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In re Scada Cases

California Court of Appeals, First District, Fourth Division
May 25, 2007
No. A112617 (Cal. Ct. App. May. 25, 2007)

Opinion


In re SCADA Cases. A112617 California Court of Appeal, First District, Fourth Division May 25, 2007

NOT TO BE PUBLISHED

Alameda County Super. Ct. No. 2002-071301 San Francisco County Super. Ct. No. CGC-03-420874

Sepulveda, J.

Appellants Transdyn/Cresci Joint Venture (the Joint Venture) and Liberty Mutual Insurance Company (Liberty) appeal an award of attorney fees following summary judgment in favor of respondent Washington International Insurance Company (Washington) (A113374). Because we agree that there was no legal basis for the attorney fees award based on contract or statute, we reverse.

Appellants also appealed from the judgment following the order granting summary judgment (A112617). The appeals were consolidated on April 12, 2006, following stipulation of the parties. Appellants informed this court in their opening brief that they chose to address only the attorney fees award in A113374. We construe this as a request to dismiss A112617 and hereby grant appellants’ request. (Cal. Rules of Court, rule 8.244(c).)

I. Factual and Procedural Background

This appeal arises out of a complex dispute over payment for services in connection with work on the San Francisco Water Supervisory Control and Data Acquisition (SCADA) system, involving one complaint and two cross-complaints. Relying primarily on the allegations in the complaints and cross-complaints filed below, we set forth only those facts that are relevant to this appeal.

A. Formation of Joint Venture for Construction Project.

The Joint Venture was formed in 1998 by Transdyn Controls, Inc. and Cresci Electric, Inc. (Cresci) in order to submit a bid to the City and County of San Francisco for a construction contract on the SCADA system. San Francisco awarded a contract to the Joint Venture, making it the general contractor on the project. Liberty issued the Joint Venture a public works labor and material bond for $10,542,055.

The award of the contract to the Joint Venture was the subject of an opinion by our colleagues in Division Two. (Transdyn/Cresci JV v. City and County of San Francisco (1999) 72 Cal.App.4th 746.)

JMB Construction, Inc. (JMB) subcontracted to provide certain labor, services, and equipment for the SCADA project (the Subcontract). In the litigation that later arose over the SCADA project, appellants claimed, contrary to JMB’s allegations, that Cresci entered into the Subcontract without the Joint Venture’s permission, and that there was no valid contract between the Joint Venture and JMB. Instead, the Subcontract was between Cresci and JMB, according to appellants.

The Subcontract contained an attorney fees provision, which later became the basis for the award of fees at issue in this appeal. The clause provided in part that “[i]n the event the parties become involved in litigation or arbitration with each other arising out of this Agreement or other performance thereof in which the services of an attorney . . . are reasonably required, the prevailing party shall be fully compensated for the cost of its participation in such proceedings, including the cost incurred for attorneys’ fees . . . .”

B. Dispute Over Payment to JMB.

Subcontractor JMB claimed that it was not paid for its work under the Subcontract. In December 2001 it served a stop notice on San Francisco, and it later served an amended stop notice following partial payment for services. Cresci obtained a stop notice release bond from respondent Washington in order to release the stop notice on the construction funds. The stop notice release bond did not contain an attorney fees provision.

“A ‘stop notice’ is a remedy to reach unexpended construction funds in the hands of the owner or lender, is available on both public and private works, and may be served by a claimant other than an original contractor. [Citations.] If the general contractor disputes a stop notice claim, the public entity may permit the general contractor to post a stop notice release bond. (Civ. Code, § 3196.) After the bond is posted, the remedies of the claimant rest solely on the bond and the public entity may not withhold money due to the general contractor on account of the stop notice. (Civ. Code, § 3196 . . . .)” (National Technical Systems v. Superior Court (2002) 97 Cal.App.4th 415, 418, fn. 2 (National Technical Systems).) All statutory references are to the Civil Code unless otherwise specified.

On May 28, 2003, JMB sued the Joint Venture, Liberty, and Washington for breach of contract and other claims. JMB alleged that the Joint Venture owed it more than $185,000; it also sought attorney fees from the Joint Venture based on the Subcontract. JMB sued the Joint Venture and Liberty on the payment bond, seeking attorney fees under the terms of the payment bond, and pursuant to section 3248, subdivision (b). JMB also sued the Joint Venture and Washington on the stop notice release bond. It sought attorney fees against Washington; however, the claim for fees was not based on the Subcontract. Washington filed a cross-complaint, alleging causes of action for apportionment and declaratory relief against Liberty.

Appellants Liberty and the Joint Venture also filed a cross-complaint, suing Cresci, San Francisco, and Washington. The allegations against Cresci focused on Cresci’s alleged unauthorized entry into the Subcontract with JMB on the Joint Venture’s behalf. Appellants sought indemnity, contribution, and apportionment from respondent Washington to the extent they were held liable to JMB. The three complaints were filed in San Francisco, but the action was later coordinated with other related actions, and transferred to Alameda County.

JMB and the Joint Venture settled their dispute in September 2004. As part of the settlement, the Joint Venture agreed to pay money to JMB, and JMB assigned its claims against Washington to the Joint Venture.

C. Washington’s Motions for Summary Judgment and Attorney Fees.

Washington filed a motion for summary judgment against the Joint Venture and Liberty on (1) causes of action in appellants’ cross-complaint against Washington, and (2) the claim against Washington that JMB assigned to the Joint Venture as part of those parties’ settlement. Washington acknowledged that there was a factual dispute over whether JMB subcontracted with the Joint Venture or Cresci, but argued that it was entitled to summary judgment under either scenario. The trial court agreed with Washington and granted the motion for summary judgment. The court agreed there was a disputed issue of fact over whether JMB contracted with the Joint Venture or with Cresci alone, but nonetheless found that Washington was entitled to summary judgment, for reasons that are not relevant to this appeal.

Judgment was entered on September 23, 2005, and the Joint Venture and Liberty timely appealed. We need not address the merits of the summary judgment order, however, as appellants have abandoned their appeal of summary judgment. (Ante, fn. 1.)

Following entry of judgment, Washington filed a memorandum of costs that included a request for more than $80,000 in attorney fees, as well as a motion setting forth the legal basis for those fees. The trial court granted Washington’s motion. The trial court first noted that the underlying dispute was between JMB and the Joint Venture, and that as part of a settlement agreement, JMB had assigned to the Joint Venture any rights it might have had against Washington. The trial court found that had JMB prevailed on its contract claim against the Joint Venture, it would have been entitled to attorney fees from the Joint Venture, Liberty, and Washington. As to the Joint Venture, the trial court found that JMB would have been entitled to attorney fees based on the attorney fees provision in the Subcontract. As to Liberty, the trial court found that JMB would have been entitled to attorney fees based on Liberty’s agreement to be the surety of the Joint Venture, which made Liberty responsible for the Joint Venture’s obligations. As to Washington, the trial court found that JMB would have been entitled to attorney fees based on Washington’s stop notice release bond agreement with the Joint Venture, which made Washington responsible for the Joint Venture’s obligations. Citing section 1717 and National Technical Systems, supra, 97 Cal.App.4th at pages 423-426, the trial court held that because Washington was the prevailing party instead of JMB, it could recover attorney fees “even though it is not a signatory to the agreement between JMB and [the Joint Venture].” The trial court ordered the Joint Venture to pay $35,000 in attorney fees, and Liberty to pay $40,000. The Joint Venture and Liberty timely appealed the order granting attorney fees.

The trial court also ordered JMB to pay $20,000. JMB is not a party to this appeal.

II. Discussion

The sole issue on appeal is the validity of the trial court’s award of attorney fees to Washington, as appellants do not challenge the reasonableness of the fee award. We review the legal basis for the award of attorney fees de novo. (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.)

Attorney fees ordinarily are not recoverable as costs, unless they are authorized by either statute or agreement. (Code Civ. Proc., § 1021; Santisas v. Goodin (1998) 17 Cal.4th 599, 606, 607, fn. 4; Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127.) The trial court found that there was a contractual basis for the award of attorney fees against both the Joint Venture and Liberty. Because this conclusion was inconsistent with the trial court’s previous findings and with general principles of contract and surety law, we disagree.

A. No Contractual Basis For Attorney Fees Against The Joint Venture.

Because the trial court’s order granting attorney fees was based in part on the mutuality of remedy guarantees of section 1717, we begin with a brief overview of that statute. Code of Civil Procedure section 1021 provides that parties have the right to enter into agreements for the award of attorney fees in litigation. Section 1717 ensures mutuality of remedy for attorney fees claims under such contractual provisions. (Santisas v. Goodin, supra, 17 Cal.4th at p. 610.) The statute provides, in relevant part: “In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.” (§ 1717, subd. (a), italics added.)

Courts construing section 1717 have recognized that the primary purpose of the statute is to ensure mutuality of remedy for attorney fees claims in at least two situations, only the second of which is relevant here. (Santisas v. Goodin, supra, 17 Cal.4th at p. 610.) First, where the contract provides for recovery by one party, but not the other, section 1717 makes the contract’s unilateral right to attorney fees reciprocal. (Santisas, supra, at pp. 610-611.) “The second situation in which section 1717 makes an otherwise unilateral right reciprocal, thereby ensuring mutuality of remedy, is when a person sued on a contract containing a provision for attorney fees to the prevailing party defends the litigation ‘by successfully arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same contract.’ [Citation.]” (Id. at p. 611, italics added.) “The statute would fall short of [the] goal of full mutuality of remedy if its benefits were denied to parties who defeat contract claims by proving that they were not parties to the alleged contract or that it was never formed. To achieve its goal, the statute generally must apply in favor of the party prevailing on a contract claim whenever that party would have been liable under the contract for attorney fees had the other party prevailed.” (Hsu v. Abbara (1995) 9 Cal.4th 863, 870-871; see also Reynolds Metals Co. v. Alperson, supra, 25 Cal.3d at p. 128.)

The trial court concluded that because JMB (and thus, by assignment, the Joint Venture) would have been entitled to attorney fees from Washington (as the Joint Venture’s surety) had JMB’s claim against the Joint Venture been successful, Washington (as the prevailing party) was entitled to attorney fees pursuant to section 1717 to ensure mutuality of remedy. The trial court’s reasoning was based on at least two flawed assumptions. First, the trial court stated that if JMB had prevailed on its contract claim against the Joint Venture, it could have recovered attorney fees under the attorney fees clause in the Subcontract “between JMB and [the Joint Venture].” (Italics added.) In fact, whether the Joint Venture was a party to the Subcontract was a disputed fact, as the trial court acknowledged in its order granting summary judgment.

Washington acknowledges in its brief to this court that the trial court never adjudicated whether the Joint Venture was a party to the Subcontract. At oral argument, Washington’s counsel again acknowledged that this was a disputed fact, but argued that because JMB had assigned its cause of action against Washington to the Joint Venture, it also necessarily assigned its rights under the Subcontract to the Joint Venture, because a surety does not exist in a vacuum, but is always attached to an obligation. As the trial court found in granting summary judgment, however, assuming that JMB contracted with the Joint Venture, no valid claim was assigned from JMB to the Joint Venture. That is because the settlement agreement that purported to assign the claim to the Joint Venture also extinguished it, as the agreement stated that once JMB accepted a settlement payment, it would release all claims against all defendants. Washington argues in its brief that even though there was no legal effect of the assignment, the fact remains that there was an “actual assignment” of the claim. We decline to overlook the legal significance of the purported assignment in determining whether Washington was entitled to attorney fees.

Second, the trial court stated that “Washington entered [into] a stop notice release bond agreement with [the Joint Venture]. Washington thereby beca[me] responsible for the obligations of [the Joint Venture]. If JMB had prevailed on its contract claim against [the Joint Venture], then it could have recovered attorneys fees from Washington up to the amount of the bond.” (Italics added.) There is no dispute, however, that Washington entered into a stop notice release bond with Cresci alone, as the trial court stated in its summary judgment order. Because Washington had no contractual relationship with the Joint Venture, it is questionable whether JMB could have made a claim for attorney fees against Washington in its action to recover money owed under the Subcontract.

In ruling on the Joint Venture’s cause of action in its cross-complaint against Washington for indemnification, the trial court stated: “The parties appear to agree that Cresci alone was the principal on the stop notice release bond, and that there was therefore no express contract between Washington and the [Joint Venture] upon which a contractual right to indemnification could be based.” Washington’s counsel agreed with the trial court at oral argument on Washington’s summary judgment motion that “the facts suggest . . . that Washington bonded around [JMB’s] stop notice on behalf of the Joint Venture.” Washington’s counsel argued at oral argument before this court that the Joint Venture was the true principal on the bond, because only the general contractor on a public works project can secure a stop notice release bond. (§ 3196.) The fact remains, however, that the trial court found that there was “no express contract between Washington and the [Joint Venture].”

After mischaracterizing the contractual relationships among the parties in this case, the trial court concluded that the factual scenario was the same as in National Technical Systems, supra, 97 Cal.App.4th 415. In that case, the court considered whether a subcontractor, as the claimant on a stop notice release bond, was entitled to recover attorney fees from a surety based on an attorney fees clause in a contract between the general contractor and the subcontractor. (Id. at p. 423.) A subcontractor claimed it was only partially paid for services rendered to a general contractor, filed a stop notice with the public entity that had hired the general contractor, and then sued the general contractor. (Id. at pp. 418-419.) The subcontractor obtained a judgment against the general contractor, as well as an attorney fees award. (Id. at pp. 419-420.) Because the subcontractor had not named the surety in its original lawsuit, it initiated a separate lawsuit against the surety that had issued a stop notice release bond. (Id. at p. 420.)

When the second action proceeded to trial, the trial court granted the surety’s motion in limine to exclude evidence of nonrecoverable damages. (National Technical Systems, supra, 97 Cal.App.4th at p. 420.) Specifically, the trial court ruled that the surety was not liable to the subcontractor for the attorney fees award that had been entered against the general contractor in the first action. (Ibid.) The appellate court concluded that the trial court erred, and held that the surety’s liability on the stop notice release bond extended to the attorney fees to which the subcontractor was entitled under the subcontract, provided that the total recovery did not exceed the amount of the bond. (Id. at pp. 424, 426.) The court’s conclusion was based on section 2808, which provides that “ ‘[w]here one assumes liability as surety upon a conditional obligation, his liability is commensurate with that of the principal . . . .’ ” (National Technical Systems at p. 424.)

The conclusion in National Technical Systems that the surety may be liable for attorney fees to a subcontractor was based on two separate and independent contractual obligations. The first is one of contract law, that the general contractor was liable to the subcontractor based on an attorney fees clause in their agreement. (National Technical Systems, supra, 97 Cal.App.4th at pp. 419, 423-424.) The second principle is one of surety law, that the stop notice release bond obligates the surety to make good on the general contractor’s obligations under the subcontract, including any attorney fees award. (Id. at pp. 424-426; see also § 2808; Boliver v. Surety Co. (1977) 72 Cal.App.3d Supp. 22, 31 [obligation of surety properly includes burden of attorney fees awarded in dispute under construction contract that contained attorney fees clause].)

Washington argues that under National Technical Systems, the Joint Venture, as the assignee of JMB’s cause of action, would have been able to recover attorney fees had it prevailed on the claim. To ensure mutuality of remedy under section 1717, Washington argues, the result “must be the same if the surety prevails.” Although National Technical Systems may support an argument that JMB would have been able to recover from Liberty, as the Joint Venture’s surety, had it prevailed on its claim against the Joint Venture, it does not follow that JMB would have been able to recover attorney fees from Washington. Again, the Joint Venture had no contractual relationship with Washington, as Washington had contracted to be Cresci’s surety.

Additionally, JMB did not sue Washington on the Subcontract; instead, it sued Washington on the stop notice release bond, and also sought various statutory penalties. Whoever prevailed on that claim was not entitled to attorney fees under the Subcontract, a fact that JMB apparently recognized when it filed its original complaint, including a general prayer for attorney fees from Washington but omitting any request for attorney fees under the Subcontract. National Technical Services did not address the recovery of attorney fees by the subcontractor in its second action against the surety. Rather, it analyzed the recovery of attorney fees awarded against the general contractor in the subcontractor’s first action on the subcontract. (National Technical Services, supra, 97 Cal.App.4th at p. 421.)

Other cases cited by Washington for the proposition that attorney fees may be awarded to nonsignatory sureties are likewise distinguishable, as they involved situations where sureties assumed a principal’s obligation under a contract that provided for attorney fees, and did not involve attorney fees being awarded because of separate claims brought against the sureties. (T&R Painting Construction, Inc. v. St. Paul Fire & Marine Ins. Co. (1994) 23 Cal.App.4th 738, 746 [subcontractor may recover attorney fees from surety on a private work payment bond]; Boliver v. Surety Co., supra, 72 Cal.App.3d Supp. at p. 31 [surety liable for attorney fees under a bonding contract]; Jen-Mar Constr. Co. v. Brown (1967) 247 Cal.App.2d 564, 573 [obligation to pay attorney fees arises under contract, which surety bond incorporates]; Grace v. Croninger (1922) 56 Cal.App. 659, 667-668 [guarantor liable for attorney fees pursuant to clause in underlying lease].)

“Ordinarily attorney fees can only be awarded when the lawsuit (1) involves a claim covered by a contractual attorney fee clause [citation] and (2) is between the parties to that contract [citation].” (Super 7 Motel Associates v. Wang (1993) 16 Cal.App.4th 541, 544-545.) Neither condition is satisfied here. Washington was not a party to the Subcontract. Because JMB sued Washington on the stop notice release bond, and not on the Subcontract, the cases cited by Washington regarding the ability of nonsignatories to recover attorney fees pursuant to section 1717 are inapposite. For example, in Reynolds Metals Co. v. Alperson, supra, 25 Cal.3d at pages 126, 129, our Supreme Court upheld an award of attorney fees to defendant shareholders and directors who were sued as “alter egos” of a corporation on promissory notes that contained attorney fees provisions. The court concluded that the purposes of section 1717 require that the statute “be interpreted to . . . provide a reciprocal remedy for a nonsignatory defendant, sued on a contract as if he were a party to it, when a plaintiff would clearly be entitled to attorney’s fees should he prevail in enforcing the contractual obligation against the defendant.” (Reynolds at p. 128, italics added.) Here, JMB did not sue Washington as if it were a party to the Subcontract. Because Washington was not a party to the Subcontract and was not sued as if it were a party to the Subcontract, the trial court erred when it found a contractual basis for an attorney fees award against the Joint Venture, as an assignee of JMB’s claim against Washington.

The other cases decided under section 1717 and relied upon by Washington also are distinguishable, because they involved cases where nonsignatory parties sued on a contract containing an attorney fees clause. (Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 383 [nonsignatory sublessee entitled to enforce attorney fee provision in lease as third party beneficiary against signatory landlord]; Brusso v. Running Springs Country Club, Inc. (1991) 228 Cal.App.3d 92, 97, 109-111 [nonsignatory shareholders sued signatory defendants on behalf of signatory corporation]; Manier v. Anaheim Business Center Co. (1984) 161 Cal.App.3d 503, 505, 508 [nonsignatory plaintiff sued on contract that contained attorney fees provision]; Jones v. Drain (1983) 149 Cal.App.3d 484, 487-488 [nonsignatory sued as if it were party to a contract containing attorney fees provision]; Lewis v. Alpha Beta Co. (1983) 141 Cal.App.3d 29, 31, 34 [tenants sued landlord and cotenant on the basis of their own lease to enforce restrictive covenant assumed by cotenant for their benefit in its lease; each lease provided for attorney fees].)

B. No Contractual Basis For Attorney Fees Against Liberty.

The trial court also found a contractual basis for the attorney fees award against Liberty. The trial court’s order states: “Liberty Mutual entered into an agreement to be the surety of [the Joint Venture]. Liberty Mutual thereby because [sic] responsible for the obligations of [the Joint Venture]. [Section] 2808. If JMB had prevailed on its contract claim against [the Joint Venture], then it could have recovered attorneys fees from Liberty Mutual up to the amount of the bond.” While this may be true, it does not follow that Liberty was obligated to pay attorney fees to Washington. At the time of the summary judgment motion, JMB no longer was pursuing a claim against the Joint Venture, and, more importantly, JMB never assigned any claim against Washington (or any other party) to Liberty. Stated differently, Liberty and Washington were not litigating the Subcontract.

Washington suggests that Liberty somehow became liable for attorney fees because of the Joint Venture’s prosecution of JMB’s claim against Washington. It argues that “a unity of interest” existed between Liberty and the Joint Venture under section 2808, making Liberty responsible for the obligations of the Joint Venture, including liability for Washington’s attorney fees. Because we previously rejected Washington’s argument that the Joint Venture is responsible under the Subcontract for Washington’s attorney fees, we likewise conclude that Liberty did not become responsible for Washington’s attorney fees as the Joint Venture’s surety. The holding of National Technical Systems does not help Washington, as it apparently recognized below when it did not argue in its motion for attorney fees that Liberty was obligated to pay attorney fees pursuant to that opinion.

Washington argues on appeal that the award against Liberty was consistent with the goal in the Subcontract to “ ‘fully reimburse all attorney’s fees actually incurred in good faith.’ ” There was no contractual relationship between Liberty and Washington, and neither party signed the Subcontract. Washington does not cite any legal authority to support its position that it is entitled to recover attorney fees from another surety under a contract between a general contractor and subcontractor. Washington points to the factors that the trial court used to allocate fees among JMB, the Joint Venture, and Liberty. While those factors may be a proper method to apportion fees, they do not provide a legal basis for ordering Liberty to pay attorney fees to Washington in the first place.

The trial court’s order states: “The parties do not discuss whether any fee award is joint and several or whether it must be apportioned. The Court has considered (1) the degree to which each party’s actions necessitated the expenditure of legal fees, (2) that JMB initiated the action against Washington and whereas Transdyn/Cresci and Liberty Mutual asserted claims against Washington at a later date, and (3) the results obtained by JMB in the litigation. The Court has considered the language in the contract between JMB and Transdyn/Cresci stating that the goal is to ‘fully reimburse all attorneys fees actually incurred in good faith’ and elected not to apportion any fees to other parties in the lawsuit.”

Washington claims that the Joint Venture and Liberty were, for many purposes, “indistinguishable” because they continued to prosecute the cross-complaint against Washington. The fact remains, however, that Liberty and Washington had no contractual relationship that would entitle either of them to attorney fees based on the outcome of the cross-complaint. The fact that Liberty may have engaged in “obstreperous litigation tactics” in pursuing its cross-complaint does not provide a legal basis for ordering Liberty to pay Washington attorney fees pursuant to the Subcontract, as Washington suggests. We conclude that the trial court erred when it found a contractual basis for awarding attorney fees against Liberty.

C. No Statutory Basis For Attorney Fees Against The Joint Venture Or Liberty.

Because the trial court concluded that there was a contractual basis for attorney fees against appellants, it did not reach Washington’s argument that there was a statutory basis to award attorney fees. We must affirm the trial court’s order under any correct legal theory (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981); however, we conclude that Washington’s alternative argument also lacks merit.

The Joint Venture and Liberty pursued claims against Washington for indemnity, contribution, and declaratory relief. Liberty also pursued a claim against Washington for apportionment. Washington argues on appeal, as it did below, that it was entitled to an attorney fees award against appellants under sections 3196 and 3250, based on appellants’ cross-complaint.

Section 3196 provides, in part, that a surety on a stop notice release bond (in this case, Washington) is jointly and severally liable with the surety on a payment bond furnished under section 3247 (in this case, Liberty). Section 3196 does not, as Washington acknowledges, provide for attorney fees. Section 3250 provides that in an action against a surety on a payment bond, the court shall award to the prevailing party reasonable attorney fees. (Winick Corp. v. Safeco Insurance Co. (1986) 187 Cal.App.3d 1502, 1506.) Washington acknowledges that it was not sued on a payment bond, but reasons that, when sections 3250 and 3196 are read together, it is entitled to fees.

Section 3247, subdivision (a), provides: “Every original contractor to whom is awarded a contract by a public entity . . . involving an expenditure in excess of twenty-five thousand dollars ($25,000) for any public work shall, before entering upon the performance of the work, file a payment bond with and approved by the officer or public entity by whom the contract was awarded.”

As Washington concedes, there is no case law interpreting the cited statutes in the manner in which Washington advocates, and there is no “express[]” statutory authority for the recovery of attorney fees in this situation. Washington reasons, however, that “had JMB prevailed on its claim against the stop notice release bond, and had [the Joint Venture] and Liberty Mutual prevailed on their indemnity and contribution cross-complaint claims against Washington, Washington would have been jointly and severally liable for their fees under” sections 3196 and 3250. Washington argues that because it prevailed, it should be entitled to attorney fees. Assuming arguendo that Washington and Liberty had become jointly and severally liable for JMB’s attorney fees, it does not follow that Washington would have become liable for the Joint Venture’s or Liberty’s fees.

Any recovery by the Joint Venture or Liberty against Washington would have been on their indemnity, contribution, declaratory relief, and, in the case of Liberty, apportionment, causes of action. The statutes cited by Washington do not provide attorney fees where a general contractor or a surety pursue such claims against another surety. Washington claims that appellants’ cross-claims against Washington were “a direct offshoot” from JMB’s payment bond claim against the Joint Venture and Liberty. In fact, appellants sued Washington in its capacity as the surety on a stop notice release bond. We reject Washington’s argument that it was entitled to attorney fees from appellants based on statute.

III. Disposition

A112617 is dismissed. (Cal. Rules of Court, rule 8.244(c).) In A113374, the attorney fees award against the Joint Venture and Liberty is reversed. Appellants shall recover their costs on appeal.

We concur: Reardon, Acting P.J., Rivera, J.


Summaries of

In re Scada Cases

California Court of Appeals, First District, Fourth Division
May 25, 2007
No. A112617 (Cal. Ct. App. May. 25, 2007)
Case details for

In re Scada Cases

Case Details

Full title:In re SCADA Cases.

Court:California Court of Appeals, First District, Fourth Division

Date published: May 25, 2007

Citations

No. A112617 (Cal. Ct. App. May. 25, 2007)