Opinion
D056204 Super. Ct. No. GIC789367
11-17-2011
JELD-WEN, INC., Plaintiff and Appellant, v. PACIFIC COAST ROOFING CORP., et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
APPEAL from judgments of the Superior Court of San Diego County, Ronald L. Styn, Judge. Affirmed in part, reversed in part.
This is the third time we have issued an opinion in this action in response to appeals filed by plaintiff Jeld-Wen, Inc. (Jeld-Wen), challenging the trial court's rulings in favor of respondents Action Iron Works, Inc. (AIW); Foshay Electric Company, Inc. (Foshay); KAS Supply Company, Inc. (KAS); National Roofing Supply Consultants, Inc. (National Roofing); Pacific Coast Roofing Corporation (Pacific); Southcoast Sheet Metal (Southcoast); Wall Systems, Inc. (Wall); Cal-Coast Construction Specialties, Inc. (Cal-Coast); and Western Insulation, Inc. (Western).
We will refer to AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall, Western and Cal-Coast collectively as Defendants.
In this appeal, Jeld-Wen challenges the trial court's rulings (1) granting summary judgment in favor of AIW, Foshay, KAS, Pacific, Southcoast and Wall on the breach of contract cause of action; (2) awarding attorney fees under Code of Civil Procedure section 1038 (section 1038) to AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast; (3) awarding attorney fees under Civil Code section 1717 (section 1717) to AIW, Foshay, KAS, Pacific, Southcoast Wall and Western; and (4) granting summary judgment in favor of National Roofing on the causes of action for equitable indemnity and declaratory relief on the ground of collateral estoppel.
As we will explain, we conclude that the trial court was without jurisdiction to issue the rulings in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall on their motions for summary judgment on the breach of contract cause of action because Jeld-Wen had requested that the trial court dismiss that remaining cause of action. Accordingly, we (1) reverse the summary judgment rulings in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall; and (2) reverse the awards of attorney fees under section 1717 to those parties because they are no longer prevailing parties on the breach of contract cause of action as required for the fee award. However, we affirm the award of defense costs under section 1038 to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast because Jeld-Wen voluntarily dismissed the remaining cause of action for breach of contract against those parties, making the trial court's 2007 summary judgment a dispositive ruling that entitles KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast to an award of defense costs under section 1038. We conclude that the trial court properly awarded Western the attorney fees that it incurred in the prior appeals, and we affirm the summary judgment in favor of National Roofing on the issue of collateral estoppel. We also deny Cal-Coast's motion for sanctions.
I
FACTUAL AND PROCEDURAL BACKGROUND
We once again summarize the relevant factual and procedural background, relying on the discussion set forth in our prior opinions, which we supplement with a description of more recent proceedings.
As we explained in prior opinions, Jeld-Wen entered into a contract with Pardee to install windows and sliding glass doors in homes being developed by Pardee in a residential community known as Regency Hills, in Oak Park, Ventura County (the Project). In December 1997, rainwater began leaking into the homes — around the
windows and elsewhere — and Pardee began receiving complaints from homeowners. Pardee implemented repairs, which included removal and repair of the windows. A. The Pardee Litigation
As explained in our prior opinions, according to Jeld-Wen there were multiple sources of water intrusion that Pardee incurred costs to remediate, and only some of the water intrusion was related to the leaking windows installed by Jeld-Wen.
In an attempt to recover the expenses it occurred as a result of the water intrusion remediation, Pardee filed a lawsuit against Jeld-Wen for, among other things, negligence, express indemnity, breach of implied warranty and breach of contract (the Pardee Litigation). After a jury trial, the court entered judgment against Jeld-Wen, awarding Pardee $1,701,543 (taking into account certain offsets, credits and adjustments) plus costs, including expert witness fees (the Pardee judgment). Jeld-Wen appealed, and in the unpublished opinion in Pardee Const. Co. v. Jeld-Wen, Inc. (Mar. 19, 2004 D038856), as modified April 19, 2004 (Pardee Opinion), we reversed the trial court's award of expert witness fees, but otherwise affirmed the Pardee judgment as to Jeld-Wen. According to Jeld-Wen, it has paid the Pardee judgment, which amounted to $2,203,472 plus accrued interest. B. Jeld-Wen Files This Litigation
The Pardee Litigation and the subsequent appeal also included (1) Pardee's claim against another subcontractor, Eagles Plastering, Co., Inc. (Eagles), which was hired by Pardee to apply overlapping building paper, lath and stucco to the homes being constructed; (2) Jeld-Wen's cross-complaint against window installer Vision Glazing (Vision) for negligence, breach of contract and indemnity; and (3) Eagles' cross-complaint for equitable indemnity against Jeld-Wen and Vision. Eagles was awarded $10,461.90 against Jeld-Wen, and Jeld-Wen was awarded $160,650 against Vision, and those awards were affirmed on appeal. Further, in a special verdict form, the jury apportioned the fault of the various parties for Pardee's injuries as follows: Jeld-Wen, 15 percent; Eagles, 75 percent; and Pardee, 10 percent. The jury found that "Other person[s]" were zero percent responsible for the damage to Pardee. In another special verdict, relating to Jeld-Wen's claims against Vision, the jury apportioned fault for Jeld-Wen's injuries as follows: Vision, 27 percent; Jeld-Wen, 73 percent; and "Others," zero percent.
After the Pardee judgment was entered, Jeld-Wen filed this action against Defendants, all of whom Jeld-Wen alleged had worked as subcontractors on the Project.
As we explained in prior opinions, evidence in the record showed that Defendants performed the following work at the Project: National Roofing acted as an inspector of certain aspects of the construction; Southcoast provided sheet metal work, including attic vents; Pacific performed roofing work; KAS performed the finish carpentry work, including installing french doors and exterior shutters; Western installed insulation; AIW installed ornamental metal; Wall installed drywall; Foshay performed electrical work; and Cal-Coast performed framing work.
Jeld-Wen contended that the water intrusion at the Project was due to Defendants' acts or omissions, and that the Pardee judgment "includes costs incurred by Pardee to repair construction defects caused by each Defendant." The operative amended complaint (the complaint) asserted causes of action for (1) negligence, (2) equitable subrogation to Pardee's right to express indemnity, (3) equitable indemnity, (4) equitable contribution, (5) breach of contract on a third party beneficiary theory, and (6) declaratory relief as to whether Jeld-Wen was entitled to indemnification and/or contribution from Defendants. C. Motions for Judgment on the Pleadings on the Breach of Contract and Negligence Causes of Action
After other proceedings had occurred, KAS, Pacific and AIW brought motions for judgment on the pleadings directed to the negligence and breach of contract causes of action, and Southcoast brought a motion for judgment on the pleadings directed only to the breach of contract cause of action. The trial court granted the motions.
Thereafter, Jeld-Wen entered into a stipulation with Foshay, Southcoast, Wall, AIW and Cal-Coast, agreeing that the trial court's ruling on KAS's motion for judgment on the pleadings with respect to both the negligence and breach of contract causes of action would apply as if each of the Defendants entering into the stipulation had filed its own motion for judgment on the pleadings on those two causes of action (the Stipulation). The trial court approved the Stipulation. D. Motions for Summary Judgment on the Remaining Causes of Action
Western did not enter into the Stipulation and instead successfully challenged the causes of action for negligence and breach of contract through its motion for summary judgment. There was no need for National Roofing to enter into the Stipulation because the trial court already had granted summary adjudication in its favor on the negligence and breach of contract causes of action.
Each of the Defendants brought motions for summary judgment challenging the remaining causes of action for equitable indemnity, equitable contribution and declaratory relief by focusing on what they asserted to be an undisputed fact: the Pardee judgment encompassed only Pardee's repair costs related to repair of the windows, and not the cost of repairs relating to any other source of water intrusion. Defendants argued that it was undisputed that their work at the Project did not give rise to costs that Pardee incurred in repairing the windows, and thus Jeld-Wen could not establish that Defendants were responsible under a theory of equitable indemnity or equitable contribution for a portion of the Pardee judgment. Defendants also challenged the equitable contribution cause of action on the ground that they were not co-obligors with Jeld-Wen on the Pardee judgment.
In their motions, Foshay, Pacific, KAS and Cal-Coast presented a further ground for summary judgment. They argued that because of the Pardee judgment, Jeld-Wen was collaterally estopped to argue that other subcontractors were responsible for any of the damages encompassed in the Pardee judgment. Ruling on the collateral estoppel argument raised by Foshay, Pacific, KAS and Cal-Coast, the trial court concluded that the causes of action for equitable indemnity, equitable contribution and declaratory relief also failed because they were barred by the doctrine of collateral estoppel.
Western, which had not earlier filed a motion for judgment on the pleadings as to the negligence and breach of contract causes of action, moved for summary judgment with respect to those causes of action, along with the causes of action targeted in the other Defendants' summary judgment motions.
After reviewing the evidence presented by the parties, the trial court granted the motions for summary judgment on the causes of action for equitable indemnity, equitable contribution and declaratory relief. It concluded that "Jeld-Wen has not met its burden of establishing a triable issue of material fact as to whether Jeld-Wen paid for non-window related water intrusion repair costs," and that "[the subcontractors have] conclusively established that all of the costs incurred by Pardee in repairing [the subcontractors'] allegedly improper work were excluded from the costs sought and paid by Jeld-Wen in the underlying trial."
Ruling on Western's motion for summary judgment, which also challenged the causes of action for negligence and breach of contract, the trial court granted Western a judgment in its favor. E. The 2008 Opinion
Jeld-Wen's first appeal in this action, which we addressed in Jeld-Wen v. Action Iron Works (Oct. 29, 2008, D049908) [nonpub. opn.] (hereafter 2008 Opinion), challenged the judgments entered in favor of all of the Defendants except for Cal-Coast. In the 2008 Opinion we (1) reversed the trial court's order granting judgment on the pleadings on the breach of contract cause of action in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall; (2) reversed the ruling in favor of National Roofing on its motion for summary judgment on the causes of action for equitable indemnity and declaratory relief; and (3) affirmed the judgment in all other respects. As a result of our ruling, only the judgment against Western was allowed to stand, and the action was returned to the trial court for further proceedings with respect to KAS, AIW, Southcoast, Pacific, Foshay, Wall and National Roofing. F. The Trial Court's Rulings Awarding Attorney Fees
Specifically, with respect to National Roofing, we ruled there was a triable issue of material fact as to whether National Roofing was a cause of some of the water intrusion that entered the homes through the leaking windows. We did not rule on the issue of collateral estoppel as to National Roofing because National Roofing had not raised that issue as a basis for summary judgment. It was also not necessary for us to reach the collateral estoppel issue as to any of the other Defendants.
While the first appeal in this action was pending, the trial court ruled on motions brought by Defendants to recover their attorney fees and costs.
1. Award of Attorney Fees Under Section 1038
First, each of the Defendants, except Western, brought a motion for an award of attorney fees and costs under section 1038 on the ground that Jeld-Wen's action contained causes of action for equitable indemnity and equitable contribution, and the action was not brought in good faith or with reasonable cause.
Section 1038 provides in relevant part: "(a) In any civil proceeding under the California Tort Claims Act or for express or implied indemnity or for contribution in any civil action, the court, upon motion of the defendant or cross-defendant, shall, at the time of the granting of any summary judgment, motion for directed verdict, motion for judgment under [Code of Civil Procedure] Section 631.8, or any nonsuit . . . determine whether or not the plaintiff . . . brought the proceeding with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint . . . . If the court should determine that the proceeding was not brought in good faith and with reasonable cause, an additional issue shall be decided as to the defense costs reasonably and necessarily incurred by the party or parties opposing the proceeding, and the court shall render judgment in favor of that party in the amount of all reasonable and necessary defense costs, in addition to those costs normally awarded to the prevailing party."
The trial court granted the motions, but only with respect to those fees and costs incurred after a certain date. After reviewing supplemental briefing, the trial court decided upon the amount of attorney fees to be awarded. The trial court then interlineated the judgments that it had already entered to include awards of attorney fees under section 1038.
2. Award of Attorney Fees Under Section 1717
All of the Defendants except National Roofing also filed motions for attorney fees pursuant to section 1717. The motions were based on the attorney fee clauses in the subcontracts that Defendants had entered into with Pardee. Defendants argued that they were entitled to recover attorney fees because Jeld-Wen had relied on the subcontracts as the basis for its breach of contract cause of action.
The trial court granted the motions for attorney fees under section 1717, but only as to those fees incurred from the inception of the action through the granting of the motions for judgment on the pleadings on the breach of contract cause of action, or in the case of Western, through the granting of Western's motion for summary judgment on the breach of contract cause of action. G. The 2009 Opinion
Before we issued the 2008 Opinion, Jeld-Wen filed two additional notices of appeal, which we consolidated. Those appeals challenged (1) the ruling granting Cal-Coast's motion for judgment on the pleadings with respect to the breach of contract cause of action; (2) the ruling granting Cal-Coast's motion for summary judgment on the causes of action for equitable indemnity, equitable contribution and declaratory relief; (3) the award of attorney fees to AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall and Cal-Coast under section 1038; and (4) the award of attorney fees to AIW, Foshay, KAS, Pacific, Southcoast, Wall, Western and Cal-Coast under section 1717. We ruled on Jeld-Wen's consolidated appeals in Jeld-Wen v. Action Iron Works (Feb. 17, 2009, D051465) [nonpub. opn.] (hereafter 2009 Opinion).
KAS has requested that we take judicial notice of the 2008 Opinion, the 2009 Opinion, the unpublished Pardee Opinion, supra, D038856, a letter brief submitted by Jeld-Wen in connection with a prior appeal in this action, and "the Clerk's Transcripts and Reporters' Transcripts filed in connection with" the appeals that we decided in the prior appeals in this action. Jeld-Wen opposes the request. We deny the request as unnecessary as to the prior opinions in this action because both of those documents appear in the clerk's transcript for this appeal. We grant the request as to the Pardee Opinion and Jeld-Wen's letter brief. We deny the request as to the records from the prior appeals because those items are unnecessary to our decision and because KAS did not comply with California Rules of Court, rule 8.252(a)(3), by providing us with a copy of the items that it wants us to consider from the record of the prior appeals.
All further rule references are to the California Rules of Court
With respect to the order granting Cal-Coast's summary judgment motion and motion for judgment on the pleadings, our analysis in the 2009 Opinion was the same as that contained in the 2008 Opinion with respect to the other Defendants. Specifically, we affirmed the ruling granting summary judgment on the equitable indemnity, equitable contribution and declaratory relief causes of action in favor of Cal-Coast, but we reversed the order granting judgment on the pleadings in favor of Cal-Coast on the breach of contract cause of action because the trial court had not reviewed the relevant contract.
With respect to Jeld-Wen's challenge to the trial court's award of attorney fees to AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall and Cal-Coast under section 1038, we considered Cal-Coast's appeal but treated the appeal as a petition for writ of mandate as to AIW, Foshay, KAS, National Roofing, Pacific, Southcoast and Wall. We rejected each of Jeld-Wen's challenges to the section 1038 fee award, but concluded that due to our reversal of the judgment on the pleadings in favor of AIW, Foshay, KAS, National Roofing, Pacific, Southcoast and Wall in the 2008 Opinion, and in favor of Cal-Coast in the 2009 Opinion, the section 1038 fee award could no longer stand.
Due to our reversal of the judgment as to AIW, Foshay, KAS, National Roofing, Pacific, Southcoast and Wall in the 2008 Opinion, the appeal from the fee awards in favor of those parties was not from a final judgment. We nevertheless reached the issues presented by treating the appeal as a writ of mandate.
As we explained, section 1038 premises a fee award on a successful summary judgment motion or other dispositive motion listed in the statute, but our reversal of the orders granting judgment on the pleadings on the breach of contract cause of action had transformed the order granting summary judgment into a summary adjudication, which did not resolve the entire case. We therefore reversed the order granting attorney fees under section 1038. We stated, however, that "[i]n the event that AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall, or Cal-Coast prevail on summary judgment or another motion specified in section 1038 during further litigation of this action, any of them may bring another motion for attorney fees under section 1038." We further stated that "[u]pon any future motion under section 1038, the trial court may consider whether the defense costs 'reasonably and necessarily incurred in defending the proceeding' (§ 1038, subd. (b)) include fees incurred during appellate proceedings in this action."
We stated: "[A] defendant may not bring a motion under section 1038 after prevailing on a motion for summary adjudication, but instead must wait until it obtains one of the rulings specified in section 1038, namely 'the granting of any summary judgment, motion for directed verdict, motion for judgment under [Code of Civil Procedure] Section 631.8, or any nonsuit.' (§ 1038, subd. (a).) Here, by virtue of the [2008 Opinion] and our ruling as to Cal-Coast in this opinion, AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall and Cal-Coast have obtained summary adjudication rather than summary judgment. The ruling in favor of those parties under section 1038 must be vacated, as the premise for the trial court's ruling under section 1038 (i.e., success on a motion for summary judgment) no longer exists."
In the course of ruling on the appeal of the orders granting fees under section 1038, we made several rulings that are specifically relevant to the issues that Jeld-Wen improperly attempts to reargue in this appeal.
First, we rejected Jeld-Wen's argument that section 1038 applies only to claims brought against governmental entities under the California Tort Claims Act. We determined that the statutory language clearly referred in the disjunctive to "any civil proceeding under the California Tort Claims Act or for express or implied indemnity or for contribution in any civil action." (§ 1038, subd. (a), italics added.) In light of the unambiguous statutory language, we stated that resort to legislative history was unnecessary, and observed that — in any event — although Jeld-Wen relied on legislative history for its argument, it failed to cite to any legislative history documents in the record.
Second, explaining that an order to pay defense costs under section 1038 is available only if a plaintiff filed and pursued the action without reasonable cause, we ruled that Jeld-Wen (1) lacked reasonable cause to pursue this action against Pacific and Wall as of August 31, 2006; and (2) lacked reasonable cause to pursue this action against AIW, Foshay, KAS, Southcoast and Cal-Coast after September 7, 2006.
With respect to Jeld-Wen's challenge to the award of attorney fees to AIW, Foshay, KAS, Pacific, Southcoast, Wall, Western and Cal-Coast under section 1717, the 2009 Opinion reversed that award as to AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast on the ground that those parties were no longer successful parties on the breach of contract cause of action. We stated that "[o]ur ruling is without prejudice to AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast bringing another motion for attorney fees premised on section 1717 in the event that they become prevailing parties on the breach of contract cause of action after further proceedings in the trial court."
Section 1717 is available to prevailing parties in certain actions on a contract. That statute provides in relevant part: "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." (§ 1717, subd. (a).)
Because Western remained a prevailing party on the breach of contract cause of action due to the order granting summary judgment in its favor, we addressed all of Jeld-Wen's challenges to the award of attorney fees under section 1717 as to Western, and we concluded that the award was proper. In so doing, we addressed two legal issues that Jeld-Wen attempts to reargue in this appeal.
First, we rejected Jeld-Wen's argument that section 1717 was inapplicable due to the trial court's finding that Jeld-Wen was not a third party beneficiary of Western's contract with Pardee. Second, we rejected Jeld-Wen's argument that an award of attorney fees is improper if defense cost were paid by the defendant's insurance carrier. We stated that "the law is clear that a party may recover attorney fees under section 1717 regardless of whether its attorney fees have been paid by an insurance carrier." H. Subsequent Proceedings in the Trial Court
The remittitur issued for the 2008 Opinion on January 7, 2009, and for the 2009 Opinion on April 20, 2009.
Less than a week after the remittitur issued for the 2008 Opinion, Jeld-Wen filed a peremptory challenge of the trial court judge under Code of Civil Procedure section 170.6, and a new trial court judge was assigned.
1. Summary Judgment Motions and Jeld-Wen's Requests for Dismissal
In late January 2009 — less than a month after the remittitur issued for the 2008 Opinion, which had reversed the judgment on the pleadings in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall on the breach of contract cause of action — each of those parties filed summary judgment motions challenging Jeld-Wen's remaining cause of action for breach of contract. All of the motions were set for hearing on April 17, 2009.
Jeld-Wen did not file an opposition to the summary judgment motions before the deadline for those filings.
On April 3, 2009 — the day that its opposition to the summary judgment motions would have been due — Jeld-Wen attempted to file a request for dismissal of the action as to KAS, Pacific and Foshay. The request for dismissal was on a preprinted Judicial Council form and stated that it was with prejudice, but added the words "[e]ach party to bear its own fees and costs." According to the transaction record from the electronic filing system used by the parties in this litigation, the superior court clerk rejected the document because "the attorney put a condition on it (waiver of fees and costs) which is not allowed on the form." On April 7, 2009, Jeld-Wen attempted to file a second request for dismissal of the action with prejudice as to all of the defendants who had pending summary judgment motions — KAS, AIW, Southcoast, Pacific, Foshay and Wall. Similar to the first request for dismissal, the second request also added the words "[e]ach party to bear their own fees and costs" and was also rejected for filing on the ground that that contained an impermissible condition.
On April 9, 2009, Jeld-Wen attempted to file another request for dismissal with prejudice against KAS, AIW, Southcoast, Pacific, Foshay and Wall which, unlike the previous dismissal requests, did not make dismissal conditional on a waiver of fees and costs. KAS, AIW, Southcoast, Pacific, Foshay and Wall immediately filed objections to the request for dismissal, and Southcoast filed an ex parte application requesting that the trial court reject the request for dismissal and allow the summary judgment motions to be heard as scheduled on April 17, 2009. The objections and the ex parte application argued that dismissal was improper under Code of Civil Procedure section 581, subdivisions (b) and (c), and case law interpreting it, because the litigation had proceeded to a point where granting of the summary judgment motions was inevitable due to (1) Jeld-Wen's failure to oppose the motions and (2) our decision on Western's motion for summary judgment in the 2008 Opinion. (See Franklin Capital Corp. v. Wilson (2007) 148 Cal.App.4th 187, 200 (Franklin); Cravens v. State Bd. of Equalization (1997) 52 Cal.App.4th 253, 257.)
Jeld-Wen responded with two different filings. First, it filed an opposition to Southcoast's ex parte application. Among other things, Jeld-Wen argued that voluntary dismissal was proper because it was attempting to dismiss the action as to KAS, AIW, Southcoast, Pacific, Foshay and Wall with prejudice. Second, Jeld-Wen filed an "Objection to Court Hearing and Ruling Upon Defendants' Motions for Summary Judgment." In this filing Jeld-Wen expressly renewed its request that the voluntary dismissal be entered and argued that the trial court should not rule on the pending summary judgment motions because (1) the trial court lacked jurisdiction over the motions in that the remittitur had not yet issued for the 2009 Opinion (although it had already issued for the 2008 Opinion); and (2) Jeld-Weld required a continuance of the summary judgment motions for the purpose of conducting discovery to support its opposition. Jeld-Wen did not specify the subject of its proposed discovery.
The pleading filed by Jeld-Wen stated, "Jeld-Wen . . . hereby renews its request that its voluntary dismissal be entered . . . ."
At an April 14, 2009 hearing, the trial court granted Southcoast's ex parte application by rejecting Jeld-Wen's request for dismissal and ordering that the summary judgment motions would be heard, as scheduled, on April 17, 2009.
Subsequently, on May 20, 2009, the superior court clerk entered and sent to the parties the request for dismissal that Jeld-Wen had attempted to file on April 9, 2009, and that the trial court had rejected for filing. In its opposition to subsequent motions for attorney fees and costs, Jeld-Wen brought the entry of dismissal to the attention of the trial court, stating that it was not sure whether the notice of dismissal was a clerical error, or whether the trial court had sua sponte reconsidered the order vacating the dismissal. In an order addressing the fee and cost motions the trial court stated, "The notice of entry of dismissal sent out by the court on May 20, 2009, was in obvious error in light of this court's April 14, 2009[] ruling specifically setting aside the April 9, 2009 dismissal. The May 20, 2009 notice was therefore ineffective because the dismissal it purported to give notice of had previously been vacated by the court." One of Jeld-Wen's appellate arguments is premised on the assumption that the April 9, 2009 request for dismissal was effective because the superior court clerk entered it. We reject any argument premised on that assumption, as the trial court plainly stated that the superior court clerk's entry of the dismissal was in error and was ineffective. (See Siegal v. Superior Court (1968) 68 Cal.2d 97, 101 ["every court of record has the inherent power to . . . correct any error or defect occurring in a record through acts of omission or commission of the clerk in entering of record the judgments or orders of the court"].)
On April 20, 2009 — the same day that the remittitur issued for the 2009 Opinion — Jeld-Wen filed an unconditional request for dismissal of the action, with prejudice, against Cal-Coast. As the 2009 Opinion reversed the judgment on the pleadings on the breach of contract cause of action against Cal-Coast and remanded for further proceedings, Jeld-Wen's immediate dismissal of Cal-Coast from the action upon the entry of the remittitur of the 2009 Opinion precluded Cal-Coast from filing and prevailing on a summary judgment motion on the breach of contract cause of action. Cal-Coast did not seek relief from the trial court from Jeld-Wen's request for dismissal.
In an April 24, 2009 minute order, the trial court granted summary judgment in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall on the sole remaining cause of action against them for breach of contract. In its ruling the trial court relied on (1) our decision in the 2008 Opinion as to Western's summary judgment motion on the breach of contract cause of action, and (2) the moving parties' showing that the contracts they entered into with Pardee were the same form contracts that Western entered into with Pardee. The trial court explained that due to our 2008 Opinion, the law of the case doctrine required it to conclude that Jeld-Wen could not meet its burden to establish a triable issue of material fact as to whether it is a third party beneficiary of the form contracts that the moving parties entered into with Pardee. The trial court also considered and rejected Jeld-Wen's contention that the court lacked jurisdiction over the summary judgment motions because those motions were filed before the remittitur issued for the 2009 Opinion.
2. Motions to Recover Attorney Fees and Costs
After they obtained summary judgment, KAS, AIW, Southcoast, Pacific, Foshay and Wall filed motions to recover defense costs pursuant to section 1038. The trial court granted the motions, relying on the discussion in the 2009 Opinion, in which we determined that for the purposes of an award under section 1038 Jeld-Wen had not maintained the action with reasonable cause against KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast.
The trial court awarded defense costs pursuant to section 1038 in the following amounts: Pacific — $126,187.49; KAS — $101,648.80; Southcoast — $178,976.91; Foshay — $118,796.14; AIW — $42,201.87; Wall — $35,528.55.
After Jeld-Wen dismissed the sole remaining cause of action against Cal-Coast, Cal-Coast also filed a motion for defense costs pursuant to section 1038. Jeld-Wen opposed Cal-Coast's motion on the ground, among others, that due to its dismissal of the remaining cause of action for breach of contract against Cal-Coast after the remittitur issued for the 2009 Opinion, Cal-Coast could not establish that it had prevailed on a motion for summary judgment motion or other dispositive motion listed in section 1038 as a prerequisite for an award of defense costs. The trial court rejected that argument, explaining that Cal-Coast was entitled to an award under section 1038 due to the fact that it had earlier prevailed on a motion for summary judgment. As the trial court reasoned, despite our statement in the 2009 Opinion that the revival of the breach of contract cause of action meant that the 2007 summary judgment in favor of Cal-Coast was to be treated as a summary adjudication for purposes of a motion under section 1038, Jeld-Wen's dismissal of the breach of contract cause of action restored the 2007 summary judgment to a dispositive ruling that could support a fee award under section 1038. Consistent with its ruling on the motion for defense costs brought by KAS, AIW, Southcoast, Pacific, Foshay and Wall, the trial court ruled that Cal-Coast was entitled to an award of defense costs under section 1038 because the 2009 Opinion established that Jeld-Wen did not have reasonable cause to maintain the action against Cal-Coast. The trial court awarded $59,798.30 in defense costs to Cal-Coast.
The trial court stated, "Following the logic of the analysis of the Court of Appeal in [the 2009 Opinion], upon dismissal of Jeld-Wen's complaint against Cal-Coast (which dismissal was effective only as to the remaining cause of action for breach of contract) the summary adjudication again became a summary judgment. Thus . . . the court treats the July 18, 2007[] summary judgment ruling as a summary judgment for purposes of [section] 1038."
After awarding defense costs pursuant to section 1038 to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast, the trial court entered judgment in their favor.
KAS, AIW, Southcoast, Pacific, Foshay and Wall then filed motions to recover their remaining attorney fees pursuant to section 1717 on the ground that they were prevailing parties on the breach of contract cause of action because the trial court had granted their motions for summary judgment. In opposing the motion for attorney fees under section 1717 brought by KAS, AIW, Southcoast, Pacific, Foshay and Wall, Jeld-Wen asserted the same legal arguments that it had asserted in the 2009 Opinion when challenging the section 1717 award in favor of Western. The trial court rejected those arguments based on the law of the case established in the 2009 Opinion. After carefully calculating the attorney fees attributable to defense of the breach of contract cause of action and subtracting amounts awarded as defense costs under section 1038, the trial court awarded attorney fees to KAS, AIW, Southcoast, Pacific, Foshay and Wall under section 1717.
The award of defense costs under section 1038 did not cover all of the fees incurred in the litigation, as the award under section 1038 included only those defense costs incurred after the date on which Jeld-Wen no longer had reasonable cause to maintain the action, which as we explained in the 2009 Opinion was August 31, 2006, for Pacific and Wall, and September 7, 2006, as to AIW, Foshay, KAS, Southcoast and Cal-Coast.
The trial court awarded attorney fees under section 1717 in the following amounts: KAS — $137,926; Pacific — $114,592; Southcoast — $29,539.70; Foshay — $79,934.50; AIW — $18,799; Wall — $40,066.50.
Less than a month after the remittitur issued for the 2009 Opinion, in which we affirmed the award of attorney fees to Western under section 1717, Western brought another motion for attorney fees under section 1717 to recover fees that it had incurred in connection with Jeld-Wen's appeals. The trial court granted Western's motion and awarded $52,904 in attorney fees incurred on appeal.
3. National Roofing's Motion for Summary Judgment
As we have explained, the 2008 Opinion reversed the summary judgment that National Roofing had obtained on the causes of action for equitable indemnity and declaratory relief. On remand, National Roofing renewed its motion for summary judgment on those causes of action on a basis that it had not previously asserted. Specifically, National Roofing argued that the judgment in the Pardee Litigation collaterally estopped Jeld-Wen from seeking equitable indemnity and declaratory relief against it in this action. The trial court concluded that the requirements for collateral estoppel were satisfied and granted summary judgment in favor of National Roofing.
As explained in our 2008 Opinion, the declaratory relief cause of action is based on the allegation that Jeld-Wen was entitled to indemnification, and thus is subject to the same legal analysis as the cause of action for equitable indemnity.
4. Jeld-Wen's Appeal
In this appeal Jeld-Wen challenges (1) the summary judgment in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall; (2) the award of defense costs pursuant to section 1038 to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast; (3) the award of attorney fees under section 1717 to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Western; and (4) the summary judgment in favor of National Roofing.
II
DISCUSSION
A. Jeld-Wen's Challenge to the Summary Judgment in Favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall
1. The Trial Court Had Jurisdiction Over the Summary Judgment Motions After the Remittitur Issued for the 2008 Opinion
Jeld-Wen contends KAS, AIW, Southcoast, Pacific, Foshay and Wall improperly filed their summary judgment motions before the remittitur issued for the 2009 Opinion, and the trial court therefore lacked jurisdiction to rule on the motions. As we will explain, Jeld-Wen's contention lacks merit.
At the time KAS, AIW, Southcoast, Pacific, Foshay and Wall filed their summary judgment motions, the remittitur for the 2008 Opinion had issued, but we had not yet issued the 2009 Opinion. Therefore, the question before us is whether the pendency of the appeal we eventually resolved in the 2009 Opinion divested the trial court of jurisdiction to consider the summary judgment motions filed by KAS, AIW, Southcoast, Pacific, Foshay and Wall challenging the breach of contract cause of action.
Code of Civil Procedure section 916, subdivision (a) states that, with certain exceptions not relevant here, "the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order." "Under [Code of Civil Procedure] section 916, 'the trial court is divested of' subject matter jurisdiction over any matter embraced in or affected by the appeal during the pendency of that appeal. [Citation.] 'The effect of the appeal is to remove the subject matter of the order from the jurisdiction of the lower court . . . .' [Citation.] Thus, 'that court is without power to proceed further as to any matter embraced therein until the appeal is determined.' " (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 196-197, fn. omitted (Varian).) "[W]hether a matter is 'embraced' in or 'affected' by a judgment within the meaning of [Code of Civil Procedure] section 916 depends upon whether postjudgment trial court proceedings on the particular matter would have any impact on the 'effectiveness' of the appeal. If so, the proceedings are stayed; if not, the proceedings are permitted." (Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629 (Elsea).)"[T]he pendency of an appeal does not divest the trial court of jurisdiction to determine ancillary or collateral matters which do not affect the judgment on appeal." (Betz v. Pankow (1993) 16 Cal.App.4th 931, 938.)
The only rulings as to KAS, AIW, Southcoast, Pacific, Foshay and Wall at issue in the 2009 Opinion were the awards of defense costs and attorney fees under section 1038 and section 1717. The summary judgment motions — in contrast — addressed the merits of the breach of contract cause of action against KAS, AIW, Southcoast, Pacific, Foshay and Wall. Therefore, the summary judgment motions on the breach of contract cause of action against KAS, AIW, Southcoast, Pacific, Foshay and Wall were collateral to and did not embrace the issues presented in the appeal pending before us.
Based on case law stating that an appeal divests the trial court of jurisdiction over a matter that could "have any impact on the 'effectiveness' of the appeal" (Elsea, supra, 4 Cal.App.4th at p. 629), Jeld-Wen argues that the summary judgment motions could have impacted the effectiveness of the appeal because they would have "fundamentally change[d] the underlying factual circumstances of the appeal." Specifically, Jeld-Wen points out that had the trial court granted the summary judgment motions before we decided the 2009 Opinion, we may not have reversed the award of defense costs and fees under section 1038 and section 1717 on the grounds we cited in the 2009 Opinion, i.e., that the breach of contract cause of action had not been resolved against KAS, AIW, Southcoast, Pacific, Foshay and Wall.
Jeld-Wen's argument fails. As our Supreme Court has explained, a proceeding on a matter in the trial court does not have an impact on the effectiveness of a pending appeal merely because the proceeding may impact the outcome of the appeal, or even render it moot. (Varian, supra, 35 Cal.4th at p. 189 ["The fact that the postjudgment or postorder proceeding may render the appeal moot is not, by itself, enough to establish that the proceeding affects the effectiveness of the appeal and should be stayed under [Code of Civil Procedure] section 916."].) "[S]omething more is needed. For example, the trial court proceeding must directly or indirectly seek to 'enforce, vacate or modify [the] appealed judgment or order.' . . . Or the proceeding must substantially interfere with the appellate court's ability to conduct the appeal." (Id. at pp. 189-190, fn. and citation omitted.) "A trial court . . . affects the effectiveness of an appeal if the possible outcomes on appeal and the actual or possible results of the proceeding are irreconcilable" or "if the very purpose of the appeal is to avoid the need for that proceeding." (Id. at p. 190, italics added.) None of those situations are present here.
Further, our Supreme Court has explained that "[a] postjudgment or postorder proceeding is . . . ancillary or collateral to the appeal despite its potential effect on the appeal, if the proceeding could or would have occurred regardless of the outcome of the appeal." (Varian, supra, 35 Cal.4th at p. 191, italics added.) Here, the summary judgment motions would have gone forward regardless of how we resolved the challenges to the defense cost and fee awards at issue in the 2009 Opinion.
In sum, because the summary judgment motions filed by KAS, AIW, Southcoast, Pacific, Foshay and Wall were not matters embraced within or affected by the appeal that we resolved in the 2009 Opinion, the pendency of that appeal did not divest the trial court of jurisdiction over the those motions.
2. The Impact of Jeld-Wen's Requests for Dismissal on the Trial Court's Jurisdiction over the Summary Judgment Motions
Jeld-Wen contends that the trial court should have allowed it to dismiss KAS, AIW, Southcoast, Pacific, Foshay and Wall from the action rather than ruling on their motions for summary judgment, and that the trial court lacked jurisdiction to proceed with the summary judgment motions after Jeld-Wen attempted to obtain a dismissal. In resolving this issue, we separately consider (1) the April 3 and April 7, 2009 requests for dismissal, which the superior court clerk rejected for filing; and (2) the April 9, 2009 request for dismissal, which the trial court ruled would not be filed.
a. Jeld-Wen's April 3 and April 7, 2009 Requests for Dismissal Did Not Divest the Trial Court of Jurisdiction Over the Summary Judgment Motions
Jeld-Wen first argues that the superior court clerk improperly rejected the April 3, 2009 request for dismissal as to KAS, Pacific and Foshay and the April 7, 2009 request for dismissal as to KAS, AIW, Southcoast, Pacific, Foshay and Wall on the ground that those requests for dismissal added the words "[e]ach party to bear their own fees and costs." According to Jeld-Wen, those dismissals should have been entered because "[t]here is no statutory prohibition to filing a Request for Dismissal which contains the words 'Each party to bear their own fees and costs.' " As we will explain, the superior court clerk properly refused to file the April 3 and April 7, 2009 requests for dismissal.
Based on long-standing authority, a superior court clerk does not have authority to enter a voluntary dismissal if it is required to exercise legal judgment rather than simply perform a ministerial act. (Montgomery v. Neilon (1919) 41 Cal.App. 184, 189 [court clerk was not authorized to enter plaintiff's request for voluntary dismissal when clerk would be required to pass on a legal question]; People ex rel. Polhemus v. Loewy (1865) 29 Cal. 264, 265 [entry of dismissal by clerk was not authorized when there was "more than a mere ministerial duty to be performed" in that the clerk would have to determine "what effect [a] stipulation filed had upon the pleadings or the rights of the parties"]; cf. 2 Witkin, Cal. Procedure (5th ed. 2008) Courts, § 361, p. 462 [a court clerk has "purely ministerial functions," with "neither power to decide questions of law nor any discretion in performing those judicial duties"].)
The generally applicable rule is that a defendant who obtains entry of a dismissal with prejudice in its favor is entitled as a matter of right to recover its costs. (Code Civ. Proc., § 1032, subds. (a)(4), (b); Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 150.) Further, in many cases, as here, a dismissed defendant will claim attorney fees based on an applicable statutory scheme or contractual provision. Thus, in this case, before deciding whether to file Jeld-Wen's requests for dismissal stating "[e]ach party to bear its own fees and costs," the superior court clerk would have been required to exercise legal judgment as to whether there was a basis for an order requiring each party to bear its own costs, despite the legal authority permitting a dismissed party to obtain costs and despite the possible applicability of a statutory or contractual provision giving a party the right to recover attorney fees. Thus by entering Jeld-Wen's requests for dismissal, the clerk would not have been performing solely a ministerial duty. Therefore, the superior court clerk properly refused to file the April 3 and April 7, 2009 requests for dismissal.
b. Jeld-Wen's April 9, 2009 Request for Dismissal Should Have Been Entered Upon Jeld-Wen's Renewed Request to the Trial Court, and the Trial Court Thereafter Was Without Jurisdiction to Rule on the Summary Judgment Motions
Jeld-Wen argues that the trial court improperly rejected its April 9, 2009 request for dismissal after KAS, AIW, Southcoast, Pacific, Foshay and Wall objected to it. According to Jeld-Wen, it "fulfilled all statutory conditions" for dismissal, and therefore the trial court "had no authority to reject the dismissal."
We apply a de novo standard of review to determine whether Jeld-Wen was entitled to entry of its request for dismissal of the action against KAS, AIW, Southcoast, Pacific, Foshay and Wall. (Gogri v. Jack in the Box Inc. (2008) 166 Cal.App.4th 255, 262 (Gogri) ["Because the trial court's application of [Code of Civil Procedure] section 581 to undisputed facts is a question of law, we apply the independent standard in reviewing on appeal the trial court's determination."].)
The authority for a voluntary dismissal with prejudice is set forth in Code of Civil Procedure section 581, which states, in relevant part:
"(b) An action may be dismissed in any of the following instances:
"(1) With or without prejudice, upon written request of the plaintiff to the clerk, filed with papers in the case, or by oral or written request to the court at any time before the actual commencement of trial, upon payment of the costs, if any. [¶] . . . [¶]
"(c) A plaintiff may dismiss his or her complaint, or any cause of action asserted in it, in its entirety, or as to any defendant or defendants, with or without prejudice prior to the actual commencement of trial.
"(d) Except as otherwise provided in subdivision (e), the court shall dismiss the complaint, or any cause of action asserted in it, in its entirety or as to any defendant, with prejudice, when upon the trial and before the final submission of the case, the plaintiff abandons it.
"(e) After the actual commencement of trial, the court shall dismiss the complaint, or any causes of action asserted in it, in its entirety or as to any defendants, with prejudice, if the plaintiff requests a dismissal, unless all affected parties to the trial consent to dismissal without prejudice or by order of the court dismissing the same without prejudice on a showing of good cause." (Italics added.)
The statute refers to the "actual commencement of trial" to distinguish which procedures govern voluntary dismissal at different stages of the proceedings. (Code Civ. Proc., § 581, subds. (b)(1), (c), (e).) In the statute, "[t]he concept of 'trial' . . . is 'not limited to "trial" in the conventional sense but also includes determinations on matters of law which dispose of the entire case, such as some demurrers and pretrial motions.' [Citation.] Therefore, 'commencement of trial' under [Code of Civil Procedure] section 581 'includes pretrial procedures that effectively dispose of the case.'" (Lewis C. Nelson & Sons, Inc. v. Lynx Iron Corp. (2009) 174 Cal.App.4th 67, 76.)
Indeed, the actual commencement of trial may take place even before the trial court makes an actual ruling on a pending dispositive motion when "there was . . . some objective indicia, e.g., by way of publicly announced tentative ruling or a failure to file opposition by the deadline, that the plaintiff's case was inherently defective on the merits." (Franklin, supra, 148 Cal.App.4th at p. 199.) As some cases explain, actual commencement of trial occurs if "(1) there has been 'a public and formal indication by the trial court of the legal merits of the case,' or (2) there has been 'some procedural dereliction by the dismissing plaintiff that made dismissal otherwise inevitable.'" (Gogri, supra, 166 Cal.App.4th at p. 262, quoting Franklin, at p. 200.)
KAS, AIW, Southcoast, Pacific, Foshay and Wall argue that Jeld-Wen was prohibited from obtaining a voluntary dismissal under Code of Civil Procedure section 581 because trial actually commenced before Jeld-Wen filed the April 9, 2009 request for dismissal. To address this argument, the threshold issue is whether, under either prong of the applicable legal standard, trial had actually commenced by April 9, 2009.
Addressing the first prong of the applicable standard, KAS, AIW, Southcoast, Pacific, Foshay and Wall argue that the 2008 Opinion constitutes a " 'public and formal indication . . . of the legal merits of the case,' " making the outcome of their summary judgment motions inevitable (Gogri, supra, 166 Cal.App.4th at p. 262), because in the 2008 Opinion we ruled that summary judgment was properly granted as to Western based on the same form contract that forms the basis of the summary judgment claims against KAS, AIW, Southcoast, Pacific, Foshay and Wall. Addressing the second prong of the standard, KAS, AIW, Southcoast, Pacific, Foshay and Wall argue that because Jeld-Wen failed to file an opposition to the summary judgment motions, there was a " 'procedural dereliction by the dismissing plaintiff that made dismissal otherwise inevitable.' " (Ibid., italics omitted.) We agree with KAS, AIW, Southcoast, Pacific, Foshay and Wall that by virtue of the 2008 Opinion and Jeld-Wen's failure to oppose the summary judgment motions, trial had actually commenced for the purposes of Code of Civil Procedure section 581 at the time that Jeld-Wen filed its April 9, 2009 request for dismissal because the favorable resolution of the pending summary judgment motions was already inevitable.
Our decision that — for purposes of Code of Civil Procedure section 581 — trial had actually commenced as of April 9, 2009, does not resolve the question of whether the trial court properly rejected Jeld-Wen's request for dismissal. It is only a preliminary step in our analysis that determines which subdivision of Code of Civil Procedure section 581 applies. In the event that trial has not yet actually commenced, Code of Civil Procedure section 581, subdivisions (b)(1) and (c) apply, under which a plaintiff may dismiss either with or without prejudice. In cases such as Gogri, supra, 166 Cal.App.4th 255, Franklin, supra, 148 Cal.App.4th 187, and the cases discussed therein, the plaintiff had attempted to dismiss without prejudice, and thus a decision that trial had actually commenced foreclosed the requested dismissal because the statute permits voluntary dismissal without prejudice as of right only before actual commencement of trial. (Code Civ. Proc., § 581, subds. (b)(1), (c).) In contrast where, as here, trial has already actually commenced, Code of Civil Procedure section 581, subdivision (e) controls. Under that provision, a plaintiff may still obtain a voluntary dismissal as of right after trial has actually commenced, but that dismissal must be with prejudice. "After the actual commencement of trial, the court shall dismiss the complaint, or any causes of action asserted in it, in its entirety or as to any defendants, with prejudice, if the plaintiff requests a dismissal . . . ." (Code. Civ. Proc., § 581, subd. (e).)
As one court accurately stated in recognizing that different rules apply to dismissals with and without prejudice, "[a] plaintiff is precluded from voluntarily dismissing an action without prejudice under various circumstances short of a full trial." (Mary Morgan, Inc. v. Melzark (1996) 49 Cal.App.4th 765, 769, italics added.) Indeed, "[Code of Civil Procedure s]ection 581's purpose in cutting off the plaintiff's absolute right to dismissal upon commencement of trial is to avoid abuse by plaintiffs who, when led to suppose a decision would be adverse, would prevent such decision by dismissing without prejudice and refiling, thus subjecting the defendant and the courts to wasteful proceedings and continuous litigation. [Citation.] That purpose is not implicated . . . where plaintiff dismissed the case with prejudice, such that he is precluded from refiling the action." (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 909 (Kyle).)
After actual commencement of trial, the dismissal may be without prejudice only if "all affected parties to the trial consent" or "on a showing of good cause." (Code. Civ. Proc., § 581, subd. (e).)
Here, because trial had actually commenced at the time Jeld-Wen filed its April 9, 2009 request for dismissal, the only type of dismissal that it could obtain as of right pursuant to Code of Civil Procedure section 581, subdivision (e) was a dismissal with prejudice. But that type of dismissal is precisely what Jeld-Wen sought. Therefore the trial court was required, pursuant to Code of Civil Procedure section 581, subdivision (e), to grant Jeld-Wen's request for a voluntary dismissal with prejudice.
The parties discuss at length whether Marina Glencoe L.P. v. Neue Sentimental Film AG (2008) 168 Cal.App.4th 874 supports the conclusion that Jeld-Wen had a right to obtain a dismissal without prejudice after actual commencement of trial. Although Marina Glencoe correctly noted that there is a difference as to whether a plaintiff will be permitted to voluntarily dismiss with or without prejudice after actual commencement of trial, it did not expressly refer to the statutory language of Code of Civil Procedure section 581, subdivision (e) during its discussion. (Marina Glencoe, at p. 878.) Thus, although we agree with Marina Glencoe's conclusion that a plaintiff has a right to obtain a voluntary dismissal with prejudice even after actual commencement of trial, we rely on the statutory language for that conclusion, rather than on Marina Glencoe's reasoning.
Foshay, Pacific and KAS advance two arguments as to why the trial court was not required to grant Jeld-Wen's request for a voluntary dismissal with prejudice pursuant to Code of Civil Procedure section 581, subdivision (e). However, as we will explain, both of those arguments lack merit.
The first contention is that Jeld-Wen could not obtain a voluntary dismissal pursuant to Code of Civil Procedure section 581, subdivision (e) because Jeld-Wen filed the April 9, 2009 request for dismissal with the superior court clerk rather than with the trial court. According to Foshay, Pacific and KAS, the statutory language provides that a request for dismissal under Code of Civil Procedure section 581, subdivision (e) must be directed to the trial court, as that provision states that "the court shall dismiss the complaint . . . , with prejudice, if the plaintiff requests a dismissal," whereas subdivision (b)(1) of Code of Civil Procedure section 581 governing voluntary dismissal prior to actual commencement of trial refers to a "written request of the plaintiff to the clerk" or an "oral or written request to the court."
In support of this argument, the parties also cite Kyle, supra, 71 Cal.App.4th 901, in which the plaintiff obtained a dismissal with prejudice by filing a request with the superior court clerk. The court determined that because trial had not commenced, the dismissal was proper under Code of Civil Procedure section 581 subdivisions (b) and (c). (Kyle, at p. 910.) Kyle stated in a footnote that it was not considering the application of section 581, subdivision (e) because "plaintiff did not proceed through the court but had the dismissal entered by the clerk." (Id. at p. 909, fn. 7.) As we will explain, that factual situation is not present here.
We note that the statutory language is unclear as to the procedure for making a request for dismissal with prejudice after commencement of trial under Code of Civil Procedure section 581, subdivision (e). However, even assuming, without deciding, that the request for dismissal must be made to the court instead of to the superior court clerk, Jeld-Wen made a request to the court. Specifically, in its "Objection to Court Hearing and Ruling Upon Defendants' Motions for Summary Judgment," Jeld-Wen sought relief from the trial court by stating, "Jeld-Wen . . . hereby renews its request that its voluntary dismissal be entered . . . ." Moreover, the subsequent hearing on Southcoast's ex parte application was, in substance, a lengthy plea from Jeld-Wen to the court to approve a voluntary dismissal with prejudice.
Indeed where, as here, the plaintiff contends that trial has not yet commenced so that Code of Civil Procedure section 581, subdivisions (b) and (c) permits the filing of a request for voluntary dismissal with the clerk, but the defendant contends that trial has commenced, so that subdivision (e) applies and requires a request for dismissal to the trial court, it would be unfair to require a plaintiff to apply, in the first instance, to the trial court for a voluntary dismissal. In such a case, it is reasonable to allow the plaintiff to fulfill whatever additional procedural requirements subdivision (e) imposes by making an informal request for dismissal to the trial court after learning of a defendant's objections to the dismissal.
Foshay, Pacific and KAS's second contention is that when a voluntary dismissal with prejudice is sought after the commencement of trial pursuant to Code of Civil Procedure section 581, subdivision (e), the trial court has discretion to decide whether to enter the dismissal. As we will explain, we disagree as we find no support in the statutory language or the case law for that proposition.
Indicating that the trial court has no discretion when a plaintiff requests to dismiss with prejudice after commencement of trial, the statutory language provides that "the court shall dismiss the complaint . . . , with prejudice, if the plaintiff requests a dismissal." (Code Civ. Proc., § 581, subd. (e), italics added.) " '[T]he presumption [is] that the word "shall" in a statute is ordinarily deemed mandatory . . . .' " (People v. Standish (2006) 38 Cal.4th 858, 869.)
In addition, " '[w]hen the Legislature has . . . used both "shall" and "may" in close proximity in a particular context, we may fairly infer the Legislature intended mandatory and discretionary meanings, respectively.' " (Tarrant Bell Property, LLC v. Superior Court (2011) 51 Cal.4th 538, 542.) This rule of statutory interpretation applies here because the next statutory subdivision states that "[t]he court may dismiss the complaint as to that defendant" in certain specified circumstances. (Code Civ. Proc., § 581, subd. (f).)
Further underscoring the mandatory nature of a voluntary dismissal with prejudice at the request of the plaintiff after commencement of trial in Code of Civil Procedure section 581, subdivision (e), is the contrasting discretion that the same provision gives the trial court discretion to enter a dismissal without prejudice after commencement of trial "on a showing of good cause." (Code Civ. Proc., § 581, subd. (e).)
We also find support for our statutory interpretation in case law that interprets a dismissal with prejudice under Code of Civil Procedure section 581, subdivision (e) as mandatory. (See D & J, Inc. v. Ferro Corp. (1986) 176 Cal.App.3d 1191, 1193 (D & J, Inc. ) [regarding a voluntary dismissal after trial commenced pursuant to former Code Civ. Proc., § 581, subd. (5), now Code Civ. Proc., § 581, subd. (e), the court stated, "Because the plaintiff initiated the request for dismissal, and because it was with prejudice, the court performed only a ministerial function in entering it."].)
Foshay, Pacific and KAS cite Vanderkous v. Conley (2010) 188 Cal.App.4th 111, 117, in support of their contention that the trial court has discretion to refuse to enter a dismissal with prejudice made pursuant to Code of Civil Procedure section 581, subdivision (e). We are not persuaded. The issue in Vanderkous concerned the timing of the plaintiff's attempt to dismiss the action with prejudice several days after the court had completed a bench trial and issued a statement of decision and an order granting relief. (Id. at p. 115.) Focusing on Code of Civil Procedure section 581, subdivision (d), which provides for a dismissal with prejudice "before the final submission of the case" when "the plaintiff abandons it" (ibid.), Vanderkous concluded that plaintiff's attempted dismissal constituted an abandonment and was barred because the case was already submitted. (Vanderkous, at p. 117.) In the course of its discussion, Vanderkous addressed plaintiff's argument that dismissal was mandatory under Code of Civil Procedure section 581, subdivisions (d) and (e): "Vanderkous maintains these provisions give a plaintiff 'the absolute right to file a dismissal with prejudice,' citing 6 Witkin, California Procedure (5th ed. 2008), Proceedings Without Trial, section 311, page 766. But that section of Witkin includes no such statement, and the following section instead states that 'a motion to dismiss under C.C.P. 581(d) is addressed to the court's discretion.' (Id., § 312, p. 768.)" (Vanderkous, at p. 117, fn. 5.) As the quote from Witkin makes clear, this statement addresses only whether a dismissal under Code of Civil Procedure section 581, subdivision (d) based on abandonment by the plaintiff is discretionary. To the extent that Vanderkous was purporting to address whether a trial court has discretion to reject a dismissal with prejudice under Code of Civil Procedure section 581, subdivision (e), it cites nothing to support that proposition and, as we have explained, such an interpretation is contrary to the plain statutory language.
Witkin states that "a motion to dismiss under C.C.P. 581(d) is addressed to the court's discretion." (6 Witkin, Cal. Procedure, supra, Proceedings Without Trial, § 312, p. 768.) However, the citations that Witkin provides do not lend support as they consider earlier statutory language and, in some instances, deal with requests to dismiss without prejudice rather than with prejudice. (Huntington Park Co. v. Superior Court (1911) 17 Cal.App. 692, 694 [statute — as discussed — provided for dismissal by the clerk, not by the court, and the opinion did not specify whether the plaintiff sought dismissal with or without prejudice]; Estate of Matthiessen (1935) 10 Cal.App.2d 323, 326 [plaintiff sought dismissal without prejudice during trial, and the statute regarding dismissal by the court upon abandonment by plaintiff during trial did not contain mandatory "shall" language]; Spellacy v. Superior Court (1937) 23 Cal.App.2d 142, 146 [statute — as discussed — provided for dismissal by the clerk before trial, not by the court, and the opinion did not specify whether plaintiff sought dismissal with or without prejudice].)
In sum, we conclude that pursuant to Code of Civil Procedure section 581, subdivision (e), the trial court was required to enter a dismissal with prejudice in response to Jeld-Wen's request. Further, because, as we have explained, the trial court had a mandatory duty to enter the dismissal with prejudice upon request from Jeld-Wen, and had no discretion to deny the request, we deem Jeld-Wen's dismissal with prejudice of KAS, AIW, Southcoast, Pacific, Foshay and Wall from the action to be effective as of Jeld-Wen's April 15, 2009 renewed written request for dismissal with the trial court.
Our statement that the dismissal is deemed to be effective as of the date of Jeld-Wen's request to the trial court is consistent with the rule that when a request for dismissal is made to the superior court clerk in the proper form, " 'the dismissal is effective immediately' " because the duty to dismiss is ministerial and not a matter of discretion. (S. B. Beach Properties v. Berti (2006) 39 Cal.4th 374, 380 (S. B. Beach Properties);see also Egly v. Superior Court (1970) 6 Cal.App.3d 476, 479-480 ["It has been held that the effect of the filing of a proper request for dismissal is 'ipso facto, to dismiss the case, even though the clerk fails to make entry thereof in the register.' "].) As we have explained, like the superior court clerk's entry of a request for dismissal prior to commencement of trial, the trial court's act in dismissing with prejudice pursuant to Code of Civil Procedure section 581, subdivision (e) is mandatory and has been described as "a ministerial function." (D & J, Inc., supra, 176 Cal.App.3d at p. 1193.)
A valid request for a mandatory dismissal under Code of Civil Procedure section 581 "deprive[s] the trial court of further jurisdiction in the matter (except, possibly, for the limited purpose of awarding costs and statutory attorney fees . . .)." (Gogri, supra, 166 Cal.App.4th at p. 273.) When, on appeal, a court determines that a voluntary dismissal should have been entered pursuant to the request of the plaintiff, a trial court's summary judgment ruling — made after the request for dismissal was rejected — is rendered void as in excess of the trial court's jurisdiction. (Id. at p. 274 [when, due to the plaintiff's valid request for dismissal, "the trial court did not have jurisdiction to decide the parties' summary judgment motions . . . , its order granting [defendant's] motion for summary judgment and judgment for [defendant] are void"]; Zapanta v. Universal Care, Inc. (2003) 107 Cal.App.4th 1167, 1174 ["We therefore find that appellants' request for dismissal without prejudice is valid and that the trial court exceeded its jurisdiction in granting respondents' motion for summary judgment."].)
Accordingly, because the trial court granted summary judgment in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall after it improperly rejected Jeld-Wen's request for dismissal of those parties from the action, the summary judgment rulings are void and in excess of the trial court's jurisdiction. We therefore reverse the summary judgment rulings in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall. B. The Trial Court Properly Awarded Defense Costs to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast Under Section 1038
We next consider Jeld-Wen's challenge to the defense cost award to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast.
1. KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast Were Entitled to an Award of Defense Costs Based on a Successful Summary Judgment Motion, Despite Jeld-Wen's Voluntary Dismissal with Prejudice of the Remaining Cause of Action for Breach of Contract
As we have explained, Cal-Coast moved for an award of defense costs under section 1038 even though Jeld-Wen had dismissed Cal-Coast from the action before Cal-Coast was able to file a summary judgment motion on the remaining breach of contract cause of action. Based on the discussion above, KAS, AIW, Southcoast, Pacific, Foshay and Wall are now in the same procedural posture as Cal-Coast. We have deemed Jeld-Wen's dismissal with prejudice of those parties to be effective as of April 15, 2009, and we have reversed the summary judgment ruling in their favor because those rulings are void. Therefore, the common question as to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast is whether Jeld-Wen's dismissal of them from this action with prejudice before they could obtain summary judgment on the sole remaining cause of action for breach of contract precluded the trial court from awarding them defense costs under section 1038.
It is well established that despite a voluntary dismissal with prejudice, the trial court retains jurisdiction to consider motions for attorney fees and costs if the underlying statute or contractual provision otherwise permits an award. (S. B. Beach Properties, supra, 39 Cal.4th at p. 380 ["a voluntary dismissal under [Code of Civil Procedure] section 581 does not deprive the trial court of jurisdiction over 'collateral statutory rights,' including 'the right to statutory costs and attorneys fees.' "].) The issue before us, therefore, is not one of jurisdiction. It is simply whether the requirements for an award of defense costs under section 1038 are satisfied in this instance.
To resolve that issue we turn to the applicable legal standard and to the procedural history of this action. Section 1038 provides:
"(a) In any civil proceeding under the California Tort Claims Act or for express or implied indemnity or for contribution in any civil action, the court, upon motion of the defendant or cross-defendant, shall, at the time of the granting of any summary judgment, motion for directed verdict, motion for judgment under Section 631.8, or any nonsuit dismissing the moving party other than the plaintiff, petitioner, cross-complainant, or intervenor, or at a later time set forth by rule of the Judicial Council adopted under Section 1034 determine whether or not the plaintiff, petitioner, cross-complainant, or intervenor brought the proceeding with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint, petition, cross-complaint, or complaint in intervention. If the court should determine that the proceeding was not brought in good faith and with reasonable cause, an additional issue shall be decided as to the defense costs reasonably and necessarily incurred by the party or parties opposing the proceeding, and the court shall render judgment in favor of that party in the amount of all reasonable and necessary defense costs, in addition to those costs normally awarded to the prevailing party. An award of defense costs under this section shall not be made except on notice contained in a party's papers and an opportunity to be heard.
"(b) 'Defense costs,' as used in this section, shall include reasonable attorneys' fees, expert witness fees, the expense of services of experts, advisers, and consultants in defense of the proceeding, and where reasonably and necessarily incurred in defending the proceeding.
"(c) This section shall be applicable only on motion made prior to the discharge of the jury or entry of judgment, and any party requesting the relief pursuant to this section waives any right to seek damages for
malicious prosecution. Failure to make the motion shall not be deemed a waiver of the right to pursue a malicious prosecution action.
"(d) This section shall only apply if the defendant or cross-defendant has made a motion for summary judgment, judgment under [Code of Civil Procedure s]ection 631.8, directed verdict, or nonsuit and the motion is granted."
We determined in the 2009 Opinion that because the statute does not expressly identify a successful summary adjudication motion as a ground for the recovery of defense costs under section 1038, a defendant who prevails on a summary adjudication motion in a civil proceeding under the California Tort Claims Act or for express or implied indemnity or for contribution is not eligible for an award under section 1038.
Turning to the relevant procedural history, we note that in 2007 each of the Defendants prevailed on summary judgment motions as to the causes of action for equitable indemnity, equitable contribution and declaratory relief. All of the Defendants, except Western, moved for an award of defense costs under section 1038 because they had, as provided by section 1038, prevailed in a summary judgment motion. The trial court granted the motions and awarded defense costs incurred after a certain date. In the 2009 Opinion, we rejected all but one of Jeld-Wen's challenges to the defense costs awarded to KAS, AIW, Southcoast, Pacific, Foshay, Wall and Cal-Coast. Specifically, we determined that because we had reversed the judgment on the pleadings that the trial court had entered in favor of AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall and Cal-Coast, those parties had "obtained summary adjudication rather than summary judgment." We therefore concluded that "[t]he ruling in favor of those parties under section 1038 must be vacated, as the premise for the trial court's ruling under section 1038 (i.e., success on a motion for summary judgment) no longer exists." We noted, however, that "[i]n the event that AIW, Foshay, KAS, National Roofing, Pacific, Southcoast, Wall, or Cal-Coast prevail on summary judgment or another motion specified in section 1038 during further litigation of this action, any of them may bring another motion for attorney fees under section 1038."
Now that further proceedings have occurred on remand, the precise question is whether, after Jeld-Wen's voluntary dismissal with prejudice of the remaining cause of action for breach of contract as to AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast, we can say — as required by section 1038 — that those defendants have "made a motion for summary judgment, judgment under [Code of Civil Procedure s]ection 631.8, directed verdict, or nonsuit and the motion [was] granted." (§ 1038, subd. (d).) The trial court directly addressed this issue as to Cal-Coast in ruling on Cal-Coast's renewed motion under section 1038. The trial court concluded that because Jeld-Wen had voluntarily dismissed the sole remaining cause of action for breach of contract, there was no bar to treating the summary judgment granted in 2007 as a summary judgment rather than a summary adjudication.
We agree with the trial court's analysis, and we apply it to AIW, Foshay, KAS, Pacific, Southcoast and Wall, as well as to Cal-Coast. In the 2009 Opinion, when we stated that the 2007 orders granting summary judgment had in effect become orders granting summary adjudication due to our revival of the breach of contract cause of action, we were operating under the assumption that Jeld-Wen would continue to litigate the breach of contract causes of action. However, Jeld-Wen's voluntary dismissal of the breach of contract cause of action as to AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast upon remittitur establishes that Jeld-Wen did not intend to pursue that cause of action. Therefore, by virtue of Jeld-Wen's voluntary dismissal of the breach of contract cause of action, the trial court's 2007 orders granting summary judgment on the equitable contribution, equitable indemnity and declaratory relief causes of action may properly be considered orders granting summary judgment, not summary adjudication. Because AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast were granted summary judgment in an action for equitable contribution and equitable indemnity, the procedural prerequisites for an award of defense costs under section 1038 are satisfied.
2. Jeld-Wen's Remaining Challenges to the Award of Defense Costs Under Section 1038 Are Without Merit
Having determined that Jeld-Wen's voluntary dismissal of the remaining cause of action for breach of contract upon remittitur does not bar AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast from obtaining an award of defense costs under section 1038, we now proceed to consider Jeld-Wen's other challenges to the defense cost awards.
a. An Award Under Section 1038 Is Available in a Suit for Contribution or Indemnity Against Private Party Defendants
Jeld-Wen contends that an award of defense costs under section 1038 is only available when the suit is against a public entity under the California Tort Claims Act. We addressed and rejected that argument in the 2009 Opinion. Our decision in the 2009 Opinion is law of the case, and we will not revisit our analysis here.
In a footnote in its opening brief, Jeld-Wen attempts to justify its reargument of this legal issue. It contends that (1) in the 2009 Opinion the court "specifically stated that it could not decide this issue because the legislative history was not in the Court record" and (2) the issue is properly before us again because "[t]he legislative history has now been incorporated into the record below . . . ." Jeld-Wen blatantly misreads the 2009 Opinion. In the 2009 Opinion, we rejected Jeld-Wen's attempt to rely on legislative history because we determined that the language of the statute clearly and unambiguously stated that section 1038 applied to suits against private parties for indemnity or contribution, not because Jeld-Wen failed to provide us with legislative history documents.
b. Jeld-Wen Did Not Have Reasonable Cause to Maintain the Action Against AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast
An award of defense costs under section 1038 is available only if the trial court determines that the plaintiff lacked reasonable cause to either bring or maintain the action. (§ 1038, subd. (a); Kobzoff v. Los Angeles County Harbor/UCLA Medical Center (1998) 19 Cal.4th 851, 862.) Repeating an argument that we already addressed and rejected in the 2009 Opinion, Jeld-Wen contends that the trial court erred in ruling Jeld-Wen lacked reasonable cause to maintain the action against AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast after a specific date. Jeld-Wen has provided no basis for us to revisit the analysis set forth in our 2009 Opinion, and we incorporate that analysis here.
Jeld-Wen states that the trial court should not have followed our decision in the 2009 Opinion that Jeld-Wen lacked reasonable cause to maintain the action against AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast as of a specific date because our decision was "dicta." Specifically, Jeld-Wen reasons that because the 2009 Opinion "determined that Defendants were not entitled to defense costs under [section] 1038," our decision that Jeld-Wen lacked reasonable cause to maintain the action was not necessary to the disposition and was thus dictum. It is difficult to understand what Jeld-Wen seeks to gain with its argument that the 2009 Opinion was dictum on the issue of reasonable cause. Jeld-Wen presented no reason to the trial court, and presents no reason on appeal, to deviate from our 2009 Opinion. Jeld-Wen's reargument of the issue is therefore a wasteful exercise in futility.
c. There Is No Merit to Jeld-Wen's Contention That the Defense Cost Award Under Section 1038 Was in Error Because an Insurance Carrier Paid Those Costs
In an argument similar to one we addressed in the 2009 Opinion with respect to an award of attorney fees under section 1717, Jeld-Wen contends that the trial court should not have awarded defense costs under section 1038 when those costs were paid by insurance carriers. For this argument Jeld-Wen relies on the same authorities it cited in support of the argument regarding an award of attorney fees under section 1717, and we reject the argument for similar reasons.
First, Jeld-Wen has failed to provide us with citations to the record to support its assertion that the defense costs incurred by AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast were paid by insurance carriers. We therefore decline to consider the argument. (City of Lincoln v. Barringer (2002) 102 Cal.App.4th 1211, 1239 [arguments not supported by adequate citations to record need not be considered on appeal].)
Second, the argument fails as a matter of law. As it did previously, Jeld-Wen cites a string of authority for the proposition that "[a] party cannot recover attorneys' fees which it has not paid out-of-pocket." These cases are inapposite because none of them deal with an award of defense costs under section 1038. Instead, each discusses whether a plaintiff in a breach of contract action may recover, as an item of damages, attorney fees that it did not actually incur. (Bramalea California, Inc. v. Reliable Interiors, Inc. (2004) 119 Cal.App.4th 468, 471-473; Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1089; Tradewinds Escrow, Inc. v. Truck Ins. Exchange (2002) 97 Cal.App.4th 704, 712.) AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast sought defense costs pursuant to section 1038 rather than as an item of damages. (See § 1038, subd. (a) [authorizing an award of "defense costs, in addition to those costs normally awarded to the prevailing party"].)
Turning to the statutory language, Jeld-Wen argues that defense costs paid by an insurance carrier cannot be recovered under section 1038 because the statute refers to "defense costs . . . incurred by the party." (§ 1038, subd. (a), italics added.) As a matter of policy, our Supreme Court has rejected the argument that the use of the term "incurred" in a fee-shifting statute requires that the party have incurred a payment from its own assets. "In practice, it has been generally agreed that a party may 'incur' attorney fees even if the party is not personally obligated to pay such fees." (Lolley v. Campbell (2002) 28 Cal.4th 367, 373.) "[I]n cases involving a variety of statutory fee-shifting provisions, California courts have routinely awarded fees to compensate for legal work performed on behalf of a party pursuant to an attorney-client relationship, although the party did not have a personal obligation to pay for such services out of his or her own assets." (Ibid.) Applying that policy here, we reject Jeld-Wen's contention that defense costs paid by insurance carriers may not be awarded in a motion brought pursuant to section 1038.
d. The Trial Court Did Not Abuse Its Discretion in Determining That the Defense Costs It Awarded Pursuant to Section 1038 Were Reasonably and Necessarily Incurred
The trial court is authorized by section 1038 to make an award of "all reasonable and necessary defense costs." (§ 1038, subd. (a).) As defined in section 1038, defense costs "include reasonable attorneys' fees, expert witness fees, the expense of services of experts, advisers, and consultants in defense of the proceeding, and where reasonably and necessarily incurred in defending the proceeding." (§ 1038, subd. (b).)
Jeld-Wen argues that the defense costs awarded by the trial court pursuant to section 1038 were not "reasonably and necessarily incurred in defending the proceeding." (§ 1038, subd. (b).) We apply a deferential standard of review. When making an award of attorney fees, "the trial court has broad authority to determine the amount of a reasonable fee." (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) "The determination of what constitutes the actual and reasonable attorney fees is committed to the sound discretion of the trial court. An appellate court will interfere with that determination only where there has been a manifest abuse of discretion." (Fed-Mart Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 228.) " 'The "experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong" ' — meaning that it abused its discretion." (PLCM Group, at p. 1095.)
Jeld-Wen first contends that only those defense costs "incurred to file and obtain summary judgment on April 24, 2009" were reasonably and necessary incurred in defending the proceeding. Jeld-Wen provides no authority for this restrictive interpretation of section 1038, which would limit recovery to those fees incurred in a dispositive motion. Case law authorizes an award of defense costs incurred in numerous types of proceedings that take place during the course of litigation, not just dispositive motions. (Gonzales v. ABC Happy Realty, Inc. (1997) 52 Cal.App.4th 391, 395 [defense costs incurred on appeal]; Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 1002 [fees incurred in preparing an attorney fee motion].) The trial court was therefore well within its discretion to determine that the defense costs incurred in the course of the litigation were reasonable and necessary to defend the action and thus formed a proper basis for an award under section 1038.
Next, Jeld-Wen argues that the trial court should not have awarded defense costs incurred in the prior appeals because our dispositions in the 2008 Opinion and 2009 Opinion both stated that "[e]ach party is to bear its own costs." We reject this argument. We were referring in both opinions to statutorily available costs under rule 8.278(d). That rule specifically states that "[u]nless the court orders otherwise, an award of costs neither includes attorney's fees on appeal nor precludes a party from seeking them . . . ." (Rule 8.278(d)(2).) Further, we specifically stated in the 2009 Opinion that upon a renewed motion under section 1038, the trial court could award fees incurred during appellate proceedings in this action.
Jeld-Wen makes the same argument with respect to the trial court's order pursuant to section 1717 awarding Western the attorney fees it incurred in the previous appeals. We reject that argument for the same reason, namely that we did not intend to foreclose subsequent awards of attorney fees incurred on appeal, and the California Rules of Court preclude such an inference.
Jeld-Wen also contends that defense costs incurred on appeal by AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast, were not reasonably and necessarily incurred in defending the proceeding because Jeld-Wen prevailed in those appeals. The trial court addressed and rejected this argument, closely examining the manner in which the 2008 Opinion and the 2009 Opinion assisted AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast in obtaining a successful outcome in this litigation. We agree with the trial court's assessment. Specifically the defense costs incurred in the prior appeals were reasonably and necessarily incurred in defending the proceeding because (1) our prior opinions affirmed the rulings in favor of AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast on the causes for action for equitable contribution, equitable indemnity and declaratory relief; and (2) the 2009 Opinion resolved many of the issues underlying an award of defense costs under section 1038 in favor of AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast, and our decision formed the basis of those parties' subsequent success on their renewed section 1038 motions.
Similarly, Jeld-Wen argues that the defense costs incurred in obtaining fee awards that were reversed on appeal were not reasonably incurred. Jeld-Wen provides no authority for this proposition, and we reject it. The fee awards were not reversed on the ground that they lacked substantive merit or were inexpertly litigated. Instead they were reversed because of our subsequent appellate decisions that undermined the procedural basis for the fee awards. As the fee awards had merit at the time they were litigated, the trial court was well within its discretion to conclude that AIW, Foshay, KAS, Pacific, Southcoast, Wall and Cal-Coast reasonably and necessarily incurred fees in litigating those awards.
Jeld-Wen's final argument is that AIW, Foshay, KAS, Southcoast and Wall did not adequately support their motions for an award under section 1038 because they "failed to produce their attorneys' fees invoices to support their requests." This argument lacks merit. Each of those parties supported their motions with declarations from their attorneys establishing the defense costs incurred. "In California, an attorney need not submit contemporaneous time records in order to recover attorney fees . . . . Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records." (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559, citations omitted (Martino).)Therefore, AIW, Foshay, KAS, Southcoast and Wall adequately supported their motion for defense costs under section 1038. C. The Award of Attorney Fees to AIW, Foshay, KAS, Pacific, Southcoast and Wall Pursuant to Section 1717 Must Be Reversed Because the Breach of Contract Cause of Action Was Voluntarily Dismissed
Jeld-Wen challenges the award of attorney fees to AIW, Foshay, KAS, Pacific, Southcoast and Wall under section 1717 on the basis, among others, that it voluntarily dismissed the breach of contract cause of action as to those parties. As we will explain, this argument has merit.
Due to our decision that Jeld-Wen's voluntary dismissal of the remaining cause of action for breach of contract against AIW, Foshay, KAS, Pacific, Southcoast and Wall is deemed effective as of April 15, 2009, those parties are not prevailing parties on the breach of contract action for the purpose of an award of attorney fees under section 1717.
An award of attorney fees under section 1717 is available only to a prevailing party. (§ 1717, subd. (a).) The statute provides that "[w]here an action has been voluntarily dismissed . . . , there shall be no prevailing party for purposes of this section." (§ 1717, subd. (b)(2).) This provision precludes an award of attorney fees under section 1717 when the action has been voluntarily dismissed with prejudice pursuant to Code of Civil Procedure section 581, even after actual commencement of trial. (D & J, Inc., supra, 176 Cal.App.3d at p. 1195; Kelley v. Bredelis (1996) 45 Cal.App.4th 1819, 1837.)
Because we have deemed Jeld-Wen's voluntary dismissal of AIW, Foshay, KAS, Pacific, Southcoast and Wall to be effective as of April 15, 2009, those parties are not prevailing parties entitled to an award of attorney fees pursuant to section 1717. D. Under Section 1717 the Trial Court Properly Made an Award to Western of Attorney Fees Incurred on Appeal
Jeld-Wen asserts that for several reasons the trial court erred in making an award to Western of the attorney fees that it incurred in the prior appeals in this action. All of Jeld-Wen's arguments lack merit.
1. Western's Motion Was Timely
Jeld-Wen claims that Western's motion under section 1717 for attorney fees incurred in the first appeal (i.e., the appeal we addressed in the 2008 Opinion) was untimely because it was filed more than 40 days after the remittitur for the 2008 Opinion.
Pursuant to rule 3.1702(c)(1), a motion for attorney fees on appeal must be served and filed within the time for serving and filing a memorandum of costs, which under rule 8.278(c)(1) is 40 days after the clerk sends issuance of the remittitur. (Rules 3.1702(c)(1), 8.278(c)(1).) Jeld-Wen argues that the motion for attorney fees incurred in connection with the 2008 Opinion was untimely because the remittitur for that appeal issued on January 7, 2009, but Western did not file its motion for attorney fees under section 1717 until 126 days later on May 13, 2009. We disagree.
As Western correctly points out, jurisdiction did not vest in the trial court to consider an attorney fee motion brought by Western under section 1717 until after the remittitur issued for the 2009 Opinion. As we have explained, Code of Civil Procedure section 916, subdivision (a) states that, with certain exceptions not relevant here, "the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order." Jeld-Wen's second appeal — which we decided in the 2009 Opinion — challenged the legal basis for the trial court's award of attorney fees to Western under section 1717. Therefore, until remittitur issued on the 2009 Opinion, all proceedings were stayed to the extent they concerned an award of attorney fees to Western under section 1717. When the remittitur issued on the 2009 Opinion on April 9, 2009, the trial court regained jurisdiction over such proceedings. The relevant remittitur date for the purpose of Western's motion for attorney fees incurred on appeal is therefore the April 9, 2009 remittitur date for the 2009 Opinion, not the January 7, 2009 remittitur date for the 2008 Opinion. Western's May 13, 2009 motion for attorney fees was properly filed within 40 days of the April 9, 2009 remittitur.
2. Payment of Western's Attorney Fees by Its Insurance Carrier Does Not Bar an Award Under Section 1717
Without acknowledging that we already resolved the issue as a matter of law in the 2009 Opinion, Jeld-Wen contends that Western may not recover fees paid by its insurance carrier. Our decision rejecting that legal argument is law of the case, and we will not revisit it here.
3. The Trial Court Did Not Abuse Its Discretion in Concluding That Western's Attorney Fees Incurred on Appeal Were Reasonable
Jeld-Wen's last argument is that Western did not establish that the amount of attorney fees it sought was reasonable because it did not submit "the actual billing sheets to verify and support its request." As we have explained, "[t]estimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records." (Martino, supra, 182 Cal.App.3d at p. 559.) Western supported its attorney fee motion with declarations from its attorney setting forth the attorney fees incurred in the prior appeals, and the trial court was within its discretion to rely on those declarations to conclude that the fee amount was reasonable. E. National Roofing's Motion for Summary Judgment
The final issue is whether the trial court properly granted summary judgment in favor of National Roofing on the ground that Jeld-Wen's causes of action for equitable indemnity and declaratory relief are barred by collateral estoppel arising from the Pardee judgment.
1. Applicable Background
The Pardee Litigation was commenced by a complaint filed by Pardee against Jeld-Wen and two other contractors involved in the Project: National Roofing and Eagles (the Pardee Complaint). The Pardee Complaint alleged that, in connection with the Project, Jeld-Wen manufactured and installed the windows; Eagles performed lath, waterproofing and plastering work; and National Roofing performed roofing and waterproofing inspection services. The Pardee Complaint alleged that Pardee had incurred losses because of "water intrusion in the vicinity of the windows" at the Project, and it asserted causes of action against Jeld-Wen, Eagles and National Roofing for negligence, express indemnity, breach of implied and express warranty, and breach of contract, among others. According to National Roofing, it was never served with the Pardee Complaint.
Jeld-Wen filed a cross-complaint against Pardee, window installer Vision and Roes 1-200. Against Vision and Roes 101-200, Jeld-Wen's cross-complaint asserted causes of action for negligence, breach of contract, express and implied indemnity, contribution and declaratory relief. The cause of action for express and implied indemnity alleged that the conduct of Vision and Roes 101-200 "in whole or in part . . . contributed to the happening of the acts alleged in [the Pardee Complaint]."
As explained in the Pardee Opinion, "Eventually, Pardee and Eagles reached a settlement determined by the superior court to be in good faith. The settlement required Eagles to remain in this lawsuit and attend trial . . . ," and "[u]nder its settlement with Pardee, Eagles was required to pursue its cross-complaint against [Jeld-Wen] and Vision, and assign any recovered proceeds to Pardee." (Pardee Opn., supra, D038856 [nonpub. opn.].) ". . . Pardee, Summit, Eagles and Vision proceeded to jury trial." (Ibid.)
During the jury trial in the Pardee Litigation, several witnesses discussed National Roofing's role in performing waterproofing inspections at the Project. First, counsel for Jeld-Wen cross examined Lee Montgomery. Among other things, Montgomery confirmed that National Roofing's role was to ensure a watertight envelope around the buildings and that during his investigation at the Project, he found instances where National Roofing had missed leaks during its inspection. Second, counsel for Jeld-Wen cross-examined Edmund Hadvina, who testified that National Roofing was supposed to have monitored Eagles's work at the Project to ensure that the homes were waterproof. Third, Bayless Cobb testified that he was critical of National Roofing's supervision and waterproofing inspections on the Project. Fourth, Alvin Lester testified that Pardee did not use National Roofing as an expert during the repair of the leaking windows because Pardee had lost confidence in National Roofing.
National Roofing did not submit the portion of the trial transcript that describes the capacity in which Montgomery testified, but according to an undisputed statement in National Roofing's brief, Montgomery was Pardee's project superintendent at the Project.
According National Roofing's brief, Hadvina was National Roofing's inspector on the Project.
As explained in National Roofing's brief, Cobb was an architect called as a expert witness by Vision during trial.
National Roofing's brief states that Lester was Pardee's senior vice president of construction and purchasing.
The jury was instructed to fill out three special verdict forms. As described in the unpublished Pardee Opinion, supra, D038856, special verdict form No. 1 concerned Pardee's express indemnity theory against Jeld-Wen; special verdict form No. 2 concerned Eagles's implied equitable indemnity theory against Jeld-Wen and Vision; and special verdict form No. 3 concerned Jeld-Wen's negligence and indemnity claims against Vision. Two of the jury's findings on the special verdict forms are relevant here.
Question No. 25 on special verdict form No. 1 asked: "Assuming the combined negligence, fault and wrongful conduct of [Jeld-Wen] and of other persons whose negligence and fault and wrongful conduct contributed to [Pardee's] damage and the negligence of [Pardee] to be 100%, what percentage of such combined negligence and fault and wrongful conduct is attributable to [Pardee] and what percentage is attributable to [Jeld-Wen] and such other persons whose negligence and fault and wrongful conduct was a cause of the plaintiff's injury?" The jury assigned 15 percent of fault to Jeld-Wen; 75 percent of fault to Eagles; and 10 percent of fault to Pardee. The names of Jeld-Wen and Pardee were typed on the special verdict form in question No. 25 next to the line on which the jury filled out the percentage of fault attributable to those parties. The form also contained two blank lines — with "Other person" next to each line — on which the jury could identify the "Other person" and indicate the percentage of fault attributable to that person. The jury used one of the blank lines to indicate the fault attributable to Eagles, but it left blank the remaining line on which it could have filled in an additional "Other person."
Question No. 6 and question No. 16 on special verdict form No. 3 were nearly identically worded. They asked: "Assuming the combined negligence and fault and wrongful conduct of Vision and of other persons whose negligence and fault and wrongful conduct contributed to [Jeld-Wen's] damage and [Jeld-Wen's] negligence[, if any,] to be 100%, what percentage of such combined negligence and fault and wrongful conduct is attributable to [Jeld-Wen] and what percentage is attributable to Vision and such other persons whose negligence and fault and wrongful conduct was a cause of [Jeld-Wen's] injury?" The jury answered both questions identically. It assigned 27 percent of the fault to Vision and 73 percent of the fault to Jeld-Wen. In addition, the jury left blank the line on which it could have filled in a percentage of the fault for "Others."
The offset phrase "if any" appeared in question No. 6, but not in question No. 16. Otherwise, the two questions were identical.
During jury deliberations, the jury raised a question about question No. 25 on special verdict form No. 1. Specifically, the jury asked " 'Who can we list in Question . . . 25[?]' " After discussion with counsel, the trial court instructed the jury: "Then as to Question 25, the two blanks for other person identified should be included, and are properly there in Question 25. The answer specifically . . . is you can put in whoever you would like if it's supported by the evidence. If you know the name of whoever that 'other' would be, you can designate that person or company by — when I use the 'person,' refers to company as well. You can designate that 'other' by name. Or if you don't know the name by trade. Again, if its supported by the evidence. If you find that to be the case." As we have explained, the jury chose to identify Eagles as one of the "Other person[s]" in question No. 25, but it left a blank for the additional "Other person," choosing not to specify National Roofing.
2. Applicable Legal Standards
The trial court concluded that the facts set forth above gave rise to collateral estoppel against Jeld-Wen on the issue of whether National Roofing was at fault for any of the losses that Jeld-Wen incurred as a result of the water intrusion at the Project, and thus barred Jeld-Wen's causes of action for equitable indemnity and declaratory relief. As "[t]he existence of collateral estoppel is a legal question," we conduct a de novo review of the trial court's decision. (Mills v. U.S. Bank (2008) 166 Cal.App.4th 871, 895 & fn. 24 (Mills).)
We first examine the applicable legal standards. "The doctrine of collateral estoppel, or issue preclusion, . . . is firmly embedded in both federal and California common law. It is grounded on the premise that 'once an issue has been resolved in a prior proceeding, there is no further fact-finding function to be performed.' " (Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 864, fn. omitted (Murray).)The doctrine of collateral estoppel applies "only if several threshold requirements are fulfilled. First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 (Lucido).) "The party seeking the benefit of the doctrine . . . need not have been a party to the earlier lawsuit" (Arias v. Superior Court (2009) 46 Cal.4th 969, 985 (Arias)),which means that a party's "loss of a particular dispute against a particular opponent in a particular forum may impose adverse and unforeseeable litigation consequences far beyond the parameters of the original case." (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829 (Vandenberg).)
"Collateral estoppel is a distinct aspect of res judicata." (Murray, supra, 50 Cal.4th at p. 866.) "A second aspect of res judicata, commonly referred to as 'claim preclusion' or simply '[r]es judicata,' 'prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.' " (Mills, supra, 166 Cal.App.4th at p. 895, fn. 25.) Because National Roofing was not a party to the Pardee Litigation, the applicable doctrine here is issue preclusion, not claim preclusion.
"[E]ven where the minimal prerequisites for invocation of the doctrine are present, collateral estoppel ' "is not an inflexible, universally applicable principle; policy considerations may limit its use where the . . . underpinnings of the doctrine are outweighed by other factors." ' [Citations.] [¶] Whether collateral estoppel is fair and consistent with public policy in a particular case depends in part upon the character of the forum that first decided the issue later sought to be foreclosed. In this regard, courts consider the judicial nature of the prior forum, i.e., its legal formality, the scope of its jurisdiction, and its procedural safeguards, particularly including the opportunity for judicial review of adverse rulings." (Vandenberg, supra, 21 Cal.4th at p. 829.) "[T]he purposes of the collateral estoppel doctrine" are "promoting judicial economy by minimizing repetitive litigation, preventing inconsistent judgments that undermine the integrity of the judicial system, and providing repose by preventing a person from being harassed by vexatious litigation." (People v. Lawley (2002) 27 Cal.4th 102, 163 (Lawley).) The party asserting collateral estoppel bears the burden of establishing that the requirements for the application of the doctrine are present. (Lucido, supra, 51 Cal.3d at p. 341.)
"The elements of a cause of action for indemnity are (1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible." (Expressions at Rancho Niguel Assn. v. Ahmanson Developments, Inc. (2001) 86 Cal.App.4th 1135, 1139 (Expressions).)If we determine that the Pardee judgment collaterally estops Jeld-Wen from litigating whether National Roofing was at fault for water intrusion at the Project, Jeld-Wen would not be able to establish the shared fault necessary to prevail on its cause of action for equitable indemnity against National Roofing or its related cause of action for declaratory relief.
3. The Requirements of Collateral Estoppel Are Satisfied
We proceed by examining (1) each of the five factors that must be present for an application of collateral estoppel; and (2) whether application of the doctrine in this case is fair and consistent with public policy.
a. Identical Issues
The first issue is whether "the issue sought to be precluded from relitigation" is "identical to that decided in a former proceeding." (Lucido, supra, 51 Cal.3d at p. 341.) "The 'identical issue' requirement addresses whether 'identical factual allegations' are at stake in the two proceedings, not whether the ultimate issues or dispositions are the same." (Id. at p. 342.)
When comparing this action and the Pardee Litigation, we conclude that identical factual issues were at stake. In the Pardee Litigation, the jury was asked in question No. 25 on special verdict form No. 1 and question Nos. 6 and 16 on special verdict form No. 3 to determine whether any other person was at fault for the water intrusion at the Project. Jeld-Wen was financially interested in establishing that persons other than itself — including National Roofing — shared fault for the water intrusion because such a finding would reduce its liability to Pardee. The jury did not identify National Roofing as a responsible person, even though it heard evidence concerning National Roofing's role at the Project. The issue of whether National Roofing was at fault for the water intrusion at the Project was therefore a factual issue at stake in the Pardee Litigation. The issue of whether National Roofing was at fault for the water intrusion at the Project was also presented in this action in Jeld-Wen's cause of action for equitable indemnity against National Roofing and its related cause of action for declaratory relief, because, as we have explained, to prevail on an equitable indemnity claim, a plaintiff must make "a showing of fault on the part of the indemnitor." (Expressions, supra, 86 Cal.App.4th at p. 1139.)
In the course of discussing the "identical issues" requirement, Jeld-Wen cites Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal.App.4th 846, 852, and argues that "[c]ollateral estoppel only applies if ' "the very same facts and no others are involved in the second case . . . ." ' " Jeld-Wen contends that "there are facts relevant to [National Roofing's] negligence and Jeld-Wen's claim for Equitable Indemnity that were not involved in the [Pardee Litigation]." If Jeld-Wen means to argue that a party can escape collateral estoppel merely by presenting additional facts in the second proceeding that it neglected to present in the first action, the argument is wrong. Collateral estoppel arises " 'on issues which were raised, even though some factual matters or legal arguments which could have been presented were not.' "(Mills, supra, 166 Cal.App.4th at p. 896.) Further, Flores is not applicable in this case because the prior judgment at issue in Flores did not involve the same factual scenario in that "[t]he loan agreement and deed of trust involved . . . were signed by different parties under different circumstances." (Flores, at p. 852, italics added.) In contrast, both this action and the Pardee Litigation involve the identical factual situation of water intrusion at the Project and the identical issue of whether any party other than Jeld-Wen — including National Roofing — was at fault for it.
b. Actually Litigated
Second, we examine whether the issue of National Roofing's fault for water intrusion at the Project was "actually litigated in the former proceeding." (Lucido, supra, 51 Cal.3d at p. 341.) "For purposes of collateral estoppel, an issue was actually litigated in a prior proceeding if it was properly raised, submitted for determination, and determined in that proceeding. In considering whether these criteria have been met, courts look carefully at the entire record from the prior proceeding, including the pleadings, the evidence, the jury instructions, and any special jury findings or verdicts." (Hernandez v. City of Pomona (2009) 46 Cal.4th 501, 511.) " 'A determination may be based on a failure of . . . proof. . . .' " (People v. Sims (1982) 32 Cal.3d 468, 484.) " 'Clearly, a former judgment is not a collateral estoppel on issues which might have been raised but were not; just as clearly, it is a collateral estoppel on issues which were raised, even though some factual matters or legal arguments which could have been presented were not.'" (Mills, supra, 166 Cal.App.4th at p. 896.)
In this case, the pleadings, the evidence, the jury instructions and the special verdicts establish that the issue of National Roofing's fault for the water intrusion at the Project was actually litigated. The pleadings show that Jeld-Wen was clearly aware of National Roofing's possible fault for the water intrusion, as the Pardee Complaint named National Roofing as a defendant. Further, as we have described, the jury heard testimony from various witnesses critical of National Roofing's performance at the Project in its role of inspecting the houses to ensure they were waterproof. The trial court's instructions to the jury in response to its inquiry about question No. 25 on special verdict form No. 1 made clear that the jury could name any other person that it found to be responsible for the water intrusion if supported by the evidence, and that such persons could be other companies or trades that worked on the Project. Therefore, in choosing not to specify National Roofing as an "Other person" at fault in question No. 25 on special verdict form No. 1, or as one of the "Others" at fault in question Nos. 6 and 16 on special verdict form No. 3, the jury actually litigated whether National Roofing shared fault for the water intrusion at the Project. Moreover, collateral estoppel still applies even though Jeld-Wen may not have presented all of the evidence regarding National Roofing that it would have sought to introduce at trial in this action. (Mills, supra, 166 Cal.App.4th at p. 896.)
Jeld-Wen contends that the issue of National Roofing's fault was not actually litigated because "the only issues litigated in Jeld-Wen's Cross-Complaint in the [Pardee Litigation] were claims against Vision Glazing, not [National Roofing]." We are not limited to the pleadings in determining what issues were actually litigated. (Hernandez, supra, 46 Cal.4th at pp. 511-512.) Here, the evidence at trial, the jury instructions and the special verdict forms all establish that that the issue of National Roofing's fault was actually litigated.
To the extent that Jeld-Wen is arguing that National Roofing's fault for the water intrusion was not actually litigated because National Roofing was not sued in Jeld-Wen's cross-complaint, that fact alone does not prelude a determination that collateral estoppel applies, as there is no requirement that the party asserting collateral estoppel have been a party to the prior proceeding. (Arias, supra, 46 Cal.4th at p. 985; Vandenberg, supra, 21 Cal.4th at p. 828.)
c. Necessarily Decided
National Roofing must also establish that the identical issue was "necessarily decided in the former proceeding." (Lucido, supra, 51 Cal.3d at p. 341.) "An issue is ' "necessarily decided" ' in a prior proceeding if the issue was not ' "entirely unnecessary" to the judgment' in the prior proceeding." (Mills, supra, 166 Cal.App.4th at p. 896.)
Jeld-Wen argues that "[a] cause of action for Equitable Indemnity permits indemnity based on comparative fault," and "[s]ince [National Roofing] was not a party at the underlying trial, any allocation of fault to [National Roofing] was entirely irrelevant and unnecessary." According to Jeld-Wen, for this reason "[a]n allocation of liability to [National Roofing] was not determined in the [Pardee Litigation]." We disagree.
Although no cause of action for equitable indemnity against National Roofing was at issue in the Pardee Litigation, because of how the special verdict forms were formulated, the issue of whether National Roofing was at fault for water intrusion at the Project was "not ' "entirely unnecessary" to the judgment.' " (Mills, supra, 166 Cal.App.4th at p. 896.) Specifically, question No. 25 in special verdict form No. 1 asked the jury to apportion fault between Jeld-Wen and other persons. The jury's apportionment of fault was then used by the trial court in its judgment to determine the amount of Jeld-Wen's liability to Pardee. If another party, such as National Roofing had been found to bear some of the fault assigned to Jeld-Wen, the amount of the judgment against Jeld-Wen would have been less. Similarly, the jury's apportionment of fault in question Nos. 6 and 16 in special verdict No. 3 was used by the trial court to arrive at Vision's liability to Jeld-Wen on the cross-complaint, and the judgment would have been in a different amount if another party, such as National Roofing, had been found to share the fault assigned to Vision. Therefore, the issue of National Roofing's fault was not entirely unnecessary to the judgment.
d. Final and on the Merits
Collateral estoppel only arises if "the decision in the former proceeding [is] final and on the merits." (Lucido, supra, 51 Cal.3d at p. 341.) There is no dispute that this requirement is met. The Pardee judgment was affirmed on appeal in 2004.
e. Jeld-Wen Was a Party to the Pardee Litigation
"Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding." (Lucido, supra, 51 Cal.3d at p. 341.) Jeld-Wen was a party in the Pardee Litigation and is a party here.
We therefore conclude that all five of the factors necessary for an application of collateral estoppel are present here.
f. Equitable Principles Do Not Foreclose Application of Collateral Estoppel in This Instance
As we have explained, the application of collateral estoppel is not automatic "even where the minimal prerequisites for invocation of the doctrine are present" because " ' "policy considerations may limit its use where the . . . underpinnings of the doctrine are outweighed by other factors." ' " (Vandenberg, supra, 21 Cal.4th at p. 829.)
Jeld-Wen contends that it would be inequitable to apply collateral estoppel here because we determined in the 2008 Opinion that a triable issue of material fact existed as to whether National Roofing was at fault for the water intrusion at the Project. Similarly, Jeld-Wen contends that its success in the 2008 Opinion and 2009 Opinion "indicates its claims are not vexatious, so collateral estoppel should not apply." We reject this argument because we decided completely different issues in the prior appeals. National Roofing did not previously raise collateral estoppel as a basis for summary judgment, and we address it for the first time. Jeld-Wen's prior success on appeal does not preclude its loss on the issue of collateral estoppel here.
Jeld-Wen contends that it would be inequitable to apply collateral estoppel here because it did not have "an incentive" and "a full and fair opportunity to litigate its claims against [National Roofing]" in the Pardee Litigation. For this argument, Jeld-Wen relies on the principle that " ' "[c]ollateral estoppel may be applied only if due process requirements are satisfied. . . ." ' Stated differently, where, as here, the party to be estopped was a party who participated in the earlier proceeding, due process requires that this party must have had an adequate incentive to fully litigate the issue in the prior proceeding . . . , and must have had a fair opportunity to pursue his claim the first time . . . ." (Murphy v. Murphy (2008) 164 Cal.App.4th 376, 404, citations omitted.) According to Jeld-Wen, it did not have a full and fair opportunity to litigate the issue of National Roofing's fault for water intrusion at the Project during the Pardee Litigation because National Roofing was not a party, which limited the type of discovery Jeld-Wen could obtain and prevented it from presenting expert testimony concerning National Roofing's fault for the water intrusion. This argument is completely speculative. Jeld-Wen points to nothing in the record to indicate that it was prevented from litigating the issue of National Roofing's shared fault for the water intrusion. If Jeld-Wen perceived that it was hampered by the fact that National Roofing was not a party, it could simply have added National Roofing as a cross-defendant and could have pursued its claims against National Roofing in the context of the Pardee Litigation rather than waiting for this action. Further, during the Pardee Litigation Jeld-Wen "had an adequate incentive to fully litigate" National Roofing's shared fault for the water intrusion at the Project (id. at p. 404) because, as we have explained, a finding that another party shared fault for the water intrusion would have lessened the percentage of Jeld-Wen's own fault and the amount of Jeld-Wen's liability to Pardee.
Collateral estoppel exists to promote judicial economy "by minimizing repetitive litigation [and] preventing inconsistent judgments that undermine the integrity of the judicial system." (Lawley, supra, 27 Cal.4th at p. 163.) That policy is promoted by applying collateral estoppel here because Jeld-Wen already litigated in the Pardee Litigation the issue of other parties' fault for the water intrusion at the Project, and judicial economy would suffer and inconsistent judgments could result if Jeld-Wen is afforded a second opportunity to do so here.
We therefore conclude that the trial court properly granted summary judgment in favor of National Roofing on the ground that the collateral estoppel arising from the Pardee judgment precludes Jeld-Wen from pursuing its causes of action for equitable indemnity and declaratory relief against National Roofing. F. Cal-Coast's Motion for Sanctions
Cal-Coast has filed a motion requesting that we sanction Jeld-Wen on the ground that the portion of the appeal pertaining to Cal-Coast is frivolous.
Rule 8.276(a) gives the appellate court the authority to "impose sanctions . . . on a party . . . for: [¶] (1) Taking a frivolous appeal or appealing solely to cause delay . . . ." Code of Civil Procedure section 907 states that "[w]hen it appears to the reviewing court that the appeal was frivolous or taken solely for delay, it may add to the costs on appeal such damages as may be just."
"[A]n appeal should be held to be frivolous only when it is prosecuted for an improper motive — to harass the respondent or delay the effect of an adverse judgment — or when it indisputably has no merit — when any reasonable attorney would agree that the appeal is totally and completely without merit." (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) Thus, we may impose sanctions either when an appeal indisputably has no merit, or when it is filed for an improper purpose.
As we have described, Jeld-Wen's appeal challenges the trial court's award of defense costs to Cal-Coast pursuant to section 1038. The threshold issue presented by Jeld-Wen's appeal is whether Jeld-Wen's voluntary dismissal of the action as to Cal-Coast following the remittitur from the 2009 Opinion foreclosed Cal-Coast from establishing that it had prevailed on a summary judgment motion within the meaning of section 1038. Although we have concluded that in light of Jeld-Wen's voluntary dismissal of the remaining cause of action for breach of contract, the 2007 summary judgment ruling in favor of Cal-Coast was sufficient to support a motion for defense costs under section 1038, it was not frivolous for Jeld-Wen to argue otherwise. No controlling authority addressed the procedural situation presented by this action, and it was reasonable for Jeld-Wen to advocate that the voluntary dismissal after we revived the breach of contract cause of action precluded Cal-Coast from establishing that it had prevailed on summary judgment for the purposes of a motion under section 1038. We therefore cannot conclude that Jeld-Wen's argument on that issue indisputably lacked merit or was filed for an improper purpose.
We are more troubled, however, by two other arguments that Jeld-Wen advanced to challenge the trial court's award of defense costs under section 1038 to Cal-Coast. As we have explained above, Jeld-Wen reasserts two arguments that we already rejected in the 2009 Opinion. Specifically Jeld-Wen argues that (1) an award of defense costs under section 1038 is only available when the suit is against a public entity under the California Tort Claims Act, and (2) the trial court erred in concluding that Jeld-Wen lacked reasonable cause to maintain the action against Cal-Coast after September 7, 2006. Jeld-Wen has not set forth any reasonable basis for rearguing those issues.
We have discretion to impose sanctions for an appeal that is frivolous as to some issues, when, as here, those issues are a significant and material part of the appeal. (Maple Properties v. Harris (1984) 158 Cal.App.3d 997, 1010 ["Sanctions for an appeal which is partially frivolous are appropriate if the frivolous claims are a significant and material part of the appeal."].) Here, we will decline to exercise our discretion to impose sanctions for the reason that the remedy that Cal-Coast seeks, namely an award of the attorney fees it incurred in this appeal, will be available to it in a further motion pursuant to section 1038 in the trial court. Therefore, although we strongly disapprove of Jeld-Wen's reargument of issues that we extensively considered and decided in the 2009 Opinion, we deny Cal-Coast's motion for sanctions.
On the last page of their appellate briefs, KAS and Pacific request that they be awarded sanctions for Jeld-Wen's filing of a frivolous appeal. We deny these request because they were not made in a motion filed pursuant to rule 8.276(b). Western also requests, without elaboration, that it "be awarded attorney fees and costs on appeal." If this is a request for sanctions, we deny it for the same reason as the other requests. If this is a request for an award of attorney fees pursuant to section 1717, Western should apply to the trial court for a determination of the reasonable amount of fees to award to Western in connection with this appeal. (Milman v. Shukhat (1994) 22 Cal.App.4th 538, 546 ["Although we possess the power to appraise and fix attorney fees, the better practice is to remand the cause to the trial court to determine the amount of such fees. [Citation.] . . . The trial court should, after the remittitur is filed, hear any application for attorney fees for services on appeal, and fix the reasonable amount thereof."].) We address Western's request for costs in the disposition, post.
DISPOSITION
The summary judgment rulings in favor of KAS, AIW, Southcoast, Pacific, Foshay and Wall are reversed. The awards of attorney fees under Civil Code section 1717 to KAS, AIW, Southcoast, Pacific, Foshay and Wall are reversed. The award of attorney fees under section 1717 to Western is affirmed. The summary judgment in favor of National Roofing is affirmed. In all other respects the judgments are affirmed. Except for Western and Cal-Coast, who shall recover their costs on appeal, the parties are to bear their own costs on appeal.
Consistent with rule 8.278(d)(2), our statement that the parties are to bear their own costs on appeal "neither includes attorney's fees on appeal nor precludes a party from seeking them . . . ." (Ibid.).
IRION, J. WE CONCUR:
HUFFMAN, Acting P. J.
NARES, J.