Filed 7/8/20 The Real Estate Store v. Michel CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

THE REAL ESTATE STORE et al.,

Plaintiffs, Cross-defendants, and Respondents,

v.

RONALD MICHEL,

Defendant, Cross-complainant, and Appellant.

B301771

(Los Angeles County

Super. Ct. No. YC071207)

APPEAL from a judgment of the Superior Court of Los Angeles County, Ramona G. See, Judge. Reversed in part with directions.

James A. Michel on behalf of Defendant, Cross-complainant, and Appellant.

No appearance on behalf of Plaintiffs, Cross-defendants, and Respondents.

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Plaintiff Real Estate Store (RES) filed a complaint against defendant Ronald Michel, and Michel filed a cross-complaint against RES. A jury returned a verdict for Michel on the complaint, and for RES on the cross-complaint. The trial court entered judgment on the jury’s verdict and ordered the parties to bear their own costs and attorney fees.

Michel appealed from the judgment, urging that the trial court erred in ordering the parties to bear their own costs. RES has not filed a respondent’s brief or otherwise appeared in this appeal. We conclude that, as a matter of law, Michel was the prevailing party for purposes of a costs award under Code of Civil Procedure section 1032. We therefore reverse the costs award and remand for a determination of the costs to which Michel is entitled.

FACTUAL AND PROCEDURAL BACKGROUND

RES filed the present action against Michel on March 23, 2016, for breach of a real estate listing agreement. Among other things, the complaint alleged that the listing agreement provided for an award of attorney fees to the prevailing party in an action regarding listing fees. On May 2, 2016, Michel filed a cross-complaint for financial elder abuse against RES. Both the complaint and the cross-complaint sought costs of suit, including reasonable attorney fees.

The complaint and cross-complaint were tried to a jury. The jury returned a verdict for Michel on the complaint, and for RES on the cross-complaint.

The trial court entered judgment on the complaint and cross-complaint on July 25, 2019. As relevant here, the judgment provided with respect to costs as follows: “Based upon the jury’s verdicts on both the Complaint and Cross-Complaint, the Court orders that each side is to bear its own costs and fees.”

Michel timely appealed from the judgment.

DISCUSSION

Michel contends the trial court erred in failing to award him costs of suit pursuant to section 1032. Because his appellate contention presents a pure question of law, our review is de novo. (Estate of Ashlock (2020) 45 Cal.App.5th 1066, 1073 [issues of statutory interpretation reviewed de novo]; Lateef v. City of Madera (2020) 45 Cal.App.5th 245, 252 [same].)

Section 1032 provides that except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding. (§ 1032, subd. (b).) A “prevailing party” “includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.” (§ 1032, subd. (a)(4), italics added.) “If any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not.” (Ibid.)

It is well established that where a defendant files a cross-complaint, but neither the complainant (plaintiff) nor the cross-complainant (defendant) obtains any relief, the trial court is required to award costs to the defendant. In McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn. (1991) 231 Cal.App.3d 1450, 1453–1455 (McLarand), the court said this result is compelled by the plain language of section 1032, which provides that a prevailing party includes “a defendant where neither plaintiff nor defendant obtains any relief.” (Italics added.) The court explained: “A defendant cannot obtain relief unless it files a cross-complaint against the plaintiff because affirmative relief cannot be claimed in the answer. (§ 431.30, subd. (c).) The statute, therefore . . . contemplates that when neither the plaintiff nor the defendant who has filed a cross-complaint prevails, the defendant is the prevailing party entitled to costs.” (Id. at p. 1454.)

Many other courts have similarly held. (See Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 438–440 (Zintel) [pursuant to section 1032, prevailing party includes defendant “ ‘who defeats the plaintiff’s claim on a complaint, but who recovers nothing on his [or her] cross-complaint against the plaintiff’ ”]; Cussler v. Crusader Entertainment, LLC (2012) 212 Cal.App.4th 356, 370–372 (Cussler) [trial court lacked discretion to deny costs to defendant who defeated plaintiff’s complaint but did not recover on cross-complaint]; Schrader v. Neville (1949) 34 Cal.2d 112, 113–115 [where neither party recovered against the other after a trial on complaint and cross-complaint, trial court erred in awarding prevailing party costs to plaintiff; “[a]lthough the defendant did not recover on her cross-complaint, she was the prevailing party in the court below because plaintiff was denied recovery against her”].)

In the present circumstances, therefore, where neither party obtained any relief, the trial court lacked discretion to require the parties to bear their own costs. We therefore will remand this matter to allow the trial court to determine the costs to which Michel is entitled.

We note the very limited nature of our holding. Although the trial court was required to award Michel his costs pursuant to section 1032, it was not required to award him contractual attorney fees. (See Cussler, supra, 212 Cal.App.4th at p. 371, fn. 6 [“A prevailing party for purposes of costs under Code of Civil Procedure section 1032 is not necessarily a prevailing party for an award of attorney fees under Civil Code section 1717”]; Zintel, supra, 209 Cal.App.4th at p. 438 [trial court’s finding that defendant was the prevailing party under section 1032 “although a necessary prerequisite for an award of attorney fees as costs [citation], was not determinative of whether she was also the prevailing party entitled to recover ‘reasonable attorney’s fees in addition to other costs’ ”]; McLarand, supra, 231 Cal.App.3d at p. 1456 [“We emphatically reject the contention that the prevailing party for the award of costs under section 1032 is necessarily the prevailing party for the award of attorneys’ fees. Civil Code section 1717 declares the party recovering a greater relief in the action on the contract is the prevailing party. But it further provides the trial court may ‘determine that there is no party prevailing on the contract’ ”].) On remand, therefore, the trial court must award Michel his costs, but is not required to award him prevailing party attorney fees.

DISPOSITION

The judgment is reversed insofar as it orders both parties to bear their own costs, and is otherwise affirmed. The matter is remanded to the trial court for a determination of the costs to which Michel is entitled. Michel shall bear his own appellate costs.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

EDMON, P. J.

We concur:

LAVIN, J.

EGERTON, J.