Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Kern County. Sidney P. Chapin, Judge, Super. Ct. No. CV255293
Collins, Collins, Muir & Stewart, David E. Barker and Douglas Fee for Plaintiff and Appellant.
Kronick, Moskovitz, Tiedemann & Girard, Robert H. Brumfield, III and William T. Chisum for Defendants and Respondents.
OPINION
HILL, J.
Plaintiff appeals from a judgment entered against it in this action arising out of contractual dispute. Judgment was entered after defendants’ motion for summary judgment was granted. Plaintiff also appeals from a subsequent order awarding defendant, the Trustees of California State University, attorney’s fees of $127,972 pursuant to statute. We reverse the judgment in favor of the Foundation of the California State University and affirm the judgment in favor of the Trustees of California State University.
FACTUAL AND PROCEDURAL BACKGROUND
The complaint alleges plaintiff entered into two contracts, one with defendant, Trustees of California State University (University) and one with defendant, Foundation of the California State University, Bakersfield (Foundation), to provide architectural services for a construction project. Modifications to the designs led to additional work, which led to disputes about the fee to which plaintiff was entitled. The parties attempted to resolve the disputes. In August 2002, defendants sent plaintiff a check for $64,000 along with a letter stating that it was offered in final settlement of all of plaintiff’s claims against both defendants and plaintiff was not authorized to cash it unless plaintiff agreed to the settlement and signed and returned the letter. Plaintiff did not sign and return the letter, but did cash the check, informing defendant that it was accepted as partial payment. Plaintiff contends the parties thereafter continued to try to resolve their disputes, with defendants offering additional amounts to plaintiff. Plaintiff eventually sued for breach of contract, quantum meruit, and declaratory relief. Defendants were granted summary judgment on the ground plaintiff’s acceptance of the August 2002 check constituted an accord and satisfaction. Additionally, the trial court found the claims against the University were barred by the 6-month statute of limitations. The University was subsequently awarded its attorney’s fees. Plaintiff separately appeals the judgment entered after the motion for summary judgment was granted and the order awarding the University its attorney’s fees.
I. Motion for Summary Judgment
A. Standard of Review
“As a summary judgment motion raises only questions of law regarding the construction and effect of supporting and opposing papers, this court independently applies the same three-step analysis required of the trial court. We identify issues framed by the pleadings; determine whether the moving party's showing established facts that negate the opponent's claim and justify a judgment in the moving party's favor; and if it does, we finally determine whether the opposition demonstrates the existence of a triable, material factual issue.” (Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.) The trial court determined that defendants established their affirmative defense of accord and satisfaction, which defeated all causes of action alleged in the complaint. Further, the trial court determined that the University established its defense that the expiration of the applicable limitations period barred plaintiff’s causes of action. We must determine whether the moving defendants’ showing justified those conclusions and, if so, whether plaintiff’s showing in opposition demonstrated the existence of any triable issues of material fact.
B. Accord and Satisfaction
“An accord and satisfaction is the substitution of a new agreement for and in satisfaction of a preexisting agreement between the same parties. The usual purpose is to settle a claim at a lesser amount. [Citations.]” (In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058; see also, Civ. Code, § 1521-1523.) When a claim is disputed or unliquidated and a check is tendered in full settlement of the claim, the retention and use of the check constitutes an accord and satisfaction. (Potter v. Pacific Coast Lumber Co. (1951) 37 Cal.2d 592, 597 (Potter).)
Two statutes address accord and satisfaction in the context of a check tendered by the debtor to the creditor with a communication that it is tendered in full settlement of a disputed obligation or claim. The first is Civil Code section 1526, subdivision (a), which provides:
“Where a claim is disputed or unliquidated and a check or draft is tendered by the debtor in settlement thereof in full discharge of the claim, and the words ‘payment in full’ or other words of similar meaning are notated on the check or draft, the acceptance of the check or draft does not constitute an accord and satisfaction if the creditor protests against accepting the tender in full payment by striking out or otherwise deleting that notation or if the acceptance of the check or draft was inadvertent or without knowledge of the notation.”
Civil Code section 1526 was enacted in 1987, and changed the common law rule, which did not allow the creditor to avoid an accord and satisfaction by striking out or deleting the “full payment” language before negotiating the check. (Stats. 1987, ch. 1268, § 1; Woolridge v. J.F.L. Electric, Inc. (2002) 96 Cal.App.4th Supp. 52, 58 (Woolridge).) The second relevant statute is Commercial Code section 3311, which provides, in pertinent part:
“(a) If a person against whom a claim is asserted proves that (1) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (2) the amount of the claim was unliquidated or subject to a bona fide dispute, and (3) the claimant obtained payment of the instrument, the following subdivisions apply.
“(b) Unless subdivision (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.”
This section was enacted in 1992, and codifies, with minor changes, the common law rule expressed in Potter, supra, 37 Cal.2d at p. 597. (Woolridge, supra, 96 Cal.App.4th at p. Supp. 58.) Civil Code section 1526 and Commercial Code section 3311 have been held to be in direct and irreconcilable conflict, leading to a conclusion that Commercial Code section 3311, as the later enacted statute, prevails. (Woolridge, supra, 96 Cal.App.4th at p. Supp. 59; Directors Guild of America v. Harmony Pictures (C.D. Cal. 1998) 32 F.Supp.2d 1184, 1192.) We need not reach that issue. By its terms, Civil Code section 1526 applies only when a “payment in full” notation is made on the check or draft. Here, there is no evidence such a notation appeared on the check tendered by defendants to plaintiff. The “payment in full” language was contained in a separate letter accompanying the check. Consequently, the provisions of Commercial Code section 3311 apply in this case.
1. Conspicuousness of the “full satisfaction” language
Commercial Code section 3311 requires that either the check offered in settlement or an accompanying writing contain a “conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.” “‘Conspicuous’” means “so written, displayed, or presented that a reasonable person against whom it is to operate ought to have noticed it.” (Comm. Code, § 1201, subd. (10).) It is undisputed that defendants sent plaintiff a check for $64,000 accompanied by a letter dated August 20, 2002. That letter contained the following language:
“[T]he University has authorized the payment of $64,000 to BFGC to settle all claims BFGC has or may have against CSUB under the two contracts referenced above.…
“In exchange for the University’s payment, BFGC agrees to release and discharge CSUB, the Trustees of the California State University, the CSUB Foundation, and each of their employees and agents, from any and all claims and liabilities, known or unknown, fixed or contingent, which BFGC may have against any of the released parties arising out of or related to the two referenced contracts.… [¶]
“If the terms of settlement in this letter are acceptable to BFGC, please sign this letter agreement at the bottom and return it to me.
“I am enclosing a check payable to BFGC in the amount of $64,000 in conformity with this letter agreement which constitutes full payment of all of BFGC’s claims against the released parties under the two contracts. BFGC is authorized to negotiate the check only after this letter has been signed by an authorized person and returned to me. BFGC’s negotiation of the check is governed by California Commercial Code § 3311.”
The letter is two pages long and addresses the contract dispute between the parties. The language concerning the purpose of the $64,000 check, and specifying that it “constitutes full payment of all of BFGC’s claims … under the two contracts” is so written that the reader of the letter “ought to have noticed it.” Plaintiff does not contend that it failed to notice the “full payment” language, or that it did not understand the nature of the settlement offer being made or the conditions placed on negotiation of the check. Defendants adequately demonstrated that the “full payment” language was conspicuous, as that term is used in section 3311.
2. Bona fide dispute about the amount of the claim
“‘[I]t matters not that there was no solid foundation for the dispute’ as the test is whether ‘the dispute was honest or fraudulent.’ [Citations.]” (Potter, supra, 37 Cal.2d at p. 597.) Plaintiff essentially concedes that a bona fide dispute about the amount defendants owed to plaintiff existed at the time the $64,000 check was tendered. In its response to defendants’ separate statement of facts, plaintiff did not dispute that, after completion of the project, a dispute arose between the parties regarding the fees to which plaintiff was entitled, and “[t]hroughout the spring and summer of 2002, the parties engaged in a series of meetings and exchanged correspondence in an attempt to resolve their differences.” Plaintiff’s complaint also included a cause of action for declaratory relief, which alleges that a controversy exists between the parties concerning their rights and duties. Thus, defendants demonstrated that a bona fide dispute existed about the amount of plaintiff’s claim.
3. Creditor’s cashing of the check
Plaintiff does not dispute that it cashed the check tendered by defendants, although it does dispute the circumstances under which this was done and whether cashing the check constituted an accord and satisfaction.
4. Good faith tender of the check as full satisfaction of the claim
Under section 3311, in order to give rise to an accord and satisfaction, the check must have been tendered in good faith as full satisfaction of plaintiff’s claims. Good faith means “honesty in fact and the observance of reasonable commercial standards of fair dealing.” (Comm. Code, § 1201, subd. (20).) Defendants presented evidence that they tendered the $64,000 check after a staff analysis determined that $63,943.82 was the approximate amount owing to plaintiff. Plaintiff disputed Michael Neal’s personal knowledge of the components of that estimate, but did not dispute that the staff analysis was performed, that the amounts included were estimated in good faith, or that the total of the estimated amounts was approximately $64,000.
The check was tendered as full satisfaction of plaintiff’s claims under the two contracts in issue. As discussed previously, the letter conspicuously stated that the payment was offered to settle all of plaintiff’s claims against the University and the Foundation under the two contracts, and it constituted “full payment of all of BFGC’s claims against the released parties under the two contracts.” Consequently, defendants demonstrated a good faith tender of the $64,000 check as full satisfaction of plaintiff’s claims against them.
Plaintiff argues that, because the letter accompanying the $64,000 check asked plaintiff to sign and return the letter agreement if plaintiff agreed to accept the check in full payment of its claims, signing the letter agreement became a condition precedent to an accord and satisfaction; therefore, because plaintiff cashed the check without signing and returning the agreement, there was no accord and satisfaction. Signing the agreement was to be a manifestation of plaintiff’s agreement, not a condition precedent to it. The letter authorized plaintiff to cash the check only after the agreement was signed and returned to defendants. The letter clearly stated that the check was tendered in full settlement of plaintiff’s claims, that the check was not to be negotiated until the agreement was signed, and that negotiation of the check was governed by Commercial Code section 3311. Both by the terms of the letter and pursuant to Commercial Code section 3311, cashing the check signified agreement to the settlement and resulted in an accord and satisfaction.
If the story ended there, the judgment would be affirmed. “Whether a transaction constitutes an accord and satisfaction,” however, “depends on the intention of the parties as determined from the surrounding circumstances, including the conduct and statements of the parties.” (In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058-1059; Conderback, Inc. v. Standard Oil Co. (1966) 239 Cal.App.2d 664, 680 (Conderback).) Plaintiff presented evidence that, even before it cashed the $64,000 check, defendants offered to pay it an additional $444 to settle its claims. Then, within a month after plaintiff cashed the $64,000 check, defendant increased that amount, and offered plaintiff an additional $11,000, bringing the total offer to $75,000. Thus, after defendants tendered the $64,000 check as payment in full for plaintiff’s claims, and even after plaintiff cashed that check, defendants continued to discuss and offer further payments, suggesting defendants did not intend the $64,000 payment to be the final settlement of all of plaintiff’s claims under the contracts.
In Potter, supra, plaintiff sold three carloads of lumber to defendant, and claimed defendant had not fully paid for them. Defendant had paid for each shipment with a check accompanied by a voucher stating that payment of the check was “accepted in full settlement of account stated below.” (37 Cal.2d at p. 596.) Plaintiff cashed each check, then wrote to defendant seeking additional payments. (Ibid.) When plaintiff sued, defendant pled accord and satisfaction. The court concluded the trial court erred in finding there was no accord and satisfaction. (Id. at p. 598.)
The court rejected plaintiff’s argument that the conduct of both parties after the checks were cashed indicated neither of them intended that acceptance of the checks would constitute full settlement of plaintiff’s claims. (Potter, supra, 37 Cal.2d at pp. 599-600.) Plaintiff asserted:
“[T]hat after cashing the three drafts, he went to defendant company's Seattle office and discussed the factors in dispute; that there then followed an exchange of correspondence between him and defendant Wilson as to the propriety of the deductions; and finally, the whole subject was discussed at a meeting in Santa Barbara between himself and defendant Wilson, culminating in the latter's offer of a settlement but that he would not agree to it. However, these matters do not strengthen plaintiff's position. Reasonably viewed, they simply show that plaintiff did not willingly assent to the condition of ‘full settlement’ accompanying the three remittances; that after cashing the three drafts tendered for acceptance on the prescribed express terms, he nevertheless persisted in his efforts to collect additional amounts which he claimed to be still due under the original contracts of sale; and that defendants remained firm in the position that they had taken at the time the checks or drafts were tendered, until finally, for reasons which do not appear, defendant Wilson at the Santa Barbara meeting made an offer of compromise, which was in turn rejected by plaintiff. As to the latter factor, it is code law that ‘An offer of compromise is not an admission that anything is due’ [citation], it constitutes no proof of liability, and its admission into evidence without objection cannot affect the disposition of this case.… Accordingly, none of these factors, either singly or in combination, can be said to have deflected from the positive position taken by defendant company in tendering the respective checks or drafts for acceptance in full discharge of the respective accounts, or from the consequences of plaintiff's cashing such checks and drafts upon that basis in establishment of an accord and satisfaction.” (Potter, supra, 37 Cal.2d at pp. 599-600.)
The court concluded the checks were unequivocally offered as full satisfaction of the accounts, and “there were no admissions by any of defendants that they regarded the accounts as still open for further adjustment and payment.” (Potter, supra, 37 Cal.2d at pp. 600-601.)
In Conderback, supra, the court affirmed the judgment in favor of plaintiff Conderback, based on the jury’s finding that there was no accord and satisfaction. Under the contract in issue, plaintiff was to design, construct, maintain, and dismantle defendant’s exhibit at the Seattle World’s Fair. The parties disagreed as to the basis on which plaintiff was to be paid. Defendant contended that, in the course of their dealings, the parties agreed on a “firm bid,” with the costs of any subsequent changes or additions to be negotiated between the parties. (239 Cal.App.2d at pp. 681-682.) Plaintiff contended the firm bid was superseded by many changes and additions, and plaintiff was to be paid under an open-ended purchase order by application of its customary pricing formula. (Id. at p. 682.) Defendant contended that it demanded, and was given, an assurance that the July 26, 1962, invoice was the final billing. (Id. at pp. 672-673.) This was the basis of its claimed accord and satisfaction. The court discussed events that occurred after the alleged accord and satisfaction.
“[T]here was evidence that in September 1962 Standard made a further payment to Conderback; that in the same month the latter sent Standard a list of developments relating to unpaid accounts; that in December 1962 the parties had discussions in connection with additional bills, quite apart from the tax liability; and that Standard made a payment in February 1963.
“From all of the foregoing evidence introduced by Conderback, the jury could reasonably conclude that the parties did not agree that the July 26 invoice was to be a final billing and that its payment by Standard was to constitute full payment for the building and exhibits, but could conclude that the various items of expense were to be billed from time to time until Conderback, in accordance with the parties' customary practices in the past, had been paid for all costs of the project.” (Conderback, supra, 239 Cal.App.2d at pp. 682-683.)
In California Metal Enameling Co. v. Waddington (1977) 74 Cal.App.3d 391, plaintiff contracted to fabricate laminated panels to be used in construction of a hospital. There was a dispute as to the number of panels delivered and plaintiff had charged a higher price than originally quoted. On July 21, 1975, defendant sent plaintiff a check with the following language on the back: “‘Endorser acknowledges full payment for material furnished Kaiser Hospital-Bellflower — (P.O. #5466 dated 11-14-73 plus 6% sales tax added) and releases all mechanic's lien, stop notice, equitable lien & material bond rights.’” (Id. at p. 394.) Plaintiff endorsed and deposited the check; the two employees who handled it did not notice the “‘full payment’” language. (Ibid.) The parties continued to discuss whether defendant owed plaintiff anything on the panels and on September 4, 1975, plaintiff advised defendant that it still owed plaintiff $17,234.33 for the panels and the exact basis for this claimed indebtedness. (Ibid.) Plaintiff sued, and defendant obtained summary judgment on the ground plaintiff’s negotiation of the July 21, 1975 check constituted an accord and satisfaction. (Id. at pp. 394-395.)
The court found a triable issue of material fact remained regarding whether the parties actually regarded the July 21, 1975, payment as a final settlement for the panels. (California Metal Enameling Co. v. Waddington, supra, 74 Cal.App.3d at p. 395.)
“That it was not so regarded is an inference reasonably deductible from the declaration of plaintiff's controller and treasurer opposing defendant's motion for summary judgment. In this declaration he states in effect that following the cashing of the specially indorsed check he discussed, both orally and in writing, with defendant's sales manager certain specific further adjustments in the panel account between the parties. Such discussion would be completely meaningless if a final and complete settlement of the account had already been effected through plaintiff's cashing of defendant's check on July 25, 1975. [Citations.]” (California Metal Enameling Co. v. Waddington, supra, 74 Cal.App.3d at pp. 395-396, fn. omitted.)
Thus, even if a check is tendered in full satisfaction of a disputed claim, and the claimant negotiates the check, an accord and satisfaction may not result if the parties’ subsequent conduct indicates that they did not consider the claim to have been satisfied by the payment. While the subsequent conduct of one party alone may not negate the existence of an accord and satisfaction, the cases indicate that, when both parties’ actions demonstrate that they did not intend a final settlement of the disputed claims, the intent necessary to give rise to an accord and satisfaction is absent.
The evidence presented by the parties indicates that, after the $64,000 check was tendered to plaintiff and before it was cashed, the parties consulted J. Patrick Drohan, Assistant Vice Chancellor for California State University, who reviewed the disputed issues. On December 1, 2002, plaintiff sent defendant an “invoice,” which stated, “[This invoice] is to receive a partial payment of $64,000 from owner. This is not the final payment.” On December 2, 2002, Assistant Vice Chancellor Drohan recommended plaintiff should be paid a total of $64,444. On December 13, 2002, defendants offered to pay an additional $444 to plaintiff. Plaintiff indicated the additional $444 was still insufficient, and asked for a larger amount. On or about December 24, 2002, plaintiff negotiated the $64,000 check. On January 13, 2003, defendants offered plaintiff an additional $11,000, bringing the total amount offered to $75,000; they sent plaintiff a check for $11,000 in “full and final settlement of all outstanding issues and claims relating to the above subject contracts” and stated it was “negotiable subject to California Commercial Code § 3311.” Plaintiff returned the $11,000 check without cashing it. On May 15, 2003, Tomas Arciniega, President of California State University, Fresno, sent a letter to plaintiff stating, in part:
“After Mr. Drohan’s recommendation was made, I understand that Vice President Michael Neal and you discussed settling BFGC’s claim and that you requested that Mr. Drohan’s recommended additional payment to you of $64,000 be increased by $11,000 for a total settlement payment of $75,000. Again, in good faith, we paid BFGC the settlement amount of $75,000 in two checks, only to learn four months later that BFGC had negotiated the check for $64,000, but refused to negotiate the check for $11,000 and would not honor the agreement to settle…. ¶ You are now proposing another settlement claim approach to settle a claim, which the CSU and CSUB believe has been settled.”
Unlike the defendant in Potter, the defendants here did not immediately take, and remain firm in, the position that plaintiff’s negotiation of the $64,000 check fully resolved all disputes between the parties. Instead, even before the check was cashed, they offered plaintiff an additional $444; within a month after the check was cashed, defendants offered plaintiff $11,000 in addition to the $64,000 already paid. As of May 2003, defendants thought they had settled the dispute for $75,000, not $64,000. Consequently, this case is more like Conderback and California Metal, where the court found that conduct subsequent to the alleged accord and satisfaction either supported the jury’s conclusion that there was no accord and satisfaction or raised a triable issue of fact as to whether the parties intended the payment to constitute full satisfaction of the disputed claim. The evidence presented raised a triable issue of material fact concerning whether the parties intended the $64,000 payment to fully settle all of plaintiff’s claims against defendants arising out of the contracts in issue. Summary judgment should not have been entered based on the existence of an accord and satisfaction.
C. Statute of Limitations
Generally, the statutes governing contracts between public entities (including California State University) and their contractors and subcontractors (including architectural firms) are found in the Public Contract Code. (Pub. Contract Code, §§ 1100.7, 10700, et seq.) The governing statutes were previously part of the Government Code, but were moved to the Public Contract Code because the Legislature believed “placing all public contract law in one code will make that law clearer and easier to find.” (Pub. Contract Code, § 100; Stats 1981, ch. 306.) The contract between plaintiff and the University specifically provided that it was made pursuant to the Public Contract Code.
Public Contract Code section 19100 provides:
“(a) Presentation of a claim pursuant to Part 3 (commencing with Section 900) of Division 3.6 of Title 1 of the Government Code is not required to commence a legal action or arbitration proceeding for money or damages on a contract with the state, but any action or proceeding shall be commenced not later than six months after either of the following:
“(1) The contracting agency's final written decision under contract claim provisions.
“(2) The accrual of the cause of action, if there are no contract claim provisions.”
Thus, plaintiff was not required to file a claim with the California Victim Compensation and Government Claims Board pursuant to Government Code section 905.2 before filing suit against the University; it was, however, required to file any action against the University within six months of the University’s final written decision on the claim, if the contract contained claim provisions, or within six months of the accrual of the cause of action, if the contract did not contain claim provisions. It is undisputed that plaintiff’s contract with the University did not contain any claim provisions. Consequently, the six month period for filing plaintiff’s complaint commenced to run upon accrual of its cause of action.
Plaintiff now argues defendants failed to establish that the contract did not contain claim provisions, because they failed to present the entire contract with their motion. In its response to defendants’ separate statement of undisputed facts, however, plaintiff responded “undisputed” to defendants’ fact no. 43, “The agreement between BFGC and the Board of Trustees does not contain any contract claim provision.”
Although it was not required to file a Government Code claim, on December 1, 2003, plaintiff submitted a claim to the University, purportedly pursuant to Government Code section 910, et seq., seeking payment based on the project fee dispute. Thereafter, it filed its complaint on April 15, 2005.
“Generally speaking, a cause of action for breach of contract accrues at the time of the breach. [Citations.]” (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 831.) The complaint alleges that, after the parties entered into their contracts, the University requested modifications to the design of the project; these modifications were “placed into a separate estimate (‘Added Scope’).” It alleges plaintiff was not paid in full the increased fee to which it was entitled under the contracts and the Added Scope. It also alleges plaintiff was not paid for extra services it performed due to changes or delays in the project.
On August 13, 2002, plaintiff sent a letter to the University, stating:
“Regrettably, the University is in breach of contract for its failure to pay BFGC for basic and additional services on the subject project…. [¶] BFGC has rendered our services in a thorough, professional and competent manner, dealing with circumstances outside our control and not of our making. This is the eighth (8th) month of extended project duration, during which time we have continued our service, yet not a single bill has been honored for basic or extended services.”
On April 21, 2003, plaintiff sent the University another letter, stating: “Due to substantive contract dispute issues, BFGC has suspended any and all further services on the subject project ….” On April 22, 2003, plaintiff sent a letter to Arciniega complaining that construction on the project was to be completed in December 2001, but the project was not completed until August 2002; it noted a dispute had arisen “[d]uring latter stages of this project,” regarding compensation for basic services and extra services. It stated plaintiff had requested the assistance of Assistant Vice Chancellor Drohan in resolving the dispute “[w]ith the intent of avoiding formal claims, arbitration or legal action.” The letter iterated plaintiff’s position that it was owed $184,806, and demanded payment of all unpaid invoices or a settlement conference within the next 30 days. On May 15, 2003, Arciniega responded, indicating the University thought it had settled the matter, but plaintiff had not honored the settlement; he stated:
“You are now proposing another settlement claim approach to settle a claim, which the CSU and CSUB believe has been settled. With regard to your request for a conference, even if CSUB, for purposes of discussion, were to put aside its position that the matter has already been settled, neither I, nor the CSU Bakersfield Foundation Board, is in a position to resolve these technical issues. While I am not opposed to meeting with you, I am not sure what, if any, benefit would be achieved by the meeting, and it certainly would not be a settlement conference.”
Thus, at least as of May 16, 2003, when it received Arciniega’s letter, plaintiff was aware that it had a breach of contract claim against the University and that the University was declining to pay the invoices or sums plaintiff contended were still due and unpaid or to meet with plaintiff for a settlement conference. Plaintiff’s cause of action for breach of contract accrued no later than that date. Plaintiff’s complaint was not filed until April 15, 2005, almost two years later – well beyond the six-month limitations period provided by Public Contract Code section 19100.
Plaintiff contends defendant is estopped to raise the statute of limitations defense by the ongoing settlement negotiations. “‘To establish estoppel as an element of a suit the elements of estoppel must be especially pleaded in the complaint with sufficient accuracy to disclose facts relied upon. [Citation.]’ [Citation.]” (Sofranek v. County of Merced (2007) 146 Cal.App.4th 1238, 1250.) Plaintiff’s complaint did not allege the facts it now seeks to rely on to establish an equitable estoppel.
“The doctrine of equitable estoppel is based on the theory that a party who by his declarations or conduct misleads another to his prejudice should be estopped from obtaining the benefits of his misconduct. [Citation.] Under appropriate circumstances equitable estoppel will preclude a defendant from pleading the bar of the statute of limitations where the plaintiff was induced to refrain from bringing a timely action by the fraud, misrepresentation or deceptions of defendant. [Citations.] A defendant should not be permitted to lull his adversary into a false sense of security, cause the bar of the statute of limitations to occur and then plead in defense the delay occasioned by his own conduct. [Citations.]” (Kleinecke v. Montecito Water Dist. (1983) 147 Cal.App.3d 240, 245.)
“In order to assert equitable estoppel, the following four elements must be present: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct be acted on, or must so act that the party asserting estoppel had a right to believe it was so intended; (3) the party asserting estoppel must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury. [Citations.]” (Sofranek v. County of Merced, supra, 146 Cal.App.4th at p. 1250.)
Plaintiff has not identified any facts of which the University was aware and plaintiff was ignorant, or any conduct or representation of the University on which it intended plaintiff rely and on which plaintiff did rely to its injury. Plaintiff asserts that the University should be estopped to raise the defense of the statute of limitations because the parties unsuccessfully attempted to negotiate a settlement before plaintiff filed suit. Defendants, however, presented as an undisputed fact that there were no settlement efforts between May 15, 2003 and December 2003. In response, plaintiff asserted “[t]here was a continuing dialog between the parties regarding the settlement of this matter.” The evidence cited in support, however, related to correspondence in December 2002 and January 2003. Plaintiff’s additional undisputed material facts referred to further correspondence and meetings in 2004 and 2005. Plaintiff cited no evidence that the University did anything within a six-month period after May 16, 2003, to lull plaintiff into a false sense of security or lead it to believe that filing suit on its claims was unnecessary. Thus, the evidence presented indicates that, for more than six months after the University informed plaintiff that it considered plaintiff’s claims to be settled and that it would not engage in a further settlement conference, the University did nothing to cause plaintiff to delay filing suit, and plaintiff nonetheless failed to commence an action against the University on its claims.
Plaintiff presented evidence that the University agreed to and participated in a further settlement conference in May and June 2004. This conduct could not have induced plaintiff to delay filing its action beyond the statutory period, because that statutory period had already expired. (See Commercial Union Assurance Co. v. City of San Jose (1982) 127 Cal.App.3d 730, 741.)
The trial court properly found that plaintiff’s breach of contract claim against the University was barred by the statute of limitations found in Public Contract Code section 19100. Plaintiff has not challenged the grant of summary judgment on the quantum meruit cause of action, and the declaratory relief cause of action fails along with the breach of contract cause of action. Consequently, the trial court did not err in granting the University’s motion for summary judgment.
“However, plaintiffs' complaint also included a count for declaratory relief, and the disposition of such count would ordinarily require an express declaration of the rights of the parties. [Citations.] While the trial court therefore erred in entering a nonsuit rather than a declaratory judgment in disposition of the count for declaratory relief, such error cannot be deemed prejudicial here. Any declaration of the rights of the parties would necessarily have been unfavorable to plaintiffs in conformity with the disposition of the other two counts, which latter disposition constituted the equivalent of an express declaration that plaintiffs had failed to establish any rights. Under such circumstances, the procedural error of the trial court does not constitute ground for reversal of the judgment. (Const., art. VI, § 4 1/2.)” (Anderson v. Stansbury (1952) 38 Cal.2d 707, 717.) Entering judgment in favor of the University on the breach of contract and declaratory relief causes of action had the effect of determining that plaintiff had not established any rights against the University under the contract.
II. Attorney’s Fees
The amount of statutory attorney fees to be awarded is within the trial court’s discretion; the legal basis for an attorney fee award, however, is a question of law to be reviewed de novo. (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.) ”‘The trial judge is in the best position to evaluate the services rendered by an attorney in his courtroom; his judgment will not be disturbed on review unless it is clearly wrong. [Citation.]’ [Citation.]” (Glendora Community Redevelopment Agency v. Demeter (1984) 155 Cal.App.3d 465, 474.)
Plaintiff challenges the award of attorney’s fees made to the University as the prevailing party pursuant to Civil Code section 3320. Plaintiff contends the trial court abused its discretion in awarding attorney’s fees not authorized by the statute and awarded an excessive amount that was not supported by substantial evidence. Plaintiff asserts the Foundation was not entitled to attorney fees under the statute, but the fees awarded included fees incurred by both defendants.
Civil Code section 3320 provides that, when a public agency contracts with a design professional, such as an architect, in the absence of a good faith dispute, the agency must pay the design professional within 30 days of receipt of a written demand for payment, and within 45 days of a written demand for the final retention payment; if any amount is wrongfully withheld or not timely paid, the design professional is entitled to a penalty in lieu of interest. Additionally, “[i]n any action for the collection of amounts withheld in violation of this section, the prevailing party is entitled to his or her reasonable attorney's fees and costs.” (Civ. Code, § 3320, subd. (b).) The complaint alleged that plaintiff entered into a contract with the University for professional architectural services, and that the University “arbitrarily and wrongfully withheld monies owed to BFGC for services performed” under that contract. It alleged plaintiff was entitled to payment, with interest and attorney’s fees pursuant to Civil Code section 3320. Thus, the University was sued under section 3320 and, as the prevailing party, is entitled to its reasonable attorney’s fees.
As plaintiff asserts and defendants concede, the Foundation is not a “public agency” as that term is used in section 3320, and is not entitled to attorney’s fees under that section. The motion for attorney’s fees, however, was brought only by the University, and the trial court’s order specifically granted “the motion of the defendant CSUB Board of Trustees for attorneys [sic] fees.” No award of attorney’s fees was made to the Foundation.
Both defendants were represented by the same attorneys. Plaintiff complains that the motion for attorney’s fees did not allocate fees between the two defendants, so the fee award included fees benefiting the Foundation, which was not entitled to a fee award. “Allocation of fees incurred in representing multiple parties is not required when the liability of the parties is ‘so factually interrelated that it would have been impossible to separate the activities … into compensable and noncompensable time units.’” (Cruz v. Ayromloo (2007) 155 Cal.App.4th 1270, 1277.)
The complaint contained one breach of contract cause of action, based on two contracts pertaining to the same construction project. The declarations supporting the motion for attorney fees indicated the defendants presented a joint defense, with briefs filed jointly on behalf of both; “the extensive discovery conducted in this litigation did not reveal any independent actions by the Foundation as to the Project;” defendants’ “actions as to the Project were intertwined and are not divisible.” Additionally, “[a]ll fees for representing both the Board of Trustees and the Foundation were billed to and paid by the Board of Trustees;” the billings in the itemized listing presented as Exhibit A “concern[ed] fees incurred by the Board of Trustees;” “any fees incurred specifically and solely by the Foundation have not been included in this motion;” and “[g]iven the nature of the causes of action asserted by BFGC, all of the defensive actions for which recovery of fees are [sic] sought directly benefited the Board of Trustees and would have necessarily been incurred even if the Foundation were not a named party.” Exhibit A to the motion itemized the work performed, time spent, billing rate of the particular attorney or paralegal, and total amount billed for each day on which work was performed. The trial court was aware of the apportionment issue, but stated, “I don’t see there is a showing that … a representation of the foundation as separated from representation of the trustees would have reduced the time incurred.”
“‘The burden is on the party complaining to establish an abuse of discretion ….’” (Denham v. Superior Court (1970) 2 Cal.3d 557, 566.) Plaintiff has not met that burden; it has not established that, given the evidence and viewing it most favorably to the trial court’s action, no judge could reasonably have made the order the trial court made. (Smith v. Smith (1969) 1 Cal.App.3d 952, 958.) Plaintiff presented no evidence contradicting the University’s declarations. It presented no evidence that any particular items of work or charges for work included in the fee award were unnecessary to the defense of the University or were incurred solely for the defense of the Foundation. The evidence supported the court’s award of the full amount of attorney’s fees sought by the University.
Plaintiff also contends the court abused its discretion “in applying an unsupported ‘lodestar’ rate to the legal services” and failing to make a reduction for “improper charges including work done for the benefit of counsel, conferring with unnecessary experts, or excessive and inflated billing.” The “‘lodestar’” is “the number of hours reasonably expended multiplied by the reasonable hourly rate”; it is the beginning point in determining the amount of attorney’s fees to award. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) In its opposition to the University’s motion, plaintiff argued that the number of hours billed and the billing rate were excessive. On appeal, plaintiff asserts the trial court did not have sufficient evidence to support the University’s billing, but it does not identify any improper items or demonstrate that the court abused its discretion in applying the rate at which the University was actually billed for its attorneys’ services, rather than the rate suggested by plaintiff.
No abuse of discretion has been shown in the award of attorney fees.
DISPOSITION
The judgment in favor of the Foundation is reversed, and the matter is remanded to the trial court with directions to deny the Foundation’s motion for summary judgment. The judgment in favor of the University is affirmed. The parties shall bear their own costs on appeal.
WE CONCUR: GOMES, Acting P.J., DAWSON, J.