James L. Harris Painting & Decorating, Inc. v. West Bay Builders, Inc.

West Bay Builders, Inc. (West Bay), and Safeco Insurance Company of America (Safeco) challenge the trial court’s denial of their motion for attorney fees under Business and Professions Code section 7108.5 and Public Contract Code sections 7107 and 10262.5 (prompt payment statutes). West Bay and Safeco were sued by James L. Harris Painting & Decorating, Inc. (Harris), for breach of contract and violation of the prompt payment statutes. In turn, West Bay filed a cross-complaint against Harris for breach of contract arising out of the same construction project. After years of litigation, the jury found both West Bay and Harris had failed to perform and thus did not award damages to either side. Safeco also did not recover because it was sued only in its capacity as issuer of a bond to West Bay for the construction project. Although West Bay and Safeco did not recover any damages, they moved for attorney fees under the fee-shifting provisions of the prompt payment statutes. The trial court denied their motion, finding there was no prevailing party in this case.

On appeal, West Bay and Safeco contend the trial court lacked discretion to refuse an award of mandatory attorney…