Dianne Lee bought a new home in Contra Costs County, just east of San Francisco Bay. Her new house didn’t have a pool. And she wanted some exterior improvements. Dianne selected David Cardiff of Advantage Pools Bay Area to do the work: a pool and spa for $88,400, a pavilion with outdoor kitchen, fireplace and landscaping for $143,000.
It didn’t go well. After a dispute, Cardiff stopped work and walked off the job.
Dianne filed suit, claiming Cardiff’s work was defective. The trial court rejected most of Dianne's claims about the pool but agreed with some of her claims about the pavilion and landscaping. The court also agreed that Cardiff had violated state law by hiring workers as unlicensed independent contractors and not employees. The court ordered Cardiff to refund $238,470 plus contract and tort damages of $236,634. Of that, $35,000 was for defects in the pool.
Dianne won the case. But the court didn’t award reimbursement of her attorney fees. That was a surprise. California Business and Professions Code § 7168 authorizes an award of attorney fees to the “prevailing party” on swimming pool claims. Claims on other types of construction don’t qualify for an award of attorney fees -- absent specific language in the contract. Dianne’s contract with Cardiff didn’t say anything about attorney fees.
Dianne appealed the trial court decision, asking for an award of attorney fees. The appellate court had to decide:
- Was Dianne’s suit a swimming pool claim?
- Was she the prevailing party?
- Should the trial court have awarded Dianne her attorney fees?
The decision (Lee v. Cardiff, July 13, 2023): Reimbursement of attorney fees under § 7168 applies only to pools. Not spas. And not to Dianne’s other home improvements. Moreover, Dianne was not the “prevailing party” on the pool claim. True, pool plaster, tile and coping were defective. The trial court awarded Dianne $35,000 for that. But Cardiff had already offered to fix those problems before Dianne filed suit. So, on the pool issue, Dianne wasn’t the “prevailing party”. Her legal fees would not be reimbursed.
What About Your Contracts?
Should your contracts include the statement:
Any judgment enforcing terms of this agreement shall include an award of court
costs and reasonable attorney's fees to the successful party.
A clause like this raises the stakes. An owner with frivolous claims or weak defenses has an incentive to settle. But law on awards of attorney fees is different in every state. For example:
California -- The right to collect attorney's fees is reciprocal. If a contractor can collect attorney's fees after winning a contract dispute, an owner has the same right. California Civil Code § 1717.
Arizona -- Courts can award "reasonable" attorney's fees to the successful party in any contract dispute. Arizona Revised Statutes § 12-341.01
Connecticut -- If a contractor has the right to collect attorney’s fees, a home owner is given the same right. Connecticut General Statutes § 42-150bb.
Georgia – Better to leave attorney’s fees out of the contract. Official Code of Georgia Annotated § 13-11-8 gives contractors the right to collect attorney's fees if the dispute is over delinquent payment.
Most states won't award attorney's fees if the contract omits that subject. All states will enforce a contract clause awarding attorney’s fees to the prevailing party. But some states will enforce a one-sided clause – an award of attorney’s fees only if suit is necessary to collect what’s due. That always favors the contractor.
To see what your state allows, have a look at Construction Contract Writer. The trial version is free.
