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Inc., Davis Moreno Construction v. Frontier Steel Buildings Corp

March 3, 2011


The opinion of the court was delivered by: Oliver W. Wanger United States District Judge



Plaintiff Davis Moreno Construction, Inc., ("Plaintiff") proceeds with an action for damages against Defendant Frontier Steel Buildings Corp. ("Defendant").

On November 18, 2010, the court entered an order granting Plaintiff's motion for partial summary judgment, holding that Defendant was a "contractor" as defined by California's Contractors' State License Law for the purposes of the parties' agreement. (Doc. 120).*fn1

On December 1, 2010, Plaintiff filed a motion for attorneys' fees. (Doc. 124). Defendant did not file timely opposition to Plaintiff's motion. See E.D. Cal. R. 230(c) (opposition due not less than fourteen days preceding noticed hearing date).


This action concerns a contract between Plaintiff and Defendant related to a public works project for the Kern Unified School District for the construction of its Records Retention Facility (the "Project") in Kern County, California. As the prime contractor on the Project, Plaintiff engaged subcontractors and suppliers, including Defendant.

Pursuant to the parties' contract, Defendant agreed to generate "anchor bolt and structural drawings," "shop drawings and engineering calculations," "fabrication drawings," and to deliver the fabricated materials to the Project site within certain specified time periods. The materials Defendant agreed to provide included primary and secondary steel, roof panels, steel framing, and other materials. Defendant also retained broad authority to perform or direct the performance of corrections to the structural framing it provided. Defendant performed various obligations under the contract, and Plaintiff made several payments to Defendant. In total, Plaintiff paid Defendant $168,025.90.

On June 18, 2008, Plaintiff filed a law suit against Defendant for breach of contract based on Defendant's alleged failure to meet certain deadlines set forth in the parties' agreement. Plaintiff filed an amended complaint on February 17, 2009 ("FAC"). (Doc. 24). Inter alia, the FAC added a claim pursuant to California's Contractor State License Law ("CSLL"). The CSLL requires contractors performing construction work to be licensed at all times during the performance of such work, see, e.g., MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., 36 Cal. 4th 412, 425 (Cal. 2005), and bars an entity from recovering or retaining compensation for any work performed in connection with an agreement for services requiring a contractor's license unless proper licensure was in place at all times during such contractual performance, White v. Cridlebaugh, 178 Cal. App. 4th 506, 518 (Cal. Ct. App. 2009) (citation omitted).

On November 18, 2010, the court issued a memorandum decision granting: (1) Plaintiff's motion for summary judgment on its statutory claim for disgorgement under the section 7031(b), which allows recovery of all compensation paid to a contractor for performing unlicensed work; and (2) Plaintiff's motion for summary judgment on Defendant's counterclaim for breach of contract pursuant to section 7031(a), which shields a person who utilizes the services of an unlicensed contractor from lawsuits by that contractor to collect payment for unlicensed work. (Doc. 118).


A federal court sitting in diversity applies the law of the forum state regarding the award of attorneys' fees. E.g., Kona Enters. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000)(citations omitted). As a general matter, California follows the "American rule," which provides that each party to a lawsuit ordinarily pays their own attorneys' fees. E.g., Lockton v. O'Rourke, 184 Cal. App. 4th 1051, 1070 (Cal. Ct. App. 2010). California's Legislature codified the American rule in 1872 when it enacted California Code of Civil Procedure section 1021. Trope v. Katz, 11 Cal. 4th 274, 278 (1995). Section 1021 provides:

Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided.

Cal. Civ Code ยง 1021 (2011). Pursuant to section 1021, parties "contract out" of the American rule "when there is an 'agreement, express or implied, of the parties' that allocates attorney fees.'" Locton, 184 Cal. App. 4th at 1070 (citing Trope, 11 Cal. 4th at 279). In order to determine whether an award of attorney fees is warranted under a contractual attorney fees provision, the reviewing ...

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