First District, Division 1 Sustains Fee Recovery of Over $381,000 Against Owners.
W. Wong Construction Co., Inc. v. Watt, Case Nos. A122409, A12327 & A124295 (1st Dist., Div. 1 June 18, 2010) (unpublished) is a case where a contractor obtained damages and a hefty $381,000-plus in attorney’s fees against owners under the construction prompt payment statutes, specifically, Civil Code section 3260(g) relating to wrongful withholding of unpaid retention amounts by the owner.
Unhappy with the result, owners appealed on numerous grounds. They were no more happier after the decision on appeal.
A host of arguments were raised by owners, with many deemed waived because they were not brought up at the trial court level. However, two arguments are worthy of mention.
Owners argued that the section 3260(g) fee entitlement was time barred because it was tied to prompt payment penalties, meaning it was precluded by the one year statute of limitations applicable to penalties under Code of Civil Procedure section 340(a). This argument was rejected because owners cited no authority indicating this SOL applied to Civil Code section 3260(g).
Next, owners contended the fee recovery was flawed because fees should have been apportioned between the retention dispute and other issues involving progress payments (which the challenge being that the progress payment prompt payment statute does not have a fee authorization). The problem with this challenge was that the retention and unpaid progress payment issues were litigated together, invoking the inextricably intertwined exception to the apportionment rule.
In the end, the trial court did not abuse its discretion in granting the fee award in the case involving the construction prompt payment statutes.