Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc.
211 Cal. App. 4th 230
Cal. Ct. App.2012Background
- Barnhart sued CMC for breach of contract and promissory estoppel over decorative metalwork for a municipal library.
- CMC bid November 5, 2005 included a prevailing-party attorney fees clause; Barnhart attached and incorporated it into its contract theories.
- Court found no contract existed between Barnhart and CMC for the library project; Barnhart recovered on promissory estoppel claim only.
- CMC sought attorney fees under the bid clause arguing it defeated Barnhart’s contract claims.
- Trial court denied fees, ruling Barnhart prevailed on promissory estoppel and contract claims were intertwined.
- Appellate court reverses, holding promissory estoppel is not a contract claim and CMC is the prevailing party on the contract for §1717 purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a contractual basis exists for fee recovery under 1717. | Barnhart contends no contract with CMC contains an fees clause. | CMC argues the bid contract clause authorizes fees for the prevailing party. | Yes; there is a contractual basis under the bid's fees clause. |
| Who is the prevailing party on the contract under §1717? | Barnhart claims prevailing on promissory estoppel controls contract result. | CMC prevailed on the contract claims by defeating them. | CMC is the prevailing on the contract; promissory estoppel not a contract claim. |
| Whether promissory estoppel can be treated as a contract claim for §1717 purposes. | Promissory estoppel closely mirrors contract and should be treated as such. | Promissory estoppel is equitable, not a contract claim. | Promissory estoppel is not a contract claim under §1717; affects remedy apportionment. |
| Remand scope for attorney fees amount. | Remand to determine reasonable fees incurred defending contract claims; apportion as needed; include appeal fees. |
Key Cases Cited
- Santisas v. Goodin, 17 Cal.4th 599 (Cal. 1998) (mutuality of remedies; contract-fee provision applies when contract exists)
- Hsu v. Abbara, 9 Cal.4th 863 (Cal. 1995) (prevailing on contract; strict standard for prevailing party under 1717)
- Frog Creek Partners v. Vance Brown, Inc., 206 Cal.App.4th 515 (Cal. App. 4th 2012) (where contract claims mixed with noncontract claims, determine prevailing contract party)
- Dintino v. FDIC, 167 Cal.App.4th 333 (Cal. App. 2d 2008) (fee recovery under contract theories; apportionment guidance)
- Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (Cal. 1979) (apportionment and fee-shifting principles for contract claims)
- Zintel Holdings v. McLean, 209 Cal.App.4th 431 (Cal. App. 4th 2012) (separate contract-fee determination from overall case outcome)
- Kachlon v. Markowitz, 168 Cal.App.4th 316 (Cal. App. 4th 2008) (interpretation of contract and estoppel in relation to 1717)
- Kajima/Ray Wilson v. Los Angeles County Metropolitan Transportation Authority, 23 Cal.4th 305 (Cal. 2000) (promissory estoppel; not a contract claim; equitable basis of estoppel)