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Attorney's Fees
 

ATTORNEY'S FEES
Attorney's Fees Law Case Summaries 

■ First National Ins. Co. v. Cam Painting, Inc., No. B200830

Appellant Cam Painting, Inc. was the contractor on a construction project for the Los Angeles Unified School District, the Noble project.  Cam hired a subcontractor, Sabco Electrique, Inc.  Under the Cam-Sabco contract, Sabco was required to provide a payment and performance bond, with Cam as obligee.  Sabco obtained its bond from respondent First National Insurance Company, which, coincidentally, had also issued a bond to Cam on the Noble project, with the LAUSD as obligee.  In connection with the issuance of the bonds, both Cam and Sabco signed indemnity agreements in favor of First National.

            When Sabco failed to pay a supplier, Allsale Electric, First National paid the claim, allocated half the payment to each bond, and sought indemnity from both Cam and Sabco.  The trial court found that First National could allocate the loss to the Cam bond as well as the Sabco bond.  We disagree.  As obligee on the Sabco bond, Cam was entitled to have First National pay the Allsale claim, which all parties agree was a valid claim.  Cam's rights as obligee were not diminished by the fact that Cam was also the principal on a First National bond.  We thus reverse the judgment in favor of First National and the order awarding it attorneys' fees as prevailing party in this action.

            Cam has another contention:  in a different part of this action, Cam sued Sabco for breach of contract, alleging that Sabco had drilled through asbestos, contrary to contract specifications.  Cam prevailed and Sabco was ordered to pay damages and attorneys' fees pursuant to a clause in the Cam-Sabco contract.  First National, as Sabco's surety, was made jointly and severally liable for the damages, but not the fees.  Cam contends that First National should have been made jointly and severally liable for the fee award.  On that claim, we again agree with Cam, and order the trial court to make that order.

■ HELD:

In a breach of contract action, trial court judgment in favor of plaintiff-insurer is reversed where plaintiff was not entitled to attribute any of a particular loss to its other bond with defendant, and was thus not entitled to indemnity from defendant-contractor for either the sum paid to a supplier or for attorneys' fees it incurred in that action. Trial court's judgment for defendant in its action against subcontractor and plaintiff-insurer is amended so that plaintiff is jointly and severally liable for the attorney's fee award as well as damages, as plaintiff was subcontractor's surety

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