Court Opinion

ID: 4689193
Source: CourtListenerOpinion
Date Created: 2021-05-21 23:02:35.513608+00
Date Added: 2024-06-11T08:04:52.764791
License: Public Domain

Filed 5/21/21 Paul Ryan Associates v. Catlin Specialty Ins. CA1/5
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                  DIVISION FIVE

 PAUL RYAN ASSOCIATES,
           Plaintiff and Appellant,
                                                                        A156755
 v.
 CATLIN SPECIALTY INSURANCE                                             (San Francisco County
 CO.,                                                                   Super. Ct. No. CGC-09-486995)
           Intervener and Appellant.

         Parties to a construction contract for a residential remodel entered into
a contractual indemnification provision that provided indemnity for a
noncontracting party. We conclude: (1) based on the contract language, the
indemnification provision is limited to third party claims and thus does not
encompass claims asserted by a contracting party against the noncontracting
indemnitee; (2) the indemnification provision does not preclude the
noncontracting party from bringing an equitable indemnity claim against the
contractual indemnitor; and (3) the trial court did not abuse its discretion in
issuing an attorney fee order denying fees.

                                                               1
                               BACKGROUND1
      In 2005, Paul Ryan Associates (Contractor) and 44 Normandie, LLC
(Owner) entered into a construction contract for a residential remodel project
(the Construction Contract). Owner also entered into a separate contract
with Linbeck Group, L.P. (Owner’s Representative) in which Owner’s
Representative agreed to perform project management services for the
remodel.
      Disputes arose. In 2009, Owner terminated Contractor and
subsequently sued, alleging Contractor performed defective work. In 2016,
following a bench trial, the trial court found Contractor liable for breach of
contract and negligence, and awarded Owner more than $7 million in
damages.
      Owner’s lawsuit also asserted claims against Owner’s Representative,
alleging it failed to properly manage Contractor. In 2014, Owner’s
Representative agreed to settle Owner’s claims for $2.6 million. The
settlement was paid by Owner’s Representative’s insurer, Catlin Specialty
Insurance Company (Insurer).2
      Insurer subsequently filed a complaint in intervention against
Contractor seeking, as Owner’s Representative’s subrogee, indemnification
for its settlement payment to Owner. Insurer’s complaint incorporated a
prior complaint filed by Owner’s Representative asserting claims against
Contractor for indemnity pursuant to the Construction Contract and for
equitable indemnity. Insurer and Contractor filed cross-motions for

1We recite only those background facts relevant to our resolution of the
appeals.
2Contractor sought, and received, an offset for this payment to Owner’s
multimillion dollar damages award.

                                        2
summary judgment/summary adjudication on Insurer’s complaint. The trial
court found Contractor was not obligated to indemnify Owner’s
Representative, granted Contractor’s motion and denied Insurer’s motion,
and later entered judgment for Contractor on Insurer’s complaint. Insurer’s
appeal challenges this order.
      Contractor then sought prevailing party contractual attorney fees and
costs from Insurer. The trial court denied Contractor’s motion. Contractor’s
appeal challenges this order.
                                 DISCUSSION
I.    Indemnity
      We review de novo the trial court’s order on the parties’ motions for
summary judgment/summary adjudication. (Monticello Ins. Co. v. Essex Ins.
Co. (2008) 162 Cal.App.4th 1376, 1385.)
      “An indemnity obligation arises from two general sources. First, it may
arise from ‘express contractual language establishing a duty in one party to
save another harmless upon the occurrence of specified circumstances.’
[Citation.] Courts interpret contractual indemnity provisions under the same
rules governing other contracts, with a view to determining the actual intent
of the parties. [Citations.] [¶] Indemnity may also arise based on equitable
considerations. [Citation.] Unlike contractual indemnity which looks to the
parties’ intent, equitable indemnification focuses on principles of fairness and
justice and ‘is designed to apportion loss among tortfeasors in proportion to
their relative culpability . . . .’ ” (Maryland Casualty Co. v. Bailey & Sons,
Inc. (1995) 35 Cal.App.4th 856, 864 (Maryland Casualty).)

                                        3
      A.    Contractual Indemnity
      The trial court found that the Construction Contract’s indemnity
provision did not require Contractor to indemnify Owner’s Representative
against Owner’s claims. Insurer challenges this finding.
      The Construction Contract’s indemnity provision states: “To the fullest
extent permitted by law, Contractor shall indemnify, defend, protect and hold
harmless Owner, Owner’s Lender, if any, Architect, Owner’s
Representative,[3] Christopher M. Bass, and each of the aforementioned
parties’ respective affiliated companies, partners, successors, assigns, heirs,
legal representatives, devisees, officers, directors, shareholders, employees
and agents (collectively, ‘indemnitees’) for, from and against any and all
claims and liabilities (including, without limitation, claims and liabilities
relating to personal injury, bodily injury or property damage) directly or
indirectly arising out of, resulting from or related to this agreement or the
Work (including, without limitation, any failure by Contractor to properly
perform the Work in accordance with the Contract Documents, or negligence
or misconduct of Contractor or Contractor’s officers, agents, employees, or
subcontractors), even if such claims or liabilities arise in part from the
negligence of any indemnitee; provided, however, Contractor’s obligation
under this paragraph will not apply to claims or liabilities arising from the
sole active negligence or intentional misconduct of any indemnitee.”
(Capitalization altered, emphasis omitted.)
      “Indemnity agreements are construed under the same rules that govern
the interpretation of other contracts. [Citation.] Accordingly, the contract
must be interpreted to ‘give effect to the mutual intention of the parties . . . .’

3“Contractor,” “Owner,” and “Owner’s Representative” have the same
meaning in the Construction Contract as they do herein.

                                         4
(Civ. Code, § 1636.) The intention of the parties is to be ascertained from the
‘clear and explicit’ contract language. ([Civ. Code,] § 1638.)” (Alki Partners,
LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 600, fn. omitted (Alki
Partners).)4
      In relevant part, the indemnity agreement provides that Contractor
will “indemnify . . . and hold harmless . . . Owner’s Representative . . . against
any and all claims and liabilities . . . arising out of . . . or related to . . . the
Work” performed by Contractor. Insurer contends this clear language
encompasses Owner’s claims against Owner’s Representative for failure to
properly supervise Contractor’s work.
      However, as Contractor argues, numerous cases have construed the
terms “indemnify” and “hold harmless” as generally applying only to claims
brought against the indemnitee by a third party. “ ‘A clause which contains
the words “indemnify” and “hold harmless” is an indemnity clause which
generally obligates the indemnitor to reimburse the indemnitee for any
damages the indemnitee becomes obligated to pay third persons.’ ” (Zalkind,
supra, 194 Cal.App.4th at p. 1024; accord, Alki Partners, supra, 4
Cal.App.5th at p. 600; Carr Business Enterprises, Inc. v. City of Chowchilla
(2008) 166 Cal.App.4th 14, 20 (Carr); Dream Theater, Inc. v. Dream Theater
(2004) 124 Cal.App.4th 547, 555 (Dream Theater); Building Maintenance

4 Contractor also relies on a declaration from one of its officers averring that
Contractor did not intend the indemnity provision to apply to Owner’s claims
against other indemnitees. The trial court did not rely on this evidence, and
neither do we. “ ‘California recognizes the objective theory of contracts
[citation], under which “[i]t is the objective intent, as evidenced by the words
of the contract, rather than the subjective intent of one of the parties, that
controls interpretation” [citation]. The parties’ undisclosed intent or
understanding is irrelevant to contract interpretation.’ ” (Zalkind v.
Ceradyne, Inc. (2011) 194 Cal.App.4th 1010, 1022, fn. 2 (Zalkind).)

                                            5
Service Co. v. AIL Systems, Inc. (1997) 55 Cal.App.4th 1014, 1029 (Building
Maintenance); Myers Building Industries, Ltd. v. Interface Technology, Inc.
(1993) 13 Cal.App.4th 949, 969 (Myers).)
      To be sure, parties may agree to an indemnity provision that
encompasses both third party claims and claims asserted by contracting
parties. (Zalkind, supra, 194 Cal.App.4th at p. 1024 [“Although indemnity
generally relates to third party claims, ‘this general rule does not apply if the
parties to a contract use the term “indemnity” to include direct liability as
well as third party liability.’ ”]; Hot Rods, LLC v. Northrop Grumman
Systems Corp. (2015) 242 Cal.App.4th 1166, 1179 (Hot Rods) [“Indemnity
provisions typically refer to third party claims, but if the parties so intend,
such provisions may also encompass direct claims.”].) To determine whether
the parties intended to so broaden the indemnity coverage, courts examine
the contractual language, as we discuss in more detail below.
      Before proceeding, we address Insurer’s suggestion, raised in a
footnote, that Owner’s claim against Owner’s Representative is “more akin to
a third-party claim” because Owner’s Representative is not a party to the
contract. First, the contention is forfeited: “An appellant cannot bury a
substantive legal argument in a footnote and hope to avoid waiver of that
argument.” (Holden v. City of San Diego (2019) 43 Cal.App.5th 404, 419.)
Second, even if we considered it, we would reject it. Insurer’s argument
misconstrues the “claim” at issue in the phrase “third party claim.” There
are two claims relating to indemnification: the underlying claim—the claim
asserted against the purported indemnitee, for which indemnification is
sought—and the resulting indemnity claim. It is the identity of the party
asserting the underlying claim that determines whether it is a third party
claim, not the identity of the party asserting the indemnity claim. Thus, it is

                                        6
immaterial that Owner’s Representative—the party asserting the indemnity
claim—is not a contracting party. The relevant question is whether Owner—
the party asserting the underlying claim—is a contracting party; it is, and
therefore its claim against Owner’s Representative is not a third party claim.5
      We now turn to the language of the Construction Contract. Insurer
emphasizes the indemnity provision’s application to “any and all claims and
liabilities (including, without limitation, claims and liabilities relating to
personal injury, bodily injury or property damage),” arguing this broad
language is not limited to third party claims. However, courts have found
similar language so limited. In Myers, the court held an indemnification
provision that was “not limited to bodily injury or property damage, and
embraces ‘any, all, and every claim’ . . . was intended to deal only with third-
party claims.” (Myers, supra, 13 Cal.App.4th at p. 974.) In Carr, the
indemnification provision applied to “ ‘all claims, damages, losses and
expenses including attorney fees arising out of the performance of the work
described herein. . . .’ ” (Carr, supra, 166 Cal.App.4th at p. 19, italics
omitted.) The court noted that, “At first glance, the language . . . seems to
extend beyond third-party claims,” but after comparing it to language
construed in other cases, concluded it was limited to third party claims. (Id.

5 We recognize that the cases discussed herein are factually distinct from the
one before us in that all involved underlying claims asserted by one
contracting party against another contracting party. Thus, some of the
analysis of the cases is inapplicable here, such as whether the parties
intended the indemnity coverage to apply to claims for breach of the contract
containing the indemnity provision. (E.g., Alki Partners, supra, 4
Cal.App.5th at p. 602 [considering whether indemnity provision extended to
“actions seeking to enforce the Agreement itself”].) Nonetheless, the analysis
of when an indemnity provision’s coverage extends beyond third party claims
to also include claims asserted by contracting parties is directly relevant and
instructive in our case.

                                         7
at pp. 20, 23.) In Building Maintenance, the indemnification provision
covered “ ‘any and all losses, liabilities, damages, claims, demands, suits,
actions, proceedings, subrogations and expenses including court costs and
reasonable attorney’s fees, related in any way to this Order [contracting for
services], or the services performed or goods delivered under this Order. . . .’ ”
(Building Maintenance, supra, 55 Cal.App.4th at p. 1022.) Again, the court
found the provision limited to third party claims. (Id. at p. 1030.)
      In contrast, where courts have concluded an indemnity provision is not
limited to third party claims, the language is markedly different. In Hot
Rods, the contract provided indemnification for “ ‘any claims, demands,
penalties, fees, fines, liability, damages, costs, losses, or other expenses
including, without limitation, reasonable environmental consulting fees and
reasonable attorney fees’ ”; defined “ ‘Claim’ ” as “ ‘any claim or demand by
any Person for any alleged liabilities, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute, Permit,
ordinance, regulation, common law, equity or otherwise’ ”; and defined
“ ‘Person’ as ‘any person, employee, individual, corporation, unincorporated
association, partnership, trust, federal, state or local governmental agency,
authority or other private or public entity.’ ” (Hot Rods, supra, 242
Cal.App.4th at p. 1181.) The court reasoned this “extremely broad language”
suggested the parties did not intend to limit the coverage to third party
claims. (Id. at p. 1182.) The court further noted, “if the language was meant
only to cover third party claims, there seems little point in including the
phrase ‘damages, costs, losses’ when those would all have been covered
already. That language seems entirely duplicative of ‘any claims, demands,
penalties, fees, fines, liability,’ if the provision is intended to apply only to
third party claims.” (Id. at p. 1181.) The indemnification provision here

                                          8
lacks the expansive coverage language of Hot Rods, and instead is closer to
the provisions considered in Myers, Carr, and Building Maintenance.
      In cases lacking such expansive language, courts have found an
indemnity provision extends beyond third party claims where the contract
contained other clear indicia the parties intended such coverage. In Dream
Theater, the indemnification provision stated the indemnitors “are obligated
to indemnify against all losses ‘whether or not arising out of third party
Claims.’ ” (Dream Theater, supra, 124 Cal.App.4th at p. 556.) In Zalkind,
the indemnification agreement included specific provisions regarding notice,
defense obligations, and subrogation which expressly applied only to
indemnification claims resulting from third party claims: “ ‘In the event of
any claim for indemnification hereunder resulting from or in connection with
any claim or legal proceeding by a third party . . . ;’ ” “ ‘[i]n connection with
any claim giving rise to indemnity hereunder that results or may result from
or arises or may arise out of any claim or legal proceeding by a person who is
not a party to this Agreement . . . ;’ ” “ ‘[i]n the event that an indemnifying
party pays all or any portion of a third party claim or demand concerning
which the indemnified party submits a claim for indemnification . . . .’ ”
(Zalkind, supra, 194 Cal.App.4th at p. 1028.) As the court reasoned, the
language clarifying that these provisions applied only to third party claims
“would not be necessary if indemnification by definition meant only third
party claims.” (Ibid.)6 In Wilshire-Doheny, a corporation sued two of its own

6 The indemnification provision also defined damages expansively—
“ ‘whether or not they have arisen from or were incurred in or as a result of
any demand, claim, action, suit, assessment or other proceeding or any
settlement or judgment’ ”—which the court concluded “suggests” damages
were “not limited to third party claims.” (Zalkind, supra, 194 Cal.App.4th at
p. 1028.)

                                         9
officers; the officers prevailed and sought recovery of their attorney fees and
costs pursuant to indemnity agreements with the corporation. (Wilshire-
Doheny Associates Ltd. v. Shapiro (2000) 83 Cal.App.4th 1380, 1383–1387
(Wilshire-Doheny).) One of the indemnity provisions “specifically applies to
an ‘action or suit by or in the right of the corporation to procure a judgment
in its favor.’ ” (Id. at p. 1396.) As the court noted in construing the same
language (appearing in a statute authorizing certain corporate
indemnification of officers and employees), such a provision “is not, by its
terms, limited in application to third party lawsuits.” (Id. at p. 1390.) The
Construction Contract’s indemnification provision contains no similar indicia
of an intent to apply indemnification beyond third party claims.7
      In sum, based on our review of the Construction Contract’s language
and applicable analyses in similar cases, we conclude that the
indemnification provision is limited to third party claims. The claim by

7 We acknowledge language in some cases suggesting that indemnification
provisions apply beyond third party claims unless contractual language
indicates otherwise. (See Wilshire-Doheny, supra, 83 Cal.App.4th at p. 1396
[“There is nothing in the language of any of the three indemnity provisions
specifically limiting their application to third party lawsuits.”]; In re
Marriage of Vaughn (2018) 29 Cal.App.5th 451, 460 [“Had [the contracting
parties] . . . intended to narrow the [indemnity] clause to only cover third-
party claims, they could have done so expressly.”].) However, as indicated in
our discussion above, the weight of the authority instead suggests that
indemnification provisions are limited to third party claims unless the
contractual language contains indicia of an intent to apply more broadly.
Indeed, as noted above, the provision in Wilshire-Doheny contained such
indicia.

                                       10
Owner—a party to the contract—against Owner’s Representative does not
fall within the scope of this provision.8
      B.    Equitable Indemnity
      Insurer’s complaint also sought indemnity pursuant to equitable
indemnity principles. Insurer did not seek summary judgment on this claim,
but Contractor did. The trial court’s summary judgment order did not
expressly address this aspect of Contractor’s motion, instead finding the
parties’ remaining arguments were resolved by the contractual indemnity
ruling. Contractor’s sole argument that it is entitled to judgment on the
equitable indemnity claim—both in its summary judgment motion below and
on appeal in this court—is that the Construction Contract’s indemnity
provision precludes Owner’s Representative from asserting an equitable
indemnity claim.
      As Contractor argues, “ ‘[W]hen parties by express contractual
provision establish a duty in one party to indemnify another, “the extent of
that duty must be determined from the contract and not from the
independent doctrine of equitable indemnity.” ’ ” (Morlin Asset Management
LP v. Murachanian (2016) 2 Cal.App.5th 184, 192.) But this does not
establish that an indemnity provision can preclude a noncontracting party
from seeking equitable indemnity. To the contrary, descriptions of the
proposition indicate it is based on the would-be indemnitee’s knowing
negotiation of and entry into the indemnity contract. “This rule seeks to

8 Because of this conclusion, we need not further consider the parties’
arguments as to whether Insurer established a subrogation claim based on
contractual indemnity. (See Fireman’s Fund Ins. Co. v. Maryland Cas. Co.
(1998) 65 Cal.App.4th 1279, 1292 [“An insurer entitled to subrogation is in
the same position as an assignee of the insured’s claim, and succeeds only to
the rights of the insured.”].)

                                        11
‘permit[] people to voluntarily order their affairs in a manner agreeable to
them’ and recognizes that ‘equity rarely interferes with a contract
knowledgeably executed.’ ” (Maryland Casualty, supra, 35 Cal.App.4th at
p. 873; see also Regional Steel Corp. v. Superior Court (1994) 25 Cal.App.4th
525, 529 [“By contract, [one contracting party] bargained away its right to
pursue [another contracting party] on equitable indemnity grounds.”].)
Indeed, to hold otherwise would allow contracting parties to unilaterally
impair the equitable rights of a noncontracting party, an entirely inequitable
outcome. (See Maryland Casualty, at p. 864 [“equitable indemnification
focuses on principles of fairness and justice”].)
      Accordingly, we will reverse the portion of the trial court’s summary
judgment order granting Contractor’s motion with respect to the equitable
indemnity claim, and remand for further proceedings on that claim.
II.   Attorney Fees
      Because we affirm the trial court’s ruling for Contractor on Insurer’s
contract claim, we proceed to consider the court’s order denying Contractor’s
motion for contractual attorney fees.
      A.    Additional Background
      Following the trial court’s summary judgment order, Contractor moved
for approximately $570,000 in contractual prevailing party attorney fees and
costs. Contractor explained how it determined the amount of the requested
award as follows: “After separately calculating the total amounts of fees and
costs [Contractor] incurred for each three month period of the case, the
number of parties, including [Contractor], was counted for each period. The
total amount of fees incurred during each quarter was then divided by the
number of parties in the case during that period, and the same was done for
costs as well. The relevant periods in which [Owner’s Representative] and

                                        12
[Insurer] were involved in the litigation were then totaled.” No underlying
data—for example, the total amount of fees and costs incurred in the
litigation, or the number of attorney hours worked in each three month
period—was submitted. The litigation included Owner’s and Contractor’s
claims against each other and claims asserted by other cross-defendants
against Contractor.
      Contractor argued its formula for determining Insurer’s liability for
fees and costs was “cost-efficient” and “easier on [Insurer]” because it avoided
the need to review more than 4,000 pages of attorney invoices and 2,000
pages of cost invoices. Contractor offered to provide these invoices to the
court upon request.
      The trial court declined to award Contractor fees on two alternative
bases. First, the court found Contractor was not entitled to prevailing party
attorney fees under the Construction Contract. Second, the court found that
Contractor’s work litigating the indemnity claims was “limited – the
summary adjudication motions but little else,” and Contractor’s method for
determining fees and costs “fail[ed] to establish the . . . reasonable amounts”
of the requested award.
      B.    Analysis
      We need not decide whether Contractor was entitled to attorney fees
under the Construction Contract because we affirm the trial court’s order on
the second independent ground.
      “ ‘[T]he [party] . . . seeking fees and costs “ ‘bear[s] the burden of
establishing entitlement to an award and documenting the appropriate hours
expended and hourly rates.’ [Citation.]” ’ [Citation.] ‘ “To that end, the court
may require [a] defendant[] to produce records sufficient to provide ‘ “a proper
basis for determining how much time was spent on particular claims.” ’

                                        13
[Citation.]” ’ [Citation.] ‘The evidence should allow the court to consider
whether the case was overstaffed, how much time the attorneys spent on
particular claims, and whether the hours were reasonably expended.’ ” (In re
Marriage of Nassimi (2016) 3 Cal.App.5th 667, 695 (Nassimi).)
      In Nassimi, as here, the appellant incurred fees and costs for which he
was only partially entitled to a fee award. (Nassimi, supra, 3 Cal.App.5th at
pp. 679–680.) The appellant submitted evidence as to the total amount of
fees and costs paid in the litigation, but his attorney “made no attempt to
allocate attorney fees” between work on the compensable and
noncompensable claims, testifying only that “ ‘probably 50 percent or 75
percent’ ” of the fees were compensable. (Id. at p. 680.) The trial court
denied fees, finding the appellant “ ‘failed to carry his burden of proof to show
the amounts he incurred as a result of the . . . litigation are amounts for
which [respondent] should be liable,’ ” and that the appellant’s “attempts to
allocate the fees was based on ‘speculative unsubstantiated assumptions,’ and
devoid of ‘reliable, credible evidence.’ ” (Id. at pp. 682–683.) The Court of
Appeal affirmed, finding “the trial court did not err in rejecting the attorney
fees claim for lack of evidence.” (Id. at p. 697.)
      Similarly, Contractor made no serious attempt to determine or
estimate the fees and costs incurred in defending against the Owner’s
Representative’s and Insurer’s indemnity claims. To be sure, as Contractor
argues, “California law does not require detailed billing records to support a
fee award; ‘[a]n attorney’s testimony as to the number of hours worked is
sufficient evidence to support an award of attorney fees, even in the absence
of detailed time records.’ ” (Rancho Mirage Country Club Homeowners Assn.
v. Hazelbaker (2016) 2 Cal.App.5th 252, 263.) But Contractor submitted
neither billing records nor attorney testimony as to the number of hours

                                        14
worked on the relevant indemnity claims. Contractor made no attempt
whatsoever to estimate the fees and costs related to these claims.
Contractor’s offer to dump thousands of pages of unreviewed billing records
on the trial court does not remedy its evidentiary failure.
      Contractor cursorily asserts that the fees and costs incurred in
defending the indemnity claims were “inextricably intertwined” with its fees
and costs in defending Owner’s claims. “ ‘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.’ ” (Maxim Crane Works, L.P. v. Tilbury Constructors
(2012) 208 Cal.App.4th 286, 298.) Contractor provides no explanation, much
less authority, for how these largely distinct claims were so intertwined.
      Contractor argues that, given the length and complexity of the
litigation, its calculation method was “[t]he only equitable way, the only
efficient way and the only accurate way” to determine reimbursable fees.
While certainly efficient, Contractor’s method cannot be described as either
equitable or accurate. As just one example, after Owner’s Representative
appeared in the case, Contractor participated in a 98-day trial involving only
claims between Owner, Contractor, and an architect. Even assuming
Contractor incurred some fees and costs related to the indemnity claims
during this time, Contractor provides neither authority nor explanation
supporting its attempt to make Insurer liable for an equal share of its total
fees and costs during the trial solely because of its status as one of the parties
in the case.
      Finally, Contractor argues that the trial court lacked discretion to deny
fees altogether. Contractor’s authority is distinguishable. In Smith v.
Krueger (1983) 150 Cal.App.3d 752, the trial court denied contractual

                                       15
prevailing party fees based on a finding that, after certain conduct by the
defendants, the plaintiffs no longer needed to proceed with the lawsuit (which
they ultimately won). (Id. at pp. 755–756.) In Texas Commerce Bank v.
Garamendi (1994) 28 Cal.App.4th 1234, the trial court denied prevailing
party fees and costs, finding that the issue underlying the litigation was a
question of law; the appellant claimed extensive fact discovery was necessary,
during which most of the claimed fees and costs were incurred; and therefore
“ ‘the appropriate allocation’ ” was for each party to bear its own costs and
fees. (Id. at pp. 1239–1240.) In other words, both cases involved a trial
court’s finding that a prevailing party was not entitled to recover fees; both
such findings were reversed on appeal. (Smith, at p. 757; Texas Commerce, at
p. 1247.) The trial court here (in its second independent ground for denying
fees) found that Contractor, assuming it was entitled to recover fees, utterly
failed to satisfy its burden of demonstrating a reasonable fee award. The
trial court acted well within its discretion.
                                 DISPOSITION
      The judgment is affirmed in part and reversed in part, as follows. The
portion of the trial court’s summary judgment/summary adjudication order
granting Contractor’s motion with respect to Insurer’s subrogation claim
based on equitable indemnity is reversed; in all other respects, the order is
affirmed. The trial court’s order denying Contractor’s motion for contractual
attorney fees and costs is affirmed. The parties shall bear their own costs on
appeal.

                                        16
                   SIMONS, Acting P.J.

We concur.

NEEDHAM, J.

BURNS, J.

(A156755)

              17