Opinion
G056765
11-26-2019
OZUNA ELECTRIC COMPANY, INC., Plaintiff, Cross-defendant, and Respondent, v. INTEGRATED PROCESS CONTROL ENGINEERING, INC., Defendant, Cross-complainant, and Appellant.
Chang & Coté, Steven J. Coté and Travis J. Tom for Plaintiff and Respondent. Clearview Law and Shannon Gallagher for Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2015-00827749) OPINION Appeal from a postjudgment order of the Superior Court of Orange County, Deborah C. Servino, Judge. Affirmed. Chang & Coté, Steven J. Coté and Travis J. Tom for Plaintiff and Respondent. Clearview Law and Shannon Gallagher for Defendant and Appellant.
Integrated Process Control Engineering, Inc. (Integrated) appeals from a postjudgment order granting Ozuna Electric Company, Inc.'s (Ozuna) motion for attorney fees. Integrated contends the trial court erred by granting Ozuna's motion because the agreement did not contain a provision permitting the recovery of attorney fees by a prevailing party. Finding no error, we affirm the postjudgment order.
FACTS
This appeal is a companion case to Ozuna Electric Company, Inc. v. Integrated Process Control Engineering, Inc. (Nov. 26, 2019, G056426) [nonpub. opn.] (Ozuna I), and is based on the same facts. It involves the underlying lawsuit by Ozuna against Integrated for breach of contract. The operative agreement between the parties (agreement) contained the following language, set forth in exhibit A: "All [c]ollection costs and [a]ttorney fees shall be added to the unpaid balance." Exhibits were fully integrated into the agreement. Integrated's operative cross-complaint against Ozuna sought "costs, and for attorneys' fees if allowed under [c]ontract."
In the interest of brevity, we provide only a general overview and otherwise do not repeat the facts or address the issues where the two cases are identical. We incorporate by reference the factual and procedural history set forth in Ozuna I.
On September 25, 2019, Integrated filed a motion to incorporate by reference trial exhibit number 2, the operative agreement. We denied the request because several copies of the agreement were already included in our record. --------
Ozuna prevailed at trial. The trial court granted Ozuna's postjudgment motion for attorney fees (motion). It determined, "Section 1.1 of the [a]greement stated Ozuna 'will perform and complete for [Integrated] all of the work described in [e]xhibit A to this [a]greement.' Exhibit A to the [a]greement included quotations and contained an attorney's fee provision that stated: 'There is a late charge of 1.5 [percent] per month, for all unpaid balances. All [c]ollection costs and [a]ttorney fees shall be added to the unpaid balance.' . . . The [a]greement integrated attached exhibits . . . . [Integrated] recognizes that the [a]greement contained an integration clause, but disputes that it included the attorney fee clause contained in [e]xhibit A. Using traditional contract interpretation principles, however, the [a]greement provides for attorney's fees related to collection efforts. Ozuna alleged [Integrated] breached the [a]greement by failing to pay the amount owed. . . . Accordingly, Ozuna may recover attorney's fees pursuant to the [a]greement."
DISCUSSION
Integrated asserts the attorney fee clause, attached as exhibit A to the agreement, was not part of the agreement. It also argues "a vague reference to 'collection costs' and 'attorney fees'" set forth in a preprinted form was insufficient to support the postjudgment fee award. Not so.
"'[E]ach party to a lawsuit must ordinarily pay his own attorney fees.' [Citation.]" (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 806.) Attorney fees are allowable as costs when authorized by contract, statute, or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).) Civil Code section 1717, subdivision (a), provides that: "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. [¶] Where a contract provides for attorney's fees, as set forth above, that provision shall be construed as applying to the entire contract, unless each party was represented by counsel in the negotiation and execution of the contract, and the fact of that representation is specified in the contract." "We review de novo an award of attorney fees under a contractual provision where, as here, extrinsic evidence has not been offered to interpret the contract, and the facts are not in dispute." (Paul v. Schoellkopf (2005) 128 Cal.App.4th 147, 151.)
By the plain language of the agreement, it is undeniable exhibit A was fully integrated into the agreement. Specifically, section 16.16 of the agreement states, "This [a]greement, attached exhibits, and all executed [c]hange [o]rders constitue the complete integrated agreement between the parties concerning the subject matter hereof."
Integrated's reliance on Hart v. Clear Recon Corp. (2018) 27 Cal.App.5th 322 (Hart) and Chacker v. J.P. Morgan Chase Bank, N.A. (2018) 27 Cal.App.5th 351 (Chacker), is misguided. Integrated argues the Hart and Chacker cases contained attorney fee provisions very "similar to the one present here" and that such language does not permit the recovery of fees to the prevailing party in the event of litigation. We disagree.
Hart and Chacker dealt with the language contained in a standard form deed of trust. The pertinent part of the standard form stated "Lender may . . . [pay] reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument." (Hart, supra, 27 Cal.App.5th at p. 325; Chacker, supra, 27 Cal.App.5th at p. 351.) The Hart court determined the language in the standard form deed of trust was not a litigation attorney fee provision. (Hart, supra, 27 Cal.App.5th at p. 327.) It explained, "Civil Code section 1717 applies only where a 'contract specifically provides that attorney's fees . . . shall be awarded' to one party or the prevailing party. We must consider whether [the pertinent provision] of the deed of trust specifically so provides. By its plain language, it does not." (Ibid.) It continued, the provision "is, in part, an indemnity clause whereby the signatory borrower agrees to be responsible for numerous expenses which the lender may incur as the result of third party interference with the lender's rights." (Id. at p. 329, emphasis added.)
In contrast to the indemnity language present in Hart and Chacker, here the words "all collection costs and attorney fees shall be added" refer to litigation attorney fees. The attorney fee provision in exhibit A stated fees "shall be" awarded, not merely that they may be paid. Ozuna also sought recovery of Integrated's debt under the agreement, not expenses incurred as a result of third party interference with the agreement. The trial court properly determined the agreement contained a prevailing party, litigation attorney fee provision.
Integrated's remaining citations to antiquated case law concerning extraneous writings are misplaced. All of the cited cases concern writings that were not made part of the operative contracts through an integration clause. Moreing v. Weber (1906) 3 Cal.App. 14, and Nielsen v. Swanberg (1929) 99 Cal.App. 270, 279, hold where a contract refers to another writing for a particular specified purpose, such writing becomes a part of the contract for the specified purpose only. In contrast here, the attorney fee provision in exhibit A was not a separate writing from the agreement, but rather an exhibit made part of the agreement by operation of the integration clause.
Finally, Integrated contends any attorney fees were required to have been pleaded and proven as part of the relief sought by Ozuna because the agreement stated all collection costs and attorney fees "shall be added to the unpaid balance." "Just as an award of costs is 'but an incident to the judgment' rather than an integral part of a judgment, attorney fees authorized solely by statute [or contract] are not part of the cause of action. Such fees are incidents to the cause and therefore properly awarded after entry of a . . . judgment . . . [Citation.] This is distinguishable from the situation in which fees are part of the relief sought and therefore must be pleaded and proved at trial, such as with the third party tort doctrine. "'No similar procedural and evidentiary base is required where "the attorney fee was not the cause of action but an incident to it."' [Citations.]" (Khavarian Enterprises, Inc. v. Commline, Inc. (2013) 216 Cal.App.4th 310, 327.)
As a practical matter, it is unclear how Ozuna would have pleaded and proven attorney fees prior to trial. Furthermore, since the matter was tried to the court and not a jury, the outcome would have been the same had Ozuna somehow proven its fees during trial. We find no error.
DISPOSITION
The postjudgment order is affirmed. Ozuna is awarded its costs on appeal.
O'LEARY, P. J. WE CONCUR: MOORE, J. GOETHALS, J.