Opinion
NOT TO BE PUBLISHED
APPEALS from judgments of the Superior Court of Los Angeles County, Ct. No. BC340967 Mark V. Mooney, Judge.
Caldwell Leslie & Proctor, Christopher G. Caldwell, David C. Codell and Aron Ketchel for Defendants and Appellants.
Klein & Wilson and Gerald A. Klein for Plaintiffs and Respondents.
TURNER, P. J.
I. INTRODUCTION
These appeals arise out of two related superior court actions that were consolidated for purposes of arbitration. We consolidated the appeals from the judgments entered on the arbitration award. In Youssefzadeh v. 740 South Broadway Associates, LLC (Super. Ct. L.A. County, 2009, No. BC340967), the trial court corrected the arbitration award to excise an attorney fee and cost award in favor of 646 South Broadway Associates, LLC, as a prevailing party, confirmed the award as corrected, and entered judgment thereon. We reverse the judgment and remand with directions. We affirm the judgment in Youssefzadeh v. Youssefzadeh (Super. Ct. L.A. County, 2009, No. BC346867).
II. BACKGROUND
A. The Two Related Lawsuit
The two related superior court actions were filed by plaintiffs, Albert Youssefzadeh and Valentine Youssefzadeh, husband and wife, individually and as trustees of the Avy Family Trust. Both actions arose out of alleged mismanagement and self-dealing in connection with two buildings in downtown Los Angeles. One building was owned and operated by 646 South Broadway Associates, LLC (646 South Broadway) and the other by 740 South Broadway Associates, LLC (740 South Broadway). Interests in the two limited liability corporations were held by members of an extended family. Plaintiffs, individually and as trustees, were minority members of the two limited liability corporations.
This surname is sometimes spelled with one “s, ” “Yousefzadeh, ” and at other times with two, “Youssefzadeh.” For ease of reference, we adopt the later. Further, to avoid repetition and confusion, we refer to members of the Youssefzadeh and Sarshar families by their first names.
Plaintiffs filed Youssefzadeh v. 740 South Broadway Associates, LLC, supra, on October 5, 2005. The defendants were 740 South Broadway, 646 South Broadway, Nedjat (Ned) Sarshar, Sepehr Sarshar, Houman Sarshar, Parvaneh Youssefzadeh, individually and as trustee of the Youssefzadeh Revocable Trust, Farhad Youssefzadeh, Sloan Capital Partners, LLC, and Beverly Hills Management Company, Inc. (Beverly Hills Management Company). With the exception of Beverly Hills Management Company, each of the aforementioned parties owned an interest in one or both of the limited liability corporations. Beverly Hills Management Company managed the buildings. Beverly Hills Management Company and Sloan Capital Partners, were jointly owned by Farhad and a brother, Faramarz Youssefzadeh. Plaintiffs alleged they were the owners of a 15 percent interest in each of the two downtown buildings, 646 South Broadway and 740 South Broadway. Plaintiffs also alleged their co-owners had engaged in mismanagement, self-dealing, fiduciary duty and contract breach, conversion and fraud. Plaintiffs sought to dissolve the limited liability corporations and appoint a receiver. On January 27, 2006, defendants’ motion to compel arbitration was granted.
A few days after the first action was ordered arbitrated, on February 2, 2006, plaintiffs filed Youssefzadeh v. Youssefzadeh, supra, The defendants were Farhad, Nighttime Broadway Corporation, and The Entertainment Group doing business as Club 740 (Club 740). In a first amended complaint, plaintiffs asserted causes of action for conversion, declaratory relief, and intentional and negligent emotional distress infliction. Plaintiffs, individually and as trustees, alleged they were the sole beneficiaries of the Avy Family Trust; further, they received all income from the South Broadway properties as beneficiaries of the trust. Plaintiffs further alleged Nighttime Broadway Corporation, owned by their son-in-law, Farhad, entered into an illegal, unauthorized sublease with Club 740 for the Globe Theatre space at 740 South Broadway. Plaintiffs alleged Nighttime Broadway Corporation had converted monies owed to plaintiffs to its own use. Plaintiffs further alleged Farhad had intentionally or negligently inflicted emotional distress by “hurl[ing] profane insults and violent threats” at Albert, making multiple insulting and obscene telephone calls to Valentine and by threatening their daughter (and his wife) with death. On November 21, 2006, the trial court ordered that the causes of action for conversion and declaratory relief be arbitrated. The trial court stayed the action with respect to the emotional distress allegations pending the conclusion of the arbitration. Plaintiffs subsequently dismissed their emotional distress claims.
The trial court ordered the actions arbitrated pursuant to identical binding arbitration clauses in the operating agreements for the two limited liability corporations, 740 South Broadway Associates and 646 South Broadway Associates: “Except as otherwise provided in this Agreement, any controversy or dispute arising out of this Agreement, the interpretation of any of the provisions hereof, or the action or inaction of any Member or Manager hereunder shall be submitted to arbitration in Los Angeles, California. Any award or decision obtained from any such arbitration proceeding shall be final and binding on the parties, and judgment upon any award thus obtained may be entered in any court having jurisdiction thereof. No action at law or in equity based upon any claim arising out of or related to this Agreement shall be instituted in any court by any Member except (a) in an action to compel arbitration... or (b) an action to enforce an award obtained in an arbitration proceeding in accordance with this Section....” The operating agreements also contained identical attorney fee provisions, “In the event that any dispute between the Company and the Members or among the Members should result in litigation or arbitration, the prevailing party in such dispute shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys’ fees and expenses.”
B. The Arbitration
Retired Court of Appeal Presiding Justice Charles S. Vogel served as the arbitrator. At the outset of the arbitration, plaintiffs abandoned their contract and fiduciary duty breach claims. Plaintiffs’ counsel stated his client’s assertions in arbitration consisted of the following: a derivative claim for damages on behalf of 740 and 646 South Broadway, because the controlling members have engaged in usurpation of an economic opportunity; dissolution of the limited liability corporations because the controlling members engaged in “pervasive fraud”; a declaration that plaintiffs are entitled to exercise provisions of the operating agreements with respect to a capital call not paid by the other members; and recovery of attorneys’ fees for failure to produce records pursuant to Corporations Code section 17106.
On May 27, 2008, Retired Presiding Justice Vogel issued an interim award. With respect to plaintiffs’ derivative claim, Retired Presiding Justice Vogel ordered defendants Ned, Farhad and Beverly Hills Management Company to pay damages and to disgorge profits received with respect to an economic opportunity they usurped from 740 South Broadway. He denied plaintiffs’ requests to dissolve the limited liability corporations and for declaratory relief. He found 740 South Broadway and its manager, Beverly Hills Management Company had failed without justification to produce documents; however, he did not award any attorney fees in connection with that claim. Retired Presiding Justice Vogel further found plaintiffs, as prevailing parties, were entitled to recover their attorney fees from 740 South Broadway and Beverly Hills Management Company. Retired Presiding Justice Vogel specifically identified the award as interim stating: “The further determination to be made at any future hearing, or based on written submissions, shall be embodied in a Final Award which shall incorporate the contents of the Interim Award. It is not intended that the Interim Award be subject to review either pursuant to 9 U.S.C. §§ 9, 10 or sections 1284 and 1285 of the California Code of Civil Procedure.”
646 South Broadway filed a motion before Retired Presiding Justice Vogel to correct the interim award. 646 South Broadway argued plaintiffs had not prevailed on any of their claims against it. Thus, 646 South Broadway argued it was a prevailing party entitled to attorney fees. As reflected in the final arbitration award, Retired Presiding Justice Vogel granted 646 South Broadway’s request.
Retired Presiding Justice Vogel issued a final arbitration award on August 7, 2008. He found: plaintiffs were to recover $86,190.75 from Ned, Farhad and Beverly Hills Management Company, on plaintiffs’ derivative claim as to 740 South Broadway’s economic opportunity; plaintiffs’ dissolution request was denied; Beverly Hills Management Company and 740 South Broadway had failed without justification to produce documents as required by law and the operating agreement; plaintiffs as prevailing parties were entitled to recover $345,569 in attorney fees and costs from Farhad, Ned and Beverly Hills Management Company; and 646 South Broadway, as a prevailing party, was entitled to recover $495,225 in attorney fees and costs from plaintiffs, individually and as trustees.
C. Post-Arbitration Proceedings In The Trial Court
On September 3, 2008, plaintiffs filed a petition to correct and confirm the arbitration award. On February 19, 2009, the trial court granted the petition. The trial court corrected the award to excise all references to 646 South Broadway as a prevailing party entitled to attorney fees and costs. The trial court ruled in pertinent part: “The Court finds that the arbitrator was without jurisdiction to modify his interim May 27 Award to make substantive changes. Landis v. Pinkertons, Inc. (2004) 122 Cal.App.4th 985. The subsequent finding of 646 [South Broadway] a prevailing party [sic] in the May 27 interim award was not the result of an inadvertent omission. Any correction to the Interim Award as a part of the August 4, 2008 Final Award was untimely pursuant to Code of Civil Procedure Section 1284.”
The September 28, 2009 judgment in Youssefzadeh v. 740 South Broadway Associates, LLC, supra, statesas follows: “On November 17, 2008, the court heard the petition... to correct and confirm an arbitration award... a copy of which is attached as Exhibit 1. On February 19, 2009, the court ordered the arbitration award be confirmed with [corrections omitting any reference to 646 South Broadway as a prevailing party entitled to recover its attorney fees]. [¶] On July 17, 2009, the court heard a motion for an award of attorneys’ fees by Plaintiffs, and a motion for an award of attorneys’ fees by 646 South Broadway Associates, LLC (‘646’) and 740 South Broadway Associates, LLC (‘740’). After considering the pleadings and the arguments of counsel, the court awarded attorneys’ fees to Plaintiffs in the amount of $30,930.50, as against 740, Nedjat Sarshar (‘Nedjat’), Farhad Youssefzadeh (‘Farhad’), and Beverly Hills Management Company (‘BHMC’). The court also awarded attorneys’ fees in the amount of $34,120.89 to 646 and 740 as against Plaintiffs pursuant to their petition to compel arbitration. [¶] In addition, defendants 646, 740, Nedjat, Sepehr Sarshar, Houman Sarshar, Parvaneh Youssefzadeh, Sloan Capital Partners, LLC, Farhad, BHMC, and Broadway Holding Group, Inc., shall recover $2,235.00 of costs from Plaintiffs.”
The September 28, 2009 judgment in Youssefzadeh v. Youssefzadeh, supra, recites the trial court confirmed the arbitration award as corrected. Additionally, the judgment provides: “As to the [emotional distress] claims in the third and fourth causes of action not addressed in the arbitration, such claims were voluntarily dismissed and Plaintiffs shall take nothing on those claims. [¶] Defendants Farhad Yousefzadeh and Nighttime Broadway Corporation shall recover costs of $602, as against Plaintiffs.”
III. DISCUSSION
A. The Order Correcting The Arbitration Award
Defendants contend the trial court erred in concluding Retired Presiding Justice Vogel exceeded his authority when, after issuing the interim award, he found 646 South Broadway was a prevailing party entitled to recover its attorney fees. We agree. In light of the strong public policy in favor of arbitration, judicial review of an award is quite limited. (Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P. (2008) 44 Cal.4th 528, 534; Board of Education v. Round Valley Teachers Assn, (1996) 13 Cal.4th 269, 275; Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11.) The parties to an arbitration agreement impliedly agree that the arbitrator’s decision will be binding and final. (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 831; Moncharsh v. Heily & Blase, supra, 3 Cal.4th at pp. 9-10.) In general, a court cannot review the merits of the controversy, the sufficiency of the evidence or the validity of the arbitrator’s reasoning. (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 11; Pierotti v. Torian (2000) 81 Cal.App.4th 17, 21, fn. 2.) Moreover, with narrow exceptions, an arbitrator’s decision cannot be reviewed for errors of law or fact even if the mistake appears on the face of the award and causes substantial injustice. (Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P., supra, 44 Cal.4th at p. 534 ; Moncharsh v. Heily & Blase, supra, 3 Cal.4th at pp. 6, 11, 27-28.) Thus, an arbitrator may make a binding award, which must be judicially enforced even though it conflicts with substantive law and would be reversible error if entered by a court in civil litigation. (Moore v. First Bank of San Luis Obispo (2000) 22 Cal.4th 782, 784; State Farm Mutual Auto. Ins. Co. v. Guleserian (1972) 28 Cal.App.3d 397, 402; Durand v. Wilshire Ins. Co. (1969) 270 Cal.App.2d 58, 61.) Judicial review of an arbitration award in a case which does not involve a statutory right is limited to those situations enumerated in Code of Civil Procedure section 1286.2 to vacate an award or section 1286.6 to correct it. (Advanced Micro Devices, Inc. v. Intel Corp, (1994) 9 Cal.4th 362, 366; Moncharsh v. Heily & Blase, supra, 3 Cal.4th at pp. 26-28.)
All further statutory references are to the Code of Civil Procedure unless otherwise noted.
Grounds for correcting an arbitration award are set forth in section 1286.6: “Subject to Section 1286.8, the court, unless it vacates the award pursuant to Section 1286.2, shall correct the award and confirm it as corrected if the court determines that: [¶] (a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; [¶] (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or [¶] (c) The award is imperfect in a matter of form, not affecting the merits of the controversy.” We review de novo the trial court’s decision to correct the arbitration award on grounds the arbitrator exceeded his powers. (Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 376, fn. 9; Jones v. Humanscale Corp. (2005) 130 Cal.App.4th 401, 408; Oakland-Alameda County Coliseum Authority v. CC Partners (2002) 101 Cal.App.4th 635, 641-642, disapproved on another point in Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1361; Alexander v. Blue Cross of California (2001) 88 Cal.App.4th 1082, 1087.) However, we also give substantial deference to Retired Presiding Justice Vogel’s own assessment of his ability to resolve the prevailing party issue as to 646 South Broadway. (Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at pp. 372-373, 381; Glassman v. McNab (2003) 112 Cal.App.4th 1593, 1601; Hightower v. Superior Court (2001) 86 Cal.App.4th 1415, 1434.)
As noted above, plaintiffs’ claims in arbitration with respect to 646 South Broadway were: a derivative damage claim on grounds the controlling members had usurped an economic opportunity belonging to the limited liability corporation; a dissolution claim on grounds the controlling members had engaged in pervasive fraud; a declaratory relief request regarding a capital call; and to recover attorney fees as a result of 646 South Broadway’s failure to produce records as required by law. In his interim award, Retired Presiding Justice Vogel concluded: a majority member usurped an economic opportunity that belonged to 740 South Broadway; there was insufficient evidence of pervasive fraud to justify dissolution of 740 South Broadway or 646 South Broadway; plaintiffs were not entitled to declaratory relief with respect to the capital call; and 740 South Broadway and its manager had failed without justification to produce records as required by the operating agreement and the Corporations Code. In other words, Retired Presiding Justice Vogel did not find in plaintiffs’ favor with respect to 646 South Broadway on any ground.
We respectfully conclude the trial court erred when it corrected the arbitration award. We conclude Retired Presiding Justice Vogel did not exceed his powers when he explicitly ruled, after issuing an interim award, that 646 South Broadway was a prevailing party entitled to attorney fees. It is within an arbitrator’s broad scope of authority to adopt an incremental approach to an award. (Mossman v. City of Oakdale (2009) 170 Cal.App.4th 83, 91; Board of Trustees of California State University v. Public Employment Relations Bd. (2007) 155 Cal.App.4th 866, 881; Hightower v. Superior Court, supra, 86 Cal.App.4th at pp. 1419, 1433-1435; San Jose Federation etc. Teachers v. Superior Court (1982) 132 Cal.App.3d 861, 866-867.) Such an approach is neither prohibited by nor offensive to the California Arbitration Act. (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 351; Hightower v. Superior Court, supra, 86 Cal.App.4th at p. 1419.) Additionally, here, an incremental approach was authorized by the very rules the parties agreed would govern the arbitration of their dispute-the Judicial Arbitration and Mediation Services Comprehensive Arbitration Rules and Procedures as revised February 19, 2005. Judicial Arbitration and Mediation Services Rule 24(d) states: “In addition to the final Award, the Arbitrator may make other decisions, including interim or partial rulings, orders and Awards.” Further, Retired Presiding Justice Vogel took pains to identify his interim award as such and specified that it would be followed by a final award. (See Bosack v. Soward (9th Cir. 2009) 586 F.3d 1096, 1103; Knight, et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 2009) ¶ 5.422.5, p. 5-284 (rev. #1, 2009).) A final award conclusively determines the matters submitted, leaving nothing further to be done. (Jacob v. Ketcham (1869) 37 Cal. 197, 201; Thibodeau v. Crum (1992) 4 Cal.App.4th 749, 759; Ulene v. Murray Millman of California (1959) 175 Cal.App.2d 655, 663; 6 Cal.Jur.3d (2003) Arbitration and Award, § 107, pp. 200-202.) The interim award did not determine all of the matters submitted and did not purport to do so. Moreover, there is no assertion any party was misled to believe the interim award was final.
Nor did Retired Presiding Justice Vogel run afoul of the timeliness requirements of section 1284 which provides in part: “The arbitrators, upon written application of a party to the arbitration, may correct the award upon any of the grounds set forth in subdivisions (a) and (c) of Section 1286.6 not later than 30 days after service of a signed copy of the award on the applicant. [¶] Application for such correction shall be made not later than 10 days after services of a signed copy of the award on the applicant.” As discussed above, the interim award was not final. Further, in his interim award, Retired Justice Vogel disavowed section 1284’s applicability: “It is not intended that the Interim Award be subject to review either pursuant to 9 U.S.C. §§ 9, 10 or sections 1284 and 1285 of the California Code of Civil Procedure.” The interim award, leaving further issues to be decided, was not an “award” within the meaning of section 1284; it could not be confirmed, corrected or vacated by a court. (Knight, et al., Cal. Practice Guide: Alternative Dispute Resolution, supra, ¶ 5:422.5, at p. 5-284.)
Moreover, even if Retired Presiding Justice Vogel had acted in excess of his powers, section 1286.6 did not authorize the trial court to render a decision that affected the merits of the arbitration decision. As noted above, the judicial power to correct an arbitration award is limited to the following circumstances: “(a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; [¶] (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or [¶] (c) The award is imperfect in a matter of form, not affecting the merits of the controversy.” (§ 1286.6.) Neither subdivisions (a) nor (c) are applicable here. And as to subdivision (b), excising all mention of 646 South Broadway as a prevailing party entitled to attorney fees as well as the attorney fee award can in no way be considered a correction not affecting the merits. (See Moshonov v. Walsh (2000) 22 Cal.4th 771, 776; Jones v. Kvistad (1971) 19 Cal.App.3d 836, 841; Banks v. Milwaukee Insurance Company (1966) 247 Cal.App.2d 34, 37-38; 6 Cal.Jur.3d, Arbitration and Award, supra, § 136, at pp. 248-250.)
B. The Order On Defendants’ Request For Pre-Arbitration Attorney Fees
While plaintiffs’ petition to correct and confirm the arbitration award was pending in the trial court, defendants filed a motion to recover $266,740.50 in attorney fees incurred in pre-arbitration judicial proceedings. Defendants asserted they were entitled to recover under the attorney fee provisions of their operating agreements and Civil Code section 1717. Defendants observed that plaintiffs had engaged in extensive pre-arbitration litigation, all of which was in direct contravention of the operating agreements’ arbitration clauses; the arbitration clauses precluded any action in the trial court other than to compel or enforce arbitration. The trial court ruled: “The Court does not consider time spent on opposing the application for the appointment of a receiver, discovery motions, or other such proceedings to be related to enforcement of the arbitration provision. The Court directs counsel to limit their request for fees only to those fees reasonably related to the motions to compel arbitration.” Following supplemental briefing, the trial court awarded defendants $34,120.89 in attorney fees as against plaintiffs “pursuant to [defendants’] petition to compel arbitration.”
As noted above, defendants’ operating agreements contained identical binding arbitration clauses as follows: “Except as otherwise provided in this Agreement, any controversy or dispute arising out of this Agreement, the interpretation of any of the provisions hereof, or the action or inaction of any Member or Manager hereunder shall be submitted to arbitration in Los Angeles, California. Any award or decision obtained from any such arbitration proceeding shall be final and binding on the parties, and judgment upon any award thus obtained may be entered in any court having jurisdiction thereof. No action at law or in equity based upon any claim arising out of or related to this Agreement shall be instituted in any court by any Member except (a) in an action to compel arbitration... or (b) an action to enforce an award obtained in an arbitration proceeding in accordance with this Section... ,” (Italics added.) The operating agreements also contained identical attorney fee provisions: “In the event that any dispute between the Company and the Members or among the Members should result in litigation or arbitration, the prevailing party in such dispute shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys’ fees and expenses.” (Italics added.)
In the absence of any extrinsic evidence as to the meaning of the terms, we construe the operating agreements de novo. (Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 183; Gil v. Mansano (2004) 121 Cal.App.4th 739, 743; Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 705.) We apply the ordinary rules of contract interpretation. (Hotels Nevada, LLC v. Bridge Banc, LLC (2005) 130 Cal.App.4th 1431, 1435; In re Tobacco Cases I (2004) 124 Cal.App.4th 1095, 1104.) Our Supreme Court has held: “‘“The fundamental rules of contract interpretation are based on the premise that the interpretation of a contract must give effect to the ‘mutual intention’ of the parties. ‘Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. (Id., § 1639.) The “clear and explicit” meaning of these provisions, interpreted in their “ordinary and popular sense, ” unless “used by the parties in a technical sense or a special meaning is given to them by usage” (id., § 1644), controls judicial interpretation. (Id., § 1638.)’ [Citations.] A [contract] provision will be considered ambiguous [only] when it is capable of two or more constructions, both of which are reasonable. [Citation.] But language in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract.” [Citation.]’” (TRB Investments, Inc. v. Fireman’s Fund Ins. Co. (2006) 40 Cal.4th 19, 27; accord, People v. Shelton (2006) 37 Cal.4th 759, 767.) As the Court of Appeal explained in Tobacco Cases I: “‘The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. (Civ. Code, § 1636.) If contractual language is clear and explicit, it governs. (Civ. Code, § 1638.)’ (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264.) ‘The court should attempt to give effect to the parties’ intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made [citations].’ (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353.)” (In re Tobacco Cases I, supra, 124 Cal.App.4th at p. 1104; accord, Victoria v. Superior Court (1985) 40 Cal.3d 734, 744.) Consistent with the foregoing, broad language in an attorney fee provision supports a broad interpretation. (Chinn v. KMR Property Management, supra, 166 Cal.App.4th at pp. 182-183; Gil v. Mansano, supra, 121 Cal.App.4th at p. 744.)
The attorney fee provisions in the operating agreements are very broad. They provide for attorney fees to the prevailing party in “any dispute, ” in “litigation or arbitration, ” for enforcing “any right.” The attorney fee provisions do not limit the prevailing party’s recovery to fees incurred to enforce the arbitration agreement. The “any dispute” language is sufficiently broad to encompass litigation beyond arbitration enforcement proceedings. We conclude the attorney fee provision of the operating agreements encompass an award of attorney fees to the prevailing party in any and all of the pre-arbitration litigation.
Further, the amount of attorney fees to be awarded under a contract is within the sound discretion of the trial court. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094-1095; Serrano v. Priest (1977) 20 Cal.3d 25, 49.) We review an order apportioning and awarding attorney fees for an abuse of discretion. (Track Mortgage Group, Inc. v. Crusader Ins. Co. (2002) 98 Cal.App.4th 857, 868; San Dieguito Partnership v. San Dieguito River Valley Regional etc. Authority (1998) 61 Cal.App.4th 910, 920, disapproved on another point in PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1097, fn. 5; Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111.) Here, the trial court apportioned recoverable attorney fees based on their connection to defendants’ motions to compel arbitration. But, as discussed above, the broad attorney fee provisions in defendants’ operating agreements support an award of attorney fees beyond those directly incurred to move the superior court actions into arbitration. The attorney fee provisions specifically state: “In the event that any dispute between the Company and the Members or among the Members should result in litigation or arbitration, the prevailing party in such dispute shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party....” (Italics added.) Given the broad reach of that language, we conclude it was beyond the allowable scope of judicial discretion to apportion attorney fees in such a way as to categorically deny defendants any attorney fees incurred in connection with discovery and receivership-related pre-arbitration judicial proceedings instituted by plaintiffs in direct contravention of the parties’ agreements. On remand, the trial court must reconsider defendants’ requests for attorney fees incurred in opposing plaintiffs’ litigation outside the arbitral forum. We leave the amount of fees to be awarded in the trial court’s good hands.
C. Ambiguity In The Judgments
Defendants assert the judgments entered in the two related actions fail to state with clarity the parties in whose favor judgment is entered and the relief awarded. We agree that the judgments lack necessary clarity. (See M.B. Zaninovich, Inc. v. Teamster Farmworker Local Union 946 (1978) 86 Cal.App.3d 410, 413, fn. 1; Bowman v. Ruchti Brothers (1970) 4 Cal.App.3d 897, 903.) On remand, the trial court must enter judgments that clearly and definitively state in whose favor the judgments are entered and the relief awarded.
IV. DISPOSITION
The judgment entered in Youssefzadeh v. 740 South Broadway Associates, LLC (Super. Ct. L.A. County, 2009, No. BC340967) is reversed. On remand, the trial court is to enter an order denying the plaintiffs’ petition to correct the arbitration award and confirming the award without correction. The judgment in Youssefzadeh v. Youssefzadeh (Super. Ct. L.A. County, 2009, No BC346867) is affirmed. Defendant 646 South Broadway Associates, LLC, is to recover its costs on appeal from plaintiffs, Albert Youssefzadeh and Valentine Youssefzadeh. On remand, the trial court is to clarify the judgments in Youssefzadeh v. 740 South Broadway Associates, LLC and Youssefzadeh v. Youssefzadeh and re-enter judgments that clearly state in whose favor the judgment lies and the relief awarded.
We concur: KRIEGLER, J., KUMAR, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.