Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Marin County Super. Ct. Nos. CV042060, CV025107.
Margulies, J.
Jon-Marc Dobrin as trustee of the Blackfield Revocable Living Trust (hereafter Blackfield) appeals from a judgment dismissing Robert Middagh from two consolidated construction defect lawsuits, and from a postjudgment order awarding contractual attorney fees to Middagh. Middagh cross-appeals from the order awarding fees. We affirm the judgment and order, finding that Middagh was properly dismissed due to Blackfield’s failure to diligently prosecute its claims against him, and that the trial court did not abuse its discretion in awarding fees to Middagh or in determining the amount of fees to be awarded.
I. BACKGROUND
A. The Underlying Transaction
In June 1994, Kit Coyle and Robert Middagh purchased a parcel of unimproved real property located in Tiburon. Coyle and Middagh were both record owners of the property after the purchase. They constructed a single-family residence on the property. Coyle and Middagh each paid 50 percent of the construction costs, while agreeing to allocate profits and losses 62 percent to Coyle and 38 percent to Middagh. According to Middagh, the allocation was based on the fact that he was a passive investor whereas Coyle was solely in charge of all design and construction decisions for the development.
In November 1996, after completion of the residence, the real property was sold to Serguie and Elena Machkine. The recorded grant deed identified Middagh as one of the sellers. In December 2001, the Machkines sold the property to Blackfield. The property was sold in an “as is” condition and was accompanied by an assignment by the Machkines to Blackfield of any legal rights or claims that the Machkines had against the developers, designers, contractors, subcontractors, and suppliers who participated in the development, design, or construction of the residence.
B. Blackfield’s Lawsuits
In October 2002, Blackfield sued Coyle and Does 1 through 100, alleging a series of damaging construction defects, including a leaking roof, water ponding in the crawl space of the property, drainage problems, water intrusion in the foundation and interior of the residence, a leaking spa tub causing damage to the home’s interior, a defective fire sprinkler system, and defective plumbing. (Super. Ct. Marin County, case No. CV025107, hereafter Action I.) Coyle was the only defendant sued by name in the complaint.
The complaint in Action I alleged four causes of action: negligence, strict liability, breach of warranty, and misrepresentation and concealment. The complaint designated Coyle and Does 1 to 20 as “Developer Defendants” and alleged that the Developer Defendants “developed, constructed, manufactured and sold” the property. The fourth cause of action for misrepresentation and concealment was based on misrepresentations allegedly made by the Developer Defendants: (1) to the Machkines that the property was free of construction defects and that should any such defects be found, they would promptly be fixed; and (2) to Blackfield after it purchased the property and ascertained the extent of the defects, that the defects were all minor in nature or were not defects at all.
Blackfield filed a first amended complaint in Action I at the end of April 2003. The first amended complaint substituted eight named contractors and subcontractors in place of Does 21 through 28. Although it added new factual allegations, the amended complaint did not substantively change the causes of action or legal theories asserted in the original complaint, or add any new causes of action. Middagh was not mentioned or sued by name in the first amended complaint.
At a May 2003 case management conference, the trial court ordered that Blackfield serve the named Doe defendants by June 6, 2003. Although Blackfield obtained further extensions, by October 5, 2003 it had served only two of the eight Doe defendants. On that date, Blackfield dismissed the other six Does from Action I without prejudice. After several months of attempts to complete a court-ordered mediation, Blackfield filed a new action in May 2004 (Super. Ct. Marin County, case No. CV042060, hereafter Action II), against the same subcontractors it had dismissed without prejudice in Action I. According to Blackfield, Action II was filed “to add various subcontractors, material persons, other responsible third parties, and Doe developers.” Middagh maintains that the “true reason” for Action II was to get around the trial court’s order for timely service of the subcontractors. The only substantive difference between the two actions was the omission from Action II of any cause of action for misrepresentation and concealment.
In November 2004, Action I and Action II were consolidated based on the parties’ stipulation. The stipulation and ensuing written order neither specified that the consolidation was for all purposes, nor that it was for any limited purpose. Blackfield contends the two actions were consolidated solely for purposes of discovery and trial. The scheduled trial date was September 16, 2005.
C. Blackfield’s Discovery Efforts
In March 2003, Blackfield served written interrogatories on Coyle seeking information about insurance and about the subcontractors, design professionals, and engineers involved in the construction of the residence. Blackfield also served Coyle with a request for production of records concerning the property in March 2003. A box containing responsive documents, including documents pertaining to the sale of the property, was inspected by counsel for Blackfield on June 10, 2003, in the offices of Coyle’s counsel, and was inspected a second time by Blackfield’s counsel on March 30, 2004. Although the parties dispute whether the box contained certain real estate disclosure forms that Coyle and Middagh had signed and given to the Machkines, there is no dispute that by May 2003, at the latest, Blackfield’s counsel was aware that Middagh was a co-owner of the property along with Coyle. Although Blackfield’s counsel was present at a December 2003 deposition taken by Coyle of the Machkines, she asked no questions concerning Middagh’s role in the sale of the property.
In May 2003, Blackfield’s counsel received copies of documents produced to Coyle under subpoena duces tecum by the Machkines. The production included unspecified sales documentation showing Coyle and Middagh as the sellers of the property to the Machkines.
With the exception of the second inspection of Coyle’s documents, Blackfield initiated no formal discovery between June 10, 2003 and March 2, 2005, when it served interrogatories and document requests on Coyle concerning his communications with the Machkines. Blackfield served additional written interrogatories in March and April 2005, but these included no inquiries concerning Middagh’s involvement with the property. Blackfield took no depositions in the case until the deposition of Coyle, which began on July 18, 2005, two months prior to the scheduled trial date.
Early in the deposition, Coyle confirmed that he and Middagh were the owners of the property and that Middagh was an investor in the residential construction project completed there. On July 18, Blackfield served a deposition subpoena on Middagh. His deposition was taken on August 12, 2005. According to Blackfield’s counsel, the real estate disclosure forms signed by Middagh and Coyle were not produced in discovery until Middagh’s deposition was taken, despite assurances from Coyle that all documentation pertaining to the 1996 sale to the Machkines had already been produced. Blackfield maintains that it learned for the first time on August 12 that Middagh had signed the disclosure forms along with Coyle. One form signed by Middagh represented that there had been no leaks at the premises as of the date of sale to the Machkines. At Coyle’s continued deposition on the morning of August 24, 2005, Blackfield learned that Coyle kept some documents pertaining to the property at his home. Coyle produced those documents after the lunch break. The documents included a day timer which, according to Blackfield, showed that there had been leaking 10 months prior to the sale that had never been revealed to the Machkines. Blackfield also learned from Coyle that Middagh had once assisted him in a repair by passing pieces of Visqueen sheeting down to him in the crawl space underneath the house.
Middagh states the deposition was taken on August 16, 2005.
D. Service of Action I on Middagh
On August 15, 2005, Coyle’s counsel served Blackfield with a statutory settlement offer pursuant to Code of Civil Procedure section 998. A copy of the offer was hand-served on Blackfield’s counsel on August 16, 2005. The offer was contingent on a general release of all claims against Coyle. It made no reference to any release of claims against Middagh.
All statutory references are to the Code of Civil Procedure.
On August 29, 2005, Blackfield filed an amendment to “the complaints” to substitute Middagh as Doe No. 30. The case caption referenced the case numbers of both Action I and Action II. Coyle’s attorneys, who also represented Middagh, were unaware of the amendment until Middagh was served with a summons and complaint on September 6, 2005. That was 10 days before the scheduled trial date. However, the only complaint served on Middagh at that time was the superseded, original complaint in Action I. The first amended complaint in Action I was thereafter served on Middagh on September 15, 2005, during hearings on in limine motions for the trial set to begin the next day. Shortly after serving Middagh on September 15, Blackfield hand-delivered its acceptance of Coyle’s section 998 offer to his counsel. September 15 was the last day that Blackfield could have accepted the offer. When the parties appeared before the court to confirm their settlement, Blackfield’s counsel stated that Blackfield had not yet decided whether to continue the litigation against Middagh only. Middagh’s attorneys advised that they would seek sanctions if forced to bring a motion to obtain Middagh’s dismissal from the action. The court vacated the trial date. The next day, Blackfield advised Middagh by letter of its intention to continue the action against him.
By that time, Blackfield had apparently either settled with the other subcontractor defendants or taken their default.
E. Middagh’s Motion to Dismiss
On October 11, 2005, Middagh filed and hand-served a “Motion to Dismiss Action” based on Blackfield’s failure to timely serve or prosecute the action against him. The motion was set for hearing on November 29, 2005. The moving papers sought the dismissal of “the action” without making any distinction between Action I and Action II. Middagh also sought sanctions in the amount of the attorney fees and costs he incurred in bringing the motion to dismiss.
Three days after receiving the motion, Blackfield filed an amendment to the complaint in Action II naming Middagh as Doe No. 1. With Middagh’s motion to dismiss pending, Blackfield served Middagh with the amended complaint in Action II on November 15, 2005. In its memorandum of points and authorities opposing Middagh’s motion to dismiss, Blackfield argued that the motion to dismiss was moot due to service on Middagh of the summons and complaint in Action II, which had been filed less than two years ago. The memorandum explained that the latter complaint had been served “[d]ue in large part to technical and form related complaints made by the defendants.”
The accompanying declaration of Hal Chase, Jr., counsel for Blackfield, did not address this point.
The trial court ordered the dismissal of both Action I and Action II. The court dismissed Action I on the grounds that Blackfield had not been diligent in pursuing discovery as to Middagh’s involvement and failed to demonstrate excusable delay. The court dismissed Action II against Middagh on its own motion, citing the following reasons: (1) the history of the two cases; (2) the history of Blackfield’s knowledge of Middagh’s existence and of his involvement or non-involvement in the construction of the residence; (3) the fact that the two actions were consolidated for trial, which had been set to go forward in September; and (4) the history of the late service on Middagh on the eve of trial. The court denied Middagh’s sanctions request.
F. Middagh’s Attorney Fee Motion
Following the entry of judgment in his favor in the consolidated action, Middagh moved for an award of attorney fees based on: (1) a prevailing party attorney fee clause contained in the real estate purchase agreement between the Machkines and Middagh and Coyle, and (2) the Machkines’ assignment to Blackfield of their rights and claims arising out of the agreement when they sold the property to Blackfield. The motion sought awards of (1) $16,488.50 for fees incurred after being served with process, in bringing the motion to dismiss and the fee motion; (2) $47,475.68 for the 38 percent allocated share of Coyle’s defense fees and costs that Middagh had in fact paid under an agreement with Coyle; and (3) Middagh’s recoverable litigation costs of $4,108.15. Blackfield responded with a motion to tax costs.
The trial court found that Middagh was entitled to recover $16,488.50 as reasonable attorney fees for litigating the motion to dismiss and the motion for fees, but it denied him any fees or costs incurred in Coyle’s defense. The court awarded him $397 of the $4,108.15 he claimed in costs for his own defense.
G. Appeals and Cross-Appeal
Blackfield timely appealed from the judgment of dismissal and, later, from the postjudgment award of fees. Middagh cross-appealed from the portion of the fee award order denying him fees incurred in defense of Coyle. The appeals and cross-appeal were consolidated.
II. DISCUSSION
A. The Dismissal of Action I
The trial court granted the motion to dismiss Action I under section 583.420, subdivision (a)(2), which authorizes the court in its discretion to dismiss an action when it has not been brought to trial within two years after its commencement against the defendant. As an initial matter, we note that for purposes of the statutes governing dismissal for failure to prosecute, an action is commenced against a Doe defendant when the complaint is filed, not when the complaint is amended to name the Doe defendant. (See, e.g., Gray v. Firthe (1987) 194 Cal.App.3d 202, 209; Nelson v. A. H. Robins Co. (1983) 149 Cal.App.3d 862, 866; Elling Corp. v. Superior Court (1975) 48 Cal.App.3d 89, 94; Warren v. Atchison T. & S. F. Ry. Co. (1971) 19 Cal.App.3d 24, 38.) To the extent that Blackfield claims this long-standing rule does not apply to discretionary dismissals under section 583.410 et seq., we reject the argument.
Section 583.420 provides in relevant part as follows: “(a) The court may not dismiss an action pursuant to this article for delay in prosecution except after one of the following conditions has occurred: [¶] (1) Service is not made within two years after the action is commenced against the defendant. [¶] (2) The action is not brought to trial within the following times: [¶] (A) Three years after the action is commenced against the defendant unless otherwise prescribed by rule under subparagraph (B). [¶] (B) Two years after the action is commenced against the defendant if the Judicial Council by rule adopted pursuant to Section 583.410 so prescribes for the court because of the condition of the court calendar or for other reasons affecting the conduct of litigation or the administration of justice.” The Judicial Council has adopted a rule giving the court discretion to dismiss for failure to bring an action to trial within two years after its commencement against the defendant. (See California Rules of Court, rule 3.1340.)
Blackfield further contends that its failure to serve or bring Middagh to trial was excused by alleged stonewalling in discovery that prevented Blackfield from learning of Middagh’s wrongdoing. The claimed stonewalling consisted of the following: (1) Coyle’s withholding of evidence—potentially with Middagh’s connivance—that would have revealed Middagh’s involvement in the construction of the residence and of his relationship with Coyle; (2) Coyle’s false assurances that he had produced all documents pertaining to the property when, in fact, Coyle maintained additional documents in his home, including the day timer, which showed his knowledge of a leak 10 months before the sale to the Machkines; (3) the withholding of real estate disclosure documents signed by Middagh that were allegedly not produced until Middagh produced them at his deposition on August 12, 2005; (4) the refusal of Middagh’s counsel to let Middagh answer questions at his deposition about whether he was paying for part of Coyle’s legal fees; and (5) Coyle’s failure to admit, until making a correction to his prior deposition testimony, that Middagh had assisted him at one point in laying down Visqueen sheets under the residence.
Middagh insists that the real estate disclosure documents created in connection with the sale of the property to the Machkines were in fact presented by Coyle to Blackfield’s counsel for review in 2003 and again in 2004.
The record does not support Blackfield’s contentions. Information about Middagh’s involvement with the property was accessible to Blackfield throughout the litigation, had Blackfield chosen to pursue it. Middagh’s former ownership interest in the property was not a secret. It was in fact a matter of public record. Blackfield’s lead counsel admitted that he knew by May 2003 at the latest—more than two years before Coyle’s deposition was taken—that Middagh had been a co-owner. Blackfield’s attorneys could have asked the Machkines about Middagh’s role when their deposition was taken in 2003, but did not avail themselves of that opportunity. Blackfield propounded no written discovery on this question, and took no depositions until two months before trial. Instead, Blackfield waited until three years into the litigation, when it finally took Coyle’s deposition, to initiate discovery concerning Middagh. Blackfield’s complete lack of curiosity about this subject through three years of litigation cannot credibly be blamed on any conduct by Coyle or Middagh.
The disclosure documents that Blackfield claimed it needed in order to discover Middagh’s role and potential wrongdoing are in fact standard documents required in any residential real estate transaction like that between the Machkines and Coyle. Assuming for the sake of analysis that these documents were not produced with the other documents inspected by Blackfield’s counsel in 2003, and could not otherwise be obtained from the Machkines, the burden was on Blackfield to make a motion to compel their production. Misrepresentation and concealment was one of four legal theories that Blackfield was alleging against Coyle. If Blackfield was diligent in pursuing this claim, it would have noticed the absence of these standard disclosure documents at a much earlier date and insisted on their prompt production. Coyle’s alleged failure to produce the disclosure documents thus affords Blackfield no plausible excuse for its very belated assertion of claims against Middagh.
Middagh’s refusal to answer questions about his contributions toward Coyle’s legal expenses, and Coyle’s initial failure to recollect that Middagh had once assisted him in making a repair, add no weight to Blackfield’s argument. These events do not demonstrate any effort to prevent Blackfield from learning of Middagh’s role in the property transaction, and they do not explain or excuse Blackfield’s long delay in attempting to learn more about that subject.
In our view, Blackfield’s arguments on appeal and in the trial court fall squarely within the following statement of principle: “A plaintiff who has been inattentive to his case for an unreasonable period of time should not be able to nullify the dismissal statute by simply invoking the general policy favoring trial on the merits. The same is true when the plaintiff offers an excuse which, under the factual and procedural circumstances of the particular case, is not credible or is clearly unreasonable.” (Putnam v. Clague (1992) 3 Cal.App.4th 542, 557.)
To prevail on an appeal from the granting of a motion to dismiss under section 583.420, the appellant must show a manifest abuse of discretion resulting in a miscarriage of justice. (Yao v. Anaheim Eye Medical Group, Inc. (1992) 10 Cal.App.4th 1024, 1029.) Blackfield has made no such showing here.
We also reject Blackfield’s claim that the trial court never exercised its discretion because it failed to actually consider whether Blackfield’s excuse for its delay in prosecution was credible. No evidence in the record supports that claim. Moreover, the error would be harmless if it occurred. This court finds that Blackfield’s excuses were not in fact credible, even if all factual differences were resolved in its favor.
B. The Dismissal of Action II
Blackfield contends that the trial court abused its discretion and violated his right to due process when it dismissed Action II on its own motion, citing its inherent power to dismiss. Blackfield points out that its delay in serving Action II on Middagh would not come within any of the provisions of section 583.420 since he was served within two years after the date Action II was commenced against him as a Doe defendant. Blackfield further argues that its due process rights were violated because it had no notice or opportunity to be heard on the question of whether Action II should be dismissed.
Trial courts do have the inherent power to dismiss actions even when no statutory ground for doing so under section 583.110 et seq. applies. Section 583.150 provides: “This chapter [concerning dismissal for delay in prosecution] does not limit or affect the authority of a court to dismiss an action or impose other sanctions under a rule adopted by the court pursuant to Section 575.1 or by the Judicial Council pursuant to statute, or otherwise under inherent authority of the court.” (Italics added; see also People v. Jefferds (1899) 126 Cal. 296, 298–301 [code provisions on the subject are not in derogation of court’s inherent power to dismiss for failure to prosecute]; Pearlson v. Does 1 to 646 (1999) 76 Cal.App.4th 1005, 1009–1012 [upholding dismissal for failure to prosecute under trial court’s inherent authority even though less than two years had passed from commencement of the action].)
In this case, the dismissal of Action II fell well within the trial court’s discretion. First, Action I and Action II had been consolidated into one action. While Blackfield argues that the cases were consolidated for trial only, the record fails to show that the trial court or either party to the stipulation expressed such limitation at the time the order was entered. In our view, the trial court’s actions and comments at the hearing show that it regarded the cases as consolidated for all purposes. (See Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127, 1149 [it is for the trial court to determine whether the consolidation is for all purposes or for trial only].) In any event, even if the cases had been consolidated for trial only, that would have been sufficient in itself to support the court’s exercise of its inherent power to dismiss in light of the totality of factors referred to in its written order.
At the hearing on the motion to dismiss, Middagh’s counsel asserted, and Blackfield did not dispute, that Coyle, who was named only in Action I, was given the right to object to the good faith of the settlements Blackfield reached with certain subcontractors, who were only named in Action II. If true, this would tend to confirm that the two actions were consolidated for all purposes.
Second, Action II was a sham proceeding as to Middagh. Action II simply restated the claims in Action I, minus the latter’s fraud claim. Blackfield had no reason to file it initially except to proceed against the subcontractor defendants that it had been forced to dismiss from Action I when it failed to serve them by the court’s deadline. It is evident that Blackfield had no reason to serve the complaint in Action II on Middagh except in an attempt to dodge Middagh’s dismissal motion. Although Blackfield claimed that its delay in serving Action I on Middagh was due to discovery stonewalling that prevented it from learning of Middagh’s purported role in defrauding the Machkines, it sought to join him as the sole remaining defendant to an action that in fact includes no fraud cause of action. These factors very strongly suggest that Action II is no more than a sham pleading as to Middagh, served on him as a procedural ruse to avert the dismissal of Blackfield’s claims against him for failure to prosecute. The trial court was not required to submit to what would have been an abuse of its processes. (See, e.g., Cunha v. Anglo California Nat. Bank (1939) 34 Cal.App.2d 383, 388–392 [affirming court’s inherent power to dismiss action not brought in good faith]; Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 297–298 [same].)
Although Blackfield tries to implicate Middagh in allegedly defective construction work performed on the premises, the evidence he cites was so minimal—Middagh’s handing of Visqueen pieces down to Coyle on one occasion—that this argument too smacks of bad faith.
We reject Blackfield’s due process objection on two grounds. First, there was no due process violation because Blackfield did have notice and an opportunity to be heard regarding the dismissal of Action II. Although Middagh had not yet been served with Action II when he filed the motion to dismiss, the motion sought dismissal of “the action” without making any distinction between Action I and Action II. The two actions had in fact been consolidated for all purposes. By the time Blackfield filed its opposition to the motion to dismiss, it had served Middagh with the complaints in both actions and had the opportunity to explain in writing why Action II should survive Middagh’s motion to dismiss “the action.” In fact, Blackfield did address Action II in its papers, claiming that it mooted Middagh’s motion. Thereafter, at the hearing on the motion to dismiss, although the court stated at the outset that it intended to dismiss Middagh from the entire action, Blackfield made no argument against the dismissal of Action II. Blackfield also did not file a motion for reconsideration of this issue. Under the circumstances, Blackfield was not deprived of due process.
Second, even assuming for the sake of analysis that there was a due process violation, Blackfield was not prejudiced. (See § 475.) In our view, there is no reasonable likelihood that the trial court would have allowed Blackfield to proceed with Action II against Middagh had Blackfield been given a further opportunity to present evidence and argument on this point. No evidence or argument would have changed the fact that the two actions were consolidated, that Blackfield’s excuse for its delay in serving Middagh was wholly unconvincing, or that allowing Blackfield to nonetheless proceed with Action II against him would have been abuse of the court’s processes.
Section 475 provides in relevant part: “No judgment, decision, or decree shall be reversed or affected by reason of any error, ruling, instruction, or defect, unless it shall appear from the record that such error, ruling, instruction, or defect was prejudicial, and also that by reason of such error, ruling, instruction, or defect, the said party complaining or appealing sustained and suffered substantial injury, and that a different result would have been probable if such error, ruling, instruction, or defect had not occurred or existed.”
C. Attorney Fee Issues
Blackfield does not dispute that, as the Machkines’ assignee under the residential purchase agreement, it became liable for contractual attorney fees to the same extent the Machkines would have been had Middagh prevailed in a construction defect lawsuit brought by them. Nonetheless, Blackfield maintains that the trial court abused its discretion in awarding attorney fees to Middagh, citing the following grounds: (1) Blackfield itself never sought fees in the operative complaints or otherwise in the litigation; (2) in his answer to the complaint in Action I, Coyle asserted that there was no privity between him and Blackfield; (3) at his deposition, Middagh refused to answer questions about whether he had paid Coyle’s legal fees; (4) under the election-of-remedies doctrine, Middagh’s fee claim was barred by his election to first seek such fees as sanctions for having to bring the motion to dismiss; and (5) Middagh failed to demonstrate that he actually incurred any fees since all attorney billing statements were addressed to Coyle.
The above grounds are without merit. Whether Blackfield alleged a right to fees in its complaint is irrelevant to Middagh’s entitlement to fees. Equally, allegations and admissions in Coyle’s pleadings cannot foreclose or delimit Middagh’s rights. Middagh’s refusal to answer questions about fees he paid in Coyle’s defense has no bearing on his right to recover fees he incurred in his own defense.
The election-of-remedies doctrine is also unavailing for Blackfield. None of the authorities it cites on this doctrine hold or suggest that first seeking attorney fees as sanctions (and failing to get them) precludes a postjudgment application for the same fees based on a contractual fee clause. The procedures Middagh followed in seeking to recover his fees were not prejudicial to Blackfield and did not allow Middagh to obtain a duplicate recovery. The doctrine of election of remedies has no application here.
The documentation supporting the fee award was sufficient. A declaration of Middagh’s counsel averred that Middagh, not Coyle, was responsible for and paid $47,475.68, which included $13,219.50 in fees incurred for the motion to dismiss. Counsel declarations and billing records also supported Middagh’s request for an additional $3,269 for fees incurred but not yet billed, including those incurred on the fee motion. Blackfield fails to establish that the billings were unreasonable in amount or that the trial court abdicated its responsibility to determine the reasonableness of the fees billed. In fact, the trial court expressly found that certain additional fees Middagh claimed for services rendered after the fee motion was filed were unreasonable.
The fact that the attorneys’ billing statements were addressed to Coyle (and copied to Middagh) does not contradict Middagh’s claim that he incurred the fees in issue. In any event, even if some portion of the fees reasonably incurred in Middagh’s defense was paid for by Coyle, Middagh was still entitled to recover 100 percent of those fees. The losing side does not reap a windfall benefit just because the prevailing party happens to have an arrangement to share the financial burden of the litigation with a nonparty. (See International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175, 1192–1194 [prevailing parties were entitled to recover attorney fees even though all of their fees were actually paid by a third party.]) The trial court did not abuse its discretion in awarding Middagh 100 percent of his reasonable fees incurred after being served with process, whether he actually paid those fees or not.
For the same reason, we reject Middagh’s claim in his cross-appeal that he was entitled to recover the fees he paid in defense of Coyle. Had Coyle prevailed in his litigation with Blackfield, and not waived his right to fees under the terms of his section 998 offer, Coyle would have been able to recover 100 percent of his reasonable defense fees from Blackfield without regard to who actually paid the fees. But Middagh, as a nonparty, would have had no rights against Blackfield for those fees even if he had paid 100 percent of them. Under the contractual attorney fee clause in issue, only a “prevailing party” can recover fees. A nonparty cannot qualify for that title. In any event, by virtue of his settlement with Blackfield, Coyle expressly waived the right to recover fees incurred in his defense, no matter who paid those fees.
Blackfield moved for sanctions against Middagh on the ground that his cross-appeal is frivolous. We deny the motion.
The appeal and cross-appeal from the trial court’s attorney fee rulings are without merit.
III. DISPOSITION
The judgment and postjudgment order awarding fees are affirmed. Costs on appeal are awarded to Middagh on Blackfield’s appeal and to Blackfield on Middagh’s cross-appeal.
We concur:
Stein, Acting P.J., Swager, J.