Following a trial, the jury returned a special verdict for Nathaniel, concluding she owed Sherwyn no additional monies.   Sherwyn appeals, contending the trial court erred in denying his posttrial motion seeking the jurors' personal information, submitting a defective special verdict form to the jury, denying his motion for new trial, and granting Nathaniel attorney fees and costs.   We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Sherwyn (appellant) and Nathaniel (respondent) entered into a contract for legal services on March 8, 1999.   Under the contract, appellant agreed to provide respondent legal representation during her divorce proceedings, and respondent agreed to pay appellant's hourly fees and costs as itemized on monthly statements he prepared.   Respondent was required to pay her balance in full upon receipt of the monthly statements.

In January 2003, the parties crafted a new agreement whereby respondent would make good faith payments of $2,000 per month against the remaining balance on her account.   As the divorce litigation dragged on, the parties' relationship became strained, with appellant claiming that respondent frequently missed payments or paid less than the agreed-upon amount.   The divorce action lasted six years.   By that time, the unpaid balance on respondent's bill was in excess of $300,000.

At the close of the divorce proceedings, the family court denied respondent's motion for attorney fees from her ex-husband, finding that appellant had driven up costs by “hyper-litigating” the case.   By July 2005, respondent had received her divorce settlement, but she and appellant were struggling to agree on a payment plan to eliminate her remaining debt.   During negotiations, respondent, agreeing with the trial court's assessment of appellant's performance, expressed the belief that appellant's bill was “highly inflated.”

On July 15, 2005, appellant sent a letter with several negotiated contract modification terms to respondent.   The terms included an assignment to appellant of respondent's several outstanding awards against her ex-husband, including an $82,891.60 award of interest and approximately $15,000 from several cost and discovery sanction orders.   The assignments were to be credited against the balance on respondent's account.   Respondent did not initially sign the July 15 agreement, but instead requested an agreement that would satisfy the entire bill.   Thereafter, appellant orally agreed to accept $100,000 and the proposed assignments as full satisfaction of respondent's debt.   Respondent sent appellant a check for $100,000 on July 21, 2005, and appellant provided written confirmation of the oral agreement by email on July 25, 2010, thanking respondent for the check and stating that execution of the assignments would “complete the terms of the settlement of your bill.”   Although respondent had written “Paid in Full” on the memo line of the $100,000 check, appellant modified this memo by writing “not” and endorsing the check with the caveat that satisfaction of the account was still conditioned on execution of the assignments.   Appellant then cashed the check.

On July 28, 2005, appellant sent respondent a new assignment agreement containing additional terms, including a second confirmation that the assignments and $100,000 would settle respondent's debt and a claim release clause.   Respondent refused to sign the modified agreement and instead signed and returned the July 15 version, because it was “not as complicated.”   Respondent added a handwritten modification to the agreement below her signature that read:  “This is final payment for my divorce.”   Appellant rejected the signed July 15 agreement as a unilateral modification.   The parties never signed a final agreement.

Respondent's ex-husband appealed the awards assigned to appellant in the July 15 agreement.   Appellant successfully defended the awards at his own expense.   Later, he had difficulty contacting respondent in order to obtain her signature on forms that would have enabled him to collect the awards and his costs on appeal.   It is unclear from the record whether appellant successfully collected the awards.   In any event, he subsequently initiated the present action.

Appellant filed the operative pleading on March 26, 2008, alleging breach of contract and quantum meruit and requesting damages in the amount of $272,180.¹  Respondent denied the allegations of the amended complaint and asserted several affirmative defenses, including accord and satisfaction based on the July 2005 agreement and the cashed $100,000 check.

The case went to trial in February 2009.   Based on the limited record before us, we cannot discern what was presented during trial.   The reporter's transcript that was filed does not include the testimony of the parties or the opening statements and closing arguments of counsel.²  The only testimony that is included in the record was offered by Connolly Oyler, an expert called by respondent, who stated that appellant's bill seemed unreasonably high and that, based on the July 2005 negotiations and the $100,000 check appellant cashed, the parties had reached an understanding and agreement to resolve the outstanding debt.   In Oyler's opinion, the cashed $100,000 check “settled” respondent's account.   From this evidence, we assume respondent argued that appellant had billed for services that were unreasonable and unnecessary and, in any event, the debt had been settled by mutual agreement.   Relying on language quoted by the trial court in its minute order denying appellant's new trial motion, appellant urged that respondent owed him $246,150.80, which reflected his total bill minus the $100,000 payment he had received from respondent and cashed in July 2005.

Appellant and respondent each submitted proposed jury instructions and special verdict forms to the court.   Several of appellant's proposed verdict forms were rejected, but one of respondent's proposed forms was approved with modifications.   The modifications requested by the court included the addition of language following each question that required the jury to stop deliberating and sign and date the verdict form if it had answered “no” to the preceding question.

On February 20, 2009, the jury returned a verdict and answered “No” to question 3, finding that the costs billed to respondent for legal services were not reasonable.³  Under the language added to the special verdict form by the court, this finding ended the jury's role and the special verdict form was dated and signed by the foreperson.

After they were excused, several jurors spoke to appellant outside of the courtroom.   They told appellant they thought some of his fees were reasonable, but that the special verdict form's “all or nothing” language did not allow them to consider awarding some, but not all, of the fees claimed.   Relying on this information, appellant filed an ex-parte application with the court on February 26, 2009, requesting the jurors' addresses for the purpose of contacting them and procuring declarations in conjunction with a planned new trial motion.   The request was denied on the ground that appellant had argued an all or nothing case and that his dismissal of the quantum meruit cause of action rendered moot the issue of whether the jury would have found some of the fees reasonable.

On March 6, 2009, appellant filed a motion for a new trial urging that, despite the dismissal of the quantum meruit claim, the jury had the “right to determine not just whether the total amount claimed should be given, or none;  but to determine the reasonable amount, whether it's zero or the amount demanded, or any place in between.”   According to appellant, the special verdict form's failure to give the jury this choice constituted material error and denied him a fair trial.

The court denied appellant's motion.   It ruled that even if the jury had awarded additional damages, acting in its role as the 13th juror, it would have directed a verdict for respondent “on the issue of accord and satisfaction, had [she] so moved on [that ground consistent with the defense she had presented].”   Pointing to the July 25 email confirmation and appellant's admission at trial that the parties had agreed to settle the debt, the judge concluded that the parties had reached a new agreement in July 2005, and that “Sherwyn's acceptance of the check and [Nathaniel's act of] sending back the executed original [July 15] assignment completed the transaction.”   Thus, the tender and acceptance of the check equaled “part performance of a substantial part of the agreement,” rendering the settlement agreement confirmed by appellant in the July 25 email enforceable.

On March 9, 2009, respondent moved for attorney fees and costs pursuant to the original March 8, 1999 contract between the parties and Civil Code section 1717.   The relevant provision in the contract states:  “In the event that any legal proceeding(s) is filed by or on behalf of this office to enforce this agreement, the prevailing party will be entitled to recover reasonable attorney's fees and all costs of suit.”   Appellant argued that “no reasonable attorney[']s fees should be ordered at this time based on my intention to file for an appeal and for a new trial [which was heard later that day].”   He also claimed respondent's counsel had failed to support their fee claim with competent evidence.   The court took the matter under submission.   On April 13, 2009, finding that appellant sued for breach under the original contract, the court granted respondent's motion and awarded her attorney fees in the amount of $31,250.

Appellant timely filed a notice of appeal on April 20, 2009.

DISCUSSION

I. Appellant Has Failed to Establish Prejudicial Error

Appellant urges that the jury had the right to determine a reasonable fee award notwithstanding his dismissal of the quantum meruit claim.   The verdict form, he argues, and question 3 in particular, improperly limited the jury's choices and forced a result “contrary to the evidence and to the wishes of the jury,” materially prejudicing his case.   He contends that if he had been allowed to obtain the juror declarations, he could have added “direct evidence of the prejudicial impact of the lower court's Special Verdict form” to the record.   Appellant concludes that he is entitled to a reversal and an entry of judgment in his favor because he has successfully demonstrated prejudicial error in the trial below.   We disagree.

Although appellant repeatedly alleges prejudicial error, he does not address the dispositive issue of this appeal:  the effect of the trial court's determination in denying the new trial motion that had the jury awarded damages it would have directed a verdict for respondent on the basis of accord and satisfaction.   In light of the trial court's conclusion that the parties reached a new agreement, as evidenced by respondent's proffer of the $100,000 check and return of a signed copy of the agreement and appellant's acceptance shortly thereafter (by cashing the check and confirming the agreement by transmitting the July 25 email), the alleged special verdict form error and denial of appellant's request to contact jurors are rendered moot.   In order to mount a successful challenge to the judgment, appellant was required to explain why the grant of a directed verdict would have been error given the evidence presented at trial.⁴

We recognize that a trial court's grant of a directed verdict (or in this case a proposed grant) is subject to de novo review.  (Fariba v. Dealer Services Corp. (2009) 178 Cal.App.4th 156, 174.)   However, it is appellant's burden to demonstrate the existence of prejudicial error;  “[t]he appellate court is not required to search the record on its own seeking error.”  (Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 768.)   Appellant's brief is silent on the issue.   It does not address, let alone challenge, the sufficiency of the evidence underlying the trial judge's directed verdict analysis.  “ ‘ “A point not presented in a party's opening brief is deemed to have been abandoned or waived.  [Citations.]” ’  (Wurzl v. Holloway (1996) 46 Cal.App.4th 1740, 1754, fn. 1.)” (Supervalu, Inc. v. Wexford Underwriting Managers, Inc. (2009) 175 Cal.App.4th 64, 84, fn. 5.) Moreover, as we have pointed out, the record provided by appellant omits the parties' testimony, making a determination of the weight of the evidence before the trial court impossible.   When challenging a judgment, “ ‘the appealing party must present to the appellate court all of the evidence touching upon the question involved.   When the appellant fails to abide by this well established and necessary rule of appellate practice, the appellate court is entitled to indulge in a presumption that the evidence sustains the determination of the trial court.’   [Citations.]”  (Estate of Hilton (1996) 44 Cal.App.4th 890, 922.)

We conclude appellant failed to establish prejudicial error.

II. The Award of Attorney Fees Was Not Error

When a contract explicitly provides that attorney fees are recoverable after an action to enforce the contract, “the party who is determined to be the party prevailing on the contract ․ shall be entitled to reasonable attorney's fees in addition to other costs.”  (Civ.Code, § 1717, subd. (a).)  The trial court “ ‘ “ ‘is given wide discretion in determining which party has prevailed on its cause(s) of action.   Such a determination will not be disturbed on appeal absent a clear abuse of discretion.’ ”  [Citation.]'  (Nasser v. Superior Court (1984) 156 Cal.App.3d 52.)”  (Roden v. AmerisourceBergen Corp. (2007) 155 Cal.App.4th 1548, 1578.)

Appellant asserts that the trial court's award of attorney fees and costs should be set aside as premature given his declaration to the trial court that he would be filing an appeal.⁵  He relies on Butler-Rupp v. Lourdeaux (2007) 154 Cal.App.4th 918 (Butler-Rupp ), where the court held that “[i]n cases where Civil Code section 1717's definition of ‘prevailing party’ applies, the identification of the party entitled to a fee award must be determined by the final result of the litigation, i.e., after conclusion of the appeal if an appeal is taken.  [Citations.]”  (Id. at p. 928.)   Appellant argues that this language means there is no final result, even after a jury has entered a verdict and a final judgment has been filed by the court, pending the resolution of the appeal.   The claim is without merit.

The statutory language of Civil Code section 1717 does not limit the trial court's discretion to award attorney fees until after the conclusion of a potential appeal.   Appellant cites no authority for this proposition and takes the language of Butler-Rupp out of context.   The court in Butler-Rupp did not state that the trial court does not have the discretion to award attorney fees following the entry of final judgment on the litigation before it;  instead, the court was discussing the different issue of a trial court's award of attorney fees when a case had not reached final disposition on the merits, e.g., following summary judgment, voluntary dismissal, or settlement.   The cases cited by the Butler-Rupp court to support this point each involved appellate review of a trial court award of attorney fees during an interim stage of the litigation, and before an appeal, where a prevailing party cannot yet be determined.  (See, e.g., Presley of Southern California v. Whelan (1983) 146 Cal.App.3d 959;  Moore v. Liu (1999) 69 Cal.App.4th 745;  Jackson v. Homeowners Association Monte Vista Estates-East (2001) 93 Cal.App.4th 773.)  Civil Code section 1717 thus “does not allow an award where the suit is still ongoing․  There must be a prevailing party before the fee provision applies.”  (Presley of Southern California v. Whelan, supra, 146 Cal.App.3d at p. 961.)

Since this action reached a final resolution on the merits when the jury returned a verdict, there was a prevailing party.   The court had the authority to declare respondent the prevailing party in its discretion:  “[t]he court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section.”  (Civ.Code, § 1717, subd. (b)(1).)   The court did not abuse its discretion in making this determination in respondent's favor notwithstanding appellant's expressed intent to file a notice of appeal.

DISPOSITION

The judgment is affirmed.   Respondent is awarded her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

We concur:

FOOTNOTES

FN1. Appellant dismissed the quantum meruit cause of action.   Respondent countered with a cross-complaint and amended cross-complaints, alleging breach of contract, fraud, and breach of fiduciary duty.   None of those claims proceeded to trial..  FN1. Appellant dismissed the quantum meruit cause of action.   Respondent countered with a cross-complaint and amended cross-complaints, alleging breach of contract, fraud, and breach of fiduciary duty.   None of those claims proceeded to trial.

FN2. The trial court's minute order denying appellant's new trial motion includes references to the testimony of appellant and respondent..  FN2. The trial court's minute order denying appellant's new trial motion includes references to the testimony of appellant and respondent.

FN3. The full text of question 3 is:  “Were the attorney's fees and costs billed to Ruth E. Nathaniel by Donald S. Sherwyn between March, 1999 and July 1, 2005 reasonable in amount?”   Appellant challenged question 2 prior to the jury deliberations, but did not object to question 3..  FN3. The full text of question 3 is:  “Were the attorney's fees and costs billed to Ruth E. Nathaniel by Donald S. Sherwyn between March, 1999 and July 1, 2005 reasonable in amount?”   Appellant challenged question 2 prior to the jury deliberations, but did not object to question 3.

FN4. At oral argument, appellant argued he was not required to address this aspect of the case because the trial court's ruling was merely advisory.   We disagree.   The essence of the court's conclusion is that appellant was not prejudiced by the special verdict form..  FN4. At oral argument, appellant argued he was not required to address this aspect of the case because the trial court's ruling was merely advisory.   We disagree.   The essence of the court's conclusion is that appellant was not prejudiced by the special verdict form.

FN5. Respondent's claim that she is entitled to attorney fees on appeal is an issue best left to the trial court..  FN5. Respondent's claim that she is entitled to attorney fees on appeal is an issue best left to the trial court.

WILLHITE, Acting P.J. MANELLA, J.