We Explore This Decision’s Reasoning In Our Comment.
Movie: The Drowning Pool. 1975.
In El Dorado Custom Pools v. Stein, Case No. C075500 (3d Dist. July 10, 2017), a plaintiff contracted with a pool company to built a pool on his property. Pool company sued for breach of contract, quantum meruit and other claims, and defendant Stein cross-complained. The lower court determined that the contract was void and unenforceable, but allowed the quantum meruit claim to proceed. Stein removed the entire case to federal bankruptcy court, with pool company’s complaint being dismissed but with Stein’s cross-claims allowed to proceed. The case then went back to state court, but Stein dismissed the cross-claims because he had achieved his objectives of beating pool company’s quantum meruit claim. After moving for $241,647.20 in attorney’s fees under Business and Professions Code section 7168 (a fee shifting statute allowing mandatory fees to a “prevailing party … in any action between a person contracting for construction of a swimming pool and a swimming pool contractor arising out of a contract for swimming pool construction”), the trial judge awarded only $31,888.57 because he concluded that no post-void determination fees were allowed because the contract was unenforceable.
The Third District affirmed. It decided that this remedial fee-shifting statute should not be broadly interpreted by using “arising out of contract” language in Civil Code section 1717 to guide the construction of section 7168. Furthermore, it decided that Stein did not prevail because he won round one on contract voidability but lost round two on the quantum meruit claim.
BLOG COMMENT—Although we usually do not comment on the reasoning in cases, co-contributor Mike was involved in this appeal. The Third District did not provide any legal analysis about why a broad interpretation should not guide remedial section 7168, which has identical language. Plus, the panel was wrong on the prevailing party analysis: Stein did win round one, but also won round two when pool company failed to prosecute and had its quantum meruit claims dismissed—Stein did achieve his litigation objectives. We might also note that this case was fully briefed as of year end 2014, such that it took 2 ½ years to get to a decision; we know the Third District has the most case to justice caseload, but just sayin’ ….. We would encourage readers, as long as the critique is respectful in tone, to provide any feedback on decisions which seems to have really gotten it wrong—we may post if the tone and critique are appropriate for posting.