No Allocation Required, Resulting in Affirmance of $318,469.82 Fee Award Where Jury Awarded Winner $71,443 In Compensatory Damages.
Rens Masonry, Inc. v. Luca Properties, Inc., Case No. D057698 (4th Dist., Div. 1 May 1, 2012) (unpublished) is an interesting decision which affirmed a $318,469.32 fee award to the winning plaintiff contractor after the jury verdict hit the defendant owner with a $71,443 compensatory damages in favor of contractor. (Yep, you heard right — the fee award was over four times the amount in controversy.)
The facts were that contractor was hired under a written contract with owner to construct foundation walls, later agreeing under a distinct oral contract to also construct a fireplace for the owner. The written contract included a written prevailing party fees clause. Contractor sued owner for money owed on the construction of both components, with owner raising an offset defense for defective construction of the fireplace and filing a cross-action for breach of contract based on the allegedly faulty fireplace. Important for this case, we surmise, is the fact that owner sought to recoup $11,045 in offsetting damages for the fireplace, which exceeded the $5,924 oral contract claim by contractor on this discrete component. The jury awarded contractor the “full monty” of $71,443 for masonry work relating to both the foundation walls and fireplace. The jury agreed that there were distinct contracts, but rejected the offset defense and cross-claims by owner.
That brings us to what we focus on: the fee award. Contractor requested all of the fees, with owner saying “no fair,” you gotta apportion out any fees on the oral contract time for the fireplace construction given the absence of a fees clause for the oral “deal.” However, the lower court rejected that contention and awarded full fees for the entire trial to contractor in the amount of $318,469.82.
Owner appealed, reiterating the apportionment argument made below. The appellate court did not find it persuasive either, determining that the fireplace issue was an offset/set-off to the entire claimed damages such that the work on it was essential to obtaining recovery on the written contract damage claim. In other words, defeating a defense to the contract cause of action is compensable and does not require apportionment where a litigant sought an offset that would impact the damages to be awarded under the recoverable written contract claim subject to the fees clause. (Siligo v. Castellucci, 21 Cal.App.4th 873, 876-880 (1994).) Subtle distinction, but one that was determinative in this particular appeal–where the fee award was over four times the amount in controversy. (Not to beat a dead horse, but look at our Mission Statement and choose carefully to sue rather than attempt to resolve a dispute informally when there is fee exposure. If not, you better tell your clients to investigate the insurance protection provided by Sonoma Risk.)