Plaintiff Was Unable To Demonstrate That Later Contract With Fees Provisions Was Applicable To Earlier Contract Under Which It Sued.
Applied General Agency, Inc. v. Chinese Community Health Plan, Case No. G055669 (4th Dist., Div. 3 February 27, 2019) (unpublished) involved a Plaintiff insurance agency and a Defendant/Cross-Complainant insurance provider who each sued each other for breach of contract claims arising out of two separate contracts between the parties – a single-page 2002 contract which did not provide for attorney’s fees, and a 13-page 2013 contract which allowed for recovery of attorney’s fees in certain circumstances.
Plaintiff sued for breach of contract under the 2002 contract for failure to pay commissions required under the contract. It prevailed at trial, with the jury awarding $265,168.00 of Plaintiff’s $1.3 million requested damages.
Defendant/Cross-Complainant sued under the 2013 contract asserting causes of action against Plaintiff and its broker for quasi-contract and breach of contract for accepting commission payments without first meeting certain commission payment prerequisites contained in the 2013 contract. On the claim for quasi-contract and restitution, the jury found in favor of Plaintiff and its broker. On the claim for breach of contract, the jury found against Plaintiff but in favor of Plaintiff’s broker. Although prevailing in its breach of contract claim against Plaintiff, Defendant/Cross-Complainant was awarded nothing by the jury.
Following trial, Plaintiff and its broker filed a motion for attorney fees of about $1.38 million. They relied on certain indemnification and arbitration provisions in the 2013 contract to support their request. Disagreeing with their position, the trial court denied their request – explaining that the indemnity provisions on which they relied applied only to third party claims, and that Plaintiff was not the prevailing party on the cross-complaint as the jury had found in favor of Defendant/Cross-Complainant even though awarding no damages.
On appeal, the 4/3 DCA disagreed with the trial court’s assessment of the indemnity provisions – finding them broadly worded enough to encompass the direct litigation between the parties. This finding, however, did not assist Plaintiff and its broker because the 4/3 DCA also found the indemnity provisions in the 2013 contract did not apply to the 2002 contract under which Plaintiff sued. The two contracts had been executed nearly 12 years apart, the 2013 contract covered topics not addressed in the 2002 contract, and the 2013 contract made no reference to the 2002 contract – meaning there was no clear and unequivocal reference that the parties meant for the 2002 contract to be incorporated into the 2013 contract. Therefore, no basis was provided for applying Civil Code section 1717 in this matter, or for reversing the trial court’s order.