A recent court decision has affirmed a postjudgment order awarding attorney fees to a commercial trading company in a contentious legal battle over a warehouse lease agreement. The case, filed by Cubework.com, Inc. against Solo Trading, Inc., was initially heard in the Superior Court of Los Angeles County and heard in the California 2nd District Court of Appeals on June 6th, 2024
Cubework.com, Inc. initiated the lawsuit on September 30, 2019, accusing Solo Trading of breaching an Occupancy License Agreement and trespassing on their property. The complaint arose from an April 29, 2019 agreement under which Cubework licensed warehouse space to Solo for general warehousing and temporary storage of inventory. According to Cubework’s claims, Solo failed to pay monthly license fees starting in July 2019 and left personal possessions at the premises while causing damage to the property. Cubework sought damages equivalent to the reasonable value of the occupied space or double the license fee as stipulated in their agreement.
Solo Trading responded with a cross-complaint alleging negligence, breach of contract, intentional interference with contractual relations, conversion, trespass to chattels, violation of Business and Professions Code section 17200 (Unfair Competition Law), fraud in inducement, and constructive eviction. Solo contended that they were unable to obtain a business license due to code violations at the property for which Cubework was responsible. They claimed that after city inspections revealed unpermitted work and lack of occupancy certification by Cubework, operations were halted by city orders. Consequently, Solo’s merchandise worth approximately $40,000 was locked inside the premises when Cubework barred access.
After two years of litigation culminating in a bench trial from January 31 through February 4, 2022, Judge Steven J. Kleifield found that while Solo had breached certain terms of the License Agreement by not paying fees and conducting retail business instead of warehousing activities as allowed by the agreement; these breaches were excused due to Cubework's failure to provide usable premises owing to code violations and lack of occupancy certification. Additionally, it was determined that Solo did not remain in possession as Cubework had locked them out while keeping their property inside unlawfully.
The trial court ruled in favor of Solo on several counts including breach of contract for failing to provide usable premises and conversion for retaining Solo’s merchandise unlawfully. The court awarded $48,511.50 in damages: $45,000 for converted merchandise plus $3,511.50 for unused license fees paid by Solo.
Subsequently, Solo moved for attorney fees based on an indemnification clause within their License Agreement citing gross negligence or willful misconduct by Cubework. Despite opposition from Cubework arguing against such findings and questioning the amount claimed ($225,894), Judge Michael Small granted the motion recognizing intertwined claims making separation impractical and deeming billed hours reasonable given litigation history.
Justices Chaney, Rothschild and Bendix upheld this decision noting that Cubework failed to demonstrate error or abuse of discretion regarding willful misconduct findings entitling Solo to indemnification under Civil Code section 2772.
Attorneys involved included Daniel M. Park representing Cubework.com Inc., while Matthew L. Brinton and Nickolas B. Solish represented Solo Trading Inc., with Judge Michael Small presiding over final rulings.