Mikki v. Lifemark Grp.

ILHAM MIKKI, Plaintiff and Respondent, v. LIFEMARK GROUP, INC., Defendant and Appellant.

D076885

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

January 20, 2021

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. 37-2018-00038794-CU-BC-CTL)

APPEAL from an order of the Superior Court of San Diego County, Eddie C. Sturgeon, Judge. Reversed.

Gordon Rees Scully Mansukhani and Craig Joel Mariam, Alison M. Pringle for Defendant and Appellant.

Law Offices of Douglas and Douglas Jaffe for Plaintiff and Respondent.

Defendant and appellant Lifemark Group, Inc. (Lifemark) appeals from an order awarding Ilham Mikki attorney fees under the Consumers Legal Remedies Act (Civ. Code,¹ §§ 1750-1784; the CLRA) in her lawsuit against Lifemark arising out of an alleged agreement to purchase a cemetery space.Mikki's operative complaint sought solely injunctive relief under the CLRA. After accepting Lifemark's Code of Civil Procedure section 998 (section 998) offer to compromise and dismissing her case with prejudice, Mikki moved for $67,000 in attorney fees. The trial court granted Mikki's motion in part, awarding $38,300 in fees after reducing the requested sum by $11,400 for fees incurred after the section 998 offer, allowing $2,700 for fees incurred for bringing the motion, and further reducing the sum by $20,000 based on apportionment. The trial court reasoned that as a practical matter, if the case had progressed Mikki would have amended her complaint to seek damages so as to permit the award of CLRA attorney fees.

Lifemark contends Mikki is not entitled to an attorney fee award under the CLRA because she did not satisfy its statutory conditions, namely, its requirement that a plaintiff make a pre-lawsuit demand for correction or amend her pleading to seek damages. It further contends Mikki is not a prevailing party because she did not obtain her requested relief under the CLRA or state any other claim. Finally, Lifemark contends that even if Mikki were entitled to a fee award, the court abused its discretion by awarding more than half of the fees she incurred.

We hold that Mikki, who sued under the CLRA for solely injunctive relief and whose section 998 compromise offer was silent on the question of damage, is as a matter of law precluded from qualifying as a prevailing party for purposes of recovering CLRA attorney fees. She cannot establish she suffered some damage within the meaning of the CLRA and Meyer v. SprintSpectrum L.P. (2009) 45 Cal.4th 634, which requires that she do so in order to obtain CLRA attorney fees.² We reverse the order.

FACTUAL AND PROCEDURAL BACKGROUND

In August 2018, Mikki and her husband sued Lifemark, a cemetery owner/operator, alleging that a Lifemark representative and Mikki had entered into a written agreement for a cemetery space, Mikki paid a security deposit which Lifemark acknowledged, but Lifemark denied them access to the cemetery. Among other causes of action,³ Mikki and her husband included a claim for violation of the CLRA, alleging they were consumers who entered into a transaction with Lifemark intended to result or resulting in the sale or lease of services, Lifemark made various false representations about its goods and services in violation of section 1770, subdivision (a), and they relied on Lifemark's false representations in deciding to purchase the space. Mikki and her husband alleged: "Plaintiffs are seeking injunctive relief, and [are] not currently seeking damages on this cause of action, and therefore Plaintiffs were not required to send a pre-filing notice to Lifemark pursuant to . . . section 1782."

Mikki thereafter noticed the deposition of a Lifemark employee, prompting Lifemark to seek a protective order to postpone discovery until after it filed its responsive pleading. Lifemark then filed a demurrer. Before the hearing on the demurrer, Mikki filed an amended complaint, droppingher husband's claims against Lifemark but retaining all causes of action including for injunctive relief under the CLRA. In this pleading, Mikki alleged she entered into the cemetery space purchase agreement so her husband could be buried near her father, Lifemark accepted and acknowledged Mikki's deposit, but Lifemark later told her it would not supply the space, telling Mikki it had been sold to another customer, though it instead used it to install a bench. Mikki alleged her husband died in September 2018 and was buried in another cemetery, making her extremely upset that he was not buried near her father. Lifemark again demurred to the amended pleading. In the interim, Mikki served written discovery and again sought to depose the Lifemark employee. Lifemark renewed its motion for a protective order.

About a month later, Lifemark served, and Mikki accepted, a section 998 offer to compromise for payment to Mikki of $5,000.01. The offer provides in part that Lifemark's payment "shall be exclusive of attorneys' fees and costs incurred as of the date of this offer."⁴ In March 2019 Mikki filed arequest for dismissal of her action with prejudice "pursuant to [the] . . . section 998 agreement." The dismissal provides that the court "did not waive court fees and costs for a party in this case."

Mikki thereafter moved for $67,000 in attorney fees under the CLRA. She maintained the section 998 offer's language that it was "exclusive of attorneys' fees and costs incurred as of the date of this offer" preserved her right to fees under Timed Out LLC v. 13359 Corp. (2018) 21 Cal.App.5th 933. Mikki argued the CLRA applied to her agreement; that she was a consumer and had entered into a transaction with Lifemark for goods or services within the meaning of the law. She argued an award of fees was mandatory under section 1780, subdivision (e) even when the litigation was resolved by pretrial settlement agreement. Mikki argued she was the prevailing party as the party with the net monetary recovery under Code of Civil Procedure section 1032, subdivision (a)(4), the amount of fees she sought was reasonable, and she should recover all of the sought-after fees without apportionment.

Lifemark opposed the motion, arguing that because Mikki did not receive the sole relief she sought under the CLRA—an injunction—she was not entitled to recover attorney fees as a matter of law. It argued that assuming she was entitled to any fees, such fees could not include fees incurred after the date of the offer or that were unnecessary or excessive to the action. Lifemark argued Mikki unnecessarily incurred fees in drafting her complaint and seeking unproductive court intervention, including on behalf of her husband. According to Lifemark, under Benson v. Southern California Auto Sales, Inc. (2015) 239 Cal.App.4th 1198 (Benson), a plaintiff who could not maintain a damages claim under the CLRA was not entitled to recover attorney fees based on a monetary settlement.

The trial court granted Mikki's motion in part, ordering Lifemark to pay $38,300 in attorney fees after reducing her request by $11,400 for fees incurred after the section 998 offer and allowing $2,700 in fees for bringing the motion. Finding the CLRA must be liberally construed to promote its underlying purpose, the court ruled the amount of fees did not need to be tied to any percentage of the recovery. It nevertheless reduced the fees an additional $20,000 "based upon apportionment with regard to [plaintiff's husband's] claims and because only one cause of action out of five allowed attorney's fees."

Lifemark filed this appeal from the order.⁵

DISCUSSION

I. Standard of Review

" 'On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.' " (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175; see also Medina v. South Coast Car Co., Inc. (2017) 15 Cal.App.5th 671, 683; Benson, supra, 239 Cal.App.4th at p. 1211; Kim v. Euromotors West/The Auto Gallery (2007) 149 Cal.App.4th 170, 176 (Kim).) Where a court makes a prevailing party determination by comparing the parties' relative degrees of success, wereview the court's conclusion for an abuse of discretion. (See DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 971; Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 148 (Graciano).)

Once a party has met the criteria for an attorney fee award, we assess the amount of the fee award for abuse of discretion, as that is a matter entrusted to the trial court's sound discretion. (In re Tobacco Cases I (2013) 216 Cal.App.4th 570, 587; Benson, supra, 239 Cal.App.4th at p. 1207.) Under either standard of review, a trial court will err by either failing to exercise discretion, or by taking " ' " ' "action that transgresses the confines of the applicable legal princip[les]" ' " ' " because such action is an abuse of discretion. (Kim, supra, 149 Cal.App.4th at pp. 176-177; see Graciano, supra, 144 Cal.App.4th at p. 148.)

II. The CLRA

"The CLRA proscribes 'unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer[]' . . . ." (Valdez v. Seidner-Miller, Inc. (2019) 33 Cal.App.5th 600, 608-609.) Such proscribed acts include, for example, "[m]isrepresenting the source, sponsorship, approval, or certification of goods or services"; "[r]epresenting that goods or services have sponsorship, approval,...