Additional Fees and Costs Awarded After Sub-Subcontractor Prevails In Contractor’s Indemnity/Misrepresentation Cross-Complaint.
Civil Code section 3248(b) authorizes an attorney’s fees award in an action “brought upon” a payment bond. Contractor and a payment bond surety heavily contested a sub-subcontractor’s right to collect $148,530.50 under the bond. Sub-sub eventually prevailed, after an earlier appellate opinion reversed the defense reliance on an incorrect release–with the lower court eventually granting summary judgment in sub-sub’s favor against the payment bond sureties. That win resulted in an initial attorney’s fees award of $120,610 and costs of $11,490.46 for sub-sub, plus another $25,650 in fees and $478 in costs for winning the previous appeal. However, contractor filed a cross-complaint against sub-sub for implied indemnity, contribution and negligent misrepresentation, staying enforcement of the judgment until resolution of the cross-claims. Sub-sub also was granted summary judgment on the cross-claims, resulting in–yes, you guessed it–more fees to the tune of $110,982.50 and more costs of $160. That prompted another appeal by two sureties.
The proverbial “fat lady” apparently has sung in this saga in Oldcastle Precast, Inc. v. Pinner Construction Co., Inc. (Oldcastle III), Case No. G043188 (4th Dist., Div. 3 Mar. 28, 2011) (unpublished).
On public works, payment bonds are provided to provide a cumulative remedy to unpaid subcontractors because public property is not subject to being burdened by mechanic’s liens. In fact, payment bond themselves must provide for payment of fees to be fixed by the court if suit is brought on the bond. (Liton Gen. Engineering Contractor, Inc. v. United Pacific Ins., 16 Cal.App.4th 577, 584 (1993).)
The issue here was whether the defense of contractor’s cross-claims was “an integral aspect of the [plaintiff’s] action on the bond.” Relying on Liton, both the trial and appellate courts held that it was. Given that enforcement of the prior judgment had been stayed, “ . . . plaintiff could not obtain recovery on its action on the payment bond without first clearing the hurdle of succesfully defending against [contractor’s] claims.” (Slip Opn., p. 14.) Fee award affirmed such that this one should finally be over.
Justice Fybel authored the opinion on behalf of a 3-0 panel of the 4/3 appellate court.
