Court Opinion

ID: 7179326
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:45:26.647468+00
Date Added: 2024-06-11T16:15:54.042528
License: Public Domain

BARHAM, Justice
(dissenting).
Suit was instituted by the contractor Fox demanding $15,468.67 balance due on a building contract. The district court and the Court of Appeal without question made that award to the contractor, and we have affirmed that award. Approximately two months after the institution of that suit, the homeowner Popich reconvened in it *171against Fox and filed a separate suit against Fox’s surety, Fidelity and Deposit Company of Maryland, for damages for failure to complete the contract, liquidated damages, and attorney’s fees. The Court of Appeal awarded the homeowner Popich $4838.05 damages by reason of poor construction or failure to complete according to contract, but refused liquidated damages. The majority of this court, as previously noted, has affirmed the award to Fox of $15,468.67. It assessed the damages of the owner Popich at the same figure arrived at by the Court of Appeal, $4838.05, and then assessed attorney’s fees in favor of the homeowner Popich and against Fox at $2183.00 based upon the surety’s contract for attorney’s fees of 5 per cent of the amount of the bond. The majority has found that these attorney’s fees are justified by the record. When three courts have cast Popich, because of his failure to pay the contract price, in an amount three times the award granted him, I am unable to agree with the majority that an award of over $2000.00 should be granted to Popich as attorney’s fees.
The authority for the holding of this court here is Maloney v. Oak Builders, Inc., 256 La. 85, 235 So.2d 386. I dissented in part in that case. Upon reflection I should have dissented in whole.
Under R.S. 9:4802 a bond is required of the contractor to insure the work on any immovable property, and the condition of the bond “shall be the true and faithful performance of the contract and the payment of all sub-contractors, journeymen, cartmen, workmen, laborers * * * as their interest may arise”. The bond is to be attached to and recorded with the contract.
The contractor and the surety in this and thousands of similar contracts, including the one in Maloney v. Oak Builders, supra, have found a simple way to make the attachment and simultaneous recordation by having the surety “intervene” in the contract between the contractor and the homeowner. In addition to the bond required by R.S. 9:4802, the sureties in these “interventions” further indemnify their principals, the contractors, for costs, charges, expenses, and attorney’s fees incurred. The attorney’s fees in this case, and in Maloney, were fixed at or limited to 5 per cent of the bond. In Maloney v. Oak Builders, supra, we treated the “intervention” of the surety in the contract, and particularly the paragraph which included a stipulation of 5 per cent of the bond as attorney’s fees, as a part of the contract between the owner and the general contractor. This “intervention” is not in my opinion a part of the contract but is an attachment as required by R.S. 9:4802. It cannot expand or limit any right of the owner to recover attorney’s fees from the contractor as provided in the contract between the contractor and the owner.
*173Paragraph 7 of the contract between the contractor and the homeowner in this case provides that the contractor shall be liable for “all costs, charges or attorney’s fees incident to the completion or enforcement of this contract”, and that these are also chargeable against the surety and may be deducted from any amount due from the owner to the contractor. Since this contract between the owner and the contractor provides for all attorney’s fees, if reasonable attorney’s fees equal an amount greater or less than 5 per cent of the bond the owner should be entitled to recover to that extent from the contractor. The surety would be liable in solido with the contractor only to the limit of its attorney’s fees indebtedness to the contractor fixed at 5 per cent of the bond.
Here the fact that the surety has agreed to indemnify the contractor to the extent of 5 per cent of the bond for attorney’s fees does not warrant a judicial assessment •of attorney’s fees in that stipulated amount. The inequities built into the situation are certainly apparent here, where the owner has retained funds due the contractor far in excess of the damages he is able to recover.
I have previously stated that the majority here has found attorney’s fees of over $2000.00 to be justified for the collection of less than $5000.00 in damages when this claim was incidental to a defense of a claim in excess of $15,000.00. The result of the present litigation is that the party who is awarded attorney’s fees is the losing party for he owes to the contractor Fox $8447.62 after deduction of his award on reconventional demand. While I believe in an early end to litigation, I am unable to determine on the record before us that the award of $2183.00 is proper as attorney’s fees. I therefore believe the case should be remanded for this determination. I reiterate that I think we erred in Maloney v. Oak Builders, supra. Since the surety-contractor agreement is a separate agreement, their contractual establishment of 5 per cent of the bond as attorney’s fees does not establish the quantum for the owner’s attorney’s fees when he, as here, has a contract with the contractor for all attorney’s fees. The owner is entitled to reasonable attorney’s fees. I respectfully dissent.'