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March 24, 2026 Get Citation Alerts Download PDF Add Note

O'Leary v. Jones

California Court of Appeal

• Citations: None known

• Docket Number: D085327

• Opinion

• Authorities (4)

• Cited By (0)

• Summaries (0)

• Similar Cases (26.8K)

• PDF

Combined Opinion

Filed 3/24/26

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

JENNIFER O’LEARY, D085327

Cross-complainant and
Respondent,

v. (Super. Ct. No. RIC2002554)

WALTER JONES III,

Cross-defendant and
Appellant.

APPEAL from an order of the Superior Court of Riverside County,
Godofredo Cuison Magno, Judge. Request for judicial notice denied.
Affirmed as modified.
Rod Pacheco and Irasema Rocha, for Cross-defendant and Appellant.
Reeves & Weiss, Jeffrey H. Reeves, Daniel L. Weiss and Lindley G.
Round, for Cross-complainant and Respondent.
Michael Scheinker filed an unsuccessful petition to confirm an
arbitration award against Walter Jones III, which the trial court dismissed
for lack of personal jurisdiction. After it dismissed the petition and expressly
declined to rule on Jones’s request to vacate the award, the court also denied
Jones’s motion for attorney’s fees, concluding there was no party prevailing

on the contract for purposes of Civil Code 1 section 1717.
We conclude the trial court did not abuse its discretion in denying
Jones’s motion for attorney’s fees, reasonably finding that Jones obtained
only an interim victory. We thus affirm the court’s attorney’s fee ruling. But
because there is no dispute that the petition to confirm arbitration award was
dismissed, we remand and direct the court to award reasonable court costs to
Jones.

FACTUAL AND PROCEDURAL BACKGROUND

This appeal is part of a broader dispute between Scheinker, 2 Jones,
and other parties. Scheinker leased his commercial property to Green
America Inc.; Jones signed the lease on Green America’s behalf. Jones also
signed a guarantee clause in the lease making him responsible for “the
prompt payment of Rent or other sums that become due pursuant to [the
lease], including any and all court costs and attorney fees included in
enforcing the [lease].”
Green America filed this action, asserting claims against Scheinker.
Scheinker filed a successful petition to compel arbitration pursuant to the

1 Undesignated statutory references are to the Civil Code.
2 Jennifer O’Leary is the successor in interest to Scheinker, who died
while these proceedings were pending. For brevity, we refer to Scheinker as
the party in the trial court, and O’Leary as respondent on this appeal.
2
terms of the lease agreement, and the court stayed the action. Scheinker
then made a counterdemand for arbitration, asserting claims against Jones,
Green America, and others. The arbitration culminated in an award in
Scheinker’s favor, finding Jones liable to Scheinker as the guarantor of Green
America’s lease agreement.
Scheinker returned to the trial court, filing a petition to confirm the
arbitration award against Green America, Jones, and the other respondents.
The court confirmed the petition as against Green America, but “denied” it
as to Jones, finding “an issue of personal jurisdiction” because Jones was
“named as [a] counter-respondent[] in Scheinker’s counter-demand in

arbitration, but never named [as a] part[y] in this action.” 3 The court
concluded that “Scheinker failed to produce any evidence that . . . Jones
ever agreed to arbitrate any claims” because he did not sign the lease in
a personal capacity, and the guarantee clause did not “incorporate the
arbitration provision included in the Lease.” According to the court, it was
irrelevant that Jones had been named as a respondent in the arbitration and
in the petition to confirm the arbitration award because he had not been
joined in the court action before the matter was ordered to arbitration, and
“personal jurisdiction over non-parties is established under [Code of Civil

3 We requested supplemental briefing on a number of issues, including
the parties’ view of the basis for the trial court’s judgment on the petition to
confirm. The parties agree that the trial court in fact “dismissed” the petition
to confirm arbitration award, either as a matter of personal jurisdiction or
under Code of Civil Procedure section 1287.2.
3
Procedure section] 1293.” 4 Scheinker appealed the court’s order, but
subsequently dismissed that appeal.
Jones filed a motion for attorney’s fees and costs with the trial court.
The parties disputed whether Jones was a “party prevailing on the contract”
under Civil Code section 1717 and thus entitled to recover fees under the
terms of the guarantee provision. The court concluded he was not,
explaining:
“The Court granted Scheinker’s petition to confirm the
arbitration award against Green America only, and denied
the petition as to . . . Jones, finding that the Court lacked
personal jurisdiction over [him]. Notably, the Court
declined to rule on Jones’[s] request to vacate the
arbitration award. Accordingly, the Court finds that there
was no prevailing party as between Jones and Scheinker in
the postarbitration proceedings.

“Given the unusual circumstances of this case, the cases
relied upon by Jones are inapposite. . . . Unlike those
cases, the Court acted sua sponte in determining that it
lacked personal jurisdiction over Jones and declined to rule
on Jones’[s] request to vacate the award. Thus, the Court
did not rule on whether the arbitration award is
enforceable against Jones, and neither Jones nor Scheinker
are prevailing parties in the postarbitration proceeding.”

The court did not separately address Jones’s request for costs under Code of
Civil Procedure section 1032. Jones appeals the order as to both fees and
costs.

4 Code of Civil Procedure section 1293 provides: “The making of an
agreement in this State providing for arbitration to be had within this State
shall be deemed a consent of the parties thereto to the jurisdiction of the
courts of this State to enforce such agreement by the making of any orders
provided for in this title and by entering of judgment on an award under the
agreement.”
4
DISCUSSION

A. Attorney’s Fees
“In any action on a contract, where the contract specifically provides
that attorney’s fees and costs, which are incurred to enforce that contract,
shall be awarded either to one of the parties or to the prevailing party, then
the party who is determined to be the party prevailing on the contract,
whether he or she is the party specified in the contract or not, shall be
entitled to reasonable attorney’s fees in addition to other costs.” (§ 1717,
subd. (a).) “[T]he party prevailing on the contract shall be the party who
recovered a greater relief in the action on the contract. The court may also
determine that there is no party prevailing on the contract for purposes of
this section.” (Id., subd. (b)(1).) “The prevailing party determination is to be
made only upon final resolution of the contract claims . . . .” (Hsu v. Abbara
(1995) 9 Cal.4th 863, 876 (Hsu).) “[F]ees under section 1717 are awarded to
the party who prevailed on the contract overall, not to a party who prevailed
only at an interim procedural step.” (DisputeSuite.com, LLC v. Scoreinc.com
(2017) 2 Cal.5th 968, 977 (DisputeSuite).
“When a defendant obtains a simple, unqualified victory by defeating
the only contract claim in the action, section 1717 entitles the successful
defendant to recover reasonable attorney fees incurred in defense of that
claim . . . .” (Hsu, supra, 9 Cal.4th at p. 877.) Otherwise, “[t]he trial court
ruling on a motion for fees under section 1717 is vested with discretion in
determining which party has prevailed on the contract, or that no party has.”
(DisputeSuite, supra, 2 Cal.5th at p. 973.)
Jones argues he “achieved a simple, unqualified victory” because he
“achieved his litigation objective of preventing the enforcement of Scheinker’s
arbitration award.” O’Leary counters that Jones was not the prevailing party

5
because the trial court’s order did not finally resolve the contract claims and
did not prevent refiling of the same substantive claims in another court. We
agree that the trial court’s order did not resolve the enforceability of the
award as to Jones. Thus, we find that the trial court did not abuse its
discretion by determining that no party prevailed on the contract in this
action.
The parties offer different interpretations of the trial court’s order
dismissing the petition to confirm the arbitration award. But in the trial
court’s own view, it “did not rule on whether the arbitration award is
enforceable against Jones.” We similarly understand the trial court to have
ruled that it lacked personal jurisdiction over Jones, not that the award did
not bind Jones under Code of Civil Procedure section 1287.2. (See id. [“The
court shall dismiss the proceeding under this chapter as to any person named
as a respondent if the court determines that such person was not bound by
the arbitration award and was not a party to the arbitration”].) The court did
not cite that statute, and instead repeatedly discussed its view that Jones
had not been properly joined as party. It repeated twice in its attorney’s fee
order that it had dismissed the petition against Jones because “it lacked
personal jurisdiction over” him.
In any case, as the trial court noted, it expressly declined to rule on
Jones’s request to vacate, leaving the arbitration award neither confirmed
nor vacated. An unconfirmed arbitration award “has the same force and
effect as a contract in writing between the parties to the arbitration.” (Code
Civ. Proc., § 1287.6.) “For purposes of res judicata, even an unconfirmed
arbitral award is the equivalent to a final judgment.” (Bucur v. Ahmad
(2016) 244 Cal.App.4th 175, 186.) The court’s order thus did not finally
resolve the enforceability of the award as to Jones.

6
Even if we could read the dismissal order as finding that the
arbitration award was not directly enforceable against Jones, the court
confirmed the award against Green America. Jones’s liability under the
arbitration award stems exclusively from his personal guarantee of Green
America’s liability. The trial court did not resolve whether Jones is liable
under the guarantee provision, and thus could have reasonably concluded it
had not finally resolved the contract dispute between these parties.
Although cited in O’Leary’s briefing, Jones does not address the
Supreme Court’s holding in DisputeSuite. In that case, the Court held that a
trial court had not abused its discretion in determining that a party who
obtained a dismissal on the ground of forum non conveniens was not the
prevailing party under section 1717, even though that issue finally resolved
the California litigation. (DisputeSuite, supra, 2 Cal.5th at pp. 974–977.)
“While [defendant] had succeeded in enforcing the forum selection clauses in
two of its agreements with [plaintiff], it had not defeated [plaintiff’s] breach
of contract and related claims.” (Id. at p. 974.) Central to the court’s
reasoning was “that the action had already been refiled in the chosen
jurisdiction and the parties’ substantive disputes remained unresolved.” (Id.
at 971.) While not discussed by the trial court here, we note that Scheinker
had already filed a second petition to confirm the arbitration award by the

time the court ruled on Jones’s fee motion. 5 This provides further support for
our conclusion that the trial court did not abuse its discretion in declining to
find Jones was the prevailing party.

5 O’Leary’s request for judicial notice is denied as unnecessary. The
second petition to compel arbitration is already part of the appellate record,
and the other documents are not relevant to our resolution of the appeal.

7
In his supplemental briefing, Jones relies on Domestic Linen Supply
Co., Inc. v. L J T Flowers, Inc. (2020) 58 Cal.App.5th 180, in which a party

filed an action to compel arbitration. (Id. at pp. 183–184.) 6 The trial court
denied the petition and found the respondent, LJT, was entitled to fees under
section 1717. (Domestic, at p. 184.) The court of appeal affirmed, agreeing
that the arbitration agreement was unenforceable and that LJT was the
prevailing party under section 1717, having won the only issue in the
litigation. (Domestic, at pp. 185, 187.)
Jones also relies on Otay River Constructors v. San Diego Expressway
(2008) 158 Cal.App.4th 796 (Otay River), another case involving a standalone
petition to compel arbitration. (Id. at p. 800.) There, this court found that
the party who defeated the petition was the prevailing party “on the only
contract claim at issue in the action—whether to compel arbitration under
the” parties’ agreement. (Id. at p. 807.) “Significantly,” we noted, “the merits
of the contract claims under the . . . [c]ontract that [the petitioner] sought to
send to arbitration were not at issue in the court proceedings to compel
arbitration and the fact that the parties will probably pursue these claims in
another action does not lessen [the respondent’s] victory in this discrete legal
proceeding.” (Id. at p. 808.)
The denial of a standalone petition to compel arbitration will usually
resolve the arbitrability of the dispute under the contract. Here, in contrast,
the dismissal of the petition to confirm the arbitration award did not finally
resolve the enforceability of the award as to Jones, either directly or in his
capacity as guarantor to Green America.

6 Although Jones’s supplemental brief went beyond the scope of our
request, O’Leary had the opportunity to respond. We thus exercise our
discretion to consider his additional arguments.
8
Further, DisputeSuite specifically “disapprove[d]” two court of appeal
decisions “to the extent they state the prevailing party determination under
section 1717 must be made without regard to the contract litigation’s
continuation in another forum.” (DisputeSuite, supra, 2 Cal.5th at p. 979.)
We are bound to follow DisputeSuite rather than Otay River to the extent the
latter suggested it was irrelevant that “the parties will probably pursue [their
contract] claims in another action.” (Otay River, supra, 158 Cal.App.4th at
p. 808.)
In sum, we find that the trial court did not abuse its discretion by
finding there was no party prevailing on the contract for purposes of this
action. We therefore affirm the court’s order denying Jones’s motion for
attorney’s fees.
B. Costs
With respect to Jones’s request for costs, the trial court failed to
separately address whether he was a “prevailing party” under Code of Civil
Procedure section 1032. Under this provision, a “ ‘[p]revailing party’ ”
includes “a defendant in whose favor a dismissal is entered.” (Id., § 1032,
subd. (a)(4).) “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.” (Id., subd. (b).) A party may be a “prevailing party” under Code
of Civil Procedure section 1032 even if he is not the “party prevailing on the
contract” under Civil Code section 1717. (See, e.g., Andrade v. Western
Riverside Council of Governments (2024) 99 Cal.App.5th 1020, 1029.)
On appeal, O’Leary does not dispute that Jones was a “a defendant in
whose favor a dismissal is entered,” and thus entitled to recover costs. (Code
Civ. Proc., § 1032, subds. (a)(4), (b).) Accordingly, we will remand to the trial
court for the limited purpose of awarding Jones his costs.

9
DISPOSITION

We affirm the court’s order with respect to Jones’s request for
attorney’s fees. With respect to costs, we remand to the trial court with
directions to award costs to Jones under Code of Civil Procedure section 1032.
O’Leary shall recover her costs on appeal.

DATO, Acting P. J.

WE CONCUR:

CASTILLO, J.

RUBIN, J.

10