BENTON BOYD, JR., Plaintiff and Appellant, v. OSCAR FISHER COMPANY, INC., Defendant and Respondent.
No. H002678
Sixth Dist.
May 10, 1989
210 Cal. App. 3d 368
Marc G. Hynes for Plaintiff and Appellant.
David E. Newhouse for Defendant and Respondent.
OPINION
AGLIANO, P. J.-
1. Introduction
Plaintiff Benton Boyd, Jr., doing business as Boyd‘s Photographic Processing Equipment Sales (dealer) appeals from a postjudgment order awarding defendant Oscar Fisher Company, Inc. (manufacturer) attorney fees of $38,730, prejudgment interest of 7 percent from the delinquent date of a number of invoices amounting to $8,652.89, and costs amounting to $17,876.65. Dealer brought this action alleging manufacturer had unjustifiably terminated an exclusive dealership agreement. Manufacturer cross-complained based on unpaid invoices. The jury awarded manufacturer $31,803.46 and gave dealer credit of $10,103.75 for labor and parts, yielding a total judgment for manufacturer of $21,699.71.
Dealer asserts the following alternative claims of error in the awards of fees, interest, and costs. Attorney fees are improper because manufacturer did not prevail on a contract, the contract did not provide for attorney fees, the terms of the contract limited recovery of attorney fees, and the fee award is unreasonable. Prejudgment interest is unwarranted because manufacturer‘s claims were unliquidated, and the trial court used the wrong method of computing interest. Fees for an arbitrator and expert witnesses are unauthorized because their basis,
2. Trial evidence
There is no issue of the sufficiency of the evidence to support the judgment, but a review is important to understanding the nature of the litigation and the basis for the subsequent award of fees, interest, and costs. “[W]e resolve factual conflicts and draw inferences in support of the verdict.” (Palmer v. Ted Stevens Honda, Inc. (1987) 193 Cal.App.3d 530, 536 [238 Cal.Rptr. 363].)
Dealer and manufacturer entered into a written agreement dated August 12, 1976, when dealer left manufacturer‘s employ in Newburgh, New York to relocate in the San Francisco, California area. In five years with manufacturer, dealer had gone from sales into management.
Oscar Fisher Company manufactures stainless steel photographic processing equipment including the Miniscomat, among other things. The Miniscomat, patented in 1969, develops images by pulling resin-coated paper over rolling drums which distribute chemical solutions over one side of the paper. The end result is a printed page. The Miniscomat is useful in photographic typesetting, an industry which grew rapidly in the late 1970‘s as “cold” type began to replace “hot” type printing. The Miniscomat was originally produced for use with a Merganthaler Linotype machine, but is also compatible with newer photo-typesetting machines.
In the August 1976 agreement, manufacturer granted dealer, as “distributor,” an “exclusive franchise” to sell manufacturer‘s photographic processing equipment in an area with a 200-mile radius centered on San Francisco. Dealer was to receive a commission of 25 percent of the product‘s list price upon the customer‘s payment. In exchange, dealer promised, among other things, “Not to purchase, sell, distribute or deal in products which are in competition with the products prepared by” manufacturer. The agreement was in effect for five years, until the end of 1981.
In 1977, dealer sold a Miniscomat which he then used as a demonstration model for other potential customers. Dealer sold about 18 Miniscomats in 1978. Out of 60 Miniscomats manufacturer sold nationwide in 1979, dealer sold 27. Out of 56 Miniscomats manufacturer sold nationwide in 1980, dealer sold 30. Out of 56 Miniscomats manufacturer sold nationwide in 1981, dealer sold 44. Manufacturer had about 25 other distributors nationwide. Dealer also sold paper and chemical supplies not made by manufacturer but needed to operate Miniscomats.
Dealer requested that he be billed by manufacturer, rather than collecting his commission after manufacturer was paid. Manufacturer‘s standard invoice provided for payment within 30 days or imposition of a 1 1/2 percent per month service charge. The dealership agreement extended the time for payment to 45 days to accommodate dealer. Dealer was aware manufacturer‘s standard invoice also provided: “If referral to a collection agency or an attorney becomes necessary as a result of non-payments cost of collection proceedings including reasonable attorneys fees shall be added to the amount due.” Dealer received such invoices when he ordered Miniscomats from manufacturer.
Out of 61 Miniscomats sold by manufacturer nationwide in 1982, dealer sold 53. In early 1982, dealer also began selling a Mohr processor, the Mohrpro 14, which processes resin-coated paper and also film. (As appears below, manufacturer perceived this to be a competitive product.) Dealer‘s first Mohrpro sale was in April 1982. Over approximately the next 14 months, dealer sold 8 more Mohrs. Out of 44 Miniscomats manufacturer sold nationwide in 1983, dealer sold 20 during the first 9 months.
Dealer did not always pay manufacturer within 45 days of an invoice. He was in constant telephone contact with Robin Horner, manufacturer‘s sales manager, or Gary Gogerty, manufacturer‘s assistant sales manager. Dealer sometimes told manufacturer before it shipped a Miniscomat he would be unable to pay in 45 days. On one occasion, dealer sold 22 pieces of equipment at a national graphic arts convention. On other occasions, customers were unsatisfied and would not pay until a Miniscomat was operating properly. Manufacturer frequently complained about late payments. There was no evidence manufacturer ever insisted on receiving interest on dealer‘s late payments. Complicating their accounting was a substantial amount of
Once in December 1982, when Horner was due to visit from New York, dealer told an employee, Michael Keen, to disassemble a Mohrpro 14 and put it in a dark room at dealer‘s warehouse.
In February 1983, manufacturer sent a letter to dealer detailing his outstanding account. Manufacturer reviewed dealer‘s account at the end of its fiscal year on May 31, 1983. In order to bring dealer‘s account current, manufacturer told dealer to pay for two machines in order to receive one. Dealer did so in June and early July.
In August 1983, dealer advised two potential customers either a Mohrpro 14 or a Miniscomat would suit them.
Dealer‘s selling of the Mohr processor came to manufacturer‘s attention in early August when dealer sought reimbursement for advertising in a trade journal. One of the ads identified dealer as selling “two processors that stand above all the rest,” namely “the Oscar Fisher Miniscomat RC Processor” for $6,800 and “the Mohrpro 14 RC Processor” for $4,950. Manufacturer‘s first response in a letter dated August 10, 1983, was to disallow dealer‘s claim for reimbursement “now that [dealer] is marketing products that are in direct competition of [sic] those manufactured by” manufacturer.
On September 23, 1983, manufacturer sent dealer a letter terminating his exclusive dealership due to “dealing in products which are in competition with the products of” manufacturer and “[f]ailure to stay within credit terms as established in Paragraph 2” of the dealership agreement.
On October 17, 1983, dealer sent manufacturer three invoices claiming a total due of $10,103.75, representing 283 hours of labor spent installing a Process-all made by manufacturer at one site, 176 hours of labor spent installing a Miniscomat at another site, and $350 for 7 circuit breakers replaced by dealer. Dealer could not attribute these circuit breakers to any particular machines or invoices of manufacturer.
In March 1984 in response to request for admission number 19, dealer admitted owing manufacturer $31,803.87 on unpaid invoices.
There was a conflict in testimony by dealer, dealer‘s employee, and others experienced in the graphic arts field about whether the Mohrpro 14 was in competition with the Miniscomat.
Dealer commenced this action with a complaint filed October 17, 1983, alleging manufacturer breached the dealership agreement by repudiating it and also breached an oral agreement of July 1980 to reimburse dealer for advertising and convention expenses. Dealer also alleged manufacturer was intentionally interfering with dealer‘s contracts and prospective economic relationships by enticing Miniscomat customers away and was unfairly competing by informing potential customers there was another exclusive Miniscomat dealer and dealer would be unable to provide spare parts. Dealer requested compensatory damages, including lost profits, and also injunctive relief.
Manufacturer filed a complaint on cross-complaints, on November 28, 1983, claiming dealer owed $32,326.97 on unpaid invoices for breach of their contract and on an open book account as well as lost profits on competing sales. Dealer filed a purported “cross-complaint” against manufacturer on December 16, 1983, claiming uncompensated labor and parts valued at $10,103.75.
The parties on January 4, 1985, filed a stipulation for judicial arbitration pursuant to
After six days of trial, dealer elected to submit only a breach of contract claim to the jury. The parties stipulated the court would determine a claim for attorney fees by way of posttrial motion. On October 17, 1986, the jury returned the verdict described above and, on October 20, a corresponding judgment was entered.
Manufacturer filed a motion for attorney fees and cost memoranda requesting attorney fees of $60,417 and costs of over $22,000. Manufacturer also filed a motion for an award of prejudgment interest. Dealer opposed these requests. At a hearing on November 26, 1986, the court made the above-described awards of fees and costs.
A. Did manufacturer prevail on a contract?
Dealer contends attorney fees under
Recent amendments to
B. Did the contract contain an attorney fee provision?
Dealer contends “the contract” contained no attorney fee provision. The attorney fee provision is found in manufacturer‘s invoices to dealer and not in their dealership agreement. Dealer‘s premise is that the invoices are not part of the parties’ agreement.
Courts will construe together several documents concerning the same subject and made as part of the same transaction (
Dealer does not dispute manufacturer‘s contention that their relationship was governed by California‘s Uniform Commercial Code Sales provisions,
There is no question the attorney fee provisions apply if each invoice is viewed as a separate contract unrelated to the dealership agreement. (E.g., Cavalier Mobile Homes v. Liberty Homes, Inc. (1983) 53 Md.App. 379 [454 A.2d 367, 377]; see Malverne Distributors v. Profile Records (1987) 135 A.D.2d 478 [522 N.Y.S.2d 569, 570].) The Uniform Commercial Code definition of “contract,” however, is “the total legal obligation which results from the parties’ agreement as affected by this code and any other applicable rules of law.” (
Dealer does not suggest the dealership agreement was intended to be a final and exclusive expression of their agreement. (
Substantial evidence supports implicit conclusions that the parties were merchants who added terms to the dealership agreement by subsequent invoices. In the agreement, dealer agreed to pay invoices on terms established by manufacturer. While the agreement gave dealer more time to pay than did the standard invoice, there is nothing in the agreement precluding a supplemental agreement on attorney fees. Dealer acknowledged receiving and reading the attorney fee provision on manufacturer‘s invoices. Pursuant to
Dealer reads too much into the jury‘s denial of manufacturer‘s request to award 18 percent annual interest as its invoices provided. Even if the jury implicitly found this part of the invoices waived by manufacturer‘s failure
C. Does the contract limit recovery of attorney fees?
Dealer contends manufacturer‘s recovery should be limited by the invoice terms to its attorneys’ collection efforts and not, for example, to successful efforts to defend against dealer‘s claims. Although manufacturer‘s attorneys extensively documented their fee claim, dealer does not identify any particular amount as not involved in manufacturer‘s collection efforts. We note the trial court awarded $38,730 when over $60,000 was requested. Dealer cites no evidence showing this was not an attempt by the trial court to limit manufacturer‘s attorney fees to those reasonably expended in collection efforts. Further, substantial evidence supports the trial court‘s implicit conclusion that any defensive efforts covered by the fee award were interrelated with manufacturer‘s collection efforts. (Wagner v. Benson, supra, 101 Cal.App.3d 27, 37.)
Dealer‘s attempt to limit recovery of attorney fees to manufacturer‘s collection efforts finds support in the narrow application given an attorney fee provision in Sciarrotta v. Teaford Custom Remodeling, Inc. (1980) 110 Cal.App.3d 444, 450-452 [167 Cal.Rptr. 889]. However, the Legislature restricted such narrow readings by enacting the following provision of
D. Is the fee award unreasonably large?
Dealer contends the award of $38,730 for attorney fees is unreasonably large in view of manufacturer‘s net recovery of $21,699.71. We adopt
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5. Award of prejudgment interest*
6. Costs awarded after rejection of arbitration award
Dealer contends the trial court erred by failing to tax several items of costs awarded solely pursuant to various subdivisions of
Dealer argues his election of a trial de novo 25 days after the arbitration award was filed did not trigger these provisions because
Dealer relies on Rabinowitch v. Cal. Western Gas Co. (1967) 257 Cal.App.2d 150 [65 Cal.Rptr. 1], as barring recovery for an audit of manufacturer‘s invoices. At the time of that decision, there was no statutory definition of costs and precedent had established only a court-appointed expert‘s fees were recoverable. (Id. at pp. 161-162.)
Dealer further contends manufacturer failed to sustain its burden of proving these costs, citing State of California v. Meyer (1985) 174 Cal.App.3d 1061, 1075 [220 Cal.Rptr. 884]. Since manufacturer provided sufficient evidence its computerization expert charged $6,000 for his services, the trial court need not have been detained by dealer‘s bare objection such fees were excessive and unnecessary.
Dealer also contends the trial court erred in not taxing $6,665 in witness fees and mileage for Gary Gogerty, Robin Horner, Oscar Fisher, and Michael Keen. Keen was originally dealer‘s serviceman, later an independent contractor, and later dealer‘s replacement as manufacturer‘s exclusive dealer. The others are manufacturer‘s officers.
This contention is not properly before us. In the trial court, dealer only objected to manufacturer‘s claim for witness fees to the extent they exceeded the statutory amount and the court taxed them accordingly. (
Dealer has identified no trial court error in the award of fees for the arbitrator, experts, or other witnesses.
7. Effect of bankruptcy*
8. Disposition
The postjudgment order awarding attorney fees, interest, and costs to manufacturer is modified to reflect a reduced award for expert computerization of $6,274.99, and is affirmed as so modified. Manufacturer is entitled to attorney fees and costs on appeal in an amount to be fixed by the trial court.
Premo, J., concurred.
BRAUER, J., Concurring and Dissenting. I join in the opinion of the court except as to part 6. My disagreement with that part also affects the disposition.
The cross-complaints in this case were clearly compulsory ones as they arose “out of the same transaction, occurrence, or series of transactions or