Trial Court’s Discretionary Decision Of No Prevailing Party Reversed On Appeal
In Advent Companies, Inc. v. SJC II/Fourth and Haven, LLC, Case No. G055609 (4th Dist., Div. 3 February 27, 2019) (unpublished), a general contractor Plaintiff and property owner/developer Defendant/Cross-Complainant entered into a written construction agreement for Plaintiff to build a 298-unit apartment complex in the city of Ontario. The contract contained an attorney fees provision for the prevailing party of any dispute arising out of the contract.
Although the project started out ahead of schedule by several months, it eventually began to experience significant delays – resulting in a dispute between the parties that led to this lawsuit – with each party suing for delay-related damages under the contract.
Pursuant to their written agreement, the parties tried their case before a referee at JAMS, which provides mediation, arbitration, and other alternative dispute resolution services. Following a five-day trial, the referee awarded Plaintiff $265,499.24 of the $370,000 it sought in damages (approximately 72%), and awarded Defendant/Cross-Complainant $18,500 of its requested $1,145,000 liquidated damages (only about 1.6%). The referee then found there to be no prevailing party – concluding that “neither party prevailed in the entirety of its claims and both Parties prevailed to some extent,” and denying award of attorney fees to either party – though amending the statement of decision to award Plaintiff its costs as the prevailing party, but still denying it attorney fees. The trial court entered the referee’s amended statement of decision, denying attorney fees to Plaintiff, as the judgment. Plaintiff appealed.
In a decision from our local appellate court, and authored by Justice Goethals, the 4/3 DCA reversed – citing its previous ruling in de la Cuesta v. Benham (2011) 193 Cal.App.4th 1287 [discussed in our March 30, 2011 post], and applying Silver Creek, LLC v. BlackRock Realty Advisors, Inc. (2009) 173 Cal.App.4th 1533 [discussed in our May 21, 2009 post], as well as the practical prevailing party test under Civil Code section 1717 as articulated in Hsu v. Abbara (1995) 9 Cal.4th 863 [our Leading Case No. 2] – and remanded for further proceedings to determine Plaintiff’s attorney fees as the prevailing party on its contract claims.