First American Title Ins. v. Cal. Dept. of Tax and Fee Admin. CA4/1 ( 2022 )

Filed 2/7/22 First American Title Ins. v. Cal. Dept. of Tax and Fee Admin. CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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). Thi s opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
FIRST AMERICAN TITLE D079025
INSURANCE COMPANY,
Plaintiff and Respondent,
(Super. Ct. No. 37-2018-
v. 00065184-CU-WM-CTL)
CALIFORNIA DEPARTMENT OF TAX
AND FEE ADMINISTRATION,
Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County,
Ronald F. Frazier, Judge. Reversed with directions.
Rob Bonta, Attorney General, Tamar Pachter, Assistant Attorney
General, and Lisa W. Chao, Deputy Attorney General, for Defendant and
Appellant.
Bewly Lassleben & Miller and Leighton M. Anderson, for Plaintiff and
Respondent.
First American Title Insurance Company (First American) prevailed in
the superior court in an action seeking (1) a refund of sales tax
reimbursement it had paid to lessors of business equipment; and (2) an order
vacating as unconstitutional a tax regulation providing that sales tax applied
if the lessee (such as an insurance company) was exempt from paying use tax.
The superior court later awarded First American $204,391.97 in attorney fees
as the prevailing party under Revenue and Tax Code section 7156. The
California Department of Tax and Fee Administration (Department)
separately appealed from the judgment and the postjudgment order awarding
attorney fees. While considering the appeal from the judgment, we stayed
briefing on the attorney fee appeal.
We recently reversed the underlying judgment and vacated the writ of
mandate issued by the superior court. (First American Title Ins. Co. v.
California Dept. of Tax & Fee Administration (2021) 71 Cal.App.5th 603(First American I).) After the remittitur issued, we vacated the stay in the
attorney fee appeal, set a briefing schedule, and encouraged the parties to
reach a negotiated resolution in light of the reversal of the judgment. Acting
on our suggestion to resolve this matter themselves, the parties have now
stipulated to a summary reversal of the attorney fee order.
DISCUSSION
Code of Civil Procedure, section 128, subdivision (a)(8), provides in
relevant part: “An appellate court shall not reverse or vacate a duly entered
judgment upon an agreement or stipulation of the parties unless the court
finds both of the following: ¶ (A) There is no reasonable possibility that the
interests of nonparties or the public will be adversely affected by the reversal.
¶ (B) The reasons of the parties for requesting reversal outweigh the erosion
of public trust that may result from the nullification of a judgment and the
risk that the availability of stipulated reversal will reduce the incentive for
pretrial settlement.”
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In this case, the parties’ reason for seeking a stipulated reversal is well-
grounded in legal authority. Upon reversal of the underlying judgment, it
necessarily follows that the trial court’s award of attorney fees under a
statute authorizing a fee award to a prevailing party must also be reversed.
(See National Parks and Conservation Assn. v. County of Riverside (2000) 81
Cal.App.4th 234, 238.) Thus, there could be no erosion of public trust
because reversal is compelled by law. On a broader level, public trust in the
courts is enhanced, not eroded, when parties recognize the legal reality of a
final disposition in a related appeal and agree to resolve other pending cases
based on it.
Nor will reversal adversely affect the interests of nonparties or the
public. To the contrary, the public interest is advanced because a pending
appeal by a state agency will be resolved in its favor without its incurring
further expense. (See Union Bank of California v. Braille Inst. of America,
Inc. (2001) 92 Cal.App.4th 1324, 1329.) And because the order being
challenged pertains only to attorney fees incurred in the underlying case,
reversal will have no impact on nonparties to the appeal, and indeed no such
nonparties have been identified.
Finally, as to the last factor, the availability of a stipulated reversal
will not reduce the incentive for pretrial settlement since the pursuit of this
appeal would inevitably lead to reversal in any event.
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DISPOSITION
The order awarding attorney fees is reversed and the matter is
remanded to the superior court with directions to enter a new order denying
First American’s motion for attorney fees. Pursuant to stipulation, the
parties shall bear their own costs on this appeal, and the remittitur shall
issue forthwith.
DATO, J.
WE CONCUR:
AARON, Acting P. J.
GUERRERO, J.
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