Case Number: EC061583    Hearing Date: July 18, 2014    Dept: NCB

14. EC061583
CHICAGO TITLE INSURANCE CO. v IRP VISTA DEL ARROYA ASSOC.
Motion for Attorneys Fees

This case arose from the Plaintiff’s attempt to recover amounts they paid on a title insurance policy to their insurer, Thomas Lin. Thomas Lin owned a condominium unit and a storage space. Thomas Lin filed a notice of claim after he discovered that Robert Moore and Dorothy Moore had title to the same storage space. The Plaintiff paid money for an appraisal and for the diminution in value of Thomas Lin’s property without the storage space. The Plaintiff filed this action to seek damages from the Defendants on the ground that they had caused the Plaintiff’s damages by previously transferring the storage space to Robert Moore and Dorothy Moore.

On March 28, 2014, the Court sustained the Defendants’ demurrer to the Complaint without leave to amend because the claims were barred by the statute of limitations. The case was dismissed on March 28, 2014.

This hearing concerns the Defendants’ motion for attorney’s fees. The Defendants argue that they are entitled to attorney’s fees because this action arises from the purchase agreement under which Thomas Lin purchased the condominium unit from the Defendants.
Civil Code section 1717 states that a party may recover attorney’s fees when the party prevails in an action based on a contract that provides for the prevailing party to recover attorney’s fees. California courts construe the term “on a contract” in section 1717 liberally. Turner v. Schultz (2009) 175 Cal.App.4th 974, 979. The phrase “action on a contract” includes not only a traditional action for damages for breach of a contract containing an attorney fees clause, but also any other action that “involves” a contract under which one of the parties would be entitled to recover attorney fees if it prevails in the action. Eden Township Healthcare Dist. v. Eden Medical Center (2013) 220 Cal. App. 4th 418, 426-427. In determining whether an action is ‘on the contract’ under section 1717, the proper focus is not on the nature of the remedy, but on the basis of the cause of action. Id.
Accordingly, an action or cause of action is “on a contract” for purposes of 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.
Eden Township, 220 Cal.App.4th at 427.

A review of the Plaintiff’s Complaint reveals that it is an action arising from the sale of the condominium from the Defendants to the Plaintiff’s insured, Thomas Lin. In paragraph 8, the Plaintiff alleges that the Defendants conveyed the property to Thomas Lin with a grant deed.
The Defendants provide a copy of the purchase agreement under which they sold the property to Thomas Lin in the second exhibit tabbed with an “A”. The exhibit follows the exhibit labeled “E”.
Under section 1 of the purchase agreement, the Defendants had a duty to convey the property by grant deed. Since the Defendants had agreed to convey title with the grant deed in the purchase agreement, the Plaintiff’s action involves the purchase agreement in the sense that it relates to the Defendants’ duties under the purchase agreement.
The purchase agreement includes in paragraph 8 on page 25 a provision that in a legal action instituted to enforce any of the terms of the contract, the prevailing party is entitled to recover attorney’s fees. Since the Defendants are the prevailing party on an action that is based on this agreement, the Defendants may recover their attorney’s fees.

In the opposition, the Plaintiff argues that its claims arise in tort. The Plaintiff brought a claim for unjust enrichment and for breach of warranties in the grant deed. Neither cause of action is a tort. The unjust enrichment cause of action is synonymous with restitution. Melchior v. New Line Productions, Inc. (2003) 106 Cal. App. 4th 779, 794. The breach of warranty claim is a contractual claim arising from the claim that the grand deed included warranties.
Further, as noted above, when determining whether an action is ‘on the contract’ under section 1717, the proper focus is not on the nature of the remedy, but on the basis of the cause of action. Eden Township Healthcare Dist. v. Eden Medical Center (2013) 220 Cal. App. 4th 418, 426-427. The basis of the Plaintiff’s action is the claim that the Defendants breached the purchase agreement because the Defendants breached the obligation to transfer title to the storage area. This indicates that the basis for the Plaintiff’s action is the Defendants’ obligations under the purchase agreement.
Therefore, the Defendants are entitled to recover attorney’s fees because the Plaintiff’s action is based on the purchase agreement and the purchase agreement includes a term awarding attorney’s fees to a prevailing party.

Under Civil Code section 1717, the Court determines the reasonable amount of attorney’s fees to award. The Defendants request $29,082.50, which is based on $24,557.50 to defend against the Complaint and $4,525 to prepare and file the pending motion. The following demonstrates that these amounts are excessive.
First, a review of the Court file reveals that this case was resolved after a single hearing on the Defendants’ demurrer. The demurrer was seven pages and was based primarily on the non-complex application of the statute of limitations to the dates in the pleadings. Further, a review of the billing records attached to the motion reveals that the majority of the billing events arose from the demurrer. There is no extensive time spent preparing or responding to discovery. There is no extensive time spend on hearings, motions, or other litigation activities. It is unreasonable to award $24,557.50 in attorney’s fees for a claim that was resolved by a simple demurrer in a single hearing.
A reasonable amount of attorney’s fees to award for this defense would be $9000. This is based on 20 hours billed at the reasonable rate of $450 per hour to review the pleadings, consult the clients, perform legal research, draft a demurrer, and appear at the hearing.
Second, a review of the six page memorandum supporting the pending motion for attorney’s fees reveals that it does not involve any complex legal issues. Instead, it is a standard request for attorney’s fees based on an action that arises from a contract that includes a term awarding attorney’s fees to the prevailing party. A more reasonable amount of attorney’s fees to award to draft and appear on the motion is $1,800 for 4 hours billed at $450 per hour.
Accordingly, the amount of reasonable attorney’s fees to award for the fees incurred to defend this case and to draft and appear on the pending motion is $10,800 ($9,000 for the litigation and $1,800 for the pending motion). It is so ordered. Payable within 30 days.