HINERFELD-WARD, INC.,v.LIPIAN Part-I
<script src="http://www.google-analytics.com/urchin.js" type="text/javascript"> </script> <script type="text/javascript"> _uacct = "UA-1698443-1"; urchinTracker(); </script> <html ><br /> <head><br /> <title>HINERFELD-WARD, INC</title><br /> </head><br /> <body><br /> <div><br /> <br/><b >HINERFELD-WARD, INC.,v.LIPIAN</b><br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/>Filed 9/1/10<br /> <br/><b<br /> > </b><br /> <br/><b<br /> > </b><br /> <br/><b<br /> > </b><br /> <br/><b<br /> > </b><br /> <br/><b<br /> > </b><br /> <br/><b<br /> > </b><br /> <br/><b<br /> >CERTIFIED FOR PARTIAL PUBLICATION</b><sup>*</sup><b<br /> ></b><br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/>IN<br /> THE COURT OF APPEAL OF THE STATE OF CALIFORNIA<br /> <br/> <br /> <br/>SECOND<br /> APPELLATE DISTRICT<br /> <br/> <br /> <br/>DIVISION<br /> FOUR<br /> <br/> <br /> <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0<br /> ><br /> <tr ><br /> <td width=319 valign=top ><br /> <br/>HINERFELD-WARD, INC.,<br /> <br/> <br /> <br/> Plaintiff, Cross-defendant, and Respondent,<br /> <br/> <br /> <br/> v.<br /> <br/> <br /> <br/>MARK LIPIAN et al.,<br /> <br/> <br /> <br/> Defendants, Cross-complainants, and Appellants.<br /> <br/> <br /> </td><br /> <td width=319 valign=top ><br /> <br/> B211257<br /> <br/> <br /> <br/> (Los Angeles<br /> County<br /> <br/> Super. Ct.<br /> No. BC365866)<br /> <br/> <br /> </td><br /> </tr><br /> </table><br /> <br/> <br /> <br/> <br /> <br/> APPEALS<br /> from a judgment of the Superior Court<br /> of Los Angeles<br /> County, David Minning, Judge. <br /> Affirmed.<br /> <br/> Law Offices<br /> of John P. Dwyer and John P. Dwyer for Defendants, Cross-complainants and<br /> Appellants, Mark and Mary Lipian.<br /> <br/> Baker &<br /> Associates, Mark E. Baker, Dean A. Reeves; Law Office of Russell R. Arens,<br /> Russell R. Arens, and Richard E. Nusbaum for Plaintiff, Cross-defendant, and<br /> Respondent.<br /> <br/> The<br /> appellants in this litigation are homeowners who embarked on a major<br /> residential home improvement project. <br /> They appeal from a judgment in these cross-actions in favor of their<br /> general contractor which awarded them only $1,000 in damages on their<br /> negligence cause of action. They contend<br /> the trial court erred in enforcing an oral contract in violation of statutory requirements that the contract<br /> be in writing; that the contractor was not entitled to an award of statutory<br /> attorney fees; and that the trial court erred in striking testimony by one of<br /> the homeowners about damages.<br /> <br/> In the<br /> published portion of this opinion, we conclude that the oral contract was<br /> enforceable and that the contractor is entitled to attorney fees for the<br /> homeowners' delay in making progress payments. <br /> In the unpublished portion of our opinion we conclude that the trial court's<br /> error in striking the homeowner's lay testimony was harmless.<br /> <br/> <br /> <br/><b >FACTUAL AND PROCEDURAL SUMMARY</b><br /> <br/> Appellants<br /> Mark and Mary Lipian purchased a single family home in Los<br /> Angeles, intending to undertake a major remodel of<br /> that property. They retained an architect,<br /> Michael Folonis, who began design of the project in early 2000. After the initial design phase, Cameron<br /> Aston, a general contractor, was retained. <br /> Aston eventually became frustrated with repeated design changes and left<br /> the project in 2004. Folonis recommended<br /> that the Lipians retain respondent Hinerfeld-Ward, Inc. as the new general<br /> contractor, based on prior experience with that firm and its reputation for<br /> high-end construction work. <br /> Hinerfeld-Ward (Hinerfeld) is the only respondent on appeal. Neither Folonis nor a lawyer assisted the<br /> Lipians in negotiating an agreement with Hinerfeld. <br /> <br/> It is<br /> undisputed that the Lipians and Hinerfeld never entered into a written contract which included the<br /> scope of the work to be done. The work<br /> began without a final agreement, but as negotiations continued, the parties<br /> entered into a memorandum of understanding and the remodeling and construction<br /> work continued. Over the course of the<br /> next two years, Hinerfeld submitted 19 payment applications for work which had<br /> been completed. All of these were<br /> approved by Folonis and paid by the Lipians. <br /> <br/> In April<br /> 2006, the Lipians disputed some of the charges in payment application 20, which<br /> included project management and supervision charges. They agreed to a partial payment for work<br /> done by subcontractors. The relationship<br /> between the Lipians and Hinerfeld deteriorated over the next several months. A dispute arose regarding commencement of<br /> work on a separate building the Lipians planned to build on their property to<br /> house a theater, gym, and office. The<br /> Lipians terminated Hinerfeld's services in September 2006. At that time, there was an unpaid balance<br /> owed Hinerfeld of approximately $200,000. <br /> <br/> Hinerfeld<br /> sued the Lipians for breach of oral<br /> contract, quantum meruit, wrongful withholding of progress payments, and<br /> related causes of action. The Lipians<br /> cross-complained for breach of contract, negligence, fraud, violation of Business<br /> and Professions Code section 17200, negligent misrepresentation, recovery on<br /> bond, and for a declaration that the oral construction contract was void. In addition to Hinerfeld-Ward, the Lipians<br /> named Tom Hinerfeld, its principal, and the firm's indemnity company, American<br /> Contractors Indemnity Company.<b ><sup><b ><sup>[1]</sup></b></sup></b> <br /> <br/> The case<br /> was tried to a jury which returned a special verdict. It found the parties had a contract and that<br /> Hinerfeld had substantially complied with its terms. It found the Lipians had breached the<br /> contract and that their breach was not justified, and that Hinerfeld had not<br /> breached the contract. The jury found<br /> Hinerfeld's damages for breach of the contract to be $202,181.58 and that the<br /> Lipians had withheld an amount more than 150 percent from a progress<br /> payment. On the causes of action for<br /> quantum meruit and foreclosure of a mechanics lien, the jury found the<br /> reasonable value of the services rendered by Hinerfeld to be $820,000, and that<br /> the Lipians failed to pay that amount. <br /> The jury found Hinerfeld negligent, but only $1,000 in damages was<br /> awarded the Lipians on their cross-action. <br /> The jury rejected the Lipians' causes of action for fraud and negligent<br /> misrepresentation, finding no false representations were made by Tom Hinerfeld.<br /> <br /> <br/> The trial court<br /> entered judgment for Hinerfeld for $202,181.58, plus prejudgment interest of<br /> $36,232.01 and costs of $38,953.19. The<br /> Lipians were given judgment for $1,000. <br /> The Lipians' motion for new trial was denied. Hinerfeld's post-trial motion for a monthly two<br /> percent charge on the amount wrongfully withheld by the Lipians was granted and<br /> $54,736.36 was assessed against them. <br /> The trial court awarded Hinerfeld $200,000 in attorney fees. Timely appeals by the Lipians from the<br /> judgment, the attorney fee award, and from the award of $54,736.36 were filed<br /> and consolidated. <br /> <br/> <br /> <br/><b >DISCUSSION</b><br /> <br/>I<br /> <br/> The Lipians<br /> argue the court erred in enforcing the oral home improvement contract with<br /> Hinerfeld because Business and Professions Code section 7159 (section 7159)<br /> requires that such contracts be in writing. <br /> The statute applies to â€