City of La Verne v. Gonzalez CA2/2

FACTS AND PROCEDURAL HISTORY

In 2007, the City and defendants agreed to settle defendants’ ongoing lawsuit against the City by signing a Settlement Agreement and Mutual Release (Agreement). Two provisions of the Agreement are relevant to this appeal: (1) defendants agreed to convert the apartment on their property back into a garage within nine months; and (2) the parties agreed that attorneys fees could be awarded to a “prevailing party” who sued to enforce the Agreement. After nearly four years went by with defendants yet to complete the conversion, the City sued them seeking (1) specific performance of the Agreement, (2) injunctive relief, and (3) disgorgement of the rents defendants were improperly collection for renting out what should be a garage. Following an unreported bench trial, the trial court granted the City’s prayer for specific performance and issued a permanent injunction. Both orders required defendants to evict their tenant and to convert the apartment back into a garage, on pains of having to disgorge rents collected after the date of judgment. The court also determined that the City was “the prevailing party in this litigation”, and thus entitled to…