Jefferson Wells International, Inc. v. American Reprographics Company, B213777 (Cal. App. 1/21/2010)

• Decision Date: 21 January 2010
• Docket Number: B213777.
• Parties: JEFFERSON WELLS INTERNATIONAL, INC., Plaintiff and Appellant, v. AMERICAN REPROGRAPHICS COMPANY, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

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JEFFERSON WELLS INTERNATIONAL, INC., Plaintiff and Appellant, v. AMERICAN REPROGRAPHICS COMPANY, Defendant and Respondent.

B213777.

Court of Appeals of California, Second Appellate District, Division Five.

January 21, 2010.

Appeal from an order of the Superior Court of Los Angeles County, No. BC381325, Elizabeth Allen White, Judge. Affirmed.

Plotkin Rapoport and Russell H. Rapoport for Plaintiff and Appellant.

Payne & Fears, Benjamin A. Nix and Erik M. Andersen for Defendant and Respondent.

Not to be Published in the Official Reports

TURNER, P. J.

I. INTRODUCTION

Plaintiff, Jefferson Wells International, Inc., appeals from a summary judgment and attorney fee award in favor of defendant, American Reprographics Company. Plaintiff asserts the trial court erred in summarily adjudicating that its contract claim was time barred under a contractual provision requiring that any action arising out of the parties' agreement be brought within one year after the cause of action has accrued. Plaintiff also challenges the attorney fee award claiming it was not authorized under Wisconsin law. We affirm the judgment including the attorney fee award in all respects.

II. BACKGROUND

The complaint, filed on November 27, 2007, contains contract breach claims (first) and common counts (second). The common counts are for an open book account and for work, labor, services and materials rendered. The complaint alleges: plaintiff is a Delaware Corporation that is qualified to do business in California; defendant is a Delaware Corporation, whose principal place of business is in California; the contract was entered into on January 28, 2005, and was to be performed in California; defendant breached the agreement in August 2006 by failing to pay balances then due or accruing thereafter; plaintiff is entitled to $287,964.02 in damages plus $75,295.77 in interest as of October 18, 2007; and plaintiff is entitled to attorney fees according to proof.

The parties' agreement was attached to the complaint and is entitled: "JEFFERSON WELLS INTERNATIONAL, INC. MASTER SERVICE AGREEMENT STANDARD TERMS AND CONDITIONS" (the agreement). Paragraph 3 of the agreement provides: "TERMINATIONUnless otherwise provided for in the Engagement Letter(s)/Proposal(s), either party may terminate this Agreement for any reason upon two weeks notice. Upon termination, [defendant] shall pay [plaintiff's] final invoice for all amounts due under the terms of section 4 below. In the event of termination of this Agreement for any reason, the obligations of the parties under [specified sections] shall survive termination." Paragraph 4 of the agreement contains a payment provision which states: "[Plaintiff] shall be paid at the billable rates and/or fees set forth in each Engagement Letter(s)/Proposal(s). [Plaintiff] shall coordinate its standard 45-hour work week for its professionals to take place within [defendant's] normal business hours, unless otherwise agreed in advance. [¶] a. [Plaintiff] shall invoice [defendant] on a bi-weekly basis. Terms shall be net 15 days. All objections by [defendant] to an invoice must be made in writing to [plaintiff] within fourteen days after the date of the invoice. If no objections are received by [plaintiff] within such fourteen-day period, the invoice shall be deemed accepted by [defendant]. [¶] b. If payment has not been received as set forth herein, [plaintiff] reserves the right, in addition to any other rights it may have, to (i) suspend the services until such payment is made in full, (ii) charge interest on the amount past due at the lesser of 1.5% per month or the maximum allowed by law and (iii) invoice [defendant] for all costs of collection including reasonable attorney's fees." Paragraph 16 of the agreement is a governing law provision which states Wisconsin law would apply to any action between the parties. This paragraph of the agreement also provided for a one-year limitation on actions between the parties arising from the agreement as follows, "No action arising out of this Agreement, regardless of the form, may be brought by either party more than one year after the cause of action has accrued."

Defendant answered the complaint and asserted as an affirmative defense the one-year limitation period contained in the agreement. The parties subsequently filed a stipulation to file cross-motions to adjudicate the statute of limitations issue. The cross-summary judgment motions were based on stipulated facts.

The parties stipulated the following facts were undisputed. The parties entered into the agreement on January 28, 2005. On April 6, 2006, plaintiff and defendant agreed to a Statement of Work. The Statement of Work states in part, "[Plaintiff] shall provide the Services [in the Statement of Work] pursuant to the provisions of this Statement of Work and [plaintiff's] Master Service Agreement between [plaintiff and defendant] dated January 28, 2005." Pursuant to the agreement and the Statement of Work, plaintiff sent 17 invoices to defendant from March 29 through December 12, 2006. In July 2006, representatives from defendant met with plaintiff's employees to discuss the invoices received to that point. During the meeting, defendant questioned the charges in the invoices. Defendant paid the balance of the majority of the invoices in their exact amounts. But, defendant did not pay the total amount of each invoice within one year of when certain invoices were sent. The invoices for which total payments were not made included invoice Nos.: SCA0104081 dated April 26, 2006 for $113,755.09; SCA0104165 dated May 10, 2006 for $224,263.45; and SCA0104215 for $309,542.00. With respect to these invoices, defendant paid plaintiff by check on July 21, 2006, a total of $663,516.89 which was $246,284.01 less than the invoiced amount. Total payment was also not made on invoices Nos. SCA0104276 dated June 21, 2006, for $147,087.09 and SCA0104324 dated July 7, 2006, for $47,579.91. Defendant paid plaintiff by check dated August 10, 2006, in the amount of $155,804.87 for the June 21 and July 7, 2006 invoices which is $38,862.13 less than the amount due. With those exceptions, defendant paid the invoices sent before and after August 10, 2006, in full. Defendant also paid two invoices in December 2006, which was within one year of when the complaint was filed on November 27, 2007. Defendant made a total payment by check dated December 5, 2006 on invoice No. SCA0104747 which bears the date November 7, 2006, in the amount of $66,972.77. Defendant made a total payment by check dated December 12, 2006 for invoice No. SCA0104782 dated November 21, 2006 in the amount of $30,551.14. Defendant did not make any payment on invoice No. SCA0104873 dated December 29, 2006, in the amount of $2,654.82. The parties stipulated that the November 27, 2007 action concerns alleged nonpayment of only the invoices which covered a period from April 26 until July 7, 2006.

The trial court granted defendant's summary judgment motion. This was because: the one-year period began to run on the sixteenth day after the invoices were issued and not paid in full; plaintiff drafted the net 15-day term in the agreement; and the options in the agreement for non-payment were remedies for a breach. The trial court ruled with respect to the common counts the invoices show there was no open account nor was there a mutual account.

On January 12, 2009, the trial court entered a judgment pursuant to stipulation. The judgment provides that claims for contract breach, open book or account stated on or before August 10, 2006 are all time-barred. The ruling disposed of plaintiff's claims for $246,284.01 plus $38,862.13 for unpaid invoiced amounts that predated August 10, 2006. The only invoice not time-barred was $2,654.82 due November 21, 2006 (the invoice date is actually December 29, 2006), which defendant contends was not a part of the case as pled. Defendant disputed the invoice but agreed to tender payment on the invoice plus interest in the amount of $3,625.69. It was stipulated, "IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that plaintiff takes nothing by way of its Complaint." This timely appeal followed.

On January 27, 2009, defendant filed a motion for an award of its attorney fees in the amount of $69,396.25 plus $2,522.60 for the motion. The attorney fee motion was brought on the grounds: defendant was the prevailing party in the action; the written contract contains an attorney fee provision which is made reciprocal by Civil Code section 1717, subdivision (a); and the fees were reasonable and necessary.

At the hearing on the attorney fee award, the trial court ruled: defendant was the prevailing party; California law applies with respect to the unilateral attorney fee provision; even if Wisconsin law applied, Wisconsin Statute, section 814.03 provides for mandatory costs to the prevailing defendant in summary judgment litigation; but, Wisconsin law did not clearly provide for attorney fees to defendant. The trial court concluded that Civil Code section 1717, subdivision (a) applied under controlling choice of law standards. The trial court entered an order awarding defendant its attorney fees and costs. Plaintiff filed a timely appeal from the attorney fee order. On April 10, 2009, we consolidated the appeals from the summary judgment and attorney fees orders.

III. DISCUSSION

A. Summary Judgment Review Standard

In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, our Supreme Court described a party's burdens on summary judgment or adjudication motions as follows: "[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court's action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable...