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Construction contract

Procedural Posture

 Defendant surety challenged an order of the Municipal Court for the San Luis Obispo County, Judicial District of San Luis Obispo County (California), which awarded plaintiff homeowner attorney fees against defendant in plaintiff's action for breach of a construction contract against defendant's principal.

 Overview

 Plaintiff brought an action for breach of contract against a contractor, his employee, and defendant. The trial court found in favor of plaintiff and awarded her damages against each defendant and attorney fees against each defendant. Defendant surety challenged the award of attorney fees. For protection from threat  Bane Act is working. It contended that the Contractor's License Law could not be used to collect a debt, that it could not be made liable for attorney fees under Cal. Civ. Code § 1717, and that the award of attorney fees unfairly infringed on the rights of competing and future bond claimants. The appellate court rejected defendant's arguments and affirmed the award. It held that plaintiff was a direct, intended beneficiary of the bonding contract and was entitled to recover as a third party beneficiary to the contract. The court further held that defendant was not directly liable for attorney fees by virtue of Cal. Civ. Code §1717, but rather it was liable based on the general principles of suretyship law. The court held that Cal. Civ. Code § 7071.11 did not preclude an award of attorney fees against a surety and that competing and future claimants would not be prejudiced by defendant's payment of the award.

 Outcome

 The appellate court affirmed an award of attorney fees against defendant surety in an action against defendant's principal for breach of a construction contract where the court held that defendant was liable for attorney fees based on the general principles of suretyship law.

 Procedural Posture

 Defendant clients appealed from the order of the Superior Court of Los Angeles County (California), which granted plaintiff law firm's petition to confirm an arbitration award, and denied defendants' petition to vacate the award and their motion for leave to file a cross-complaint.

 Overview

 Plaintiff law firm filed an action to recover fees from defendant clients. Pursuant to Cal. Bus. & Prof. Code § 6200 et seq., defendant requested binding arbitration and the trial court proceedings were stayed. Defendant attempted to waive arbitration by filing an answer and cross-complaint in the trial court. The arbitration panel refused the waiver and the trial court granted plaintiff's motion to strike. Defendant next filed a motion to lift the stay and reinstate the case. The motion was denied. The panel awarded recovery to plaintiff. Plaintiff filed a petition to confirm the award and defendant filed a petition to vacate and a motion for leave to file a cross-complaint. The trial court granted plaintiff's petition and denied defendant's petition and motion. The court on appeal affirmed, holding that the panel had authority to determine whether the arbitration was terminated. The court held that the trial court had authority to determine whether the dispute should be removed from arbitration and there was no evidence that it's determination was an abuse of discretion. Moreover, the court held that the arbitration award did not exceed the scope of the submitted issue.

 Outcome

 The court affirmed the grant of plaintiff law firm's petition to confirm an arbitration award and the denial of defendant clients' petition to vacate the award and their motion for leave to file a cross-complaint in an action for recovery of unpaid fees, holding that neither the arbitration panel nor the trial court had abused its discretion in exercising the authority to deny defendant's request to terminate arbitration prematurely.