Ponce v. Philco Construction
Certified Tire & Service Centers, Inc. (Certified) hired general contractor Philco Construction, Inc. (Philco) to build an automobile service store location in Moreno Valley, California (the Project). Philco, in turn, entered into an agreement with subcontractor Abraham Victor Ponce (Ponce), obligating Ponce to perform concrete and masonry work on the Project in exchange for $150,000. Because he was not paid the full contract price, Ponce sued Philco and Certified (collectively, defendants), seeking payment of the remaining amount owed to him pursuant to the terms of the subcontract. Defendants claimed that partial nonpayment was justified due to alleged defects in the concrete slab poured by Ponce. Indeed, defendants filed cross-complaints seeking damages and/or indemnification from Ponce to cover the costs of remediating the alleged defects in the concrete slab and delay associated therewith.
A jury awarded Ponce $92,023.64 in damages against defendants (plus interest and costs) and rejected the causes of action asserted in cross-complaints against Ponce. We disagree with defendants’ claims on appeal that they are entitled to a new trial based on either (1) the admission of evidence pertaining to Certified’s business practices, or (2) alleged instructional and special verdict form error. But we modify the judgment to eliminate the award of attorney fees to Ponce and against Philco. The subcontract clearly indicates that the parties “shall†resolve all controversies arising out of the subcontract in arbitration and that “[t]he arbitrator shall have the authority to award reasonable attorneys fees.†The parties did not arbitrate the matter. The subcontract did not authorize the trial court to award attorney fees to the prevailing party at trial.
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