T.E.D. BEARING CO. v. WALTER E. HELLER & CO. Docket No. 42112.
38 Cal.App.3d 59 (1974)
112 Cal. Rptr. 910
T.E.D. BEARING COMPANY, Plaintiff and Appellant, v. WALTER E. HELLER & COMPANY OF CALIFORNIA et al., Defendants and Respondents.
Court of Appeals of California, Second District, Division Four.
March 25, 1974.
Frank Gafkowski, Jr., and Daniel W. Gage for Plaintiff and Appellant.
Kaplan, Livingston, Goodwin, Berkowitz & Selvin, Charles M. Levy, Jones & Bednar and Clayton Straube for Defendants and Respondents.
This appeal is the second of two appeals resulting from an amended complaint filed on behalf of T.E.D. Bearing Company, plaintiff (hereinafter T.E.D.) against defendants Walter E. Heller & Company (hereinafter Heller) and Lawrence Warehouse Company (hereinafter Lawrence).
This complaint alleged various counts. After the court sustained demurrers, an order of dismissal was granted by the court in favor of Lawrence, and T.E.D. entered a stipulation for an order of dismissal, allowing Heller $26 in trial costs.
Plaintiff's first argument is that, where attorneys' fees are predicated on contract, recovery must be predicated on that contract and not be given as costs under Code of Civil Procedure section 1021, and the fees must be alleged and demanded in the complaint. Section 1021 reads as follows: "Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to costs and disbursements, as hereinafter provided."
But where attorneys' fees are awarded pursuant to a statute rather than by contract, they are costs. (System Inv. Corp. v. Union Bank (1971) 21 Cal.App.3d 137, 162 [98 Cal.Rptr. 735].)
It is clear that Heller and Lawrence predicated their claim to attorneys' fees in part on contract; that is, they originally relied on certain language in each of their agreements with T.E.D. which required T.E.D. to pay any attorneys' fees incurred by defendants Heller and Lawrence.
"Attorney's fees provided for by this section shall not be subject to waiver by the parties to any contract which is entered into after the effective date of this section. Any provision in any such contract which provides for a waiver of attorney's fees is void.
"As used in this section `prevailing party' means the party in whose favor final judgment is rendered."
The primary purpose of Civil Code section 1717 is to transfer a unilateral contractual contract right to attorneys' fees into a reciprocal provision giving the right to recover to either party. (Associated Convalescent Enterprises v. Carl Marks & Co., Inc. (1973) 33 Cal.App.3d 116 [108 Cal.Rptr. 782].) In the agreements before us the contracts provided that attorneys' fees and costs will be awarded to only one of each of the contracting parties, Lawrence in one contract, and Heller in the other contract, and not to T.E.D., thus bringing those unilateral contracts for attorneys' fees within the reciprocal provisions of Civil Code section 1717. Accordingly, respondents Heller and Lawrence had rights to attorneys' fees by virtue of statute (§ 1717), as well as by virtue of contract.
The legal situation before us is, perhaps, unique in the sense that Civil Code section 1717 has been used in the past to benefit the prevailing party in cases where the prevailing party was not also the party to be benefited by the unilateral contractual provisions granting attorneys' fees. That is, the cases we have found have generally dealt with the granting of attorneys' fees to the prevailing party, under Civil Code section 1717, where the contract had granted attorneys' fees solely to the other contracting party who lost the law suit. But the language of Civil Code section 1717 is not so limited as this. The statute says that attorneys' fees shall be awarded to "the prevailing party, whether he is the party specified in the contract or not." The language of Civil Code section 1717 does not say that attorney fees will be awarded to the party not benefited by the provision granting attorneys' fees if that party prevails. The language is broader than that, and it awards attorneys' fees to "the prevailing party" whether he is the one specified in the contract or whether he was the one to be disadvantaged by the contract. Therefore, in the case before us, while Heller and Lawrence had rights to attorneys' fees by contract, they also had rights to attorneys'
Case law is consistent with this view. It has been judicially determined that the "prevailing party's" rights to attorneys' fees under section 1717 is a statutory right.
T.E.D. argues that Heller and Lawrence waived their rights to attorneys' fees. The rule of law requiring that attorneys' fees be specially averred where they are special damages as a function of contract (Hunt v. Smyth (1972) 25 Cal.App.3d 807 [101 Cal.Rptr. 4]) has no application where an award of attorneys' fees is statutory. In any event, it has been held that, where a party's right to attorneys' fees rests on section 1717, the fact that the entire contract was before the court in the original action is a sufficient "pleading" to authorize an attorneys' fees award. (San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Elec. Co. (1972) 28 Cal.App.3d 556, 570-573 [104 Cal.Rptr. 733].) That was the case here. All of the pertinent contractual documents were included in the complaint and amended complaint filed by T.E.D., and were relied on by it as the foundation for its action. T.E.D. is in no position, at this stage, to deny that the contract provision was incorporated in the contracts between the parties, thus triggering the application of section 1717.
T.E.D. contends that the superior court had no jurisdiction to grant attorneys' fees on appeal, arguing that, for a superior court to hear an application for attorneys' fees on appeal after judgment has become final, jurisdiction must be conferred on it by the appellate court or by statute. T.E.D. cites American City Bank v. Zetlen (1969) 272 Cal.App.2d 65 [76 Cal.Rptr. 898], for this proposition. In Zetlen, the Court of Appeal affirmed the trial court's denial of plaintiff's motion for attorneys' fees on the ground that there was no request by the appellant for attorneys' fees on appeal, and because there was no provision by the appellate court in its decision or in its remittitur. T.E.D. argues that, in the case at bench, there also was no request for attorneys' fees, and neither the opinion filed by the appellate
The order is affirmed; our remittitur will carry with it authority for the trial court to award to respondents on this appeal, reasonable attorneys' fees in addition to the usual costs on appeal.
Jefferson, Acting P.J., and Dunn, J., concurred.
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