APPEAL from a judgment of the Superior Court of the County of Los Angeles, Dan Thomas Oki, Judge. Affirmed in part and reversed in part. (Los Angeles County Super. Ct. No. KC050999)
The opinion of the court was delivered by: Mosk, J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
Plaintiff and appellant Diaa Yassin (Yassin), a contractor, was hired by defendants and respondents Vinicio Solis and Sonia Solis (collectively Solises) to do improvement work on the Solises' home. Yassin sued for money he claimed was owed him, and the Solises cross-complained, inter alia, for breach of contract in connection with the work performed. The trial court awarded Yassin nothing and the Solises $50,000 in damages and, pursuant to Civil Code section 3260, subdivision (g) (penalties and attorney fees for wrongfully withheld retention payments in certain construction contracts), attorney fees of $36,205.14.*fn2 On appeal, Yassin contends, inter alia, that the claim for the last payment due under the contract upon completion of the work and issuance of the certificate of occupancy did not involve a retention under section 3260, and therefore the trial court erred in awarding attorney fees under that section. In the published portion of this opinion we hold that although a party did not have to plead that it is seeking attorney fees in order to recover those fees,the last contractual payment due Yassin was not a retention under section 3260, and therefore the Solises, as the prevailing parties in the Solises' claim to recover that amount, were not entitled to attorney fees under section 3260, subdivision (g). We also hold that section 3260.1 does not authorize the award of attorney fees. In the unpublished portion of the opinion, we hold that there was substantial evidence of damage. Accordingly, we affirm the award of damages, but reverse the attorney fees award.
Yassin, a licensed contractor, contracted with the Solises to construct an addition on the Solises' home and to do additional work on the home for a total of $75,000. The contract provided as follows: ―The contractor shall furnish to the owner all of the labor and material required for the construction of a new addition . . . [a]ccording to building department approved plans and specifications . . . . The owner shall pay to the contractor for furnishing the labor and materials and for the construction of this residence the sum of $75,000, paid as follows: $7,500 downpayment on the signing of this Agreement; $22,500 Foundation placement; $22,500 Rough Framing Inspection; $15,000 Final Inspection; $7,500 Certificate of Occupany. 3. The final payment shall be made upon completion of the work and before occupancy. . . .‖ There were some change orders. After the City inspector signed a ―final inspection‖ on the project (which was actually the ―drywall inspection‖), Yassin demanded payment of $30,000. Yassin had already received $55,850 from the Solises. The Solises claimed that Yassin had performed deficient work and violated the Contractors' State License Law (Bus. & Prof. Code, § 7000 et seq.), the subcontractors were unlicensed, and the work deviated from the plans and was substandard. The Solises asserted that as a result of these deficiencies, they terminated Yassin from the job and hired another contractor to complete the work. The Solises contended at trial that Yassin caused repeated problems in connection with the project, created difficulties in communications, made spurious claims of change orders, delayed the project, and caused numerous work deficiencies.
Yassin sued the Solises for the $30,900 he claimed was owed him. The Solises cross-complained for damages. Yassin submitted evidence attributing the alleged construction defects to preexisting conditions on the property. The Solises contended that it would cost $63,728.10 to repair the damage caused by Yassin.
The trial court awarded Yassin nothing on his claim and awarded the Solises on their cross-complaint $50,000 in damages. After a posttrial motion based on sections 3260 and 3260.1, the trial court awarded the Solises $36,205.14 in attorney fees under section 3260, subdivision (g) on the theory that the Solises prevailed on Yassin's claim for $7,500 due and payable upon completion of the work and issuance of a certificate of occupancy,*fn3 which payment the trial court deemed to be a retention under section 3260.
Yassin asserts on appeal that there was a lack of substantial evidence to support the Solises' claim for damages;that sections 3260 and 3260.1 are inapplicable to this action because there was no withholding of progress payments or retention of monies due under the contract; that the failure of any of the parties to invoke in their pleadings sections 3260 and 3260.1 precludes an award of attorney fees under those sections; and that any liability under section 3260.1 is barred by the one-year statute of limitations. (Code Civ. Proc., § 340, subd. (a).)
We review a contention that evidence does not support a damage award under the substantial evidence standard of review. (See Major v. Western Home Ins. Co. (2009) 169 Cal.App.4th 1197, 1203, fn. 1.) The normal standard of review for a challenge to the attorney fees award is abuse of discretion, but ―‗de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.'‖ (Connerly v. State Personnel Board (2006) 37 Cal.4th 1169, 1175.)
B. Substantial Evidence of Damage
1. Substantial Evidence of Cause ...