Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. BC319241, James R. Dunn, Judge.
Kester & Isenberg and Charles F. Kester; Snell & Wilmer, Richard A. Derevan and Todd E. Lundell for Plaintiff and Appellant.
Mitchell Silberberg & Knupp and Christopher B. Leonard; Richard S. Hessenius for Defendants and Respondents, Regency Outdoor Advertising, Inc.; Pick & Boydston and Erik S. Syverson; Caldwell Leslie & Proctor, Michael J. Proctor and Jeanne A. Fugate for Defendants and Respondents, Viacom Outdoor Inc.; The Trowbridge Corporation.
CROSKEY, J.
Plaintiff Superior Property of Carson, LLC (“Superior”) purchased a parcel of property on which a billboard had been erected. The billboard had been the subject of a long-term lease from a prior owner of the property to The Trowbridge Corporation (“Trowbridge”); and Trowbridge had subsequently entered into an agreement sharing its rights in the billboard with Regency Outdoor Advertising, Inc. (“Regency”) and Viacom Outdoor, Inc. (“Viacom”); Trowbridge, Regency and Viacom are referred to collectively as “defendants.” When Superior purchased the property, it gave notice to defendants and demanded that they remove the billboard. Defendants refused, believing that the billboard was governed by a lease allowing them to keep the billboard for a number of years. This lease will be referred to as the “October 11” lease. Superior disagreed and brought suit, arguing that no lease applied to the billboard, and that, if the October 11 lease did apply, the lease was void. Defendants responded that the October 11 lease applied, and that it was not void.
We use “Viacom” to include all Viacom entities – including predecessors in interest. We also understand that Viacom is now known as CBS Outdoor, Inc.
As the case progressed, another billboard lease came to light; in fact, it had been in Superior’s possession since it had acquired the property. This lease, which had been executed the day before the October 11 lease, will be referred to as the “October 10” lease. At some point before the case came to trial, defendants came to believe that the October 10 lease, not the October 11 lease, governed the billboard. Superior disagreed, and the case went to trial over the issue as to which lease governed. Defendants took the position that the October 10 lease governed; Superior pursued a three pronged challenge, arguing in the alternative, that: (1) no lease governed; (2) if not, the October 11 lease governed, and it was void; or (3) if not, defendants should be judicially estopped from relying on the October 10 lease. A bench trial was held. The trial court concluded that the October 10 lease governed, and that defendants were not judicially estopped from relying on it. Pursuant to the terms of the October 10 lease, the billboard was permitted to remain.
Superior had also brought a cause of action for unpaid rent. By the close of trial, or shortly thereafter, defendants had made all rent payments required under the October 10 lease; Superior therefore recovered nothing on its cause of action for unpaid rent. The trial court also refused to award Superior any prejudgment interest on the unpaid rent.
The parties each sought their attorney’s fees as prevailing parties, as both the October 10 and October 11 leases contained prevailing party attorney’s fee clauses. The court concluded that, even though Superior’s action had resulted in the payment of back rent, defendants were the prevailing parties. Defendants were awarded substantial attorney’s fees, although the amounts awarded were reduced by the fees incurred between the time defendants became aware of the October 10 lease and the time they first brought that lease to the court’s attention.
Superior appeals. On appeal, Superior does not challenge the trial court’s finding that the October 10 lease applies; however, Superior challenges the court’s conclusion that defendants were not judicially estopped from relying on the October 10 lease. Superior also challenges the court’s refusal to award prejudgment interest on the late paid rent and the court’s award of prevailing party attorney’s fees to defendants. We reverse and remand for a determination of the prejudgment interest awardable to Superior, and otherwise affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The record in this case is sizeable, encompassing 16 volumes of appendix and 11 volumes of reporter’s transcript.
The property in question is located near the San Diego Freeway in the City of Carson. When the events surrounding this litigation began, the property was unimproved land owned by the Koll Trust; the City of Carson would eventually take the property in eminent domain. When the property was owned by the Koll Trust, two different billboards were located on the property; when the City of Carson took the property, it adjusted the property lines so that only one billboard was on the property eventually sold to Superior. From this state of events, much confusion arose. The parties refer to the billboard on Superior’s property as the “Billboard”; they refer to the billboard on the property not sold to Superior as the “smaller signs.”
The Billboard is a double-faced billboard, so has two signs on it; presumably, the smaller signs refers to a double-faced construction as well.
Initially, the property was leased by the Koll Trust to Viacom for the purpose of building and maintaining the Billboard, by a series of agreements. The last such agreement was executed on April 14, 1992, which had a term of seven years, and was renewed thereafter. We refer to this lease as the “April Viacom” lease. It contained a clause permitting the Koll Trust to cancel the agreement at any time if it was to develop the property.
Trowbridge believed that it could obtain substantially more money for the Billboard than the Koll Trust was earning in rent from Viacom; it also believed it could make a profit off of the smaller signs. In October 1992, Trowbridge entered into agreements with the Koll Trust giving it long-term lease rights to both billboards. The agreement was reflected in two separate lease agreements, and additional writings. As relevant to this dispute, Trowbridge and the Koll Trust entered into the October 10 lease with respect to the Billboard, and the October 11 lease with respect to the smaller signs.
Superior does not challenge, on appeal, the trial court’s finding that the October 10 lease, not the October 11 lease, governs the Billboard. We note, however, that reading the two documents next to each other, it is difficult to reach any other conclusion. Specifically, the October 10 lease provides that it requires the Koll Trust to assign to Trowbridge the Koll Trust’s interest (as lessor) in the April Viacom lease, and increases Trowbridge’s rental obligation to the Koll Trust if Trowbridge successfully obtains use of the Billboard during the term of the April Viacom lease. The October 11 lease specifically states that it “is for the smaller signs... located on the North end of said parcel,” and specifically provides for a rent increase if Trowbridge successfully obtains the use of “the other said sign” as referenced “in our other contract.”
While many of the terms of the two leases are similar, there are two relevant areas in which they differ. First, the initial term of the October 10 lease (governing the Billboard) is twenty years from October 1, 1992, while the initial term of the October 11 lease (governing the smaller signs) is twenty-seven years from August 1, 1993. Second, the October 11 lease (governing the smaller signs) contains a clause voiding the lease “if [the] signs are in any way found to be illegal and subsequently must be removed”; the October 10 lease (governing the Billboard) has no such void-if-illegal clause.
This clause was apparently included because, at the time of the October leases, some question had been raised regarding the legality of the smaller signs.
Both leases, however: (1) contain a prevailing party attorney’s fee clause; (2) provide that they bind successors and assigns; and (3) include an option to renew on a first right of refusal basis. The October 10 and 11 leases were executed. As relevant to this action, rent under the October 10 lease was $3000 per month.
As required by the October 10 lease, the Koll Trust assigned to Trowbridge its rights as lessor pursuant to the April Viacom lease. In 1995, Trowbridge assigned to Regency 50% of its right as Lessor with respect to the Billboard. Trowbridge was not able to negotiate an early termination of the April Viacom lease with Viacom, and therefore gave Viacom notice that the April Viacom lease would not be renewed and would terminate in 1999. Since Trowbridge and Regency possessed the rights to maintain the Billboard on the property from 1999 through 2012, while the Billboard itself was owned by Viacom, a co-ownership agreement was reached. In February 1999, Trowbridge and Regency assigned to Viacom 50% of their interest in the Billboard lease, while Viacom assigned to Trowbridge and Regency a 50% interest in the Billboard itself. In practice, this “Co ownership Agreement” resulted in Viacom using one side of the Billboard while Regency and Trowbridge shared the other side.
The agreement did not specifically reference the October 10 or October 11 lease, but the parties are in agreement, however, that the assignment refers to Trowbridge’s lessor’s rights with respect to the Billboard.
By the time the Co-Ownership Agreement was executed, however, Trowbridge’s President, Brian Gurnee, had apparently forgotten that Trowbridge had executed two separate lease agreements with the Koll Trust. Gurnee possessed a fully executed copy of the October 11 lease; his copy of the October 10 lease was signed, but not dated. He came to believe that the October 10 lease was an inapplicable draft, and that the October 11 lease governed both the Billboard and the smaller signs. The Co-Ownership Agreement, therefore, includes recitals indicating that the Koll Trust’s rights to the Billboard had been assigned to Trowbridge under the October 11 lease. This mistake furthered the initial confusion in this case—as both Regency and Viacom believed that their rights derived from the October 11 lease.
At some point, the Koll Trust lost the property to the City of Carson in eminent domain; defendants thereafter paid rent on the Billboard to the City. In 2003, Superior purchased the property from the Carson Redevelopment Agency, intending to build a car dealership on the property. By this time, the property line had been moved, leaving the Billboard on the property and the smaller signs on an adjoining parcel.
When Superior purchased the property, it was aware of the Billboard. During Superior’s early negotiations for the property, Superior had been told that, pursuant to the April Viacom lease, Superior would be able to remove the Billboard upon informing Viacom that it intended to develop the property. However, when Superior actually purchased the property, the purchase agreement indicated that Superior would obtain title subject to the October 10 lease. Moreover, as part of its purchase of the property, Superior executed an assumption of the October 10 lease.
On March 17, 2003, Superior wrote Trowbridge indicating that it had purchased the property and planned to develop it. Superior requested that Trowbridge remove the Billboard. Superior attached to its letter the grant deed in its favor, indicating that it had obtained title to the property. Superior made no mention of the October 10 lease, although it had assumed the lease and purchased the property subject to it. On April 11, 2003, Superior’s counsel again wrote Trowbridge demanding removal of the Billboard. In his letter, Superior’s counsel assumed that the only lease governing the Billboard was the April Viacom lease. He stated, “[W]e are unaware of any formal renewal of the lease by you. Thus, it appears that you are a hold over month-to-month tenant and that the lease is terminable upon thirty days written notice. This letter constitutes that notice.” Again, Superior made no mention of the October 10 lease, although it had purchased the property subject to it. On April 25, 2003, counsel for Regency responded to this letter, on behalf of Regency and Trowbridge. Regency’s counsel enclosed a copy of the October 11 lease, indicating that this lease governed the Billboard and was in effect through 2020.
We note that Trowbridge never had a lessee’s interest in the Billboard pursuant to the April Viacom lease. The Koll Trust had assigned to Trowbridge its interest in the lease as lessor. This fact should have been apparent to Superior from its review of the October 10 lease, which provides for that assignment.
At this point, in April 2003, Superior could have indicated to Regency (and Trowbridge) that it had taken the property pursuant to the October 10 lease, which was only in effect through 2012, not 2020. Either defendants would have realized their mistake in believing that the October 11 lease governed the Billboard as well as the smaller signs, or the dispute would have proceeded to litigation over which of the two leases governed. However, Superior would not be satisfied with a determination that the October 10 lease governed, as Superior did not want to wait until 2012 to have the Billboard removed.
Instead, on August 12, 2003, Superior sued Trowbridge and Regency in Unlawful Detainer. Superior’s verified complaint in the Unlawful Detainer action alleged, “In October, 1992 a prior owner of the premises granted in writing to Trowbridge a license to use a portion of the premises for the purposes of the erection and maintenance of a billboard.” The complaint did not attach the document which granted this purported license; preferring instead the vague reference to “October, 1992.” This was done despite Superior’s knowledge that Trowbridge and Regency were relying on the October 11 lease and Superior’s still-undisclosed knowledge of the October 10 lease. Five months later, in February 2004, Superior dismissed the Unlawful Detainer action without prejudice. Superior did not disclose the October 10 lease during the course of that action.
The record is unclear as to why Viacom was not named as a defendant in the Unlawful Detainer action.
The Unlawful Detainer complaint seeks “termination of the license for non payment,” and references Superior’s March 17, 2003 termination letter. That letter did not reference non-payment or any purported October 1992 license, but simply claimed a right to terminate on 30 days’ notice, as Trowbridge was a holdover tenant.
In its brief on appeal, Superior states, “Before the unlawful detainer action was dismissed, however, Regency and Trowbridge denied under penalty of perjury that the October 10 lease governed and instead affirmatively asserted that the October 11 lease governed.” This is an overstatement of the evidence. Superior is here referencing discovery responses by Trowbridge and Regency, wherein Trowbridge and Regency were responding to discovery requests by Superior which referred to the October 10 lease, but did not attach a copy of it. For example, Superior asked Regency and Trowbridge to admit that “[t]he only document which exists by which you claim a right to maintain a billboard on the Property is that document... dated October 11, 1992 between Trowbridge Corporation and [the] Koll Trust.” Superior also asked Regency and Trowbridge to admit the same statement, only with “October 10” replacing “October 11.” Both Regency and Trowbridge denied both requests. To be sure, Regency and Trowbridge did not identify the October 10 lease as a governing document when answering Superior’s form interrogatories. But none of these discovery responses is a “deni[al] under penalty of perjury that the October 10 lease governed,” when Superior never showed Trowbridge and Regency the October 10 lease and asked them about it.
On March 26, 2004, Superior’s counsel wrote Viacom, seeking removal from the property of a meter box servicing the Billboard. The letter stated, “It is our understanding that Viacom is currently occupying the property under [the April Viacom lease].” Superior’s counsel indicated that, pursuant to the terms of that lease, the lease could be terminated upon notice of an intention to develop the property. Superior’s counsel stated that his letter constituted such notice, and demanded removal of the Billboard.
Apparently, Superior no longer was pursuing its “October 1992 license” argument.
During this time, the legality of the smaller signs was being arbitrated. In 2000, the California Department of Transportation (“Caltrans”) had brought a complaint against Regency, challenging several of its billboards, including the smaller signs. It was stipulated in 2002 that the dispute would be arbitrated (the “Caltrans Arbitration”) and the initial arbitration status conference was held in May 2004.
On July 29, 2004, Superior brought the instant action against defendants. In its complaint, Superior alleged that when it purchased the property, “there was no lease or other documentation relating to the Billboard on file with the Los Angeles County Recorder’s Office.” This is true; however, Superior again failed to mention that it specifically purchased the property subject to the October 10 lease and assumed that lease as part of its obligations. Superior alleged that, after the April Viacom lease terminated in 1999, “there has not been any valid written lease in effect for the Billboard,” and that the Billboard has remained pursuant to a month to month tenancy. Superior acknowledged that defendants had relied on the October 11 lease. Superior disputed that the October 11 lease applied to the Billboard; but alleged, in the alternative, that if the October 11 lease applied, the lease was void by its own terms because the smaller signs were illegal according to Caltrans. Superior alleged six causes of action: (1) Declaratory Relief, seeking a declaration that the Billboard must be removed at defendants’ expense; (2) Breach of Implied Contract, seeking “fair market monthly rent” for the Billboard in the amount of $15,000 per month, or disgorgement of profits, plus consequential damages for not removing the Billboard; (3) Trespass; (4) Abatement of Nuisance; (5) Unfair Competition; and (6) Ejectment. Superior also alleged that it was entitled to recover its attorney’s fees, as the suit involved interpretation of the October 11 lease. Superior sought attorneys’ fees from all defendants; the complaint did not seek to recover attorney’s fees only from Trowbridge, the sole signatory defendant.
Defendants answered. Initially, Trowbridge and Viacom were represented by the same counsel. Viacom’s counsel discovered a potential conflict in November 2004 and withdrew from representing Trowbridge, which then retained its own counsel. Regency, which, during the course of this case was being sued by Trowbridge in a separate matter also relating to the Billboard, was separately represented.
On February 25, 2005, Trowbridge moved for summary judgment on the basis that the October 11 lease governed, and the lease was not void because no court had yet found the smaller signs to be illegal. Superior opposed the motion, arguing that the October 11 lease applied by its terms only to the smaller signs, but again not raising the October 10 lease. Superior also took the position that the court could find that the October 11 lease was void because Caltrans had determined that the smaller signs were illegal. The hearing on Trowbridge’s summary judgment motion was set for May 13, 2005.
On May 11, 2005, defendants took the deposition of Jack Smith, Superior’s Executive Vice President. At Smith’s deposition, Superior disclosed, for the first time, the October 10 lease.
Prior to disclosing the October 10 lease, Superior’s counsel withheld it for 45 minutes on a baseless claim of attorney/client privilege.
At the hearing on Trowbridge’s motion for summary judgment, two days later, no party raised the issue of the October 10 lease potentially applying to the Billboard, rather than the October 11 lease. Faced only with the October 11 lease (and the long since-terminated April Viacom lease), the trial court indicated its belief that the October 11 lease governed. However, the court declined to rule on the legality of the smaller signs while the Caltrans Arbitration was pending. The court continued the hearing on the summary judgment motion, with supplemental briefing to be filed regarding the status of the Caltrans Arbitration.
Defendants began to consider the impact of the October 10 lease on the case. On June 10, 2005, Viacom’s counsel wrote Superior’s counsel and stated, “If the October 10 [lease] were an unimportant document, your withholding of the document might not be worth quibbling about. But its existence arguably undercuts one of your main theories for relief. [¶] Viacom... is still assessing the effects of the October 10 [lease] on its substantive arguments and has not yet taken a position in this regard.”
Trowbridge and Regency both filed supplemental briefs in support of Trowbridge’s summary judgment motion in late August 2005. Neither one mentioned the October 10 lease. Neither did Superior, in its supplemental briefing. On September 23, 2005, the trial court denied the motion for summary judgment. The court concluded that the Billboard was, in fact, governed by the October 11 lease; however, the court found a disputed issue of fact existed as to whether the smaller signs were illegal, which would void the lease. The case proceeded toward trial.
The court acknowledged the language in the October 11 lease indicating that it applied only to the smaller signs. However, the court was persuaded by language in the introductory paragraph indicating that the lease gave Trowbridge the right to put billboards on the property.
On October 15, 2005, Viacom filed a motion in limine to exclude evidence regarding the illegality of the smaller signs. Viacom stated that the recently disclosed October 10 lease did not contain a void-if-illegal clause, and argued that if the October 10 lease “proves to be the governing agreement, there is no basis whatsoever to void the lease for the Billboard. These are questions that are unlikely to be resolved prior to trial.” This was the first time that any party in the case informed the trial court of the October 10 lease. Both Trowbridge and Regency filed joinders in Viacom’s motion in limine. However, between the date of Viacom’s motion and Regency’s joinder, Regency filed another motion in which it relied on the October 11 lease as governing.
In opposition to the motion in limine, Superior again took the position that the April Viacom lease governed. Acknowledging, however, the trial court’s determination on summary judgment that the October 11 lease governed, Superior argued that the October 11 lease was void for illegality. Superior also stated, “Finally, Viacom... also suggests in its moving papers that an earlier version of the [lease] – dated October 10, 1992 – may be relevant to this case. Viacom[’s] enthusiastic embrace of this earlier version is easily explained – because the earlier version appears to lack the ‘termination clause’ found in the later October 11, 1992 lease. Leaving aside for now the fact that Defendants have consistently taken the position throughout this case – including under oath – that the October 11th version was the controlling agreement, the fact that an earlier October 10th version exists is irrelevant to the pending Motion in Limine. If Viacom Outdoor wants to assert at trial that the October 10th version controls, then presumably they can attempt to do so – and be cross-examined and impeached on the matter. But nothing about that claim supports granting the pending Motion – especially because Superior vigorously will dispute that the October 10th version is controlling.”
The motion in limine was not immediately heard as the trial court again stayed the matter pending the outcome of the Caltrans Arbitration. In February 2006, the trial court lifted the stay to enable Regency to move to dismiss the action on unrelated grounds. On March 7, 2006, Regency filed its motion to dismiss. In the course of its motion, Regency unambiguously argued, for the first time, that “[t]he October 11 Lease is not the operative contract. Rather, the October 10 Lease is the operative contract for the [Billboard]. Because it does not contain a ‘found to be illegal’ clause, there are no grounds to void the contract, and the complaint should be dismissed against Regency with prejudice for failure to state a claim.” On March 28, 2006, Superior opposed Regency’s motion. As to Regency’s assertion that the October 10 lease governed, Superior indicated that it intended to pursue a judicial estoppel argument. The record does not reflect the trial court’s resolution of Regency’s motion, but it was apparently denied.
The motion is irrelevant to the issues on appeal. Regency argued that Superior, as a private party, lacked standing to allege the illegality of the smaller signs.
On June 26, 2006, an interim award was issued in the Caltrans Arbitration, concluding that the smaller signs were illegal and had to be removed. Thus, it was likely, although not a foregone conclusion, that the October 11 lease was now void.
During the briefing on Trowbridge’s motion for summary judgment, Regency had suggested that, since the Billboard and the smaller signs were now on different properties, voiding the October 11 lease with respect to the smaller signs would not necessarily void it with respect to the Billboard. As the trial court denied the motion for summary judgment, this issue would presumably still exist if the court found the October 11 lease to govern the Billboard.
On July 12, 2006, Viacom filed its trial brief, arguing that the October 10 lease, not the October 11 lease, governed the Billboard. Trowbridge joined in Viacom’s trial brief. Regency also filed a trial brief arguing that the October 10 lease applied. Superior filed a trial brief arguing that the April Viacom lease governed the Billboard, and that since it was terminated, a month to month tenancy applied. Alternatively, Superior argued that the October 11 lease, which was now void for illegality, governed the Billboard. Superior argued that the October 10 lease was merely a draft of the October 11 lease, and further argued that defendants were judicially estopped to rely on it.
The case proceeded to a bench trial. The trial court indicated that it would first try the issue of which contract applied. A nine-day bench trial was held, with seven witnesses and over 1500 pages of exhibits. During the trial, Gurnee testified that he first realized he had been wrong in asserting that the October 11 lease governed around Thanksgiving of 2005, when he was preparing for trial and reviewed the October 10 lease along with the October 11 lease and related documents. He conceded that this was six months after the October 10 lease had been disclosed in Smith’s deposition, but stated that he had not seen the October 10 lease until November 2005.
At the close of the evidence, and after hearing argument, the trial court tentatively indicated that it believed the October 10 lease applied, but was uncertain whether the doctrine of judicial estoppel should bar defendants from relying on it. The court therefore sought additional briefing on the issue.
Superior argued that defendants definitely knew about the October 10 lease when it was disclosed in the May 11, 2005 deposition, but continued to pursue Trowbridge’s motion for summary judgment based on the October 11 lease. Superior took the position that defendants did not “complete[ly] and unequivocal[ly]” accept the October 10 lease until after the Caltrans arbitration had concluded that the smaller signs were illegal, which would void the October 11 lease. Superior theorized that defendants pursued the October 11 lease even after the disclosure of the October 10 lease, because the October 11 lease had a term eight years longer than the October 10 lease.
Defendants argued that judicial estoppel did not apply based on three grounds: (1) their assertion of the October 11 lease was never successful; (2) their assertion of the October 11 lease was based on Gurnee’s mistake; and (3) Superior had withheld the October 10 lease, and was therefore barred from asserting judicial estoppel by the doctrine of unclean hands. Defendants adamantly denied Superior’s theory that defendants had intentionally declined to pursue the October 10 lease (because they sought the longer lease term of the October 11 lease) until such time as the ruling in the Caltrans Arbitration made pursuit of the October 11 lease problematic. The defendants noted that they each had asserted the October 10 lease prior to the arbitrator’s ruling in the Caltrans arbitration. They further argued that it is not necessarily the case that the October 11 lease has a greater term than the October 10 lease, as the October 10 lease contains a renewal clause.
Specifically, Viacom’s motion in limine in October 2005 (joined by the other defendants) and Regency’s motion to dismiss in March 2006 both predated the June 2006 interim award in the Caltrans Arbitration.
The trial court concluded that the October 10 lease applies to the Billboard, and that defendants were not judicially estopped from relying on that lease. The court’s judicial estoppel finding was based on all three bases raised in defendants’ briefing – lack of success, mistake, and unclean hands.
With the October 10 lease governing the Billboard, Superior had no legal basis on which to argue for the Billboard’s removal. The main issue remaining in the case was the issue of rent for the Billboard. The parties agreed that they could resolve the issue without further testimony. It was undisputed that defendants had paid Superior no rent for the Billboard from the time Superior obtained the property in February 2003. However, it was also undisputed that, during 2006, defendants made several back rent payments and became current with rent payments by the time the issue was ultimately presented to the trial court for resolution. Thus, it was undisputed that all back rent had been paid.
Two issues then remained: first, whether Superior was entitled to interest for the late-paid rent; and, second, whether either party was entitled to attorney’s fees as prevailing party on a contract with an attorney’s fee provision. The trial court sought briefing on both issues.
Superior argued that it was entitled to prejudgment interest on the unpaid rent, pursuant to statute. (Civ. Code, § 3287.) Superior also argued that it was the prevailing party, or, alternatively, that there was no prevailing party. Superior based this argument on its success in obtaining some $138,000 in back rent (and, it hoped, prejudgment interest). Superior also argued that it had prevailed on the contract because it successfully established that the October 11 lease did not govern, thus lessening the term for which the Billboard could remain on its property by 8 years. Superior argued, however, that it could recover its attorney’s fees only from Trowbridge, as Trowbridge was the only signatory defendant to the October 11 lease. Similarly, Superior took the position that if defendants were considered the prevailing parties, only Trowbridge could recover its fees.
As stated above, this was contrary to the allegations of Superior’s complaint, which had sought attorney’s fees against all three defendants.
In response, defendants argued that Superior had no basis for an award of prejudgment interest as all rent payments had been made. In fact, defendants argued, they had offered to pay rent earlier and Superior had declined their offer. Moreover, defendants argued that the amount of rent had not been undisputed, as necessary for an award of prejudgment interest, because Superior had sought $15,000 per month in fair market value, when the rent owed under the contract was actually only $3000 per month. As to attorney’s fees, defendants argued that they had been the prevailing parties on the bulk of Superior’s contract-based causes of action, in that Superior had sought immediate removal of the Billboard and they obtained a judgment that allowed the Billboard to remain. They also argued that it had not yet been established that the Billboard had to be removed at the end of the October 10 lease term in 2012, because that lease contained an option to extend. Finally, defendants argued that they were all entitled to attorney’s fees as the October 10 and 11 leases provided that their benefits ran in favor of assignees.
At the deposition of Regency’s President, Drake Kennedy, on April 21, 2005, Kennedy offered to pay Superior rent if Superior would tell him to whom rent should be paid (as there was some concern regarding Superior having transferred the property to a related entity). Regency’s counsel stated that if such notice was given, Regency would calculate what was owed and pay it. Superior’s counsel responded, “I will take that under advisement.” No rent request was made.
Superior replied that there was no prevailing party. As to defendants’ argument that the October 10 lease term would not end in 2012 because of the option to extend, Superior noted that the option was only on a “right[] of first refusal” basis, and argued that it could therefore terminate the lease in 2012 by removing the Billboard altogether. Superior argued that by obtaining a judgment that the October 10 lease applied rather than the October 11 lease, it obtained the extremely valuable benefit of being able to terminate the lease in 2012, rather than 2020, and should be considered to have prevailed as much as defendants.
The trial court concluded that Superior was not entitled to prejudgment interest, as Superior’s claim for rent was not liquidated. The court further concluded that defendants were the prevailing parties, as Superior’s main objective had been removal of the Billboard, and its limited success in obtaining back rent was purely incidental. The court specifically indicated that Superior never sought a declaration that the Billboard could be removed in 2012 (as opposed to 2020) and declined to reach the issue of when the Billboard could be removed. The court concluded that all defendants could receive attorney’s fees, based on the assignability clause in the contract. However, the court indicated that it was likely to reduce the award of fees to eliminate fees incurred during the period from the disclosure of the October 10 lease at the Smith deposition to the time defendants clearly asserted that it applied. Further briefing was requested.
Defendants each submitted sizeable requests for attorney’s fees. They argued that, although each defendant was separately represented, there was minimal duplication of work, and that all fees incurred were reasonable.
Superior argued that any fees awarded must be reasonable, and that the use of three separate law firms to represent the three defendants was unreasonable, as the interests of the three defendants in this matter were perfectly aligned. Superior argued, “[T]he unwarranted ‘triple team’ defense tactic used by Defendants in this case is functionally no different than if a single law firm had represented Defendants and then had three attorneys perform identical and duplicative (triplicative?) work on every aspect of the case – e.g., three attorneys attend each deposition; three attorneys attend each court hearing; three attorneys prepare and propound identical written discovery; three attorneys separately prepare for trial, including the preparation and filing of three sets of substantively-identical pretrial papers; three attorneys serve as ‘lead’ trial counsel; and three attorneys prepare and file three sets of substantively-identical post trial papers.” Superior also argued that the October 10 and October 11 leases each contemplated only one party on each side, not three, so the use of three attorneys was unreasonable under the contract.
The trial court concluded that the rates and hours of counsel were reasonable. The court concluded, however, that defendants should not receive attorney’s fees for the time between the disclosure of the October 10 lease on May 11, 2005, and when they brought it to the attention of the court, because they took too long to do so. Viacom and Trowbridge were considered to have brought the lease to the court’s attention at the time of Viacom’s motion in limine on October 17, 2005. Regency, whose joinder in Viacom’s motion in limine was questionable as it had, nearly simultaneously, argued for the application of the October 11 lease, was denied fees until its motion to dismiss was filed on March 7, 2006.
Judgment was amended to include the fees awarded on October 10, 2007. Regency was awarded $395,839 in attorney’s fees; Viacom was awarded $372,848 in attorney’s fees; and Trowbridge was awarded $124,257 in attorney’s fees. Superior filed a timely notice of appeal.
ISSUES ON APPEAL
On appeal, Superior does not contest the trial court’s finding that the October 10 lease governed. However, Superior challenges the trial court’s determination that defendants were not judicially estopped to rely on the October 10 lease. Superior next challenges the trial court’s refusal to award prejudgment interest on the late rent payments under the October 10 lease. Finally, Superior challenges the award of attorney’s fees, on three bases: (1) the determination that defendants were the prevailing parties; (2) the determination that all three defendants were entitled to attorney’s fees; and (3) the amount of fees awarded.
DISCUSSION
1. Judicial Estoppel
“ ‘ “Judicial estoppel, sometimes referred to as the doctrine of preclusion of inconsistent positions, prevents a party from ‘asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding....’ ”... It is an “ ‘extraordinary remed[y] to be invoked when a party’s inconsistent behavior will otherwise result in a miscarriage of justice.’ ” ’ ” (Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 130-131.)
“In California, courts consider five factors in determining whether to apply judicial estoppel: ‘The doctrine [most appropriately] applies when “(1) the same party has taken two position; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” ’ [Citations.]
“ ‘[C]ourts have uniformly recognized that [the] purpose [of judicial estoppel] is “to protect the integrity of the judicial process.” ’ [Citations.] The doctrine is ‘ “aimed at preventing fraud on the courts.”... [It] “ ‘ “is invoked to prevent a party from changing its position over the course of judicial proceedings when such positional changes have an adverse impact on the judicial process.... ‘The policies underlying preclusion of inconsistent positions are “general consideration[s] of the orderly administration of justice and regard for the dignity of judicial proceedings.” ’... Judicial estoppel is ‘intended to protect against a litigant playing “fact and loose with the courts.” ’ ” ’... ‘It seems patently wrong to allow a person to abuse the judicial process by first [advocating] one position, and later, if it becomes beneficial, to assert the opposite.’ ” ’ [Citation.] [¶] Judicial estoppel also ‘ “ ‘protect[s] parties from opponents’ unfair strategies’ ” ’ [citation] and ‘targets... unfairness between individual parties’ [citation]. Even so, the doctrine is primarily concerned with the connection between a party and the judicial system, not the relationship between the parties.” (Gottlieb v. Kest, supra, 141 Cal.App.4th at p. 131.)
There are no inflexible prerequisites or an exhaustive formula for determining the applicability of judicial estoppel. (Gottlieb v. Kest, supra, 141 Cal.App.4th at p. 132.) It is an equitable doctrine and its application, even when all of the necessary elements are present, is discretionary. (Ibid.) Thus, for example, when, in a dissolution action, a wife asserts that her husband is judicially estopped due to a declaration the husband filed in another case, application of judicial estoppel is properly denied when the wife had actively assisted the husband in preparing the key declaration. (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 850.)
The parties in this case dispute the standard of review to be applied to a trial court’s ruling on the issue of judicial estoppel; Superior contends the review is for substantial evidence, while defendants assert abuse of discretion applies. Both parties are correct. When the issue on appeal is a challenge to the evidence supporting a trial court’s factual determination, substantial evidence review is the appropriate standard. (E.g., In re Marriage of Dekker, supra, 17 Cal.App.4th at p. 850.) However, when the court’s exercise of discretion based on those facts is challenged, abuse of discretion review applies. (Cf. Frei v. Davey (2004) 124 Cal.App.4th 1506, 1512 [an abuse of discretion in a court’s ruling on attorney’s fees is established when the court’s findings are not supported by substantial evidence or there has been a miscarriage of justice].)
Here, Superior argues that defendants should have been estopped to assert that the October 10 lease governed due to their prior assertions that the October 11 lease governed. The trial court declined to apply judicial estoppel on three grounds: (1) Defendants had not been successful in their assertion that the October 11 lease governed; (2) Defendants’ assertion that the October 11 lease governed was based on mistake; and (3) Superior’s acts in withholding the October 10 lease constitute unclean hands, rendering the application of judicial estoppel in their favor inappropriate. The first two grounds are factual; the third is a finding of fact mixed with an exercise of discretion.
We conclude that the trial court’s decision was well-supported. We need address only the second issue, that defendants’ initial assertion that the October 11 lease governed was based on mistake. This finding was based on substantial evidence, specifically, Gurnee’s testimony that he had forgotten about the October 10 lease and did not realize its significance until preparing for trial in November 2005. This testimony is not inherently incredible or unworthy of belief. On the contrary, it is Superior’s theory that Gurnee’s assertion of the October 11 lease was a calculated attempt to play fast and loose with the court that is unsupported by the evidence. Superior posits that defendants pursued the October 11 lease (with the longer lease term) until such time as the Caltrans Arbitration reached a result which would likely void that lease, at which time defendants chose to pursue the October 10 lease. But Viacom and Trowbridge first placed the October 10 lease before the trial court in Viacom’s motion in limine in October 2005, eight months before the interim award in the Caltrans Arbitration. Regency unambiguously asserted that the October 10 lease governed three months before the interim award, in its March 2006 motion to dismiss. While Superior prefers to focus on the trial briefs of July 2006 as the first time defendants “collectively asserted” that the October 10 lease applied, the evidence is clear that one defendant had unambiguously relied on the October 10 lease, and the other two had brought it to the court’s attention, long before the Caltrans Arbitration award.
Superior suggests that since Gurnee had signed the October 10 contract, he cannot disclaim knowledge of it, and that his possession of an undated version of the October 10 lease put him on inquiry notice that a fully executed version of the October 10 lease may exist. The arguments are beside the point. We are not concerned with whether Gurnee would be bound by the October 10 lease, but with if his assertion of the October 11 lease was mistaken or an intentional attempt to mislead the court. He testified that it was the former; the trial court agreed.
That the trial court ultimately declined to award defendants their attorney’s fees incurred between the time they learned of the October 10 lease and the time they first brought it to the court’s attention does not undermine the court’s finding of mistake. The attorney’s fees were denied because fees awarded must be reasonable, and the trial court concluded that defendants’ attorneys were unreasonable in the amount of time it took them to analyze the October 10 lease and realize that their earlier assertion of the October 11 lease was mistaken. That defendants (or their counsel) were not sufficiently diligent in discovering their mistake does not render their assertion of the October 11 lease any less mistaken.
Moreover, we conclude that the trial court did not err in its determination that judicial estoppel should not apply because Superior had also withheld the October 10 lease. We reiterate that, when Superior purchased the property, it specifically purchased it subject to the October 10 lease, and signed an assumption of the obligations under that lease. Nonetheless, when Superior brought this action in July 2004, it alleged that there had been no recorded lease when it had purchased the property, and that there was not any valid written lease in effect – allegations carefully constructed to avoid disclosing the existence of the unrecorded October 10 lease, which Superior had apparently determined for itself was invalid. The case proceeded to a motion for summary judgment. In Superior’s opposition to the motion for summary judgment, it argued that the October 11 lease applied only to the smaller signs and not to the Billboard, but did not present the trial court with the October 10 lease which would enable the court to easily make that determination. Superior waited until May 2005, ten months after filing this action, to even disclose to defendants what would become the key document to resolving this litigation. Superior contended that the defendants should have been estopped from relying on the October 10 lease due to their continued assertion of the October 11 lease after Superior had disclosed the October 10 lease to them on May 11, 2005. But Superior’s delay in disclosing the October 10 lease to defendants prior to May 11, 2005 is at least partially responsible for defendants’ continued mistaken reliance on the October 11 lease throughout the early stages of this litigation. As such, the court did not abuse its discretion in concluding that this was not an appropriate case for the application of the doctrine of judicial estoppel.
2. Rent and Prejudgment Interest
Preliminarily, we note that it is undisputed that, by the time the judgment was entered in this case, defendants were current in their rent payments to Superior. Thus, the only reason Superior sought a judgment for rent was to have a judgment on which to attach an award of prejudgment interest. The sole issue was whether Superior was entitled to an award of prejudgment interest for the defendants’ delay in making the rent payments.
Civil Code section 3287, subdivision (a) provides, in pertinent part, “Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt.” The purpose of an award of prejudgment interest is “to make the plaintiff whole ‘for the accrual of wealth which could have been produced during the period of loss.’ [Citation.]” (Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 958.)
This section “does not authorize prejudgment interest as a matter of law where the amount of damages depends upon a judicial determination based upon conflicting evidence.” (Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 434.) However, prejudgment interest is to be awarded when the debtor knows the amount owed or would be able to compute that amount. (Id. at pp. 434-435.) Cases have held that when there is a great disparity between the amount of damages sought by the plaintiff and the amount ultimately awarded, the disparity suggests that the amount of damages was not certain or capable of calculation. (E.g., Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at p. 961; Chesapeake Industries, Inc. v. Togova Enterprises, Inc. (1983) 149 Cal.App.3d 901, 910; Polster, Inc. v. Swing, supra, 164 Cal.App.3d at p. 435.) But it is not the fact that the plaintiff overreached in its complaint that mandated the denial of prejudgment interest in these cases; it was that the disparity gave rise to an inference that the amount ultimately awarded was not, in fact, certain. (Wisper Corp. v. California Commerce Bank, supra, 49 Cal.App.4th at p. 961; Chesapeake Industries, Inc. v. Togova Enterprises, Inc., supra, 149 Cal.App.3d at p. 910; Polster, Inc. v. Swing, supra, 164 Cal.App.3d at pp. 435-436.) It is certainty of damages, not disparity in pleading, which governs.
“ ‘Generally, the certainty required of Civil Code section 3287, subdivision (a), is absent when the amounts due turn on disputed facts, but not when the dispute is confined to the rules governing liability.’ [Citation.]” (Shell Oil Co. v. National Union Fire Ins. Co. (1996) 44 Cal.App.4th 1633, 1651.) Thus, a plaintiff is not barred from recovering prejudgment interest when it proposed alternative theories of damages, if the amount of the award would be fixed once the trial court determined the appropriate theory of relief. (Ibid.) In Shell Oil Co. v. National Union Fire Ins. Co., supra, 44 Cal.App.4th at p. 1951 & fn. 9, the plaintiff had pleaded three different measures of damages, which could result in an award of $500,000, $1,000,000 or $2,225,500. The trial court found the first measure to be the correct one, and awarded $500,000 and prejudgment interest on that amount. The prejudgment interest award was affirmed, even though the plaintiff had sought damages in the alternative, and one measure of damages more than four times the amount ultimately awarded. The court reasoned that the court was required only to make the legal determination of which measure of damages was appropriate; the amount itself was not subject to dispute. (Id. at p. 1951.)
In this case, it is not disputed that defendants did not timely pay rent for the Billboard. It is also undisputed the amount of rent due under the October 10 lease was $3000 per month. It follows that the amount of damages was certain, or capable of being made certain by a simple calculation. Defendants argue, however, that Superior’s pleadings and differing theories of relief should bar Superior from recovering prejudgment interest on the unpaid rent. First, defendants note that Superior never pleaded a cause of action for breach of written contract or otherwise sought the unpaid rent, preferring instead to pursue a cause of action for breach of an implied contract to pay the fair market value. Defendants never raised this objection below and, in fact, proceeded as though the issue of unpaid rent was before the trial court for resolution after the court had determined the October 10 lease governed. Defendant cannot now challenge Superior’s failure to plead a cause of action for unpaid rent. Second, defendants argue that Superior sought substantially more money for unpaid rent (calculated as fair market value) than it was awarded (calculated pursuant to the contract). But it was not the amount of rent that was subject to determination by the trial court based on disputed facts, only the proper theory to apply; once the trial court made the legal determination that the October 10 contract governed, the amount of rent was capable of calculation. Thus, the trial court erred in refusing to award prejudgment interest.
At oral argument on appeal, defendants suggested Superior failed to meet its burden of proof on this issue at trial. After the trial court indicated its tentative decision that the October 10 lease applied, the parties agreed to meet and confer on the issue of unpaid rent. The parties ultimately agreed that, by the time of the hearing on the issue, all of the rent had been paid. The sole disputed issue was whether Superior was entitled to prejudgment interest for the late-paid rent. The parties agreed it was unnecessary for the court to take testimony on the issue. The parties then submitted briefs on the issue of whether Superior was entitled to prejudgment interest and, if so, in what amount. Thus, there was no need for Superior to introduce evidence of unpaid rent; the parties agreed to the facts and simply disputed their legal effect.
Indeed, when Kennedy offered, at his deposition, to pay the rent due, Kennedy stated that if he was told whom to pay, he would “give it to [Regency’s] accounting department and they would make a determination as to what amounts were owed.”
However, while the amount of unpaid rent was not subject to dispute in this case, the amount of prejudgment interest was. Numerous factual questions remain, including: (1) was Kennedy’s offer to pay rent at his deposition a sufficient tender of rent to stop interest incurring? (2) When Regency subsequently issued rent checks to Superior, Superior declined to negotiate the checks, believing the checks were not unconditional enough to constitute a tender of rent; was this correct? (3) Were Defendants’ tenders of rent to the City prior to Superior’s demand for payment of rent sufficient? (4) Did Superior’s pursuit of the Unlawful Detainer action have any effect on defendants’ obligation to pay rent? We therefore remand for the trial court to resolve these issues, as well as any other issues related to the determination of the proper amount of prejudgment interest on unpaid rent to which Superior is entitled. While we do not calculate the amount of prejudgment interest to which Superior is entitled, we note that the amount is likely not to exceed $25,000.
We note that, in Superior’s brief on appeal, it overstates its case in this regard. Superior states that Regency’s tenders were “improperly conditioned on Superior’s waiver of its right to prejudgment interest.” In fact, when Superior received one of Regency’s checks, it asked Regency’s counsel to “confirm that [Superior] is free to negotiate Regency’s check without any waiver of any of its arguments in this litigation concerning, among other things: (1) the amount of unpaid rent that is owing to Plaintiff; (2) Plaintiff’s entitlement to recover all unpaid rent that is owing, including the $10,000/month ‘fair market value’ rental amount that the parties have stipulated to for trial; (3) Plaintiff’s entitlement to interest on the unpaid rent dating back to the dates that the rent became owing; and (4) Plaintiff’s entitlement to seek removal of the Billboard at issue in this case.” Regency’s counsel responded that it would not “enter into any stipulations about the conditions under which the check is to be negotiated.” Superior’s counsel then replied that it would not negotiate the check and would take the position at trial that the tender was not a true tender “because of the conditions attached by Regency to negotiating the check – i.e., Regency apparently would want to argue at trial that if Plaintiff negotiates Regency’s recent check, then such conduct may amount to a satisfaction that would preclude Plaintiff from seeking additional sums that it believes are owing.” Regency’s counsel clarified that there were no “strings attached to the tender,” and that Superior’s action or inaction with respect to negotiating the check would be the subject of appropriate comment at trial. In short, Regency simply refused to enter into a stipulation that Superior’s negotiation of the check, tendered with no “strings attached,” would not waive four different arguments Superior sought to pursue at trial (including Superior’s arguments that it was entitled to fair market value for the Billboard and to remove the Billboard). This cannot be characterized as a tender “conditioned on Superior’s waiver of its right to prejudgment interest.”
When Superior took title to the property and requested that the Billboard be removed, defendants continued to pay rent to the City; they stopped when Superior filed the Unlawful Detainer action. Ultimately, defendants paid rent for those months a second time, to Superior, to eliminate any doubt that they had paid all necessary rent.
Superior obtained rent payments in the amount of $138,000. When it sought prejudgment interest on the unpaid rent after trial, it estimated the amount of prejudgment interest to be $25,000, assuming that none of defendants’ tenders – including all of the rent checks then in Superior’s possession – were legally effective.
3. Attorney’s Fees
Together, defendants were awarded nearly $900,000 in attorney’s fees as prevailing parties under the October 10 and 11 leases. Superior raises three challenges to the award of fees. First, Superior contends defendants were not the prevailing parties. Second, Superior contends there was no legal basis for an attorney’s fee award to all three defendants. Third, Superior contends the amount of fees awarded was unreasonable.
a. Prevailing Party
Superior argues that the trial court erred in finding that defendants were the prevailing parties, rather than finding that Superior was the prevailing party or that there was no prevailing party. We review a trial court’s determination of the prevailing party for an abuse of discretion. (Hsu v. Abbara (1995) 9 Cal.4th 863, 871; Frei v. Davey, supra, 124 Cal.App.4th at p. 1511.)
Both the October 10 and October 11 leases provide, “In the event of any litigation to determine the rights of either party under this lease or to construe the said lease, or the obligations of either party in regard thereto, the prevailing party shall be entitled to such reasonable attorney’s fees and all court costs as shall be awarded by the court of competent jurisdiction.” When a contract does not otherwise define “prevailing party,” “a court may base its attorney fees decision on a pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 622.) 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 v. Abbara, supra, 9 Cal.4th at p. 876.) When the results are equivocal and victory and loss are evenly divided between both sides, the court can determine that there is no prevailing party. (Id. at pp. 874-875.)
In this case, Superior’s main litigation objective was the removal of the Billboard. Its complaint sought declaratory relief to remove the Billboard, and alleged a cause of action for breach of implied contract on the basis that the Billboard should have been removed upon Superior’s demand. While it is true that Superior also sought compensation for the time the Billboard remained after Superior took ownership of the property, Superior sought fair market rent in the amount of $15,000 per month, or disgorgement of defendants’ profits. In contrast, defendants sought the right to keep the Billboard on the property at a price of $3,000 per month. Although defendants had not paid rent to Superior from the moment Superior took title and immediately demanded the Billboard be removed, defendants offered to, and ultimately did, become current with their $3000 rent payments. The result – that the Billboard could not be removed and that Superior was owed only $3000 per month – was an unqualified victory for defendants, rendering them the prevailing parties.
At trial, Superior reduced the fair market rental amount sought to $10,000 per month, by stipulation.
It is important to recognize the monetary value of keeping the Billboard on the property. According to Superior, the Billboard could generate a staggering net revenue of $60,000 per month; which is equal to $720,000 per year. Superior brought suit seeking removal of the Billboard in July 2004, when defendants were actually entitled to keep the Billboard through at least October 2012. This time period would be worth nearly $5.9 million to defendants, at those same rates. In other words, Superior sought removal of the Billboard, which would have deprived defendants of $5.9 million; instead, the Billboard remained and defendants preserved their right to those substantial revenues.
This is based on Gurnee’s assertion, in the litigation with Regency, that Regency nets $30,000 per month from one side of the Billboard.
The trial court expressed no opinion on whether defendants would be entitled to renew the October 10 lease. We, similarly, express no opinion on the issue.
Superior contends that it prevailed on two key issues. First, it argues that it prevailed on the issue of rent, because this litigation prompted defendants to offer, and ultimately pay, the back rent (and, as we have concluded on appeal, will require them to pay interest on those amounts). Yet this was a small victory – payments of $3000 per month compared to the $15,000 per month Superior sought – and surely dwarfed by the $5.9 million at issue by Superior’s cause of action for removal of the Billboard. Indeed, Superior characterized the payment of rent as a subsidiary issue which was incidental to its goal of removing the Billboard. In May 2005, in answering an interrogatory regarding whether Superior had ever requested rent from Viacom, Superior responded, “Superior did not expressly request an amount of rent from Viacom Outdoor because Superior’s primary focus was to have the Billboard removed.” When Kennedy offered to pay rent at his April 2005 deposition, if requested by the proper entity, Superior’s counsel indicated he would take it under advisement, but did not then request the rent. Indeed, Superior never even pleaded a cause of action for payment of back rent under any of the written contracts, although the issue was ultimately litigated. Moreover, the evidence indicates that defendants readily acknowledged their obligation to pay $3000 per month rental for the Billboard, and that they were willing to pay it. The fact that this action ultimately resulted in Superior receiving this rent is a small victory indeed. The small amount of prejudgment interest to which Superior is also entitled does not change this result. Superior sought removal of the Billboard at least eight years too early, and lost. Superior’s minor success in obtaining the agreed-upon rent simply does not compare.
Second, Superior argues that it actually prevailed on the issue of which lease governed the Billboard. Specifically, Superior argues that it succeeded in its goal of establishing the October 11 lease did not apply to the Billboard, thereby reducing defendants’ lease term from 16 further years to only 8, a victory which Superior claims is worth $5.7 million to it. There are three reasons this argument is unpersuasive. First, Superior never sought a ruling that the lease term expires in 2012 (rather than 2020). Second, Superior never obtained a ruling that the lease term expired in 2012. Third, Superior’s suggestion that its secondary litigation goal was establishing that the October 11 lease did not apply is an oversimplification – if not an outright mischaracterization – of its position at trial. At trial, defendants took the position that the October 10 lease governed. Superior, on the other hand, took the position that the October 11 governed, but that it was void, due to the illegality of the smaller signs. The court never ruled on whether the October 11 lease was void; the conclusion that the October 10 lease governed made such a determination unnecessary. But the fact that Superior took the position that the October 11 lease was void due to illegality cannot be transformed into a position that the October 11 lease did not govern the Billboard. We have reviewed the transcript of the nine-day bench trial, and it is apparent that the main issue that was litigated was whether the October 10 lease or the October 11 lease governed the Billboard, and Superior firmly argued that the October 11 lease did, in fact, govern. The trial court rejected Superior’s argument and concluded, as defendants had argued, that the October 10 lease prevailed. This was not a partial victory for Superior, but a total loss. As such, the trial court did not abuse its discretion in concluding that defendants were the prevailing parties.
Superior argues that the additional eight years “are worth at least $5.7 million in additional advertising revenue that will inure to the benefit of Superior should it choose to retain the billboard on the property after 2012.” We question Superior’s implied premise that it, a car dealership owner with a single billboard, could generate the same $60,000 per month revenue as Regency, an experienced player in the billboard industry with rights to numerous billboards. Indeed, given Superior’s trial stipulation that fair market rental for the Billboard is $10,000 per month, it is much more likely that, if it chose to continue to lease the Billboard, it would obtain a rental amount on that scale. Moreover, we note that Superior does not own the Billboard itself, but only the land beneath. The Billboard was owned by Viacom, which transferred half of its interest to Regency and Trowbridge. Thus, if Superior terminates its relationship with defendants, Superior will not own a Billboard to lease at all.
The secondary issue litigated was whether, despite the October 10 lease governing the Billboard, defendants were judicially estopped from relying on it. This issue, too, was resolved against Superior.
b. Award to Three Defendants
Superior next contends that, as a matter of law and/or contract interpretation, only a single prevailing party may obtain its attorney’s fees, not three different parties. We review the trial court’s decision de novo, as the issue is one of law and contract interpretation. (Frei v. Davey, supra, 124 Cal.App.4th at p. 1511.)
Superior relies on the language of the attorney’s fee clause, which provides, “In the event of any litigation to determine the rights of either party under this lease or to construe the said lease, or the obligations of either party in regard thereto, the prevailing party shall be entitled to such reasonable attorney’s fees and all court costs as shall be awarded by the court of competent jurisdiction.” Superior focuses on the use of the words “either party” and “the prevailing party,” to suggest that the leases contemplated only a single party on each side, with only one party prevailing and being awarded its fees. However, both leases also provide “The word ‘Lessor’ as herein used shall include and means ‘Lessors’. This lease is binding upon, and inures to the benefit of the heirs, assigns and successors of both the Lessor and Lessee[s].” In other words, the leases contemplated multiple Lessors as well as multiple heirs, assigns, and successors. Moreover, an assignment of rights under a contract also transfers a contractual right to recover attorney’s fees. (A.J. Industries, Inc. v. Ver Halen (1977) 75 Cal.App.3d 751, 762.) Given that the contracts contemplated multiple parties in the roles of lessor and lessee, we conclude that the contracts also contemplated multiple parties in the role of the prevailing party in litigation.
The October 11 lease used the plural “Lessees,” while the October 10 lease used the singular “Lessee.”
Indeed, the October 11 lease even contemplated multiple lessees.
Superior also argues that the Co-Ownership Agreement among defendants contemplates joint legal representation and, therefore, a single award of fees. We disagree with Superior’s interpretation of that agreement. The Co-Ownership agreement provides, “Any attorney’s fees to defend the rights to maintain the [Billboard] shall be shared equally.” This means that fees shall be shared, not that the parties must necessarily be jointly represented by a single attorney.
Moreover, caselaw provides that when a single prevailing party is represented by more than one attorney, the party can receive fees for each attorney, as long as the services rendered by the attorneys were not unnecessarily duplicative. (Mix v. Tumanjan Development Corp. (2002) 102 Cal.App.4th 1318, 1324.) We see no practical difference between an individual party represented by multiple attorneys and multiple aligned parties represented by multiple attorneys. In either event, the dispositive issue is not the number of attorneys, but whether their fees are reasonable. It is to that issue which we now turn.
c. Reasonable Amount
Superior argues that the amounts awarded as attorney’s fees in this case were unreasonably high, because the attorneys for the three defendants duplicated each other’s work. The trial court has broad discretion to determine the amount of a reasonable fee. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) “ ‘The []experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong’—meaning that it abused its discretion.” (Ibid.)
We take guidance from Hadley v. Krepel (1985) 167 Cal.App.3d 677, which involved a defendant prevailing on a contract with an attorney’s fee clause, who had, throughout the litigation, used the services of three different firms sequentially. The plaintiffs argued that an award of fees for all three firms was unreasonable, because plaintiffs should not be required to pay excess amounts simply because the defendant was unable or unwilling to keep his attorneys. The trial court agreed, and awarded defendant a mere 20% of the fees he had sought. The appellate court reversed, on the basis that the award was unjustifiably low. The court stated, “a losing party in a lawsuit should not be responsible for expenses unnecessarily incurred by reason of his adversary’s need or desire to hire a new attorney. Thus, to the extent the [plaintiffs] challenged services which legitimately may have been duplicative, we think plaintiffs’ objections may have been appropriate.” (Id. at p. 683.) However, on the record, the appellate court could see only a relatively small amount of hours which were duplicative; the amount was clearly insufficient to justify the trial court’s massive reduction of the fees claimed. (Id. at pp. 683-684.) While the plaintiffs had complained that other work claimed by the defendants’ attorneys was unnecessary or unreasonable, they gave only generalized objections to particular dates and fees claimed by the attorneys, and did not explain why the fees were allegedly unnecessary. The court concluded that these conclusory and unsubstantiated objections were inadequate to establish any particular fees were unreasonable or unnecessary. (Id. at p. 684.) The court therefore reversed the award of minimal fees as an abuse of discretion.
The same principles govern here. While Superior is quick to challenge defendants’ fees as duplicative and unnecessary, Superior’s arguments are long on rhetoric and short on detail. In response to the hundreds of pages of billing records submitted by defendants’ attorneys, Superior identified few, if any, specific incidents of duplicative work. Superior complained that each defendant had counsel present at trial, while Viacom’s counsel was the “de facto lead counsel,” suggesting the other attorneys were unnecessary. But the fact that one attorney took the lead while the others took more supporting roles at trial does not establish that the three attorneys were unnecessary or unreasonable; indeed, it establishes that the attorneys did not repeat each other’s work at trial. Superior also suggested, in general, that the attorneys’ work was redundant, stating that there was no need for “three attorneys [to] prepare and propound identical written discovery; three attorneys separately [to] prepare for trial, including the preparation and filing of three sets of substantively-identical pretrial papers; three attorneys [to] serve as ‘lead’ trial counsel; and three attorneys [to] prepare and file three sets of substantively-identical post-trial papers.” This challenge identifies no specific documents as duplicative and no hours as unnecessary – nor does it demonstrate with any specificity how the written documents were substantively identical. For the first time on appeal, Superior identifies, in a string citation, certain documents in the record which it believes were duplicative. However, with no discussion of how the documents are, in fact, duplicative or whether the hours spent preparing them were unreasonable, it is truly too little, too late.
Superior’s argument is simply that it was unnecessary for the additional attorneys to even be present at trial to represent their clients’ individual interests. Superior presents no authority for the proposition that a multi-million dollar case must be litigated by only a single trial attorney.
Superior did specifically challenge some $14,000 in fees related to the trial attendance of a particular attorney for Regency who did not question any witnesses. The court disagreed, and Superior does not challenge this particular amount of fees on appeal.
It is, for example, possible that the attorneys shared the results of research, resulting in duplicative filings, but not duplicative billings.
The trial court read all of the documents filed in this case, and presided over the trial. It was in the best position to determine whether the services provided by defendants’ counsel were reasonably necessary to the defense of the action, and made its determination. We have reviewed the trial transcript as well as the voluminous filings the parties have designated as part of the record on appeal. While we have noticed some overlap in the documents filed, it is not enough for us to conclude that the trial court’s award was an abuse of discretion.
We also emphasize that the trial court did reduce the fees awarded to each party, based on their delay in raising the issue of the October 10 lease to the court. Thus, while both Trowbridge and Regency filed supplemental points and authorities in support of Trowbridge’s motion for summary judgment, the potential duplication of effort is irrelevant as neither was awarded fees for the preparation of these documents.
DISPOSTION
The judgment is reversed in part and affirmed in part. The matter is remanded to the trial court with directions to enter a judgment in Superior’s favor in the amount of the back rent on the Billboard, against which defendants are entitled to a full credit for the rent amounts tendered, and a calculation of prejudgment interest to which Superior is entitled for the late payment of said amounts. In all other respects, the judgment is affirmed. Defendants shall recover their costs on appeal. On remand, the trial court shall, in accordance with the views expressed herein, determine an award of reasonable attorney’s fees to defendants for their successful defense of the appeal, as Superior’s limited success on prejudgment interest does not alter the trial court’s prevailing party determination.
We Concur: KLEIN, P. J. KITCHING, J.