JAMES L. HARRIS PAINTING & DECORATING, INC., Plaintiff and Respondent, v. WEST BAY BUILDERS, INC., et al., Defendants and Appellants.
No. C072169
Third Dist.
Aug. 27, 2015
239 Cal. App. 4th 1214
COUNSEL
Wanger Jones Helsley, Kurt F. Vote, John P. Kinsey and David E. Cameron for Plaintiff and Respondent.
OPINION
HOCH, J.—West Bay Builders, Inc. (West Bay), and Safeco Insurance Company of America (Safeco) challenge the trial court’s denial of their motion for attorney fees under
On appeal, West Bay and Safeco contend the trial court lacked discretion to refuse an award of mandatory attorney fees under the prompt payment statutes because they prevailed at trial. We disagree. Under the prompt payment statutes, the trial court has discretion to determine there is no prevailing party in an action. And in this case, the trial court did not abuse its discretion in concluding there was no prevailing party. Accordingly, we affirm the denial of the motion for attorney fees.
FACTUAL AND PROCEDURAL HISTORY
In 2003, West Bay entered into a prime contract with the Stockton Unified School District to perform work at Cesar Chavez High School. In 2004, West Bay entered into a subcontract for $530,000 with Harris that covered the application of paint and water repellants. From the beginning of the project, disagreements arose over the scope of work to be provided by Harris. West Bay asserted Harris had a contractual obligation to carry out several sections of the project’s specifications Harris disclaimed it had any duty to fulfill. Harris performed what it perceived to be extra work on assurances West Bay would pay for the additional services. According to Harris, West Bay refused to pay for the additional work.
According to West Bay, Harris refused to fulfill its contractual obligations and simply abandoned the project. West Bay was forced to hire a third party painting subcontractor to repair and complete Harris’s work. West Bay deducted the cost of the third party painting subcontractor from the amount due Harris. By West Bay’s calculation, Harris was overpaid by $71,607 when all the adjustments were made.
In June 2007, Harris filed a complaint for breach of contract and violation of the prompt payment statutes by West Bay. Harris also claimed Safeco was obligated to release money under the payment bond issued to West Bay. West Bay filed a cross-complaint against Harris for breach of contract arising out of the same construction project.
The trial court entered (1) judgment in favor of West Bay and Safeco on the complaint and (2) judgment in favor of Harris on the cross-complaint. The trial court awarded no damages on the complaint or cross-complaint. Nonetheless, the trial court awarded costs of suit to West Bay and Safeco. The trial court reserved ruling on whether there was a prevailing party for purposes of statutory attorney fees.
West Bay and Safeco moved for attorney fees under the prompt payment statutes, and Harris opposed the motion. The trial court heard argument on the motion and ruled: “The motion for attorney’s fees is denied. Each party sued for breach of contract, but neither side prevailed. The Jury denied all relief. Fairness dictates that each side should pay its own attorney’s fees.”
From the denial of the motion for fees, West Bay and Safeco timely filed a notice of appeal.
DISCUSSION
I
The Prompt Payment Statutes’ Fee-shifting Provisions
West Bay and Safeco contend the prompt payment statutes do not confer the trial court with discretion to deny attorney fees in a case in which the plaintiff asserts a claim under these statutes. (See
A.
Standard of Review
We consider the question of whether a statute provides for a mandatory award of attorney fees under the de novo standard of review. (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1213 [117 Cal.Rptr.3d 342, 241 P.3d 840].) In construing a statute, “[w]e apply well-established principles of statutory construction in seeking ‘to determine the Legislature’s intent in enacting the statute “so that we may adopt the construction that best effectuates the purpose of the law.“’” [Citations.] We begin with the statutory language because it is generally the most reliable indication of
B.
The Prompt Payment Statutes
Each of the three prompt payment statutes asserted by Harris against West Bay and Safeco contains a nearly identical fee-shifting provision.
A similar fee-shifting provision was addressed in Brawley v. J.C. Interiors, Inc. (2008) 161 Cal.App.4th 1126 [74 Cal.Rptr.3d 832] (Brawley). Brawley involved a challenge to the denial of a motion for attorney fees under
The Brawley court explained, “‘[C]ourts in cases involving ... statutes which provide that the prevailing party “shall” recover attorney fees also have concluded that a court has the discretion to find there is no prevailing party, even though the statute does not expressly say so. (See, e.g., Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574 [26 Cal.Rptr.2d 758] (Heather Farms) [
In some cases a party may obtain a result that is “so minimal or insignificant as to justify a finding that it did not prevail.” (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020 [113 Cal.Rptr.2d 625] (ComputerXpress).) Thus, even though the prompt payment statutes provide for an award of attorney fees to a prevailing party, the trial court may determine there is no prevailing party for purposes of attorney fee shifting. Consequently, “when a defendant cannot in any realistic sense be said to have been successful, fees need not be awarded.” (Moran v. Endres (2006) 135 Cal.App.4th 952, 956 [37 Cal.Rptr.3d 786].) For this reason, the trial court had discretion under the prompt payment statutes in this case to determine there was no prevailing party for purposes of attorney fee shifting.
Given that the trial court had discretion to deny attorney fees in the absence of a prevailing party, we turn to the question of whether the court abused its discretion in determining West Bay and Safeco were not prevailing parties.
II
Trial Court Determination West Bay and Safeco Were Not Prevailing Parties
West Bay and Safeco contend the trial court erred in determining they were not prevailing parties under the prompt payment statutes. (
A.
Standard of Review
In reviewing the trial court’s determination of whether a party prevailed in the litigation, we apply the deferential abuse of discretion standard of review. As the Brawley court aptly summarized, “‘Generally, where a trial court has discretionary power to decide an issue, an appellate court is not authorized to substitute its judgment of the proper decision for that of the trial judge. The trial court’s exercise of discretion will not be disturbed on appeal in the absence of a clear showing of abuse, resulting in injury sufficiently grave as to amount to a manifest miscarriage of justice. [Citations.]’ (In re Marriage of Rosevear (1998) 65 Cal.App.4th 673, 682 [76 Cal.Rptr.2d 691].) “The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court.“’ (Walker v. Superior Court (1991) 53 Cal.3d 257, 272, 279 [Cal.Rptr. 576, 807 P.2d 418].) ‘The burden is on the party complaining to establish an abuse of discretion ....’ (Denham v. Superior Court (1970) 2 Cal.3d 557, 566 [86 Cal.Rptr. 65, 468 P.2d 193]; see Blank v. Kirwan (1985) 39 Cal.3d 311, 331 [216 Cal.Rptr. 718, 703 P.2d 58].) ‘[T]he showing is insufficient if it presents facts which merely afford an opportunity for a difference of opinion.’ (People v. Stewart (1985) 171 Cal.App.3d 59, 65 [215 Cal.Rptr. 716].)” (Brawley, supra, 161 Cal.App.4th at pp. 1137-1138.)
B.
Prevailing Party Determination
Fundamentally, “[t]he determination of whether there is a prevailing party is to be made ‘on a practical level’ after considering what each party accomplished via the litigation.” (ComputerXpress, supra, 93 Cal.App.4th at p. 1017.) This means that “‘[t]he prevailing party determination is to be made only upon a final resolution of the contract claims and only by “a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.” [Citation.]’ (Hsu v. Abbara (1995) 9 Cal.4th 863, 876 [39 Cal.Rptr.2d 824, 891 P.2d 804].)” (Brawley, supra, 161 Cal.App.4th at p. 1137.)
Significantly, the determination of whether a party has prevailed for purposes of attorney fee shifting under the prompt payment statutes is not
C.
The Trial Court’s Determination
The trial court did not abuse its discretion in determining there was no prevailing party in this case after it awarded costs of suit to West Bay and Safeco.
In their briefing and at oral argument, West Bay and Safeco characterize the trial court’s conclusion that “[e]ach party sued for breach of contract, but neither side prevailed” as encompassing only the breach of contract causes of action—to the exclusion of the prompt payment remedies sought by Harris. Based on this cramped interpretation of the trial court’s order, West Bay and Safeco argue they are the prevailing parties on the prompt payment cause of action and therefore entitled to the fee shifting provided by the prompt payment statute. We reject this narrow interpretation of the trial court’s order as referring to only some of the causes of action at trial.
As the trial court noted, “The Jury denied all relief. Fairness dictates that each side should pay its own attorney’s fees.” This is an accurate description of the litigation in which the complaint and cross-complaint alleged breach of contract causes of action but for which the jury awarded nothing because both Harris and West Bay failed to perform their contractual obligations.
Granted, West Bay and Safeco did manage to defeat Harris’s prompt payment claims. However, West Bay and Safeco did not obtain the defense verdict by demonstrating timely payments were made to Harris under the prompt payment statutes. To the contrary, the jury found West Bay did not act in good faith in withholding payment to Harris in June 2004.
West Bay and Safeco’s success on the prompt payment statute claim did not render them victorious because the prompt payment statute claim was
We also reject Safeco’s argument it is entitled to attorney fees because it did not file a cross-complaint against Harris and thus prevailed on the complaint. Under the terms of the agreement by which West Bay obtained the bond from Safeco, West Bay assumed the duty to defend, indemnify, and hold Safeco harmless from all claims by Harris. Consistent with the agreement, counsel for West Bay represented Safeco at all times during the litigation. Further, the record does not show Safeco paid any attorney fees.
For these reasons, we conclude the trial court did not abuse its discretion in denying statutory attorney fees to West Bay and Safeco.
DISPOSITION
The order denying West Bay Builders, Inc., and Safeco Insurance Company of America’s motion for attorney fees is affirmed. James L. Harris Painting & Decorating, Inc., shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
Robie, Acting P. J., and Mauro, J., concurred.
A petition for a rehearing was denied September 28, 2015, and on September 3, 2015, the opinion was modified to read as printed above.