“No Harm, No Foul” Means No Real Reason to Award Fees Under a Discretionary Statute.
For those of you who litigate construction actions, you likely are familiar with the requirement that indemnity cross-complainants must file a certificate of merit—after obtaining a favorable expert opinion—in cross-claims filed against professional engineers, architects, or surveyors. (Code Civ. Proc., § 411.35.) If this requirement is not complied with, a demurrer or motion to strike will lie. (§ 411.35(g).) Further, section 411.35(h) provides that a trial court may order a party, a party’s attorney, or both, to pay reasonable expenses, including attorney’s fees, incurred by another party as a result of the failure to comply with the COD requirement upon favorable conclusion of the litigation for the indemnity cross-defendant. The purpose of this fee statute is to discourage frivolous professional negligence suits against certain professionals. (Ponderosa Center Partners v. McClellan/Cruz/Gaylord & Associates, 45 Cal.App.4th 913, 915 (1996).)
Fees were not levied against a noncompliant party in the recently published decision of UDC-Universal Development, L.P. v. CH2M Hill, Case No. H033610 (6th Dist. Jan. 15, 2010) (certified for publication). There, a discretionary denial of fees was upheld where the circumstances demonstrated that (1) the failure to file the COD had not caused the cross-defendant any further expense of any kind; and (2) cross-complainant had consulted an expert and obtained a favorable decision before filing the cross-claim. “No harm, no foul” was the basic conclusion of the appellate panel in upholding the fee denial.