Contractors Labor Pool, Inc. v. Westway Contractors, Inc.

• Citation: 61 Cal.Rptr.2d 715,53 Cal.App.4th 152
• Decision Date: 28 February 1997
• Docket Number: No. B091490,B091490
• Court: California Court of Appeals Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 1600, 97 Daily Journal D.A.R. 3038 CONTRACTORS LABOR POOL, INC., Plaintiff and Appellant, v. WESTWAY CONTRACTORS, INC., et al., Defendants and Respondents; American Bonding Company, Defendant and Appellant.

Page 715

61 Cal.Rptr.2d 715

53 Cal.App.4th 152, 97 Cal. Daily Op. Serv. 1600,

97 Daily Journal D.A.R. 3038

CONTRACTORS LABOR POOL, INC., Plaintiff and Appellant, v. WESTWAY CONTRACTORS, INC., et al., Defendants and Respondents American Bonding Company, Defendant and Appellant.

No. B091490.

Court of Appeal, Second District, Division 3, California.

Feb. 28, 1997.

Review Denied June 11, 1997.

McDonough, Holland & Allen, Robert W. O'Connor, Steven A. Lamon, for Plaintiff and Appellant.

Fisch, Spiegler, Ginsburg, Ladner & Attarian, Phillip L. Ginsburg, Karen M. Ladner and Peter J. Attarian, Jr., for Defendant and Appellant.

No appearance for Defendants and Respondents.

CROSKEY, Associate Justice.

Defendant, appellant and cross-respondent American Bonding Company (hereafter In the judgment, the court found Westway and its president liable to CLP for damages and also found CLP entitled to recover against ABC on the bond. On a cross-complaint by ABC, the court found ABC entitled to indemnification from Westway. ² In its post-judgment order awarding attorney fees and costs, the court awarded CLP a total of $12,543.17, including $7,965.49 in attorney fees. CLP had filed a motion for $43,151.00 in attorney fees for attorneys' services prior to judgment and had later requested an additional $8,064 for its successful resistance of ABC's motion for a new trial.

"ABC") appeals from a judgment of the Superior Court, in which, after a court trial, the court found in favor of plaintiff, respondent and cross-appellant, Contractors Labor Pool, Inc. ("CLP") in CLP's action against ABC and co-defendants Westway Contractors, Inc. and its president. CLP's complaint sought recovery of damages for breach of contract and common counts as well as recovery on a payment bond which had been furnished by ABC pursuant to Civil Code section 3248. CLP cross-appeals from a post-judgment order awarding it attorney fees under Civil Code section 3250. ¹ CLP contends the award was so grossly inadequate as to constitute an abuse of discretion.

The trial court correctly found CLP to be a claimant entitled to recover against the payment bond. However, the court did not correctly assess the extent of its discretion to award attorney fees under section 3250. We therefore affirm the judgment and remand the matter for a redetermination of the amount of the attorney fee award.

FACTUAL AND PROCEDURAL BACKGROUND

CLP is a California corporation in the business of furnishing skilled and unskilled temporary workers to licensed construction contractors. Defendant Westway is a contractor to whom CLP furnished workers for a public works project in which Westway was involved as a subcontractor. The general contractor was R.A. Francis, Inc. ("Francis"). ABC provided a $567,464 payment bond for the project.

In late 1991, the California Department of Transportation ("Cal-Trans") awarded Francis a contract to construct the Vermont Street Station, a passenger station on the Green Line electric railway in Los Angeles County, California. Francis subcontracted with Westway for Westway to do structural concrete work on the station. Westway contracted with CLP for CLP to supply workers for the project. The contract between CLP and Westway was a printed form contract drafted by CLP and entitled "Contractors Labor Pool Labor Agreement." It provided, among other things, that: (1) Westway would pay CLP an hourly rate for each hour a CLP employee (Special Employee) performed services for Westway; (2) CLP would be responsible for the Special Employees' payroll taxes, workers' compensation and other insurance premiums, federal and state withholding, and fringe benefits; (3) Westway would control the activities of the Special Employees while on the job; (4) Westway would indemnify CLP for damages to persons or property arising out of work performed or not performed by the Special Employees and/or Westway in connection with the labor agreement; (5) Westway would provide CLP with all information needed to maintain CLP's mechanic's lien rights and would cooperate with CLP as reasonably requested in connection with filing such liens.

After the Labor Agreement was executed by CLP and Westway, Westway placed orders for workers, such as carpenters, laborers and superintendents, by calling CLP and Westway eventually fell behind in paying CLP's invoices, and by April of 1993, Westway owed CLP $170,495.47. When this amount remained unpaid, CLP ceased to provide workers to Westway and, in addition, filed the within action to recover the amounts owing. After a trial, the court found (1) Westway liable to CLP in the amount of $170,405.47, plus service charges, (2) Westway's president liable to CLP in the amount of $50,000 plus interest, and (3) CLP entitled to recover $170,495.47, plus service charges against the payment bond furnished by ABC. A motion by ABC for a new trial was denied. This timely appeal followed.

making a verbal request. If a particular worker was not satisfactory to Westway, Westway had the right to send that worker back, and Westway directed, controlled and supervised the workers' activities on the jobsite. CLP paid the workers' wages and employment benefits, provided workers' compensation insurance, and was responsible for the workers' tax withholding. CLP invoiced Westway weekly, based on the actual hours worked by the Special Employees.

CONTENTIONS

ABC contends that (1) CLP has no right to recover against the payment bond because it is not a claimant protected by section 3110; (2) alternatively, pursuant to Business and Professions section 7031, CLP has no right to any recovery under its contract with Westway, because if CLP is indeed a claimant protected by section 3110, then it necessarily was acting in the capacity of a contractor when its employees performed services on the work of improvement, and CLP had no contractor's license when these services were performed. CLP disputes each of the above contentions and further argues that the court's post-judgment order awarding attorney fees was so inadequate as to constitute an abuse of discretion.

DISCUSSION

1. CLP, As A Furnisher Of Labor, Was Entitled To Recover On The Payment Bond.

ABC contends CLP is not entitled to recover against the bond, because it is not entitled to a mechanics' lien under section 3110. ABC cites Primo Team, Inc. v. Blake Construction Co. (1992) 3 Cal.App.4th 801, 4 Cal.Rptr.2d 701 (hereafter, "Primo Team ") in support of its claim that CLP is not entitled to recover against the bond. Primo Team held that an employment services company which performed personnel and payroll services for a subcontractor on a public project, but was not actually the employer of the workers, was not entitled to recover against a performance bond. (Id. at p. 804, 4 Cal.Rptr.2d 701.) ABC argues that "[F]or all meaningful purposes, the workers were really employed by Westway while they were on the jobsite because Westway in fact directed and controlled their activities." Therefore, ABC argues that CLP was an employer of the workers in name only and, like the plaintiff in Primo Team, is consequently not entitled to recover on the performance bond.

We disagree. As a furnisher of labor contributing to the public work of improvement, CLP was a claimant protected by the Mechanics' Lien Law and was therefore entitled to recover against the payment bond. (Myers v. Alta Construction Co. (1951) 37 Cal.2d 739, 742, 235 P.2d 1; Sweet v. Fresno Hotel Co. (1917) 174 Cal. 789, 797, 164 P. 788; Primo Team, supra, 3 Cal.App.4th at p. 807, 4 Cal.Rptr.2d 701; Rich-Lee Equipment Rentals, Inc. v. Intermountain Constr. Co. (1978) 79 Cal.App.3d 581, 588-589, 145 Cal.Rptr. 106; Contractors Dump Truck Service, Inc. v. Gregg Constr. Co. (1965) 237 Cal.App.2d 1, 4-5, 46 Cal.Rptr. 738.).

a. Those Who Furnish Laborers For A Public Work Of Improvement, As Well As Those Who Perform Labor Themselves, Are Entitled To Recover Against A Payment Bond.

Section 3248 provides that a payment bond on a construction contract awarded by a public entity must "[b]y its terms inure to the benefit of any of the persons named in Section 3181 so as to give a right of action to such persons or their assigns in any suit brought upon the bond." Section 3181 provides that: "Except for an original contractor, any person mentioned in Section 3110 In Primo Team, supra, 3 Cal.App.4th 801, 4 Cal.Rptr.2d 701, which is relied upon by ABC, plaintiff Primo Team, Inc. ("Primo") entered into a series of "Labor Services Agreements" with R.J. 1, Inc. ("R.J."), a subcontractor on a public project. These agreements, which evidently were similar in form to the "Labor Agreement" between CLP and Westway, called for Primo to supply Primo employees to R.J. to perform labor on a public work. (Id. at p. 804, 4 Cal.Rptr.2d 701.) However, the court found that "the reality was substantially different," and R.J., not Primo, was the actual employer of the workers. (Id. at p. 804, fn. 3, 4 Cal.Rptr.2d 701.) Summary judgment was entered against Primo in its suit on the payment bonds on the ground that Primo was not within the class of persons entitled to pursue claims on public payment bonds. (Id. at pp. 803-804, 4 Cal.Rptr.2d 701.)

                3111 or 3112, or in Section 4107.7 of the Public Contract Code, or furnishing provisions, provender, or other supplies" may serve a stop notice for a public work.  Section 3110 mentions the following persons and entitles such persons to a mechanic's lien for the value of labor done or materials furnished to any work of improvement:  "[m]echanics, materialmen, contractors, subcontractors, lessors of equipment, artisans, architects, registered engineers, licensed land surveyors, machinists, builders, teamsters, and draymen, and all persons and laborers of every class performing labor upon or bestowing skill or other necessary services on, or furnishing materials or leasing equipment to be used or consumed in or furnishing [53

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