Filed 1/23/20 Jefferson Pointe Professional Center Property Owners Assn. v. Kriger CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

JEFFERSON POINTE PROFESSIONAL CENTER PROPERTY OWNERS ASSOCIATION,

Plaintiff and Appellant,

v.

JOEL M. KRIGER,

Defendant and Appellant.

D075946

(Super. Ct. No. MCC1401325)

APPEALS from a judgment and postjudgment order of the Superior Court of Riverside County, Raquel A. Marquez, Judge. Judgment affirmed; postjudgment order affirmed as modified.

Grebow & Rubin and Arthur Grebow for Plaintiff and Appellant.

Law Office of Philip H. Dyson and Philip H. Dyson for Defendant and Appellant.

After settling a lawsuit for his client, a since-disbarred attorney transferred his client’s settlement funds from a client trust account into an investment vehicle he managed, without obtaining prior written consent. The client, Jefferson Pointe Professional Center Property Owners Association (Jefferson Pointe), sued the attorney, Clayton M. Anderson, when he failed to return the settlement funds upon demand. It also sued Joel M. Kriger, who it claimed was held out to be Anderson’s law partner. Only one cause of action for conversion proceeded to a bench trial, where the court entered judgment against Anderson but in favor of Kriger. Jefferson Pointe appeals the judgment entered in Kriger’s favor, and Kriger appeals the denial of his postjudgment motion for attorney’s fees.

As we explain, substantial evidence supports the court’s finding that Jefferson Pointe impliedly consented to or ratified the investment of its settlement funds into Anderson’s investment vehicle. For reasons we explain, this renders Jefferson Pointe’s conversion cause of action against Kriger time-barred under the one-year limitations period in section 340.6 of the Code of Civil Procedure. We accordingly affirm the judgment entered in Kriger’s favor.

Turning to his appeal, Kriger is entitled to recover attorney’s fees, but only as to the breach of contract action summarily adjudicated in his favor. Although the trial court denied attorney’s fees outright, it made a finding that to the extent Kriger was entitled to receive attorney’s fees for the breach of contract claim, he should receive only $46,923. Kriger does not establish that this was an abuse of discretion, so we modify the postjudgment order to award him $46,923 in attorney’s fees.

FACTUAL AND PROCEDURAL BACKGROUND

Jefferson Pointe is an association that manages five business condominium buildings in Murrieta. In 2010, it retained “The Law Office of Anderson & Kriger” on a contingency fee basis to pursue construction defect litigation. (Jefferson Pointe Professional Center et al. v. Sudweeks Development, LLC (Super. Ct. Riverside County, 2010, No. RIC10024976) (Sudweeks).) Sudweeks settled in 2012 for over $1.8 million, with Jefferson Pointe entitled to receive a net settlement amount of $982,549.69. This case involves a dispute between Jefferson Pointe and its former counsel over the handling of those settlement funds.

1. The A-Plan Investment, Complaint, and Pretrial Proceedings

In February 2013 Jefferson Pointe’s Sudweeks counsel, Clayton M. Anderson, disbursed $182,549.69 of the settlement funds to Jefferson Pointe. Later that month, Anderson directed his bookkeeper to transfer the remaining $800,000 from the client trust account into A-Plan Investment Services, Inc. (A-Plan). A-Plan was an investment vehicle to advance costs related to pending construction defect litigation being pursued by Anderson on behalf of various clients. In theory, if the litigation was successful, A-Plan investors stood to realize a return on their investment.

Before the $800,000 transfer, Anderson did not disclose the terms of the investment in writing or otherwise. He likewise did not obtain Jefferson Pointe’s written consent or advise it that it could seek independent counsel. The investment was unsecured; A-Plan was not licensed to operate as an investment company; and A-Plan was a suspended corporation.

Nevertheless, Jefferson Pointe’s agents were aware of the investment by March 2013. Board members tried repeatedly to call Anderson and establish a payment plan, but they did not refuse any interest checks or object in writing to the investment. Jefferson Pointe’s attorneys ultimately wrote three demand letters a year later in March 2014, but Anderson did not return the remaining settlement funds. In total, between March 2013 and September 2014, Jefferson Pointe deposited 18 interest payments from A-Plan totaling $153,925.38, and a principal payment of $25,000.

At that point Jefferson Pointe sued. Its operative fourth amended complaint named as defendants Anderson, Kriger, Joel M. Kriger, A.P.C., and Anderson & Kriger, LLP. The trial court granted defendants’ motions for summary adjudication as to all but one cause of action for conversion asserted against Anderson and Kriger individually, finding the remaining causes of action barred by the one-year statute of limitations for wrongful conduct “arising in the performance of professional services” (§ 340.6, subd. (a)). Jefferson Pointe admitted knowing about Anderson’s transfer of its settlement funds into A-Plan in March 2013, yet did not file suit until September 2014.

The court denied summary adjudication as to the conversion claim, finding “no evidence that the conversion relates to the professional obligation of counsel.” That single claim proceeded to a bench trial in April 2017.

2. Trial

Jefferson Pointe called Kriger as its first trial witness. Kriger explained that he and Anderson had been law partners from 1992 to 2003. The partnership ended in 2003 when Kriger sold his share to Anderson and the two formed “Anderson & Kriger LLP” with their new solo practices as the two limited-liability partners. Anderson & Kriger LLP had no bank accounts or client trust accounts and never practiced law. Kriger was a creditor of A-Plan, which he viewed as “one [and] the same” as Anderson. But he had no other connection with A-Plan. Kriger and Anderson filed dissolution paperwork for Anderson & Kriger LLP in December 2012. In 2013, they agreed to indemnify one another as to any third-party claims brought against them or Anderson & Kriger, LLP.

Kriger learned through a phone call with Jefferson Pointe’s then-president John Gwinn in December 2013 that it was having an issue with its settlement funds. Until that point, Kriger said he had never heard of Jefferson Pointe and never had control over any account bearing its settlement funds. In January 2014, Kriger signed agreements with Anderson to forgive a promissory note of A-Plan’s for $250,000 in exchange for a real estate transaction. When pressed by Jefferson Pointe’s counsel, Kriger claimed he had no knowledge at that point in time that A-Plan had missed payments to any investor.

Chris McCann, Jefferson Pointe’s board president from 2007 to 2013, testified that he always believed Anderson and Kriger were partners. Jefferson Pointe signed a retainer with the “Law Offices of Anderson Kriger”; the Sudweeks complaint listed “Anderson & Kriger” as counsel; and letters bore the masthead, “Anderson & Kriger . . . A Limited Liability Partnership” and identified Kriger’s practice as the firm’s “Homeowner Association Division.” Anderson told McCann that he and Kriger were partners and encouraged the board to use Kriger as general counsel. John Gwinn, who succeeded McCann as board president in late 2013, had a similar impression. He remembered Anderson telling them that he handled construction defect work while his partner Kriger managed the firm’s homeowners association work.

McCann further testified that Jefferson Pointe never approved the transfer of $800,000 from its trust account to A-Plan. It received a written offer to invest in October 2012 for a 13 percent annual interest rate. Although the board was “intrigued” and reached out to a couple of A-Plan investors for more information, it did not commit. When Anderson’s bookkeeper Michelle Cashen followed up in January 2013, McCann replied, “We have not come to any conclusions on working with A-Plan.” To the board’s surprise, it received a letter in March welcoming it to A-Plan and referencing an $800,000 promissory note it had never signed. As Gwinn would explain, Jefferson Pointe never agreed to the investment, despite accepting interest payments. It was happy to finally be receiving some of its money and cashed the checks for building repairs.

Anderson did not testify, invoking his Fifth Amendment right against self-incrimination. Cashen described depositing Jefferson Pointe’s settlement funds into A-Plan at Anderson’s direction. William Sickinger, the associate attorney who handled Sudweeks, believed he worked for “Anderson & Kriger,” and not just for Anderson. Malpractice experts also testified, offering differing opinions as to whether Kriger bore liability for Anderson’s handling of Jefferson Pointe’s settlement funds.

3. Statement of Decision and Judgment

The court issued a detailed statement of decision. First, it found that Anderson and Kriger worked as law partners, irrespective of how their organizational relationship changed over the years. “The salient feature for this case, since we are dealing here with attorneys, is how their clients viewed them. And in this, the evidence is clear that both Anderson and Kriger were holding themselves out to the public, to their own clients, to the others’ clients, and to their employees as working in a legal partnership with each other, with all of the responsibilities that entails.”

Second, the court agreed with the State Bar that Anderson had violated the Rules of Professional Conduct. “As each of these acts were taken by the Law Offices of Anderson & Kriger,” the court further determined that Kriger violated the Rules of Professional Conduct by failing to adequately control the law practice and take steps to prevent Anderson from making misrepresentations in the practice.

Finally, the court turned to the merits of the claim, evaluating the nature of the conversion to determine what statute of limitations applied. As explained below, the court entered judgment in favor of Jefferson Pointe in the amount of $775,000 against Anderson and A-Plan, but it entered judgment against Jefferson Pointe and in favor of Kriger, finding any conversion action against Kriger time-barred.

As the court explained, a conversion action against Kriger could rest only on the initial transfer of settlement funds from the client trust account into A-Plan, not A-Plan’s subsequent refusal to return Jefferson Pointe’s funds upon demand. A-Plan was an alter ego of Anderson, but Kriger was a creditor of A-Plan, not an owner or member of it. And as to the initial transfer, the court determined that Jefferson Pointe had impliedly consented to or ratified the transaction. Its agents received investment information about A-Plan; were notified after the investment; failed to object upon learning of the transfer; knew they were receiving interest payments from the investment; and knowingly accepted at least 18 interest payments as well as a principal payment thereafter. This implied consent or ratification meant there was no conversion as to the initial transfer.

The court went on to explain that the Rules of Professional Conduct plainly require more than implied consent and ratification. “And to be sure, that was not done here.” But that noncompliance did not alter the fact that there was consent. “Here no duress, nor anything else, has been shown by the evidence sufficient to vitiate Plaintiff’s consent to the initial transfer of funds and investment with A-Plan.”

To the extent violations of the Rules of Professional Conduct negated consent and rendered the initial transfer a conversion, the court found that the action was governed by a one-year statute of limitations for actions “arising in the performance of professional services” (§ 340.6, subd. (a)), based on Lee v. Hanley (2015) 61 Cal.4th 1225, 1237 (Lee) because it requires proof that an attorney violated his professional obligations. Jefferson Pointe received notice of the transfer to A-Plan at the latest by March 2013 and did not sue until September 2014, rendering the action against Kriger time-barred.

The court reached a different result as to Anderson. A conversion claim against him could rest on his refusal to return settlement funds upon Jefferson Pointe’s March 2014 demand, and that action was not time barred. Accordingly, the court entered judgment in Jefferson Pointe’s favor, finding Anderson and his alter-ego A-Plan converted $775,000 in March 2014.

4. Postjudgment Motion for Attorney’s Fees

Following entry of judgment, Kriger filed a motion seeking to recover $469,230 in attorney’s fees and $33,984.94 in additional costs pursuant to a provision in Jefferson Pointe’s retainer agreement. The court denied Kriger’s motion, explaining that the gravamen of the action was not “on the contract” as required by Civil Code section 1717, but rather based on a breach of fiduciary duty and conversion. It also rejected Kriger’s request for additional costs.

DISCUSSION

Jefferson Pointe appeals from the judgment in favor of Kriger on the conversion cause of action. Kriger appeals the denial of its motion for attorney’s fees and additional costs. As we explain, we affirm the judgment and modify the postjudgment order to award Kriger $46,923 in attorney’s fees on the breach of contract cause of action.

1. Jefferson Pointe’s Appeal

Jefferson Pointe challenges the court’s finding of implied consent, arguing any such consent was vitiated by A-Plan’s illegality, Jefferson Pointe’s misconception of facts, and the economic duress that led it to accept interest payments. It accordingly maintains that the three-year statute of limitations applies, rendering its conversion cause of action against Kriger timely-filed. Jefferson Pointe also raises a new tolling argument for the first time on reply. We reject each of these contentions, finding the tolling claim forfeited. As the trial court determined, any conversion action against Kriger necessarily rests on proof that an attorney violated the Rules of Professional Conduct. Under Lee, supra, 61 Cal.4th 1225, the one-year limitations period under section 340.6 applies and bars Jefferson Pointe’s conversion claim.

a. Legal Principles

“An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission . . . .” (§ 340.6, subd. (a).) On the other hand, conversion is typically subject to a three-year limitations period. (§ 338, subd. (c)(1).) The central question is what statute of limitations applies to Jefferson Pointe’s conversion claim against Kriger for the initial transfer of its settlement funds to A-Plan. The question is critical because the undisputed facts show that Jefferson Pointe knew of the transfer in March 2013 but did not sue until September 2014.

Both parties also agree on the framework for the legal analysis: Lee, supra, 61 Cal.4th 1225 controls. If Jefferson Pointe’s conversion claim “necessarily depends on proof that an attorney violated a professional obligation,” the one-year limitations period applies. (Id. at pp. 1236−1237, 1238.) “[S]ection 340.6(a) applies to a claim when the merits of the claim will necessarily depend on proof that an attorney violated a professional obligation—that is, an obligation the attorney has by virtue of being an attorney—in the course of providing professional services.” (Id. at p. 1229.) “By contrast, . . . section 340.6(a) does not bar a claim for wrongdoing—for example, garden-variety theft—that does not require proof that the attorney has violated a professional obligation, even if the theft occurs while the attorney and the victim are discussing the victim’s legal affairs.” (Id. at p. 1237.)

Comparing the investment of its settlement funds in A-Plan to garden variety theft, Jefferson Pointe argues the trial court erred in applying the one-year statute of limitations to find its action against Kriger time-barred. Specifically, it takes issue with the court’s finding that it impliedly consented to or ratified the A-Plan investment when it did not object after the transfer and thereafter accepted interest payments. As we explain, substantial evidence supports the court’s factual finding, notwithstanding Jefferson Pointe’s claim that illegality, mistake of fact, or economic duress vitiated consent.

b. Substantial Evidence Supports the Court’s Finding of Implied Consent.

“[T]here can be no conversion where an owner either expressly or impliedly assents to or ratifies the taking, use or disposition of his property.” (Farrington v. A.Teichert & Son, Inc. (1943) 59 Cal.App.2d 468, 474; see French v. Smith Booth Usher Co. (1942) 56 Cal.App.2d 23, 27−28 (French); CACI No. 2100 [plaintiff must prove it “did not consent”]; Civ. Code, § 3515 [one “who consents to an act is not wronged by it”].) Consent ” ‘is not, strictly speaking, a privilege, or even a defense, but goes to negative the existence of any tort in the first instance.’ ” (Tavernier v. Maes (1966) 242 Cal.App.2d 532, 552.) By negating the wrongfulness element, consent “prevents the existence of a tort.” (Ibid.)

Although McCann and Gwinn testified they never agreed to invest, they admitted receiving investment information before the transfer, being notified after the transfer, then tacitly accepting the investment as they received at least 18 interest payments and a principal payment totaling $175,925.38. Crediting the reasonable inferences to be drawn from this evidence, the court found that Jefferson Pointe had impliedly consented to or ratified the A-Plan investment. To the extent ethical violations vitiated consent, the conversion claim necessarily depended on proof that an attorney violated a professional obligation and was time-barred under Lee, supra, 61 Cal.4th 1225. We conclude substantial evidence supports the court’s finding of implied consent.

Anderson first asked Jefferson Pointe to invest in A-Plan in October 2012. Finding the proposal “intriguing,” the board discussed it internally and contacted other A-Plan investors. Cashen followed up in January. In March 2013, Jefferson Pointe received a welcome packet indicating that $800,000 of its settlement funds had been invested in A-Plan and referencing a promissory note it had never signed. McCann met with Anderson later that spring and called him a few times. Anderson attended a board meeting in August, but McCann did not recall asking him then about the settlement funds.

Not until November did McCann write Anderson formally asking him to return the $800,000 in four installments. McCann suggested “interest payments [would] remain in effect on moneys that remain with A-Plan during this payment process.” Anderson did not respond, and the board continued accepting interest payments and a $25,000 principal check. McCann conceded “it wasn’t secret; the board knew that it was receiving [interest] checks from A-Plan.” Not once did it refuse an interest payment and instead demand return of its principal.

Cashen received periodic calls from Jefferson Pointe’s agents asking her about the status of interest payments. She did not recall any phone calls expressing confusion about the payments or any objection that the board had never agreed to invest in A-Plan. Nor did she receive any follow-up e-mails when she sent Jefferson Pointe tax forms for its interest payments.

Near the end of trial, the court zeroed in on the issue of consent. It sought clarification during Gwinn’s cross-examination on what Jefferson Pointe’s board understood was happening with its settlement funds as it accepted interest payments. Gwinn then testified that Jefferson Pointe was aware that its settlement funds “were very highly at risk.” He admitted the board had a general understanding that its funds may have been used to finance Anderson’s construction defect litigation.

On balance, although Jefferson Pointe never expressly agreed to invest in A-Plan, its conduct supported a reasonable finding of implied consent or ratification. The fact that the evidence might have also supported a contrary finding is of no consequence. A judgment is upheld so long as it is supported by evidence that is substantial, “no matter how slight it may appear in comparison with the contradictory evidence.” (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631 (Howard).) Substantial evidence supports the court’s finding of implied consent. As we explain below, this consent was not negated by illegality, mistake of fact, or economic duress.

c. Consent Was Not Vitiated By Illegality, Mistake or Economic Duress.

Invoking contract principles, Jefferson Pointe argues A-Plan was not licensed to operate as an investment company and that this illegality vitiates Jefferson Pointe’s consent. We agree with Kriger that Jefferson Pointe conflates distinct concepts.

Illegality may render a contract unenforceable. (See Armendariz v. Found. Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 124; 1 Witkin, Summary of Cal. Law (11th ed. 2017) Contracts, § 422, p. 447.) If Anderson argued a contract was formed to invest in A-Plan, Jefferson Pointe could argue A-Plan’s illegality to challenge its enforcement. (See, e.g., McIntosh v. Mills (2004) 121 Cal.App.4th 333, 346 [illegality of fee-sharing agreement between nonattorney and attorney barred its enforcement in contract dispute].) And where a contract is unenforceable, restitution may be awarded in lieu of breach of contract damages to prevent unjust enrichment. (See Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co. (2018) 6 Cal.5th 59, 88, fn. 11.)

But these contract and quasi-contract principles do not bear on whether Jefferson Pointe consented to Anderson’s taking, thus precluding recovery in tort. (See French, supra, 56 Cal.App.2d at p. 28 [distinguishing the concepts: “[plaintiff’s] act of consent was not the making of a contract; it merely prevented the defendant’s acts of which he now complains from being a conversion”].) Fatal to its claim, “consent is effective to bar recovery in a tort action although the conduct consented to is a crime.” (Rest.2d Torts, § 892C.) Thus, even if A-Plan was illegal, that would not negate Jefferson Pointe’s implied consent.

Jefferson Pointe also argues that its consent was vitiated by mistake. Specifically, it claims it “continued accepting interest on the mistaken belief that they were entitled to interest on the unpaid settlement amount and that it would not hinder any legal rights it had.” But as Kriger notes, Jefferson Pointe fails to show that Anderson or Kriger knew of its mistaken belief. (See Rest.2d Torts, § 892B [for plaintiff’s mistake to invalidate its consent, the mistake must be “known to the other”]; id., §892B, com. c.) Moreover, the evidence supports a reasonable implied finding that Jefferson Pointe did not have any such misconception. A Jefferson Pointe board member asked whether the A-Plan investment was secured and if there was possibility of losing principal. Gwinn explained that the board knew its settlement funds were highly at risk while it was accepting interest payments. Although a contrary finding could also be supported by the evidence, that does not warrant reversal on mistake grounds. (Howard, supra, 72 Cal.App.4th at p. 631.)

Finally, Jefferson Pointe contends that any consent was vitiated by economic duress. “Consent is not effective if it is given under duress.” (Rest.2d Torts, § 892B.) “Duress is constraint of another’s will by which he is compelled to give consent when he is not in reality willing to do so.” (Id., § 892B, com. j.) Constraint is not limited to the use or threat of force; it may include economic pressure that coerces consent. (Lewis v. Fahn (1952) 113 Cal.App.2d 95, 100; see Millsap v. National Funding Corp. (1943) 57 Cal.App.2d 772, 779−780 [in conversion action, evidence supported a finding of duress where plaintiff, a notary public, gave her notary fees to her employer in the belief she would otherwise be discharged]; see also Tarpy v. County of San Diego (2003) 110 Cal.App.4th 267, 277 [defining economic duress in tort action].)

In essence, Jefferson Pointe claims it accepted interest payments because it needed to make repairs and had no alternative source of funds. It never agreed, asked repeatedly when it would receive its money, and felt resigned to accept whatever sum came its way. As Gwinn put it: “It’s like somebody walked in and picked up your wallet and walked out the door, and then you [are alleged to have] just loaned the man your wallet. We didn’t loan him that money. We had no choice.”

But the trial court considered and expressly rejected this theory, determining “no duress, nor anything else, has been shown by the evidence . . . sufficient to vitiate [Jefferson Pointe’s] consent to the initial transfer of its funds and investment with A-Plan.” Although the statement of decision does not expressly reference economic duress, it is the only theory of duress supported by the evidence, and “[w]e presume the trial court followed applicable law.” (Cahill v. San Diego Gas & Elec. Co. (2011) 194 Cal.App.4th 939, 956 (Cahill); see In re Marriage of Winternitz (2015) 235 Cal.App.4th 644, 653−654.) As discussed in section 1.b ante, sufficient evidence supports the court’s finding of consent, including its rejection of duress. Although Gwinn believed the board had “no choice,” the court reasonably found otherwise based on evidence that it researched the offer and to its advantage knowingly accepted months of interest payments without objecting.

d. The Tolling Argument Is Forfeited.

For the first time in its reply brief, Jefferson Pointe argues the statute of limitations should be equitably tolled based on Anderson’s fraudulent concealment. It claims it was unaware that the A-Plan investment was illegal until the State Bar issued its report in February 2015, warranting tolling to that date. Perhaps to justify its delay in raising the argument, Jefferson Pointe seeks judicial notice of documents filed after its opening brief in Anderson’s federal criminal case.

“A party may not raise an issue for the first time on appeal [citation], and points raised for the first time in a reply brief on appeal will not be considered, absent good cause for failure to present them earlier [citation].” (Nordstrom Com. Cases (2010) 186 Cal.App.4th 576, 583.) Jefferson Pointe offers no good cause for its delay. The State Bar report was a trial exhibit, and the court concurred with its findings in evaluating Anderson’s conduct. Yet Jefferson Pointe did not claim fraudulent concealment as a basis for tolling before the trial court, or raise the argument in its opening brief on appeal.

Further, Jefferson Pointe fails to support its claim with proper argument. (Cal. Rules of Court, Rule 8.204(a)(1)(B).) Other than describing the general concept of fraudulent concealment, it does not explain what Anderson or Kriger did to prevent it from discovering facts essential to its conversion claim until issuance of the State Bar report in 2015. Nor does it explain how Anderson’s federal guilty plea and restitution order in 2018 affect discovery of its claim. ” ‘We are not bound to develop [Jefferson Pointe’s] argument for [it].’ ” (Cahill, supra, 194 Cal.App.4th at p. 956.) When an appellant fails to support a point with reasoned argument and citations to authority, we treat it as forfeited. (Ibid.)

In short, “[o]bvious reasons of fairness militate against our considering this poorly developed and untimely argument.” (Garcia v. McCutchen (1997) 16 Cal.4th 469, 482, fn. 10.) Because the documents subject to the request for judicial notice are irrelevant to our analysis, we also deny that request. (See Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063 [“only relevant material may be noticed”].)

e. Effect of Finding Implied Consent

Deciding that Jefferson Pointe had impliedly consented to or ratified the A-Plan investment, the court concluded the only way to find a conversion would be if consent was negated by violations of the Rules of Professional Conduct. Jefferson Pointe does not challenge the court’s reasoning on appeal. Consequently, as the court found, the conversion cause of action “necessarily depends on proof that an attorney violated a professional obligation,” and the one-year limitations period applies. (Lee, supra, 61 Cal.4th at p. 1238.) Because Jefferson Pointe knew about the transfer in March 2013 but did not sue until September 2014, its conversion claim is time-barred, and judgment was properly entered in Kriger’s favor.

2. Kriger’s Cross-Appeal

Kriger challenges the court’s denial of his postjudgment request for attorney’s fees and additional litigation costs. As we explain, Kriger is entitled to recover fees solely as to the breach of contract cause of action, which was decided in his favor at summary adjudication. Based on the trial court’s findings, he is entitled to $46,923 in attorney’s fees as to this claim, and we modify the order accordingly.

a. Additional Background

The retainer agreement signed by Jefferson Pointe and Anderson (on behalf of the “Law Offices of Anderson & Kriger”) contains the following provision:

“The prevailing party in any lawsuit regarding the terms and enforcement of this Fee Agreement shall be entitled to receive their costs of suit and reasonable attorneys’ fees for the prosecution of the suit and collection of any judgment.”

After entry of judgment in his favor, Kriger filed a motion for $469,230 in attorney’s fees pursuant to Code of Civil Procedure section 1021 and Civil Code section 1717. Although he submitted a separate costs memorandum under Code of Civil Procedure section 1033.5, his brief filed in support of his attorney’s fee motion also sought an additional $33,984.94 in costs.

The court denied Kriger’s motion. It explained that a prevailing defendant has no right to recover attorney’s fees pursuant to Civil Code section 1717 unless the gravamen of the action is “on the contract.” Here, the gravamen of Jefferson Pointe’s action was breach of fiduciary duty and conversion, and it “sought to enforce duties owed independent of any contractual obligations under the fee agreement.” To the extent a portion of the action was “on the contract,” the court ruled it would be inclined to award no more than 10 percent of the claimed fees, or $46,923, as reasonable to litigate the contract claim. Invoking equitable principles, the court found that “the magnitude of the attorney fees incurred was substantially increased by Kriger’s own litigation tactics and were largely unrelated to the prosecution and defense of the breach of contract action.”

Finally, the court denied Kriger’s request for additional costs. It noted that Kriger submitted a cost memorandum (§ 1033.5) and did not cite authority that would allow him to recover additional costs by motion. Moreover, the court believed it could not enhance Kriger’s claimed costs when the notice of motion only sought an award of attorney’s fees under Code of Civil Procedure section 1021 and Civil Code section 1717.

b. Applicable Legal Principles

We independently review the legal basis for a contractual attorney’s fee award. (R.W.L. Enterprises v. Oldcastle, Inc. (2017) 17 Cal.App.5th 1019, 1025.) The trial court’s discretionary decision as to the appropriate amount of fees is reviewed for abuse of discretion. (Cavalry SPV I, LLC v. Watkins (2019) 36 Cal.App.5th 1070, 1101.)

“Under the American rule, each party to a lawsuit ordinarily pays its own attorney fees.” (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).) Section 1021 codifies this rule but allows the parties to contract around it. (Ibid.) When authorized by contract, attorney’s fees may be recovered as costs. (§§ 1032, 1033.5, subd. (a)(10).)

Parties may validly agree to award attorney’s fees to the prevailing party in any litigation between them, whether the action sounds in contract or tort. (Mountain Air, supra, 3 Cal.5th at p. 751; Santisas v. Goodin (1998) 17 Cal.4th 599, 608 (Santisas).) But if the litigation sounds in contract, an attorney’s fee arrangement must comply with Civil Code section 1717. (Mountain Air, at p. 752.) “In any action on a contract,” an attorney’s fee provision is construed as applying reciprocally to both parties and as covering the “entire contract.” (Civ. Code, § 1717, subd. (a).)

” ‘Before [Civil Code] section 1717 comes into play, it is necessary to determine whether the parties entered an agreement for the payment of attorney fees, and if so, the scope of the attorney fee agreement.’ ” (Mountain Air, supra, 3 Cal.5th at p. 752.) Applying traditional rules of contract interpretation, we “consider the mutual intention of the parties at the time the contract providing for attorney’s fees was formed.” (Ibid.; Civ. Code, § 1636.) “[A]ny inquiry begins with the language of the attorney fees provision itself.” (Mountain Air, at p. 760.) Where possible, we ascertain the parties’ intent from the “writing alone,” considering the clear and explicit meaning of the fee provision by construing any language in its ordinary and popular sense. (Id. at p. 752; Civ. Code, §§ 1638, 1639, 1644.) If the meaning a layperson would ascribe to the language is unambiguous, we apply that meaning. (Mountain Air, at p. 752.)

c. The Fee Provision Does Not Cover Jefferson Pointe’s Tort Claims.

The attorney’s fee provision here covers “any lawsuit regarding the terms and enforcement of this Fee Agreement.” The retainer agreement itself is simple. Section I defines its scope: “to primarily resolve construction defects issues through the process as outlined.” Section II lays out a contingency fee schedule—depending on the stage the case reached, “A&K” would receive between 10 and 40 percent of any recovery by Jefferson Pointe. The remaining sections concern: (1) advances of litigation expenses; (2) calculation of fees from a settlement for real or personal property; (3) the need for client approval before settlement; (4) the firm’s right to associate with other attorneys; (5) directions for terminating the relationship; (6) the firm’s authority to sign for the client; and (7) the firm’s disclaimer of guarantees of success.

There is no dispute Kriger is the “prevailing party.” Jefferson Pointe sued Kriger for negligence, breach of fiduciary duty, breach of contract, and conversion. Three of those causes of action resolved in Kriger’s favor on summary adjudication, and Kriger prevailed on the conversion claim at trial. Instead, the question is whether any of Jefferson Pointe’s claims “regard[ed] the terms and enforcement” of its retainer agreement.

As to the tort-based claims asserted against Kriger—for negligence, fiduciary breach, and conversion—the answer is plainly no. Jefferson Pointe had no problem with Anderson’s handling of Sudweeks. Its tort claims concern what Anderson did thereafter. Although these causes of action may have arisen out of the retainer agreement, they did not “regard[] the terms and enforcement of this Fee Agreement.” (Compare Santisas, supra, 17 Cal.4th at pp. 603, 607 [fee provision covering claims ” ‘arising out of the execution of this agreement’ ” covered tort claims] and Khan v. Shim (2016) 7 Cal.App.5th 49, 61 (Khan) [fee provision covering litigation ” ‘concerning [the] terms, interpretation or enforcement or the rights and duties of any party in relation [to the sale contract]” covered tort claims] with Santisas, at p. 622, fn. 9 [by comparison, provision covering claims to ” ‘ “enforce any other provision, condition or agreement of this lease” ‘ ” would not cover tort claims] and Loube v. Loube (1998) 64 Cal.App.4th 421, 429−430 [fee provision covering actions ” ‘to enforce the terms of this [retainer] Agreement” did not cover professional negligence action].)

Simply put, “[a] tort claim does not enforce a contract.” (Gil, supra, 121 Cal.App.4th at p. 743.) “Where a contract authorizes an award of attorney fees in an action to enforce any provision of the contract, tort claims are not covered.” (Ibid.) Construing the fee provision before us, Kriger is not entitled to attorney’s fees on the causes of action for negligence, breach of fiduciary duty, and conversion.

d. Kriger is Entitled to Attorney’s Fees for Prevailing on Jefferson Pointe’s Breach of Contract Claim.

The breach of contract cause of action requires a different analysis. Jefferson Pointe alleged a breach occurred when Anderson and Kriger failed to return the $775,000 in settlement funds upon demands made in November 2013 and March 2014. Although the retainer agreement did not specifically identify Anderson’s obligation to convey settlement funds to Jefferson Pointe, such a term is reasonably implied. (See College Block v. Atlantic Richfield Co. (1988) 206 Cal.App.3d 1376, 1380 [“To effectuate the intent of the parties, implied covenants will be found if after examining the contract as a whole it is so obvious that the parties had no reason to state the covenant, the implication arises from the language of the agreement, and there is a legal necessity.”].) The retainer tied attorney compensation to any recovery by Jefferson Pointe. Implicit in that arrangement is a commitment to return the remainder to Jefferson Pointe once counsel was paid. (See id. at p. 1381 [lease contained implied term requiring continued operation of gas station where “rent was tied to the operation of the station”].)

Unlike the other causes of action, Jefferson Pointe’s breach of contract claim is reasonably construed as “regarding the terms and enforcement of this Fee Agreement.” (See Heidt v. Miller Heating & Air Conditioning Co. (1969) 271 Cal.App.2d 135, 138 [although plaintiff could have brought a tort action, his breach of contract claim based on defendant’s poor workmanship was an action “to enforce” the contract].) Because this fits within the scope of the provision and sounds in contract, we are required to consider any restrictions under Civil Code section 1717. (Mountain Air, supra, 3 Cal.5th at p. 752.)

The Legislature enacted Civil Code section 1717, with its reciprocal right to recover attorney’s fees, to ensure that contractual attorney’s fee provisions “do not operate in an unfairly one-sided manner.” (Santisas, supra, 17 Cal.4th at p. 602.) The statute provides in relevant part: “In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.” (Civ. Code, § 1717, subd. (a).)

The trial court went straight to this step, without construing the scope of the fee provision. Rejecting Kriger’s request for attorney’s fees, it concluded “the gravamen of Plaintiff’s action was the alleged breach of fiduciary duty and conversion claims by which Plaintiff sought to enforce duties owed independent of any contractual obligations under the fee agreement between Plaintiff and Anderson & Kriger.” Accordingly, the court found the action was not “on the contract” as required by Civil Code section 1717, subdivision (a). Exercising our independent judgment on this question of law, we reach a different conclusion.

“The mere fact that [Jefferson Pointe’s] complaint pleaded a breach of contract action is not dispositive” of whether its action was “on the contract.” (Hyduke’s Valley Motors v. Lobel Fin. Corp. (2010) 189 Cal.App.4th 430, 436.) “An action (or cause of action) is ‘on a contract for purposes of Civil Code section 1717 if (1) the action (or cause of action) ‘involves’ an agreement, in the sense that the action (or cause of action) arises out of, is based upon, or relates to an agreement by seeking to define or interpret its terms or to determine or enforce a party’s rights or duties under the agreement; and (2) the agreement contains an attorney fees clause.” (Douglas E. Barnhard, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 242.) Relevant factors include ” ‘the pleaded theories of recovery, the theories asserted and the evidence produced at trial, if any, and also additional evidence submitted on the motion in order to identify the legal basis of the prevailing party’s recovery.’ ” (Hyduke, at p. 436.)

In Santisas, supra, 17 Cal.4th 599, the Supreme Court rejected the notion that a contract action was actually a mislabeled tort claim for which attorney’s fees were unavailable under Civil Code section 1717. “[T]he alleged breach did not consist of a ‘failure to disclose certain defects in the property,’ ” but instead “a breach of contract consisting of the seller defendants’ failure to perform repairs and other remedial work required by the contract in connection with the sale. This claim sounds in contract, not tort, and is therefore an ‘action on a contract within the meaning of [Civil Code] section 1717.” (Santisas, at p. 615.) Likewise, here, Jefferson Pointe’s action centers on Kriger’s alleged breach of the implied covenant to return its settlement proceeds once contingent fees were paid. As it argued on summary adjudication, “Jefferson Pointe may succeed on this claim simply by showing the agreement required Anderson to pay it the balance after attorney’s fees in the agreed amount, expert fees and litigation costs were paid, and that he failed to do so.” This sounds in contract, not tort. Thus, the breach of contract cause of action was “on the contract” for purposes of Civil Code section 1717.

Nevertheless, Jefferson Pointe invokes Civil Code section 1717’s reciprocity requirement to argue Kriger may not recover attorney’s fees because it could not have recovered such fees against Kriger had it prevailed. (See Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129 (Reynolds) [defendants who had not signed the contract could nonetheless recover attorney’s fees because plaintiff would have been entitled to recover such fees from defendants had it prevailed on its alter ego theory]; Burkhalter Kessler Clement & George LLP v. Hamilton (2018) 19 Cal.App.5th 38, 46 [same].) Making a claim similar to Kriger’s defense at trial, Jefferson Pointe argues that because Anderson & Kriger LLP had dissolved by December 2012, Kriger could not be liable for Anderson’s debts. Kriger strenuously objects that Jefferson Pointe cannot avoid paying attorney’s fees by now claiming its “whole claim against Kriger was a sham and a fraud.”

Jefferson Pointe’s breach of contract claim rested on an apparent partnership between Anderson and Kriger. In signing with the “Law Offices of Anderson and Kriger,” it believed Kriger was Anderson’s partner. Anderson held out Kriger as his partner; the Sudweeks complaint listed “Anderson & Kriger”; until 2010, Anderson and Kriger worked the same building bearing an “Anderson & Kriger” sign; Kriger answered the phone when Gwinn called for Anderson; and even the associate who handled Sudweeks received paychecks from “Anderson & Kriger PLC” and thought there was a partnership. “In the absence of other evidence these facts would justify a reasonable man in believing that he was dealing with a partnership.” (Blackmon v. Hale (1970) 1 Cal.3d 548, 558.) “It is immaterial in this case that the actual misappropriation occurred after the partnership of [Anderson] and [Kriger] was dissolved. Until [Jefferson Pointe] had notice of the dissolution and consented to a discharge of the partnership, [Kriger] remained liable for obligations assumed before dissolution.” (Id. at p. 558, fn. 3 [holding innocent partner in a law firm liable for misappropriation of client trust funds].)

In short, the reciprocity requirement of Civil Code section 1717 does not preclude an attorney’s fee award to Kriger as to the breach of contract cause of action.

e. The Trial Court Properly Limited the Fee Award to 10 Percent of the Total Fees Incurred.

Finally we consider the appropriate amount of the attorney’s fee award. “Where a cause of action based on the contract providing for attorney’s fees is joined with other causes of action beyond the contract, the prevailing party may recover attorney’s fees under [Civil Code] section 1717 only as they relate to the contract action.” (Reynolds, supra, 25 Cal.3d at p. 129.) “Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit.” (Civ. Code, § 1717, subd. (a).) “Consistent with that purpose, the trial court has broad authority to determine the amount of a reasonable fee.” (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM).) ” ‘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.)

Here, the court did not award attorney’s fees because it concluded the action was not “on the contract.” (Civ. Code, § 1717, subd. (a).) But it went on to state that to the extent a portion of the action was “on the contract,” it “would be inclined to award no more than $46,923 (10 percent of the claimed fees) based upon the fees necessary to address the superfluous breach of contract action as reflected in Defense Counsel’s time records.” As the court reasoned, the magnitude of fees Kriger incurred “[were] substantially increased by [his] own litigation tactics and were largely unrelated to the prosecution and defense of the breach of contract cause of action.”

Presented with detailed hourly billing records by Kriger’s counsel, and having presided over the entire litigation, the trial judge “was familiar with the quality of services performed and the amount of time devoted to the case.” (PLCM, supra, 22 Cal.4th at p. 1096.) It also appropriately considered equitable principles. (Id. at p. 1095.) On appeal Kriger repeats the same arguments he made below, asserting his request was reasonable in light of his potential exposure, the nature of the litigation, hourly billing rates, and the favorable result reached. But he fails to show how the trial court abused its discretion in concluding that only 10 percent of the requested fees would be appropriate as to the breach of contract cause of action. Finding no such abuse occurred, we modify the court’s postjudgment order to award Kriger $46,923 in attorney’s fees.

f. Costs

In addition to attorney’s fees, Kriger sought “reasonable litigation costs” beyond those listed in his costs memorandum pursuant to section 1033.5. He claimed the retainer agreement entitled the prevailing party to “receive the costs of suit” over and above statutory costs. He also claimed he could recoup these costs pursuant to section 998 because Jefferson Pointe rejected his $20,000 pretrial settlement offer and failed to obtain a “more favorable judgment or award” at trial. In total, Kriger requested $33,984.94 for copies, delivery services, travel, parking, expert witness fees, meals, deposition fees, and court call charges.

The trial court denied Kriger’s request, finding “no authority that would allow him to enhance his claimed costs through a motion as opposed to a supplemental or amended cost memorandum.” Moreover, it determined that Kriger’s notice of motion only sought an award of attorney’s fees in accordance with Code of Civil Procedure section 1021 and Civil Code section 1717, constraining the court’s ability to grant different relief.

Kriger does not identify any error in the court’s ruling. Instead, he again merely copies and pastes the arguments he made before the trial court. This does not satisfy his burden to support his claim by proper argument. (Cal. Rules of Court, Rule 8.204(a)(1)(B).) We will not develop Kriger’s argument for him and instead treat any challenge to the court’s denial of his request for additional costs as forfeited. (See Cahill, supra, 194 Cal.App.4th at p. 956.)

DISPOSITION

The judgment in favor of Kriger is affirmed. The postjudgment order denying Kriger’s request for attorney’s fees and costs is modified to award Kriger $46,923 in attorney’s fees reasonably incurred to defend Jefferson Pointe’s breach of contract cause of action. Kriger is entitled to recover his costs on appeal.

DATO, J.

WE CONCUR:

O’ROURKE, Acting P. J.

AARON, J.