Filed 2/11/14 Jeld-Wen v. Southcoast Sheet Metal CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

JELD-WEN, INC., D062591

Plaintiff and Appellant,

v. (Super. Ct. No. GIC789367)

SOUTHCOAST SHEET METAL,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of San Diego County, Richard

E.L. Strauss, Judge. Affirmed.

The Sieving Law Firm, Richard N. Sieving and Jennifer L. Snodgrass for Plaintiff

and Appellant.

Archer Norris, W. Eric Blumhardt and Namvar A. Mokri for Defendant and

Respondent.

This is the fourth opinion we have issued in this action. Jeld-Wen, Inc.

(Jeld-Wen) appeals from the trial court's award to Southcoast Sheet Metal (Southcoast) of all of the attorney fees it incurred since October 2009, when Jeld-Wen filed the appeal

that was the subject of our third opinion in this action. We conclude that the trial court

properly awarded the attorney fees pursuant to Code of Civil Procedure section 1038,1

and we accordingly affirm the judgment awarding Southcoast $129,760.50, plus interest,

in attorney fees.

I

FACTUAL AND PROCEDURAL BACKGROUND

We assume that the parties are thoroughly familiar with the history of this

litigation, which our previous three opinions explained in detail.2 We provide a

truncated procedural summary, focusing on the items most pertinent to the issues

presented in this appeal and omitting the procedural history concerning defendants other

than Southcoast.3

1 Unless otherwise indicated, all further statutory references are to the Code of Civil Procedure.

2 The three previous opinion in this matter are: Jeld-Wen, Inc. v. Action Iron Works, Inc. (Oct. 29, 2008, D049908) [nonpub. opn.] (hereafter 2008 Opinion); Jeld-Wen, Inc. v. Action Iron Works, Inc. (Feb. 17, 2009, D051465) [nonpub. opn.] (hereafter 2009 Opinion); and Jeld-Wen, Inc. v. Pacific Coast Roofing (Nov. 17, 2011, D056204) [nonpub. opn.] (hereafter 2011 Opinion).

3 Jeld-Wen represents that it has fully satisfied the judgment as to all of the other defendants, so that Southcoast is now the only defendant involved in ongoing proceedings.

2 A. Jeld-Wen Files This Litigation to Recover from Southcoast and Other Defendants

Jeld-Wen filed this action after Pardee Construction Company (Pardee) obtained a

judgment against Jeld-Wen for $1,701,543 based on Pardee's costs of remediating

damage from rainwater that leaked into homes through windows installed by Jeld-Wen.

In an attempt to recover some of its liability to Pardee from other subcontractors on the

development, who Jeld-Wen contended shared responsibility for the water intrusion,

Jeld-Wen filed this lawsuit against numerous entities, including Southcoast. As relevant

here, the causes of action included negligence, breach of contract, equitable indemnity,

equitable contribution and declaratory relief.

Southcoast, along with other defendants, obtained a judgment on the pleadings on

the breach of contract and negligence causes of action, and it then successfully moved for

summary judgment on the remaining causes of action for equitable indemnity, equitable

contribution and declaratory relief.

B. Our 2008 Opinion

In the 2008 Opinion, we reversed the order granting judgment on the pleadings on

the breach of contract cause of action in favor of Southcoast and other defendants, and

returned the matter to the trial court for further proceedings on the breach of contract

cause of action.

C. Our 2009 Opinion

While the first appeal was pending, the trial court awarded attorney fees to

Southcoast and other defendants pursuant to sections 1038 and 1717. Jeld-Wen appealed

the attorney fee awards. In the 2009 Opinion, we reversed the attorney fee awards. We

3 reversed the award of fees under section 1717 because that award was premised on the

defendants obtaining judgment on the pleadings on the breach of contract cause of action,

which we reversed in the 2008 Opinion. We reversed the award of fees under section

1038, as that award was based on the defendants' success in obtaining summary judgment

on the claims for indemnity and contribution. Specifically, we explained that the

summary judgment that Southcoast and the other defendants obtained on the equitable

indemnity, contribution and declaratory relief causes of action had effectively been

transformed into a summary adjudication by virtue of the 2008 Opinion's reinstatement of

the breach of contract cause of action, and therefore no dispositive summary judgment

existed to support an award of attorney fees under section 1038.

Although the 2009 Opinion reversed the award of attorney fees under section 1038

on the procedural ground that no case-dispositive order existed as to the equitable

indemnity and equitable contribution causes of action, that opinion also specifically

analyzed and rejected all of Jeld-Wen's other challenges to the fee award under section

1038. As relevant here, the 2009 Opinion established that one of the fundamental

prerequisites for an award of fees under section 1038 was present because Jeld-Wen

lacked reasonable cause to pursue this action against Southcoast after September 7, 2006.

Further, we stated that Southcoast and the other defendants could bring another motion

for attorney fees under section 1038 in the event they prevailed on summary judgment or

another motion specified in section 1038.

4 D. Our 2011 Opinion

Upon remand, Jeld-Wen attempted to voluntarily dismiss the remaining cause of

action for breach of contract, but the trial court rejected the dismissal and granted

summary judgment in favor of Southcoast and other defendants on the breach of contract

cause of action. The trial court also once again awarded attorney fees to Southcoast and

the other defendants pursuant to both section 1717 and section 1038. As to Southcoast

specifically, the trial court awarded defense costs of $178,976.91 pursuant to section

1038 and $29,539.70 pursuant to section 1717. Judgment was entered accordingly.

Jeld-Wen appealed. In the 2011 Opinion we concluded that the trial court should

have allowed Jeld-Wen to voluntarily dismiss the remaining cause of action for breach of

contract rather than considering and granting the summary judgment motions filed by

Southcoast and other defendants. We deemed Jeld-Wen's voluntary dismissal of the

breach of contract cause of action to be effective as of April 15, 2009, and we reversed

the summary judgment on the breach of contract cause of action. Because Southcoast

and the other defendants had not prevailed on the summary judgment cause of action, we

also reversed the award of attorney fees under section 1717, which requires that a party

prevail on a breach of contract claim.

However, we affirmed the award of attorney fees to Southcoast and the other

defendants under section 1038. We stated, "[B]y virtue of Jeld-Wen's voluntary

dismissal of the breach of contract cause of action, the trial court's 2007 orders granting

summary judgment on the equitable contribution, equitable indemnity and declaratory

relief causes of action may properly be considered orders granting summary judgment,

5 not summary adjudication. Because [Southcoast and the other defendants] were granted

summary judgment in an action for equitable contribution and equitable indemnity, the

procedural prerequisites for an award of defense costs under section 1038 are satisfied."

The 2011 Opinion addressed and rejected numerous arguments made by Jeld-Wen

against the section 1038 attorney fee award, several of which we had already rejected in

the 2009 Opinion.

Among other arguments we addressed in the 2011 Opinion was Jeld-Wen's claim

that only a limited category of defense costs qualified for an award under section 1038,

namely those incurred in bringing the dispositive motion. We disagreed, explaining that

Jeld-Wen's interpretation was overly restrictive and that "[c]ase law authorize[d] an

award of defense costs incurred in numerous types of proceedings that take place during

the course of litigation," including defense costs incurred on appeal and in seeking an

award of attorney fees.

We also rejected Jeld-Wen's argument that Southcoast and the other defendants

should not be awarded defense costs incurred during the prior appeals because Jeld-Wen

partially prevailed in those appeals. We explained that that an award of defense costs

incurred in the prior appeals was warranted because the defendants' efforts in those

appeals had assisted them in successfully resolving this litigation. Specifically, we

explained that our prior opinions (1) affirmed the trial court's ruling in favor of

defendants on the equitable indemnity and equitable contribution causes of action; and

(2) resolved issues regarding the availability of defense costs under section 1038 that

6 formed the basis for the defendants' subsequent success on the renewed section 1038

motions.

E. Proceedings After Remittitur of the 2011 Opinion

As we have explained, the 2011 Opinion affirmed the portion of the judgment

awarding $178,976.91 to Southcoast pursuant to section 1038. Nevertheless, after the

remittitur issued for the 2011 Opinion on February 24, 2012, Jeld-Wen did not agree to

pay the judgment to Southcoast. Instead, it filed a motion to modify the judgment to

delete a significant portion of the defense costs that had been initially awarded to

Southcoast under section 1038 and affirmed by this court. Jeld-Wen argued that because

we had determined in the 2011 Opinion that Jeld-Wen dismissed the action with

prejudice effective April 15, 2009, Southcoast was not entitled to an award of defense

costs incurred after that date. The trial court eventually denied that motion on July 27,

2012, pointing out that in the 2011 Opinion, we unambiguously affirmed the portion of

the judgment awarding $178,976.91 in defense costs to Southcoast under section 1038,

despite our determination that Jeld-Wen had dismissed the remaining cause of action for

summary judgment effective April 15, 2009.

Further, when Jeld-Wen refused to make payment to Southcoast of the

$178,976.91 judgment, plus interest, within 30 days after the remittitur from the 2011

Opinion, Southcoast brought a motion in March 2012 to enforce liability on the appellate

bond issued by Jeld-Wen's surety. (§§ 917.1, subd. (b), 996.440.)

In May 2012, Jeld-Wen made a payment of $213,120.41 to Southcoast in partial

satisfaction of the judgment after the surety indicated it was prepared to make payment

7 on the bond.4 Jeld-Wen then filed an opposition to Southcoast's motion to enforce

liability on the appellate bond, arguing that Southcoast should reimburse Jeld-Wen for

$25,717.41 of Jeld-Wen's $213,120.41 partial payment of the judgment.

The trial court granted Southcoast's motion to enforce liability on the appellate

bond on July 27, 2012, ruling that Jeld-Wen still owed $15,132.68 to Southcoast on the

judgment after its partial payment.

Meanwhile, in April 2012, Southcoast brought a motion seeking the attorney fee

award that is at issue in this appeal. Specifically, Southcoast brought a motion pursuant

to section 1038 to recover the attorney fees it had incurred since Jeld-Wen filed its third

appeal in October 2009. As Southcoast explained, the attorney fees were incurred in

responding to Jeld-Wen's third appeal as well as in responding to Jeld-Wen's recent

motion to reduce the judgment, and in attempting to obtain payment of the judgment

from Jeld-Wen through the motion to enforce liability on the appellate bond. Southcoast

sought fees in the amount of $129,760.50.

In opposition, Jeld-Wen advanced the same arguments it made in its motion to

reduce the judgment, contending again that it should not be required to make payment of

attorney fees incurred by Southcoast after the effective date of Jeld-Wen's voluntary

dismissal of the remaining cause of action for summary judgment on April 15, 2009.

Jeld-Wen also argued (1) that Southcoast should not be granted its attorney fees because

4 According to Southcoast, prior to Jeld-Wen's partial payment of $213,120.41, Jeld-Wen owed $228,050.21 on the judgment, including interest.

8 Jeld-Wen partially prevailed on appeal in the 2011 Opinion; and (2) Southcoast's attorney

fees were not reasonable or supported with sufficient detail.

The trial court granted Southcoast's attorney fee motion pursuant to section 1038.

It awarded $129,760.50 plus interest, citing the principle that defense costs under section

1038 include reasonable fees incurred on appeal. (Gonzales v. ABC Happy Realty (1997)

52 Cal.App.4th 391, 394) (Gonzales). With respect to Jeld-Wen's argument that the fees

should be reduced or denied because it partially prevailed in the 2011 Opinion, the trial

court stated that neither policy nor equity required a reduction in fees under the

circumstances, and that in any event, it would be "impracticable or impossible to separate

or apportion" the fees incurred by Southcoast to unsuccessfully defend the section 1717

fee award from the fees incurred by Southcoast to successfully defend the section 1038

fee award. As the trial court explained, "the same legal work would have been required

and the claims at issue overlap or are so intertwined."

The trial court entered judgment awarding Southcoast an additional $129,760.50

in attorney fees under section 1038. Jeld-Wen appeals from the award of attorney fees.

II

DISCUSSION

A. No Additional Summary Judgment Is Needed for Southcoast to Obtain Its Attorney Fees Incurred on Appeal and After Remittitur

Jeld-Wen's first argument is that the prerequisites for an award of attorney fees

under section 1038 are not present here because Southcoast did not obtain an additional

9 summary judgment or prevail on another dispositive motion identified in section 1038 to

support the latest award of attorney fees.

Section 1038 states that a defendant may seek an award of attorney fees in an

action for indemnity or contribution upon "the granting of any summary judgment,

motion for directed verdict, motion for judgment under Section 631.8, or any nonsuit

dismissing the moving party." (§ 1038, subd. (a).) As Jeld-Wen acknowledges, our 2011

Opinion determined that this prerequisite was established because the trial court granted

summary judgment in 2007 on the equitable contribution, equitable indemnity and

declaratory relief causes of action. Jeld-Wen argues, however, that because the trial court

had already made an award of attorney fees under section 1038 in the amount of

$178,976.91 based on the 2007 summary judgment ruling, Southcoast is precluded from

seeking an additional award unless it obtains a "new summary judgment award."

We reject Jeld-Wen's argument. It is well established that once the trial court

finds that a defendant is entitled to attorney fees under section 1038, the defendant is

entitled not only to the fees it has incurred during its successful defense of the action but

may also recover the fees that it subsequently incurs in defending its judgment on appeal.

(Gonzales, supra, 52 Cal.App.4th at p. 395; Bosetti v. United States Life Ins. Co. v. City

of New York (2009) 175 Cal.App.4th 1208, 1226 (Bosetti).) The trial court's award of

additional attorney fees to Southcoast is consistent with the principle that a defendant

entitled to a fee award under section 1038 is entitled to an award of fees incurred on

appeal. There is no need for Southcoast to have prevailed on an additional summary

judgment.

10 B. An Award Under Section 1038 of Attorney Fees Incurred on Appeal Does Not Require a Finding That the Appeal Was Brought in Bad Faith or Without Reasonable Cause

We next address Jeld-Wen's contention that because it purportedly brought its

appeal in good faith and with reasonable cause, the trial court improperly awarded

Southcoast its attorney fees incurred on appeal. As we will explain, Jeld-Wen's argument

fails because it incorrectly assumes an award of attorney fees incurred on appeal is

available under section 1038 only if the appeal is brought in bad faith or without

reasonable cause.

When a defendant in an action for contribution or indemnity prevails on summary

judgment or another dispositive motion listed in the statute, "[t]o avoid an award of

defense costs and fees under . . . section 1038, the plaintiff must establish that the action

was pursued both with reasonable cause and in good faith." (Bosetti, supra, 175

Cal.App.4th at p. 1226.) However, once the trial court determines that the action was

either not pursued in good faith or with reasonable cause, "[a]wards of costs and attorney

fees under . . . section 1038 include costs and fees incurred defending the judgment on

appeal, even when the appeal was not frivolous." (Bosetti, at p. 1226, italics added; see

also Gonzales, supra, 52 Cal.App.4th at pp. 394-395 [affirming award of § 1038 attorney

fees incurred on appeal even though appeal was not frivolous, and rejecting the

appellant's contention that "if section 1038 is extended to appeals that do not qualify as

frivolous, . . . the right to pursue a potentially meritorious appeal may be severely

inhibited" (fn. omitted)].)

11 Here, it is undisputed that the trial court determined that Jeld-Wen did not

maintain the action with reasonable cause, and we affirmed that determination in the

2009 Opinion, specifically stating that Jeld-Wen lacked reasonable cause to pursue its

claims against Southcoast after September 7, 2006. Therefore, under section 1038

Southcoast is entitled to an award of the defense costs it incurred defending the judgment

on appeal, without a further finding that the appeal itself was brought in bad faith or

without reasonable cause.

C. The Award of Attorney Fees Was Reasonable

Presenting several interrelated arguments, Jeld-Wen contends that the award of

attorney fees was not reasonable. As we will explain, Jeld-Wen's contentions lack merit.

1. The Award of Attorney Fees Was Reasonable Even Though Jeld-Wen Partially Prevailed in the 2011 Opinion

Jeld-Wen contends that Southcoast should not have been awarded its attorney fees

incurred in the appeal decided in our 2011 Opinion — or those fees should have been

reduced — because Jeld-Wen partially prevailed on that appeal. Specifically, Jeld-Wen

points out that although the award of attorney fees under section 1038 was affirmed, it

did prevail in obtaining a reversal of the attorney fees awarded under section 1717.

Jeld-Wen argues that "equity dictates that Southcoast should . . . not be entitled to an

award of its attorneys' fees and costs from the prior appeal in which its Judgment was

partially reversed," and that the award of fees "effectively sanctions Jeld-Wen for

pursuing its ultimately successful prior appeal." (Capitalization omitted.)

12 The trial court rejected this argument based on its determination that it was not

possible to separate the fees incurred in addressing Jeld-Wen's challenge to the section

1717 award from the fees incurred in connection with the section 1038 award, as the legal

issues were intertwined. "[A]pportionment of fees . . . rests within the sound discretion

of the trial court." (Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 687.)

"[F]ees need not be apportioned when incurred for representation of an issue common to

both a cause of action for which fees are permitted and one for which they are not. . . .

When the liability issues are so interrelated that it would have been impossible to separate

them into claims for which attorney fees are properly awarded and claims for which they

are not, then allocation is not required." (Akins v. Enterprise Rent-A-Car Co. (2000) 79

Cal.App.4th 1127, 1133.) "Apportionment is not required when the claims for relief are

so intertwined that it would be impracticable, if not impossible, to separate the attorney's

time into compensable and noncompensable units." (Bell, at p. 687.)

Based on our in-depth exploration of the pertinent legal issues in the 2011

Opinion, we agree that the attorney fees incurred in defending the section 1717 fee award

and the section 1038 fee award were necessarily intertwined. Most notably, the defense

of both the section 1717 award and section 1038 award turned on the legal significance of

Jeld-Wen's attempt to voluntarily dismiss the remaining cause of action for breach of

contract. It was therefore proper for the trial court to determine that all of the fees

incurred in Jeld-Wen's prior appeal were reasonable attorney fees necessarily incurred in

defense of the action despite the fact that Jeld-Wen partially prevailed on the appeal with

respect to the section 1717 fee award.

13 We rejected a similar argument in the 2011 Opinion, where we determined that

even though Jeld-Wen partially prevailed in prior appeals, the award of the total amount

of fees incurred in those appeals was proper because the outcome of the appeals assisted

Southcoast and the other defendants in obtaining a successful outcome. The same is true

here, and our previous reasoning applies. Southcoast's efforts, as reflected in the 2011

Opinion, led to the affirmance of a judgment in favor of Southcoast, even though some of

the issues were resolved in Jeld-Wen's favor. Accordingly, the attorney fees incurred in

defending Jeld-Wen's latest appeal were reasonable and properly awarded under section

1038.

Jeld-Wen attempts to portray itself as having been faced with the "Hobson's

choice" of deciding whether to forego a meritorious appeal or risk incurring an additional

judgment against it for attorney fees. Jeld-Wen also complains that it is effectively being

sanctioned for pursuing an appeal. We are not sympathetic to Jeld-Wen's pleas to equity.

Although Jeld-Wen prevailed on its challenge to the section 1717 fee award, it

significantly and unnecessarily increased the cost of the litigation for Southcoast with

respect to the section 1038 fee award. Specifically, much of Jeld-Wen's appeal of the

section 1038 fee award was frivolous because it simply repeated arguments that we had

already rejected in previous appeals. Under those circumstances, the trial court

reasonably concluded that equity did not support a reduction in the fee award.

14 2. The Fees Incurred After Remittitur Were Reasonably Incurred Defense Costs

Although Jeld-Wen does not clearly develop the argument, it appears to contend

that the trial court improperly awarded Southcoast the fees it incurred after remittitur in

bringing its motion to enforce liability on the appellate bond. Jeld-Wen states that in

filing that motion, Southcoast "unnecessarily incur[ed] additional fees and costs" and that

Southcoast's claim for attorney fees was "simply a self-inflicted wound."

We disagree. Jeld-Wen ignores the fact that Southcoast prevailed in its motion to

enforce liability on the appellate bond. Indeed, in granting Southcoast's motion to

enforce liability on the appellate bond and in simultaneously denying Jeld-Wen's motion

to reduce the judgment, the trial court determined that Jeld-Wen had no reasonable basis

for refusing to pay the judgment that Southcoast obtained and we affirmed. Southcoast's

post-remittitur attorney fees were thus a reasonable and necessary response to Jeld-Wen's

legally unfounded efforts against Southcoast in this action rather than a "self-inflicted

wound."

To the extent that Jeld-Wen takes the position that Southcoast's attorney fees

incurred in the motion to enforce liability on the appellate bond are not "defense costs" as

defined in section 1038, we reject that argument. Under section 1038, a defendant may

recover its "defense costs," which the statute defines as including "reasonable attorneys'

fees . . . where reasonably and necessarily incurred in defending the proceeding."

(§ 1038, subd. (b).) In the 2011 opinion we rejected Jeld-Wen's limited view of "defense

costs" as that term is used in section 1038, explaining that it is not limited to attorney fees

15 incurred in bringing a dispositive motion, but includes all aspects of defending an action,

including defending an appeal and bringing an attorney fee motion. Although no case

law specifically addresses whether fees incurred in enforcing a judgment are recoverable

under section 1038, our Supreme Court has resolved that issue in the analogous situation

of attorney fees incurred by a successful defendant in a strategic lawsuit against public

participation (SLAPP). (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1141.) Ketchum

established that under the mandatory fee provision in the anti-SLAPP statute (§ 425.16,

subd. (c)), "an award of fees may include not only the fees incurred with respect to the

underlying claim, but also the fees incurred in enforcing the right to mandatory fees" and

that the defendant may recover "an award of 'collection' fees" for "successfully enforcing

a judgment." (Ketchum, at p. 1141 & fn. 6.) The same principle applies here.

Southcoast is entitled to recover all of its reasonable attorney fees, including those

incurred in enforcing the judgment that Jeld-Wen refused to pay.

In light of Jeld-Wen's seemingly endless capacity for litigating issues that have

already been resolved by our prior opinions, Southcoast requests that we award

Southcoast its attorney fees incurred in this appeal. Under the authority we have

discussed above, Southcoast is entitled to recover its attorney fees incurred in this appeal.

We remand to the trial court to determine the appropriate amount of those fees.

DISPOSITION

The judgment awarding Southcoast $129,760.50, plus interest, in attorney fees

pursuant to section 1038 is affirmed. Southcoast is entitled to an award of attorney fees

16 incurred in this appeal, and the matter is remanded for the trial court to determine the

appropriate amount of those fees.

IRION, J.

WE CONCUR:

HUFFMAN, Acting P. J.

NARES, J.

17