Allocation, Construction, Section 1717: Contractor Defeating Worker’s Compensation Insurance Claims Not Entitled To Contractual Fees, Which Needed To Be Apportioned On Remand

No Contractual Fee Provisions Covered The Worker’s Compensation Issues.

            Although apportionment is sometimes a discretionary exercise, it can be mandatory where there are non-fee entitlement issues which are likely disparate in nature. 

            Fernandez v. Escutia, Case Nos. H046529/H047015 (6^th Dist. Feb. 24, 2021) (unpublished) is a situation where a contractor won a construction dispute against homeowners, including a claim that he failed to maintain worker’s compensation insurance.  The trial judge subsequently awarded contractor $103,717.50 out of a requested $157,659.66 in Civil Code section 1717 based on a contractual fees clause.

            The Sixth District reversed and remanded.  The problem was that the win on the worker’s compensation insurance issue did not arise out of the construction contract, given no provision indicating it was a necessity (beware, because such a provision is common in many construction contracts).  That being the case, and given the absence of an indication that the other contract issues overlapped with the worker’s compensation claim, a remand was necessary to apportion fees, if needed, unless there was a common overlap with other issues.