DC Partners, Inc. v. Eaton Aerospace, LLC

PLAINTIFF’S MOTION FOR ATTORNEY’S FEES AND COSTS

 

MOVING PARTY: Plaintiff DC Partners, Inc. dba Soligen 2006

RESPONDING PARTY(S): Defendant Eaton Aerospace, LLC

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS

Plaintiff DC Partners, Inc. dba Soligen 2006 (“Soligen”) alleged that Defendant Eaton Aerospace, LLC (“Eaton”) was indebted to Soligen in the amount of $183,481.06 plus interest based on component parts Soligen supplied Eaton. The operative First Amended Complaint contained common count causes of action for (1) Goods Sold and Delivered, (2) Account Stated, and (3) Open Book Account.

The action proceeded to jury trial on January 3, 2023.  Following trial, the jury rendered a verdict in Plaintiff’s favor in the amount of $212,981.00.  (See 1/23/2023 Judgment.)

Plaintiff now moves to recover its attorney’s fees and costs pursuant to contract.  Defendant opposes.

TENTATIVE RULING:

Plaintiff’s Motion for Attorney’s Fees is DENIED in its entirety.

This court defers its ruling on Plaintiff’s Costs until the May 3, 2023, hearing on Defendant’s motion to strike/tax costs.

Defendant to give notice, unless waived.

DISCUSSION:

Motion for Attorney’s Fees and Costs

Plaintiff now moves for its award of attorney’s fees and costs as the prevailing party at trial.  Plaintiff seeks attorney’s fees of $273,892.50 and costs of $51,551.01, in the total amount of $325,443.51.

I. Attorney’s Fees

In California, “[a] party may not recover attorney fees unless expressly authorized by statute or contract.” (Hom v. Petrou (2021) 67 Cal. App. 5th 459, 464; See Code Civ. Proc., §§ 1021, 1033.5, subd. (a)(10).)

Civil Code section 1717(a) provides:

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.

“Because section 1717 only applies to an action ‘on a contract,’ the statute and its reciprocity rules do not apply to claims for fees for tort or other non-contract claims.” (Hom, supra, 67 Cal. App. 5th at 465.) But “California courts liberally construe the term ‘on a contract’ in Civil Code section 1717.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 894.) “‘As long as the action “involve[s]” a contract, it is “ ‘on [the] contract’ ” within the meaning of section 1717.’ ” (Id.) “To determine whether an action is on the contract, we look to the complaint and focus on the basis of the cause of action. [Citations.] Any action that is based on a contract is an action on that contract regardless of the relief sought.” (Yoon v. Cam IX Tr. (2021) 60 Cal. App. 5th 388, 392.)

A. The Action was Likely “On A Contract”

The first issue is whether this action was one “on a contract.” Plaintiff argues it is “undisputed that a contract between the parties existed,” and that this controlling contract was Plaintiff’s “Quote for Purchase.” (Mtn. 5: 4-5.) Plaintiff argues its “Quote for Purchase” “allows [it] to recover its attorney’s fees and costs incurred in bringing this action. Plaintiff also contends that Defendant “never approached Soligen with an issue about its terms [and] conditions presented” in the Quotes. Rather, Defendant issued a purchase order in response in response to the Quote, “thereby agreeing to do business with Soligen, and in agreement with Soligen’s contract terms.” (Mtn. 5: 21-22.)

Defendant, on the other hand, argues section 1717 is inapplicable here.  Defendant notes that Plaintiff’s action was one for common count, not breach of contract. Defendant contends Plaintiff therefore “waived any contract-based claims or related recovery at the outset.” (Opp. 1: 18-19.)  Defendant asserts then that Soligen’s action is not “on a contract” and that Soligen did not incur attorney’s fees to “enforce that contract.” (Opp. 1: 20-22; Civ.Code § 1717(a), (b).)

First, there is no obvious controlling written contract in this matter.  Plaintiff brought this matter for account stated, not breach of contract.  The controlling First Amended Complaint in this matter provided three common count causes of action for (1) goods and services rendered, (2) open book account, (3) and account stated. “ ‘The common count is a general pleading which seeks recovery of money without specifying the nature of the claim.” (Title Ins. Co. v. State Bd. of Equalization (1992) 4 Cal.4th 715, 731.) A common count action “is governed by principles of equity. It may be brought ‘wherever one person has received money which belongs to another, and which “in equity and good conscience,” or in other words, in justice and right, should be returned.” (Mains v. City Title Ins. Co. (1949) 34 Cal.2d 580, 586 [internal citations omitted].) “[S]ince the basic premise for pleading a common count . . . is that the person is thereby ‘waiving the tort and suing in assumpsit,’…excluded are damages for a breach of an express contract. The relief is something in the nature of a constructive trust and . . . ‘one cannot be held to be a constructive trustee of something he had not acquired.’ One must have acquired some money which in equity and good conscience belongs to the plaintiff or the defendant must be under a contract obligation with nothing remaining to be performed except the payment of a sum certain in money.” (Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 14–15 [internal citations omitted].) “[A] party need not prove the existence of a contract [citations], but it must show the circumstances were such that ‘the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made.’ ” [Citation.]” (E. J. Franks Construction, Inc. v. Sahota (2014) 226 Cal.App.4th 1123, 1127–1128.) 

Each common count was based on the general allegation that Defendant had become indebted to Plaintiff in the sum of $183,481.06. (FAC ¶¶ 5, 8, 11.) Plaintiff did not identify the contract(s) at issue in the FAC. At trial, there was a factual dispute as to which contracts were actually at issue, which invoices were paid in full, and which invoices, out of certain unpaid invoices at issue, justified payment. Indeed, the damages sought by Plaintiff have fluctuated.  This was not a simple contract matter. 

Be that as it may, it would appear that one or more contracts existed between the parties, either express or implied, based on Plaintiff having provided goods to Defendant in the first place.  Because this court must “liberally construe the term ‘on a contract’,” it finds that the action here “involved a contract.” (Blickman Turkus, LP, supra, 162 Cal.App.4th at 894.) This is true even though Plaintiff did not seek relief for breach of contract. (Yoon, supra, 60 Cal. App. 5th 388, 392.)

B. Plaintiff was the Prevailing Party at Trial

The next issue is whether Plaintiff is the “prevailing” party in this action. There is little doubt that Plaintiff prevailed here. Indeed, the jury found in Plaintiff’s favor and against Eaton, awarding Plaintiff damages in excess of those sought in the First Amended Complaint.  (See Judgement, 01/23/2023.) In other words, Plaintiff received exactly what it wanted and then some. Plaintiff is therefore the prevailing party.

C. There is No Enforceable “Contract” Which Provides for the Recovery of Attorney’s Fees Under Civil Code Section 1717

First and foremost, the sole legal basis for which the Plaintiff is seeking an award of attorney’s fees is Civil Code § 1717.  See, e.g., Plaintiff’s Notice of Motion for Attorney’s Fees and Costs, p. 2, lines 3-5; see also, First Amended Complaint, Prayer for Relief, p. 3, line 20.

Assuming this action was one “on a contract,” [as discussed above] and given the fact that Plaintiff was the “prevailing party” in the action, the final issue this court must address is which contract(s), if any, applies and what terms govern. Put differently, does the controlling contract, if any, “specifically provide[]” for recovery of attorney’s fees and costs? (CCP § 1717(a).)

The parties have presented more than one document/alleged contract in this litigation and at trial purporting to reflect the negotiated terms of the agreements between the parties.  Where possible, “[s]everal contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.” (Civ. Code, § 1642.; R.W.L. Enterprises v. Oldcastle, Inc. (2017) 17 Cal. App. 5th 1019, 1027.) “Under traditional common law, no contract was reached if the terms of the offer and the acceptance varied.  An acceptance containing additional terms was viewed as ‘both a rejection of the offer and a counteroffer.’ The California Uniform Commercial Code rejects this mirror image rule in the commercial context, where its strict application would be ‘both unfair and unrealistic.’ Section 2207 considers ‘whether the parties intended to complete an agreement.’”) [All internal citations omitted.]    [FN 1]

As discussed herein, the evidence does not preponderate that the parties did, in fact, intend to complete any agreement as to attorney’s fees.   As previously noted, there was never a cause of action even alleged for any breach of contract.  The simple fact remains that Plaintiff’s rather fortuitous recovery from the jury’s verdict was based solely on an open book account. [FN 2]

As further noted, Plaintiff relies on its “Quote” which contains a provision allowing recovery of attorney’s fees.  On the other hand, Defendant notes that its Purchase Orders (“POs”) and related Terms and Conditions (“T&Cs”)—which the parties agree Defendant issued after and in response to Soligen’s Quotes—“explicitly rejected all proposed terms and conditions contained within Soligen’s quotes, including Soligen’s ability to recover attorney’s fees and collection costs.” (Opp. 1: 26-27.)

The Plaintiff’s motion includes zero legal authority addressing how the court is tasked to resolve the conflicting terms in this case.  Rather, it contends boldly and summarily that there is “no doubt” its Quote—which provides for the recovery of attorney’s fees—should govern now. (Mtn. 5: 6.) But “failure to offer reasoned analysis of [an] issue constitutes a waiver.”  (Trinity Risk Management, LLC v. Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1009; see also In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 [“[t]he absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived.”])

Moreover, there is also no indication nor discussion as to whether Eaton’s POs and related T&Cs contained a provision for recovery of attorney’s fees which could invoke the reciprocal provision of Civil Code section 1717. 

Therefore, construing the documents together, this court cannot find that it was the mutual intention of the parties that either party be entitled to recover attorney fees and costs. Thus, the contract does not “specifically provide[]” for recovery of attorney’s fees and costs. (CCP § 1717(a).)

For these reasons, Plaintiff’s motion for attorney’s fees is DENIED.  

Accordingly, there is no need for this Court to analyze what would be the reasonable amount of attorney’s fees incurred by Plaintiff in this action, if such an award was, in fact, required.  [FN 3]

II. Costs

In general, the prevailing party is entitled as a matter of right to recover costs for suit in any action or proceeding.  (Code Civ. Proc., §1032(b); Santisas v. Goodin (1998) 17 Cal.4th 599, 606; Scott Co. Of Calif. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) With regard to the definition of “prevailing party”, section 1032(a)(4) provides that: 

 

“‘Prevailing party” includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.” 

 

Allowable costs under Code of Civil Procedure section 1033.5 must be reasonably necessary to the conduct of the litigation, rather than merely convenient or beneficial to its preparation, and must be reasonable in amount.  An item not specifically allowable under section 1033.5(a) nor prohibited under subdivision (b) may nevertheless be recoverable in the discretion of the court if they meet the above requirements (i.e., reasonably necessary and reasonable in amount). (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-774.)   In determining litigation success, Courts should “respect substance rather than form” and consider “the unique facts and circumstances of each case.” (Marina Pacifica Homeowners Assn. v. S. California Fin. Corp. (2018) 20 Cal. App. 5th 191, 206.)

Plaintiff filed its costs memorandum on January 26, 2023.  Defendant filed a motion to strike/tax costs on February 15, 2023. That motion to strike/tax is currently set for hearing on May 3, 2023.  Therefore, this court will defer its ruling on Plaintiff’s awardable costs until that date.  

Moving party to give notice.

IT IS SO ORDERED.

Dated:   April 12, 2023 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

FN 1 - This Court is somewhat baffled that the parties engaged in no discussion whatsoever (or even citation) to the Cal. Uniform Commercial Code, which typically governs transactions of this type between business entities.  It is the parties’ responsibility to cite and discuss the applicable laws; it is not this Court’s duty to conduct its own independent research.  Perhaps it doesn’t apply?  So be it.  

FN 2 - The Plaintiff may, in fact, be entitled to an attorney’s fee award of $1,200 under Civil Code section 1717.5 (a).  However, no such a specific request has ever been pled or made.  Indeed, this section appears to be the only section which actually applies in this case as to the issue of attorney’s fees.  It is a well settled cannon of statutory construction that a more specific statute trumps a general statute if there are any conflicts between the two.  See, e.g., Lopez v. Sony Elecs., Inc. (2018) 5 Cal.5th 627, 634-635; see also, Civil Code § 3534 [“Particular expressions qualify those which are general.”]

FN 3 - For example:  Would the Plaintiff’s unsuccessful attempts [plural] to disqualify this Court under CCP section 170.1/170.3 be considered reasonable attorney’s fees to be fairly charged to the Defendant in this particular case?  The same issue would also be presented as to the unsuccessful attempts [once again, plural] to amend the complaint to add a RICO cause of action. Was that reasonable?  A RICO cause of action!  This Court notes that considerable attorney’s fees are being requested to be awarded in those specific and specious efforts.  (See, e.g., Declaration of Steven A. Simons, Exhibit “A”, 06/09/2022 through 08/22/2022)