Filed 8/27/20 Balakhane v. Sakhai CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

PEYMAN BALAKHANE et al.,

Plaintiffs and Appellants,

v.

MORIS SAKHAI et al.,

Defendants and Respondents.

B294837

(Los Angeles County
Super. Ct. No.BC531321)

APPEAL from an order of the Superior Court of Los Angeles County, Richard Edward Rico, Judge. Affirmed.

Matthew J. Kita for Plaintiffs and Appellants.

Law Office of George E. Omoko and George E. Omoko for Defendants and Respondents.

Plaintiffs and appellants Peyman and Pejman Balakhane appeal the denial of their motion for attorney fees and costs incurred in securing compliance with the settlement of their underlying lawsuit. They contend that defendants and respondents Moris Sakhai, Naziar Azadegan, and California Capital Venture, Inc., breached the settlement agreement and therefore that appellants were entitled to attorney fees and costs as the prevailing party under the agreement. We find no error and therefore affirm the trial court’s order denying appellants’ motion.

FACTUAL AND PROCEDURAL HISTORY

We provide the following summary based on the limited record provided on appeal. Appellants, together with L.A. Fashion Hub, Inc., filed a complaint against respondents in December 2013, alleging causes of action for breach of contract, fraud, and related claims. As summarized by the trial court, the dispute arose from a transaction in which respondents made a payment to appellants, which appellants claimed was a capital investment in a joint venture and respondents claimed was a loan.

The jury trial commenced on January 26, 2018. Following a settlement conference on February 2, 2018, the parties announced that they had reached a settlement. The minute order from that hearing reflects that the “terms of the settlement are recited into the record fully reflected in the notes of the official court reporter” and that the settlement was made in accordance with Code of Civil Procedure section 664.6.

Appellants excluded the terms of the settlement agreement from the record, stating that the settlement was confidential. However, we granted respondents’ request for judicial notice of several case documents, including a transcript of the February 2, 2018 hearing. During the hearing, counsel for respondents informed the court that the parties had “agreed upon a complete settlement of all claims between and among them.” He described the terms of the agreement to the court, including that respondents would execute a policy release by February 5, 2018 relieving their insurance carriers of liability, and the insurance carriers would then make an initial payment to appellants 15 days later. Respondents would pay the balance of the settlement to appellants within 60 days after the 15-day deadline. In addition, the agreement included terms that it was enforceable under section 664.6, a liquidated damages clause triggered by breach of the agreement, and an “attorney’s fees provision whereby the prevailing party under any action required by reason of a breach of the settlement agreement will be entitled to recover his or its attorney’s fees and costs in connection with the filing of that suit.” The parties agreed to these terms on the record, as did counsel for respondents’ insurance carriers. The court accepted the settlement agreement and retained jurisdiction under section 664.6.

Shortly thereafter, on February 7, 2018, appellants filed an ex parte application to enforce the settlement agreement pursuant to section 664.6, including liquidated damages, and to recover attorney fees and costs under the agreement. This application is not in the record. Following a hearing on March 5, 2018, the court issued a written ruling. In its ruling, the court reviewed the terms of the settlement agreement relating to respondents’ execution of the insurance policy release and the subsequent payments to appellants. In addition, the court found that the settlement agreement included payment of attorney fees and costs in the event of breach, as well as liquidated damages.

Although respondents had not executed the insurance release or issued payment, the court concluded there had been no breach of the settlement agreement and therefore, appellants’ request for liquidated damages was premature. The court reasoned that the deadline for execution of the insurance release was not absolute, and respondents’ payment obligations “flow from the date of the execution of the full policy release.” The court granted the motion in part, to “enforce that part of the agreement granting the carrier a full policy release on the condition that it forward the agreed upon proceeds forthwith to Plaintiffs. Once accomplished, the time will commence by which Defendant Sakhai[ ] shall be required to submit his portion of the settlement proceeds.” According to a trial court order issued March 14, 2018, respondents completed the policy release and the insurance carriers tendered the initial payment to appellants in accordance with the settlement agreement.

Appellants filed another ex parte application regarding their motion to declare that respondents breached the settlement agreement and to enter judgment against respondents. The ex parte application is not in the record. A minute order from June 22, 2018 reflects that the court granted the ex parte application and set a hearing on a motion to enforce the judgment for August 3, 2018. The court also directed appellants to give notice of the ruling.

The hearing proceeded on August 3, 2018. At the conclusion of the hearing, the court adopted its tentative ruling as the final order. In its written ruling, the court noted that both sides claimed that the other breached the settlement agreement. According to the court, it was undisputed that the insurance carriers issued the first payment to appellants, but respondents had not made the remaining payment. Respondents claimed the nonpayment was excused because appellants breached the agreement. The court rejected this argument, stating: “If there is a breach, Sakhai has breached the Settlement Agreement. Sakhai is to . . . make the remaining payment of [redacted] forthwith or face the consequences of having the liquidated damages clause go into effect.” The minute order from the hearing states that the court granted appellants’ motion for enforcement of the settlement and ordered Sakhai to deposit the settlement proceeds.

Appellants also included in the record a notice of ruling they prepared from the August 3 hearing, stating that the court ordered that they “may bring a Motion for Attorneys’ Fees in connection with the work and costs expended to enforce the Settlement Agreement.” The notice is not file stamped.

Appellants filed a motion for attorney fees and costs to enforce the settlement agreement on August 16, 2018. They claimed that Sakhai failed to perform, necessitating motion practice to enforce the agreement. Appellants cited to the court’s March 5 order, requiring Sakhai to submit the balance of the settlement payment after the insurance carrier paid. They contended that respondents’ time to submit payment elapsed on June 4, 2018. They acknowledged that Sakhai paid on August 3, 2018, following the court’s order on that date, but contended by that time respondents were already in breach and had necessitated expenses incurred by appellants to enforce the agreement.

Appellants contended they were prevailing parties on their motion to enforce the settlement agreement and were therefore entitled to attorney fees and costs pursuant to the agreement and also under sections 1021, 1032, 1033.5(a)(1), and Civil Code section 1717. They requested $117,826.34 in attorney fees and costs.

In support of their motion, appellants submitted the declaration of attorney Alexander Escandari, setting forth his experience and hourly rate, as well as the rate for his associates. He stated that the work done was “extensive as it included a large number of ex parte applications, motions, oppositions, and hearings, in addition to filing a separate lawsuit against Defendant Sakhai.” The claimed fees included 239 hours of attorney work, plus over $5,100 in costs. Appellants also attached a five-page spreadsheet supporting their fee request, with columns for the date, description of services rendered, time spent, and rate. There are no opposition or reply papers included in the record, although the trial court’s docket indicates that both were filed.

On November 5, 2018, the court heard the motion for attorney fees and costs and issued a written ruling denying the motion. In the ruling, the court concluded that the motion was “not well taken for at least three reasons. First, it appears that Mr. Sakhai performed following the August 3 hearing. Second, Plaintiff’s request for attorney fees and costs is unsupported under the terms of the subject settlement agreement. Third, Plaintiff provides insufficient records to support attorney fees. Although detailed time records are not required, California Courts have expressed a preference for contemporaneous billing and an explanation of work. (Raining Data Corp. v. Barrenechea (2009) 175 Cal.Ap.4th 1363, 1375.)”

Appellants timely appealed.

DISCUSSION

Appellants contend the trial court erred in denying their motion for attorney fees and costs because they were the prevailing party in their action to enforce the settlement agreement. We conclude the limited record provided does not support this assertion; moreover, appellants have failed to provide a sufficient record to allow us to adequately assess their claims.

Appellants filed their motion to enforce the settlement agreement under section 664.6. In ruling on a section 664.6 motion, the trial court acts as a trier of fact, with the authority to interpret both the express and implied terms of a settlement agreement. (Skulnick v. Roberts Express, Inc. (1992) 2 Cal.App.4th 884, 889; Fiore v. Alvord (1985) 182 Cal.App.3d 561, 565.) We presume the judgment to be correct and “must indulge all presumptions in favor of its correctness.” (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America (2005) 133 Cal.App.4th 1319, 1338.) “In keeping with that standard, we will infer findings in support of the judgment if such findings are supported by substantial evidence.” (Ibid.) We affirm the factual determinations made by the trial court if they are supported by substantial evidence. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 815.) We review the trial court’s legal conclusions de novo. (See Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.)

Attorney fees can be awarded as costs to the prevailing party when authorized by contract. (§§ 1032, 1033.5, subd. (a)(10); see also Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109 (Scott).) “If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees.” (Scott, supra, 20 Cal.4th at p. 1109.)

Appellants argue that each of the trial court’s three bases for denying their motion was insufficient. First, the trial court found that Sakhai paid the outstanding amount under the settlement agreement on August 3, 2018. Appellants do not dispute that Sakhai ultimately made the settlement payment, but argue that the court previously found respondents “in breach of the agreement in a court order dated June 22, 2018.” The record does not support appellants’ contention. The June 22 order appellants cite is the minute order granting appellants’ ex parte application and setting the August 3, 2018 hearing on their motion to declare a breach of the settlement agreement and to enforce judgment against respondents. The minute order does not, as appellants suggest, contain any findings by the court that respondents were in breach of the settlement agreement. If the court had made such a finding, there would have been no need to set a hearing on a noticed motion on the same issue.

Moreover, appellants have failed to provide an adequate record to enable us to fully assess their claim of error. They failed to include numerous documents in the record related to their attempts below to establish a breach, including their ex parte application, a notice of ruling granting the application (which the court’s June 22 minute order directed them to provide), their noticed motion to declare a breach, all related opposition or reply papers, or the transcript of the August 3, 2018 hearing on that motion. Appellants’ failure to provide an adequate record on the court’s determination regarding a breach of the settlement agreement requires us to resolve this claim against them. (See Rancho Santa Fe Assn. v. Dolan–King (2004) 115 Cal.App.4th 28, 46 [“Where the party fails to furnish an adequate record of the challenged proceedings, his claim on appeal must be resolved against him.”]; Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502.)

Further, based on the partial record provided, we infer a finding by the trial court that respondents did not breach the settlement agreement. Substantial evidence supports this conclusion. None of the court’s orders expressly finds a breach. In its August 3 order, the court rejected respondents’ claim of breach and granted appellants’ request to enforce the agreement, ordering Sakhai to make the outstanding payment. But the court stopped short of finding that respondents had already committed a breach. At best, the court suggested that any further failure by Sakhai to pay following the August hearing would be deemed a breach of the agreement, triggering the liquidated damages provision and, presumably, the provision awarding attorney fees and costs to appellants. Although appellants failed to provide the terms of the settlement agreement as part of the record, the trial court found that the settlement agreement “included attorney fees and costs in the event of a breach.” The court’s refusal to award attorney fees or liquidated damages to appellants further supports the conclusion that the court did not find a breach of the agreement by respondents.

Appellants’ failure to establish a breach of the settlement agreement also dooms their challenge to the trial court’s second basis for denying attorney fees. The trial court denied appellants’ motion on the basis that their request for fees and costs was “unsupported under the terms of the subject settlement agreement.” Appellants argue this finding was in error because the court had already “held that [appellants] were the prevailing party and enforced the Settlement Agreement in their favor.” As such, they contend the court invited them to file the motion to recover attorney fees and costs pursuant to the settlement agreement. As we have discussed, the record contains no evidence that the court held that respondents breached the settlement agreement or that appellants were the prevailing party under that agreement. Indeed, because they failed to include their motion to enforce the settlement in the record, we cannot assess the degree to which they prevailed on that motion. The trial court implicitly found they had not sufficiently prevailed to trigger an award of attorney fees under the settlement agreement, and on this record, we have no basis to conclude otherwise.

We are similarly unpersuaded by appellants’ contention that the court invited them to file their motion for attorney fees, thus implying a finding in their favor. There is nothing in the record to establish that the court extended such an invitation, apart from a notice of ruling prepared by appellants that bears no indication that it was filed. Even if it had, allowing appellants to bring a motion for fees does not equate to a finding on the merits of such a motion, as further demonstrated by the court’s eventual denial of the request for attorney fees.

Appellants additionally challenge the trial court’s third basis for denying their motion, a finding that their documentation was insufficient to support of their attorney fee request. We need not reach this contention in light of our conclusion that the trial court did not err in its other bases for denying the motion. We note, however, that appellants again failed to provide a sufficient record on this issue. Although they claim respondents did not object to their evidence supporting the request for attorney fees, we cannot assess that claim as appellants did not provide the opposition or reply papers for the motion. As such, appellants have failed to establish error in the trial court’s denial of their motion for attorney fees and costs.

Finally, we note that respondents contend in their brief on appeal that the settlement agreement is void for noncompliance with section 664.6. There is no indication in the record before us that respondents raised this claim before the trial court; indeed, they expressly agreed to the settlement on the record at the February 2 hearing and ultimately made payment pursuant to its terms. (See, e.g., Barnes v. Department of Corrections (1999) 74 Cal.App.4th 126, 130 [“the general rule is that failure to raise an issue below will waive that claim on appeal”].) Moreover, respondents may not seek affirmative relief without bringing a cross-appeal. (Valentine v. Plum Healthcare Group, LLC (2019) 37 Cal.App.5th 1076, 1090 [“As a general matter, ‘a respondent who has not appealed from the judgment may not urge error on appeal.’”]; see also Preserve Poway v. City of Poway (2016) 245 Cal.App.4th 560, 585 [“To obtain affirmative relief by way of appeal, respondents must themselves file a notice of appeal and become cross-appellants.”].)

For both of these reasons, respondents have forfeited this claim.

DISPOSITION

The order denying appellants’ motion for attorney fees is affirmed. Respondents are entitled to recover their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, J.

We concur:

MANELLA, P. J.

CURREY, J.