It Is Well Within The Trial Court’s Discretion To Make A Determination That Neither Party Prevailed Sufficiently To Justify An Award Of Attorney Fees.
In Ayala Boring v. HPS Mechanical, Case No. D076054 (4th Dist., Div. 1 March 19, 2021) (unpublished) – which resulted in two separate appeals – contractor defendant entered into a contract with the City of San Diego to work on a trunk sewer project, and subcontracted work to plaintiff subcontractor – an underground pipeline boring contractor – to install casings and sewer lines at two locations under Interstate 8. When one of the locations revealed conditions requiring additional unanticipated work, City, contractor and subcontractor agreed to a change order to pay subcontractor an additional $203,000 for the extra work. However, when lanes of the I-8 began heaving in the area subcontractor was performing work, contractor decided to withhold payment of the $203,000 until subcontractor repaired the heaving damage. Because subcontractor refused to make the repairs, contractor made them at the cost of $199,559.34.
Subcontractor sued contractor and its bonding companies for breach of contract – seeking $451,113.98 in compensatory damages for payment of the $203,000 and other amounts it alleged contractor wrongfully withheld – and later amended to add a common count for money had and received, and reduced damages to $203,000 at trial. Contractor cross-complained for breach of contract – seeking reimbursement of the costs to repair the heaving damage and for indemnity re costs, expenses, attorney and expert witness fees in connection with the heave and resulting dispute.
The parties obtained mixed results at trial – with the jury returning special verdicts in favor of subcontractor on its common count cause of action and on contractor’s breach of contract claim, and in favor of contractor on subcontractor’s breach of contract claim. Ultimately, subcontractor was awarded $249,470 in damages by the jury, and another $94,733.33 in prejudgment interest, $227,945 in prevailing party fees, and $32,961.81 in costs on its complaint and for defeating contractor’s cross-complaint by the trial court. The first appeal followed and the 4/1 DCA reversed subcontractor’s wins – remanding for further proceedings, and concluding contractor was entitled to its costs on appeal.
On remand, contractor sought $579,838.50 in prevailing party fees pursuant to the fee provision in the parties’ subcontract. The trial court denied – finding there was no prevailing party on the contract claims, but awarded contractor $205,095.63 in costs and disbursements which included various trial costs, costs on appeal, surety bond premiums, and expert witness, mediation and reporter’s fees – results affirmed on the parties’ second appeal, with exception to reversal of $55,468 in expert witness fees and $2,280 in mediation fees incurred for a different case.
There was no abuse of discretion in the trial court’s determination that there was no prevailing party as neither party achieved complete victory on all of the contract claims. As to the reversal of expert witness fees awarded to contractor, there was no statutory prevailing party basis, pursuant to Code Civ. Proc. § 1033.5(a)(8), for the trial court’s award. Further, there was no basis for entitlement under the parties’ fees/costs provision as there was no prevailing party. Finally, as to the reversed mediation fees, the fees were incurred for mediation sessions in a different case months after the jury trial in this case.