McKenzie v. Kaiser-Aetna, KAISER-AETNA

• Decision Date: 05 February 1976
• Docket Number: KAISER-AETNA
• Citation: 127 Cal.Rptr. 275,55 Cal.App.3d 84
• Court: California Court of Appeals Court of Appeals
• Parties: John Edward McKENZIE, Individually and dba McKenzie Construction Co., Plaintiff, Cross-Defendant and Appellant, v., a partnership, Ponderosa Homes Division, Defendant, Cross-Complainant and Respondent. Civ. 37409.

Page 275

127 Cal.Rptr. 275

55 Cal.App.3d 84

John Edward McKENZIE, Individually and dba McKenzie Construction Co., Plaintiff, Cross-Defendant and Appellant, v. KAISER-AETNA, a partnership, Ponderosa Homes Division, Defendant, Cross-Complainant and Respondent.

Civ. 37409.

Court of Appeal, First District, Division 4, California.

Feb. 5, 1976.

As Amended on Denial of Rehearing March 3, 1976.

Hearing Denied March 31, 1976.

Donald E. Hanson, Wilhelm, Hanson, Olson & Bass, Redwood City, for appellant.

Johnston, Miller & Giannini, San Jose, for respondent.

CHRISTIAN, Associate Justice.

John Edward McKenzie appeals from a judgment determining that he was not entitled to recover attorney's fees in an action against respondent Kaiser-Aetna. McKenzie alleged that Kaiser-Aetna had failed to pay for services, labor, and material furnished by appellant to Kaiser-Aetna on a construction project. The services, labor and material were furnished in accordance with specifications that McKenzie alleged were not included in the original written contract but were adopted by Kaiser-Aetna after McKenzie had begun construction work. On the basis of this alleged change in specifications, the complaint also stated causes of action for unpaid sums on an open book account and on an account stated, for compensation on a count or quantum meruit, and for damages for breach of implied warranty, for fraud, and for negligent misrepresentation. A cause of action for compensation for extra work performed pursuant to an agreement outside the original written contract was also stated. The complaint requested attorney's fees on the basis of a provision in the contract. ¹ Under Civil Code section 1717, some contractual provisions for attorney's fees are to be given reciprocal effect; i.e., the prevailing party 'in any action on a contract' is to receive reasonable attorney's fees 'where such contract specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of such contract, shall be awarded to (any) one of the parties, . . .'

In its answer, Kaiser-Aetna alleged that the specifications in question had at all times been part of the contract, denied that it had failed to compensate McKenzie for the extra work he had done, and contested McKenzie's entitlement to attorney's fees if he prevailed in the action. Kaiser-Aetna cross-complained for costs incurred in paying other contractors to complete the work under the specifications in question after McKenzie allegedly ceased work without fulfilling his contractual obligations.

At trial, the bases for recovery on which the judge instructed the jury were breach of contract, breach of implied warranty, negligent misrepresentation, and restitution for extra work done outside the contract. Neither party requested that the jury make special findings as to what portions of the verdict were attributable to the various theories of recovery on which it was instructed. The jury returned a general verdict of $12,500 for McKenzie and $2,500 for Kaiser-Aetna.

The parties had stipulated that the issues of which party should recover attorney's fees and the amount of such attorney's fees should be heard and decided by the trial judge. After that hearing was held, the judge ruled that McKenzie was not entitled to recover attorney's fees and that Kaiser-Aetna was entitled to recover attorney's fees in the amount of $1,000. McKenize requested written findings of fact and conclusions of law. The judge made the following findings of fact, among others:

3. Plaintiff has not sustained his burden of proof to establish that the portion of the jury verdict and judgment in plaintiff's favor against defendant was based on the written contract which contains the provisions regarding attorney's fees, as opposed to having been based upon breach of a separate oral contract, or an implied warranty, or one or more of plaintiff's other theories not constituting an action on a contract which specifically provides for attorney's fees.

4. Cross-complainant, KAISER AETNA's cross-complaint for damages is an action on, and to enforce, the written contract of August 4, 1971 herein-above-referred-to, and the jury rendered a verdict, and judgment was thereafter entered, in favor of cross-complainant and against cross-defendant in the sum of $2,500.00 on that cross-complaint, and cross-complainant was the prevailing party in the action on the written contract of August 4, 1971.

5. The sum of $1,000.00 is a reasonable sum to be awarded to cross-complainant for attorney's fees incurred in successfully prosecuting its action on the cross-complaint to a judgment in favor of cross-complainant.

On the basis of these findings, the judge made the following conclusions of law:

1. In that portion of the action which was on the written...