Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Alameda County Super. Ct. No. 2002-066360
Kline, P.J.
This is the second appeal in a case arising from construction work performed by respondent JRW Construction, Inc. (JRW), for appellants Judith, Kevin and Dennis Murray (collectively the Murrays). On the previous appeal by JRW, this court affirmed a judgment determining that the Murrays owed JRW $180,001.33 in satisfaction of a mechanics lien, after subtraction of amounts JRW owed the Murrays due to improperly performed construction work and other issues. The Murrays sought attorney fees on the appeal. The trial court initially granted the fee request, then reversed itself on JRW’s motion for a new trial and to vacate. The Murrays contend the trial court erred in granting the new trial motion and denying their request for attorney fees.
STATEMENT OF THE CASE AND FACTS
The facts underlying the parties’ dispute are set forth in full in our opinion on the prior appeal, Murray v. JRW Construction, Inc. (May 15, 2006, A108956) [nonpub. opn.]. The Murrays hired JRW to perform repairs on an apartment building in Alameda. JRW stopped work on the project before completion due to the Murrays’ failure to make payments due under the parties’ contracts, and filed a mechanic’s lien in the amount of $409,533.33. The Murrays filed a complaint for breach of contract, negligence, declaratory relief and negligent construction against JRW, seeking general and punitive damages, interest, and a declaration that JRW had no claim or right to foreclose the mechanic’s lien. JRW cross-complained for breach of contract. The trial court determined that the Murrays had breached the contracts by not making required payments, and that JRW was negligent in performing under the contract, in that it performed work in contravention of building plans and specifications and industry standards. The court ordered that JRW’s mechanic’s lien be reduced by the amount it found to be the Murrays’ damages for JRW’s negligence, an amount due to JRW under a contractual provision the court found unconscionable, and an amount the court found represented labor, services, materials and equipment JRW had not actually provided. This resulted in a judgment for JRW in the amount of $180,001.33. At a hearing on JRW’s motion for clarification, the trial court made clear that it intended to compensate both parties to a degree because both were at fault. The court ordered that “neither party prevailed in this action and that [the Murrays are] to pay [JRW] $180.011.33 in satisfaction of Mechanic’s lien.”
JRW appealed, challenging the manner in which the trial court had calculated the damages it owed to the Murrays and arguing the trial court improperly failed to award interest. This court affirmed, and the remittitur provided for the Murrays to recover their costs.
On August 23, 2006, the Murrays filed a memorandum of costs and motion for attorney fees on the appeal. The Murrays argued that they were entitled to attorney fees as the prevailing party on the appeal, because the underlying construction contract provided for the prevailing party to recover attorney fees. JRW did not oppose the Murrays’ request for costs on appeal. With respect to the motion for attorney fees, however, JRW argued there was no basis for an award because there was no prevailing party on the contract containing the fee provision, noting that neither party had appealed the trial court’s determination in this respect.
After a hearing on September 29, 2006, the trial court granted the Murrays’ motion and ordered JRW to pay $18,875 in attorney fees. The court cited as authority former rules 27 and 870.2 of the California Rules of Court, now rules 8.278 and 3.1702 respectively. JRW filed a motion to vacate the judgment and for new trial. The Murrays opposed JRW’s motion, which it viewed as in effect an improper motion for reconsideration. On December 1, 2006, the trial court issued a tentative decision denying JRW’s motion. After hearing, however, the court granted the motion, vacated its order awarding attorney fees, and denied the Murrays’ motion for attorney fees.
All further references to rules will be to the California Rules of Court.
The Murrays filed a timely notice of appeal on January 31, 2007.
DISCUSSION
I.
“ ‘On appeal this court reviews a determination of the legal basis for an award of attorney fees de novo as a question of law.’ ” (Butler-Rupp v. Lourdeaux (2007) 154 Cal.App.4th 918, 923, quoting Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671, 677; see Snyder v. Marcus & Millichap (1996) 46 Cal.App.4th 1099, 1102 (Snyder).)
The Murrays contend they are entitled to attorney fees under rules 8.278 and 3.1702 because they were the prevailing parties on the prior appeal, which affirmed the trial court’s judgment, regardless of whether they were the prevailing parties at trial. They further contend they are entitled to attorney fees on appeal because they were the prevailing parties at trial—even though the trial court expressly stated neither party prevailed—in that they recovered greater relief than JRW. (See Mustachio v. Great Western Bank (1996) 48 Cal.App.4th 1145, 1150.) This argument is based on the fact that the trial court awarded the Murrays a total of $229,532, $49,531 more than the $180,001 it awarded to JRW.
As explained in our prior opinion, the trial court deducted from JRW’s $409,533 mechanics lien $185,000 for JRW’s negligence, $26,782 for an unconscionable provision in the contract, and $17,750 for work not performed.
The Murrays’ latter argument is unavailing. As stated above, the trial court expressly found that neither party prevailed in the action. Neither the Murrays nor JRW appealed this determination. The only appeal from the trial court’s judgment was JRW’s, and it was expressly limited to challenging the method by which the trial court calculated its award. “An ‘ “appeal from a distinct and independent part of a judgment does not bring up the other parts for review in the appellate court . . . .” [Citation.]’ (Gonzales v. R.J. Novick Constr. Co. (1978) 20 Cal.3d 798, 805.)” (11382 Beach Partnership v. Libaw (1999) 70 Cal.App.4th 212, 219.) “As explained in Gonzales v. R.J. Novick Constr. Co., [at pages] 804-805, ‘ “Ordinarily [an appeal from a specific portion of a judgment] would leave the parts not appealed from unaffected, and it would logically follow that such unaffected parts must be deemed final, being a final judgment of the facts and rights which they determine. . . . [T]he court upon such partial appeal can inquire only with respect to the portion appealed from.” ’ (Ibid., quoting Whalen v. Smith (1912) 163 Cal. 360, 362–363.)” (ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1015.) The Murrays cannot now challenge the determination that neither party prevailed at trial.
The question, then, is whether the Murrays are entitled to attorney fees on appeal because this court affirmed the judgment from which JRW appealed—that is, because they were the prevailing party on appeal even though they were not the prevailing party at trial. As stated above, the Murrays’ argument is based on rules 8.278 and 3.1702.
Rule 8.278(a)(1) provides that “the party prevailing in the Court of Appeal in a civil case . . . is entitled to costs on appeal.” The “prevailing party is the respondent if the Court of Appeal affirms the judgment without modification or dismisses the appeal. The prevailing party is the appellant if the court reverses the judgment in its entirety.” (Rule 8.278(a)(2).) Rule 8.278(d)(2) further specifies, “[u]nless the court orders otherwise, an award of costs neither includes attorney’s fees on appeal nor precludes a party from seeking them under rule 3.1702.”
Rule 3.1702, entitled “Claiming attorney’s fees,” sets forth the time for filing motions for attorney fees, including attorney fees on appeal. “A notice of motion to claim attorney fees on appeal—other than the attorney’s fees on appeal claimed under (b) [attorney fees before trial court judgment]—under a statute or contract requiring the court to determine entitlement to the fees, the amount of the fees, or both, must be served and filed within the time for serving and filing the memorandum of costs under [former] rule 8.276(d) [now rule 8.278(c)].” (Rule 3.1702(c)(1).) The foregoing provision applies “when the court determines entitlement to the fees, the amount of the fees, or both, whether the court makes that determination because the statute or contract refers to ‘reasonable’ fees, because it requires a determination of the prevailing party, or for other reasons.” (Rule 3.1702(a).)
The Murrays contend that under rule 8.278, they were the prevailing party on the first appeal because the judgment was affirmed in its entirety. Accordingly, they argue, they were entitled to move for attorney fees on appeal pursuant to the procedures of rule 3.1702. Contrary to the Murrays’ position, however, rules 8.278 and 3.1702 do not provide independent authority for an award of attorney fees. Rule 8.278 simply states that an award of costs on appeal neither includes nor precludes an award of attorney fees. Rule 3.1702 provides that a notice of motion to claim attorney fees on appeal “under a statute or contract requiring the court to determine entitlement to the fees, the amount of the fees, or both” must be filed and served within the time for filing and serving the memorandum of costs under rule 8.278(c) [former rule 8.276(d)]. As our Supreme Court has explained, “recoverable litigation costs do include attorney fees, but only when the party entitled to costs has a legal basis, independent of the cost statutes and grounded in an agreement, statute, or other law, upon which to claim recovery of attorney fees.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 606.)
The attorney fees provision of the parties’ contract states: “In the event legal action or arbitration is instituted for the enforcement of any term or condition of this contract, the prevailing party shall be entitled to an award of reasonable attorney fees in said action or arbitration, in addition to costs and reasonable expenses incurred in the prosecution or defense of said action or arbitration.” According to the Murrays, a “legal action” to enforce the contract includes an appeal, entitling the prevailing party on appeal to fees regardless of whether that party prevailed at trial.
Civil Code section 1717, subdivision (a), provides: “In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.” (Italics added.) As the italicized language demonstrates, the prevailing party is the party who prevails “on the contract,” not necessarily the one who prevails at any given stage in the litigation.
This point was established in Snyder, supra, 46 Cal.App.4th 1099. In that case, the defendant appealed and obtained a reversal of an award of punitive damages, then sought attorney fees for the appeal. Snyder affirmed the trial court’s denial of fees, explaining that although the defendant successfully reduced the amount of the judgment against it, the plaintiff, who retained a judgment for compensatory damages, was the prevailing party on the lawsuit as a whole. The contract at issue in Snyder provided for attorney fees to the prevailing party in “a lawsuit or other legal proceedings” arising from the contract. (Id. at p. 1101.) The attorney fees provision in the present case is substantially similar.
The Murrays argue Snyder is distinguishable because in that case the defendant obtained only a partial reversal and therefore was not the “prevailing party” under rule 8.278, whereas here the appeal resulted in an affirmance entirely in the Murrays’ favor. The Murrays point out that Snyder did not consider rule 8.278, but only Civil Code section 1717. As discussed above, rule 8.278 does not provide independent authority for an award of attorney fees. The distinction the Murrays draw is not relevant to Snyder’sholding that a party is only entitled to attorney fees if it is the prevailing party in the entire litigation, rather than in a portion of it. “In cases where Civil Code section 1717’s definition of ‘prevailing party’ applies, the identification of the party entitled to a fee award must be determined by the final result of the litigation, i.e., after conclusion of the appeal if an appeal is taken.” (Butler-Rupp v. Lourdeaux, supra, 154 Cal.App.4th at p. 928.) A number of cases apply this principle where an appeal is to be followed by further proceedings in the trial court that will ultimately resolve the action. (E.g., Mustachio v. Great Western Bank, supra, 48 Cal.App.4th 1145, 1150 [appeal reversed award of punitive damages and remanded for determination of prejudgment interest owed to plaintiff]; Presley of Southern California v. Whelan (1983) 146 Cal.App.3d 959, 961 [summary judgment reversed on appeal].) Here, the prior appeal did not anticipate further litigation in the trial court. It did, however, affirm a judgment that found neither party had prevailed on the underlying contract. The Murrays’ successful defense of the judgment against JRW’s attempt to modify the damages award did not alter the fact that—according to the trial court’s unappealed determination—there was no prevailing party in the litigation.
The Murrays attempt to further distinguish Snyder, supra, 46 Cal.App.4th 1099, by arguing they were the prevailing parties in the overall litigation because they obtained the greater net recovery. As we have explained, this argument is unavailing, as the trial court’s determination that there was no prevailing party was never challenged.
Aside from the merits of the trial court’s decision denying the Murrays attorney fees on the prior appeal, the Murrays argue the trial court did not have authority to alter its initial decision to award the fees. According to the Murrays, JRW’s motion to vacate judgment and for a new trial (Code Civ. Proc., §§ 663, 657) was in fact a motion for reconsideration (Code Civ. Proc., § 1008) which did not allege proper grounds. A motion for reconsideration must allege “new or different facts, circumstances or law” and demonstrate why, with reasonable diligence, the new evidence or authority could not have been produced earlier. (Code Civ. Proc., § 1008; Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1198, 1200.)
JRW’s motion cited a number of grounds under Code of Civil Procedure section 657, including errors of law. (Code Civ. Proc., § 657, subd. 7.) “A motion for new trial may be used to challenge an appealable order on a motion as well as a decision or verdict in a conventional civil action (In re Marriage of Beilock (1978) 81 Cal.App.3d 713, 719-721) and a motion for new trial may be based on a number of different grounds, including errors of law. (Code Civ. Proc., § 657, subd. 7.)” (Blue Mountain Development Co. v. Carville (1982) 132 Cal.App.3d 1005, 1014.)
The Murrays rely upon Mann v. Superior Court (1942) 53 Cal.App.2d 272, 285, for the proposition that “there may be no new trial upon an issue of fact brought forward by a motion in the case.” Since the time Mann was decided, however, caselaw has established a broad definition of the term “trial” and held that motions for new trial can be used to address issues of law as well as issues of fact. (In re Marriage of Beilock, supra, 81 Cal.App.3d at pp. 19-721; Adams v. Superior Court (1959) 52 Cal.2d 867, 870 [“A ‘trial’ is the examination before a competent tribunal . . . of questions of fact or of law put in issue by pleadings, for the purpose of determining the rights of the parties”]; Carney v. Simmonds (1957) 49 Cal.2d 84, 90 [“issues of law may be reexamined on a motion for a new trial”].) Mann’sblanket prohibition is inconsistent with these developments in the law. (See Hoffman-Haag v. Transamerica Ins. Co. (1991) 1 Cal.App.4th 10, 14 [stating of Bertch v. Social Welfare Dept. (1957) 149 Cal.App.2d 517, 519, which followed Mann in holding a motion for new trial cannot be used to review an issue raised by a motion (in Bertch, “fixing” the amount of mandatory attorney fees), “[t]he limitations on motions for new trial discussed in Bertch were abandoned in Carney v. Simmonds[, supra,] 49 Cal.2d [at p.] 90”].)
The question is not free from doubt. We are aware of no recent case expressly holding a motion for new trial can be utilized to secure review in the trial court of the decision on a postjudgment motion for attorney fees. The view that the petitions for writ of execution at issue in Blue Mountain and Beilock were analogous to pleadings presenting an issue for “trial” does not necessarily require a determination that the hearing on a motion for attorney fees is so analogous. On the other hand, as stated above, the bald statement that a new trial motion can never be used to challenge the order on a motion in the trial court is clearly too broad.
Other than their reliance upon Mann, the Murrays do not argue that JRW’s motion did not meet the requirements of Code of Civil Procedure section 657. Rather, they contend that allowing a motion for new trial to be used to challenge a trial court’s order on a motion would render Code of Civil Procedure section 1008 meaningless. As stated above, section 1008 permits a trial court to reconsider a prior ruling only on a showing that the alleged new evidence or new law could not with reasonable diligence have been presented earlier. (Baldwin v. Home Savings of America, supra, 59 Cal.App.4th 1192, 1198, 1200.) The Murrays contend that because Baldwin accepted that the burden of a party seeking reconsideration on grounds of new or different evidence was “ ‘the same as that of a party seeking new trial on the ground of “newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial” (Code Civ. Proc. § 657, subd. 4)’ ” (Baldwin, at p. 1198), the case also stands for the proposition that a party applying for reconsideration of a motion on the basis of new or different law—“whether by motion for new trial or for reconsideration”—cannot prevail without showing the information could not have been presented with reasonable diligence.
Baldwin, of course, did not address the requirements for motions for new trial based on alleged errors of law. Code of Civil Procedure section 657 expressly includes the due diligence requirement for granting a new trial motion on grounds of newly discovered evidence (Code Civ. Proc., § 657, subd. 4); this is the diligence requirement imposed by Blue Mountain on motions for reconsideration based on new evidence and extended by Baldwin to motions for reconsideration based on new law. Section 657 does not include the same kind of diligence requirement for new trial motions based on legal error. (Code Civ. Proc., § 657, subds. 6, 7; Hoffman-Haag v. Transamerica Ins. Co., supra, 1 Cal.App.4th at pp. 14-15 [“legal challenges which may be brought by way of section 657, subdivision 6, and section 663, subdivision 1, are not limited to those raised before verdict or judgment”].)
In the present case, we do not find it necessary to resolve the propriety of JRW’s motion. If the procedural mechanism utilized below was improper, JRW’s only recourse after the trial court’s initial decision in the Murrays’ favor would have been to appeal the order granting attorney fees. Had JRW done so, we would necessarily have reversed the trial court’s order; as discussed above, the decision the trial court ultimately reached was the legally correct result on the merits of the Murrays’ request for attorney fees on the prior appeal. Were we to reverse the present order due to procedural defects in the manner in which it was obtained, the parties would be left with an order erroneously awarding attorney fees to the Murrays. JRW would appeal from that order and we would reverse. No possible purpose would be served by such a futile sequence of events. Under the familiar doctrine of harmless error, a judgment will not be reversed where there has been no miscarriage of justice. Here, viewing the case as a whole, this is patently the case.
After this appeal was fully briefed, JRW filed a motion for sanctions against the Murrays, arguing that the appeal was frivolous in light of Snyder, supra, 46 Cal.App.4th 1099, and that the Murrays’ arguments were so baseless as to be sanctionable. While we agree, as discussed above, that the Murrays’ arguments on the attorney fees question are meritless, their argument regarding the propriety of the new trial motion is not so clearly without basis. Indeed, JRW complicated this court’s task by failing to respond in its reply brief to the Murrays’ citation of Mann v. Superior Court, supra, 53 Cal.App.2d 272, which held that the decision on a motion for attorney fees may not be challenged by a motion for new trial. We do not find this a proper case for imposition of sanctions.
The judgment is affirmed. Costs on appeal to JRW.
We concur: Haerle, J., Lambden, J.
Former rule 870.2, in effect during the trial court proceedings in this case, was replaced by Rule 3.1702, which became effective January 1, 2007. Rule 27, which applied during the trial court proceedings, was replaced by rule 8.276, effective January 1, 2007, and then by rule 8.278, effective January 1, 2008. There is no difference in substance between the former and current rules as they pertain to this case.