Court of Appeal Agrees With Reasoning in Hinerfeld-Ward.
Plaintiff contractor sued defendant owner for breach of contract, mechanic’s lien foreclosure, violation of the Civil Code section 3260.1 prompt payment statute relating to withheld progress payments, promissory fraud, and conspiracy to commit fraud. The case was arbitrated, with plaintiff eventually awarded $245,763.09 in damages against defendant. The arbitrator then awarded plaintiff $342,360 in attorney’s fees under Civil Code sections 3260.1 and 3260(g).
Defendant, among other things, appealed the fee award in PacificaWest General Contracting v. Calvada Development, Case No. G042804 (4th Dist., Div. 3 March 11, 2011) (unpublished).
The Fourth District, Division 3, in a 3-0 opinion authored by Justice Fybel, affirmed the fee award.
Aside from finding that the award was impervious from attack even if the arbitrator incorrectly applied the statute (Taylor v Van-Catlin Construction, 130 Cal.App.4th 1061, 1068 (2005)), the appellate court found that fee recovery was allowable under section 3260.1 based upon its incorporation of section 3260(g) penalty language that included a grant of fees to the prevailing contractor. In this respect, the 4/3 panel agreed with the analysis of this fee issue set forth in Hinerfeld-Ward, Inc. v. Lipian, 188 Cal.App.4th 86, 99-100 (2010) [discussed in our September 2, 2010 post]. Even though appellant submitted additional legislative history in an attempt to show the decision was flawed, Justice Fybel and his colleagues disagreed, finding the proffered legislative history was not inconsistent with the reasoning in Hinerfeld-Ward. “We find the analysis of Hinerfeld-Ward persuasive and conclude the trial court did not err by refusing to correct the final award to eliminate the prevailing party attorney fees in favor of [plaintiff contractor].” (Slip Opn., p. 26.)