Case Explores Fee Clause Interpretation, An Award Of Fees To An Unlicensed Associate Supervised By A California Attorney, And An Award Of Expert Witness Costs Which Were Not Pled Or Proven As Damages.
The Whiting-Turner Contracting Co. v. 250 Fourth Development LP, Case No. A169470 (1st Dist., Div. 5 June 13, 2025) (unpublished) is case where both sides got something on appeal, although construction general contractor was probably more pleased. However, it did explore a plethora of issues of interest to us as fee bloggers.
General contractor won a construction contract breach case against owner. Later, the lower court awarded general contractor $4,716,845.21 in attorney’s fees under contractual construction agreement provisions in owner’s favor (made reciprocal by Civil Code section 1717) as well as $619,516 in expert witness costs. On appeal, general contractor retained the fee victory, but owner overturned the expert witness costs award.
Fee Clause Interpretation/Section 1717. The fee award was sustained based on a broadly worded fee recovery clause (see AIA Owner/Contractor Forms A102-2007) in the owner/contractor agreement, which did allow for direct recovery by owner yet became reciprocal for general contractor based on section 1717. Even though there was ending indemnity language which might have led to a different result in isolation, construction of the entire clause showed general fee entitlement to general contractor by virtue of section 1717. (Because this relates to AIA contracts, it should be instructive to construction practitioners in the cited contractual provisions.)
Ethics—Unlicensed Attorney Compensation. Owner challenged some fees awarded to an unlicensed associate, before he was admitted pro hac vice in California, with a referee awarding fees to the associate at a paralegal rate. The appellate court observed that the Birbrower general prohibition against awarding fees to unlicensed attorneys does have exceptions as to registered in-house counsel, out-of-state attorneys in arbitration proceedings, and out-of-state attorneys on short-term litigation projects (CRC, rules 9.46, 9.43, 9.47). Because the out-of-state associate was supervised by an actively licensed California attorney, CRC rule 9.47(c)(4) likely applied, but it was made unnecessary by the referee’s decision to award fees at a lower paralegal rate (not tantamount to the practice of law)—more underscored because the associate did not make court appearances or provide legal advice to the client.
Expert Witness Fees as Costs. This related to an award of fees for expert witnesses not ordered by the court, which is not allowed under CCP § 1033.5(a)(8), (b)(1). However, that did not end the issue as general contractor was relying on the contractual provision allowing recovery of fees and costs. The appellate panel did observe that most intermediate appeal decisions supported owner’s position that such expert witness fees must be pled and proven as damages at trial, not under a cost memorandum. But it then confronted Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC, 185 Cal.App.4th 1050, 1056, 1058-1060, 1065-1066 (2010), which held otherwise but in the context of a reciprocal expert fee contractual provision inuring to the overall “prevailing party.” The 1/5 DCA found the Thrifty contract provision distinguishable because the expert witness costs provision in the case before it only benefited owner—the result being that section 1717’s reciprocity principles could not make it applicable in favor of general contractor. This is an important nuance, because it shows that unilateral costs provisions will only be enforced in favor of the benefited unilateral party.
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