Opinion
NOT TO BE PUBLISHED
APPEALS from an order of the Superior Court of Los Angeles County Super. Ct. No. BC315745, Conrad Richard Aragon, Judge.
Peter J. Glor for Plaintiff and Appellant.
Sedgwick, Detert, Moran & Arnold, Marilyn Klinger and Janet Nalbandyan for Defendants and Appellants.
MALLANO, Acting P. J.
Plaintiff Automated Switching & Controls, Inc. (Automated), and defendants Fireman’s Fund Insurance Company and National Surety Company (Sureties) each appeal from an order awarding attorney fees to Sureties on Automated’s action to enforce payment bonds. Automated contends that the trial court erred in determining that Sureties were the prevailing parties. Sureties contend that the trial court erred in failing to award the total amount of fees requested in their original motion and refusing to award any fees on denial of Automated’s motion for reconsideration. We reverse the order entered on denial of the motion for reconsideration and remand for further proceedings on that motion. In all other respects, we affirm.
BACKGROUND
In August 2004, Automated filed a first amended complaint against Modern Continental Construction Company and other entities and individuals (collectively “Modern”), as well as Sureties, for common counts, breach of contract, alter ego, enforcement of stop notice, and enforcement of payment bond. The complaint alleged that Modern was the general contractor on a public works project for the City of Los Angeles. Automated entered an agreement with Modern to perform subcontractor services on the project and Modern failed to make payments due to Automated for labor and materials under the subcontractor agreement. The cause of action for enforcement of payment bond, which was the only one stated against Sureties, alleged that, as required by the prime contract, Modern had secured payment bonds from Sureties and that payment was now due to Automated on the bonds.
In December 2004, Sureties filed a demurrer to the first amended complaint based on the statute of limitations. In February 2005, Automated filed a request that Sureties be dismissed from the action with prejudice. The dismissal was entered by the clerk.
Sureties later filed a motion for attorney fees as the prevailing party in the action. Among other authority, Sureties relied on Civil Code section 3250 and Winick Corp. v. Safeco Insurance Co. (1986) 187 Cal.App.3d 1502 (Winick), which held that a surety was entitled to attorney fees as the prevailing party where a subcontractor’s section 3250 action has been dismissed. Sureties requested attorney fees of $15,756, supported by declarations setting forth counsel’s itemized billing to Sureties for services rendered and expenses incurred from October 2004 through January 2005, which included time for preparation of the motion for attorney fees. Sureties requested an additional $1,500 attorney fees as an estimate for work to be performed in replying to Automated’s expected opposition and attending any hearing.
All further statutory references are to the Civil Code unless otherwise indicated.
Section 3250 provides in pertinent part: “An action on the payment bond may be maintained separately from and without the filing of an action against the public entity by whom the contract was awarded or any officer thereof. In any action, the court shall award to the prevailing party a reasonable attorney’s fee, to be taxed as costs.”
Automated opposed the motion, arguing among other things that Winick, supra, 187 Cal.App.3d 1502, was distinguishable because it involved a court-ordered, rather than a voluntary dismissal. Automated further asserted, without elaboration, that the amount of fees requested by Sureties was excessive.
On April 25, 2005, the court granted the motion for attorney fees, finding Winick, supra, 187 Cal.App.3d 1502, applicable to this case. As to the amount of fees, the court ruled: “Automated also protests against the reasonableness and amount of charges, but provides the court with no line-entry detail. Notwithstanding the lack of a detailed critique[] of individual charges, the court is of the opinion that the $15,756 [plus $1,500] attorney fee charge is excessive, given [Sureties’] minimal involvement in the action prior to voluntary dismissal of the complaint as to them by Automated. Fees are reduced by 25% ($4,314), for a total entitlem[e]nt of $12,942.”
On October 7, 2005, Automated, now represented by new counsel, filed a motion for reconsideration. Automated argued that the provisions of the prime contract between Modern and the City of Los Angeles, which was not before the court at the previous hearing on attorney fees, established that such fees were not proper because the parties to that contract had waived all attorney fees and the waiver was binding on Sureties.
Sureties opposed the motion, arguing that no new facts or circumstances had been presented to qualify for reconsideration and that Automated’s argument lacked merit. Sureties also requested an additional $11,774.90 in attorney fees for work involved in that opposition, again supported by a declaration containing itemized billing.
On December 1, 2005, the motion for reconsideration was denied. The court also ruled that “[Sureties’] argument for further and additional fees is not authorized under [section] 3250. That request is also denied.”
Judgment for attorney fees in favor of Sureties against Automated was filed on January 31, 2006.
DISCUSSION
1. Propriety of Attorney Fees
In Winick, supra, 187 Cal.App.3d 1502, a subcontractor which was not paid by the general contractor on a public works contract sued the surety on the general contractor’s payment bond. (Other defendants and other theories of relief were also alleged.) On motion by the surety, the case was dismissed with prejudice under former Code of Civil Procedure section 581a for the subcontractor’s failure to serve and return service within three years. The surety then sought attorney fees as the prevailing party in the litigation. (Winick, at pp. 1504–1505.) The court held that the surety qualified as a prevailing party under section 3250. (Winick, at pp. 1506–1509.)
In reaching its conclusion, the Winick court noted that section 3250 is one of a “steadily growing family” of fee-shifting statutes, and that it required, rather than merely permitted, an award of attorney fees to the prevailing party. (Winick, supra, 187 Cal.App.3d at p. 1506.) The court further noted that the parties in the case had agreed that the dismissal for failure to prosecute was not “‘on the merits’” and that as a consequence the surety did not qualify as the prevailing party under then-existing definitions of the term. (Ibid.) Interpreting section 3250 as a matter of first impression, the court concluded it was not bound by interpretations of section 1717, which governs attorney fees in actions on a contract. (Winick, at p. 1507.) “Section 1717 outlines the ground rules where a contract as opposed to a specific statute authorizes fee-shifting. Thus, it does not control whether and how fee-shifting is to take place under section 3250.” (Winick, at p. 1507.)
As the Winick court “look[ed] beyond section 1717” (Winick, supra, 187 Cal.App.3d at p. 1507), it undertook “a ‘pragmatic inquiry’ into whether the [surety] prevailed in the . . . case . . . .” (Id. at p. 1508.) This inquiry was resolved in favor of the surety because the dismissal of the subcontractor’s action with prejudice constituted a “total victory” for the surety. (Ibid.) Therefore, the surety, “[i]n any practical sense of the word, [had] ‘prevailed.’” (Ibid.)
Automated contends that Winick is not dispositive because Automated’s “cause of action against [sureties] to enforce a stop notice pursuant to Civil Code section 3250 was an action on contract.” Thus, according to Automated, the case is controlled by section 1717, under which there is no prevailing party where, as here, an action has been voluntarily dismissed. (See § 1717, subd. (b)(2) [“Where an action has been voluntarily dismissed . . ., there shall be no prevailing party for purposes of this section”].) We disagree.
In support of its contention, Automated notes that section 3247, subdivision (a), requires the original (in this case, general) contractor on a public works project involving an expenditure in excess of $25,000 (such as the one here) to file a payment bond. Under section 3248, subdivision (a), the payment bond must be at least in the “amount payable by the terms of the contract.” Automated next turns to section 3267, which states that there is no right of action against the payment bond unless the claim is based on work performed “pursuant to the contract between the original contractor and the owner.” Finally, Automated relies 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 . . . .”
Based on this authority, Automated concludes that “the extent of any claim against the surety is governed by the terms of the underlying contract between the principal and the claimant, here, Modern and [Automated]. The subject bond was a provision of the contract between the City of Los Angeles and Modern, but was incorporated in . . . the contract between Modern and [Automated.] Consequently, any claim against the bond, including [Automated’s] cause of action for enforcement of stop notice, is an action on the underlying contract and entitlement to attorneys fees is governed by . . . section 1717.”
This strained interpretation of statutory authority, by which Automated attempts to insinuate itself into the contract between Modern and Sureties, has no basis in law. As noted above, Automated argues that its “cause of action against [Sureties] to enforce a stop notice pursuant to Civil Code section 3250 was an action on contract.” But the single cause of action in the first amended complaint to enforce the stop notice, on which Automated relies, did not name Sureties as defendants, nor did it mention section 3250. Rather, the only reference in the first amended complaint to section 3250 was in the cause of action on the payment bond, which by definition was not a cause of action in contract. Simply put, Automated’s cause of action was “an action on the payment bond” under section 3250. Accordingly, Automated’s contention must be rejected.
A “stop notice” sets forth information about the value of labor, services, equipment or material supplied on a work of improvement. (§ 3103.)
As an aside, we note that the recitation of facts in Winick mentions that the subcontractor served a stop notice. (Winick, supra, 187 Cal.App.3d at p. 1504.) That notice played no part in the court’s analysis and was not mentioned in the remainder of the opinion.
2. Reduction of Requested Attorney Fees
Sureties contend that the trial court abused its discretion when it reduced the amount claimed for attorney fees on the original motion by 25 percent. We disagree.
“The amount of an attorney fee to be awarded is a matter within the sound discretion of the trial court. [Citation.] The trial court is the best judge of the value of professional services rendered in its court, and while its judgment is subject to our review, we will not disturb that determination unless we are convinced that it is clearly wrong. [Citations.] The only proper basis of reversal of the amount of an attorney fees award is if the amount awarded is so large or small that it shocks the conscience and suggests that passion and prejudice influenced the determination. [Citation.]” (Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1134.)
Contrary to Sureties’ assertion, there is nothing in Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 624, or Winick, supra, 187 Cal.App.3d at page 1509, which precluded the trial court’s assessment of the reasonableness of Sureties’ fees request based on the general nature of Automated’s objection. Nor is there any basis on this record to conclude that the trial court abused its discretion in ordering the fee reduction. Sureties’ contention of such abuse is therefore lacking in merit.
3. Failure to Award Attorney Fees on Motion for Reconsideration
But there is merit to Sureties’ contention that the trial court erred in concluding, on denial of Automated’s motion for reconsideration, that further attorney fees were “not authorized under [section] 3250” and denying Sureties’ request for such fees on that basis.
The parties have not cited any case directly addressing the propriety of an award of attorney fees on denial of a motion for reconsideration of a ruling that attorney fees are authorized in the matter by statute. But Automated’s motion for reconsideration was nothing more than a continuation of its opposition to Sureties’ motion for attorney fees, which properly included fees for the motion itself (see Ketchum v. Moses (2001) 24 Cal.4th 1122, 1141), and we further note that “[a] statute authorizing an attorney fee award at the trial court level includes appellate attorney fees unless the statute specifically provides otherwise. [Citations.]” (Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499.) Accordingly, attorney fees were permissible on Automated’s motion for reconsideration.
Because the trial court erroneously believed that it was not authorized to award attorney fees on the motion, the matter must be remanded for exercise of discretion on that issue. (See Kim v. Euromotors West/The Auto Gallery (2007) 149 Cal.App.4th 170, 176–177.)
DISPOSITION
The judgment is reversed with respect to the trial court’s ruling on the request by Fireman’s Fund Insurance Company and National Surety Company for attorney fees in conjunction with the motion of Automated Switching & Controls, Inc., for reconsideration, and the matter remanded for the limited purpose of allowing the trial court to exercise its discretion on that issue. In all other respects, the judgment is affirmed. Fireman’s Fund Insurance Company and National Surety Company are entitled to recover costs on appeal.
We concur: ROTHSCHILD, J., JACKSON, J.
Judge of the Los Angeles Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.