Opinion
NOT TO BE PUBLISHED
APPEALS from a judgment and order of the Superior Court of San Diego County Super. Ct. No. GIE024584, Jan I. Goldsmith, Judge.
BENKE, Acting P. J.
Preferred Western Collection, Inc. (Preferred Western), filed a complaint against Upper Group, Inc. (Upper Group), and Shih Ching Chiang (Chiang) (Upper Group and Chiang together UG). Preferred Western sought to collect unpaid fees allegedly owed to Preferred Western's assignee American Pacific Environmental Consultants, Inc., dba Mooney & Associates (Mooney), for work Mooney claimed it performed in connection with a project UG sought to develop in Lakeside, California, known as "Rios Canyon Ranch." UG cross-complained against Mooney, among other parties, alleging causes of action for accounting, negligence, breach of contract and fraud.
After a month-long bench trial, the trial court entered judgment for Preferred Western, awarding it $31,900.81, and found against UG on its cross-complaint. UG appeals only the judgment for Preferred Western, contending it was not supported by sufficient competent evidence. Preferred Western and Mooney separately appeal the trial court's order denying their joint motion for attorney fees and costs.
As we explain, we conclude the record contains substantial evidence to support the judgment for Preferred Western. We further conclude the trial court did not err when it denied the motion of Preferred Western and Mooney for attorney fees and costs.
FACTUAL AND PROCEDURAL BACKGROUND
When findings of fact in a statement of decision are challenged on appeal, as is the case here, we are bound by the substantial evidence rule. That rule requires us to review the entire record to determine whether substantial evidence supports the appealed judgment. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) In so doing, we "view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor in accordance with the standard of review so long adhered to" by courts of review. (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.) Certain portions of the factual and procedural history related to the parties' claims of errors are discussed post, in connection with those issues.
A. Project History
This case arose out of the efforts of UG to obtain development entitlements for the Rios Canyon Ranch property (subject property or project) owned by Chiang. The subject property is located at the top, and along the sides, of a steep hill, is extremely rocky and hilly and contains numerous ravines. Upper Group, an agricultural company owned by Chiang, operated an avocado/citrus orchard on the subject property.
In 2000, Upper Group retained Mooney, an environmental and land use planning firm, to design a tentative map (TM) and complete other documents it would use to obtain approvals from the County of San Diego (County) for development of the subject property. Toward the end of 2000, Upper Group submitted a proposal to place 184 custom, single-family residence estate lots on the subject property. That project was criticized by the Lakeside Community Planning Group (LCPG). Staff of the County Department of Planning and Land Use (DPLU) issued letters in January 2001 outlining their concerns with the proposed project and requesting that Upper Group prepare an environmental impact report (EIR).
In 2001, Upper Group hired John Musial as its new project manager for the project. Musial coordinated the work of consultants, including Mooney, to revise the TM, EIR and other documents. In January 2002, Musial and a representative of Mooney met with staff of DPLU and discussed a revised plan that Upper Group intended to offer In response to one of the County's January 2001 letters. The revised project consisted of 143 single-family residences. A revised TM and EIR, among other documents, were submitted to the DPLU in September 2002.
The County in January 2003 issued a letter criticizing the September 2002 revised proposal. In response, Musial instructed all Upper Group consultants, including Mooney, to work on a proposal for the subject property that would involve development of 105/107 unit/lot single-family residences.
In January 2004, when the work on the plan for 105/107 lots was nearing completion, Chiang ordered all consultants to stop work. At Chiang's urging, the consultants (including Mooney) were directed to prepare submittals for a 144-unit (as opposed to lot) project. Up to this time, Upper Group's project designs had involved only single-family residences.
The DLPU's response to the 144-unit project was lukewarm. In response, Mooney suggested yet another proposal for development of the subject property and agreed to become the project manager. Chiang stated he would agree to the Mooney proposal only if Mooney guaranteedthe County would approve 144 units. Because Mooney refused to offer such a guarantee, the parties' relationship ended in summer 2004.
B. Bench Trial and Statement of Decision
Mooney assigned to Preferred Western its claim against Upper Group for unpaid fees of $30,338.26. Preferred Western sued UG.
UG answered the complaint and filed a cross-complaint against Mooney, among other parties. UG's cross-complaint, as amended, alleged causes of action against Mooney for accounting, breach of contract, negligence and fraud, and sought damages in excess of $13 million. UG subsequently added Musial, its former project manager, as a cross-defendant and asserted claims against him for breach of fiduciary duty, negligence and negligent misrepresentation. By stipulation, the parties agreed that Preferred Western would not participate in the trial and that it would only seek payment for invoices from January 2004 through June/July 2004.
The case proceeded to a bench trial. The court heard testimony from 12 witnesses and received over 150 exhibits in evidence. At the conclusion of the trial, the court issued a detailed 19-page statement of decision. The court found in favor of Preferred Western and awarded it damages of $31,900.81, which included prejudgment interest, but which excluded $3,932.25 for work Mooney performed for Upper Group that the court determined was unauthorized. The court also found Mooney and Musial were not liable on UG's cross-complaint.
As the fact finder, the court "did not find Chiang to be a credible witness." Instead, the court found "Musial's testimony to be credible to the effect that during his last few meetings with Chiang in 2004, he was asked by Chiang and his assistant, William Yen, to assist them in finding a rationale for not paying Mooney's bills and finding fault with Mooney's work. Musial refused, stating that Mooney had done an excellent job and did what [it] was asked to do. Chiang and Yen did not criticize Musial's work at that time or at any time prior to this lawsuit. Accordingly, the court infers that when it became clear to Chiang in 2004 that Mooney was unwilling to write off the invoices, UG embarked upon an effort to find a rationale for not paying [Mooney] and only after Musial refused to support UG's efforts was [Musial] sued.
"Consistent with Chiang's attitude toward this collection lawsuit, UG revisited every aspect of the Rios project over the course of some five years seeking to find some bases upon which to hold Musial and/or Mooney liable for some wrongful conduct. UG now seeks recovery of millions of dollars in lost opportunity damages and recovery of every penny spent on consultants and engineering, including expenses paid before Musial and Mooney began working on the project.
"The court reviewed in detail all of the evidence presented and the accusations made by UG and could only find one basis for reducing the outstanding invoices. The court finds that Mooney continued working on an EIR in 2004 despite explicit instructions from Chiang to stop all EIR work. UG should not be required to pay for that portion of the invoices. Other than that one area, the court finds no basis for recovery against Musial or Mooney."
Chiang testified at trial that he was unaware of the development process and simply followed the consultants' advice. However, in its statement of decision the court instead found UG was "kept accurately apprised of the project on an ongoing basis by way of memos and personal meetings and UG had the opportunity to make all decisions." It further found that "Chiang was a sophisticated businessman who has successfully invested in real estate and, in this case, a highly speculative investment in unimproved land. At all times [Chiang] was aware of the progress of the Rios project and retained the right to make all decisions while he delegated the details of implementation to Musial" and Musial's predecessor. In fact, the court found the evidence "was very substantial" that Musial and Mooney disclosed to Chiang the facts to allow him to make informed decisions regarding the project.
DISCUSSION
I
Appeal of Preferred Western Judgment
A. Background
In its statement of decision, the trial court found that with the exception of work Mooney performed on an EIR in 2004, "Mooney was authorized by contract to perform all the work reflected in its invoices and was authorized to retain the subcontractors to work on the Rios project." The court further found "the amounts charged by Mooney complied with its contractual obligations and were fair and reasonable charges for the work performed"; Mooney did not double bill for any work it performed for UG; the "[p]resentation of time sheets for trial was not a contractual obligation"; and "the time reflected on the invoices was in fact performed."
UG claims these findings of the trial court, and the judgment for Preferred Western based on such findings, are not supported by substantial evidence because of accounting irregularities attributable to Mooney. Specifically, UG claims Mooney's inability to produce time cards to support invoices paid by UG, and Mooney's presentation of inconsistent billing invoices for payment, show the damage award for Preferred Western was not supported by substantial evidence. We disagree.
As we noted ante, because the trial court here "reached its decision after resolving conflicts in the evidence, or inferences that could be drawn from the evidence, we review those factual findings to determine whether they are supported by substantial evidence." (County of Los Angeles v. Superior Court (2006) 139 Cal.App.4th 8, 12.) " 'The substantial evidence rule provides that where a finding of fact is attacked on the ground it is not sustained by the evidence, the power of an appellate court begins and ends with a determination whether there is any substantial evidence, contradicted or uncontradicted, which support the finding.' " (Huang v. Board of Directors (1990) 220 Cal.App.3d 1286, 1293-1294.)
In making this determination, we examine all relevant evidence in the record and view that evidence in the light most favorable to the judgment, resolving all conflicts in the evidence and drawing all inferences in support of the judgment. (Young v. Gannon (2002) 97 Cal.App.4th 209, 225.) We do not, however, "weigh the evidence, consider the credibility of witnesses, or resolve conflicts in the evidence or in the reasonable inferences that may be drawn from it." (Huang v. Board of Directors, supra, 220 Cal.App.3d at p. 1294.)
B. Time Cards
UG contends the Preferred Western judgment was unsupported by substantial evidence because during discovery Mooney was unable to produce employee time cards to support 419 hours of work Mooney claims, and the court found, it performed on the project. UG contends the time cards were essential to the accounting practices of Mooney and further contends Mooney's inability to produce the records supports a reasonable inference that Mooney never performed the work in the first place.
UG's argument misconstrues the substantial evidence standard of review, inasmuch as there is sufficient evidence in the record showing Mooney in fact performed the 419 hours of work. For example, Mooney's financial manager (who left the company in April 2004) testified at trial that each month accounting would collect the employee time cards, enter the information therein into Mooney's computerized billing system and generate, among other things, a billing review report and a draft invoice that set out in detail who worked on what project, the time that was billed and the employee's billing rate. The project manager would then review the billing review report and draft invoice, make changes, if necessary, and return them to accounting where a final invoice was prepared and sent out for payment.
Mooney's financial manager also testified that all time cards had to be turned in before accounting could create draft invoices; Mooney required time cards to be turned in on a monthly basis; and that to the best of her knowledge, all invoices prepared by accounting in connection with Upper Group's project were supported by actual time cards prepared by Mooney employees that existed at the time the invoices were generated. Moreover, the financial manager testified it was the responsibility of accounting to verify the amounts on the invoices matched the amounts entered into the computer that were derived from the employee time cards.
Although the testimony of a single witness, if believed by the trier of fact, is sufficient to provide substantial evidence to support a factual finding (see In re Marriage of Mix (1975) 14 Cal.3d 604, 614; Fariba v. Dealer Services Corp. (2009) 178 Cal.App.4th 156, 171), there is additional evidence in the record to support the finding Mooney actually worked the 419 hours disputed by UG. Mooney's director of business operations testified at trial that she also was familiar with the preparation of billing invoices by Mooney. She testified the billing process began when data was entered by a "billing clerk" into the computer system from employee time cards and from other sources of information known as "reimbursables" (e.g., miscellaneous charges attributable to a given project, such as charges for postage, mileage, third-party vendor fees and the like). Mooney then generated a billing report from this data, from which a draft invoice was created. The project manager then reviewed both the billing report and the draft invoice, made corrections if necessary, and accounting then created a final invoice that was mailed to the client for payment.
The director of business operations testified that Mooney followed this practice in connection with the billing invoices on Upper Group's project, and further that the invoices sent to Upper Group were in fact, to the best of her knowledge, supported by actual time cards and correct.
We thus conclude there is sufficient evidence in the record to support the trial court's finding that Mooney actually worked the 419 hours disputed by UG, despite Mooney's inability to produce the "missing" time cards in discovery. (See Fariba v. Dealer Services Corp., supra, 178 Cal.App.4th pp. 170-171 [under the substantial evidence standard of review, the test is not whether there is evidence to support a finding different from that made by the trier of fact, "but whether there is some evidence that, if believed, would support the findings of the trier of fact"].)
In reaching this conclusion, we independently note the lack of evidence in the record to support UG's contention that Mooney did not work the 419 hours, or that the time reflected in the computerized entries was inaccurate. We further note the testimony of Mooney's project manager that he and other Mooney employees unsuccessfully attempted to locate the missing time cards sought by UG in discovery. Although UG continues to argue on appeal that the "facts" suggest the time cards did not exist because Mooney never did the work, the trial court clearly rejected this argument when it concluded the time reflected on the invoices was in fact performed, a finding we conclude is based on substantial evidence contained in the record, as noted ante. Accordingly, we reject UG's argument the "secondary evidence rule," formerly known as the "best evidence rule," applied and prevented the court from including in the judgment sums owed Mooney based on the 419 hours. (See Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1069-1070 ["A corollary of the rule that the contents of lost documents may be proved by secondary evidence is that the law does not require the contents of such documents be proved verbatim" and the "lost document cases illustrate a few of the many types of secondary evidence that courts have admitted to prove the contents of a missing instrument," including oral testimony that "courts have often admitted" for this purpose].)
C. Billing Discrepancies
1. 2000-2001 Invoices
UG next contends the trial court erred when it found Mooney was entitled to recover for work performed between December 2000 and February 2001 because, it argues, there were substantial discrepancies among three different versions of the same set of invoices generated by Mooney, as reviewed and testified to by its expert. UG claims the first set of invoices totaled $22,190.45. However, because the invoices did not reference the tasks performed by Mooney, Upper Group requested that Mooney restate those invoices, which led to a second set that totaled $27,326.31. Finally, a third set of invoices was generated at the direction of Mooney's project manager to restate and correct various tasks. The invoices for this third set totaled $30,725.61.
The trial court found the work described in the "restated billing invoices" prepared by Mooney was in fact performed and that "[a]t most, there were some errors in Mooney's records that were discovered by UG and offered as proof of fraudulent billings." However, the court found those errors to be "minor, not intentional or fraudulent." UG disputes these findings.
We conclude substantial evidence supports the trial court's findings. Although UG contends there is "quite a difference" between the various sets of invoices, the evidence in the record shows otherwise. Mooney's project manager testified that in reviewing the summary of the invoices prepared by UG's expert, she determined UG's expert failed to include in the first set of invoices amounts due for work performed by Mooney in January and February 2001, although he included such amounts in his analysis of the second set of invoices. She testified that is the reason for the discrepancy between the first two sets of invoices.
She also testified UG's expert's summary of the second set of invoices did not include $3,031.80 for work that was included in the third set. Moreover, she testified UG's expert neglected to add $367.50 to the total of the second set of invoices, although that entry—for "Research & Review existing information"—was listed as one of the tasks. When these "mistakes" were corrected, Mooney's director of business operations testified—and we have confirmed—that the total billed for the second and third sets of invoices was identical (e.g., $30,725.61).
Mooney's director of business operations also testified that when she added the bills for January and February 2001 to the subtotal in set one of the invoices, Mooney actually under billed UG by almost $900. Based on her review of the three sets of invoices, the director of business operations testified that UG was not double-billed for any work performed by Mooney on the project.
In addition, the record shows that once Mooney explained the billing discrepancies to Musial and added the appropriate tasks as requested, the invoices were paid in full without further objection. Consistent with the trial court's findings regarding the credibility of witnesses, or lack thereof, it was only after the instant dispute arose between the parties that UG complained about the (alleged) billing discrepancies.
Reviewing this evidence in the light most favorable to the prevailing party, as we must (see Young v. Gannon, supra, 97 Cal.App.4th at p. 225), we conclude the record contains substantial evidence to support the trial court's findings that Mooney in fact performed the work described in the invoices and that Upper Group was not double-billed for that work.
2. 2004 Invoices
The trial court found that after January 2004, Mooney was not entitled to bill for its EIR work on the proposed 105/107-unit project. The evidence shows UG determined in January 2004 that the proposed 105/107-unit plan was "not financially feasible" and instructed its "consultant team," including Mooney, to determine the feasibility of a 144-unit project. Mooney was responsible for directing the planning and environmental constraint issues regarding that project.
The evidence also shows that in mid-March 2004 Mooney presented the proposed 144-unit project to the County Planning Director and other County staff, who determined the project was feasible. In early April 2004, Mooney also presented this proposed project to the LCPG. However, unlike the County, LCPG expressed "major concerns" over the "visibility and density of the proposed multiple family units in the northern portion" of the subject property.
In mid-May 2004, the County Board of Supervisors continued its hearings on Lakeside's land use designation plan, which included the site of the subject property. Mooney's project manager testified at that hearing on behalf of Upper Group.
The evidence in the record thus supports the trial court's finding that with the exception of the 105/107-unit EIR, Mooney was authorized to continue work on the 144-unit proposal at least through the end of May 2004, when Mooney prepared a status letter at the request of UG regarding the "entitlement processing," "summary of planning issues" and "environmental constraints" for that revised project.
Although under the substantial evidence standard of review we would affirm the trial court's finding that Mooney was authorized through May 2004 to continue work on the 144-unit project even if UG had proffered evidence to the contrary (see Huang v. Board of Directors, supra, 220 Cal.App.3d at pp. 1293-1294), we independently note the record is bereft of evidence of UG objecting to Mooney's work on the proposed 144-unit project during the March, April and May 2004 timeframe. We also note that UG has not challenged the findings of the trial court that Chiang was a sophisticated businessperson, he was kept accurately apprised of the status of the project on an ongoing basis, and he retained the right to make all decisions in connection with the project.
UG also claims the trial court erred when it credited UG for EIR work performed by Mooney on the 105/107 project for the months of February and March 2004, but failed to give UG a credit for what it claims is the same work done by Mooney in the months of April and May 2004. UG notes this "error" by the trial court may have been "unintentional," but that "simple math" shows the months of April and May 2004 must be credited to it in order for the court's statement of decision to remain "consistent."
UG's argument misstates the record on appeal. It neglected to inform this court that the trial court, which sat as the fact finder in the month-long bench trial, rejected this identical argument in connection with UG's new trial motion. The court found Mooney was authorized to do some EIR work in connection with the proposed 144-unit development:
"[UG's counsel:] Next, your honor, I would like to move to the post January 2004 charges. [¶] You have already found, your honor, that Mooney was not entitled to charge for EIR work on the 105, 107 project. You gave a credit for 300-some dollars for that. In fact, what you gave a credit for, your honor -- this is an easy one -- was for work billed by Mooney on the 105, 107-project for EIR work for February and March. In fact, your honor, Mooney billed for that same unapproved service for April and May, totaling $1366.25, for what you have already found were unapproved services. [¶] So that is an easy one, your honor, to which Upper Group should be entitled to a credit.
"THE COURT: Actually, if you take a look at the statement of decision, it wasn't as broad as you stated, except to the extent that the work involved evaluation of the impacts of the 144-unit project on the EIR or assembling EIR documents at UG's request; so there was some EIR work that was authorized with regard to the 144 as well as assembling documents, and in assessing that, I sought to make that distinction in my statement of decision as well as assessing the evidence.
"[UG's counsel]: Pardon me. [¶] That was a good distinction, your honor, and I picked up on that. [¶] What I am saying, that there were EIR charges on the 105/107 project, which were disapproved for February/March, which also should have been disapproved for April and May for the 105, 107 project. I'm not discussing the 144 project. That's the next subject. [¶] Are you following me? Am I clear?
"THE COURT: I'm following your arguments. That's inconsistent with my findings based on the evidence. [¶] Please proceed."
Thus, the record shows the trial court made a finding that Mooney was entitled to recover for EIR work performed in April and May 2004 to the extent that work also involved the proposed 144-unit project. As noted ante, the evidence in the record supports the finding that Mooney was authorized to work on the proposed 144-unit development at least through the end of May 2004. The evidence also shows that some of Mooney's work on the proposed 144-unit project involved assembling EIR materials in assessing the viability of that project.
We thus reject UG's argument the trial court erred when it did not credit UG for EIR work performed by Mooney in April and May 2004, and conclude substantial evidence supports the finding that Mooney performed some EIR work in connection with the proposed 144-unit project.
II
Appeal of Order Denying Motion of Preferred Western and Mooney for Attorney Fees and Costs
Preferred Western and Mooney separately appeal the trial court's ruling denying their joint motion for attorney fees and costs. The trial court found the basis of the collection action brought by Preferred Western on behalf of its assignor, Mooney, was a balance due and owing incurred by Mooney in 2004. As such, the court further found the July 18, 2003 contract between Mooney and Upper Group was the operable agreement between the parties, and that this contract did not include in an attachment an attorney fees clause, unlike earlier contracts executed by these same parties. The trial court thus ruled there was no applicable attorney fees clause as between Preferred Western and Upper Group.
With respect to Mooney, the court ruled whether Mooney was entitled to recover its attorney fees for successfully defending UG's cross-complaint turned on whether the various contracts executed by the parties were made as part of substantially one transaction, as provided in Civil Code section 1642, inasmuch as there was no attorney fees clause in the July 18, 2003 contract. The court noted: "It appears that the agreements are separate agreements and the collection action was based upon the [July 18, 2003] Letter Agreement lodged as Exhibit B to the Opposition, which does not contain an attorney fee clause." The court further noted that the language of the attorney fees provision was restricted to "collection efforts and not broad enough to include the claims asserted in the cross-complaint."
A. Background
As Mooney itself notes, "Various proposals memorialized the contractual relationship between Mooney and Upper Group." The first such proposal was an informal letter agreement on Mooney letterhead dated September 29, 2000, in which Mooney agreed to evaluate the planning and environmental materials for the project. The September 29, 2000 proposal provided that Mooney's work on the project was not to exceed $5,000 without the prior written consent of Upper Group. The September 29, 2000 proposal further provided that upon the signature of an authorized representative of Upper Group, it would become a "formal contract" between the parties and that either party could terminate the agreement by written notice. Upper Group's project manager executed the September 29 proposal on October 2, 2000, thus creating a formal contract between the parties.
The next proposal between the parties was dated October 16, 2000. This proposal, like all others between the parties, was prepared on Mooney letterhead. It included specific tasks Mooney agreed to perform in connection with the project, including drafting a general plan amendment and preparing environmental materials; set forth a schedule when the work by Mooney was to be completed and the cost for such work, which was not to exceed $20,320 (excluding miscellaneous costs for materials, photocopying, mileage and the like, which would be "billed separately in accordance with the attached billing rate sheet"); and like the September 29, 2000 contract, the October 16 proposal provided it would become a "formal contract" when signed by an authorized representative of Upper Group. Although initially there was some confusion between the parties whether Upper Group executed the October 16 proposal, it was never signed.
The copy of the October 16, 2000 proposal lodged by Mooney (per court order, as discussed post) did not include as an attachment the billing rate sheet referenced in the proposal.
UG continues to argue on appeal, as it argued at trial, that Mooney engaged in fraud when it attached the fully executed signature page from the parties' November 6, 2000 contract to the October 16 proposal. The trial court in its statement of decision, however, found Mooney did not falsify the signature page of the October 16 proposal, a finding we conclude is supported by substantial evidence in the record.
Mooney sent Upper Group another proposal dated November 6, 2000. This proposal was similar to the one of October 16 except the November 6 proposal included preparation of an EIR. The November 6 proposal specified the scope of work Mooney was to perform, broken down by tasks, and provided a schedule for completion of that work. Unlike the October 16 proposal, the November 6 proposal did not include an estimate for the costs of such work, but instead provided: "All billing for this project will be based on time and materials with the attached billing rates sheet."
The November 6 proposal noted Upper Group intended to use the work performed by Mooney to demonstrate how the proposed project's "180 residences will be integrated into the site and the adjacent communities, thereby justifying the proposed changes in land use designation and zoning." As before, the proposal stated it would become a "formal contract" only when signed by Upper Group's authorized representative. Upper Group's project manager signed the November 6 proposal on November 8, 2000.
The billing rate sheet attached to the November 6, 2000 contract is at the heart of the appeal of Preferred Western and Mooney. In addition to setting out the standard billing rates of various Mooney employees slated to work on the project, at the bottom of the sheet were four additional terms, including a provision dealing with payment of services rendered by Mooney. It provided: "Payment of Mooney & Associates' invoices for services performed will not be contingent upon the client's receipt of payment from other parties. Client agrees to pay legal costs, including attorney's fees, incurred by Mooney & Associates in collecting any amount past due and owing to client's account." (Italics added.)
There were additional proposals between the parties following the November 6, 2000 contract. For example, Mooney prepared a proposal dated December 6, 2001, for "professional planning services" regarding the development of up to 140 single-family residences on the subject property. This proposal, like the others, set forth the scope of work Mooney was to perform and its costs.
Specifically regarding costs, the December 6 proposal estimated the costs for Mooney's work to be $19,570. It further provided this cost was for "professional services only," and that miscellaneous costs, including for "materials, reproduction, fax, mileage" and the like would be "billed separately in accordance with the attached rate sheet." At the bottom of the rate sheet attached to the December 6 proposal was an attorney fees clause that was identical to the clause in the billing rate sheet attached to the November 6, 2000 contract.
Like the earlier proposals prepared by Mooney, the December 6, 2001 proposal noted it would become a "final contract" once signed by an authorized representative of Upper Group and when Upper Group paid Mooney $12,824.88 from an outstanding invoice. It appears the December 6 proposal was never executed by Upper Group, although its project manager testified that he believed the proposed agreement was operable.
As the development of the project was revised, so too were the proposals of the parties. Mooney prepared yet another proposal for Upper Group on May 2, 2002, for environmental consulting services on the project. The May 2 proposal appears to have been a successor proposal to one prepared on February 13, 2002, which Mooney contends was fully executed by the parties. In any event, the May 2 proposal was prepared in response to environmental issues identified by the DPLU in January 2001. It set forth Mooney's qualifications to perform such work and noted the revised scope of work that Mooney would perform included technical studies and analysis related to biological, agricultural, visual and noise impacts of the proposed project. The May 2 proposal provided the costs of this work would not exceed $119,515 (which estimate was later modified to $125,020), was for professional fees only, and excluded miscellaneous costs that would be billed "separately in accordance with the attached billing rate sheet."
As before, the billing rate sheet attached to the May 2 proposal included an attorney fees clause with language that was identical to the attorney fees clauses in earlier proposals. The May 2 proposal likewise provided it would become a "formal contract" when signed by an authorized representative of Upper Group within 60 days from "this date." On May 16, 2002, Musial executed the May 2 proposal on behalf of Upper Group.
Pages 1 and 2 of the May 2, 2002 contract lodged as an exhibit by Mooney state the date of the parties' agreement as "May 2, 2002." However, pages 3 through 7 confusingly provide the date on the agreement as "February 13, 2002." Therefore, it is not clear if "this date" refers to February 13, 2002, or to May 2, 2002.
Mooney next sent Upper Group an "Augment Request to Proposal to Provide Environmental Consulting Services" for the subject property. The July 18, 2003 "augment request" did not identify, however, which of the previous proposals/contracts it was in fact augmenting. In any event, it referenced an earlier augment request dated March 20, 2003, and noted the one of March 20 covered the scope and cost for addressing the DPLU comments, but not the design changes that occurred to the project after that augment request.
From our own independent review of the voluminous appeal record, which included multiple exhibits that were not tabbed, we were unable to locate the March 20, 2003 augment request referred to by the parties in their July 18, 2003 contract.
The July 18, 2003 contract was executed by Musial on behalf of Upper Group on August 1, 2003. Like the parties' previous contracts, it set out the scope of work to be performed by Mooney, which included planning and environmental consulting services, and the costs of such work, which was estimated at $58,350. The July 18 contract further provided that per Upper Group's request, Mooney's revised cost estimate was for a "single submittal to the [DPLU] for review," and that "[i]f additional revisions to the Specific Plan or Draft EIR were required, [Mooney would] provide a subsequent cost proposal for any additional work."
In addition, the July 18 contract included an attached billing rate sheet. However, unlike earlier proposals, there were no general terms at the end of the billing rate sheet, and no attorney fees clause.
B. Governing Law and Analysis
"The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties." (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264.) We give "great weight" to the "contemporaneous construction of the contract by the parties themselves prior to the time controversy over its meaning arose." (Lix v. Edwards (1978) 82 Cal.App.3d 573, 579; see also Civ. Code, § 1636 ["A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful."]) If the intention of the parties to a contract is "doubtful," the rules governing interpretation of contracts, including Civil Code section 1642, "are to be applied." (See Civ. Code, § 1637.)
Whether Civil Code section 1642 applies in a particular case is a question of fact for the trial court. (Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1675.) However, we review de novo a court's decision whether the language of a contract entitles a party to attorney fees. (Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 705.)
Section 1642 of the Civil Code provides: "Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together."
Preferred Western and Mooney argue the trial court erred because it failed to decide whether the November 6, 2000 and July 18, 2003 contracts between Mooney and Upper Group comprised "substantially one transaction" within the meaning of Civil Code section 1642. They further argue that if the trial court had reached this issue, it would have found these two contracts comprised substantially one transaction. As such, Preferred Western and Mooney argue the court erred when it did not apply to the July 18, 2003 contract the attorney fees and costs clause in the rate sheet attached to the parties' November 6, 2000 contract. Because Mooney's assignee, Preferred Western, prevailed in the collection action and because Mooney successfully defended the cross-complaint, they argue the court erred in denying their joint motion for attorney fees and costs.
Assuming arguendo Mooney is correct that the trial court neglected to make a finding whether the November 6, 2000 and July 13, 2003 contracts between Mooney and Upper Group comprised substantially one transaction for purposes of Civil Code section 1642, we independently conclude that at the time the parties executed these contracts (and presumably the other intervening contracts between them) they intended each to be separate and cover a separate transaction related to the proposed project.
Indeed, we note each contract stood on its own, as opposed to being part of an integrated transaction comprised of several contracts; each contract included all terms necessary for its creation, performance and enforcement, without reference to the parties' other contracts; and each contract was executed at different times, over the course of years, in response to changes in Mooney's work as the proposed development of the subject property was revised. (See Merkeley v. Fisk (1919) 179 Cal. 748, 754 [in interpreting Civil Code section 1642, the "most certain criterion of the completeness of an individual writing will be found within the writing itself," and noting the "general rule that two or more separately executed instruments may be considered and construed as one contract only when upon their face they deal with the same subject matter and are by reference to one another so connected that they may be fairly said to be interdependent"]; Coons v. Henry (1960) 186 Cal.App.2d 512, 517-518 [parties did not intend four documents to be treated as a single transaction because each of the four documents was executed separately by the parties and at different times, one of the documents was not yet in existence when the other was executed, and under such circumstances the documents were not " 'so connected that they may be fairly said to be interdependent.' "])
We thus conclude the existence of the July 18, 2003 contract was not dependent on the November 6, 2000 contract, nor was the July 18 contract an "inherent part" of the parties' November 6, 2000 contract. (Compare, Neptune Society Corp. v. Longanecker (1987) 194 Cal.App.3d 1233, 1249-1250 [parties contemporaneously signed three promissory notes containing attorney fees clauses, which the court found were "inherent parts" of the parties' limited partnership agreement, and thus constituted one integrated transaction]; BMP Property Development v. Melvin (1988) 198 Cal.App.3d 526, 531-532 [parties to land trade and loan contracts intended their transaction to be part of a single transaction because of the overlapping subject matter of the two contracts, and because the escrows for each contract were processed within six days of each other, made reference to each other and their closings were mutually dependent]; Nevin v. Salk (1975) 45 Cal.App.3d 331, 335 [parties intended agreement of sale, promissory notes, deed of trust and security instruments to comprise a single transaction because provisions of the notes and the security instruments were incorporated into the agreement of sale, made a part thereof, and because the sale involved a single piece of real property involving a veterinary hospital/practice]; Goodspeed v. Great Western Power Co. (1939) 33 Cal.App.2d 245, 267-268 [parties intended stock purchase and water agreements to be interdependent and thus part of one transaction, as demonstrated by various recitals in each agreement and the testimony of plaintiffs].)
Preferred Western and Mooney argue the use of the term "augment" by the parties in the July 18, 2003 contract shows the parties were still relying on the November 6, 2000 contact, which Preferred Western and Mooney argue was an "unlimited time and materials contract for both planning and environmental services," when the parties executed the July 18 contract. We disagree.
First, we are not bound by what parties call their agreement. (See Welk v. Fainbarg (1967) 255 Cal.App.2d 269, 272-273 [the rule is "well established that the form and name of an instrument are not controlling, for the law looks through the form to substance and gives effect to the intention of the parties"]; see also Allen v. Smith (2002) 94 Cal.App.4th 1270, 1279 [the parties' use of various terms of art in a contract are not dispositive in the interpretation of that contract].) Second, we note the July 18 contract also refers to the parties' agreement as a "proposal," like the earlier contracts between the parties, and thus at best the July 18 contract is ambiguous on the issue of whether it was intended by the parties to "augment" the November 6, 2000 contract. (See Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)
Third, we note in the execution section of the July 18 "proposal" that it would become a "formal contract" between the parties only when signed by an authorized representative of Upper Group. The July 18 proposal further noted that when signed by Upper Group, it agreed to the "terms and conditions as stated above and authorize[d] Mooney & Associates to begin work" under that contract. (Italics added.) Clearly, if the November 6, 2000 contract was an "unlimited time and materials contract for both planning and environmental services" and was intended by the parties to govern their rights and obligations in 2003 and 2004, as Preferred Western and Mooney argue, there would have been little or no reason to require Upper Group to enter into the July 18, 2003 "formal contract," or to condition the beginning of Mooney's work under that contract on its execution by Upper Group.
Along these same lines, we note the July 18 contract also provides that if additional revisions to the planning documents or the EIR were required, Mooney would provide a "subsequent cost proposal for any additional work." (Italics added.) Again, if the November 6 contract was intended by the parties to govern in 2003 and 2004, it would seem unnecessary for the parties to contemplate yet another proposal even beyond their July 18 contract.
What's more, the parties' various proposals following the November 6, 2000 contract undermines Mooney's argument that the parties intended the November 6 contract to govern their relationship in 2003 and 2004. We note that in many of the proposals following the November 6 contract, Mooney attached a billing rate sheet that included an attorney fees clause that was identical to the clause found in the attachment to the November 6 contract. If, however, the parties' November 6 contract was intended by them to address their rights and obligations going forward in connection with the project, as it underwent myriad revisions, there would have been little reason for Mooney to include in subsequent contracts the same attorney fees clause that was first contained in the November 6 contract.
Conversely, we note the November 6, 2000 contract refers specifically to the proposed development of 180 residences on the subject property, while the December 6, 2001 proposal referred to the development of up to 140 single-family residences. The May 2, 2002 proposal was for environmental consulting services, in response to the revised development of the project after Musial and a representative of Mooney met with staff of the DPLU and discussed developing 143 single-family residences. However, at the time of the July 18, 2003 contract, Upper Group had instructed Mooney to work on yet another revised proposal, in which Upper Group sought to develop 105/107 unit/lot single-family residences.
In light of these circumstances, we conclude the parties did not intend the November 6, 2000 and July 18, 2003 contracts to be considered together as substantially one transaction, for purposes of Civil Code section 1642. Instead, we conclude that at the time the parties executed the two contracts (as well as the other contracts between them) they intended the contracts to be separate transactions based on, and in response to, the various revisions to the proposed development of the subject property that occurred over the course of years. (See Ucovich v. Basile, Jr. (1938) 26 Cal.App.2d 272, 278 [concluding that because two separate documents conflicted, they could not be read together as one contract in determining the intention of the parties, but instead must be considered separately, and the "last in date will, if it is valid, supersede the earlier instrument"]; Lynch v. Bank of America N. T. & S. Assn. (1934) 2 Cal.App.2d 214, 222-223 [whether separate written documents between the same parties are to be construed together as one transaction is determined by the language of the documents themselves or by the circumstances under which the documents were executed].)
We further conclude the trial court's finding that the collection action of Preferred Western was based on the July 18, 2003 contract is supported by substantial evidence in the record. Indeed, the record shows all the unpaid invoices for work done by Mooney in the collection action occurred in 2004, after the parties executed their final contract on July 18, 2003. In addition, we note the July 18 contract was for planning and environmental consulting services, and estimated the cost of such work at $58,350, an amount greater than the sum sought by Preferred Western in the collection action.
Thus, although Preferred Western was the prevailing party in the collection action, because it prevailed under the July 18 contract that did not include an attorney fees clause, neither it nor Mooney as assignor and cross-defendant was entitled to an award of attorney fees and other costs. (Cf. Civ. Code, § 1717, subd. (a) ["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... shall be entitled too reasonable attorney's fees in addition to other costs." (Italics added.)
In light of our decision, we need not reach Mooney's claim the trial court erred when it found the attorney fees clause in the billing rate sheet attached to the November 6, 2000 contract was restricted to collection efforts and thus was not sufficiently broad to include Mooney's successful defense of the cross-complaint.
DISPOSITION
The judgment for Preferred Western and the order denying the joint motion of Preferred Western and Mooney for attorney fees and costs are affirmed. Each party to bear their own costs on appeal.
WE CONCUR: NARES, J. McINTYRE, J.