Case Name: NATIONAL COMPUTER RENTAL, LTD., Plaintiff and Appellant, v. BERGEN BRUNSWIG CORPORATION, Defendant and Respondent
Court: Court of Appeal of the State of California
Jurisdiction: California
Decision Date: 1976-06-14
Citations: 59 Cal. App. 3d 58
Docket Number: Civ. No. 47094
Parties: NATIONAL COMPUTER RENTAL, LTD., Plaintiff and Appellant, v. BERGEN BRUNSWIG CORPORATION, Defendant and Respondent.
Judges: 
Reporter: California Appellate Reports, Third Series
Volume: 59
Pages: 58–71

Head Matter:
[Civ. No. 47094.
Second Dist., Div. Four.
June 14, 1976.]
NATIONAL COMPUTER RENTAL, LTD., Plaintiff and Appellant, v. BERGEN BRUNSWIG CORPORATION, Defendant and Respondent.
Counsel
Marvin Zinman for Plaintiff and Appellant.
Sheppard, Mullin, Richter & Hampton and William A. Masterson for Defendant and Respondent.

Opinion:
Opinion
KINGSLEY, Acting P. J.
Plaintiff appeals from a judgment in an action for breach of contract that awarded it less than the amount sued for. For the reasons set forth below, we affirm the judgment.
Plaintiff is in the business of leasing computer equipment. Defendant is a major user of such equipment. On October 5, 1972, the parties entered into an agreement whereby plaintiff leased to defendant, for a period of 24 months, a complex of computer equipment for use by defendant at its facility in Raleigh, North Carolina. The equipment involved consisted of an IBM basic computer unit, a Fabric-Tec memory core, and various tape discs and tape drives. The agreement provided for a rental of $9,150 per month, with a right in defendant to terminate the lease after 12 months by paying the difference between $9,150 per month and $10,850 per month for the number of months that the equipment was used by defendant. In July of 1973 defendant considered with plaintiff exercising defendant's option to terminate: Extended negotiations were carried on between the parties, acting through a broker (P & A), whereby defendant sought to secure either a waiver of the obligation to pay the agreed fee for termination or a reduction in the amount of that fee. During those negotiations, plaintiff at one time agreed to reduce the fee if defendant would keep the Fabric-Tec core. It also developed, during the course of those negotiations, that defendant was a competitor for a contract with the State of Pennsylvania to provide a computer complex to that state. Plaintiff was interested in supplying to defendant the equipment that would be needed if that contract resulted. Finally, on September 13, 1973, plaintiff prepared and sent to defendant, through the broker, a proposed amendment to the original lease. That proposed amendment read as follows:
"Amendment #2 to Lease Agreement Dated October 5, 1972, Between Bergen Brunswig Dataservice Co., (Lessee) and National Computer Rental, Ltd. (Lessor)
"1. The equipment covered by Lease Agreement dated October 5, 1972 and Amendment #1 dated October 25, 1972, will be released on January 10, 1974. All penalties associated with the discontinuance are removed.
"2. The equipment shown on Schedule 'B' (attached), will be rented for a minimum term of twenty-four (24) months at a monthly rental of $7,400.
"3. In addition, the Fabric-Tec core presently installed on the 360/30, under the existing lease, is to be retained by Bergen for an additional twelve (12) months at a monthly rate of $650 per month.
"4. All other terms and conditions of the Lease Agreement shall remain unchanged."
Defendant hesitated to execute the proposed amendment because its terms bound defendant to lease the additional equipment, whether or not defendant secured the Pennsylvania contract.
Defendant was negotiating with other suppliers of computer equipment to secure bids for the equipment necessary to fulfill the Petinsylvania contract when, and if, it was awarded to defendant. Plaintiff's bid was somewhat higher than its competitors but defendant concluded that, with a waiver of the termination fee, plaintiff was close enough in its bid to be acceptable as the supplier. Plaintiff was anxious to be first in line to supply the equipment if defendant secured the Pennsylvania contract. Ultimately, plaintiff, through the broker, communicated to defendant an oral agreement whereby plaintiff agreed: (1) That defendant's obligation to lease the additional equipment was dependent on securing the Pennsylvania contract; and (2) that the waiver of the termination fee would stand even though the defendant, because it had not received the Pennsylvania contract, did not lease the additional equipment. With that assurance, on September 21, 1973, defendant signed the proposed amendment as drafted.
Defendant did not get the contract and, on October 7, 1973, so advised plaintiff. Later, at plaintiff's request, defendant agreed to release to plaintiff the Fabric-Tec core involved in the third paragraph of the amendment.
On April 1, 1974, plaintiff sued' defendant seeking three items of recovery: (1) $4,123.60 unpaid rent for the Raleigh equipment; (2) $884 taxes due under the original agreement; and (3) $22,100 termination fee. Defendant admitted the first two items, but denied obligation for the fee. After trial to the court, plaintiff was denied recovery of the termination fee, but was granted judgment for the unpaid taxes and rent, in the amount of $5,007.60, less an attorney fee to defendant of $2,000, leaving a net judgment to plaintiff of $3,007.60. Plaintiff has appealed; we affirm.
I.
The pertinent findings by the trial court relative to the dispute over the termination fee are as follows:
"7. On or about September 21, 1973, plaintiff and defendant entered into an oral and written agreement. By reason of the execution and performance of such oral and written agreement, the following separate factual matters are found to have taken place:
"(a) By reason thereof, plaintiff and defendant mutually rescinded the Lease insofar as defendant was obligated to pay to plaintiff a termination fee and discharged defendant from that obligation.
"(b) By reason thereof, plaintiff and defendant made and entered into a novation, insofar as defendant was obligated to pay to plaintiff a termination fee and discharged defendant from that obligation.
"(c) By reason thereof, plaintiff waived all provisions of the Lease relating to the alleged obligation of defendant to pay a termination fee and thereby discharged defendant from that obligation."
Those findings are amply supported by the record.
Contrary to statements in plaintiff's brief on appeal, the trial court had before it extrinsic evidence concerning the intent of the parties when the amendment was executed on September 21, 1973. Its determination that the parties intended that paragraph 1 of that amendment, containing the waiver, stands independent of the other two paragraphs is a factual finding beyond our power to review. Since the oral agreement preceded the execution of the written contract, its admission did not violate the parol evidence rule. Plaintiff itself not only agreed to, but demanded, the elimination of paragraph 3. It has never denied that the failure of defendant to secure the Pennsylvania contract excused performance of the literal terms of paragraph 2. Plaintiff cannot complain that the trial court found that paragraph 1 was intended to be read literally and that the parties intended it to be severable from the other two paragraphs.
II.
Plaintiff contends that the trial court erred in its award of attorney fees to. defendant. We disagree. As the trial court found, defendant had, in conformity with section 998 of the Code of Civil Procedure, duly tendered the unpaid rent and that tender had been rejected because plaintiff was demanding the other two items of its claim. Liability for the unpaid rent and the taxes was never litigated at the trial, which proceeded only on the termination fee issue.
It is agreed that, under section 1717 of the Civil Code, as construed by the cases, the attorney fee clause in the lease inured to the benefit of the "prevailing party" in the trial court. We have found no cases directly in point regarding the meaning of "prevailing party." However, in Weller v. Brown (1914) 25 Cal.App. 216, 222 [143 P. 251], plaintiff sued to quiet title to a strip of land. Defendant claimed an easement over that strip. The judgment quieted title to the land in plaintiff, but subject to defendant's easement. The court held that the defendant, and not the plaintiff was the "prevailing party." Although that case dealt with the statutes on costs, we regard its definition of "prevailing party" to be applicable here. Defendant prevailed on the only issue in the case; it is the "prevailing party" within the meaning of section 1717, even though plaintiff nominally holds a'judgment for an amount never disputed and never litigated.
The judgment is affirmed.
Dunn, J., concurred.
Although ordinarily, as here, attorney fees are awarded as part of a judgment, we held in T.E.D. Bearing Co. v. Walter E. Heller & Co. (1974) 38 Cal.App.3d 59 [112 Cal.Rptr. 910], that attorneys' fees awardable, as here, to a party not expressly named in the contract, were recoverable as costs.