Allocation: 4/3 DCA Affirms Trial Court’s Apportionment Of Plaintiffs’ Fee Award Between Both Contractor And Subcontractor Where Subcontractor’s Contract With Plaintiffs Did Not Provide For Fee Recovery

Statutory Basis Supported Plaintiff’s Recovery of Attorney Fees Directly From Subcontractor.

            In Nassif v. Mission Pools of Escondido, Case No. G060433 (4^th Dist., Div. 3 December 5, 2022) (unpublished), swimming pool contractor and subcontractor were sued for substandard work relating to the design and construction of a swimming pool.  Pursuant to the global settlement agreement entered into with plaintiffs, contractor and subcontractor agreed to an apportionment amongst themselves of the settlement payment to plaintiffs.  However, when the trial court apportioned plaintiffs’ attorney’s fees and costs award against contractor and subcontractor, based on its determination regarding contractor’s indemnity cross-claims against subcontractor, and applying the same apportionment the parties used in the settlement agreement, subcontractor appealed.

            In a 3-0 opinion, authored by Orange County Superior Court Judge Linda S. Marks, sitting by assignment, the 4/3 DCA affirmed.  

            The panel first addressed subcontractor’s arguments that the settlement agreement did not authorize the trial court to apportion fees, and that the trial court’s order deprived it of its rights to a trial and due process as they relate to contractor’s indemnity claims.  Pursuant to the terms of the settlement agreement, the parties had waived their right to a trial on the indemnity issues, and had agreed instead to allow the trial court to determine the indemnity issues in its determination of plaintiffs’ fee motion.  Further, the 4/3 DCA found subcontractor did not suffer a violation of its due process rights as the trial court had made a determination as to the indemnity claims which resulted in the apportionment of the fee award. 

            Finally, although subcontractor’s contract with plaintiffs did not provide for the recovery of fees, and the trial court had erroneously concluded that the equitable indemnity claim provided a sufficient legal basis for apportioning the fees, the trial court’s apportionment order was statutorily supported.  Business and Professions Code § 7168 provides for the recovery of reasonable attorney’s fees by the prevailing party in any action arising out of a contract for swimming pool construction between a swimming pool contractor and a person contracting for the construction – with sections 7026 and 7150.1 providing that a “subcontractor” is included in the definition of a “home improvement contractor, including a swimming pool contractor.”