However, Defendant’s Beating of Contract Claim Did Give Rise to Fee Recovery.
In Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc., Case No. D060849 (4th Dist., Div. 1 Nov. 20, 2012) (published), defendant defeated a plaintiff’s contract claim airising under a bid document containing a fees clause but lost a related promissory estoppel claim to plaintiff. Defendant was denied requested fees of over $150,000 because the trial court determined that plaintiff was the prevailing party on the promissory estoppel claim (found to be contractually-based).
The Fourth District, Division 1 reversed. Defendant did prevail on the bid document-based contract claim, such that it was entitled to an award of fees under section 1717 mutuality principles but only if the promissory estoppel claim was contractually based so that the trial court could determine the matter was a mixed result with no clear winner.
However, different matter on the promissory estoppel claim. Even though the litigation results were mixed (defendant won on the bid claim but lost on the promissory estoppel claim), the dispositive issue was whether a promissory estoppel claim was “on the contract” under 1717 for purposes of allowing the trial court discretion to decide that no one prevailed. That was foreclosed, because the appellate court determined that a promissory estoppel claim was not “on the contract,” which meant that defendant did prevail on the only adjudicated contract claim. A remand was necessary to apportion out unsuccessful noncontract work or decide whether the noncontract work was inextricably intertwined so as to allow for recovery.
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