Filed 4/16/13 Janopaul + Block Companies v. Sundt Construction Co. CA4/1

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

JANOPAUL + BLOCK COMPANIES, LLC, 

et al.,

Plaintiffs and Respondents,

v.

SUNDT CONSTRUCTION COMPANY, 

INC., SOUTHERN CALIFORNIA,

Defendant and Appellant.

 D059947

 (Super. Ct. No. GIC854799)

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

Luis R. Vargas, Judge. Reversed.

Sundt Construction Company, Inc., Southern California (Sundt) appeals an order 

and a corresponding judgment awarding Janopaul + Block Companies, LLC (J + B), 

Janopaul Block S.D. No. 1, LLC (S.D. No. 1), and their principals, Peter Janopaul III and 

Anthony P.A. Block, $901,085.27 in costs, attorney fees, and prejudgment interest in this 
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construct defect action. We conclude respondents were not legally entitled to costs, 

attorney fees, or prejudgment interest and therefore reverse the order and judgment.

I.

BACKGROUND

A. The Hotel to Condominium Conversion

J + B hired Ninteman Construction Company, Inc., now known as Sundt, to 

convert a hotel that J + B owned to apartments and retail space. While construction was 

ongoing, J + B deeded the hotel to S.D. No. 1.

A few years after construction was completed, the apartments were converted to 

condominiums and sold to the public. In connection with these sales, J + B and S.D. 

No. 1 (collectively Janopaul) made disclosures of construction defects, which reduced 

their sales revenue by approximately $3 million. Janopaul also incurred approximately 

$750,000 in out-of-pocket expenses for repairs.

B. The Construction Defect Litigation

The faulty construction resulted in several lawsuits, which were eventually 

consolidated. The first to be filed was an action by Janopaul against Sundt seeking 

damages for various construction defects on theories of negligence, breach of contract, 

and breach of warranty. Janopaul also sought attorney fees on the breach of contract and 

breach of warranty claims, but not on the negligence claim.1 The condominium 

 

1 The construction contract between Janopaul and Sundt contained the following 

clause: "In the event of any action instituted between the parties in connection with this 
3

homeowners association subsequently sued Janopaul and Sundt for damages for 

construction defects based on various theories. Janopaul and its principals filed a crosscomplaint against Sundt in the homeowners association's action seeking defense and 

indemnity against the association's claims. Two other actions were also filed and 

consolidated with the actions filed by Janopaul and the homeowners association, but 

neither is relevant to this appeal.

Janopaul and the homeowners association resolved their dispute by a settlement 

agreement to which Sundt was not a party. A provision of the settlement agreement gave 

the homeowners association the right to force Janopaul to accept an offer of less than 

$600,000 from Sundt to resolve Janopaul's claims against Sundt, except those for 

attorney fees and costs. If the homeowners association exercised this right, it would 

receive all of the settlement proceeds. The settlement agreement also provided for a 

mediation and arbitration process in the event of a dispute between the homeowners 

association and Janopaul regarding their continuing obligations under the agreement.

A dispute between Janopaul and the homeowners association subsequently arose 

when the association accepted Sundt's offer of $300,000 to settle Janopaul's claims 

against Sundt.2 The dispute was submitted to mediation, which was unsuccessful, and 

 

Agreement, the prevailing party shall be entitled to recover from the losing party the 

prevailing party's costs and expenses, including reasonable attorneys' fees."

2 As part of our request for supplemental briefs, we asked the parties whether a 

separate written agreement or other document memorialized the $300,000 settlement 

between Janopaul and Sundt; and, if such a document existed, we asked them to augment 

the record to include it. Janopaul responded that no separate settlement agreement with 
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then to arbitration. The arbitrator ruled (1) the homeowners association had a unilateral 

right to accept Sundt's offer without consulting Janopaul; (2) "the Sundt/Janopaul 

settlement for $300,000 is final and binding on all parties"; and (3) the only rights 

Janopaul retained against Sundt were the rights to pursue fees and costs. Sundt was not a 

party to the arbitration proceedings. The trial court confirmed the arbitration award and 

entered a corresponding judgment in the homeowners association's action against 

Janopaul and Sundt.

C. Janopaul's Motion for Attorney Fees, Costs and Prejudgment Interest

Two months later, Janopaul filed a motion for an award of $1,259,669.67 in 

attorney fees, costs, and prejudgment interest against Sundt (hereafter, fee motion). 

Janopaul stated that "[b]y this motion [it] seeks recovery as the prevailing party on its 

contract in Case 1 [i.e., its lawsuit against Sundt]," and contended it was "the prevailing 

party . . . by virtue of Sundt's payment of $300,000 on the Janopaul contract claims." As 

to attorney fees, Janopaul quoted the attorney fee provision of the construction contract 

with Sundt (see fn. 1, ante); cited Civil Code section 1717 and Code of Civil Procedure 

 

Sundt exists. Sundt responded that a written agreement between it and the homeowners 

association memorializes the settlement, submitted a copy of that agreement, and asked 

us to augment the record to include it. We deny Sundt's augmentation request, which 

Janopaul opposes, because Janopaul is not a party to the settlement agreement between 

Sundt and the homeowners association, the agreement was not part of the record before 

the trial court, and it is not necessary to our resolution of the appeal. (See Cal. Rules of 

Court, rule 8.155(a)(1)(A) [authorizing augmentation of record to include document filed 

or lodged in trial court]; Guardianship of Jacobson (1947) 30 Cal.2d 312, 325 [denying 

augmentation request when "proffered data would not affect the determination of this 

appeal"]; Electronic Funds Solutions, LLC v. Murphy (2005) 134 Cal.App.4th 1161, 

1172, fn. 4 [denying augmentation request when document was not before trial court 

when it entered challenged judgment].)
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section 1033.5, subdivision (a)(10); and claimed its "entitlement to fees rest[ed] in 

Sundt's breach of the construction contract." As to costs, Janopaul argued it was the party 

with the net monetary recovery entitled to recover costs as a matter of law under Code of 

Civil Procedure section 1032.

In support of the fee motion, Janopaul's counsel submitted a declaration that 

attached tables listing attorney fees, costs, and prejudgment interest incurred through 

April 2010, and another table listing payments received from insurers and subcontractors. 

Janopaul submitted no attorney time records, no information about its attorneys' billing 

rates, and no supporting documentation for any of the claimed costs. In its legal 

memorandum, however, Janopaul stated: "Back-up [documents] for all submitted costs 

are available should the Court wish to review them."

Sundt vigorously opposed Janopaul's fee motion on several grounds. Sundt 

challenged the motion as procedurally improper, objected to the standing of some parties 

to seek fees, and argued Janopaul was not entitled to fees because it was not a licensed 

contractor. Sundt also contended Janopaul would recover nothing under the $300,000 

settlement approved by the homeowners association and therefore should not be deemed 

the prevailing party under the construction contract. Sundt further complained that 

Janopaul had submitted no evidence that the fees and costs requested were reasonable, 

and, to the contrary, were unnecessary, unreasonable, and excessive. Finally, Sundt 

asserted there was no legal basis for an award of prejudgment interest on fees and costs.

As part of its opposition, Sundt submitted the declaration of its counsel, who 

stated he had reviewed the billing records of Janopaul's counsel (which were obtained in 
6

discovery) and concluded Janopaul's fee request should be reduced by approximately 

$1.7 million because the corresponding billing entries were "unnecessary, unreasonable 

and excessive" for several reasons. Copies of the challenged billing records were lodged 

with the court. Sundt also filed evidentiary objections to Janopaul's tables summarizing 

costs, fees, and interest, and requested the court take judicial notice of several pleadings 

and other documents on file in the consolidated actions.

In its reply in support of the fee motion, Janopaul argued Sundt was trying "to 

confuse th[e] simple point" that Janopaul "filed a complaint for breach of contract against 

Sundt. To be clear, that is the only case to which this motion relates." Janopaul 

contended the motion was procedurally proper; all parties requesting fees had standing to 

do so; it was the prevailing party because it had a net monetary recovery of $300,000 

from Sundt; its contractor licensing status was irrelevant because Janopaul did not act as 

a contractor; and the total amount of fees, costs, and interest requested was reasonable. 

Janopaul did not respond to Sundt's argument that prejudgment interest was not 

recoverable.

Included among Janopaul's reply papers was a declaration of its counsel's office 

manager, who attached a two-page chart that listed the total attorney, paralegal, and clerk 

hours for each month and the corresponding hourly billing rates, but provided no 

information about the tasks performed by those individuals whose time was billed. 

Janopaul also filed evidentiary objections to some of the declarations and other materials 

Sundt had submitted in opposition to the fee motion. The day before the hearing on the 
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motion, Janopaul submitted a declaration from its counsel seeking an additional $113,945 

in attorney fees incurred since April 2010.

D. The Trial Court's Order and Judgment

The trial court held a hearing on Janopaul's fee motion and then took the matter 

under submission. Approximately 10 weeks later, the court issued the following minute 

order:

"[Janopaul's fee motion] is granted, in part, and denied, in part. [¶] The 

Court finds [Janopaul] is the prevailing party as against [Sundt]. [¶] The 

Trial Court has broad authority to determine the amount of a reasonable fee. 

(PCLM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) To this end, 

the Court awards [Janopaul] its attorney's fees in the amount of 

$901,085.27. The Court finds these fees are reasonable and were 

necessarily incurred. [¶] All objections to evidence are overruled. [¶] All 

requests for judicial notice are granted." 

The order does not explain which aspects of the motion were granted and which were 

denied; nor does it mention Janopaul's request for costs or prejudgment interest.

The trial court subsequently entered a judgment in Janopaul's action against Sundt. 

The judgment states the minute order entered on Janopaul's fee motion "is the final Order 

of the Court and Judgment is entered accordingly." The judgment did not award 

Janopaul any damages or other relief on any of its causes of action against Sundt.

II.

DISCUSSION

In their initial briefing, the parties advanced several opposing arguments regarding 

the adequacy of the explanation in the trial court's order, the standing of certain 

respondents to recover costs and attorney fees, the legality of the contract containing the 
8

attorney fee clause under the Contractors' State License Law (Bus. & Prof. Code, § 7000 

et seq.), the reasonableness of the amount awarded by the trial court, and the legal basis 

for awarding prejudgment interest. After we reviewed the parties' initial briefing and the 

record on appeal, we had a more fundamental question: whether, in light of the $300,000 

settlement between Janopaul and Sundt and the governing statutes, Janopaul qualified as 

a prevailing party entitled to recover costs and attorney fees from Sundt. Because the 

parties had not adequately addressed this question in their briefing, we solicited 

supplemental briefs. (See Gov. Code, § 68081.) Having considered the parties' 

supplemental briefs, we conclude, for reasons explained below, that Janopaul is not the 

prevailing party entitled to costs, attorney fees, or prejudgment interest.

A. Janopaul Was Not Entitled to Costs

We first consider whether Janopaul was entitled to recover costs from Sundt. 

"Under the common law rule, parties to litigation must bear their own costs. The right to 

recover any of such costs is determined entirely by statute." (Davis v. KGO-T.V., Inc. 

(1998) 17 Cal.4th 436, 439.) Here, the governing statute provides: "Except as otherwise 

expressly provided by statute, a prevailing party is entitled as a matter of right to recover 

costs in any action or proceeding." (Code Civ. Proc., § 1032, subd. (b).) And, as 

pertinent to this appeal, " '[p]revailing party' includes the party with a net monetary 

recovery, [and] a defendant in whose favor a dismissal is entered . . . ." (Id., § 1032, 

subd. (a)(4).)

Janopaul contends it was the prevailing party under Code of Civil Procedure 

section 1032 because the $300,000 settlement payment from Sundt constituted a net 
9

monetary recovery, and Sundt did not obtain a dismissal of Janopaul's causes of action. 

Sundt counters that it was the prevailing party under section 1032 because settlement 

proceeds do not constitute a net monetary recovery, and the judgment confirming the 

arbitration award was "akin to a dismissal." We conclude Sundt has the better argument.

Janopaul's receipt of $300,000 in settlement proceeds from Sundt did not make it 

the prevailing party. By using the term "net monetary recovery" in Code of Civil 

Procedure section 1032, "the Legislature did not intend to include settlement proceeds 

received by the plaintiff in exchange for a dismissal in favor of the defendant." (Chinn v. 

KMR Property Management (2008) 166 Cal.App.4th 175, 188.) Rather, when a case 

settles, the defendant with a dismissal entered in its favor is the prevailing party for 

purposes of an award of costs under section 1032. (Id. at p. 190.) Although the record in 

this case contains no formal dismissal of Janopaul's claims that was given in exchange for 

Sundt's settlement payment, it does contain two judgments that operated as a dismissal. 

The judgment confirming the arbitrator's award entered in the homeowners association's 

action, after Janopaul settled with the association and Sundt settled with Janopaul, 

terminated that action without a trial and awarded Janopaul no damages or other relief on 

its cross-complaint against Sundt. Similarly, the judgment in Janopaul's action against 

Sundt, also entered after the parties settled, terminated that action without trial and 

awarded Janopaul no damages or other relief on its complaint. Although neither of these 

judgments mentioned dismissal of Janopaul's action or cross-action, there is no 

requirement that to constitute a dismissal a judgment "must, in explicit terms, dismiss the 

action." (Schisler v. Mitchell (1959) 174 Cal.App.2d 27, 29.) A judgment constitutes a 
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dismissal where, as here, it "terminat[es] a case without a trial of the issues of fact 

involved." (Ibid.; see also Saddlemire v. Stockton Savings etc. Soc. (1904) 144 Cal. 650, 

655-656 [judgment that plaintiff take nothing by action is equivalent to judgment 

dismissing action].) Thus, having settled with Janopaul and obtained judgments that 

were "akin to a dismissal," Sundt was the prevailing party for purposes of costs. (See 

Code Civ. Proc., § 1032, subd. (a)(4); Chinn, at p. 190.)

We also reject Janopaul's additional argument that it was entitled to costs because 

the parties specifically excepted its right to pursue attorney fees and costs from the 

$300,000 settlement the homeowners association forced Janopaul to accept from Sundt. 

Janopaul points out that parties who reach a settlement may stipulate to resolve the matter 

of costs by using procedures alternative to those prescribed by the cost recovery statutes 

(Code Civ. Proc., § 1032, subd. (c); Chinn, supra, 166 CalApp.4th at p. 184; Goodstein v. 

Bank of San Pedro (1994) 27 Cal.App.4th 899, 908), and it cites as such a stipulation the 

portion of the arbitrator's award purporting to reserve Janopaul's right to pursue costs and 

attorney fees against Sundt. The flaw in this argument is that arbitration "is a matter of 

contract," and "an arbitrator has no power to determine the rights and obligations of one 

who is not a party to the arbitration agreement or arbitration proceedings." (Unimart v. 

Superior Court (1969) 1 Cal.App.3d 1039, 1045; see also Berglund v. Arthroscopic & 

Laser Surgery Center of San Diego, L.P. (2008) 44 Cal.4th 528, 536 [arbitration award 

not conclusive or final as to nonparties].) Since Sundt was not a party to the settlement 

agreement between the homeowners association and Janopaul that contained the 

arbitration clause or to the arbitration proceedings, the portion of the arbitrator's award 
11

purporting to reserve Janopaul's right to pursue costs does not constitute a stipulation 

binding on Sundt.

B. Janopaul Was Not Entitled to Attorney Fees

We next consider whether Janopaul was entitled to recover attorney fees from 

Sundt. Unless a statute or contract provides otherwise, parties to litigation must bear 

their own attorney fees. (Code Civ. Proc., § 1021; Musaelian v. Adams (2009) 45 Cal.4th 

512, 516.) This case does not involve any statutory causes of action for which attorney 

fees are recoverable. But, as noted earlier, the construction contract between Janopaul 

and Sundt contains a provision authorizing "the prevailing party" to recover fees in "any 

action instituted between the parties in connection with [the contract]." (See fn. 1, ante.)

Based on the attorney fee clause, Janopaul contends it was entitled to an award of 

fees because it was "the only party who recovered any relief on the construction 

contract . . . , when Sundt paid $300,000 to resolve Janopaul's construction defect 

claims." Sundt counters that under Civil Code section 1717, subdivision (b)(2) (no 

prevailing party when action dismissed pursuant to settlement), the $300,000 settlement 

precludes either party from being a prevailing party entitled to recover attorney fees. 

Janopaul replies that section 1717, subdivision (b)(2) does not apply. We again conclude 

Sundt has the better argument.

Where, as here, a party invokes a contractual fee provision to recover attorney fees 

incurred in litigating contract claims, Civil Code section 1717 governs. (Santisas v. 

Goodin (1998) 17 Cal.4th 599, 614-615 (Santisas); Douglas E. Barnhart, Inc. v. CMC 

Fabricators, Inc. (2012) 211 Cal.App.4th 230, 237 (Barnhart).) Section 1717 authorizes 
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"the party prevailing on the contract," i.e., "the party who recovered a greater relief in the 

action on the contract," to recover attorney fees. (Civ. Code, § 1717, subds. (a), (b)(1).) 

The statute, however, further provides: "Where an action has been voluntarily dismissed 

or dismissed pursuant to a settlement of the case, there shall be no prevailing party for 

purposes of this section." (Id., § 1717, subd. (b)(2).) As we explained in part II.A., ante, 

Janopaul's action and cross-action against Sundt were effectively dismissed pursuant to 

the settlements among Janopaul, Sundt, and the homeowners association. Accordingly, 

there was no prevailing party entitled to attorney fees. (Ibid.; cf. Exxess Electronixx v. 

Heger Realty Corp. (1998) 64 Cal.App.4th 698, 707 [cross-defendant not entitled to 

attorney fees under contractual fee clause when cross-complainant dismissed action 

pursuant to settlement].)

Janopaul contends Civil Code section 1717, subdivision (b)(2) does not apply 

because: (1) "it did not enter into a settlement which resulted in the dismissal of the 

Contract Case [i.e., Janopaul's lawsuit against Sundt]"; (2) section 1717 covers only 

contract claims, and therefore does not affect Janopaul's entitlement to a fee award based 

on its negligence claim; and (3) the parties reserved Janopaul's right to pursue attorney 

fees against Sundt. We are not persuaded.

First, the $300,000 settlement between Janopaul and Sundt did result in the 

dismissal of Janopaul's claims against Sundt. As we explained above, the effect of the 

settlement was to dismiss all of Janopaul's claims against Sundt because, as a result of the 

settlement, all of Janopaul's claims were resolved without a trial, and Janopaul recovered 

no damages or other relief. (See pt. II.A., ante.) Janopaul acknowledged this effect in 
13

papers filed in support of its fee motion. In its initial moving papers, Janopaul stated that 

"there is nothing left to try in the breach of contract action (Case 1) so [Janopaul's] 

contract action is over and there is no question it is owed fees and costs. The case 

effectively concluded when Sundt agreed to pay on the claim." (Italics added.) In its 

reply papers, Janopaul similarly stated that after confirmation of the arbitration award, 

"There is nothing left to do, except for Sundt to pay the $300,000 and to have the fee and 

cost claims finalized." (Italics added.) Thus, although Janopaul did not explicitly agree 

to dismiss its claims as part of the settlement with Sundt, the fact the claims were 

resolved without trial because of the settlement is sufficient to trigger application of the 

statutory prohibition against attorney fee recovery, which applies when an action has 

been "dismissed pursuant to a settlement of the case." (Civ. Code, § 1717, subd. (b)(2); 

see id., § 3528 ["The law respects form less than substance."].)

Second, Janopaul's inclusion of a claim labeled "negligence" in its complaint 

against Sundt does not allow it to avoid the operation of Civil Code section 1717. 

Janopaul relies on the rule that "[i]f an action asserts both contract and tort or other 

noncontract claims, section 1717 applies only to attorney fees incurred to litigate the 

contract claims." (Santisas, supra, 17 Cal.4th at p. 615.) Such reliance is misplaced, 

however, because Janopaul never sought fees based on its negligence claim. In its 

complaint Janopaul requested fees in connection with only its breach of contract and 

breach of warranty claims, not its negligence claim. In its fee motion, Janopaul never 

mentioned the negligence claim, but it repeatedly asserted it was entitled to fees for 

having prevailed on claims based on the construction contract, and as support it cited 
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section 1717 and interpretive case law.3 Janopaul may not disavow the theory it pursued 

in the trial court and adopt a different theory on appeal. (See, e.g., In re Marriage of 

Facter (2013) 212 Cal.App.4th 967, 987, fn. 27; Sumner Hill Homeowners' Assn., Inc. v. 

Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1027.) In any event, though 

labeled "negligence," the first claim asserted in Janopaul's complaint against Sundt was 

not a tort claim. In that claim, Janopaul alleged that "in performing the work of 

contractor," Sundt "negligently, carelessly, and in an unworkmanlike manner, performed 

the aforesaid work" and thereby caused Janopaul to suffer damages. The mere negligent 

performance of a construction contract is not a tort; it is a breach of contract. (Erlich v. 

Menezes (1999) 21 Cal.4th 543, 552, 554.) Thus, all three claims pleaded in Janopaul's 

complaint were based on the construction contract and thus were subject to section 1717. 

(Barnhart, supra, 211 Cal.App.4th at p. 242 [breach of contract claim subject to Civ. 

Code, § 1717]; A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 495 

[breach of warranty claim subject to Civ. Code, § 1717].)

 

3 For example, Janopaul asserted: (1) it was "the prevailing party as against Sundt 

by virtue of Sundt's payment of $300,000 on the Janopaul contract claims"; (2) it was the 

prevailing party "on the contract action"; (3) its "entitlement to fees rests in Sundt's 

breach of the construction contract"; (4) "[b]y this motion [Janopaul] seeks recovery as 

the prevailing party on its contract in Case 1 [i.e., its lawsuit against Sundt]"; (5) "it is 

clear that [Janopaul's] entitlement to attorneys fees comes [from] the construction 

contract in accordance with Civil Code section 1717"; and (6) "it filed a complaint for 

breach of contract against Sundt," and "[t]o be clear, that is the only case to which this 

motion relates." In light of these statements, we reject Janopaul's suggestion in its 

supplemental brief that it also sought and was properly awarded attorney fees in 

connection with the negligence and equitable claims asserted in the cross-complaint filed 

against Sundt in the homeowners association's action.
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Third, Janopaul did not reserve any right to recover attorney fees from Sundt. 

Janopaul relies on Jackson v. Homeowners Assn. Monte Vista Estates-East (2001) 93 

Cal.App.4th 773, 782, where the court held "the parties could validly waive [Civil Code] 

section 1717, subdivision (b)(2) in order to submit the question [of prevailing party 

attorney fees] to the trial court for resolution." We question whether Jackson is 

consistent with our Supreme Court's interpretation of section 1717, subdivision (b)(2) "as 

overriding or nullifying conflicting contractual provisions." (Santisas, supra, 17 Cal.4th 

at p. 617.) We need not resolve this potential conflict, however, because the factual 

predicate for application of the Jackson rule is absent here. In Jackson, "[t]he parties 

expressly agreed, on the record and in the written settlement agreement, to have the trial 

court determine whether there was a prevailing party and, if so, determine which party 

prevailed, and then to award attorney fees accordingly." (Jackson, at p. 784.) Here, by 

contrast, Janopaul admits it never entered into a written settlement agreement with Sundt. 

In particular, in its fee motion Janopaul stated: "And to be perfectly clear on another 

point, there was never an agreement regarding waiver of attorneys fees and costs." 

Further, as we explained earlier, Janopaul may not rely on the portion of the arbitrator's 

award purporting to reserve its right to pursue fees from Sundt, because Sundt, as a 

nonparty to the settlement agreement that contained the arbitration clause or to the 

arbitration proceedings, is not bound by the award. (See pt. II.A., ante.) Therefore, even 

if we were to assume parties may "validly waive section 1717, subdivision (b)(2)" 

(Jackson, at p. 782), they did not do so here.
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C. Janopaul Was Not Entitled to Prejudgment Interest

We finally consider whether Janopaul was entitled to recover prejudgment interest 

from Sundt. In the trial court, Janopaul requested an award of $459,939.27 in 

prejudgment interest on its costs and attorney fees; and, on the day before the hearing on 

the fee motion, Janopaul claimed for the first time that it was entitled to interest under 

Civil Code section 3287. On appeal, Janopaul argues "[t]he trial court properly 

considered the request for pre-judgment interest and there is no basis for reversing the 

ruling because it may have included these expenses in its award." We disagree, for two 

reasons.

First, Civil Code section 3287 does not authorize an award of prejudgment interest 

on either costs or attorney fees, which are considered an element of costs (Code Civ. 

Proc., § 1033.5, subd. (a)(10); Civ. Code, § 1717, subd. (a)). The statute authorizes the 

award of prejudgment interest only to "a person who is entitled to recover damages 

certain, or capable of being made certain by calculation, and the right to recover which is 

vested in him upon a particular day" (Civ. Code, § 3287, subd (a)), or to a "person who is 

entitled under any judgment to receive damages based upon a cause of action in contract 

where the claim was unliquidated" (id., § 3287, subd. (b)). "Thus, prejudgment interest 

awarded under Civil Code section 3287 is an element of compensatory damages, not a 

court cost." (Bodell Construction Co. v. Trustees of Cal. State University (1998) 62 

Cal.App.4th 1508, 1525; accord, North Oakland Medical Clinic v. Rogers (1998) 65 

Cal.App.4th 824, 830 ["It is well established that prejudgment interest is not a cost, but 
17

an element of damages."].) Here, Janopaul was awarded no damages against Sundt and 

was therefore not entitled to prejudgment interest under Civil Code section 3287.

Second, even if prejudgment interest were recoverable on costs or attorney fees, 

we have concluded that Janopaul is entitled to recover neither costs nor fees from Sundt. 

It therefore follows that Janopaul is not entitled to a stand-alone award of prejudgment 

interest. (Cf. State Farm General Ins. Co. v. Mintarsih (2009) 175 Cal.App.4th 274, 290 

[reversing prejudgment interest award when underlying damages award was reversed]; 

Metropolitan Water Dist. v. Imperial Irrigation Dist. (2000) 80 Cal.App.4th 1403, 1436 

[order granting fees and costs must be reversed when underlying judgment is reversed].)

DISPOSITION

The order awarding Janopaul $901,085.27 on its motion for costs, attorney fees, 

and prejudgment interest and the judgment incorporating that order are reversed.

IRION, J.

WE CONCUR:

HUFFMAN, Acting P. J.

MCINTYRE, J.