Filed 11/23/20 Buechler v. Butker CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

VIRGINIA BUECHLER,

Plaintiff and Appellant,

v.

VANESSA BUTKER et al.,

Defendants, Cross-complainants, and Respondents;

BRUCE WOOCKMAN,

Cross-defendant and Appellant.

G058054

(Super. Ct. No. 30-2016-00891108)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Martha K. Gooding, Judge. Reversed and remanded with instructions.

Bohm Wildish & Matsen, Daniel R. Wildish and Charles H. Smith for Plaintiff and Appellant Virginia J. Buechler and Cross-defendant and Appellant Bruce Woockman.

Douglas T. Richardson for Defendants, Cross-complainants, and Respondents Vanessa Butker and Sister Group, LLC.

Martin E. Dack for Defendant, Cross-complainant and Respondent Lenora Schroeder.

* * *

Plaintiff Virginia J. Buechler filed a complaint against defendants Vanessa Butker, Lenora Schroeder and Sister Group LLC over the use of a lateral sewer line. The parties settled the dispute with defendants agreeing to detach their sewer system from the line in question. After several months, the detachment had not occurred, and Buechler and cross-defendant, Bruce Woockman, moved to enforce the settlement as a judgment. The court granted the motion and entered judgment, including an award of attorney fees.

Around the same time, defendants began discussions in earnest with city and county authorities about how to connect their sewer line to the main sewer line. Despite diligently pursuing the matter, the detachment still had not occurred several months after the judgment—in part due to Buechler’s own interference. Meanwhile, Buechler and Woockman initiated contempt proceedings based on defendants’ alleged failure to comply with the judgment. That was denied, with the court finding defendants had no ability to comply with the judgment. Afterward, notwithstanding the failed contempt proceeding, Buechler and Woockman moved for attorney fees as costs of enforcing the judgment pursuant to Code of Civil Procedure section 685.040. The court denied the motion on two grounds: (1) the fees incurred were not for the enforcement of the judgment, and (2) the underlying judgment did not include a provision for attorney fees. Buechler and Woockman (appellants) appealed from the denial of the motion for attorney fees.

We reverse because the two grounds the court relied upon were in error. A contempt proceeding in this context plainly constitutes enforcement activity. And while appellants did not prevail on the motion, section 685.040 does not contain a prevailing party requirement. As to the second ground, there is no requirement in the statute that the judgment contain a provision for further attorney fees. In that regard, the only requirement is that the judgment itself contain an award of contractual attorney fees, which the underlying judgment did.

However, we remand with specific directions to consider a third element of section 685.040 that both the court and the parties seem to have missed. Specifically, the fees must be “reasonable and necessary.” (Ibid.) Appellants contend their contempt motion prompted defendants to comply with the judgment. On remand, the court should make findings in the first instance as to whether the fees appellants incurred in the contempt motion were reasonable and necessary.

FACTS

In April 2017, Buechler filed the underlying complaint for trespass and nuisance against defendants Vanessa Butker, Lenora Schroeder, and Sister Group, LLC, alleging defendants were, without permission, maintaining an illegal sewer hookup that encroached on Buechler’s property. At a mediation in September 2017, the parties entered into a settlement agreement, the gist of which was that defendants would pay nothing on the complaint, but would detach and cap their sewer line from the line on Buechler’s property by December 31, 2017. As to attorney fees, the agreement provided that each side would bear its own fees, but that in any motion to enforce the settlement pursuant to section 664.6, the prevailing party would be entitled to reasonable fees.

The work to detach and cap the sewer line had not begun by December 31, 2017, prompting appellants to move for entry of judgment on the settlement agreement pursuant to section 664.6. The court granted the motion in April 2018, and judgment was entered pursuant to the terms of the settlement agreement in July 2018.

Meanwhile, in October 2017 defendant Sister Group, LLC had acquired a new owner, K. Koukladas. In July 2018, Koukladas began working with city and county authorities in earnest to comply with the judgment. The Orange County Sanitation District (OC Sanitation) initially told him that Sister Group, LLC could not connect directly to a public sewer line, but would instead have to connect to a lateral line on Lincoln Avenue (where the parties’ properties are located), which was owned by the City of Orange (the City). He then reached out to City authorities, who took some time to research the matter and collaborate with OC Sanitation. About a week after Koukladas’s initial inquiry, the City responded stating it had completed its research and concluded that Sister Group LLC would be permitted to connect to the lateral line. The e-mail included a description of the application process and costs.

By November 2018, Koukladas was prepared to move forward with attaching to the lateral line and once again received confirmation from the City that it would be allowed. In January 2019, Koukladas hired a contractor to complete the work.

However, on January 15, 2019, the City e-mailed the contractor to say that Buechler’s attorney had contacted the City, presented the judgment, and demanded that defendants not be allowed to connect to the lateral line. The City put the project on pause pending a review by the City Attorney.

That same day, appellants filed a motion to hold defendants in contempt of court on the ground that defendants “have failed and refused . . . to perform the work required of them by the Judgment . . . .” (Italics added.)

Meanwhile, the process with the City continued apace. On January 18, 2019, the City took the position that the judgment prohibited any connection to the public sewer line “anywhere along the sewer line that [Buechler] installed-regardless if the connection is to be made in the Public [right of way].” The City suggested that defendants either build their own lateral line or go to court to have the judgment modified to permit the connection.

In response, Koukladas contacted OC Sanitation about the possibility of installing a new lateral line. However, OC Sanitation forbade it. A meeting was then convened involving Koukladas, a representative from OC Sanitation, and the City. At the meeting, OC Sanitation and City took conflicting positions. OC Sanitation took the position that the lateral line belonged to the City and that it would need to allow its residents to connect to the lateral line. The City took the position that Buechler owned the lateral line (or, at minimum, that the ownership was unclear).

As a workaround, Koukladas sought permission from the City to connect to a City owned septic tank. Although the City was initially resistant to the idea, it soon acquiesced. Koukladas then located and, on January 25, 2019, hired a septic tank specialist to perform the work at a cost of $8,000 to $10,000. He then informed Woockman of the plan to connect to the septic tank.

Three days later, Koukladas contacted the City to verify the steps needed to connect to the septic tank. The City responded by informing Koukladas that Buechler would permit a connection to the lateral line, but only on certain conditions, including that Koukladas install a new manhole and the City agree to maintain and repair the lateral line. As a result, the City rescinded its permission to allow Koukladas to connect to the septic tank. The cost to install the manhole and connect to the lateral was estimated to be $35,000 to $50,000.

Buechler formally gave the City permission to permit the lateral connection on February 15, 2019.

In March 2019, the court denied appellants’ motion to hold defendants in contempt. Based on the record before it, the court concluded defendants’ failure to comply with the judgment was not willful.

In April 2019, appellants moved for post-judgment attorney fees in the amount of $37,052.50. The motion was made pursuant to section 685.040, which, under certain conditions discussed below, permit the recovery of attorney fees incurred to enforce a judgment. The court denied it on two grounds: (1) the fees were not incurred to enforce the judgment, and (2) the underlying settlement agreement did not permit the recovery of such fees. Appellants appealed from the order denying attorney fees.

DISCUSSION

Section 685.040 provides, “The judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment. Attorney’s fees incurred in enforcing a judgment are not included in costs collectible under this title unless otherwise provided by law. Attorney’s fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” (Italics added.) In interpreting this statute, the court relied on Jaffe v. Pacelli (2008) 165 Cal.App.4th 927, 935, which states, “[T]here are two requirements before a motion for an award of postjudgment attorney fees may be awarded as costs: (1) the fees must have been incurred to ‘enforce’ a judgment; and (2) the underlying judgment had to include an award for attorney fees pursuant to . . . section 1033.5, subdivision (a)(10)(A), which provides that attorney fees may be awarded when authorized by contract.”

This statement is true as far as it goes, but it is incomplete. The statute contains a third requirement: that the fees incurred be “reasonable and necessary.” (§ 685.040.) The internal logic of the statute is as follows: attorney fees are costs; only costs that are reasonable and necessary are recoverable; therefore, fees must be reasonable and necessary to be recoverable. Accordingly, there are three requirements for recovering attorney fees under section 685.040: (1) the fees sought were incurred to enforce the judgment; (2) the underlying judgment included an award of contractual attorney fees; and (3) the fees incurred were both reasonable and necessary.

Neither the parties nor the court addressed the third element. Instead, the court found that neither of the first two elements were satisfied. We conclude the court’s findings were in error.

Regarding the first element, the court found that none of the fees sought constituted enforcement activity. The court reasoned, “[T]he attached billing includes only vague descriptions of ‘conferences’ regarding ‘motions,’ or ‘attorney fees’ or they provide no description at all. The only ‘motion’ described with any specificity is the motion for civil contempt, which was unsuccessful. [¶] Moreover, there is no evidence that the time incurred for ‘a considerable amount of written and oral communications’ between [Appellants], Defendants and the City’s representatives was to ‘enforce’ the judgment.”

As to the vague entries the court described, we find no error. Appellants only response to this aspect of the court’s ruling is that defendants did not specifically challenge the entries that the court described as vague. But the court did, and we presume the court’s ruling is correct. It thus became appellants’ burden on appeal to overcome that presumption. Simply pointing out that defendants had not challenged them is insufficient. Moreover, the evidence supports a conclusion that Buechler’s shifting position on how defendants were to replace their sewer connection, and the fees incurred in connection with that, were counterproductive and, rather than enforcing the judgment, actually inhibited the enforcement of the judgment.

As to the contempt motion, however, we conclude the court erred. The contempt proceedings were plainly enforcement proceedings. The grounds for the motion were that defendants allegedly had “failed and refused, and continue to fail and refuse, to perform the work required of them by the Judgment . . . .” While appellants did not prevail on the motion, there is nothing in section 685.040 that requires the moving party to prevail in order to recover enforcement costs. And where, as here, the gist of the judgment requires the performance of a physical act, short of appointing a receiver, the primary means by which performance may be compelled is to hold the nonperforming party in contempt.

Regarding the second element, the court concluded the underlying judgment did not contain an award of contractual attorney fees, reasoning as follows: “[T]he underlying judgment included an award of attorney’s fees and costs only for the bringing of the CCP 664.6 motion, as provided for by the parties’ settlement agreement ‘for such motion.’ Otherwise, the judgment expressly stated, ‘[a]ll parties shall bear his/her/its/their own costs and attorney’s fees,’ in accordance with the stipulation for settlement. The underlying judgment an[d] order grant[ed] Moving Parties $5,140 in attorney’s fees and costs for the bringing of the section 664.6 motion, but there was no award of fees or costs to the Moving Parties as the ‘prevailing party’ in the stipulation for settlement that was reduced to judgment.”

The court read too much into section 685.040. The second element asks one simple question: Does the judgment contain an award of contractual attorney fees? Here, it plainly does. The settlement agreement contained a provision authorizing fees to the prevailing party on a motion pursuant to section 664.6. “A settlement agreement is simply a contract.” (Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161, 1176.) And the judgment included a fee award pursuant to that contract. The element was satisfied. The fact that the fee provision was limited in scope does not change that outcome.

Nor is that outcome changed by the fact that the judgment incorporated the provision in the settlement agreement that “[a]ll parties shall bear his/her/its/their own costs and attorney’s fees.” This provision started as a boilerplate part of a mediation settlement form. There is nothing in the record to suggest that the parties or the court ever contemplated section 685.040 at all, much less that appellants intended to waive their rights under section 685.040. We interpret the contractual provision as simply a limitation on what fees the contract permitted: fees incurred in successfully litigating a section 664.6 motion, and nothing else.

Appellants’ motion, however, was not based on a contract, or even on the judgment per se. It was a statutory motion. As the court explained in Jaffe, supra, 165 Cal.App.4th at p. 934, “Generally, when a judgment is rendered on a case involving a contract that includes an attorney fees and costs provision, the ‘judgment extinguishes all further contractual rights, including the contractual attorney fees clause. [Citation.] Thus, in the absence of express statutory authorization, . . . postjudgment attorney fees cannot be recovered.’ [Citation.] However, ‘[f]ees authorized by statute do not present the same problem. A judgment does not act as a merger and a bar to statutory fees.’” Thus, absent a waiver, the only question was whether the elements of the statute were satisfied. Here, the requirement that the judgment contain an award of contractual attorney fees was satisfied.

While the first two elements of the statute were satisfied, neither the parties nor the court addressed whether the third element was satisfied; i.e., that the fees incurred in the contempt motion were “reasonable and necessary.” (§ 685.040.) “It is axiomatic that the determination of what constitutes reasonable attorney’s fees is a matter vested in the sound discretion of the trial court.” (Cortez v. Bootsma (1994) 27 Cal.App.4th 935, 938.) Here, the court did not exercise that discretion. Appellants contend their contempt motion, though denied, was successful in prompting defendants to comply with the judgment. Whether that rendered the fees incurred in the contempt motion reasonable and necessary is something the trial court should address in the first instance. Accordingly, we will remand with instructions to reconsider appellants’ attorney fee motion in light of the requirement that the fees incurred be reasonable and necessary.

DISPOSITION

The postjudgment order denying Buechler’s and Woockman’s motion for attorney fees pursuant to section 685.040 is reversed. On remand, the court is directed to reconsider the motion in light of the requirement in section 685.040 that the fees incurred be “reasonable and necessary.” The parties shall bear their own costs on appeal.

IKOLA, J.

WE CONCUR:

ARONSON, ACTING P. J.

THOMPSON, J.