Hawkins
Filed
6/25/12 Mari v. Hawkins CA5
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
WALEED MARI et al.,
Plaintiffs and
Appellants,
v.
RODRICK H. HAWKINS et al.,
Defendants and
Respondents.
F062563
(Super.
Ct. No. 634903)
APPEAL from
a judgment of the Superior Court of
County. Roger M. Beauchesne, Judge.
Wylie P.
Cashman for Plaintiffs and Appellants.
Ericksen
Arbuthnot, Sharon L. Hightower and Nathaniel R. Lucey for Defendants and
Respondents.
-ooOoo-
Plaintiff Waleed Mari, doing business as Waleed Mari
& Associates, retained the surveying services of defendants, Rodrick H.
Hawkins, doing business as Hawkins & Associates Engineering, and Hawkins
& Associates Engineering, Inc., to determine the corners and boundaries of
plaintiff’s land. The survey performed
by defendants was in error, which plaintiff did not discover until after he had
relied on it to his detriment. Plaintiff
filed a lawsuit for damages in superior court, alleging both contract and tort
causes of action against defendants. At
the same time, plaintiff demanded arbitration of the dispute pursuant to the
terms of the parties’ contract. One
month later, the parties agreed to proceed in superior court rather than go to
binding arbitration. Following a bench
trial, the trial court found that plaintiff prevailed on his cause of action
for professional negligence and a
favor. Plaintiff moved for recovery of
his attorney fees pursuant to paragraph 37 of the parties’ contract. The trial court denied the motion on the
ground that paragraph 37 only authorized an award of attorney fees in the
limited context of arbitration proceedings.
Plaintiff appeals from that order, arguing that the trial court
misconstrued the terms of the contract regarding attorney fee recovery. We will affirm.
FACTS AND PROCEDURAL HISTORY
Plaintiff
needed an accurate survey of his property in Modesto, California, in order to
proceed with plans to develop a strip mall.
He entered into a contract with defendants by which defendants agreed to
perform the necessary survey (the contract).
The survey was completed by defendants, and plaintiff constructed the
strip mall in accordance with the corners and boundaries shown on the
survey. Thereafter, plaintiff discovered
the survey was inaccurate and the inaccuracy resulted in a loss of use of a
portion of his land. On December 5,
2008, plaintiff filed a complaint against defendants in superior court,
alleging causes of action for breach of
contract, professional negligence, fraud and negligent misrepresentation.
Concurrent
with filing the complaint, plaintiff also served a demand for arbitration of
the dispute. The reason for the demand was that the contract expressly
provided, in paragraph 37, that “[a]ny dispute arising out of or related to
this Agreement shall be resolved by binding
arbitration and not in a court of law.â€
On January 5, 2009, counsel for the parties agreed that the matter
would be resolved in superior court, rather than arbitration, and the demand
for arbitration was withdrawn. The
agreement to proceed in superior court was confirmed in writing, and it
constituted a modification of the terms of the contract.
Trial
commenced in May 2010. After hearing the
evidence at trial, posttrial briefs were filed by the parties and the trial
court took the matter under submission.
The trial court issued a tentative decision and, at the request of
counsel, a statement of decision was issued.
An amended statement of decision was issued on October 15,
2010. In the amended statement of
decision, the trial court found that plaintiff had succeeded in proving his
cause of action for professional negligence, but not the other three causes of
action. The trial court found plaintiff
was damaged in the amount of $155,134, but due to a provision in the contract
limiting liability to $50,000 (¶ 25), the damage award was reduced to that
amount. On December 20, 2010, judgment was entered in plaintiff’s favor in the
amount of $50,000.
On March
11, 2011, plaintiff filed his motion for attorney fees. The motion pointed out that the contract
actually had three provisions relating to attorney fees: paragraphs 37, 39 and 40. Of the three provisions, he acknowledged that
paragraphs 39 and 40 were inapplicable and, therefore, he requested fees under
paragraph 37. Paragraph 37 provided, in
relevant part, as follows:
“37. Arbitration
of Disputes. Any dispute arising out
of or related to this Agreement shall be resolved by binding arbitration and
not in a court of law. The dispute will
be settled in accordance with the Rules of the American Arbitration Association,
and judgment will be entered on the award. The
arbitrator will award attorney’s fees to the prevailing party.†(Italics added.)
Defendants filed opposition to the
motion for attorney fees. Defendants
argued that paragraph 37 was limited to arbitration proceedings and it only
authorized the arbitrator to award attorney fees. Since the case was litigated in superior
court before a judge, defendants claimed no fees could be awarded. The trial court agreed with defendants’
position and denied the motion. The
trial court held that the parties had stipulated to litigate their dispute in
superior court rather than by binding arbitration as required by paragraph 37,
resulting in a modification of their contract; and that the provision in
paragraph 37 for an award of attorney fees by the arbitrator applied only
in binding arbitration.
Plaintiff
appealed from the order denying his motion for attorney fees.
DISCUSSION
The issue before us is one of
contractual interpretation; namely, whether
the language of the attorney fees provisions in the contract would permit an
award of attorney fees to plaintiff under the circumstances presented. We apply a de novo review to the
interpretation of a written contract where, as here, such interpretation does
not depend on the credibility of conflicting
v. Bristol Development Co. (1965) 62 Cal.2d 861, 865-866.)
The fundamental goal of contractual
interpretation is to give effect to the mutual intention of the parties. (Bank
of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264.) Where the contract is reduced to writing, the
intention of the parties is to be inferred, if possible, solely from the
written provisions of the contract.
(Civ. Code, § 1639.) If
contractual language is clear and explicit, it governs. (Bank
of the West v. Superior Court,
§ 1638.) Further, “[t]he whole of a
contract is to be taken together, so as to give effect to every part, if
reasonably practicable, each clause helping to interpret the other.†(Civ. Code, § 1641.)
We agree with the trial court that
paragraph 37 did not allow attorney fees recovery in the present case. The subject matter addressed by paragraph 37
was that of binding arbitration and, along with requiring arbitration of
disputes, the paragraph also provided the terms or conditions applicable to
such arbitration proceedings. Included
as one of the terms or conditions applicable to arbitration was that “[t]he
arbitrator will award attorney’s fees to the prevailing party.†Said attorney fees provision, being contained
within an arbitration clause and delineating one aspect of how that arbitration
would be conducted, was plainly not meant to be applied outside of the arbitration
context. Even if there were any doubt,
and there is none, we think the fact that paragraph 37 expressly conferred
authority to award attorney fees only to the “the arbitrator†confirms this
interpretation. We conclude the trial
court correctly ruled that paragraph 37 applied only in binding
arbitration. Since, in this case, the
parties modified their contract to litigate their dispute in superior court
rather than by means of binding arbitration, paragraph 37 (including the
attorney fees provision therein) was clearly inapplicable.
This construction was consistent
with the other attorney fees
provisions in the contract—paragraphs 39 and 40. Paragraph 39, entitled “Attorney’s Fees,â€
provided that “[i]f any proceeding is brought to enforce or interpret the
provisions of this Agreement, the prevailing party therein shall be entitled to
receive from the losing party therein, its reasonable attorneys’
fees .…†Paragraph 40, entitled
“Costs of Dispute Resolution,†stated that “[i]n the event [plaintiff] institutes
a proceeding against [defendants], either directly or by way of
cross-complaint, including a claim for … alleged negligence … wherein: (a) [plaintiff] fails to obtain a
judgment or award in [plaintiff’s] favor, (b) the action is dismissed, or
(c) judgment is or award is rendered for [defendants], [plaintiff] agrees
to pay [defendants] immediately following the proceedings all costs of defense,
including, but without limitation, reasonable attorneys’ fees, expert witness
fee, court costs, and any and all other expenses of defense.†It is clear from the broad terms used in
paragraphs 39 and 40 to describe their applicability that they were not limited
to binding arbitration but applied with respect to any proceedings, including judicial or court proceedings. Additionally, paragraphs 39 and 40 were
plainly much narrower in scope than paragraph 37 in regard to the recovery of
attorney fees. That is,
paragraph 39 only allowed recovery of attorney fees to a party prevailing
in an action on the contract; while paragraph 40 permitted defendants to recover attorney fees from plaintiff in the event that plaintiff instituted a negligence
action against defendants but did not prevail.
The only reasonable conclusion to
draw from these several provisions addressing the subject of attorney fees is
that the parties intended to broadly allow attorney fees to the prevailing
party in any dispute resolved through binding arbitration, as provided in
paragraph 37. However, if for any
reason a dispute between them was litigated in a judicial proceeding, then the
narrower provisions of paragraphs 39 and 40 would apply.
construed, the several provisions make sense and are given effect, thereby
adhering to the rule that “[t]he whole of a contract is to be taken together,
so as to give effect to every part, if reasonably practicable, each clause
helping to interpret the other.†(Civ.
Code, § 1641.)
We briefly address two arguments
presented by plaintiff in support of his contention that he should have been
awarded attorney fees under the terms of the contract. First, he argues that the parties intended
merely to substitute “a Judge of the Superior Court in the place of an
arbitrator and the judicial process in the place of the binding arbitration
process,†but that the remaining terms of paragraph 37—including its attorney
fees provision—were intended to remain intact.
In this regard, plaintiff refers to the trial court’s enforcement of
paragraph 25 (the limitation on liability) as purported evidence that all of the
provisions of the contract were intended to remain operative in the judicial
proceeding—even the provisions of
paragraph 37. Plaintiff’s argument
ignores the obvious fact that paragraph 37 is a self-contained provision that
addresses binding arbitration of disputes and outlines terms or conditions of
such arbitration. Once the contract was
modified and the parties agreed not to use arbitration at all, paragraph 37
became moot and the remaining attorney fees provisions took effect. We agree with defendants’ position that “an
interpretation finding the broader attorney’s fees provision in Paragraph 37
applied in a judicial setting would mean that the limitations placed on
attorney’s fee[s] in Paragraphs 39 and 40 would not be given any effect.†Such a result would not only violate Civil
Code section 1641, but would require us to disregard the parties’ clear
intention in the contract to distinguish between arbitration and other (i.e.,
judicial) proceedings with respect to attorney fees awards.
Plaintiff’s second argument is that
he is entitled to recover his attorney fees based on paragraph 39 of the
contract. Paragraph 39 provided that
“[i]f any proceeding is brought to enforce or interpret the provisions of this
Agreement, the prevailing party therein shall be entitled to receive from the
losing party therein, its reasonable attorneys’ fees .…†Even though the trial court found that
plaintiff failed to prove his cause of action for breach of contract, plaintiff
nonetheless argues that the attorney fees provision in paragraph 39 was
applicable here because (i) the trial court considered the nature of the
parties’ contractual relationship in determining that defendants were
professionally negligent, and (ii) the trial court enforced the limitation of
liability provision set forth in paragraph 25 of the contract. Based on these facts, plaintiff contends that
the trial court “enforce[d]†or “interprete[d]†the contract in connection with
his victory on the professional negligence cause of action.
Defendants respond that we should
disregard this argument because it was not raised in the trial court and,
moreover, it is contrary to the position plaintiff took in the motion for
attorney fees. As noted earlier,
plaintiff conceded in the trial court that paragraphs 39 and 40 were
inapplicable and, therefore, it was unnecessary for the trial court or
defendants to address the applicability of those provisions. Now, on appeal, he has reversed that
position. “‘The rule is well
settled that the theory upon which a case is tried must be adhered to on
appeal. A party is not permitted to
change his position and adopt a new and different theory on appeal. To permit him to do so would not only be
unfair to the trial court, but manifestly unjust to the opposing litigant.’†(Cable
Connection, Inc. v. DIRECTV, Inc.
(2008) 44 Cal.4th 1334, 1350-1351, fn. 12; Ernst
v. Searle (1933) 218 Cal. 233, 240-241.)
Applying the theory of the case doctrine, we agree that under the
circumstances plaintiff is not permitted to unfairly reverse his position
regarding the basis of his claim for attorney fees. (See Planned
Protective Services, Inc. v. Gorton
(1988) 200 Cal.App.3d 1, 12-13 [theory of case prevented appellant from
changing on appeal the statutory ground of his attorney fees claim].)
But even if
we were to consider plaintiff’s argument that he was entitled to attorney fees
under paragraph 39, we would reject it.
Plaintiff prevailed on a tort cause of action for professional
negligence. Paragraph 39 was limited to
causes of action “to enforce or interpret the provisions†of the contract. Clearly, this language cannot be stretched to
include plaintiff’s tort cause of action.
In Loube v. Loube,
through 430, the Court of Appeal found that a similarly worded attorney fees
provision (i.e., allowing fees in an action “to enforce†an agreement) was too
narrow to permit an award of fees where the plaintiff prevailed on a cause of
action for professional negligence, even though, as here, the professional
negligence cause of action arose out of the parties’ contractual
relationship. Likewise, plaintiff’s
attempt to bring his cause of action within the scope of paragraph 39 is
unconvincing. Furthermore, the fact that
the trial court enforced the contract’s limitation of liability provision
(¶ 25) did not change the nature of plaintiff’s
cause of action, but rather operated more as a partial defense. That is, limiting liability as required by
paragraph 25 of the contract did not convert plaintiff’s cause of action for
professional negligence into an action to enforce or interpret the
contract. (See Plemon v. Nelson (1983) 148 Cal.App.3d 720, 724-725 [limitation of
liability asserted defensively did not convert negligence claim into an action
on the contract].)
DISPOSITION
The order of the trial court is
affirmed. Costs on appeal are awarded to
defendants.
_____________________
Kane, J.
WE CONCUR:
_____________________
Hill, P.J.
_____________________
Levy, J.
name="_ftn1" title="">[1] The
trial court found it was a valid modification of the terms of the original
contract, which finding has not been challenged.
name="_ftn2" title="">[2] The
attorney fees provision in paragraph 40 was obviously one-sided. The validity of that provision is not at
issue in this appeal. We note that the
mutuality requirements of Civil Code section 1717 are not applicable where, as
here, the cause of action on which the party prevailed was for professional
negligence rather than on the contract.
(Loube v. Loube (1998) 64
Cal.App.4th 421, 430.) We also observe
the trial court found that both parties had equal bargaining power and dealt at
arm’s length, which finding was not challenged.
