Plaintiff subcontractor appealed the judgment

Procedural Posture

Plaintiff subcontractor appealed the judgment of the Superior Court of Los Angeles County (California), which held that defendant surety was not liable for the attorney fees incurred by plaintiff while seeking to enforce the contract between plaintiff and the general contractor, who was the insured party.

Overview: caci agency

Plaintiff subcontractor obtained an award in arbitration, including attorney fees, against general contractor for termination of a subcontract. The general contractor declared bankruptcy and plaintiff was granted a stay to obtain judgment on its arbitration award. Plaintiff then settled the action with the property owner to prevent foreclosure on plaintiff's mechanic's lien, and filed a complaint to compel defendant surety to pay the attorney fees of its insured, the general contractor. Defendant prevailed at trial and plaintiff appealed. The court reversed the judgment and remanded to the trial court to determine the amount of attorney fees. The court held that the arbitration did not involve defendant and, therefore, the one final judgment rule or res judicata did not operate to bar plaintiff's action against defendant. Further, the court held that imposition of attorney fees was appropriate where there was a construction contract that provided for attorney fees to the prevailing party, supported by a surety bond issued by a third party, and the bond did not provide for liability for attorney fees.

Outcome

The court reversed and remanded the judgment that held defendant surety was not liable for plaintiff subcontractor's attorney fees because there was no final judgment to which plaintiff and defendant were both parties, and plaintiff was a party for whose use and benefit the contractor/insured's surety bond was issued by defendant.

Procedural Posture

Appellant shareholder of a title company challenged a judgment of the Superior Court of Fresno County (California), which ordered appellant to deliver his shares to appellee in an action by appellee to enforce an option agreement between the title company and appellee's assignor. Appellant argued that the option agreement contemplated the purchase of all shares of the title company at the overall purchase price.

The court held that it was unreasonable to believe that the shareholders intended to have the net worth of their stock reevaluated every time appellee's assignor decided to exercise an option to purchase a block of shares.

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