Sugarman v. Benett CA2/8 filed 8/3/26

Filed 8/3/26 Sugarman v. Benett CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 EIGHT
STEVEN A. SUGARMAN,
Individually and as Trustee, etc.,
Plaintiffs and Appellants,
v.
HALLE BENETT et al.
Defendants and Respondents.
B338610
(Los Angeles County
Super. Ct. No. 19STCV36697)
APPEAL from a post-judgment order of the Superior Court
of Los Angeles County, Wendy Chang, Judge. Affirmed.
Cozen O’Connor, Thomas W. Casparian; Dorsey & Whitney
and Jeremy E. Deutsch for Plaintiffs and Appellants.
Morrison & Foerster, Mark R. McDonald, Zachary
Maldonado, Joseph R. Palmore, Zach ZhenHe Tan and Rebecca
W. Setrakian for Defendants and Respondents.
_____________________________

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INTRODUCTION
Plaintiffs Steven A. Sugarman and his trust sued Banc of
California, several executives, and members of its board directors
in the wake of a scandal that led to Sugarman’s resignation from
his positions at Banc of California in January 2017.
After years of litigation, on April 18, 2024, the trial court
awarded $1,062,813.20 in attorney fees to the directors of the
board and executives jointly and severally.
On appeal, plaintiffs request that we reverse the attorney
fee order. They argue the trial court misinterpreted the relevant
contracts and misapplied the law governing fee applications. In
the alternative, plaintiffs ask us to reduce the fee award by
$401,396.
We disagree with plaintiffs’ arguments and affirm the order
awarding fees.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Parties
Plaintiff Sugarman is the former chair of the board,
president, and chief executive officer of Banc of California, Inc.
and its national bank subsidiary Banc of California, N.A. (Banc).
While Banc was a defendant in the underlying suit, it is not a
party or respondent in this appeal.
A second plaintiff is The Steven and Ainslie Sugarman
Living Trust, Sugarman’s revocable living trust which held
various stock warrants and common stock in Banc. As relevant
here, the trust is the successor-in-interest to Banc’s contracts
with two of Sugarman’s business enterprises, COR Capital LLC
and COR Advisors LLC. For convenience, we refer to Sugarman
and the trust collectively as plaintiffs.

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Plaintiffs sued Banc and some of its executives and
members of the board of directors over circumstances
surrounding Sugarman’s resignation. Defendants Halle Benett,
Jeffrey Karish, Jonah Schnel, Robert Sznewajs, and Richard
Lashley served on Banc’s board of directors at times relevant to
plaintiffs’ claims. Defendant Hugh Boyle was Banc’s chief risk
officer and was promoted to interim chief executive officer upon
Sugarman’s resignation. Defendant John Grosvenor was Banc’s
general counsel and corporate secretary. We collectively refer to
the Banc executives and directors as defendants.
B. The Operative Complaint
On February 19, 2020, plaintiffs filed the 167-page
operative first amended complaint (FAC) with 636 pages of
exhibits attached. The FAC alleged 12 causes of action, some
against Banc, some against defendants, and some against both
Banc and defendants: 1) breach of contract; 2) fraudulent
inducement to hold securities; 3) negligent misrepresentation to
induce holder to hold securities; 4) tortious interference with
contract; 5) unfair competition; 6) conspiracy to engage in unfair
competition; 7) misrepresentation preventing subsequent
employment; 8) tortious interference with prospective economic
advantage; 9) defamation; 10) breach of indemnification
agreements; 11) account stated with respect to the separation
indemnification agreement; and 12) breach of the covenant of
good faith and fair dealing.
We concentrate on the allegations relevant to the fourth
cause of action for tortious interference with contract, as follows:
In 2010, Sugarman’s investment firm COR Capital led a
recapitalization of Banc for $60 million with other investors.
Concurrent with the recapitalization, “Sugarman and the entities

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he wholly owned with his wife, including the Trust, COR Capital,
LLC and COR Advisors LLC, entered into a series of contracts
with Banc.” (Italics added.) At least seven contracts are
identified throughout the FAC: 1) Subscription Agreement with
Registration Rights and Indemnification Rights dated July 16,
2010 (Subscription Agreement) (entirely restating the
Subscription Agreement dated May 3, 2010); 2) Consulting and
Expense Agreement with Warrant Agreement, Registration
Rights and Indemnification Rights dated July 16, 2010
(Consulting Agreement) (restating the Consulting Agreement
dated May 3, 2010 with Annex I entitled “Indemnification” and
Annex II entitled “Form of Warrant”); 3) Warrant to Purchase
Common Stock dated November 1, 2010 (Warrant Agreement);
4) Stock Appreciation Rights Agreement granted August 21, 2012
inclusive of all subsequent amendments dated August 21, 2012,
December 13, 2013, May 23, 2014, March 2 and 24, 2016
(collectively, SAR Agreement); 5) 2016 employment agreement;
6) director and officer indemnification right agreement; and
7) separation agreement with indemnification rights entered
January 23, 2017. These contracts “were each entered into by
Banc as inducements for Mr. Sugarman and the entities he
wholly owned with his wife . . . to provide services and capital to
Banc and each, as required, were approved by the Board of
Directors of the Banc, through the full Board . . . prior to
adoption.”
1. The Subscription Agreement
The Subscription Agreement (attached as an exhibit to the
FAC) provides terms for the purchase and sale of securities and
common stock. The Subscription Agreement identifies the
subscriber as COR Capital LLC with Sugarman’s signature as

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the “managing member.” Article X of the Subscription
Agreement, entitled “Miscellaneous,” includes relevant provisions
10.3, 10.6, and 10.8.
Section 10.3 states in part, “Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the
benefits of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and assigns. If
the Subscriber is more than one person, the obligation of such
Subscriber shall be joint and several and the agreements,
representations, warranties, covenants, and acknowledgements
herein contained shall be deemed to be made by and be binding
upon each such person and his or her heirs, executors,
administrators, successors and legal representatives.” (Italics
added.)
Section 10.6 provides: “In the event of a dispute regarding
this Agreement that results in litigation or arbitration, the
prevailing party, as determined by the finder of facts, shall be
entitled to an award of reasonable attorneys’ fees.” (Italics added.)
Section 10.8 provides: “The parties agree to execute and
deliver all such further documents, agreements and instruments
and take such other and further action as may be necessary to
carry out the purposes and intent of this Agreement.”
Section 5.6 of the Subscription Agreement specifies that
“[t]he Company shall provide for the registration, offering and
sale of the shares of Common Stock purchased by [the]
Subscriber. . . in accordance with the terms of Schedule III to this
Agreement.” (Italics added.) The Schedule III attachment to the
Subscription Agreement, entitled “Registration Rights” is also
attached to the FAC as part of its exhibits. Section (h) of the
Registration Rights provides the “agreements set forth in this

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Schedule III shall . . . be binding upon the successors and assigns
of each of the parties to the Agreement, including without
limitation and without the need for an express assignment or
assumption, direct and indirect transferees of Subscriber’s
Registrable Securities to whom the Registrable Securities have
been validly transferred under the terms of the Agreement.”
(Italics added.)
2. The Consulting Agreement
The Consulting Agreement specifies that the Banc seeks to
engage COR Advisors LLC “as a consultant to provide . . .
strategic, financial, and general corporate advise, and COR
Advisor desires to be engaged by [Banc] to provide such advice.”
The Consulting Agreement provides: “In consideration of COR
Advisors’ entry into this Agreement and the services
contemplated to be provided hereunder, the Board has
determined to issue . . . and [Banc] further agrees to deliver, to
COR Advisors . . . a warrant (the ‘Warrant,’ such Warrant to be
substantially in the form attached as Annex II to this Agreement)
to purchase, in the aggregate, 1,560,000 shares of Class B Non-
Voting Common Stock at an exercise price of $11.00, which shall
become exercisable in increments of 130,000 shares of Class B
Non-Voting Common Stock upon the Authorization Date . . . as
set forth in Annex II to this Agreement. [Banc] shall provide for
the registration, offering and sale of the shares of Common Stock
issuable upon exercise of the Warrant in accordance with the
terms of Annex III to this Agreement.” (Italics added.)
The Consulting Agreement includes no attorney fee
provision.

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Annex III of the Consulting Agreement, entitled
“Registration Rights,” provides: “Substantially simultaneously
with the Closing, [Banc] shall enter into an agreement (the ‘Reg
Rights Agreement’) with COR Advisor, which shall provide
COR Advisor with customary rights from and following the
Closing with respect to the registration, offering and sale of the
shares of Common Stock issuable upon exercise of the Warrant.
Subject to the foregoing, the terms and conditions of the Reg
Rights Agreement shall be substantially consistent in substance
with, and, taken as a whole, not less favorable to COR Advisor (as
a holder of registrable securities) than, the terms and conditions of
any agreement(s) entered into with investors in the Transaction
relating the registration, offering and sale of the shares of
Common Stock issued in the Transaction; provided, that (i) the
registration rights set forth in the Reg Rights Agreement shall in
no event expire prior to the Final Expiration Date (as defined in
the Warrant) (subject to customary early sunset provisions
relating to public sale of all subject registrable securities prior to
the expiration of such term) and (ii) the Reg Rights Agreement
will provide that in connection with any registration thereunder,
[Banc] will reimburse COR Advisor for the reasonable fees and
disbursements of one counsel.” (Italics added.)
Neither the Consulting Agreement nor Annex III’s
Registration Rights were attached to the FAC.
3. Warrant to Purchase Common Stock Agreement
The agreement entitled “Warrant to Purchase Common
Stock” dated November 1, 2010 (Warrant Agreement), attached
as an exhibit to the FAC, provides that the warrants, initially
issued to COR Advisors LLC, could be converted into voting
stock. It provides: “This certifies that, for value received, COR

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Advisors LLC . . . is entitled to purchase, in the aggregate, up to
1,395,000 fully paid and nonassessable shares (the ‘Warrant
Shares’) of Class B Non-Voting Common Stock, par value $0.01
per share (the ‘Class B Common Stock’) of [Banc] . . . during the
Warrant Exercise Period, at the Exercise Price. Notwithstanding
the foregoing, this Warrant shall be exercisable for, in lieu of
shares of Class B Common Stock, shares of common stock, par
value $0.01 per share (the ‘Voting Common Stock,’ and
collectively, with the Class B Common Stock, the ‘Common
Stock’) . . . and, in such event, the term ‘Warrant Shares’ shall be
deemed to include such shares of Voting Common Stock for all
purposes hereunder. This Warrant is being granted in connection
with the Amended and Restated Consulting and Expense
Agreement, dated as of July 16, 2010, between COR Advisors . . .
and [Banc] (the ‘Consulting Agreement’). This Warrant is
entitled to the benefits of the registration rights set forth in
Annex III of the Consulting Agreement (the ‘Registration Rights
Agreement’).”
4. The FAC’s Relevant Allegations
In the second half of 2016, Sugarman reported wrongdoing
and self-dealing by defendant Benett and others at Banc “to the
Board of Directors and other control functions for Banc . . . on
numerous occasions.” Defendants refused to address the
wrongdoing and instead “Benett and the other Director
Defendants agreed to help protect one another . . . to further their
personal interests, and to take over control of the bank.” In
December 2016, defendants “saw the opportunity to topple Mr.
Sugarman and take over the bank to their great personal benefit”
and “became determined to retaliate against Sugarman and to
have [him] terminated for his whistleblowing.” On January 4,

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2017, defendants became aware that the Securities and Exchange
Commission (SEC) planned to open a formal order of
investigation into Banc. On January 6, 2017, the board’s special
committee (whose members were the director defendants)
“ ‘morphed’ its work from investigating allegations of wrongdoing
to instead focus on ways to terminate Mr. Sugarman, take over
control of Banc, and to cloak their illicit plans . . . to coordinate
their [c]over [u]p strategy.”
On January 22, 2017, defendants called an emergency
board meeting where Benett recommended the board terminate
Sugarman as chief executive officer and president. Sugarman
“objected to Director Defendants[’] conduct as inappropriate,
illegal, and totally conflicted” but “ultimately concluded that he
would be unable to sign Banc’s financials or serve as an
Executive or Director at Banc so long as the Director Defendants
were in control of the Board.” Sugarman “decided it was in his
[and] Banc’s . . . best interest to separate . . . and to avoid
personal liability for signing false financial disclosures which the
Director Defendants were pressuring him to do.”
The next day, on January 23, 2017, Sugarman resigned and
entered into a separation agreement including a full release and
a new indemnification agreement with Banc and its affiliates. He
“provided a full release to the Banc for its actions which occurred
prior to the execution of the Separation Agreement.”
“Following Mr. Sugarman’s departure, Defendants
breached various contracts, including those between Banc and
Mr. Sugarman, Mrs. Sugarman and their wholly owned affiliates
(including the Trust, COR Capital LLC, and COR Advisors, LLC)
relating to Mr. Sugarman’s warrants, stock appreciation rights,
registration rights, and indemnification rights.” Defendants

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“attempted to control Sugarman through strategic failures to
perform on [his] post-employment indemnification agreement,
Warrant Agreement, registration rights agreements,
indemnification agreements, tax reporting, and other contractual
agreements and relationships with Banc.” More specifically.
defendants breached the Warrant Agreement with plaintiffs by
“fraudulently amending their Articles of Organization to the
detriment of Class B stockholders in June 2017” without
Sugarman’s consent and by “refusing to tender common stock
upon the exercise of the Warrants”; defendants breached
Sugarman’s “indemnification agreements in order to attempt to
punish [him] for providing true and accurate testimony about
defendant wrongdoing and to attempt to control him in
litigation.” Defendants “targeted [plaintiff] for financial and
reputational harm including through intentional breaches of
contract, fraud, torts, unfair business practices, and unfair
competition that have resulted in not less than $65 million in
financial harm to [plaintiff] following the end of his employment
from Banc.” Defendants made material misrepresentations to
induce plaintiffs to hold, rather than sell, Banc common stock
and warrants.
Per the Stock Appreciation Rights Agreement, Sugarman
had a right to stock based on the appreciation of 1,559,012 shares
of Banc common stock upon his departure from Banc. The
agreement enabled Sugarman to convert his stock appreciation
rights into voting common stock upon his election to exercise
those rights. Misrepresentations by defendants “caused Mr.
Sugarman to be restricted from exercising his [stock appreciation
rights].”

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Sugarman “is also entitled to recovery of his necessary and
reasonable legal fees and expenses under the Separation
Indemnification Agreement, Subscription Agreement, and
Consulting Agreement incurred in connection with his need to
enforce his rights under these agreements.”
5. Fourth Cause of Action for Tortious Interference with
Contract
The FAC’s fourth cause of action for tortious interference
with contract alleges:
Plaintiffs owned warrants initially issued to COR Advisors
on November 1, 2010, pursuant to the Warrant Agreement and
later transferred to the plaintiff trust. The Warrant Agreement
entitled plaintiffs to purchase nonassessable shares of Class B
common stock (i.e., warrant shares) and the warrants could be
converted into Class A voting stock. Plaintiffs complied “with all
requisite conditions such that the [w]arrant [s]hares may be
converted into voting common stock.” The Registration Rights
Agreement “contained a provision stating that the registration of
COR Advisor’s [w]arrants would be done on terms no less
favorable than terms offered to any other investor.” Defendants
“knew” about the Warrant Agreement and Registration Rights
Agreement between plaintiffs and Banc and “engaged in conduct
to cause Banc to breach” those two agreements to plaintiffs’
detriment.
In breach of the Warrant Agreement, Banc refused to allow
plaintiffs to convert the warrant shares it holds into voting
common stock. In breach of the Registration Rights Agreement,
Banc failed to register the warrant shares as voting common
stock. Defendants “engaged in conduct to cause Banc to
unilaterally change [these] agreements by falsely asserting and

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then disclosing that Mr. Sugarman’s warrants were convertible
only into Class B non-voting shares, shares which were
substantially less valuable than the Class A voting shares.”
Defendants’ conduct of unilaterally changing the rights and
terms of Class B shares in 2017 “without any notice to or
approval by plaintiffs” amounted to a breach of Plaintiffs’
Warrant Agreement and Registration Rights Agreement. “The
Director Defendants, Grosvenor, Lashley, and Boyle intended to
cause Banc to breach the Warrant Agreement and the
Registration Rights Agreement as retaliation against Mr.
Sugarman. The Director Defendants, Grosvenor, Lashley, and
Boyle acted outside the scope of their roles as Directors for their
own personal benefit . . . and acted as part of their individually
tortious conspiracy . . . to cause Banc to breach the Warrant
Agreement and the Registration Rights Agreement.”
Banc’s refusal to issue Class A voting shares amounted to
at least $17 million in harm to plaintiffs. Sugarman was “further
damaged due to the fact that, in good faith, he sold for value some
of his warrant contracts on to a third-party buyer based on, in
part, the representation that the warrants would be convertible
into Class A voting shares” but due to the tortious interference by
defendants, Sugarman “incurred significant cost and expense in
providing indemnification to the warrants’ purchaser as required
under the purchase agreement with the purchaser.”
C. Defendants’ Demurrer and Anti-SLAPP Motion
On April 6, 2020, defendants filed a demurrer and an anti-
SLAPP motion. They demurred to the second, third, fourth, fifth,
sixth, seventh, eight, and ninth causes of action for failure to
state facts sufficient to constitute a cause of action; as to the
fourth cause of action for tortious interference with contract,

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defendants also argued Sugarman lacked standing to sue.
Defendants’ anti-SLAPP motion sought to strike the same causes
of action excepting the fourth cause of action for tortious
interference with contract.
On September 1, 2020, the trial court granted the anti-
SLAPP motion in part. On December 27, 2021, the Court of
Appeal affirmed the judgment to the extent it granted the anti-
SLAPP motion and reversed the judgment to the extent it denied
the anti-SLAPP motion on the remaining claims. Thus, seven of
the eight causes of action against defendants were struck in their
entirety. (Sugarman v. Benett (2021) 73 Cal.App.5th 165;
Sugarman v. Brown (2021) 73 Cal.App.5th 152.)
On May 17, 2022, defendants filed a motion for attorney
fees as prevailing parties on their anti-SLAPP motion. On
November 10, 2022, the trial court granted defendants’ attorney
fee motion in part. The record does not include the trial court’s
ruling on defendants’ April 6, 2020 demurrer. However, all
parties represent on appeal that the trial court did not adjudicate
the demurrer.
D. Defendants’ Second Demurrer and Writ Petition
On June 16, 2022, defendants filed a second demurrer as to
the remaining fourth cause of action for tortious interference with
contract. Defendants argued, inter alia, defendants “as corporate
officers, cannot be held personally liable for inducing their
corporation to breach a contract.” On September 9, 2022, the
trial court overruled the demurrer.
Defendants filed a writ of mandate petitioning the Court of
Appeal to reconcile “two distinct but overlapping doctrines. A
cause of action for tortious interference with contract can be
brought only against a ‘stranger’ to the contract—not against a

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contracting party or its agents. . . . [¶] Separately, courts have
recognized a privilege defense—often called the ‘managerial
privilege’—to tortious interference when third parties induce a
breach to protect a contracting party. Defendants invoking this
privilege may be required to show they were not motivated by
personal gain. [¶] At least theoretically, both doctrines may
apply where, as here, plaintiffs bring tort claims against a
corporation’s officers and directors for allegedly interfering with
the corporation’s contract.”
On July 6, 2023, the Court of Appeal issued its order and
alternative writ of mandate (case No. B324186). The court
ordered the trial court to vacate its September 9, 2022 order
overruling defendants’ second demurrer to the fourth cause of
action for tortious interference with contract and issue a new
order sustaining the demurrer. The court concluded, among
other things, that Defendants are “current and/or former officers,
directors, or employees of Banc” and corporate agents and
employees acting for and on behalf of a corporation cannot be
held liable for inducing a breach of the corporation’s contract.
“Whether the agent is motivated by a potential personal benefit
does not nullify the agency or otherwise render the agent a
stranger to the contract. The agent’s motivations may be
relevant to the managerial privilege and the agent’s immunity
rule, but those doctrines are separate from the stranger doctrine.”
On July 17, 2023, the trial court vacated its September 9,
2022 order and sustained without leave to amend defendants’
demurrer to the fourth cause of action for tortious interference
with contract. All eight causes of action against defendants had
now failed, and the trial court entered judgment in favor of
defendants on July 28, 2023.

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E. Defendants’ Motion for Attorney Fees
On October 2, 2023, defendants moved for an award of
$1,067,598.50 in attorney fees and $2,925.67 in costs. This sum
was the result of 1,274.6 hours of attorney and paralegal time
incurred in the proceeding and for which defendants had “not
otherwise recovered for in connection with their prior anti-
SLAPP motion.” The total fees and costs incurred in this
proceeding are categorized as follows:
T Ta as sk ks s T To otta all H Ho ou ur rs s T To otta all F Fe ee es s
Research and Briefing re:
April 6, 2022 Demurrer
539.6 $401,396
Research and Briefing re:
June 16, 2022 Demurrer
94.8 $89,561.25
Preparation of Answers to FAC 53.8 $44,023.50
Research and Briefing re:
Motion for Reconsideration
56 $54,445.05
Research and Briefing re:
Writ Petition
220.1 $161,901.75
Propounding Discovery and
Responding to Discovery
237.2 $236,588.40
Research and Briefing re:
Motion for Protective Order
73.1 $79,682.55
T To otta alls s 1 1,,2 27 74 4..6 6 $ $1 1,,0 06 67 7,,5 59 98 8..5 50 0
Defendants argued they are entitled to fees as the
prevailing parties as a matter of right based on the Subscription
Agreement, which included a Registration Rights Agreement
with “an extraordinarily broad attorney’s fees provision.”
Defendants argued “there has been a dispute regarding th[e]
[Subscription Agreement] that has resulted in litigation—which

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is why Plaintiffs attached the [Subscription Agreement] to their
First Amended Complaint.” Defendants filed the declarations of
their attorney Mark R. McDonald.
On January 4, 2024, plaintiffs filed their opposition to the
motion for attorney fees and argued their dispute with
defendants does not “regard” the Subscription Agreement.
Plaintiffs filed the declaration of their counsel Jeremy E. Deutsch
in support of their opposition.
On January 10, 2024, defendants filed their reply as well as
the declaration of Banc’s attorney Jonathan C. Sanders.
Defendants included as exhibits their propounded discovery and
plaintiffs’ responses.
F. Hearings on the Attorney Fee Motion
On March 21, 2024, the trial court indicated its intent to
continue the hearing because “the way that the tasks were
described to me were very global. I need them broken down, you
don’t have it done by lawyer, you have them by actual lump sum
and then it was like this motion, this motion, that motion. I need
more detail as to what exactly is being done. And so although I’m
not requiring you to actually submit the bill – quite frankly, that
might be a bit much. I don’t want to look at a million dollar bill.
So whatever works for you guys that gives me a better
understanding of how the task broke down between the
individuals so I can evaluate the time spent, what specific task.”
The court continued: “I do think there is a fee agreement. [¶] The
question, then, is whether or not if the defendants can enforce as
part of it – I don’t think the third-party beneficiary listed enough
facts to establish that that was enough information, but I do
think they are agents and they are entitled to claim provisions of
the fees because they were agents . . . at that time. That was the

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entire basis of the theory against them and that was the basis of
the court of appeals result which actually is law in this case.”
As the trial court requested, defendants filed the
supplemental declaration of attorney Mark R. McDonald in
support of their fee motion. Plaintiffs filed a supplemental brief
in opposition.
At the continued hearing on April 18, 2024, the trial court
stated: “I requested further detail from [defendants’ counsel] and
he has filed them, and I am satisfied in his explanation of why
the hours turned out to be the way that they did. [¶] The only
issue I have is Ms. Jowkofsky’s rate. She is a fairly new lawyer
so I am going to reduce her requested rate down.” “Beyond that,
though, the time and all the other rates are fine. This was and is
a very, very aggressively litigated case. And I mean, on the
plaintiffs’ side, I can only remember I think one hearing where
there was only one lawyer present from the plaintiffs’ side. Every
hearing, there are multiple partners from Cozen which I don’t
think is a problem. If your client wants that, I think that is fine.
But I think that is reflective, though, of the aggression and the
way that this case was litigated. [¶] And, because of the way it
was litigated, I don’t think it should be a surprise that the people
on the other side throw equivalent resources at it to defend it.
And so the hours spent in light of the way the litigation has
unfolded – and I have absolutely personally observed it. The
filings are always very large. There is lots of stuff that has to be
responded to. . . . Mr. McDonald’s supplemental filings go in and
explain why the hours were what they were for each – he singles
out a couple of major litigation points in the case, and he points
out why the hours that were expended [are] justified. And I
largely agree. [¶] And so, as a result of that, I am not cutting any

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of the time, and that is the tentative[,]” awarding “$1,065,738.87
jointly and severally against the plaintiffs.”
G. The Trial Court’s Ruling
On April 18, 2024, the trial court awarded a total of
$1,062,813.20 in attorney fees and $2,925.67 in costs. The trial
court found defendants “are prevailing parties as defined in Code
of Civil Procedure section 1032.” The trial court found “[a]t least
one of Plaintiffs’ claims is based directly on interference with the
Subscription Agreement” and that regardless of “[w]hether or not
plaintiffs’ cause of action was brought directly on the Registration
Rights Agreement, the fourth cause of action ‘regards’ the
Subscription Agreement” due to the “broad wording” of the
attorney fees clause. “The clause permits recovery for any
dispute ‘regarding’ the Subscription Agreement. The constant
cross-referencing of all these documents to each other, all as part
of the same transaction during Banc’s 2010 recapitalization,
demonstrates that each document ‘regards’ the others.” The trial
court further found that defendants “may enforce the attorneys’
fees provision in the Subscription Agreement” because they
“acted as Banc’s agents at all relevant times.”
Finally, the trial court found defendants sought reasonable
fees and costs and made lengthy findings in that regard:
Defendants’ “timekeepers charge reasonable hourly rates” for the
work of nine attorneys and 4 paralegals. Based on its review of
Mr. McDonald’s declarations, the trial court found the hourly rate
for Hanna Jolkovsky, “a third-year associate charging $810
hourly in 2023 after her graduation from Pepperdine Law in
2020” “inflated due to her inexperience and reduced it to $751.50
hourly, commensurate with the rate approved for “another
associate.”

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The trial court found “[d]efendants have proven their
entitlement to all the hours they billed via a Second
Supplemental Declaration of Mark R. McDonald.” The court
found unpersuasive plaintiffs’ arguments that defendants’ fees
were excessive. “McDonald’s Supplemental Declaration more
than explains how the tasks were divided, the contribution that
each team member made, and the reason why each task took as
long as it did. The Court also observes that this argument is
ironic, given that Plaintiffs staffed most hearings in this case
with multiple experienced lawyers at each hearing, from across
different offices. [¶] In the case of Defendants’ demurrer,
McDonald explains that the complaint was 165 pages long,
contained 561 paragraphs and exhibits totaling 620 pages, and
incorporated by reference an additional 3,200 pages of
documents. . . . McDonald enumerates [40] specific issues his
team researched, some basic, others quite advanced. . . . He
attests to [32] drafts of the demurrer, with major changes from
beginning to end . . . . The time charged is reasonable in context.”
The court found “unpersuasive” plaintiffs’ argument that
defendants’ fees “should be slashed because all of Plaintiffs’
claims except the tortious interference claim were stricken when
defendants prevailed on their special motion to strike.” The trial
court relied on the language of the fees clause in determining the
“prevailing party is entitled to all its fees, not only those incurred
regarding one cause of action.”
Plaintiffs filed a timely notice of appeal.

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DISCUSSION
On appeal, plaintiffs argue the trial court erroneously
awarded $1.065 million in attorney fees based on a fee shifting
provision in the Subscription Agreement when no claim
regarding the Subscription Agreement was asserted against
defendants, who were neither signatories nor parties to it.
Plaintiffs argue the trial court erred in holding that their claim
for tortious interference with contract “regards” the Subscription
Agreement (such that the Subscription Agreement’s fee-shifting
provision applied) because that claim alleges that defendants
“interfered with the Warrant Agreement and the Consulting
Agreement’s Registration Rights Agreement (neither of which
have an attorneys’ fee provision), not the [Subscription
Agreement’s] Registration Rights Agreement.” Plaintiffs argue
that the trial court’s order awarding fees should be reversed, or,
alternatively, reduced by $401,396, i.e., the fees incurred for the
April 6, 2020 demurrer, because defendants “did not meet their
burden to apportion the $401,396 in fees incurred . . . concerning
(1) the tortious interference with contract claim and (2) plaintiffs’
seven other claims . . . which indisputably do not ‘regard’ the
[Subscription Agreement] and are not inextricably intertwined
with the tortious interference claim.”
We conclude a dispute “regarding” the Subscription
Agreement resulted in litigation between plaintiffs and
defendants, such that the attorney fee provision of the
Subscription Agreement applies. We further conclude defendants
are empowered to enforce the attorney fee provision as they are
agents of Banc, as previously decided by this court in the writ
proceedings. Finally, we find the trial court did not abuse its

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discretion in refusing to apportion the fee award based only on
the cause of action for tortious interference with contract.
A. Applicable Law
Under the American rule, each party to a lawsuit ordinarily
pays its own attorney fees. Code of Civil Procedure1 section 1021,
which codifies this rule, provides: “Except as attorney’s fees are
specifically provided for by statute, the measure and mode of
compensation of attorneys and counselors at law is left to the
agreement, express or implied, of the parties . . . .” In other
words, section 1021 permits parties to “contract out” of the
American rule by executing an agreement that allocates attorney
fees. Thus, parties “may validly agree that the prevailing party
will be awarded attorney fees incurred in any litigation between
themselves, whether such litigation sounds in tort or in contract.”
(Mountain Air Enterprises, LLC v. Sundowner Towers, LLC
(2017) 3 Cal.5th 744, 751, italics added (Mountain Air); see Miske
v. Coxeter (2012) 204 Cal.App.4th 1249, 1259 (Miske); see Xuereb
v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1341.)
Section 1032, subdivision (b) provides: “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.” For
purposes of section 1032, “ ‘[p]revailing party’ includes . . . a
defendant in whose favor dismissal is entered.” (§ 1032,
subd. (a)(4).) Section 1033.5 allows for the recovery of attorney
fees as costs under section 1032 when they are expressly
authorized by contract, statute, or law. (§ 1033.5, subd. (a)(10).)
1 Undesignated statutory references are to the Code of Civil
Procedure.

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22
As to tort claims, the question of whether to award attorney
fees turns on the language of the contractual attorney fee
provision, i.e., “whether the party seeking fees has ‘prevailed’
within the meaning of the provision and whether the type of
claim is within the scope of the provision.” (Exxess Electronixx v.
Heger Realty Corp. (1998) 64 Cal.App.4th 698, 708 (Exxess);
Santisas v. Goodin (1998) 17 Cal.4th 599, 602, 608–609, 617,
619.) “ ‘If a contractual attorney fee provision is phrased broadly
enough, . . . it may support an award of attorney fees to the
prevailing party in an action alleging both contract and tort
claims: “[P]arties may validly agree that the prevailing party will
be awarded attorney fees incurred in any litigation between
themselves, whether such litigation sounds in tort or in
contract.” ’ ” (Exxess, at p. 708; Santisas, at p. 608.) Under
statutory rules of contract interpretation, the mutual intention of
the parties at the time the contract is formed governs
interpretation; such intent is to be inferred, if possible, solely
from the written provisions of the contract. (Ibid.) The clear and
explicit meaning of these provisions interpreted in their ordinary
and popular sense, unless used by the parties in a technical sense
or a special meaning is given to them by usage, controls judicial
interpretation. (Ibid.) Thus, if the meaning a layperson would
ascribe to contract language is not ambiguous, we apply that
meaning. (Ibid.)
B. Standard of Review
“ ‘Generally, a trial court’s determination that a litigant is a
prevailing party, along with its award of fees and costs, is
reviewed for abuse of discretion.’ ” (Lampkin v. County of Los
Angeles (2025) 112 Cal.App.5th 920, 926; Goodman v. Lozano
(2010) 47 Cal.4th 1327, 1332.) However, when the question

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presented requires interpretation of a statute or contract, our
review is de novo. (Lampkin, at p. 926; Goodman, at p. 1332;
Saeta v. Superior Court (2004) 117 Cal.App.4th 261, 267.) In
other words, it is a discretionary trial court decision on the
propriety or amount of statutory attorney fees to be awarded, but
a determination of the legal basis for an attorney fee award is a
question of law to be reviewed de novo. (Mountain Air, supra,
3 Cal.5th at p. 751; Cargill, Inc. v. Souza (2011) 201 Cal.App.4th
962, 966 (Cargill); see Connerly v. State Personnel Bd. (2006)
37 Cal.4th 1169, 1175 [“Under some circumstances, this may be a
mixed question of law and fact and, if factual questions
predominate, may warrant a deferential standard of review.”].)
“An experienced trial judge is in the best position to
evaluate the value of professional services rendered in the trial
court. We presume the fee approved by the trial court is
reasonable. We will not disturb the trial court’s judgment unless
it is clearly wrong. The burden is on the objector to show error.”
(Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th
734, 743.) The benchmark in determining attorney fees is
reasonableness. The primary method for calculating a
reasonable attorney fee award is the lodestar method, which
multiplies the number of hours reasonably expended by a
reasonable hourly rate. (Howell v. State Dept. of State Hospitals
(2024) 107 Cal.App.5th 143, 155.) The court then may increase or
decrease the lodestar based on a variety of factors, including the
nature, difficulty, and extent of the litigation and its issues, the
skill it required, the quality of the representation, and the results
obtained, as well as other factors. (Karton, at p. 744; Howell, at
p. 155.) The choice of a fee calculation method is generally one
within the discretion of the trial court, with the “ ‘ultimate goal’ ”

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being to calculate an award that fairly compensates counsel
without encouraging unnecessary litigation. (Howell, at p. 155.)
In reviewing a trial court’s attorney fee award, we
“ ‘ “accept the trial court’s resolution of credibility and conflicting
substantial evidence, and its choice of reasonable inferences that
can be drawn from the evidence.” ’ ” (City of San Clemente v.
Department of Transportation (2023) 92 Cal.App.5th 1131, 1149.)
“ ‘However, a trial court abuses its discretion when factual
findings critical to its decision are not supported by substantial
evidence.’ ” (Ibid.; Sukumar v. City of San Diego (2017)
14 Cal.App.5th 451, 464.)
C. The Broad Attorney Fees Provision in the
Subscription Agreement Applies to this Litigation.
The Consulting Agreement, which was not attached to the
FAC, contains no attorney fee provision.
Section 10.6 of the Subscription Agreement, attached to the
FAC, provides: “In the event of a dispute regarding this
Agreement that results in litigation or arbitration, the prevailing
party, as determined by the finder of facts, shall be entitled to an
award of reasonable attorneys’ fees.” (Italics added.)
Here, defendants are certainly the prevailing parties in the
underlying proceedings, as each of the causes of action plaintiffs
asserted against defendants were either stricken or dismissed.
The trial court entered judgment in favor of defendants on July
28, 2023. Section 1032, subdivision (a)(4) defines “prevailing
party” to include “a defendant in whose favor a dismissal is
entered.” (§ 1032, subd. (a)(4).) Thus, to determine whether
defendants are entitled to an award of attorney fees, we must
determine, consistent with the language of the Subscription

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Agreement, whether this action entailed “a dispute regarding
[the Subscription] Agreement that results in litigation.”
Where the language of the agreement broadly applies to
any “dispute” under it, the attorney fee clause encompasses any
conflict concerning the effect of the agreement, including a tort
claim. (Thompson v. Miller (2003) 112 Cal.App.4th 327, 337;
Miske, supra, 204 Cal.App.4th at p. 1259.) Applying the ordinary
rules of contract interpretation, the attorney fee provision does
not require an individual “claim” or “cause of action” in a dispute
to regard the Subscription Agreement for the fee provision to
apply; it only requires a “dispute” regarding the Subscription
Agreement which “results in litigation.” Thus, the language of
the Subscription Agreement’s fee provision does not require a
party in an action to enforce a provision of the Subscription
Agreement in order for the fee provision to apply. It is an
extremely broadly worded fee provision.
“Broad language in a contractual attorney fee provision
may support a broader interpretation.” (Gil v. Mansano (2004)
121 Cal.App.4th 739, 744; Exxess, supra, 64 Cal.App.4th at
p. 712.) Black’s Law Dictionary defines “dispute” as “[a] conflict
or controversy, especially one that has given rise to a particular
lawsuit.” (Black’s Law Dict. (12th ed. 2024) p. 593, col. 2.) The
word “regarding” and the phrase “[with respect to]” ordinarily
mean the same thing. (See Skrbina v. Fleming Companies (1996)
45 Cal.App.4th 1353, 1369, fn. 10.) “Regarding” is defined as
“with respect to; concerning.” (Webster’s Third New Internat.
Dict. (1993) pp. 1911 [definition of “regarding”] & 1934 [definition
of “respect” and phrase “with respect to”].) “[W]hen the language
of a contract is plain and unambiguous it is not within the
province of a court to rewrite or alter by construction what has

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26
been agreed upon.” (In re Mission Ins. Co. (1995) 41 Cal.App.4th
828, 837–838.)
So, as long as the litigation between the parties regards a
dispute regarding the Subscription Agreement, then the attorney
fee provision applies and permits recovery of fees by the
prevailing party. We also conclude the fee provision’s reference
to “litigation” resulting from “a dispute regarding th[e]
[Subscription Agreement]” encompasses the entire controversy
and is not limited to specific claims or causes of action arising
from the contract. If such a limitation exists, it must come from
other words in the attorney fees provision, and no such limitation
exists here.
Plaintiffs contend the FAC does not allege a dispute
regarding the Subscription Agreement and that the trial court
“erred in holding that the Consulting Agreement’s Registration
Rights Agreement is merely a ‘cross-reference’ to the
[Subscription Agreement]’s Registration Rights Agreement.”
Plaintiffs argue the FAC alleged no claims against defendants
regarding the Subscription Agreement and that the tortious
interference with contract cause of action “arises from
[defendants’] interference with the Warrant Agreement and the
Consulting Agreement’s Registration Rights Agreement, not the
[Subscription Agreement’s] Registration Rights Agreement.”
Upon our review of the language of the FAC, we must reject
plaintiffs’ argument.
Plaintiffs assert in the fourth cause of action for tortious
interference with contract that Banc breached the Registration
Rights Agreement and that defendants caused Banc to breach
said agreement. The FAC alleges: Defendants “engaged in
conduct to cause Banc to unilaterally change the rights and terms

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27
of Class B shares in 2017 without any notice to or approval by
plaintiffs which was a breach of Plaintiffs’ Warrant Agreement
and the Registration Rights Agreement.” Part of the issue here is
that the wording of the FAC does not specify if it is referring to
the Registration Rights Agreement that forms Schedule III of the
Subscription Agreement (actually entitled Subscription
Agreement with Registration Rights and Indemnification Rights
dated July 16, 2010) versus the Registration Rights Agreement
that is Annex III to the Consulting Agreement (entitled
Consulting and Expense Agreement with Warrant Agreement,
Registration Rights and Indemnification Rights dated July 16,
2010).
Similarly, the FAC does not differentiate which Warrant
Agreement it is referring to, as both the Consulting Agreement
(entitled Consulting and Expense Agreement with Warrant
Agreement, Registration Rights and Indemnification Rights dated
July 16, 2010) and the Warrant Agreement (entitled Warrant to
Purchase Common Stock dated November 1, 2010) include the
relevant wording in the title and may apply. At no point in the
FAC do plaintiffs specify any short cite or abbreviated form to the
agreements to the effect of Warrant Agreement or Registration
Rights Agreement.
We find it telling, however, that the FAC’s exhibits totaling
636 pages include the Subscription Agreement (with Schedule III
entitled Registration Rights) and not the Consulting Agreement
(with Annex III called Registration Rights Agreement). We find
the Subscription Agreement’s “Registration Rights” agreement is
the only document in the FAC’s voluminous exhibits that
plausibly includes the registration rights with which plaintiffs
alleged tortious interference.

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In addition, plaintiffs’ FAC cites many provisions directly
from the Subscription Agreement. For instance, the FAC
provides: “In addition to the Indemnification Agreement, Mr.
Sugarman is also entitled to indemnification under the
Subscription Agreement dated May 3, 2010, and amended July
19, 2010, between Banc and COR Capital, Mr. Sugarman’s
company.” (Italics added.) The FAC also directly cites sections
(g)(i) and (h) of Schedule III of the Subscription Agreement, i.e.,
Registration Rights. In fact, plaintiffs twice refer to the fee
provision of the Subscription Agreement in the FAC: 1) “All costs
incurred to collect the fees owed to Mr. Sugarman under the
Separation Indemnification Agreement and Subscription
Agreement are covered and to be paid by Banc to Mr. Sugarman
pursuant to such agreements. Latham & Watkins reasonably
incurred legal fees and expenses in connection with its
representation of Mr. Sugarman. . . .” (italics added); 2) “Mr.
Sugarman is also entitled to recovery of his necessary and
reasonable legal fees and expenses under the Separation
Indemnification Agreement, Subscription Agreement, and
Consulting Agreements incurred in connection with his need to
enforce his rights under these agreements.” (Italics added.) This is
indicative that the dispute, to some extent, regards the
Subscription Agreement.
Moreover, the declaration of Banc’s attorney Jonathan C.
Sanders, filed in support of defendants’ reply to their fee motion,
included as exhibits plaintiffs’ discovery responses. Relevant for
our purposes, in response to defendants’ second set of special
interrogatories No. 32 requesting plaintiffs to “[i]dentify the
document that YOU contend is the ‘registration rights agreement’

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29
reference[d] in Paragraph 2102 of the First Amended Complaint,”
plaintiffs’ response served on September 25, 2023 provides:
“While Responding Party lacks access to Banc’s records which
may contain further, other, and different registration rights
agreements, Responding Party identifies not less than the
agreement embodied in Annex III to the Amended and Restated
Consulting and Expense Agreement, dated May 3, 2010, and the
various subscription agreement[s] which are all believed to
include additional relevant registration rights.” Plaintiffs’
sworn discovery response identifies “subscription agreements”
which undoubtedly includes the Subscription Agreement dated
July 16, 2010, and its Registration Rights attachment.
Plaintiffs’ admission directly connects their cause of action
for their tortious interference with contract to the Subscription
Agreement. This special interrogatory response stands in direct
contradiction to what plaintiffs claim in their opposition to the
fee motion, as well as on appeal. It is well-established that “a
party cannot create an issue of fact by a declaration which
contradicts his prior discovery responses.” (Shin v. Ahn (2007)
42 Cal.4th 482, 500, fn. 12; Whitmire v. Ingersoll-Rand Co. (2010)
184 Cal.App.4th 1078, 1087; see Preach v. Monter Rainbow
(1993) 12 Cal.App.4th 1441, 1451 [the trial court may give “great
weight” to admissions made in discovery and “disregard
contradictory and self-serving affidavits of the party.”].)
To no avail, plaintiffs also make much of the fact that the
Subscription Agreement is between Banc and COR Capital,
whereas the Consulting Agreement is between Banc and COR
2 The FAC’s paragraph 210 is under the heading “Fraud
and Breach of the Warrant Agreement and Registration
Rights Agreement.”

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30
Advisors. Plaintiffs’ differentiation fails. The express language
of the Subscription Agreement and its Registration Rights
Agreement (Schedule III to the Subscription Agreement) includes
the following provisions: Section (h) of the Registration Rights
provides that the “agreements set forth in this Schedule III shall
. . . be binding upon the successors and assigns of each of the
parties to the Agreement, including without limitation and
without the need for an express assignment or assumption, direct
and indirect transferees of Subscriber’s Registrable Securities to
whom the Registrable Securities have been validly transferred
under the terms of the Agreement.” (Italics added.) The
agreement gave the subscriber, i.e., COR Capital, the right to
assign or validly transfer its “Registrable Securities” to another,
“without the need for an express assignment.” As relevant here,
the trust became the successor-in-interest to Banc’s contracts
with both of Sugarman’s business enterprises, COR Capital and
COR Advisors. Thus, the agreement is binding onto the
successor trust, i.e., plaintiff. Similarly, section 10.3 of the
Subscription Agreement states in part, “Except as otherwise
provided herein, this Agreement shall be binding upon and inure
to the benefits of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and assigns. If
the Subscriber is more than one person, the obligation of such
Subscriber shall be joint and several and the agreements,
representations, warranties, covenants, and acknowledgements
herein contained shall be deemed to be made by and binding
upon each such person and his or her heirs, executors,
administrators, successors and legal representatives.” (Italics
added.)

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31
Given the extremely broad and unambiguous language of
the attorney fee provision in the Subscription Agreement, coupled
with the wording of and exhibits to plaintiffs’ FAC, as well as
plaintiffs’ discovery responses, we find the litigation between the
parties is a dispute “regarding” the Subscription Agreement.
The attorney fees provision applies.
D. Defendants May Enforce the Attorney Fee Provision
as Agents of Banc.
Plaintiffs argue that defendants “lack standing to
enforce the [Subscription Agreement’s] fee shifting
provision” and that nonsignatories like defendants cannot
“invoke a fee provision based on mere agency principles.”
Plaintiffs contend California case law does “not suggest that
individuals who become mere agents years after the contracts are
entered into can ‘stand in the shoes’ of their principles for the
purposes of fee provisions.”
As a general rule, such attorney fees are awarded only
when the lawsuit is between signatories to the contract. (Cargill,
supra, 201 Cal.App.4th at p. 966.) However, two situations may
entitle a nonsignatory party to attorney fees. (Ibid.) “First is
where the nonsignatory party ‘stands in the shoes of a party to
the contract.’ Second is where the nonsignatory party is a third
party beneficiary of the contract.” (Ibid.)
Here, plaintiffs argue defendants “were sued as if they were
strangers to the contract, not signatories.” (Italics added.) They
contend defendants “lack standing to invoke the [Subscription
Agreement’s] fee provision because they do not ‘stand in the shoes’
of Banc.” (Italics added.)

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First of all, this Court of Appeal previously rejected
plaintiffs’ argument that defendants were strangers to the
Subscription Agreement. “It is a rule of general application that
all questions and issues adjudicated on a prior appeal are the law
of the case upon all subsequent appeals and will not be
reconsidered.” (Allen v. California Mut. Building & Loan Ass’n
(1943) 22 Cal.2d 474, 481.) This doctrine also applies “[w]hen the
appellate court issues an alternative writ . . . and the cause is
decided by a written opinion. The resultant holding establishes
law of the case upon a later appeal from the final judgment.”
(Kowis v. Howard (1992) 3 Cal.4th 888, 894; Nelson v. Tucker
Ellis LLP (2020) 48 Cal.App.5th 827, 838.)
Via its July 6, 2023 order following defendants’ writ
petition, this Court of Appeal ordered the trial court to vacate its
order overruling defendants’ second demurrer to the FAC’s fourth
cause of action for tortious interference with contract and to issue
a new order sustaining the demurrer because defendants stood in
the shoes of Banc and were not strangers to the agreements
between Banc and plaintiffs, thus defeating the fourth cause of
action as a matter of law. The July 6, 2023 order reviewed
applicable case law (Mintz v. Blue Cross of California (2009)
172 Cal.App.4th 1594; Shoemaker v. Myers (1990) 52 Cal.3d 1;
Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994)
7 Cal.4th 503; Woods v. Fox Broadcasting Sub., Inc. (2005)
129 Cal.App.4th 344; Collins v. Vickter Manor, Inc. (1957)
47 Cal.2d 875) and concluded that current and/or former officers,
directors, and employees of Banc cannot be sued as strangers to a
contract to which Banc was a party. (See Shoemaker, at pp. 24–
25 [agents were “vested with the power to act for the employer
(rightly or wrongly)” and “stand in the place of the employer,

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33
because the employer . . . cannot act except through such
agents”]; see Mintz, at p. 429 [it is thus “settled that ‘corporate
agents and employees acting for and on behalf of a corporation
cannot be held liable for inducing a breach of the corporation’s
contract.’ ”].) The Court of Appeal found “an agent ‘acting for and
on behalf of’ the corporate principal simply refers to an agent who
took the questioned actions in the course of their role with the
corporation. . . . Whether the agent is motivated by a potential
personal benefit does not nullify the agency or otherwise render
the agent a stranger to the contract.”
Defendants are thus entitled to the benefit of the
Subscription Agreement’s fee-shifting provision because, as we
previously held, defendants stand in Banc’s shoes in the
underlying dispute regarding the Subscription Agreement. (See
Cargill, supra, 201 Cal.App.4th at p. 966 [a nonsignatory party is
entitled to attorney fees “where the nonsignatory party ‘stands in
the shoes of a party to the contract.’ ”].)
In their opening brief Plaintiffs neither address nor
mention this Court’s July 6, 2023 order and analysis. In their
reply brief, they cursorily claim defendants’ “law-of-the-case
argument is . . . meritless” and that the writ decision “did not
adjudicate [defendants’] ability to invoke the [Subscription
Agreement’s] fee provision. Instead, the Court [of Appeal]
addressed . . . an entirely different issue with respect to entirely
different contracts (i.e., the Consulting Agreement’s Registration
Rights Agreement and Warrant Agreement).”
Plaintiffs are incorrect in surmising that the writ decision
was based on the Consulting Agreement and not the Subscription
Agreement; the writ decision was based on plaintiffs’ claim for
tortious interference with contract, and as explained in detail

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above, the FAC fails to adequately identify which Registration
Rights Agreement and/or Warrant Agreement it refers to in its
allegations. Moreover, plaintiffs fail to recognize that the writ
decision’s legal conclusion that defendants are not strangers to
the contract and stand in the shoes of their corporate principal
(Banc) can and does apply to the Subscription Agreement. Not
only did we find that the Subscription Agreement’s “Registration
Rights” agreement was the only document in the FAC’s 636 pages
of exhibits that included the registration rights with which
plaintiffs alleged tortious interference, but also plaintiffs’ own
response to special interrogatory No. 32 identified not just the
Consulting Agreement but also “various subscription agreements
which are all believed to include additional relevant registration
rights” in reference to paragraph 210 of the FAC under the
heading “Fraud and Breach of the Warrant Agreement and
Registration Rights Agreement.” Plaintiffs’ contrary
argument fails.
Additionally, during oral argument, plaintiffs relied heavily
on Reynolds Metal Co. v. Alperson (1979) 25 Cal.3d 124, which
addressed the factors to be considered when a non-signatory
stands in the shoes of a signatory to a contract. The Reynolds
elements, as described by plaintiffs, were neither raised nor
discussed below throughout trial court proceedings. Plaintiffs’
opposition to defendants’ motion for attorney fees did not analyze
the Reynolds factors. Plaintiffs’ supplemental opposition does not
even cite to Reynolds. Plaintiffs did not raise the Reynolds
elements to the trial court at the hearings held March 21, 2024
and April 18, 2024. While plaintiffs briefed this issue in their
reply brief on appeal, they did not discuss it in their opening brief
either. A litigant forfeits an appellate argument by failing to

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35
raise it before the trial court; we find it is belatedly raised and
forfeited. (Quiles v. Parent (2018) 28 Cal.App.5th 1000, 1013
[“ ‘Failure to raise specific challenges in the trial court forfeits the
claim on appeal.’ ”]; Premier Medical Management Systems, Inc.
v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th
550, 564 [“ ‘ “ ‘[I]t is fundamental that a reviewing court will
ordinarily not consider claims made for the first time on appeal
which could have been but were not presented to the trial court.’
Thus, ‘we ignore arguments, authority, and facts not presented
and litigated in the trial court. Generally, issues raised for the
first time on appeal which were not litigated in the trial court are
waived.’ ” ’ ”]; Mepco Services, Inc. v. Saddleback Valley Unified
School Dist. (2010) 189 Cal.App.4th 1027, 1049 [same].)
E. The Trial Court Did Not Abuse its Discretion in
Refusing to Apportion the Fee Award.
Defendants sought to recover 539.6 hours of fees in
connection with work performed “research[ing] and briefing
relat[ed] to the April 6, 2022 demurrer” to the 167-page FAC—
this amounted to $401,396 in attorney’s fees. McDonald’s
declaration confirms that none of that time was included in
defendants’ prior fee motion as prevailing parties in connection
with their anti-SLAPP motion.
Plaintiffs argue defendants should “not be entitled to any of
$401,396 in fees incurred on the April 6, 2020 demurrer” because
defendants “did not meet their burden to apportion the fees
incurred on the tortious interference claim from the fees incurred
on the seven other unrelated claims that were at issue on the
April 6, 2020 demurrer.” Plaintiffs contend “apportionment is
required because the [Subscription Agreement’s] fee provision
only covers disputes ‘regarding’ the [Subscription Agreement].”

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Plaintiffs contend the trial court erred in awarding fees on the
April 6, 2020 demurrer and request that we reverse the fee award
and reduce it by $401,396.
We review a trial court’s decision whether to apportion
attorney fees under the abuse of discretion standard. (Heppler v.
J.M. Peters Co. (1999) 73 Cal.App.4th 1265, 1297 (Heppler).)
In its ruling issued on April 18, 2024, the trial court
“reiterate[d] the language of the relevant fees clause” and found
the “dispute regards the Agreement. It resulted in litigation.
The prevailing party is entitled to all its fees, not only those
incurred regarding one cause of action.”
We agree with the trial court’s ruling. Apportionment
would be appropriate only if defendants were entitled to recover
fees on certain claims and not others; plaintiffs argue, “[w]hen
fees are recoverable on only some claims and not others, the fees
must be apportioned, unless the issues are ‘inextricably
intertwined.’ ” (Italics added.) However, the attorney fees
provision in the Subscription Agreement does not specify that
fees are recoverable on some claims and not others; it is
extremely broadly worded and expansive, and plainly read, is not
limited to fees incurred in connection with only the fourth cause
of action for tortious interference with contract.
The Subscription Agreement’s fee provision provides: “In
the event of a dispute regarding this Agreement that results in
litigation or arbitration, the prevailing party, as determined by
the finder of facts, shall be entitled to an award of reasonable
attorneys’ fees.” (Italics added.) Applying the ordinary rules of
contract interpretation, the fee provision does not require an
individual “claim” or “cause of action” in a dispute to regard the
Subscription Agreement for the fee provision to apply; it only

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37
requires a “dispute” regarding the Subscription Agreement which
“results in litigation.” The only limitation set forth by the fee
provision is that the fees awarded must be “reasonable.”
Plaintiffs’ interpretation would hold water if the fee provision
qualified or limited the award of attorney fees like so: “In the
event of a dispute regarding this Agreement that results in
litigation or arbitration, the prevailing party, as determined by
the finder of facts, shall be entitled to an award of reasonable
attorney fees solely for claims regarding or enforcing the
Subscription Agreement.”
Plaintiffs’ reliance on Heppler is misplaced. There the
prevailing party sought fees pursuant to Civil Code section 1717,
which authorizes fees only on a claim to enforce contract, not tort,
claims. (Heppler, supra, 73 Cal.App.4th at p. 1296 [citing Civil
Code section 1717 and finding “[t]he subcontract specifically
provides for recovery of attorney fees incurred to enforce the
contract”].) (Italics added.) Plaintiffs’ reliance on Estate of
Goldberg v. Goss-Jewett Company, Inc. (C.D. Cal., Oct. 12, 2016,
No. EDCV 14-1872 DSF (SHx) 2016 WL 7479344 is similarly
misplaced. Defendants in that case moved for attorney fees
arguing that “the contract along with Civil Code § 1717 entitles
them to fees as prevailing parties on the contract.” (Id. at p. *1.)
Defendants in that case “ma[de] no attempt to differentiate fees
incurred in relation to the contract claim from any of the other
claims in the case” and only “[a]fter plaintiffs opposed
[defendants’] motions by noting that § 1717 generally only entitles
a prevailing party on a contract claim to fees incurred that were
related to the contract claim . . . [did defendants] shift[] [their]
argument to a broad interpretation of the attorney’s fee provision
that [defendants] claim allows to recover any and all fees for any

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suit between [them].” (Italics added.) (Ibid.) The district court
did “not consider this theory” as it was “first raised in the reply.”
(Ibid.)
We find no abuse of discretion by the trial court with
respect to its decision not to apportion the fees pertaining to the
April 6, 2020 demurrer.
DISPOSITION
The trial court’s order granting defendants’ motion for
attorney fees is affirmed. Costs awarded to defendants.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
STRATTON, P. J.
We concur:
WILEY, J.
VIRAMONTES, J.

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