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Reginald De La Cuesta v. Esther Benham et al

March 29, 2011

REGINALD DE LA CUESTA, PLAINTIFF AND APPELLANT,
v.
ESTHER BENHAM ET AL., DEFENDANTS AND RESPONDENTS.



Appeal from an order of the Superior Court of Orange County, James Di Cesare, Judge. (Super. Ct. No. 30-2009-00116964)

The opinion of the court was delivered by: Sills, P. J.

CERTIFIED FOR PUBLICATION

OPINION

Reversed and remanded.

I. INTRODUCTION

This case tests the limits of a trial court's discretionary authority to determine that there is no "prevailing party" under Civil Code section 1717. Here, a landlord brought an unlawful detainer action and sought unpaid rent. The tenant asserted she owed the landlord nothing because there were leaks in the premises. The day before the trial the tenant vacated the premises, so the case went to trial only on the landlord's money claims. The landlord recovered 70 percent of what he claimed was owing. Nevertheless, the trial court ruled that there was no "prevailing party" for purposes of the attorney fee clause in the lease agreement.

We reverse. The result was so lopsided that, even under an abuse of discretion standard, it was unreasonable to say the landlord was not the prevailing party.

II. FACTS

Reginald de la Cuesta, the landlord, rented out a set of five suites in Laguna Hills to Esther Benham, the tenant, and her company, "Suits 4 U," under a lease agreement requiring the tenant to pay $15,000 a month (later increased to about $15,800). By November 2008 the tenant had stopped making rent payments, and in mid-December 2008 the landlord had served a 3-day notice to pay rent or quit. In a complaint for unlawful detainer filed in early January 2009, the landlord claimed $34,000 in unpaid rent through December 31, 2008. The landlord also claimed other damages of about $32,600.*fn1

The tenant quickly answered the unlawful detainer complaint, asserting that she owed nothing: The landlord had breached the warranty of habitability, and refused to repair certain water and sewage leaks. Thus the answer asserted (without further specification) that "The rental value is currently zero due to the health issues," and went on to claim that the "lease be ordered forfeit" and the landlord declared "unable to sue thereon" because of "fraud in the inducement." (In a trial brief the tenant would assert that the premises "leaked both rain and sewage water like a sieve.")

The case was scheduled to go to trial on Monday, February 23, 2009. However, since the tenant vacated the premises the previous weekend -- indeed, the day before -- the court converted the case to an ordinary civil action (see Civ. Code, § 1952.3), and, as such, the case did not come to trial until November 30, 2009. The trial court squarely rejected the tenants' fraud allegations, finding that the tenant was both an attorney and a real estate broker and represented by a realtor in entering into the transaction, and in any event the property was in good condition when the lease was signed.

As to rent, the landlord had sought $103,000 in total monetary damages in an amended trial brief. The trial court awarded $69,500. The calculations were as follows: The rent due without any deductions was $61,200, but, because there were 84 days when "the tenancy was affected by water leaks," and "the affected area" was about 25 percent of the premises, the court decided that a reduction of $11,100 was in order. The trial court also found that the common area maintenance charges should be limited to what they were estimated to be in the lease ($1,600) a month, which meant that the total common area maintenance charges due were about $12,400. With late charges stipulated to be $7,000, the judgment came in at about $69,500.

Costs were to be determined by posttrial motion, and, in February 2010, the landlord made a motion for about $42,200 in attorney fees. The motion was denied. We quote the entirety of the minute order denying the request: "Motion by plaintiff for an award of attorney's fees in the amount of $42,163 against defendant Esther Benham is denied. The court finds that there is no prevailing party for purposes of awarding attorneys fees. While plaintiff did obtain possession that was due to defendant surrendering the property. The amended trial brief filed by plaintiff on 12/01/09 requested total monetary damages of $103,015 which was reduced significantly. The plaintiff's statement of decision filed 01/22/10 notes that the court reduced the [common area maintenance] charges requested and the ...


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