COOLEY'S GENERAL PEST AND TERMITE CONTROL, INC. v. WESTLAKE BAY HOMEOWNERS ASSN. 2d Civil No. B221937.
COOLEY'S GENERAL PEST AND TERMITE CONTROL, INC., Plaintiff and Respondent, v. WESTLAKE BAY HOMEOWNERS ASSOCIATION, Defendant and Appellant.
Court of Appeals of California, Second District, Division Six.
Filed May 24, 2011.
Buchalter Nemer, PC, Steven Brower , Robert M. Dato for Defendant and Appellant.
Law Offices of Randall S. Shiffman, Randall S. Shiffman for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
Westlake Bay Homeowners Association ("Westlake") appeals an order awarding $102,025 attorney's fees to Cooley's General Pest and Termite Control, Inc. ("Cooley"). We affirm.
FACTS AND PROCEDURAL HISTORY
Westlake Bay is a residential development located on Westlake Boulevard in Westlake Village, consisting of townhomes situated in 34 buildings. The Board of Directors ("Board") governs the Westlake homeowners association. In 2001 and 2002, Cooley performed localized treatment (heat, microwave, and chemical) in the development for swarming termites.
In April 2007, the Board requested Cooley to perform termite inspections in the development. Cooley then inspected 31 buildings, prepared 31 specific and detailed termite reports with legally required information, and submitted the reports to the Board. On August 13, 2007, the president of the Board executed a two-page agreement obligating Westlake to pay Cooley $244,880 to treat subterranean termites and fumigate the residential buildings. Westlake paid an initial deposit sum and Cooley commenced termite treatment in September 2007.
Meanwhile, members of the Board were recalled and new Board members elected due to controversy regarding the scope of the termite eradication and the treatment methods necessary. On October 20, 2007, Westlake contacted Cooley and advised it to cease performance. On November 9, 2007, Westlake wrote Cooley and stated that it was rescinding the agreement due to "a mistake of fact." Westlake contended that Cooley recommended treatment in buildings without termite infestation and that its treatment methods violated pesticide regulations and pesticide label directions.
On February 6, 2008, Cooley brought an action against Westlake for breach of contract. Westlake answered the complaint and on April 1, 2008, filed a cross-complaint seeking rescission of the agreement. Each pleading prayed for an award of attorney's fees. Following a jury trial, the jury awarded $157,806 to Cooley, consisting of out-of-pocket expenses and lost profits. The jury determined that Westlake did not establish grounds for rescission of the contract.
On October 2, 2009, Cooley sought $129,217.35 attorney's fees, relying on paragraph 2 of the "Work Authorization." It provides: "In the event that legal action is necessary to enforce the terms of this contract, reasonable attorney's fees may be awarded to the prevailing party." The three-page Work Authorization was attached to each of the 31 inspection reports submitted to Westlake. Westlake resisted the motion and contended that the Work Authorization was not an executed agreement and that the only document executed by the Board president—a two-page untitled document—does not contain an attorney's fee clause.
Following written and oral argument, the trial court awarded Cooley $102,025 attorney's fees. During the hearing, the trial judge stated that "the work authorization contains an attorney's fee clause . . . . [and] [i]t's part of the contractual relationship between the parties." The court also found that the inspection reports, containing the work authorizations, were admitted into evidence at trial.
Westlake appeals and contends that the trial court erred by awarding attorney's fees to Cooley because Cooley did not demonstrate the existence of a contract with an attorney's fee provision.
Westlake points out that it did not execute the work authorizations and that the two-page untitled document that it did execute neither refers to nor incorporates the work authorizations. It asserts that we review the trial court's ruling independently because the parties did not present extrinsic evidence to interpret the contract. (Paul v. Schoellkopf (2005) 128 Cal.App.4th 147, 151 [independent review whether escrow instructions containing attorney's fee clause were part of the overall agreement between the parties].)
Westlake also argues that the trial court erred by not ruling on the foundation objections to the specific inspection report and the work authorization attached to Cooley's attorney's fee motion.
Civil Code section 1642 provides: "Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together." This familiar and general rule permits separate instruments to be considered and construed as one contract when they deal with the same subject matter and are so connected by reference as to be interdependent. (Coons v. Henry (1960) 186 Cal.App.2d 512, 517 [statement of general rule].)
"Whether a document is incorporated into the contract depends on the parties' intent as it existed at the time of contracting. The parties' intent must, in the first instance, be ascertained objectively from the contract language." (Versaci v. Superior Court (2005) 127 Cal.App.4th 805, 814.) The contract need not recite that it "incorporates" another document; the reference between the documents, however, must be clear and unequivocal. (Ibid.) The applicability of Civil Code section 1642 is a question of fact for the trial court. (Vons Cos., Inc. v. Lyle Parks Jr., Inc. (2009) 177 Cal.App.4th 823, 834, fn. 5; Versaci, at p. 815.) We must affirm the trial court's resolution if it is supported by substantial evidence. (Versaci, at p. 815.)
Sufficient evidence supports the trial court's conclusion that the inspection reports and work authorizations are part of the contract between Cooley and Westlake. Cooley inspected the buildings on May 29, 2007, and prepared a legally required inspection report for each building. (Bus. & Prof. Code, § 8514 ["No registered company shall commence work on a contract . . . or deliver any documents expressing an opinion or statement relating to the control of household pests, or wood destroying pests or organisms until an inspection has been made"].) Each report references the address of the building inspected, the inspection findings (including the portion of the building where termites were found), the recommended treatment, and legally required warnings regarding pesticides. Cooley also prepared a corresponding work authorization for each building, stating the cost of recommended treatment for that building, and providing legally required warnings regarding mechanics' liens. Paragraph 2 of the third page of the work authorization permits an award of attorney's fees to enforce the contract.
Cooley submitted the inspection reports and work authorization to the Board in June 2007. On August 13, 2007, the Board executed a two-page document and paid a deposit to Cooley. The two-page document states that Cooley will undertake "[f]umigation of all buildings as listed in the job description." Under the factual circumstances, Civil Code section 1642 applies.
At trial, the parties stipulated to the admission of the inspection reports and accompanying work authorizations into evidence at trial. John Cooley testified that he prepared the inspection reports and work authorizations and submitted them to the Board, the Board's project manager, and others. The former Board president testified and identified the documents as those he received from Cooley. The project manager also testified and identified the inspection reports. Although the trial court did not rule on Westlake's evidentiary objections to the reports and authorizations at the attorney's fees motion, Westlake cannot have suffered any prejudice.
The judgment is affirmed. Cooley is to recover costs on appeal.
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