Opinion
A129670 A130837
01-04-2012
DARWIN RICHARDS, Plaintiff and Appellant, v. S.J. AMOROSO CONSTRUCTION CO., INC., Defendant and Respondent. SYMMETRY DEVICE RESEARCH, INC., et al., Plaintiffs and Appellants, v. S.J. AMOROSO CONSTRUCTION CO., INC., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. RG08-406695)
Appellant Symmetry Device Research, Inc. (SDRI) was a subcontractor on a public works project for construction of a community college facility in Berkeley. SDRI and its principal, Darwin Richards, sued both the general contractor and the community college district asserting claims for extra work. The trial court granted pretrial dispositive motions on most of the claims, and the general contractor paid a remaining disputed amount, expressly to avoid the costs of trial. The trial court then dismissed the final claim on the subcontractor's motion, entered judgments for the defendants, and awarded costs and fees to the defendants.
The subcontractor and its principal have filed separate appeals from judgments entered in favor of each defendant, challenging the rulings on the dispositive motions, the form of one judgment, and the awards of costs and fees. On our own motion, we have consolidated the appeals for purposes of argument and decision. We conclude that SDRI and Richards have timely appealed only from the judgments and from the cost and fee award against the public entity. We lack jurisdiction to review the other cost and fee awards. We affirm the judgments and the cost and fee award to the public entity.
I. BACKGROUND
In August 2004, S.J. Amoroso Construction Co., Inc. (Amoroso) entered into a written contract with Peralta Community College District (Peralta) to build the Vista Community College Permanent Campus (later renamed Berkeley City College) in Berkeley, California (Project). Amoroso then entered into a written subcontract (Subcontract) with SDRI to perform commissioning coordination on the Project. SDRI would be paid $41,500 to perform this work "subject to additions and deductions for changes in the work, made in accordance with Paragraph F of the General Subcontract Provisions . . . ." Paragraph F required prior notice and a written change order before the subcontractor performed work that would require additional compensation (hereafter, notice and change order procedure). Pursuant to a December 2004 change order, the Subcontract price was increased by $3,000 to $44,500. The Subcontract also included a provision requiring written consent before contractual rights could be assigned to others, and a fee-shifting provision. The Subcontract was signed on behalf of SDRI by Darwin Richards, who was identified as its chief technical officer.
"Section 2 - SCOPE" stated: "SUBCONTRACTOR agrees to . . . perform the work necessary or normally performed by SUBCONTRACTOR'S trade or incidental to complete commissioning coordination[] for the project in strict accordance with the Contract Documents and as more particularly, though not exclusively, specified in: DIVISION 1 - (AS IT APPLIES) 01810 - COMMISSIONING 15900 - CONTROLS AND INSTRUMENTATION 15970 - MECHANICAL COMMISSIONING (AS IT APPLIES) SUBCONTRACTOR acknowledges that its work may be described in locations within the Contract Documents other than those specifically identified above, and SUBCONTRACTOR certifies that it has carefully reviewed all of the Contract Documents to determine the extent of its work regardless of where located within the Contract Documents, and to determine the manner and place in which SUBCONTRACTOR'S work interferes with the work of other trades." In addition, "SECTION 3 - SPECIAL PROVISIONS" provided: "INCLUDES: Furnish commissioning coordination in accordance with the plans and specifications. [¶] EXCLUDES: Engineering change orders or statements of work not already contained in the plans or specification." The numbered references are to Project specifications.
Paragraph F of the General Subcontract Provisions provided: "CHANGES -SUBCONTRACTOR shall proceed with any Change to the Work upon receipt of written authorization from CONTRACTOR in the form of a Change Order, Field Directive, or Direction to Proceed and, absent such written authorization, SUBCONTRACTOR shall adhere strictly to the requirements of the Contract Documents. SUBCONTRACTOR shall notify CONTRACTOR in writing within five (5) work days of its having reason to be aware of an event which SUBCONTRACTOR believes entitles it to an increase in the Contract Price or Time (hereafter referred to as a 'Changed Condition'); however, if the Changed Condition is critical to work to be performed or planned during the five (5) days notice period, then SUBCONTRACTOR shall take all steps necessary to immediately notify the CONTRACTOR in writing of the onset of the Changed Condition. If SUBCONTRACTOR proceeds with extra work or work impacted by a Changed Condition without prior written authorization from CONTRACTOR, such work shall be deemed 'Unauthorized Work' even if it was directed verbally by CONTRACTOR or was directed in any form, written or otherwise, by OWNER or any other person or entity. SUBCONTRACTOR agrees that it shall not be paid or receive an extension of time for Unauthorized Work and SUBCONTRACTOR agrees that it shall be solely responsible for all costs resulting from its having proceeded with the Unauthorized Work or from its failing to notify CONTRACTOR timely of a Changed Condition, including the costs incurred in restoring, correcting or repairing the Work or in regaining the Project Schedule."
Paragraph T of the General Subcontract Provisions provided: "ASSIGNMENT OF CONTRACT - SUBCONTRACTOR shall not assign, transfer or sublet any portion or part of the work required by this Agreement or assign any payments hereunder to others without written consent of CONTRACTOR. If SUBCONTRACTOR is given written consent to assign, transfer or sublet any portion or part of the work, SUBCONTRACTOR shall bind its subcontractors assignees, or sublettors to all of the terms and provisions of this Agreement. No assignment, subcontract, or sublet shall be valid unless SUBCONTRACTOR has fully complied with the provisions of this paragraph."
Provision G of the General Subcontract Provisions, "CLAIMS AND DISPUTE RESOLUTION," included the following language: "Attorney and Consultant Fees - . . . If a dispute is not resolved by agreement, the prevailing party in arbitration or litigation shall be awarded their attorney and consulting fees and other costs as the trier of fact deems equitable under the circumstances. In determining the amount of such fees and costs to be awarded, the trier of fact may consider (a) the reasonableness of the costs incurred in view of the issues in dispute, (b) the reasonableness of the positions taken by the parties throughout the Dispute Resolution process, and (c) the degree of cooperation and good faith the parties exhibited throughout the Dispute Resolution process. In determining the prevailing party, the trier of fact shall apportion costs incurred before and after delivery of an unaccepted written settlement offer and, if a party failed to recover more than they declined to accept in response to a written settlement offer, the before and after costs shall be off-set or awarded accordingly."
Contract Disputes
A dispute arose about extra work SDRI allegedly was required to perform on the Project. In April 2008, SDRI invoiced Amoroso $121,307 for extra work it performed in Milpitas. In June, SDRI sent Peralta a pre-lien "Preliminary 20-Day Notice (Private Work)" pursuant to Civil Code sections 3097, 3111, 3241, and 3252 et seq. stating that Amoroso owed SDRI $121,307 for work performed on the Project. In August, it recorded a mechanic's lien on the Project property, and in October, it filed a stop notice against Peralta pursuant to Civil Code sections 3103 and 3179 et seq. claiming that $102,021.62 due to SDRI remained unpaid.
Plaintiffs later conceded this stop notice was invalid.
First Amended Complaint
In January 2009, SDRI and Richards (Plaintiffs) filed a first amended complaint against Peralta and Amoroso (collectively Defendants). SDRI was represented by counsel and Richards appeared in propria persona. Plaintiffs alleged that Richards was the president of SDRI, a Nevada corporation, and that he had been assigned SDRI's rights to receive payments from Defendants "and assigned certain duties regarding payment for labor performed," specifically "the obligation to pursue the receipt of payment from Defendants." The complaint stated a breach of contract claim against Amoroso, a stop notice action against Peralta, and unjust enrichment and declaratory relief claims against both Defendants.
SDRI initiated the lawsuit in August 2008, with a complaint naming only SDRI as plaintiff and suing Amoroso and Peralta for breach of contract and foreclosure of a mechanics' lien.
In support of their breach of contract claim, Plaintiffs alleged that SDRI performed its obligations under the Subcontract as well as extra work that was requested orally or in writing by Amoroso. The total value of SDRI's performance was $142,021.62 and payment had been demanded, but only $40,000 had been paid, with $102,021.62 still due. Under the stop notice cause of action, Plaintiffs alleged that they had given preliminary notice, filed a mechanic's lien, caused a stop notice to be given, and demanded payment from Peralta, but had not been paid the sums due. For the unjust enrichment claim, they alleged that they conferred a benefit on Defendants worth $102,021 and had not been paid. Finally, as to the declaratory relief claim, they alleged that a dispute had arisen between Plaintiffs and Defendants "regarding their rights, duties and obligations under the contract(s) and/or regarding the work done at the job including the labor provided by SDRI and payments therefor." Amoroso and Peralta separately answered the first amended complaint.
Plaintiffs fault Amoroso for filing an unverified answer to their verified first amended complaint. Plaintiffs have forfeited any objection to the error. " '[T]he proper objection where a party fails to verify a pleading is a motion to strike . . . which may be made only upon timely notice and provides for hearing and extension of time to answer.' [Citation.]" (Zavala v. Board of Trustees (1993) 16 Cal.App.4th 1755, 1761.) Plaintiffs failed to avail themselves of this remedy in the trial court and cannot complain of the lack of verification for the first time on appeal. (See ibid.)
Motion for Summary Judgment
On December 9, 2009, Defendants jointly filed a motion for summary judgment or adjudication. They argued that SDRI could not recover compensation for work performed on the Project, a public works project, because SDRI was not a licensed contractor; that Richards was likewise barred from recovering for the work because as assignee he stood in the shoes of SDRI; that the "extra work" for which SDRI claimed payment actually fell within the Subcontract scope of work; and that SDRI could not demand payment for what it alleged to be extra work because it failed to follow the notice and change order procedure in the Subcontract. In opposition, Plaintiffs questioned whether a contractor's license was required for the work performed within the scope of the contract (i.e., commissioning work) or for the extra work SDRI performed. Plaintiffs also claimed that any extra work that required a license was performed by SDRI under Amoroso's general contractor's license. Regarding the notice and change order procedure, Plaintiffs argued the extra work SDRI performed was outside the Subcontract and thus not subject to that contractual procedure, and also that written minutes of a meeting where Amoroso ordered the work should satisfy any writing requirement.
Previously, the trial court had granted in part a motion to dismiss the complaint pursuant to Corporations Code section 2203, subdivision (c) on the ground that SDRI failed to comply with Corporations Code section 2105, which requires foreign corporations to obtain a certificate of qualification from the Secretary of State before transacting business in California. The court abated the action and ordered SDRI to demonstrate compliance with the statute within 30 days or the action would be dismissed. SDRI filed a declaration of compliance on October 19, which apparently resolved the issue.
In March 2010, the court granted the motion in part. The court found the record was insufficient to support the conclusion that the work performed by SDRI under the Subcontract required SDRI to hold a contractor's license. Defendants thus failed to establish their entitlement to summary adjudication of a claim for payment of $4,452 allegedly due on the work performed by SDRI that was within the Subcontract scope. As to extra work SDRI allegedly performed that was the same type of work as that within the Subcontract scope (i.e., commissioning coordination), SDRI failed to comply with the notice and change order provisions of the Subcontract regarding extra work and thus forfeited its right to extra compensation. As to extra work of a different nature (i.e., heating, ventilation and air conditioning work), SDRI's recovery was barred under Business and Professions Code section 7031 because SDRI did not hold a contractor's license and could not claim coverage by Amoroso's license because it was not in an employment relationship with Amoroso. In sum, the court granted summary adjudication of Plaintiffs' claims as they applied to extra work SDRI allegedly performed on the Project and denied it insofar as Plaintiffs' claims applied to work within the original scope of the Subcontract (i.e., the claim for $4,452 allegedly still owed under the Subcontract).
Motions for Judgment on the Pleadings
Peralta and Amoroso also separately moved for judgment on the pleadings. Peralta argued Plaintiffs' claims were barred because they failed to comply with the claims presentation requirements of Government Code section 900 et seq.; because a public agency cannot be sued for unjust enrichment; because declaratory relief is not available when plaintiffs also assert a claim for damages; because any purported assignment to Richards was invalid; and because there could only be one plaintiff in the action. Amoroso argued Plaintiffs' claims were barred because a claim for express contract bars a claim for unjust enrichment; because declaratory relief is not available when plaintiffs also assert a claim for damages; because any purported assignment to Richards was invalid; and because there could only be one plaintiff in the action.
In opposition, Plaintiffs argued their claims for extra work arose outside the express Subcontract and thus the claim for unjust enrichment as to the extra work was not precluded. Moreover, there was no express contract between Richards and Defendants. On the assignment issue, Plaintiffs argued the Subcontract only prohibited assignments of the work to be performed and of payments SDRI owed to others without Amoroso's consent. SDRI assigned Richards the right to collect payments others owed to it, which was unaffected by the provision.
In March 2010, the court granted Peralta's motion for judgment on the pleadings in its entirety. On the stop notice claim, Plaintiffs had conceded during discovery that the stop notice SDRI filed was invalid. Plaintiffs' other claims against Peralta were barred by their failure to comply with government claim requirements. The court also ruled that the unjust enrichment claim could not be brought against a public agency and the declaratory relief action was barred because Plaintiffs had stated facts alleging a matured claim for breach of contract. The court thus dismissed all of Plaintiffs' claims against Peralta. It did not, however, then enter judgment.
The court granted Amoroso's motion for judgment on the pleadings in part. The court ruled that Plaintiffs' unjust enrichment claim could not be maintained in the face of their allegations of an express contract and their claim for declaratory relief was barred because they stated a matured claim for breach of contract. The court further found that the purported assignment to Richards of SDRI's claim for payment under the Subcontract was invalid because the Subcontract prohibited assignments without Amoroso's written consent, which SDRI had not obtained. In sum, the court granted judgment on the pleadings for Amoroso on both Plaintiffs' claims for unjust enrichment and declaratory relief and on Richards' claim for breach of contract.
The trial court specifically provided that, following these rulings on the dispositive motions, the only remaining claim in the action was SDRI's breach of contract claim against Amoroso for $4,452 still purportedly owed on the Subcontract, as modified by a written change order.
Amoroso's Payment of $4,452 Plus Interest
At a March 12, 2010 hearing where the court announced its ruling on the motions for judgment on the pleadings, Amoroso stated that it would tender payment of the amount allegedly due on the Subcontract rather than incur the cost of trial, although it denied liability. After a recess, SDRI's counsel informed the court that Amoroso "agreed to pay the principal amount $4,452. They want three more days to see if the client will pay $778 of interest on top of that. Whatever gets paid[] . . . will be within ten days from now. . . . [¶] We are of the mind to brief the issues on whether attorney's fees are allowed or not allowed as a cost, I'll let you decide . . . ."
In March 2010 correspondence (submitted to the trial court by Defendants in support of their initial motion for fees and costs), Defendants acknowledged that "[p]ursuant to the stipulation reached last Friday, . . . to avoid the costs of trial and motion practice on the interest issue S.J. Amoroso will pay the principal sum of $4,452.00 plus $778.00 legal interest within ten (10) business days of the March 12, 2010 hearing. This will be payment in full under the [Subcontract] . . . . [¶] As stipulated at the hearing, [Amoroso] reserves all rights related to attorneys' fees and costs in this action" against both SDRI and Richards. In a letter dated a few days later, defense counsel confirmed delivery of a $5,230 check to SDRI.
At a June 17, 2010 hearing, the parties implicitly acknowledged that Amoroso had paid SDRI the outstanding amount allegedly due on the Subcontract plus interest.
Judgments
Shortly after the trial court's rulings on the dispositive motions, the parties filed cross-motions for fees and costs. The court denied the motions as premature because no judgment or dismissal had yet been entered and directed the parties to submit proposed judgments or orders of dismissal. In objections to the form of judgment then submitted by Defendants, Plaintiffs argued the parties should stipulate to a dismissal pursuant to Code of Civil Procedure section 581d, and argued they were prevailing parties because they recovered a net monetary recovery in the action (i.e., Amoroso's $5,230 payment in March 2010).
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
On July 13, 2010, the court signed a judgment in favor of Amoroso only and against Richards. The judgment stated: "IT IS HEREBY ORDERED that judgment is entered for Defendant S.J. Amoroso Construction Co., Inc. against Plaintiff Darwin Richards. [¶] Plaintiff Darwin Richards to receive nothing from Defendant S.J. Amoroso Construction Co., Inc. [¶] Defendant S.J. Amoroso Construction Co., Inc. to recover costs upon a Memorandum of Costs and attorney's fees upon noticed motion." Richards filed his Notice of Appeal from this judgment on September 10, 2010.
No judgment was entered in Peralta's favor because Peralta claimed a right to fees under section 1038, an issue required to be raised before entry judgment. (§ 1038, subd. (c).) The court reserved entry of judgment pending resolution of that issue. No judgment was entered in Amoroso's favor against SDRI because a breach of contract claim remained pending.
At a June 17, 2010 hearing, SDRI's counsel did not dispute that the amount allegedly claimed by SDRI on the remaining breach of contract claim had been paid. Counsel for Amoroso argued that the claim should be dismissed by SDRI as moot or, in the alternative, Amoroso would move for summary judgment of this sole remaining claim. Plaintiffs expressed concern that a voluntary dismissal might prejudice their ability to establish their alleged prevailing party status as the parties receiving a net monetary recovery (i.e., the March payment of $5,230). On the other hand, SDRI needed a final judgment in order to appeal the court's adverse rulings on the dispositive motions. SDRI's counsel suggested a section 581d dismissal.
On August 10, 2010, Plaintiffs moved to dismiss their complaint because they "have now been paid about $5,000 from AMOROSO for their work on PERALTA's building in Berkeley, CA." They submitted evidence that they had been paid the cited amount and stated, "That payment from AMOROSO was given to RICHARDS, the principal of SDRI and to whom the right to this payment was assigned under Civil Code [section] 953 et seq. The payment was given without any formal settlement agreement and no voluntary dismissal has occurred under [section] 581." Defendants opposed the motion to dismiss and filed their own motion for summary judgment on the claim.
On November 5, 2010, the court ruled: "[T]he Court understands the purpose of Plaintiffs' Motion to be to finally resolve the one remaining claim in SDRI's action against [Amoroso] in order that SDRI may proceed to appeal the Court rulings otherwise disposing SDRI's claims by way of summary adjudication (Court Order dated March 11, 2010) and judgment on the pleadings (Court Order dated March 12, 2010), and to do so without implicating the general rule that a party may not appeal after voluntarily dismissing its complaint." Thus construed, the motion was granted and SDRI's remaining claim against Amoroso was dismissed with prejudice. The court added, "This dismissal is not intended to be treated as 'voluntary', or to otherwise foreclose Plaintiffs' right to appeal. (See Ashland Chemical Co. v. Provence (1982) 129 Cal.App.3d [7]90, 792-793.) [¶] Judgment for [Amoroso] as against all claims by SDRI is hereby entered." (Italics added.) The court denied Amoroso's motion for summary judgment as moot in light of the court's dismissal of the claim on Plaintiffs' motion. On January 3, 2011, Plaintiffs appealed from the November 5, 2010 judgment for Amoroso and against SDRI.
As previously noted, judgment for Peralta and against Plaintiffs was reserved until the court resolved Peralta's request for fees under section 1038.
Peralta Fee Motions, Memoranda of Costs and Judgment
In August 2010, Peralta moved for a determination of entitlement to costs and to "defense costs" pursuant to section 1038. Section 1038 provides for recovery by a prevailing public agency of attorney fees when a party brings an action without reasonable cause or a good faith belief that there was a justifiable controversy. In opposition, Plaintiffs argued in part that they, rather than Peralta, were the prevailing parties because they had a net monetary recovery in the action. In September 2010, the court granted Peralta's motion. The court noted that Peralta had prevailed on all of the claims brought against it by Plaintiffs and thus clearly was the prevailing party. The court found that Plaintiffs brought the action against Peralta without reasonable cause and without a good faith belief that there was a justifiable controversy under the facts and law and thus Peralta was entitled to recover reasonable and necessary defense costs under section 1038, the amount of which would be determined by separate motion.
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 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."
Peralta moved for an award of $147,041.25 in costs and fees from Plaintiffs. In opposition, Plaintiffs again argued in part that they were the true prevailing parties. They further argued the action was in good faith and with reasonable cause as shown by the fact that they prevailed in part.
On November 10, 2010, the court granted the motion and ordered Plaintiffs jointly and severally to pay Peralta $121,190 in defense costs pursuant to section 1038, subdivision (b) and an undetermined amount of costs pursuant to section 1032. To the extent these amounts "include compensation for work performed for the joint benefit of Peralta and [Amoroso], duplicative recovery of those same fees by [Amoroso] from either Richards or SDRI will not be permitted." In the same order, the court entered judgment for Peralta against SDRI and Richards in the amount of $121,190 "plus costs pursuant to California Rules of Court 3.1700." Plaintiffs appealed from this judgment on January 3, 2011.
Peralta filed a memorandum of costs. In a motion to tax costs, Plaintiffs argued in part that they were the prevailing parties in the action. On January 19, 2011, the court granted in part the motion to tax Peralta's costs. The court granted Peralta $5,140.85 in costs, payable jointly and severally by SDRI and Richards. "To the extent that any of the costs . . . were shared by [Amoroso] and also claimed by [Amoroso] on its Memorandum of Costs, recovery of those shared costs by either defendant will serve to satisfy Richards' and SDRI's obligation to reimburse both. [¶] In order to establish a clear record, the Court will enter a Final Judgment, Amended and Revised, in favor of Peralta and [Amoroso] against Richards and SDRI, reflecting all awards of defense costs and attorney's fees. The Final Judgment will supersede all earlier judgments entered for and against these parties."
Amoroso Fee Motions and Memoranda of Costs
In July 2010, Amoroso filed a memorandum of costs against Richards. In a motion to tax, Richards again argued that he was the prevailing party on the net monetary recovery theory. In August 2010, Amoroso moved for an award of attorney fees against Richards. In opposition, Richards again argued in part that he was the prevailing party.
In late November 2010, Amoroso filed a memorandum of costs against SDRI. SDRI filed a motion to tax. In December 2010, Amoroso filed a motion for fees from SDRI and a notice revising the amount of fees it sought from Richards. In opposition, Plaintiffs again argued that they were the true prevailing parties in the action.
On January 19, 2011, the court awarded Amoroso costs and fees against both Plaintiffs. The court awarded Amoroso $13,691.51 in costs, payable jointly and severally by Richards and SDRI, and provided that there would be no duplicate recovery of costs. The court awarded Amoroso $150,712.75 in fees payable jointly and severally by both Plaintiffs and provided there would be no duplicate recovery of fees. Again the court wrote that it would enter a final judgment to clarify the record.
Final Judgment
On January 19, 2011, the court filed a "Final Judgment, Amended and Revised." After cataloging all the prior dispositive orders on the merits, fees and costs in the case, the court entered judgment as follows: "I) Peralta takes from Richards and SDRI, jointly and severally, the amount of $22,574.35. [¶] II) [Amoroso] takes from Richards and SDRI, jointly and severally, the amount of $60,647.76. [¶] III) Peralta and [Amoroso] together take from Richards and SDRI, jointly and severally, the amount of $103,756.50. [¶] This final judgment amends and supersedes all early judgments and orders of dismissal as between and among Peralta, [Amoroso], Richards and SDRI." Plaintiffs did not separately appeal from this final judgment.
Plaintiffs' January 25, 2011 requests (in both appeals) that we take judicial notice of the January 19, 2011 judgment is denied because the judgment is already part of the record, as it was included in the Supplemental Clerk's Transcript in appeal No. A130837 filed pursuant to California Rules of Court, rule 8.155(b) on February 28, 2011. Plaintiffs properly designated the record in appeal No. A129670 as part of the record in appeal No. A130837. (See Cal. Rules of Court, rule 8.147(b)(1).)
On February 22, 2011, Defendants moved to dismiss appeal No. A130837 because it was taken from the November 2010 judgments, which had been superseded by the January 2011 judgment, thus rendering the appeal moot. We denied the motion because the January 2011 judgment did not substantively change the November 2010 judgments and thus did not render the appeal moot. Defendants also argued, in the event we denied the motion to dismiss (and assuming the court did so because it construed Plaintiffs' appeal as a premature appeal from the January 2011 judgment), that they should be allowed to augment the record "to include additional proceedings relevant and necessary to the matters appealed." We denied the request. "Because the parties treat the appeal as being from the November [2010] judgments, respondents have not shown that there is good cause to augment the record to include material pertinent to the issues newly decided by the trial court on January 19, 2011. Therefore, the augmentation requested by respondents is inappropriate at this time." On June 2, 2011, Defendants filed a further motion to augment the record in appeal No. A130837, which we granted on June 30, 2011. In our June 30, 2011 order, we directed the parties "to address, in the respondents' brief and appellants' reply brief, whether this court has jurisdiction, pursuant to appellants' January 3, 2011 notice of appeal, to address arguments directed to the trial court's post-judgment award of fees and costs, dated January 19, 2011."
II. DISCUSSION
A. Appeal No. A130837
In appeal No. A130837, SDRI appeals the November 5, 2010 judgment in favor of Amoroso and against SDRI, and both Plaintiffs appeal the November 10, 2010 judgment in favor of Peralta. Plaintiffs also purport to appeal from fee and cost awards to both Defendants.
1. Summary Adjudication of Extra Work Claims
Plaintiffs first challenge the trial court's March 2010 grant of summary adjudication as to their claims for compensation for extra work.
Summary adjudication of a claim is appropriate "if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to [adjudication] as a matter of law." (§ 437c, subds. (c), (f).) The party moving for summary adjudication bears the burden of showing there is no triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) "There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Ibid., fn. omitted.) An order granting or denying summary adjudication is reviewed de novo. (Id. at p. 860.)
Plaintiffs have forfeited this issue on appeal because, while they argue that the trial court failed to draw all reasonable inferences from the evidence in their favor, they fail to cite or discuss the evidence presented in support of or in opposition to summary adjudication. (Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1115 (Guthrey) [appellate court may treat as waived any factual contentions not supported by a citation to the record].) In their reply brief, they contend their verified complaint constitutes evidence on the issue, but this is incorrect. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 720, fn. 7 [parties cannot rely on verified pleadings as evidence in support of or in opposition to summary judgment].) In their reply brief, Plaintiffs refer to an unspecified declaration by Richards, without citation to the appellate record, but this belated and inadequate discussion of the record is insufficient to overcome Plaintiffs' forfeiture of the claim. (See REO Broadcasting Consultants v. Martin (1999) 69 Cal.App.4th 489, 500 (REO Broadcasting) [refusing to entertain an argument raised for the first time in a reply brief].)
Plaintiffs erroneously cite the evidence they produced in opposition to Amoroso's August 2010 motion for summary judgment of SDRI's claim for $4,452 due on the work it performed under the Subcontract. Although Plaintiffs filed a declaration by Richards in opposition to the March 2010 summary judgment motion, they do not cite it on appeal in support of their challenge to the court's ruling on the motion. Nor do they cite or discuss any of the evidence Defendants produced in support of their summary judgment and adjudication motions.
In any event, Plaintiffs' challenge to the summary adjudication order fails on the merits. Plaintiffs argue that no contractor's license was required for the extra work they performed; that the extra work did not fall within the scope of the Subcontract and thus was not subject to any of the Subcontract's terms; and that if the extra work was subject to the Subcontract's terms, SDRI's compliance with the notice and change order procedure (and the nonassignment clause) was excused because Amoroso had already breached the contract (anticipatory breach theory).
On the contractor's license requirement, Plaintiffs cite no legal authority. Therefore, their argument is again forfeited. (Guthrey, supra, 63 Cal.App.4th at pp. 1115-1116 [appellate court may deny claim on appeal that is unsupported by citations to the record or legal argument that applies legal principles to the particular facts of the case on appeal].) Moreover, the trial court's analysis of this issue appears sound. Although the court concluded there was a triable issue about whether a contractor's license was required for commissioning coordination work, which included the extra work performed in Milpitas, the court also concluded that Plaintiffs' claim for compensation for that work was barred by their failure to comply with the notice and change order procedure, an issue we discuss post. As to other extra work " 'related to the Variable Air Volume units[']," the court conclude a contractor's license was required: "Plaintiffs assert that this work was originally the responsibility of the HVAC subcontractor, Kent Lim. (Richard's [sic] declaration at paragraph 13.) . . . If, . . . in fact[,] [this] was work that should have been done by the HVAC contractor, then Plaintiffs['] recovery for that work is barred by Business and Professions Code § 7031." The court's reference to Plaintiffs' evidence is accurate, and Defendants' evidence and legal authority also supported this result. It was undisputed that Plaintiffs lacked a contractor's license, and the court persuasively rejected Plaintiffs' argument that they could perform the work under the aegis of Amoroso's general contractor's license. Because Defendants met their burden of establishing that Plaintiffs' claims for compensation for the Variable Air Volume units (VAV) extra work was barred by Business and Professions Code section 7301 and Plaintiffs failed to establish an exception to the statute, the court properly granted summary adjudication of these claims.
Plaintiffs next suggest that, even if the extra work was the same type of work as was required under the Subcontract, it was not subject to the Subcontract's terms because it was the subject of a separate oral contract between the parties. However, under the Subcontract SDRI "agree[d] . . . to perform the work necessary or normally performed by SUBCONTRACTOR'S trade or incidental to complete commissioning coordination for the project . . . ." (Italics added.) There is no dispute that the extra work was performed on the Project, not some other construction project. Therefore, if the extra work was commissioning coordination, it fell within the scope of work covered by the Subcontract.
Finally, Plaintiffs argue they were released from any obligation to comply with the notice and change order procedure because Amoroso had breached the contract. Plaintiffs did not raise this theory in the trial court nor did they present evidence in opposition to this motion that would have supported the theory, i.e., evidence that Amoroso had breached the Subcontract. Even on appeal, Plaintiffs do not establish Amoroso had breached the contract at the time Plaintiffs learned they needed to perform the extra work and were required to provide notice and obtain a change order. In any event, Plaintiffs fail to explain how Amoroso's alleged breach—failure to make a final payment of $4,452—justified Plaintiffs' rescission or abandonment of the Subcontract, much less Plaintiffs' noncompliance with selective terms of the Subcontract. (See Integrated, Inc. v. Alec Fergusson (1967) 250 Cal.App.2d 287, 296.)
As Amoroso explains on appeal, "[U]nder any scenario SDRI's breach of the notice and change order requirements in 2005 and 2007 . . . came well before the release of any funds to [Amoroso] with which to pay SDRI." Peralta had "withheld monies from [Amoroso] based on SDRI's invalid stop notice." The stop notice was filed in October 2008. "Ultimately it took a Court order to invalidate SDRI's stop notice," and that invalidation necessarily took place after October 2008. "Pursuant to the Subcontract payment provisions, no monies were ever owed to SDRI until [Amoroso] received payment therefor[] from [Peralta]." That is, even assuming Amoroso's alleged failure to pay SDRI $4,452 was a breach of the Subcontract (which Amoroso disputes), the breach occurred no earlier than October 2008, which was well after SDRI itself breached the contract by failing to comply with the notice and change order procedures. This timeline of events is not disputed by Plaintiffs.
We affirm the trial court's grant of summary adjudication to Peralta and Amoroso of SDRI's claims for compensation for extra work performed on the Project.
2. Motions for Judgment on the Pleadings
Plaintiffs challenge "the March 2010 judgment on the pleadings." A motion for judgment on the pleadings "is equivalent to a demurrer and is governed by the same standard of review. All material facts that were properly pleaded are deemed true, but not contentions, deductions, or conclusions of fact or law. If leave to amend was not granted, we determine whether the complaint states a cause of action and whether the defect can reasonably be cured by amendment. If the pleading defect can be cured, the trial court committed reversible error. If not, we affirm. The plaintiff bears the burden of proof on this issue. Finally, the judgment will be affirmed if it is proper on any grounds raised in the motion even if the court did not rely on those grounds. [Citation.]" (Pang v. Beverly Hospital, Inc. (2000) 79 Cal.App.4th 986, 989.)
Plaintiffs have forfeited this issue on appeal. Their sole argument, in two brief paragraphs, is that "the lower court had to presume that all of the alleged facts in the operative complaint were true, and the pleadings had to be liberally construed. [Citations.] [¶] That meant it was an error to dismiss the claims against PERALTA. [Citation to Jan. 2011final judgment.] [¶] That means SDRI and RICHARDS should have been allowed to proceed with their claims against PERALTA for work done (on the subcontract and for extra work), all of which benefited PERALTA (and all of which was done at the specific request of PERALTA's agent, AMOROSO.)" This argument addresses only Peralta's motion, not Amoroso's. Plaintiffs' failure to argue on appeal that the trial court erred in granting Amoroso's motion under an appropriate heading forfeits the issue. (Cal. Rules of Court, rule 8.204(a)(1)(B); 300 DeHaro Street Investors v. Department of Housing & Community Development (2008) 161 Cal.App.4th 1240, 1257.) As to Peralta's motion, Plaintiffs' argument simply urges us to reverse the trial court's order without discussing Peralta's arguments in the motion, Peralta's legal authority, or Peralta's or the court's application of the law to Plaintiffs' allegations. Plaintiffs thus have wholly failed to meet their burden on appeal to demonstrate error by the trial court. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564; see also Guthrey, supra, 63 Cal.App.4th at pp. 1115-1116 [appellate court may deny claim on appeal that is unsupported by legal argument applying legal principles to the particular facts of the case on appeal].)
In their reply brief, Plaintiffs belatedly raise two arguments attacking the court's rulings. (See REO Broadcasting, supra, 69 Cal.App.4th at p. 500 [refusing to entertain an argument raised for the first time in a reply brief].) On the government claim requirements (which the court cited as a bar to all their claims for damages), they argue that Amoroso complied with the requirements on behalf of all of the Project subcontractors. However, Plaintiffs cite no evidence or legal authority in support of this argument, again resulting in forfeiture. (Guthrey, supra, 63 Cal.App.4th at pp. 1115-1116.) Moreover, they failed to raise the issue below. (Ward v. Taggart (1959) 51 Cal.2d 736, 742 (Ward).)
On the declaratory relief claim (which the trial court ruled was duplicative of the breach of contract claim), Plaintiffs argue they need a declaration of their rights under three separate contracts—the Peralta-Amoroso general contract, which was incorporated into the Subcontract; the Subcontract; and the oral contract for extra work—which presumably was not precluded by their matured breach of contract claim. They did not raise this argument in the trial court. (Ward, supra, 51 Cal.2d at p. 742.) Moreover, as legal authority for the argument they merely cite section 1060, which allows for a declaratory relief action to determine parties' rights "under a contract"; they do not address the authority relied upon by Peralta, which holds, "Declaratory relief operates prospectively to declare future rights, rather than to redress past wrongs. [Citation.] Where, as here, a party has a fully matured cause of action for money, the party must seek the remedy of damages, and not pursue a declaratory relief claim. [Citation.]" (Canova v. Trustees of Imperial Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497 (Canova).) Plaintiffs do not contend that any of the three alleged contracts was still being performed nor did they request a declaration of specific rights under any of the three contracts.
Plaintiffs do not raise any claim of error as to their stop notice and unjust enrichment claims against Peralta. SDRI does not raise any claim of error as to its unjust enrichment claim against Amoroso. In sum, the trial court properly granted judgment on the pleadings on all of Plaintiffs' claims against Peralta and on SDRI's unjust enrichment and declaratory relief claims against Amoroso.
a. Amoroso Judgment Against SDRI
SDRI argues the trial court erred by entering judgment for Amoroso and against SDRI. SDRI contends that, in light of Amoroso's payment of the $4,452 allegedly owed on SDRI's outstanding contract claim plus interest, the proper disposition of the case was a judgment for SDRI and against Amoroso with no money due. Such a judgment, SDRI contends, would have entitled it to costs and attorney fees as the prevailing party in the case.
Plaintiffs moved to dismiss their complaint "under [section] 581d since [Plaintiffs] have now been paid about $5,000 from AMOROSO for their work on PERALTA's building in Berkeley, CA." Section 581d simply prescribes the manner of recording a dismissal and the effect of the dismissal: "A written dismissal of an action shall be entered in the clerk's register and is effective for all purposes when so entered. [¶] All dismissals ordered by the court shall be in the form of a written order signed by the court and filed in the action and those orders when so filed shall constitute judgments and be effective for all purposes, and the clerk shall note those judgments in the register of actions in the case." Although section 581d provides that dismissal orders "shall constitute judgments," it does not dictate whether the judgment is for or against a particular party.
A plaintiff's power to voluntarily dismiss a claim or action without prejudice is governed by section 581. As relevant here, section 581 provides, "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." (§ 581, subd. (c).) However, case law establishes that a plaintiff loses this right to dismiss once a claim has been adjudicated on the merits by the court, even if a trial has not actually commenced. (Zapanta v. Universal Care, Inc. (2003) 107 Cal.App.4th 1167, 1171.) For example, once a court sustains a demurrer to certain claims without leave to amend, or sustains a demurrer with leave to amend and the plaintiff fails to amend within the allotted time, the plaintiff loses the right to dismiss the claims. (Id. at pp. 1171-1172, citing Groth Bros. Oldsmobile, Inc. v. Gallagher (2002) 97 Cal.App.4th 60, 64, 70 & Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 785.) By the time Plaintiffs filed their motion to dismiss, the court had already granted judgment on the pleadings to Peralta on all of Plaintiffs' claims against it and to Amoroso on all claims except breach of contract for failing to pay $4,452 allegedly due under the Subcontract. As to the adjudicated claims, Plaintiffs no longer had the right to voluntarily dismiss the claims without prejudice.
As to the sole remaining SDRI claim against Amoroso, SDRI still had the right to voluntarily dismiss the claim at the time it brought its motion to dismiss. This is true even though Amoroso had filed a motion for summary adjudication of the claim (and summary judgment of the action) and that motion was still pending. (See Zapanta, supra, 107 Cal.App.4th at pp. 1173-1174 [plaintiff had right to dismiss where no hearing on pending summary judgment motion had been held and no decision tantamount to an adjudication had yet been made in defendant's favor].) The trial court thus appropriately granted SDRI's motion.
SDRI impliedly faults the trial court for dismissing this claim with prejudice and for entering judgment for Amoroso "as against all claims by SDRI." Although SDRI argues the court should have entered judgment in its favor on the remaining contract claim, it provided the court with no basis to do so. Plaintiffs moved for voluntary dismissal of the claim pursuant to section 581, not summary adjudication of the claim pursuant to section 437c. Section 581 allows a plaintiff to dismiss a cause of action with or without prejudice. SDRI did not specify whether it wanted the court to dismiss the claim with or without prejudice. Ordinarily, when a plaintiff voluntarily dismisses a claim to expedite an appeal of an adverse prior ruling, the dismissal is with prejudice, thus making the plaintiff an aggrieved party with a right to appeal. (See Gutkin v. University of Southern California (2002) 101 Cal.App.4th 967, 974-975 [distinguishing voluntary dismissal without prejudice, which is not appealable, to voluntary dismissal with prejudice, which is appealable].) Moreover, because Plaintiffs informed the court that the amount that had allegedly been owed under the contract had in fact been paid, the court could reasonably infer that the dismissal was to be with prejudice as SDRI had no basis to renew the now satisfied claim in a separate action. Thus, the court reasonably dismissed the claim with prejudice, which self-evidently resulted in a judgment in Amoroso's favor. Plaintiffs forfeited any objection to the form of dismissal by failing to ask the trial court to modify the order and dismiss the claim without prejudice. In any event, while it might be argued that a dismissal without prejudice is not a judgment in a defendant's favor, we see no basis for regarding it as a judgment in SDRI's favor.
SDRI's primary concern in bringing the motion to dismiss was to resolve the action on the merits while preserving two rights: (1) its right to appeal the court's rulings on the summary adjudication motion and the motions for judgment on the pleadings, and (2) its right to argue that it was a prevailing party in the action as a whole or on certain causes of action. The court expressly ruled that SDRI retained those rights. SDRI has not established that the court erred in nevertheless entering judgment for Amoroso in the action.
b. Jurisdiction to Review Fee and Cost Awards
As noted ante, in our June 30, 2011 order we directed the parties "to address, in the respondents' brief and appellants' reply brief, whether this court has jurisdiction, pursuant to appellants' January 3, 2011 notice of appeal, to address arguments directed to the trial court's post-judgment award of fees and costs, dated January 19, 2011." Defendants argue the Plaintiffs failed to bring a timely appeal from the January 19, 2011 final judgment and that this court thus lacks jurisdiction to review the fee and cost awards included in that judgment. Plaintiffs argue their notice of appeal sufficed to encompass the subsequent fee and cost awards to Peralta and to Amoroso against SDRI. We first consider the law regarding our appellate jurisdiction to review a postjudgment cost or fee order when the appellant appealed only from the judgment and fails to appeal from postjudgment orders. We then apply that law to each of the two judgments appealed from.
i. Legal Authority
"A postjudgment order which awards or denies costs or attorney's fees is separately appealable[,] [citations], and if no appeal is taken from such an order, the appellate court has no jurisdiction to review it. [Citation.]" (Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 46, fn. omitted (Norman I. Krug).) The absence of jurisdiction is not subject to waiver, forfeiture or estoppel. (Id. at p. 47.) The issue can and must be raised by the appellate court sua sponte. (Hollister Convalescent Hosp., Inc. v. Rico (1975) 15 Cal.3d 660, 666-667.)
Where the judgment is silent as to costs and fees, this rule is easy to apply. (See Robinson v. City of Yucaipa (1994) 28 Cal.App.4th 1506, 1517.) However, where the judgment states that the party in whose favor the judgment is entered shall receive costs or fees, or both, but does not quantify the award or where the judgment states that costs and fees shall be settled in subsequent proceedings, application of the rule is more difficult and subject to debate.
In Grant v. List & Lathrop, the trial court entered judgment in favor of the defendants and awarded costs (which included contractual attorney fees) to the defendants but left the amounts of the awards blank, "presumably for later insertion by the clerk." (Grant v. List & Lathrop (1992) 2 Cal.App.4th 993, 996 (Grant).) The defendants thereafter filed memoranda of costs, the plaintiff moved to tax costs, and the court ordered specific amounts of costs awarded. The plaintiff appealed from the judgment, but not the later order awarding costs. (Ibid.) The court held that "when a judgment awards costs and fees to a prevailing party and provides for the later determination of the amounts, the notice of appeal subsumes any later order setting the amounts of the award." (Id. at p. 998; hereafter, the rule of Grant.)
Another division of this court has interpreted Grant, correctly in our view, to apply only where "the entitlement to fees was adjudicated by the original judgment, leaving only the issue of amount for further adjudication." (DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 44 (DeZerega).) Such was not the case in DeZerega itself. There, the original judgment "allowed 'costs of suit' but did not award attorneys' fees." (Id. at p. 43.) The court rejected the argument that, because contractual attorney fees are statutorily defined as costs, the allowance of costs in the judgment encompassed the later fee award. (Id. at p. 44; see Civil Code, § 1717, subd. (a); see also § 1033.5, subd. (a)(10).) The court observed that the parties clearly did not treat the judgment as having decided the defendant's entitlement to fees; on the contrary, the plaintiffs vigorously disputed that entitlement in their postjudgment motion to tax costs. (Id. at p. 44.) "The parties' conduct and the written record belie counsel's assertion at oral argument that after judgment was entered, nothing remained to be determined but the amount of the fee to be allowed. It follows that the order granting the motion for fees was the only one from which an appeal challenging the award would lie." (Ibid.)
Sometimes the intent to determine entitlement and amount of costs and fees in a postjudgment proceeding is made explicit in a judgment. (See Colony Hill v. Ghamaty (2006) 143 Cal.App.4th 1156, 1171-1172 [judgment stated, " 'Award of attorney's fees and costs shall be determined by post-judgment application' "].) Where the language of the judgment is ambiguous, courts have taken a holistic view of the case to determine whether the court intended and the parties understood that the issue of entitlement has or has not been settled by the judgment.
DeZerega is an example of this approach: although the judgment "allowed 'costs of suit,' " the court concluded that neither the court nor the parties understood this as a determination of entitlement to attorney fees (a form of costs). (DeZerega, supra, 83 Cal.App.4th at pp. 43-44.) Because the record established that the judgment did not determine entitlement to fees, the rule of Grant did not save the appellant from having failed to separately appeal from the fee award.
In Silver v. Pacific American Fish Co., Inc. (2010) 190 Cal.App.4th 688 (Silver), the court similarly concluded that that the record as a whole established the judgment did not determine entitlement to fees, despite ambiguous language in the judgment. In Silver, the judgment provided the defendant " 'shall recover . . . attorney fees and costs of suit,' but left a blank space for the amount." (Id. at p. 692.) However, the court's "statement of decision, on which the judgment [was] based, provided that '[the defendant], as prevailing party, may make an application for attorney's fees and costs by postjudgment motion for allowance of attorney's fees as an element of costs.' " (Ibid.) The appellate court inferred from that language that "the trial court intended, and the parties understood, that the issue of attorney fees would be the subject of a separate postjudgment application. Consistent with the trial court's intent and the understanding of the parties, [the defendant] argued in its motion the threshold issue of entitlement under Code of Civil Procedure section 1032 and Civil Code section 1717, contending it was the prevailing party under both statutes. [The plaintiff] opposed the motion arguing, inter alia, that [the defendant] was not the prevailing party. The minute order for the hearing on [the] attorney fees motion reflects that the trial court adjudicated both [the defendant's] entitlement to an award of attorney fees and the reasonableness of the amounts claimed." (Id. at pp. 692-693.) That is, the record as a whole clearly indicated that entitlement to attorney fees had not been decided in the judgment, but was determined later, thus bringing the case outside the rule of Grant.
Silver makes clear that the only issue the plaintiff was attempting to appeal was the award of attorney fees, not the award of other costs. (Silver, supra, 190 Cal.App.4th at pp. 691, 694.) Thus, we do not read Silver as holding that the judgment did not determine the defendant's entitlement to ordinary costs as a prevailing party.
In Fish v. Guevara (1993) 12 Cal.App.4th 142, the court applied a similar analysis to a postjudgment award of expert witness fees pursuant to section 998. In that case, the judgment "provided that defendants could recover from plaintiffs 'all costs, expenses and disbursements allowed by law . . . .' " (Id. at p. 144.) In their subsequent memoranda of costs, the defendants sought expert witness fees pursuant to section 998, which the court granted. (Ibid.) The appellate court held the case did not fall within the rule of Grant because the award of expert witness fees under section 998 was discretionary and thus the judgment for the defendant (and the allowance of costs) did not necessarily establish the defendants' entitlement to such discretionary fees. (Id. at pp. 147-148.) "An award of expert witness fees pursuant to section 998 is not incidental to the judgment but is instead a separately litigated issue. [Citation.] . . . [Therefore,] the propriety of a postjudgment award of expert witness fees cannot be reviewed on an appeal from the judgment." (Id. at p. 148.)
When applied to ordinary costs other than attorney fees or discretionary expert witness fees, the state of the case law is less clear. (See Norman I. Krug, supra, 220 Cal.App.3d at p. 46, fn. 4 [in dicta, suggesting routine allowance of costs in judgment never indicates determination of entitlement to costs such that case comes within rule of Grant]; DeZerega, supra, 83 Cal.App.4th at p. 44, fn. 10 [same]; see also Silver, supra, 190 Cal.App.4th at pp. 693-694 [in dicta, favorably quoting Norman I. Krug on this issue].) We need not weigh in on this unsettled area of law because, as we explain below, with respect the judgments before us either the judgments clearly include a determination of entitlement to costs (and fees), thus bringing the notice of appeal within the rule of Grant, or the record as a whole clearly indicates that the court intended and the parties understood that the entitlement to costs (and fees) would be determined in postjudgment proceedings, in which case the notice of appeal falls outside the rule of Grant.
ii. Appeal from Judgment for Amoroso and Against SDRI
We conclude SDRI has not timely appealed the award of costs and fees to Amoroso. SDRI appealed from the court's November 5, 2010 judgment against SDRI and in favor of Amoroso, "including costs awarded to [Amoroso] not already appealed, as a result of an order requiring such judgment and/or regarding a CCP Sec. 581d motion to dismiss, entered on Nov. 5, 2010."
Preliminarily, SDRI's anticipatory attempt to appeal from a future award of costs was ineffective. (Silver, supra, 190 Cal.App.4th at p. 691 [notice of appeal that purported to appeal from court's future order on pending motion for fees and costs ineffective where trial court had not yet indicated its intended ruling on the motion].) Thus, the notice of appeal from the judgment is effective as to the subsequent cost and fee orders only if the notice falls within the rule of Grant.
It does not. The appealed judgment says nothing about costs or fees. Instead, the court explained in the November 5, 2010 order that it would grant SDRI's motion to dismiss, clarified that the dismissal would not preclude SDRI from appealing the court's prior dispositive orders, and then announced a "Judgment for [Amoroso] as against all claims by SDRI." Not only was the judgment silent as to costs and fees, but the record clearly establishes that the court and the parties anticipated that the issues of entitlement to and amount of both costs and fees would be decided in postjudgment proceedings. At the June 17, 2010 hearing, SDRI had expressed concern that its dismissal of its outstanding claim against Amoroso not be determinative of the prevailing party issue (i.e., entitlement to costs and fees). Following the entry of judgment, Amoroso filed a memorandum of costs and motion for fees from SDRI. In its brief in support of the fee request, Amoroso argued that it was the prevailing party in the action under section 1032, subdivision (a)(4) and thus the prevailing party under Civil Code section 1717. In opposition, SDRI argued that it was the prevailing party entitled to costs and fees. Because the judgment was silent as to costs and fees and the parties clearly understood that entitlement to costs and fees and the amounts to be awarded would both be decided in postjudgment proceedings, we conclude that SDRI's appeal from the November 5, 2010 judgment did not encompass the court's subsequent award of fees and costs to Amoroso. Because that subsequent award was not separately appealed, we have no jurisdiction to review it.
iii. Appeal from Judgment for Peralta
We conclude Plaintiffs timely appealed the award of fees and costs to Peralta. Plaintiffs appealed from the trial court's November 10, 2010 order granting judgment to Peralta against both Plaintiffs, and which awarded Peralta $121,190 in attorney fees pursuant to section 1038. The notice of appeal expressly "include[d] defense costs [i.e., fees] awarded . . . as a result of an order regarding such judgment entered on Nov. 10, 2010." We have no difficulty concluding that Plaintiffs timely appealed the award of fees to Peralta.
On its face, the order is ambiguous on the issue of costs. The court wrote that section 1032 costs would be awarded in addition to section 1038 costs "if at all, pursuant to the procedure set forth in California Rule of Court 3.1700." The order concludes, "JUDGMENT IS HEREBY ENTERED for [Peralta] against [SDRI] and Darwin Richards in the amount of $121,190.00 . . . , plus costs pursuant to California Rules of Court 3.1700." However, the court had already determined Peralta's entitlement to costs in a prior proceeding. In August 2010, Peralta moved for a determination of its entitlement to costs and section 1038 "defense costs" (including fees), and in September the court granted the motion and declared Peralta the prevailing party. Although Plaintiffs continued to contest Peralta's status as the prevailing party in its postjudgment motion to tax costs, this does not change the fact that Peralta's entitlement to costs and fees had already been determined in the November 10 judgment. Therefore, Plaintiffs' notice of appeal subsumed the later order awarding a specific amount of costs. We thus proceed to the merits.
c. Award of Costs to Peralta Was Appropriate
Plaintiffs argue the trial court erred in awarding costs to Peralta. We affirm the award of costs.
"Unless otherwise provided by statute, a 'prevailing party' is entitled to recover costs in any action or proceeding 'as a matter of right.' (§ 1032, subd. (b); see § 1033.5, subd. (a)(10)(A)-(C) [allowable costs under § 1032 include attorney fees authorized by contract, statute, or law].) 'Prevailing party' for purposes of section 1032(a)(4) is defined as including: '[1] the party with a net monetary recovery, [2] a defendant in whose favor a dismissal is entered, [3] a defendant where neither plaintiff nor defendant obtains any relief, and [4] a defendant as against those plaintiffs who do not recover any relief against that defendant.' " (Goodman v. Lozano (2010) 47 Cal.4th 1327, 1333 (Goodman).) However, this definition of prevailing party is qualified by the express limitation in the text of the statute, "unless the context clearly requires otherwise." (§ 1032(a).) Moreover, "[i]f a party recovers anything other than monetary relief and in situations not specified above, a trial court shall determine the prevailing party and use its discretion to determine the amount and allocation of costs, if any. [Citations.]" (Goodman, at p. 1333.)
Plaintiffs contend they are entitled to costs as the prevailing party because they had a "net monetary recovery" in that Amoroso paid SDRI the amount allegedly owed on the remaining contract claim before the action was finally resolved on the merits. They argue Peralta is in the same position as Amoroso with respect to Plaintiffs' net monetary recovery because Peralta and Amoroso had a unity of interest.
On the "net monetary recovery" issue, Plaintiffs rely primarily on Reveles v. Toyota by the Bay, which held that a plaintiff had a net monetary recovery within the meaning of section 1032(a)(4) after the defendant, on the morning set for trial, agreed to pay the entire amount the plaintiff had previously demanded. (Reveles v. Toyota by the Bay (1997) 57 Cal.App.4th 1139, 1145-1146, 1151 (Reveles), overruled on other grounds by Snukal v. Flightways Manufacturing, Inc. (2000) 23 Cal.4th 754, 775, fn. 6 & Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal.4th 1246, 1261.) There was no judgment in Reveles; instead, the parties stipulated to an order that apparently declared the case settled and reserved the plaintiff's right to seek fees and costs. (Reveles, at pp. 1145-1146, 1147.) In subsequent proceedings to identify the prevailing party, the plaintiff submitted evidence of the defendant's liability on the merits of the settled cause of action. (Id. at p. 1146.) The court found that plaintiff had been entitled to a judgment in his favor on the merits and thus declared him the prevailing party. (Id. at p. 1148.) On the issue of costs, the appellate court held that "it cannot be seriously argued that Reveles, who obtained $9,300 from Toyota, did not obtain a 'net monetary recovery.' " (Id. at p. 1151.) The instant case is distinguishable from Reveles because the court here made no finding that Plaintiffs should have prevailed on the merits of the dismissed breach of contract claim. Moreover, our research has disclosed no other opinion holding that a plaintiff had a "net monetary recovery" in similar circumstances.
On the contrary, Kim v. Euromotors West/The Auto Gallery, which repeatedly cites Reveles, adopted a different analysis in comparable circumstances. (Kim v. Euromotors West/The Auto Gallery (2007) 149 Cal.App.4th 170, 174-175, 177-179, 181 (Kim).) Kim holds that a settlement that involved the dismissal of several claims against the defendant and a substantial payment to the plaintiff fell within the section 1032 category "situations other than as specified," thus making the award of costs discretionary. (Id. at p. 181.) Here, the payment to SDRI was not substantial in comparison to Plaintiffs' demands, there was no evidence that Peralta would have been liable for the amount paid by Amoroso (particularly with a defective stop notice), and the other claims against Defendants were adjudicated in Defendants' favor rather than dismissed by Plaintiffs pursuant to settlement. However, to the extent the facts of this case are similar to those of Kim, we conclude the case presents a situation "other than as specified," thus making the award of costs discretionary. It is clear from the trial court's award of fees to Defendants, including Amoroso, that the court would have awarded costs to Defendants as prevailing parties even if it viewed such an award as discretionary.
Defendants argue they were entitled to costs pursuant to section 1032 as "defendant[s] as against those plaintiffs who do not recover any relief against th[ose] defendant[s]." However, for the reasons just stated this case arguably falls within the "situations other than as specified" category of the statute, making the award of costs discretionary. Because we uphold the court's cost award under this analysis, we need not consider Defendants' argument that they were entitled to a nondiscretionary cost award under section 1032(a)(4).
Under the terms of the fee provision in the Subcontract and under Civil Code section 1717, the award of fees to Amoroso was effectively a discretionary determination requiring the weighing of several qualitative factors. (See Santisas v. Goodin (1998) 17 Cal.4th 599, 622 [if contractual fee provision does not define prevailing party, court should apply pragmatic definition]; General Subcontract Provisions, ¶ G [equitable factors govern amount of fees].)
Because we reject the arguments that Plaintiffs were entitled to prevailing party status as the parties with the "net monetary recovery" and that the trial court abused its discretion in declaring Amoroso the prevailing party despite its payment to SDRI, we need not address Plaintiffs' argument that Peralta shared Amoroso's status as the non-prevailing party due to their unity of interest. We affirm the trial court's cost award to Peralta.
d. Award of Section 1038 Fees to Peralta Was Appropriate
Plaintiffs argue the trial court erred in awarding fees to Peralta pursuant to section 1038. We disagree.
Section 1038 provides for an award of "defense costs reasonably and necessarily incurred by the party or parties opposing the proceeding" to a prevailing defendant "[i]n any civil proceeding under the California Tort Claims Act [Gov. Code, § 810 et seq.,]" following grant of summary judgment or certain other dispositive motions "[i]f the court should determine that the proceeding was not brought in good faith and with reasonable cause." Good faith is a question of fact that we review for substantial evidence and reasonable cause is a legal question we review de novo. (Hall v. Regents of University of California (1996) 43 Cal.App.4th 1580, 1586 (Hall).)
Plaintiffs did not argue in the trial court and do not argue here that Peralta is not entitled to these fees because its motion for summary judgment was not granted in full and it was dismissed from the action only after the trial court granted its motion for judgment on the pleadings (which is not among the motions specified in the statute). Therefore, the argument is forfeited. (Ward, supra, 51 Cal.2d at p. 742; Title G. & T. Co. v. Fraternal Finance Co. (1934) 220 Cal. 362, 363.)
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The trial court found that Plaintiffs "brought and maintained this action against Peralta without reasonable cause and without a good faith belief that there was a justifiable controversy under the facts and law as related to Peralta." This finding of bad faith, which is sufficient alone to support the award of fees (Hall, supra, 43 Cal.App.4th at pp. 1585-1586), is supported by substantial evidence in the record. Plaintiffs' brought a stop notice action against Peralta but admitted during discovery that their stop notice was invalid. They brought an unjust enrichment claim against Peralta even though such claims are barred as a matter of law. (See Amelco Electric v. City of Thousand Oaks (2002) 27 Cal.4th 228, 234-235 [in quantum meruit claims for extra work performed under a contract not cognizable in action against public entity]; Janis v. California State Lottery Com. (1998) 68 Cal.App.4th 824, 830 ["generally a private party cannot sue a public entity on an implied-in-law or quasi-contract theory"]; Winick Corp. v. General Ins. Co. (1986) 187 Cal.App.3d 142, 146 [generally subcontractor's only remedy against public entity regarding payment on public works project is statutory stop notice procedure].) They brought a claim for judicial declaration of their contractual rights even though the claim was barred as a matter of law because they also alleged a matured claim for contractual damages. (See Canova, supra, 150 Cal.App.4th at p. 1497.)
The fee award in Peralta's favor is affirmed. B. Appeal No. A129670
In appeal No. A129670, Richards challenges the trial court's grant of summary adjudication and judgment on the pleadings to Amoroso against him, as well as the trial court's award of costs and fees to Amoroso.
1. Dispositive Motions and Validity of Assignment
Richards's arguments that the trial court erred by granting summary adjudication on the "extra work" contract claims and erred by granting judgment on the pleadings are the largely same as the arguments made by SDRI on those issues in appeal No. A130837. We reject those duplicative arguments on the grounds already stated with respect to appeal No. A130837.
Richards argues that he was not bound by the Subcontract's notice and change order procedure because he was not a party to the Subcontract. Rather, he held the right to collect the amounts due under the Subcontract as assignee of SDRI's interest in the contract. However, the trial court ruled the assignment was invalid because it was barred by the Subcontract without written consent from Amoroso. Paragraph T of the General Subcontract Provisions provided that the subcontractor (SDRI) "shall not assign, transfer or sublet any portion or part of the work required by this Agreement or assign any payments hereunder to others without written consent of [Amoroso]." (Italics added.) It was undisputed that SDRI did not obtain Amoroso's consent to the assignment. Richards implies SDRI had a statutory right to assign its rights under the contract despite the terms of the contract's assignment provision. (See Civ. Code, § 1458 ["[a] right arising out of an obligation is the property of the person to whom it is due, and may be transferred as such"].) However, contractual nonassignability provisions are enforceable despite this general statutory right to assign one's property interests. (Benton v. Hofmann Plastering Co. (1962) 207 Cal.App.2d 61, 67.) Even assuming for purposes of argument that the assignment was effective, as assignee Richards stood in the shoes of the contracting party and was subject to the same contractual conditions that burdened the contracting party. (Searles Valley Mineral Operations Inc. v. Ralph M. Parsons Service Co. (2011) 191 Cal.App.4th 1394, 1402.) Indeed, the contract expressly provided that any assignment under the Subcontract "shall bind its subcontractors['] assignees, or sublettors to all of the terms and provisions of this Agreement." Thus, if an assignment of SDRI's interests under the Subcontract was valid, Richards was bound by the notice and change order procedure, which he did not follow. Finally, Richards argues the contractual provision is inapplicable to the extra work claims because they did not arise directly from the Subcontract. However, we have already concluded that the trial court correctly ruled that any extra work claims that did not arise from the Subcontract were barred because Plaintiffs did not hold a contractor's license.
2. Award of Costs and Fees to Amoroso
Richards appealed from the trial court's July 13, 2010 judgment for Amoroso and against him, which stated, "[Amoroso] to recover costs upon a Memorandum of Costs and attorney's fees upon noticed motion." This statement is facially ambiguous as to whether the court had determined Amoroso's entitlement to a cost award, particularly regarding ordinary costs, although the court's express reference to future proceedings suggests all cost and fee issues would be determined postjudgment. Plaintiffs had argued the issue of prevailing party status before the July 13 judgment was entered, but Defendants argued that argument was procedurally improper, again suggesting all cost and fee issues were deferred to postjudgment proceedings. The parties continued to brief the issue of prevailing party status following entry of the July 13 judgment and Defendants did not contend the court had already determined the issue. Moreover, more than six months passed before the final cost and fee award issued (following extensive briefing on the prevailing party issue among all of the parties). We conclude the record as a whole indicates that the court did not intend and the parties did not understand that Amoroso's entitlement to costs or fees or both was determined in the July 13 judgment. Thus, Richards' appeal of that judgment did not subsume the court's later award of costs and fees, and Grant does not save his appeal. Because Richards did not separately appeal the cost and fee award, we have no jurisdiction to review it.
III. DISPOSITION
We affirm the July 13, 2010 judgment in favor of Amoroso and against Richards; the November 5, 2010 judgment in favor of Amoroso and against SDRI; the November 10, 2010 judgment in favor of Peralta and against SDRI and Richards; and the trial court's award of costs and fees to Peralta and against SDRI and Richards. We lack jurisdiction to consider SDRI's and Richards's attempted appeals of the trial court's awards of costs and fees to Amoroso and those orders are thus final. Peralta and Amoroso are entitled to recover their costs on appeal.
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Bruiniers, J.
We concur:
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Jones, P. J.
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Needham, J.