235 So.2d 386 (La. 1970), 50049, Maloney v. Oak Builders, Inc.

Citation256 La. 85,235 So.2d 386
Date04 May 1970
Docket Number50060.,50049
PartiesOlga KENNY, Wife, of/and Paul MALONEY, Jr. v. OAK BUILDERS, INC., et al.
CourtLouisiana Supreme Court

Page 386

235 So.2d 386 (La. 1970)

256 La. 85

Olga KENNY, Wife, of/and Paul MALONEY, Jr.

v.

OAK BUILDERS, INC., et al.

Nos. 50049, 50060.

Supreme Court of Louisiana.

May 4, 1970

Rehearing Denied June 8, 1970.

Page 387

[256 La. 87] Morphy & Freeman, A. D. Freeman, Jr., Lemle, Kelleher, Kohlmeyer, Matthews & [256 La. 88] Schumacher, George A. Frilot, III, Julian H. Good, New Orleans, for appellant.

Casey, Babin & Casey, A. F. Babin, Jr., New Orleans, for appellees.

HAMLIN, Justice.

We directed limited certiorari to the Court of Appeal, Fourth Circuit, for review of that part of its judgment which is in favor of Oak Builders, Inc. and against third party defendants, Chris Peters, DeSota-Rabalais, Bernard Wholesale Distributing Company, Inc., Higgins & Ostarly, Milford A. Friedrich, Jr., St. Bernard Roofing and Sheet Metal Company, and Marvin N. Garrett solidarily in the full sum of $4,608.20 as indemnity for the sum which Oak Builders, Inc. was condemned to pay plaintiffs' attorney. (That part of the judgment of the trial court which condemned Oak Builders, Inc. to pay plaintiffs' attorney provided, 'that there be judgment herein in favor of Arthur F. Babin, Jr., attorney for plaintiffs, and against the defendants, Oak Builders, Inc. and Fidelity and Deposit Company of Maryland, in solido, in the full sum of $4,608.20, for attorney fees herein,' and 'that there be judgment herein in favor of Third-Party Plaintiff, Fidelity and Deposit Company of Maryland, and against Third-Party Defendants, Oak Builders, Inc., John S. Morvant, Jr. and Mrs. Beverly Mire Morvant, in solido, in the full sum of $4,608.20, for plaintiffs' attorney [256 La. 89] fees herein.') Art. VII, Sec. 11, La. Const. of 1921; 254 La. 804, 227 So.2d 143; La.App. 224 So.2d 161. In this matter, two applications for certiorari were granted and limited to the issue of attorney fees; they are interrelated and are therefore consolidated for the purpose of this decision.

The Court of Appeal correctly states the substantial facts of this matter as follows:

'The record discloses that Paul Maloney, Jr., the president of the Citizen's Homestead Association, together with Mrs. Maloney, entered into an agreement with one of the defendants, Mrs. Betty A. L. Moss, an architect, on March 27, 1963, to draw plans for the erection of a home for them in the Lakeshore area of the City of New Orleans. The agreement was confected through the medium of the standard form used by the American Institute of Architects. On October 21, 1963, Oak Builders, Inc., the principal defendant herein, entered into a building contract with the plaintiffs and with the Citizen's Homestead Association through the use of a building contract form of the citizen's home contract form of the Citizen's Homestead, wherein Oak Builders, Inc., agreed sum of $92,164.00. The plans and specifications drawn by Mrs. Moss were paraphed by the homestead's notary for [256 La. 90] identification with the building contract, but the homestead's own building expert, John J. Cruthirds, was named in the agreement as the expert to direct the work and to whose satisfaction it was to be performed.

'Thereafter, construction was begun and the residence was completed on or about September 1, 1964. On that date, the plaintiff was dissatisfied with certain imperfections in the house, and he prepared, with the assistance of his wife, a list of these defects, referred to herein as a 'punch list'. The plaintiff also had in his possession the sum of approximately $30,000.00, which was payable upon final acceptance of the contractor's work.

'In order to obtain as much of the $30,000.00 final payment as possible, Oak Builders, Inc., entered into an agreement with the plaintiff by virtue of which it paid him the sum of $3,000.00 for unacceptable items contained in the house,

Page 388

together with $1,720.00 as liquidated damages for delay in conformity with the demurrage clause set forth in the building contract. Oak Builders, Inc., also agreed to complete or redo the items delineated in the punch list, which was made part of the argeement. Thereafter, after, an acceptance was filed in the appropriate office, and the plaintiffs took [256 La. 91] possession of the residence. All payments specified in the compromise agreement of October 1, 1964, were paid. On May 25, 1965, the plaintiff, Maloney, through his attorney, made a demand upon the architect and contractor to remedy or repair certain architectural and construction errors, omissions, and defects which allegedly caused the plaintiffs to pay large sums of rent, substantial interest, and to incur other expenses. When the architect and the contractor did not capitulate to these demands of the plaintiffs, this suit ensued.'

Named as defendants in the suit were Oak Builders, Inc., the contractor, Fidelity and Deposit Company of Maryland, its surety, Betty A. L. Moss, the architect, and Continental Casualty Company, her liability insurer; plaintiffs prayed for damages in the sum of $38,163.27, together with 10% Attorney's fees on the full amount claimed, plus legal interest and costs. Answers and third party petitions were filed. After an extended trial on the merits, the trial court rendered judgment on new trial as follows:

  1. In favor of the plaintiffs and against Oak Builders, Inc. and Fidelity and Deposit Company of Maryland solidarily in the amount of $8,248.47, together with a like judgment in favor of Fidelity and Deposit Company against Oak Builders, Inc., John S. Morvant, Jr., and Beverly Morvant [256 La. 92] solidarily in conformity with their indemnity agreement.

  2. In favor of defendants, Betty A. L. Moss and Continental Casualty Company and against the plaintffs, dismissing their suit against them.

  3. In favor of Oak Builders, Inc., and against Chris Peters in the amount of $332.00.

  4. In favor of Oak Builders Inc. against DeSota-Rabalais in the amount of $140.00.

  5. In favor of Oak Builders, Inc. against Bernard Wholesale Distributing Company, Inc., in the amount of $352.60.

  6. In favor of Oak Builders, Inc. against Higgins & Ostarly in the amount of $63.95.

  7. In favor of Oak Builders, Inc., against Milford A. Friedrich, Jr., in the amount of $1,087.42.

  8. In favor of Oak Builders, Inc. against DeSota-Rabalais in an additional amount of $25.00.

  9. In favor of Oak Builders, Inc against St. Bernard Roofing and Sheet Metal Company in the amount of $4,632.60.

  10. In favor of Oak Builders, Inc. against Higgins & Ostarly for the additional sum of $300.00.

    [256 La. 93] 11. In favor of J. C. Baumgartner and against Oak Builders, Inc., dismissing Oak Builders, Inc.'s third party petition.

  11. In favor of Oak Builders, Inc. against Marvin N. Garrett for $135.97.

  12. In favor of Noel St. Cyr and against Oak Builders, Inc., dismissing its third party petition.

  13. In favor of Gus Duncan, dismissing Oak Builders, Inc.'s third party petition.

  14. In favor of Oak Builders, Inc., Betty A. L. Moss, and Continental Casualty Company, dismissing St. Bernard Roofing and Sheet Metal Works' reconventional demand and third party petition.

    Page 389

  15. In favor of Arthur F. Babin, Jr., attorney for the plaintiffs, against the defendants, Oak Builders, Inc. and Fidelity and Deposit Company of Maryland, solidarily in the amount of $4,608.20, representing attorney's fees, together with a like judgment in favor of Fidelity and Deposit Company against Oak Builders, Inc. and Mr. and Mrs. Morvant under their indemnity agreement. (This part of the judgment was recited supra.)

    [256 La. 94] All amounts with legal interest thereon from date of judicial demand until paid.

    The Court of Appeal reduced the award to plaintiffs from $8,248.47 to $8,152.50; judgment in a like amount was rendered in favor of Fidelity and Deposit Company of Maryland against Oak Builders, Inc., John S. Morvant, Jr., and Beverly Morvant solidarily. The Court of Appeal rendered the judgment supra with respect to attorney's fees and affirmed the judgment of the trial court in all other respects.

    In this Court, Oak Builders, Inc. and Fidelity and Deposit Company of Maryland contend that the Court of Appeal erred in affirming the award of attorney's fees herein. They argue that an attorney's fee provision engrafted upon a statutory bond will be read out of the bond, and that when the claim is debatable and highly inflated--as judged here by the quantum actually awarded--the claimant should receive no attorney's fee.

    Milford A. Friedrich, Jr., d/b/a Friedrich Refrigeration, and Bernard Wholesale Distributing Company, Inc., urge that the Court of Appeal 'erred in giving judgment in favor of the defendant general contractor over against third-party subcontractors for the attorney's fees awarded the plaintiffs' counsel under the bond for the building[256 La. 95] contract.' Alternatively, they argue that if it should be found that the subcontractors are liable for attorney's fees, the Court of Appeal erred in rendering judgment in solido against the subcontractors for the full amount thereof.

    Plaintiffs urge that the judgment of the Court of Appeal is correct as to attorney's fees and should be affirmed.

    Posed for our determination are the questions of whether the principal contractor, Oak Builders, Inc., can be held liable for plaintiffs' attorney fees under the facts of this case, and, whether subcontractors, who neither signed the instant bond nor gave an indemnification contract to plaintiffs, can be held liable in solido to the principal contractor for the attorney's fees it is condemned to pay.

    As stated supra, plaintiffs entered into a building contract with Citizens Homestead Association on October 21, 1963. The following appears at the end of the contract just before the signatures:

    'And hereunto intervenes FIDELITY AND DEPOSIT COMPANY OF MARYLAND, herein represented by Paul J. Leaman, Jr., Attorney-in-Fact who declared: That said Company takes full cognizance of the within...

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